Document:

Stock Purchase Agreement

 Exhibit 10.4 
 EXECUTION COPY 
  

 
  

STOCK PURCHASE AGREEMENT 
 by and among 
 THE HILLMAN GROUP, INC., 

THOMAS ROWE 
 and

 MARY JENNIFER ROWE 
 December 29, 2010 
  

 
  

 TABLE OF CONTENTS 

 

							
	 ARTICLE I PURCHASE AND SALE OF SHARES
	  	 	1	  
	 1.01
	 	Purchase and Sale of Shares	  	 	1	  
	 1.02
	 	Calculation of Estimated Purchase Price and Final Purchase Price	  	 	1	  
		
	 ARTICLE II THE CLOSING; PURCHASE PRICE ADJUSTMENT
	  	 	2	  
	 2.01
	 	The Closing	  	 	2	  
	 2.02
	 	Deliveries	  	 	2	  
	 2.03
	 	The Closing Transactions	  	 	3	  
	 2.04
	 	Purchase Price Adjustments	  	 	4	  
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS
	  	 	6	  
	 3.01
	 	Authorization; No Breach	  	 	6	  
	 3.02
	 	Governmental Consents, etc	  	 	6	  
	 3.03
	 	Title to Shares	  	 	6	  
	 3.04
	 	Litigation	  	 	6	  
	 3.05
	 	Brokerage	  	 	7	  
	 3.06
	 	No Other Representations and Warranties	  	 	7	  
		
	 ARTICLE IV REPRESENTATIONS AND WARRANTIES AS TO THE COMPANY
	  	 	7	  
	 4.01
	 	Organization and Corporate Power	  	 	7	  
	 4.02
	 	No Subsidiaries	  	 	7	  
	 4.03
	 	Authorization; No Breach	  	 	8	  
	 4.04
	 	Capital Stock	  	 	8	  
	 4.05
	 	Financial Statements; Indebtedness; Internal Controls	  	 	9	  
	 4.06
	 	Absence of Certain Developments	  	 	9	  
	 4.07
	 	Title to Properties	  	 	11	  
	 4.08
	 	Tax Matters	  	 	12	  
	 4.09
	 	Contracts and Commitments	  	 	14	  
	 4.10
	 	Customers and Suppliers	  	 	16	  
	 4.11
	 	Intellectual Property	  	 	16	  
	 4.12
	 	Litigation	  	 	17	  
	 4.13
	 	Product Warranties	  	 	17	  
	 4.14
	 	Governmental Consents, etc	  	 	17	  
	 4.15
	 	Employee Benefit Plans	  	 	17	  
	 4.16
	 	Compliance with Laws	  	 	19	  
	 4.17
	 	Environmental Matters	  	 	19	  
	 4.18
	 	Affiliated Transactions	  	 	20	  
	 4.19
	 	Insurance	  	 	20	  
	 4.20
	 	Brokerage	  	 	20	  
	 4.21
	 	Employees	  	 	20	  
	 4.22
	 	No Other Representations and Warranties	  	 	21	  
		
	 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
	  	 	21	  

  
 i 

							
	 5.01
	 	Organization and Corporate Power	  	 	21	  
	 5.02
	 	Authorization	  	 	22	  
	 5.03
	 	No Violation	  	 	22	  
	 5.04
	 	Governmental Consents, etc	  	 	22	  
	 5.05
	 	Litigation	  	 	22	  
	 5.06
	 	Brokerage	  	 	22	  
	 5.07
	 	Investment Representation	  	 	22	  
	 5.08
	 	Financial Capacity	  	 	23	  
	 5.09
	 	No Other Representations and Warranties	  	 	23	  
		
	ARTICLE VI COVENANTS OF THE PARTIES	  	 	23	  
	 6.01
	 	Access to Books and Records	  	 	23	  
	 6.02
	 	Non-Compete	  	 	23	  
	 6.03
	 	Non-Solicitation	  	 	24	  
	 6.04
	 	Confidentiality	  	 	24	  
		
	 ARTICLE VII INDEMNIFICATION
	  	 	25	  
	 7.01
	 	Survival of Representations, Warranties, Covenants, Agreements and Other Provisions	  	 	25	  
	 7.02
	 	Indemnification for the Benefit of the Purchaser	  	 	25	  
	 7.03
	 	Indemnification by the Purchaser for the Benefit of the Sellers	  	 	26	  
	 7.04
	 	Defense of Third-Party Claims	  	 	27	  
	 7.05
	 	Determination of Loss Amount	  	 	28	  
		
	 ARTICLE VIII TAX MATTERS
	  	 	28	  
	 8.01
	 	Tax Returns	  	 	28	  
	 8.02
	 	Tax Indemnification	  	 	29	  
	 8.03
	 	Tax Indemnification Procedures	  	 	30	  
	 8.04
	 	Tax Contests; Cooperation	  	 	30	  
	 8.05
	 	Straddle Periods	  	 	31	  
	 8.06
	 	Coordination; Survival	  	 	32	  
	 8.07
	 	Section 338(h)(10) Election	  	 	32	  
		
	 ARTICLE IX DEFINITIONS
	  	 	33	  
	 9.01
	 	Definitions	  	 	33	  
	 9.02
	 	Other Definitional Provisions	  	 	39	  
	 9.03
	 	Cross-Reference of Other Definitions	  	 	39	  
		
	 ARTICLE X MISCELLANEOUS
	  	 	41	  
	 10.01
	 	Press Releases and Communications	  	 	41	  
	 10.02
	 	Expenses	  	 	41	  
	 10.03
	 	Notices	  	 	41	  
	 10.04
	 	Assignment	  	 	43	  
	 10.05
	 	Further Assurances	  	 	43	  
	 10.06
	 	Severability	  	 	43	  
	 10.07
	 	Construction	  	 	43	  
	 10.08
	 	Amendment and Waiver	  	 	44	  

  
 ii 

							
	 10.09
	 	Complete Agreement	  	 	44	  
	 10.10
	 	Third-Party Beneficiaries	  	 	44	  
	 10.11
	 	Counterparts; Electronic Delivery	  	 	44	  
	 10.12
	 	Governing Law	  	 	44	  
	 10.13
	 	Jurisdiction; Service of Process	  	 	45	  
	 10.14
	 	Waiver of Jury Trial	  	 	45	  

  
 iii

 List of Exhibits 
 Exhibit A — Consulting Agreement 
 Exhibit B — Headquarters Lease 

Exhibit C — Packaging Facility Lease 

Exhibit D — Escrow Agreement 
 Exhibit E
— Balance Sheet and Working Capital Schedule Rules 
 List of Schedules 

Affiliated Transactions Schedule 
 Authorization
Schedule 
 Capital Stock Schedule 

Contracts Schedule 
 Customers Schedule

 Developments Schedule 
 Employee
Benefits Schedule 
 Employees Schedule 

Environmental Matters Schedule 
 Financial
Statements Schedule 
 Indebtedness Schedule 
 Insurance Schedule 
 Intellectual Property Schedule 

Lease Schedule 
 Litigation Schedule 

Organization and Corporate Power Schedule 

Permitted Liens Schedule 
 Taxes Schedule

 Vendors Schedule 
 Warranty Schedule

 Working Capital Schedule 

  
 iv 

 STOCK PURCHASE AGREEMENT 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of December 29, 2010, is made by and among The Hillman
Group, Inc., a Delaware corporation (the “Purchaser”), Thomas Rowe and Mary Jennifer Rowe (together with Thomas Rowe, the “Sellers”). Capitalized terms used have the meanings set forth in ARTICLE IX
(Definitions). 
 WHEREAS, the Sellers own 100% of the issued and outstanding shares of common stock, no par value per share
(the “Shares”), of Serv-A-Lite Products, Inc., an Illinois corporation (the “Company”); 

WHEREAS, the Sellers desire to sell to the Purchaser, and the Purchaser desires to purchase from the Sellers, all of the Shares owned by
the Sellers on the terms and subject to the conditions set forth herein; 
 WHEREAS, simultaneously with the execution of this
Agreement, the Company and the Sellers have entered into a consulting agreement, a copy of which is attached hereto as Exhibit A (the “Consulting Agreement”), with respect to the Sellers provision of services to the Company
after the date hereof on the terms and subject to the conditions set forth therein; 
 WHEREAS, simultaneously with the
execution of this Agreement, the Company, on the one hand, and the Sellers (the “Headquarters Landlord”), have entered into a lease agreement, a copy of which is attached hereto as Exhibit B (the “Headquarters
Lease”), with respect to the Company’s headquarters located at 3451 Morton Drive, East Moline, Illinois on the terms and subject to the conditions set forth therein; and 

WHEREAS, simultaneously with the execution of this Agreement, the Company and the Sellers (the “Packaging
Facility Landlord”) have entered into a lease agreement, a copy of which is attached hereto as Exhibit C (the “Packaging Facility Lease”), with respect to the packaging facility located at 4307 49th Avenue, Moline, Illinois on the terms and subject to the conditions
set forth therein. 
 NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I

 PURCHASE AND SALE OF SHARES 
 1.01 Purchase and Sale of Shares. Upon the terms and subject to the conditions set forth in this Agreement, the Sellers shall sell, assign, transfer and convey to the Purchaser, free and clear of any
Liens, and the Purchaser shall purchase and acquire from the Sellers, all of the Shares owned by the Sellers in exchange for a cash payment at the Closing equal to the Estimated Purchase Price, which shall be subject to adjustment following the
Closing pursuant to Section 2.04. 
 1.02 Calculation of Estimated Purchase Price and Final Purchase Price.

  
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 (a) For purposes of this Agreement, the term “Estimated Purchase Price”
means (i) $21,355,000.00 (the “Transaction Price”), minus (ii) the amount of the Estimated Indebtedness, plus (iii) the amount, if any, by which the Estimated Net Working Capital exceeds the Target Net
Working Capital, minus (iv) the amount, if any, by which the Estimated Net Working Capital is less than the Target Net Working Capital, minus (v) the amount of the Estimated Transaction Expenses. 

(b) For purposes of this Agreement, the term “Final Purchase Price” means (i) the Transaction Price, minus
(ii) the amount of Indebtedness as finally determined pursuant to Section 2.04 (Purchase Price Adjustments), plus (iii) the amount, if any, by which the Net Working Capital exceeds the Target Net Working Capital as
finally determined pursuant to Section 2.04 (Purchase Price Adjustments), minus (iv) the amount, if any, by which the Net Working Capital is less than the Target Net Working Capital as finally determined pursuant to
Section 2.04 (Purchase Price Adjustments), minus (v) the amount of Transaction Expenses as finally determined pursuant to Section 2.04 (Purchase Price Adjustments). 

ARTICLE II 

THE CLOSING; PURCHASE PRICE ADJUSTMENT 

2.01 The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Califf & Harper, P.C., 506 15th Street, Suite 600, Moline, Illinois 61265, at 10:00 a.m. local time on the date hereof, or at such other time or place as the Purchaser and the Sellers mutually agree. The date and time of the Closing
are referred to herein as the “Closing Date.” 
 2.02 Deliveries. At the Closing: 

(a) the Purchaser, the Sellers and the Escrow Agent shall execute and deliver the Escrow Agreement; 

(b) the Company and the Headquarters Landlord shall execute and deliver the Headquarters Lease; 

(c) the Company and the Packaging Facility Landlord shall execute and deliver the Packaging Facility Lease; and 

(d) the Sellers shall deliver to the Purchaser each of the following: 

(i) all minute books, ownership records, stock books, ledgers and registers, and corporate seals, as applicable, relating to the
organization, ownership and maintenance of the Company that are not otherwise located at the facilities of the Company; 
 (ii)
certified copies of the Articles of Incorporation and bylaws of the Company; 

  
 2 

 (iii) a certificate or certificates, in compliance with Section 1445 of the Code and
the Treasury Regulations promulgated thereunder, certifying that the transactions contemplated hereby are exempt from withholding under Section 1445 of the Code; 
 (iv) stock certificates representing all of the issued and outstanding Shares, in each case duly endorsed for transfer or accompanied by duly executed stock powers; and 

(v) copies of written resignation letters from each of the members of the board of directors and each officer of the Company specified by
the Purchaser at least three (3) Business Days prior to the Closing Date, effective as of the Closing. 
 2.03 The Closing
Transactions. Subject to the terms and conditions set forth in this Agreement, the parties hereto shall consummate the following transactions (the “Closing Transactions”) on the Closing Date: 

(a) the Purchaser shall deposit $250,000.00 (the “Purchase Price Adjustment Escrow Amount”) into an escrow account
(including any interest or earnings thereon, the “Purchase Price Adjustment Escrow Account”) designated and established pursuant to the terms and conditions of an escrow agreement (the “Escrow Agreement”)

 (b) by and among the Purchaser, the Sellers and Wells Fargo Bank, National Association, as escrow agent (the “Escrow
Agent”), a copy of which is attached hereto as Exhibit D; 
 (c) the Purchaser shall deposit $1,250,000.00 (the
“Indemnity Escrow Amount,” and together with the Purchase Price Adjustment Escrow Amount, the “Escrow Amount”) into an escrow account (including any interest or earnings thereon, the “Indemnity Escrow
Account”) designated and established pursuant to the terms and conditions of the Escrow Agreement; 
 (d) in accordance
with Section 1.01 (Purchase and Sale of Shares), the Purchaser shall deliver to the Sellers the Estimated Purchase Price minus the Escrow Amount (as determined in accordance with Section 1.02(a)), by wire transfer of
immediately available funds to a bank account designated in writing by the Sellers at least two Business Days before the Closing Date; 
 (e) the Purchaser shall repay, or cause to be repaid, on behalf of the Company, the Indebtedness listed on the Indebtedness Schedule, by wire transfer of immediately available funds to the
account(s) designated by the holders of such Indebtedness; provided, that the Sellers shall have delivered, or the Sellers shall have caused the Company to deliver, to the Purchaser prior to the Closing Date appropriate payoff letters from
the holders of Indebtedness listed on the Indebtedness Schedule and shall have made arrangements reasonably satisfactory to the Purchaser for such holders of Indebtedness listed on the Indebtedness Schedule to deliver all related Lien
releases to the Purchaser at the Closing; and 
 (f) simultaneously with the Closing, the Purchaser shall pay, or cause to be
paid, on behalf of the Sellers or the Company (as applicable), the Estimated Transaction Expenses by wire transfer of immediately available funds as directed by the Sellers. 

  
 3 

 2.04 Purchase Price Adjustments. 

(a) At least five (5) days prior to the Closing Date, the Sellers shall have caused the Chief Financial Officer of the Company to
prepare and deliver to the Purchaser his good faith calculation of the estimate of the Estimated Purchase Price, including (i) Indebtedness as of the close of business on the Closing Date (the “Estimated Indebtedness”),
(ii) Net Working Capital (the “Estimated Net Working Capital”), and (iii) Transaction Expenses as of the close of business on the Closing Date (the “Estimated Transaction Expenses”), each being prepared in
accordance with the Balance Sheet and Working Capital Schedule Rules and being in form and substance reasonably satisfactory to Purchaser. 
 (b) As promptly as practicable, but in no event later than one hundred and twenty (120) days after the Closing Date, the Purchaser shall in good faith prepare and deliver to the Sellers a certificate
setting forth the Purchaser’s calculation of the Final Purchase Price including Indebtedness as of the close of business on the Closing Date, Net Working Capital and Transaction Expenses as of the close of business on the Closing Date (the
“Preliminary Statement”). The Preliminary Statement shall be prepared in accordance with the Balance Sheet and Working Capital Rules. 
 (c) During the 30-calendar day period following receipt of the Preliminary Statement, the Purchaser shall permit, and shall cause the Company to permit, the Sellers and their representatives (subject to
the execution of a customary confidentiality and indemnification agreement) to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with the preparation of the Preliminary Statement
and provide the Sellers with copies thereof (as reasonably requested by the Sellers). The Preliminary Statement shall become final and binding upon the parties hereto on the thirtieth (30th) calendar day following the date on which the
Preliminary Statement is delivered to the Sellers, unless the Sellers, within thirty (30) days after the Sellers’ receipt of the Preliminary Statement, notifies the Purchaser in writing of its objections thereto (an “Objection
Notice”). Any Objection Notice shall (i) specify in reasonable detail the nature of any disagreement so asserted and (ii) only include good faith disagreements based on calculations of Indebtedness and Net Working Capital not
being calculated in accordance with the Balance Sheet and Working Capital Schedule Rules and whether the expenses included as Transaction Expenses constitute Transactions Expenses. If an Objection Notice is received by the Company in a timely
manner, then the Preliminary Statement (as revised in accordance with this sentence) shall become final and binding upon the parties hereto on the earlier of (i) the date on which the Company and the Sellers resolve in writing any differences
they have with respect to the matters specified in the Objection Notice and (ii) the date on which any disputed matters are finally resolved in writing by the Valuation Firm (as defined below) pursuant to subsection (d) below. If an
Objection Notice is delivered to the Purchaser, then the Purchaser and the Sellers shall negotiate in good faith to resolve any such objections. In the event that the Purchaser and the Sellers are unable to resolve all such objections within fifteen
(15) days after the Purchaser’s receipt of such Objection Notice, the Purchaser and the Sellers shall submit such remaining disagreements to the Chicago, Illinois offices of PricewaterhouseCoopers LLP (the “Valuation
Firm”). 
 (d) The Purchaser and the Sellers shall use their respective reasonable efforts to retain the Valuation Firm
no later than five (5) Business Days following the expiration of such 

  
 4 

 
15-day period and shall cause the Valuation Firm to resolve all remaining disagreements with respect to the Preliminary Statement as soon as practicable, but in any event shall direct the
Valuation Firm to render a determination within sixty (60) days after its retention. The Valuation Firm shall consider only those items and amounts which are identified in the Objection Notice as being items and amounts to which the Purchaser
and the Sellers have been unable to agree. In resolving any disputed item, the Valuation Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item
claimed by either party. The Valuation Firm’s determination shall be based solely on written materials submitted by the Purchaser and the Sellers (i.e., not on independent review) and on the applicable provisions and definitions included
in this Agreement. The determination of the Valuation Firm shall be conclusive and binding upon the parties hereto. Judgment may be entered upon the determination of the Valuation Firm in any court having jurisdiction over the party against which
such determination is to be enforced. 
 (e) The costs and expenses of the Valuation Firm shall be borne by the Purchaser, on the
one hand, and the Sellers, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party such that the prevailing party pays the lesser
proportion of such costs and expenses. For example, if the Purchaser claims the appropriate adjustments are $1,000 less than the amount determined by the Sellers, and the Sellers contest only $500 of the amount claimed by the Purchaser, and if the
Valuation Firm ultimately resolves the dispute by awarding the Purchaser $300 of the $500 contested, then the costs and expenses of the Valuation Firm will be allocated 60% (i.e., 300 ÷ 500) to the Sellers and 40% (i.e., 200
÷ 500) to the Purchaser. 
 (f) If, after taking into account the adjustments contemplated by Sections 2.04(b)-(e)
(Purchase Price Adjustments) above, the Final Purchase Price is greater than the Estimated Purchase Price (such excess, the “Company Adjustment Amount”), then (i) the Purchaser and the Sellers shall promptly (but in any
event within five (5) Business Days) cause the Escrow Agent to deliver to the Sellers by wire transfer of immediately available funds the Purchase Price Adjustment Escrow Account and (ii) the Purchaser shall promptly (but in any event
within five (5) Business Days) deliver to the Sellers by wire transfer of immediately available funds an amount equal to the Company Adjustment Amount. 
 (g) If, after taking into account the adjustments contemplated by Sections 2.04(b)-(e) (Purchase Price Adjustments) above, the Final Purchase Price is less than the Estimated Purchase Price
(such shortfall, the “Purchaser Adjustment Amount”), then the Purchaser and the Sellers shall promptly (but in any event within five (5) Business Days) cause the Escrow Agent (i) to deliver to the Purchaser to the extent
of the Purchase Price Adjustment Escrow Account the Purchaser Adjustment Amount; provided that if the Purchase Price Adjustment Escrow Amount is insufficient to pay the Purchaser Adjustment Amount in full, the Sellers shall be personally
liable for such shortfall, and (ii) to deliver to the Sellers the amount, if any, remaining in the Purchase Price Adjustment Escrow Account following the payment set forth in the immediately preceding clause (i). 

(h) All payments (the “Purchase Price Adjustments”) made pursuant to this Section 2.04 shall be treated by
all parties for Tax purposes as adjustments to the transaction price. 

  
 5 

 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF THE SELLERS 
 The Sellers, jointly and
severally, represent and warrant to the Purchaser as of the date hereof that: 
 3.01 Authorization; No Breach. The Sellers have
the legal capacity to execute and deliver this Agreement and the other Transaction Documents to which he or she is a party and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Sellers of this
Agreement and the other Transaction Documents to which he or she is a party and the consummation of the transactions contemplated hereby and thereby do not conflict with or result in any breach of, constitute a default under, result in a violation
of, result in the creation of any Lien upon any assets of the Sellers under, or require any authorization, consent, approval, exemption or other action by or notice to any court or other governmental body under, any indenture, mortgage, lease, loan
agreement or other agreement or instrument to which the Sellers are bound, or any Laws, statute, rule or regulation or order, judgment or decree to which the Sellers are subject, except as would not reasonably be expected to, individually or in the
aggregate, be material to the Sellers. This Agreement and the other Transaction Documents to which the Sellers are a party have been duly executed and delivered by the Sellers and assuming due authorization, execution and delivery by the other
parties of this Agreement and such other Transaction Documents, this Agreement and such other Transaction Documents constitute a legally valid and binding obligation of the Sellers, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies. 

3.02 Governmental Consents, etc. The execution and delivery by the Sellers of this Agreement do not, and the performance of his or her
obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except for applicable requirements, if any, under federal or state securities or “blue
sky” Laws. 
 3.03 Title to Shares. The Sellers own 100% of the issued and outstanding Shares and has good and valid title
to such Shares free and clear of all Liens. Upon delivery to the Purchaser at the Closing of stock certificates representing such Shares, good and valid title to such Shares will pass to the Purchaser, free and clear of any Liens. Such Shares are
not subject to any contract, agreement, arrangement, note, bond, mortgage, leases, sublease or other agreement restricting or otherwise relating to the voting, distribution rights or disposition of such Shares. 

3.04 Litigation. There are no Actions, suits or proceedings pending or, to the Sellers’ knowledge, overtly threatened against or
affecting the Sellers at law or in equity, or before or by any Governmental Entity, which would reasonably be expected, individually or in the aggregate, to materially impair the Sellers’ performance under this Agreement or the consummation of
the transactions contemplated hereby. The Sellers are not subject to any outstanding judgment, order or decree of any Governmental Entity. 

  
 6 

 3.05 Brokerage. There are no claims for brokerage commissions, finders’ fees or similar
compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Sellers. 
 3.06 No Other Representations and Warranties. Except as expressly set forth in this ARTICLE III, the Sellers make no representation or warranty, express or implied, at law or in equity, in respect
of the Sellers or any of his or her Affiliates (other than the Company) or any of their respective assets, liabilities or operations, on which the Purchaser may rely, and any such other representations or warranties are hereby expressly disclaimed.

 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES AS TO THE COMPANY 
 The Sellers, jointly and
severally, represent and warrant to the Purchaser that the statements in this ARTICLE IV are correct and complete as of the date hereof, except as set forth in the schedules accompanying this Agreement (each, a “Schedule”
and, collectively, the “Disclosure Schedules”). The Disclosure Schedules have been arranged for purposes of convenience in separately titled sections corresponding to the sections of this ARTICLE IV; however, each section of
the Disclosure Schedules shall be deemed to incorporate by reference all information disclosed with respect to any other section of the Disclosure Schedules to which the relevance of such fact or item would be readily apparent on its face to a third
party without further investigation, or knowledge, of other facts, circumstances, events, changes or conditions, or the need to examine any underlying documentation. Except as set forth in this ARTICLE IV, the inclusion of any information in
any Schedule attached hereto shall not be deemed to be an admission or acknowledgment by the Company or the Sellers, in and of itself, that such information is material to or outside the ordinary course of the business of the Company. Capitalized
terms used in the Disclosure Schedules and not otherwise defined therein have the meanings given to them in this Agreement. 

4.01 Organization and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the Laws
of the State of Illinois, and the Company has all requisite corporate power and authority and all governmental approvals, authorizations, licenses and Permits necessary to own, lease and operate its properties and to carry on its businesses as now
conducted, except where the failure to hold such authorizations, licenses and Permits has not been, and would not reasonably be expected to, individually or in the aggregate, be material to the Company. Except as set forth in the Organization and
Corporate Power Schedule, the Company is qualified to do business and is in good standing in every jurisdiction in which its ownership of property or the conduct of business as now conducted requires it to qualify, except where the failure to be
so qualified has not had and would not have, individually or in the aggregate, a Material Adverse Effect. 
 4.02 No
Subsidiaries. The Company has no Subsidiaries or any direct or indirect equity ownership in any Person and does not have any right or obligation to acquire, directly or indirectly, any outstanding equity interest in any Person. 

  
 7 

 4.03 Authorization; No Breach. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action, and no other corporate proceedings on its part are necessary to authorize the
execution, delivery or performance of this Agreement and the other Transaction Documents. Except as set forth on the Authorization Schedule, the execution, delivery and performance of the Transaction Documents by the Company and the
consummation of the transactions contemplated hereby and thereby do not conflict with or result in any breach of, constitute a default under, result in a violation of, result in the creation of any Lien upon any assets of the Company under, or
require any authorization, consent, approval, exemption or other action by or notice to any court or other governmental body under, the provisions of the Company’s certificates or articles of incorporation or bylaws, as applicable, or any
indenture, mortgage, lease, loan agreement or other agreement or instrument to which the Company is bound, or any Laws, statute, rule or regulation or order, judgment or decree to which the Company is subject, except as would not reasonably be
expected to, individually or in the aggregate, be material to the Company. The Transaction Documents to which the Company is a party have been duly executed and delivered by the Company and assuming due authorization, execution and delivery by the
other parties of the Transaction Documents, and such Transaction Documents constitute a legally valid and binding obligation of the Company, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy Laws, other
similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies. 
 4.04 Capital Stock. 
 (a) The authorized number of Shares is ten thousand and there
are no other authorized shares of capital stock or other equity interests of the Company. As of the date hereof, three thousand Shares are issued and outstanding and are owned of record by the Sellers. All of the outstanding shares of capital stock
or other equity interests of the Company (i) are duly authorized, validly issued, fully paid and non-assessable, (ii) are free and clear of any Lien and (iii) were issued in compliance with applicable state and federal securities Laws
or exemptions therefrom and not in violation of any preemptive or similar rights. Except as set forth on the Capital Stock Schedule, (i) no shares of capital stock or other equity interests of the Company are reserved for issuance or are
held as treasury shares; (ii) the Company does not have any outstanding options, warrants, rights, calls, conversion rights, rights of exchange, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable
securities or other plans or commitments, contingent or otherwise, relating to the capital stock or other equity interests of the Company that would obligate the Company to (A) issue, transfer or sell any shares of capital stock or other equity
interests of the Company or securities convertible into or exchangeable for such shares or equity interests, (B) redeem or otherwise acquire any such shares or capital stock or other equity interests or (C) provide a material amount of
funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Person; (iii) there are no outstanding agreements of the Company, the Sellers, or any other Person to purchase, redeem or otherwise
acquire any outstanding shares of capital stock or other equity interests of the Company, or securities or obligations of any kind convertible into any shares of the capital stock or other equity interests of the Company; (iv) there are no
outstanding or authorized equity equivalents, stock appreciation, phantom stock, stock plans or similar rights 

  
 8 

 
with respect to the Company; (v) there are no voting trusts, proxies, registration rights agreements or any other agreements or understanding relating to the voting, disposition or dividends
with respect to the equity securities or equity interests of the Company, or agreements among the Sellers and any other Person relating to the management of the Company or any equity interest of the Company; (vi) the Company does not have
outstanding any bonds, debentures, notes or other obligations the holders of which have a right to vote (or convertible into or exercisable for securities having the right to vote); and (vii) there are no declared or accrued unpaid dividends
with respect to any capital stock of the Company. 
 4.05 Financial Statements; Indebtedness; Internal Controls. 

(a) The Financial Statements Schedule consists of true, correct and complete copies of: (i) the Company’s unaudited
consolidated balance sheet as of September 30, 2010 (the “Latest Balance Sheet”) and the related statement of income for the nine-month period then ended and (ii) the Company’s reviewed consolidated balance sheet and
statements of income and cash flows for the fiscal years ended December 31, 2008 and December 31, 2009 (the financial statements referred to in clause (ii) are referred to herein, as the “Reviewed Financial
Statements” and, together with the financial statements referred to in clause (i), the “Financial Statements”). Except as set forth on Financial Statements Schedule, the Financial Statements have been prepared in accordance
with the books and records of the Company and GAAP applied on a consistent basis throughout the periods included and present fairly in all material respects the consolidated financial condition and results of operations of the Company as of the
times and for the periods referred to therein. 
 (b) Except as set forth in the Indebtedness Schedule, the Company does
not have any outstanding Indebtedness or any liability or obligation of any nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and
whether due or to become due) except for (i) liabilities reflected on the Latest Balance Sheet, (ii) liabilities incurred in the ordinary course of business consistent with past practice since the date of the Latest Balance Sheet and
which, individually or in the aggregate, are not material to the Company (none of which is a liability for breach of contract, breach of warranty, tort or infringement by the Company) and (iii) liabilities disclosed on any Schedule to this
Agreement (none of which is a liability for breach of contract, breach of warranty, tort or infringement by the Company). Except as set forth in the Financial Statements, the Company does not maintain any “off-balance-sheet arrangements”
within the meaning of Item 303 of Regulation S-K of the Securities and Exchange Commission. 
 4.06 Absence of Certain
Developments. Since the date of the Latest Balance Sheet, there has not been any effect, event, fact, circumstance, condition, development or change that, individually or in the aggregate, has had a Material Adverse Effect. Except as set forth on
the Developments Schedule, since the date of the Latest Balance Sheet, (i) the business of the Company has been conducted only in the ordinary and usual course and in a manner consistent with past practices and (ii) the Company has
not taken any of the following actions: 
 (a) issued, sold, pledged, encumbered or delivered any shares of capital stock (or
options or other securities convertible into or exchangeable or exercisable for, with or without additional consideration, such capital stock); 

  
 9 

 (b) split, combined or reclassified any shares of its capital stock or declared, set aside
or paid any dividends or made any other distributions (whether in cash, stock or other property) in respect of such shares; 

(c) amended the certificate of incorporation or bylaws (or equivalent governing documents) of the Company; 

(d) made any redemption, purchased or otherwise acquired for any consideration any outstanding shares of its capital stock or securities
carrying the right to acquire or which are convertible into or exchangeable or exercisable for, with or without additional consideration, such capital stock; 
 (e) incurred, assumed, guaranteed, prepaid or otherwise became liable for any Indebtedness (directly, contingently or otherwise), except borrowings permitted under the Company’s existing lines of
credit set forth on the Indebtedness Schedule; 
 (f) made any loans or advances of borrowed money or capital
contributions to, or equity investments in, any other Person, other than the extension of trade credit to customers and suppliers in the ordinary course of business consistent with past practice; 

(g) created any Subsidiary or made any acquisition or disposition of stock; 

(h) bought, sold, leased, assigned, transferred, or otherwise acquired or disposed of, pledged or encumbered property or assets or equity
interests of any Person, business or division, except acquisitions or dispositions of inventory and equipment in the ordinary course of business consistent with past practice; 
 (i) entered into or adopted a plan or agreement of recapitalization, reorganization, merger or consolidation, or adopted a plan or complete or partial liquidation or dissolution; 

(j) (A) created, granted, assumed or suffered to be incurred any Lien (other than Permitted Liens) of any kind on any of its properties or
assets or (B) made any commitment for any capital expenditure to be made on or following the date hereof other than capital expenditures that are not in excess of those forecasted in the Company’s current operating budget previously
provided to the Purchaser or failed to make any capital expenditure in the ordinary course of business or within the time period contemplated by such budget; 
 (k) amended, renewed or terminated, or agreed to a release, waiver, modification or termination of, any Company Contract (other than terminations of Company Contracts as a result of the expiration of the
term of such Company Contract); 
 (l) except for the sale of inventory in the ordinary course of business, (A) sold,
assigned, transferred, leased or otherwise disposed of, or agreed to sell, assign, transfer, lease or otherwise dispose of, any material assets or (B) acquired, sold, assigned, transferred, leased or otherwise disposed of any real property or
any interest in real property; 

  
 10 

 (m) leased, licensed, or otherwise granted to any other Person or parties the right to use
or occupy any portion of the Leased Real Property other than in the ordinary course of business or as a result of the expiration of such leases; 
 (n) amended, renewed, or terminated any Real Property Lease; 
 (o) except as
otherwise required by Law or an existing Plan, taken any action with respect to the grant of any severance or termination pay that will become due and payable on or after the Closing Date that is not a Transaction Expense; (ii) except in the
ordinary course of business consistent with past practice, adopted, entered into, amended or terminated any Plan or increased the compensation or fringe benefits of any present or former director, officer or employee of the Company; 

(p) made any change in the key management structure of the Company, including the hiring or termination of any employee at the senior
management level or above, or entered into, amended, adopted, terminated, increased the payments to or benefits under, or supplemented any Plan or other employment, severance, retirement, employee benefits, profit-sharing, bonus, deferred
compensation, savings, insurance, pension, or other agreement or plan, or made any change in the compensation, severance or termination benefits payable or to become payable to any employees of the Company (other than planned annual increases in the
rates of compensation in the ordinary course of business consistent with past practice); 
 (q) amended, renewed or terminated,
or agreed to a release, waiver, modification or termination of, an agreement (other than terminations as a result of the expiration of such agreement), or entered into a new transaction or agreement, with an Affiliate; 

(r) cancelled, reduced or allowed to lapse any insurance covering the Company; 

(s) changed any of its Tax or accounting principles, methods or practices other than as required by GAAP; 

(t) cancelled, waived or settled any claims or rights in excess of $50,000.00 related to the Company or settled or compromised any Action
involving potential Losses (as determined by the Company in good faith) in excess of $50,000.00; 
 (u) taken any action which
would materially interfere with the consummation of the transactions contemplated by this Agreement or materially delay the consummation of such transaction; or 
 (v) committed, authorized or agreed to take any of the foregoing actions. 
 4.07
Title to Properties. 
 (a) The Company has good and marketable title to, or hold pursuant to valid and enforceable leasehold
interests in, (i) all of their respective personal property shown to be owned or leased by it on the Latest Balance Sheet, and (ii) upon the entering into of the Headquarters Lease and the Packaging Facility Lease, all Leased Real
Property, each of the foregoing (i) and (ii) free and clear of all Liens, except for Permitted Liens. 

  
 11 

 (b) Except as set forth on the Lease Schedule, the Leased Real Property consists of
the real property described in each of the Headquarters Lease and the Packaging Facility Lease and no other real property. The Leased Real Property is owned in fee by the Sellers, subject only to Permitted Liens. 

(c) The Leased Real Property constitutes all of the real property utilized by the Company in the operation of its business and the Company
(i) is not a party to any agreement or option to purchase any real property or interest therein, or (ii) does not own in fee any real property. 
 (d) The Company has not entered into any lease, sublease, license, concessions or other agreement granting to any other Person or parties the right to use or occupy any portion of the Leased Real
Property; and 
 (e) The Company has not received any notice of any and to the knowledge of the Company, there are no existing,
pending, threatened or contemplated condemnation, eminent domain or similar proceeding affecting the Leased Real Property or any portion thereof or of any sale or other disposition of the Leased Real Property or any portion thereof in lieu of
condemnation. 
 (f) On the date hereof, all leases covering the Leased Real Property in effect prior to Closing shall be
terminated and be of no further force and effect except for the lease set forth on the Lease Schedule (which is a month to month lease). The Sellers agree that the Company shall have no further liabilities or obligations under such leases
other than the obligation to pay the 2010 real estate taxes payable in 2011. An estimate of the 2010 real estate taxes based on the 2009 real estate taxes has been accrued as a current liability as part of the Net Working Capital. 

4.08 Tax Matters. Except as set forth on the Taxes Schedule: 

(a) All Tax Returns required to be filed by or with respect to the Company have been properly prepared and timely filed, and all such Tax
Returns (including information provided therewith or with respect thereto) are true, complete and correct in all material respects. The Company has fully and timely paid all Taxes owed by them (whether or not shown on any Tax Return), and the
Reviewed Financial Statements reflect an adequate reserve (excluding any reserve for deferred Taxes) for all Taxes payable by the Company for all taxable periods and portions thereof accrued through the date of the Reviewed Financial Statements and
since the date of the Reviewed Financial Statements, the Company has not incurred any Tax liabilities other than Taxes relating to ordinary course operations conducted by the Company. The Company has withheld from their respective employees,
independent contractors, stockholders, creditors, and third parties and have fully and timely paid to the appropriate Governmental Entity proper and accurate amounts in all respects for all periods ending on or before the Closing Date in compliance
with all Tax withholding and remitting provisions of applicable Laws and have complied in all respects with all Tax information reporting provisions of all applicable Laws. 
 (b) No audit or other proceeding by any Governmental Entity is pending or threatened in writing with respect to any Taxes due from or with respect to the Company, no

  
 12 

 
Governmental Entity has given notice of any intention to assert any deficiency or claim for additional Taxes against the Company, and no claim has been made by any Governmental Entity in a
jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. All deficiencies for Taxes asserted or assessed against the Company have been fully and timely paid, settled or properly
reflected in the Reviewed Financial Statements. 
 (c) There are no outstanding agreements extending or waiving the statutory
period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, Taxes due from the Company for any taxable period and no request for any such waiver or extension is currently pending. 

(d) The Company has given or otherwise made available to the Purchaser or its representative true, correct and complete copies of all
material Tax Returns, examination reports and statements of deficiencies for taxable periods, or transactions consummated, for which the applicable statutory periods of limitations have not expired. 

(e) The Company has not constituted a “distributing corporation” or a “controlled corporation” (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution that could otherwise
constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the acquisition of the Shares of the Sellers. The Company has not distributed stock of
another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 361 of the Code. 

(f) To Company’s knowledge, the Company has not (i) participated in a reportable transaction within the meaning of Treas. Reg.
§1.6011-4 (or any similar provision of state, local or foreign Tax law) or (B) taken any reporting position on a Tax Return, which reporting position (i) if not sustained would be reasonably likely, absent disclosure, to give rise to
a penalty for substantial understatement of federal income Tax under Section 6662 of the Code (or any similar provision of state, local, or foreign Tax law), and (ii) has not adequately been disclosed on such Tax Return in accordance with
Section 6662(d)(2)(B) of the Code (or any similar provision of state, local, or foreign Tax law). 
 (g) There are no Liens
for Taxes upon the assets or properties of the Company, except for statutory Liens for current Taxes not yet due. 
 (h) The
Company is not a party to any agreement relating to the sharing, allocation or indemnification of Taxes, or any similar agreement, contract or arrangement, (collectively, “Tax Sharing Agreements”) or has any liability for Taxes of
any Person under Treasury Regulation § 1.1502-6, Treasury Regulation § 1.1502-78 or similar provision of state, local or foreign Tax law, as a transferee or successor, by contract, or otherwise. 

(i) The Company will not be required to include in a taxable period ending after the Closing Date taxable income attributable to income
that accrued in a taxable period prior to the Closing Date but was not recognized for Tax purposes in such prior taxable period (or to 

  
 13 

 
exclude from the determination of taxable income in a taxable period ending after the Closing Date any deduction the recognition of which was accelerated from such taxable period to a taxable
period prior to the Closing Date) as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, Section 481 of the Code or
Section 108(i) of the Code or comparable provisions of state, local or foreign Tax law, or for any other reason. 
 (j) Any
adjustment of Taxes of the Company made by the IRS, which adjustment is required to be reported to the appropriate state, local, or foreign Governmental Entities, has been so reported. 

(k) Within the last five (5) years, and to the knowledge of the Company the Company has not executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any similar provision of state, local or foreign Tax law, and the Company is not subject to any private letter ruling of the IRS or comparable ruling of any other Governmental Entity.

 (l) The Company has been a validly electing S corporation (an “S Corporation”) within the meaning of
Sections 1361 and 1362 of the Code (and under any analogous state or local Tax law) at all times since November 1, 1987 and will be an S Corporation through the taxable year that ends as a result of the Closing. 

(m) The Company will not be obligated to pay any Tax under Section 1374 of the Code in connection with the transactions contemplated
by this Agreement (including with respect to the Section 338(h)(10) Election). 
 4.09 Contracts and Commitments

 (a) The Contracts Schedule sets forth a correct and complete list of the following Contracts (the Contracts within any
of the following categories whether or not set forth on such list, the “Company Contracts”) (other than any Contract set forth on the Employee Benefits Schedule and Insurance Schedule, each of which are not Company
Contracts): 
 (i) collective bargaining agreement or contract with any labor union; 

(ii) all bonds, notes, debentures, loan or credit agreements or loan commitments, indentures, mortgages, guarantees, pledges or other
Contracts evidencing or governing Indebtedness or placing a Lien on any assets; 
 (iii) all exchange traded or over-the-counter
swap, forward, future, option, cap, floor or collar financial Contracts, or any other interest rate or foreign currency protection Contract; 
 (iv) all limited liability company agreements, partnership, joint venture or other similar agreements or arrangements; 
 (v) all leases or other agreements under which the Company is lessee of, or holds or operates any personal property owned by any other party, for which the annual rental exceeds $50,000.00;

  

  
 14 

 (vi) all leases or other agreements under which the Company is lessor of or permits any
third party to hold or operate any property, real or personal, for which the annual rental payment exceeds $50,000.00; 
 (vii)
all Contracts or group of related Contracts with the same party for the purchase of products or services, under which the undelivered balance of such products and services has a selling price in excess of $50,000.00; 

(viii) all Contracts or group of related Contracts with the same party for the sale of products or services under which the
undelivered balance of such products or services has a sales price in excess of $50,000.00; 
 (ix) all Contracts that purport
to limit or restrict the Company or its Affiliates from (A) engaging in any line of business, (B) competing with any Person or operating in any location or (c) soliciting or hiring any employee or consultant; 

(x) all Contracts that are terminable upon, or prohibit assignment upon, a change of control or ownership of the Company; 

(xi) all Contracts with Governmental Entities; 
 (xii) all Contracts for capital expenditures requiring the payment by the Company of an amount in excess of $25,000.00 individually or $50,000.00 in the aggregate; 

(xiii) all Contracts granting to any Person (other than the Company) an option or a first refusal, first-offer or similar preferential
right to purchase or acquire any material assets of the Company; 
 (xiv) all Contracts that contain most favored nation or
other similar provisions with any third party requiring that a third party be offered terms or concessions at least as favorable to those offered to one or more other Persons; 
 (xv) all Contracts entered into within the preceding five (5) years, or not yet consummated, involving the sale or purchase of substantially all of the assets or capital stock of any Person, or a
merger, consolidation, business combination or similar extraordinary transaction; 
 (xvi) any acquisition Contract pursuant to
which the Company has continuing indemnification, “earn-out” or other contingent payment obligations; 
 (xvii) all
Contracts under which the Company is the licensor or licensee of material Intellectual Property rights; 
 (xviii) all Contracts
with Material Customers and Material Vendors (other than purchase orders); 
 (xix) all Contracts involving any resolution of
settlement of any actual or threatened Action or other dispute with a value of greater than $50,000.00; 

  
 15 

 (xx) all Contracts (other than those described in subsections (i) through
(xix) of this Section 4.09(a)), in each case, involving annual consideration payable to or from the Company of an amount reasonably likely to exceed $50,000.00; and 

(xxi) any Contract or commitment to enter into any one of the foregoing. 

(b) When requested by Purchaser, correct and complete copies of all Company Contracts, including all amendments, modifications and
supplements thereof, will be made available to the Purchaser. Each Company Contract is valid, binding and enforceable in accordance with its terms with respect to the Company, and to the knowledge of the Company, each other party to such Company
Contracts. Except as set forth on the Contracts Schedule, (i) there is no existing default or breach of the Company, under any Company Contract, and to the knowledge of the Company, there is no default by any other party to any Company
Contract and (ii) no counterparty to any Company Contract has threatened, or to the knowledge of the Company, intends not to fully perform its obligations under any Company Contract or to terminate or seek to materially modify any Company
Contract. 
 4.10 Customers and Suppliers. 
 (a) The Customers Schedule sets forth a true and complete list, by dollar volume paid for the twelve (12) months ended June 30, 2010, of the twenty (20) largest customers of the
Company (the “Material Customers”). Since July 1, 2010, no Material Customer (i) has threatened to cancel or otherwise terminate, or to the knowledge of the Company, intends to cancel or otherwise terminate, the
relationship of such Person with the Company or (ii) has decreased materially or threatened to decrease or limit materially or, to the knowledge of the Company, intends to modify materially its relationship with the Company or intends to
decrease or limit materially, its usage or purchase of the services or products of the Company. 
 (b) The Vendors
Schedule sets forth a true and complete list, by dollar volume paid for the twelve (12) months ended June 30, 2010, of the ten (10) largest vendors to the Company (the “Material Vendors”). Since July 1, 2010,
no Material Vendor (i) has threatened to cancel or otherwise terminate, or to the knowledge of the Company, intends to cancel or otherwise terminate, the relationship of such Person with the Company or (ii) has decreased materially or
threatened to decrease or limit materially or, to the knowledge of the Company, intends to modify materially its relationship with the Company or intends to decrease or limit materially, its provision of services or products to the Company.

 4.11 Intellectual Property. All of the registered and material unregistered Intellectual Property owned by the Company
(collectively, “Company Intellectual Property”) are set forth on the Intellectual Property Schedule. All of the registrations, issuances and applications set forth on the Intellectual Property Schedule are valid, in
full force and effect and have not expired or been cancelled, abandoned or otherwise terminated, and payment of all renewal and maintenance fees and expenses in respect thereof, and all filings related thereto, have been duly made. The Company owns
and possesses all right, title and interest in and to the Company Intellectual Property free and clear of all Liens. Except as set forth on the Intellectual Property Schedule: (i) the Company owns all right, title and interest in and to,
or have the right to use, the material Intellectual Property used in the conduct of the Company’s businesses as 

  
 16 

 
presently conducted; (ii) the Company has not received any written notices of, and no claim or Action is pending that allege, any material infringement or misappropriation from any third
party within the past thirty-six (36) months with respect to Intellectual Property; (iii) the Company is not currently infringing or misappropriating the Intellectual Property of any other Person in any material respect; and (iv) to
the knowledge of the Company, no third party is infringing or misappropriating the Company Intellectual Property in any material respect. To the Company’s knowledge, all software material to the business of the Company (i) performs in
material conformance with its documentation, (ii) is free from any material software defect, and (iii) does not contain any virus, software routine or hardware component designed to permit unauthorized access or to disable or otherwise
harm any computer, systems or software, or any software routine designed to disable a computer program automatically with the passage of time or under the positive control of a Person other than an authorized licensee or owner of the software. The
representations and warranties set forth in this Section 4.11 and, with respect to Intellectual Property licenses in Section 4.09(a)(xvii) (Contracts and Commitments) are the only representations and warranties being made as
to the Company in this Agreement with respect to Intellectual Property, including with respect to infringement, misappropriation or other violation of any Intellectual Property of any Person. 

4.12 Litigation. The Litigation Schedule sets forth a correct and complete list of (a) all Actions pending or, to the
knowledge of the Company, threatened against the Company, any of its property, or any of its directors and officers in their capacity as such and (b) all judgments, decrees, injunctions, rules or orders of any court or arbitration panel to
which the Company is subject. 
 4.13 Product Warranties. Except as set forth on the Warranty Schedule, there are no
claims outstanding against the Company in excess of $25,000.00 individually or $50,000.00 in the aggregate to return products by reason of alleged overshipments, early or late shipments, defective delivery, defective merchandise or otherwise, and
there is no Action pending, or to the Company’s knowledge threatened, against the Company under any product warranty, nor, to the Company’s knowledge, is there any basis upon which any claim could validly be made. The Warranty
Schedule lists all product warranty and product liability claims in excess of $25,000.00 that have been asserted against the Company within the preceding five (5) years, indicating for each claim whether it has been resolved or remains
outstanding and, if resolved, the manner and cost of resolution. 
 4.14 Governmental Consents, etc. The execution and delivery
by the Company of this Agreement do not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity other than notification to the
Internal Revenue Service of the company’s termination of S Corporation status. 
 4.15 Employee Benefit Plans. 

(a) Section (a) of the Employee Benefits Schedule sets forth a true, complete and correct list of each “employee benefit
plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and each other employee benefit plan, program, agreement or arrangement, whether or not subject
to ERISA, 

  
 17 

 
and whether written or oral, formal or informal, including each pension, profit-sharing, savings, retirement, employment, consulting, severance pay, termination, executive compensation, incentive
compensation, deferred compensation, bonus, stock purchase, stock option, phantom stock or other equity-based compensation, change-in-control, retention, salary continuation, vacation, sick leave, disability, death benefit, group insurance,
hospitalization, medical, dental, life, educational assistance or fringe benefit plan, program, policy, practice, agreement or arrangement, including each plan of a similar nature maintained in jurisdictions outside of the United States and which
are not subject to ERISA (including with respect to independent contractors of the Company), that is (i) sponsored, maintained or contributed to by the Company or any of its ERISA Affiliates (as defined below) or for which the Company or any of
its ERISA Affiliates has any obligation to maintain, sponsor or contribute, or (ii) with respect to which the Company or any of its ERISA Affiliates has any direct or indirect liability, whether contingent or otherwise (the
“Plans”). Each Plan that is intended to meet the requirements of a “qualified plan” under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”) has received a favorable
determination letter from the Internal Revenue Service (“IRS”) or is in the form of a prototype plan with respect to which the IRS has issued a favorable opinion letter, in each case, to the effect that the Plan satisfies the
requirements of Section 401(a) of the Code and that its related trust is exempt from taxation under Section 501(a) of the Code and there are no facts or circumstances that would reasonably be expected to cause the loss of such
qualification. Each Plan has been established and administered in all material respects in accordance with its terms and the requirements of the Code, ERISA and other applicable Laws. 

(b) With respect to each Plan, (i) all material required contributions have been made or properly accrued, (ii) there are no
Actions, suits or claims pending, or to the Company’s knowledge, threatened, other than routine claims for benefits, except as would not, individually or in the aggregate, reasonably be expected to result in a material liability,
(iii) there have been no non-exempt and uncorrected “prohibited transactions” (as that term is defined in Section 406 of ERISA or Section 4975 of the Code) or breaches of fiduciary duty (as determined under ERISA) and
(iv) all reports, returns, notices and other documentation that are required to have been filed with or furnished to the IRS, the Department of Labor or any other governmental authority, or to the participants or beneficiaries of such Plan,
have been filed or furnished on a timely basis. No event has occurred and no condition exists that would, either directly or by reason of the affiliation of the Company with any other Person which, together with the Company would be treated as a
single employer under Section 4001 of ERISA or Section 414 of the Code (each an “ERISA Affiliate”), subject the Company to any material Tax, fine, Lien, penalty or other liability imposed by ERISA, the Code, or other
applicable Laws. Each Plan providing for deferred compensation that constitutes a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code and applicable regulations) for any service provider to the
Company (i) complies with the requirements of Section 409A of the Code and the regulations promulgated thereunder or (ii) is exempt from compliance under the “grandfather” provisions of IRS Notice 2005-1 and applicable
regulations, and has not been “materially modified” (within the meaning of IRS Notice 2005-1 and Treas. Reg. §1.409A-6(a)(4)) since October 3, 2004. 
 (c) With respect to each Plan, the Company has furnished to the Purchaser, or provided the Purchaser with access to, the most recent copies of the following documents (as

  
 18 

 
applicable): (i) Plan document, (ii) summary plan description, (iii) determination letter received from the IRS, (iv) IRS Form 5500 annual report and (v) actuarial
report. 
 (d) Except as set forth on Section (d) of the Employee Benefits Schedule, neither the Company nor any of
its ERISA Affiliates contributes to or has in the past six (6) years sponsored, maintained, contributed to or had any liability with respect to any “defined benefit plan” (as defined in Section 3(35) of ERISA), plan subject to
Section 412 of the Code or Section 302 of ERISA, or “multiemployer plan” (as defined in Section 3(37) of ERISA). None of the Plans is subject to Title IV of ERISA. The Company has not incurred any current or projected
liability in respect of post-employment health, medical or life insurance benefits for any current or former employees of the Company, except as may be required under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended
(“COBRA”), and at the expense of the employee. 
 (e) Except as set forth on section (e) of the Employee
Benefits Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will cause or result in (either alone or in combination with another event) (i) the acceleration
of vesting in, or timing of payment of, any compensation or benefits under any Plan or otherwise materially accelerate or increase any obligation under any Plan, (ii) severance pay or any increase in severance pay upon any termination of
employment after the date of this Agreement, (iii) any payment, compensation or benefit becoming due, or increase in the amount of any payment, compensation or benefit due, to any current or former employee of the Company, (iv) any
limitation or restriction on the right of the Company to merge, amend or terminate any of the Plans or (v) the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute
payment,” as defined in Section 280G(b)(1) of the Code. 
 4.16 Compliance with Laws. The Company is in material
compliance with all applicable Laws and regulations of foreign, federal, state and local governments and all agencies thereof and there is no investigation or review pending or to the knowledge of the Company, threatened with respect to a material
violation of any applicable Laws. Notwithstanding the foregoing, no representations and warranties are being made under this Section 4.16 with respect to subject matters expressly addressed in any other section of this ARTICLE IV
with respect to Taxes, Intellectual Property, litigation and environmental. 
 4.17 Environmental Matters. Except as
specifically identified on the Environmental Matters Schedule: 
 (a) the Company is and has been in material compliance
with all Environmental Laws; 
 (b) the Company has obtained and possesses all Environmental Permits required in connection with
owning or operating their properties or for their operations, the Company is and has been in material compliance with such Environmental Permits and all such Environmental Permits are in full force and effect and will remain so after consummation of
the transactions contemplated hereby; 

  
 19 

 (c) there are no events, conditions or circumstances, including, without limitation, the
presence of pollutants or contaminations at any Leased Real Property, that could reasonably be expected to result in material liability to the Company pursuant to Environmental Laws; and 

(d) the Company is not subject to any Action arising under Environmental Laws, including any investigatory, remedial or corrective
obligation, relating to the Company or its facilities and arising under Environmental Laws which has not been fully resolved. 
 This
Section 4.17 constitutes the sole and exclusive representations and warranties as to the Company with respect to matters arising under Environmental Laws. 
 4.18 Affiliated Transactions. Other than the Transaction Documents, except as set forth on the Affiliated Transactions Schedule, no officer, director, stockholder or Affiliate of any of the
foregoing or the Company or any individual in such officer’s, director’s or stockholder’s immediate family is a party to or otherwise has any interest or benefit in any agreement, contract, commitment or transaction with the Company
or has any material interest in any property used by the Company which will not be terminated on the Closing Date. 
 4.19
Insurance. A true and complete list of all insurance policies (“Insurance Policies”) carried by, or for the benefit of, the Company, specifying the insurer, the amount of and nature of coverage, the risk insured against, the
deductible or self insured retention (if any) and the date through which coverage shall continue by virtue of premiums already paid is set forth on the Insurance Schedule. The Insurance Policies are of the types and in amounts customarily
carried against risks of a character and in such amounts as are usually insured against by similarly situated companies in the same or similar business. All Insurance Policies are in full force and effect and are valid, outstanding and enforceable,
and all premiums due thereon have been paid in full. The Company has not received any written notice from or on behalf of any insurance carrier issuing policies or binders relating to or covering the Company that could reasonably be likely to be
followed by a written notice of cancellation or nonrenewal of existing policies or binders. The Company has complied in all material respects with the provisions of each Insurance Policy under which it is the insured party. Any claims, or
circumstances which might give rise to a claim, under the Insurance Policies has been reported and filed in a timely fashion. The Company has made available to the Purchaser loss-runs for the last three (3) years in respect of the Company. All
proceedings listed on the Litigation Schedule have been timely reported to all applicable insurance carriers. 
 4.20
Brokerage. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Company.

 4.21 Employees. 
 (a) The Company is not a party to or bound by any collective bargaining agreement, nor in the five years preceding the date of this Agreement has it experienced any strikes, material employee disruptions
or unfair labor practices claims. The Company in the five years preceding the date of this Agreement has not committed any material unfair labor practice. The Company has not received written notice of pending or threatened changes of employment

  
 20 

 
status with respect to (including resignation of) any employee member of the senior management team of the Company. To the Company’s knowledge, no organizational effort is presently being
made or threatened by or on behalf of any labor union or other organized labor with respect to employees of the Company. No individual who has performed services for the Company has been improperly excluded from participation in any Plan, and the
Company does not have any direct or indirect liability, whether actual or contingent, with respect to any misclassification of any person as an independent contractor rather than as an employee, or with respect to any employee leased from another
employer. The Company is not, or has not been, in material violation of any applicable Laws, including all such Laws relating to terms and conditions of employment, labor relations, wages and hours, equal employment opportunities, fair employment
practices, immigration, and occupational health and safety. 
 (b) There has been no “mass layoff” or “plant
closing” (as defined by the Worker Adjustment and Retraining Notification Act of 1988 (29 USC § 2101 et seq.) and any similar state or local laws (collectively, “WARN”)) with respect to the Company within the past 6
months. The Company has not incurred any liability under WARN that remains unsatisfied. To the extent that, after the Closing, the Purchaser operates the Company in the same manner operated during the six-month period prior to the Closing, the
Purchaser will not incur any liability under WARN or any other similar applicable Law as a result of any layoffs or other employment terminations made by the Company during such six-month period prior to the Closing. 

(c) The Employees Schedule sets forth a true, correct and complete list of the name, position, job location, salary or wage rate,
bonus opportunity, date of hire, full- or part-time status and “exempt” or “non-exempt” status and opportunity, for each employee and independent contractor of the Company. 

4.22 No Other Representations and Warranties. Except as expressly set forth in this ARTICLE IV, the Sellers make no representation or
warranty, express or implied, at law or in equity, in respect of the Company or any of his or her Affiliates (other than the Sellers) or any of his or her respective assets, liabilities or operations, on which the Purchaser may rely, and any such
other representations or warranties are hereby expressly disclaimed. 
 ARTICLE V 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 
 The Purchaser represents and warrants to the Sellers as of the date hereof that: 

5.01 Organization and Corporate Power. The Purchaser is a corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware, with full corporate power and authority to enter into this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated by this Agreement and perform its obligations hereunder and
thereunder, except where the failure to be so qualified has not had and would not, individually or in the aggregate, have a material adverse effect on the Purchaser’s ability to consummate the transactions contemplated by this Agreement.

  
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 5.02 Authorization. The execution, delivery and performance of this Agreement and the other
Transaction Documents by the Purchaser and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action, and no other corporate proceedings on their part are necessary
to authorize the execution, delivery or performance of this Agreement. This Agreement and the other Transaction Documents to which the Purchaser is a party have been duly executed and delivered by the Purchaser and assuming that this Agreement and
such other Transaction Documents are a valid and binding obligation of the Sellers, this Agreement and such other Transaction Documents constitute a valid and binding obligation of the Purchaser, enforceable in accordance with its terms. 

5.03 No Violation. The Purchaser is not subject to or obligated under its certificate or articles of incorporation, its bylaws (or similar
organizational documents), any applicable Laws, or rule or regulation of any governmental authority, or any agreement or instrument, or any license, franchise or Permit, or subject to any order, writ, injunction or decree, which would be breached or
violated in any material respect by the Purchaser’s execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby. 
 5.04 Governmental Consents, etc. The execution and delivery by the Purchaser of this Agreement do not, and the performance of its obligations hereunder will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental Entity, except for applicable requirements, if any, under federal or state securities or “blue sky” Laws. 

5.05 Litigation. There are no Actions, suits or proceedings pending or, to the Purchaser’s knowledge, overtly threatened against or
affecting the Purchaser at law or in equity, or before or by any Governmental Entity, which would reasonably be expected, individually or in the aggregate, to materially impair the Purchaser’s performance under this Agreement or the
consummation of the transactions contemplated hereby. The Purchaser is not subject to any outstanding judgment, order or decree of any Governmental Entity. 
 5.06 Brokerage. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of the Purchaser. 
 5.07 Investment Representation. The Purchaser is acquiring the Shares of the
Sellers for its own account with the present intention of holding such securities for investment purposes and not with a view to, or for sale in connection with, any distribution of such securities in violation of any federal or state securities
Laws. The Purchaser is an “accredited investor” as defined in Regulation D under the Securities Act. The Purchaser acknowledges that it is informed as to the risks of the transactions contemplated hereby and of the ownership of
Shares. The Purchaser acknowledges that the Shares have not been registered under the Securities Act or any state or foreign securities Laws and that the Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of unless such transfer, sale, assignment, pledge, hypothecation or other disposition is pursuant to the terms of an effective registration statement under the Securities Act and the Shares are registered under any applicable state or

  
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foreign securities Laws or sold pursuant to an exemption from registration under the Securities Act and any applicable state or foreign securities Laws. 

5.08 Financial Capacity. The Purchaser has sufficient cash to make payment of all amounts to be paid by it hereunder on and after the
Closing Date. 
 5.09 No Other Representations and Warranties. Except as expressly set forth in this ARTICLE V, the
Purchaser makes no representation or warranty, express or implied, at law or in equity, in respect of the Purchaser or any of its Affiliates or any of their respective assets, liabilities or operations, on which the Sellers may rely, and any such
other representations or warranties are hereby expressly disclaimed. 
 ARTICLE VI 

COVENANTS OF THE PARTIES 
 6.01 Access to Books and Records. For a period of three (3) years after the Closing, upon reasonable advance notice, the Purchaser shall, and shall cause the Company to, provide the Sellers and his
or her agents with reasonable access (for the purpose of examining and copying), during normal business hours, without unreasonably interfering with the operation of the business of the Company, to the employees, offices, books and records of the
Company with respect to periods or occurrences on or prior to the Closing Date that the requesting Sellers reasonably need (i) to comply with reporting, disclosure, filing or other legal requirements imposed on the Sellers (including under
applicable securities Laws) by a Governmental Entity having jurisdiction over the Sellers; (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy Tax, audit, accounting, claims, regulatory,
litigation or other similar legal requirements or (iii) to comply with its obligation under this Agreement; provided, however, that in the event that the Purchaser or the Company determines that any such provision of information
could be commercially detrimental, violate any Law or agreement, or waive any attorney-client or other similar privilege, the Purchaser, the Company and the Sellers shall take all reasonable measures (including the execution of customary
confidentiality agreements) to permit the compliance with such obligations in a manner that avoids any such harm or consequence. 
 6.02 Non-Compete. In partial consideration for entering into this Agreement for the sale of the Shares owned by the Sellers, each of the Sellers agrees with the Purchaser that, for a period of sixty
(60) months following the Closing Date (the “Restricted Period”), he or she will not, without the prior written consent of the Purchaser, directly or indirectly, and whether as principal or investor or as an employee, officer,
director, manager, partner, consultant, agent or otherwise, alone or in association with any other Person (other than as a consultant of the Company pursuant to the Consulting Agreement), compete with the Company in North America; provided,
however, that nothing herein shall limit the right of the Sellers to own not more than 3% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. The parties hereto agree that the provisions of this Section 6.02 are an integral part of this Agreement and that the Purchaser would not be entering into this Agreement
without the provisions of this Section 6.02. If the final judgment of a court of competent 

  
 23 

 
jurisdiction declares that any term or provision of this Section 6.02 is invalid or unenforceable, the parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration or area of such term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed. The
parties hereto recognize and agree that immediate irreparable damages for which there is not adequate remedy at law would occur in the event that the provisions of this Section 6.02 are not performed in accordance with the specific terms
hereof or are otherwise breached. It is accordingly agreed that in the event of a failure by the Sellers to perform his or her obligations under this Section 6.02, the Purchaser shall be entitled to specific performance through
injunctive relief, without the necessity of posting a bond, to prevent breaches of the provisions and to enforce specifically the provisions of this Section 6.02, in addition to any other remedy to which such party may be entitled, at
law or in equity. 
 6.03 Non-Solicitation. As a separate and independent covenant, also in partial consideration of entering
into this Agreement for the sale of the Shares owned by the Sellers, each of the Sellers agrees that during the Restricted Period he or she will not in any way, directly or indirectly (except in the course of performing his or her duties under the
Consulting Agreement), call upon, solicit, advise or otherwise do, or attempt to do, any business that competes with the Company with any Person who is, or was, during the then most recent 12 month period, a customer or employee of the Company, or
take away or interfere or attempt to take away or interfere with any custom, trade, business, patronage or affairs of the Company, or solicit, induce, hire or attempt to solicit, induce or hire any of them to leave the employ of the Purchaser or the
Company or violate the terms of their contracts, or any employment arrangements, with the Purchaser or the Company. 
 6.04
Confidentiality. Each of the Sellers acknowledges that he or she is in possession of confidential information concerning the Company and its businesses and operations (the “Confidential Information”); except that Confidential
Information shall not include any such information that is or becomes generally available to the public other than as a result of disclosure of the Sellers in violation of this provision. Each of the Sellers agrees that, from and after the Closing,
he or she shall, and shall cause his or her Affiliates, Related Persons and advisors (“Representatives”) to, keep during the Restricted Period all such Confidential Information strictly confidential and use such Confidential
Information only as consultant of the Company or for the purpose of fulfilling his or her obligations hereunder or enforcing his or her rights hereunder. Each of the Sellers acknowledges and agrees that the Confidential Information is proprietary
and confidential in nature and may be disclosed to his or her Representatives only to the extent necessary for the Sellers and such Representatives to fulfill the Sellers’ obligations hereunder or to enforce the Sellers’ rights hereunder;
provided, that the Sellers shall be responsible for any breach of those confidentiality provisions by the Sellers’ Representatives following the Closing. If, following the Closing, the Sellers or any of his or her Representatives are
legally required to disclose (after the Sellers have used his or her commercially reasonable efforts to avoid such disclosure and after promptly advising and consulting with the Purchaser about his intention to make, and the proposed contents of
such, disclosure) any of the Confidential Information (whether by deposition, interrogatory, request for documents, 

  
 24 

 
subpoena, civil investigative demand or similar process) (and other than to enforce his or her rights hereunder or other than for use as a consultant of the Company), the Sellers shall, or shall
cause such Representative, to provide the Purchaser with prompt written notice of such request so that the Purchaser may seek an appropriate protective order or other appropriate remedy. If such protective order or remedy is not obtained, the
Sellers or such Representative may disclose only that portion of the restricted Confidential Information which such Person is legally required to disclose, and the Sellers shall exercise his or her commercially reasonable efforts to obtain assurance
that confidential treatment will be accorded to such Confidential Information so disclosed. The Sellers further agree that, from and after the Closing Date, the Sellers and their Representatives, upon the request of the Purchaser, the Company shall
promptly destroy all information and documents constituting or containing Confidential Information and shall certify such destruction to the Purchaser or the Company, other than information retained for purposes of monitoring or enforcing the
Sellers rights hereunder or for taxes or other regulatory needs. 
 ARTICLE VII 

INDEMNIFICATION 
 7.01 Survival of Representations, Warranties, Covenants, Agreements and Other Provisions. The representations and warranties set forth in ARTICLE III (Representations and Warranties of the
Sellers), ARTICLE IV (Representations and Warranties as to the Company) and ARTICLE V (Representations and Warranties of the Purchaser) and any certificate delivered pursuant to this Agreement shall survive the Closing and shall
terminate on the date which is eighteen (18) months after the date hereof, except that (i) the representations and warranties set forth in Section 4.08 (Tax Matters) shall survive the Closing and shall terminate on the date
that is sixty (60) days after the expiration of the applicable statute of limitations (including all periods of extension, whether automatic or permissive); provided, however, if no statute of limitations is applicable to any Tax, then the
indemnification provisions of this Article VII upon which the liability to which any claim under such Tax may relate shall terminate on the date which is thirty six (36) months after the date hereof, and (ii) the Fundamental
Representations shall survive the Closing and shall terminate on the sixth anniversary of the Closing Date. Subject to Section 8.06 (Coordination; Survival), all covenants and agreements to be performed following the Closing shall expire
in accordance with their terms. No claim for indemnification hereunder for breach of any representations, warranties, covenants, agreements and other provisions may be made after the expiration of the applicable survival period; provided that
any representation, warranty, covenant, agreement or other provision in respect of which indemnity may be sought under Section 7.02 (Indemnification for the Benefit of the Purchaser) or under Section 7.03 (Indemnification by
the Purchaser for the Benefit of the Sellers), and the indemnity with respect thereto, shall survive (with respect to any claim that has been made) the time at which it would otherwise terminate pursuant to this Section 7.01 if notice of
a claim of breach thereof giving rise to such right shall have been given to the Person against whom such indemnity may be sought prior to such time. 
 7.02 Indemnification for the Benefit of the Purchaser. 
 (a) From and after the
Closing (but subject to the limitations and other provisions of this ARTICLE VII), the Sellers, jointly and severally, shall indemnify and hold harmless in 

  
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respect of any loss (including diminution in value), liability, damage, settlement, fine, judgment or expense (“Losses”) suffered or incurred by the Purchaser, the Company and
their Affiliates, and their respective officers, directors, advisors and representatives, and each of their successors and permitted assigns (each a “Purchaser Indemnified Party”, and collectively, the “Purchaser Indemnified
Parties”) (other than any Losses relating to Taxes, for which the indemnification provisions are set forth in Section 8.02(a) (Tax Indemnification)) to the extent arising from (i) a breach of any representation or warranty
made by the Sellers in this Agreement or in any exhibit, Schedule or certificate delivered hereunder or (ii) a breach of any covenant, agreement or other provision set forth herein by the Sellers in any exhibit, Schedule or certificate
delivered hereunder; provided, that no claims by a Purchaser Indemnified Party shall be asserted under Section 7.02(a)(i) unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a
cumulative basis an amount equal to $200,000.00 (the “Indemnification Threshold”), and then only to the extent such Losses exceed the Indemnification Threshold but in no event in excess of $2,500,000.00 (the “Cap”);
provided, that the Indemnification Threshold and the Cap shall not apply to breaches of the Fundamental Representations. For the avoidance of doubt, the Cap shall apply to the total amount of Tax Losses and Losses (other than Losses in
respect of breaches of Fundamental Representations). 
 (b) Notwithstanding anything to the contrary contained in this Agreement,
a Purchaser Indemnified Party shall have no right to indemnification hereunder with respect to any Loss or alleged Loss to the extent such Loss or alleged Loss is included in the final calculation of the Purchase Price Adjustments. 

(c) All indemnification payments made hereunder shall be treated by the parties as an adjustment to the proceeds received by the Sellers
pursuant to ARTICLE II (The Closing; Purchase Price Adjustment) hereof. 
 (d) The Purchaser, on behalf of any Purchaser
Indemnified Party or Tax Indemnified Purchaser Party (as defined below), shall have the right to recover against the Indemnity Escrow Account for any of such Person’s Losses, pursuant to the terms of this Section 7.02
(Indemnification for the Benefit of the Purchaser), Section 8.02(a) (Tax Indemnification) and the Escrow Agreement. On the date that is eighteen (18) months following the date hereof, the Escrow Agent shall release to the Sellers
all amounts then remaining in the Indemnity Escrow Account, less the aggregate amount of all claims made under Sections 7.02 (Indemnification for the Benefit of the Purchaser) and 8.02(a) (Tax Indemnification) (i) with
respect to which an unresolved dispute between the Sellers, on the one hand, and a Purchaser Indemnified Party or Tax Indemnified Purchaser Party, as applicable, on the other hand, exists, and (ii) which have been finally resolved but have not
yet been paid to the applicable Purchaser Indemnified Party or Tax Indemnified Purchaser Party. The foregoing provisions in this Section 7.02(d) shall in no way limit any Purchaser Indemnified Party’s or Tax Indemnified Purchaser
Party’s right to indemnification as set forth in Sections 7.02 (Indemnification for the Benefit of the Purchaser) and 8.02(a) (Tax Indemnification). 
 7.03 Indemnification by the Purchaser for the Benefit of the Sellers. From and after the Closing, the Purchaser shall indemnify the Sellers and his or her Affiliates, and their respective officers,
directors, partners, members, employees, agents, representatives, successors, heirs and permitted assigns (each a “Sellers Indemnified Party” and collectively, the “Sellers  

  
 26 

 
Indemnified Parties”) and hold them harmless against any Losses which the Indemnified Parties may suffer or sustain, as a result of: (a) any breach of any representation or
warranty made by the Purchaser in this Agreement and (b) a breach of any covenant, agreement or other provision by the Purchaser under this Agreement; provided, that no claims by a Sellers Indemnified Party shall be asserted under
Section 7.03(a) unless and until the aggregate amount of Losses that would otherwise be payable hereunder exceeds on a cumulative basis an amount equal to the Indemnification Threshold, and then only to the extent such Losses exceed the
Indemnification Threshold but in no event in excess of an amount equal to the Indemnity Escrow Amount (as reduced from time to time). Any indemnification of the Sellers pursuant to this Section 7.03 shall be effected by wire transfer of
immediately available funds to the Sellers within five (5) days after the final determination thereof. 
 7.04 Defense of
Third-Party Claims. Any Person making a claim for indemnification under Section 7.02 (Indemnification for the Benefit of the Purchaser) or under Section 7.03 (Indemnification by the Purchaser for the Benefit of the Sellers)
(an “Indemnitee”) shall notify the indemnifying party (an “Indemnitor”) of the claim in writing promptly, and in any event within five (5) days, after receiving written notice of any Action, lawsuit,
proceeding, investigation or other third party claim against it (if by a third party), describing the claim, the amount thereof (if known and quantifiable) and the basis thereof; provided, that the delay of any Indemnitee in giving a notice
hereunder shall not affect rights to indemnification hereunder, except to the extent that the Indemnitor was materially prejudiced by such delay. Any Indemnitor shall be entitled to participate in the defense of such Action, lawsuit, proceeding,
investigation or other claim giving rise to an Indemnitee’s claim for indemnification at such Indemnitor’s expense, and at its option shall, unless the Indemnitee has been advised in writing by counsel that there are one or more legal
defenses available to such Indemnitee that are different from or additional to those available to an applicable Indemnitor or there is otherwise a conflict of interest that exists or is reasonably likely to exist that would make it inappropriate, in
the reasonable judgment of the Indemnitee, for the same counsel to represent both the Indemnitee and the Indemnitor, in which event such Indemnitee shall be entitled, at the Indemnitor’s cost and expense, to separate counsel of its own choosing
(provided, that such cost and expense shall be limited to one firm of attorneys, together with appropriate local counsel, for any such claim), be entitled to assume the defense thereof by appointing a reputable counsel reasonably acceptable
to the Indemnitee to be the lead counsel in connection with such defense; provided that (i) any Indemnitor shall continue to be entitled to assert any limitation on any claims contained herein; (ii) the Indemnitee shall be entitled
to participate in the defense of such claim and to employ counsel of its choice for such purpose; and (iii) subject to the proviso above, the fees and expenses of such separate counsel shall be borne by the Indemnitee. If the Indemnitor shall
control the defense of any such claim then the Indemnitor shall be entitled to settle such claim; provided that the Indemnitor shall obtain the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld,
conditioned or delayed). Notwithstanding the foregoing, the Indemnitor shall not be entitled to assume the defense of any claim if the claim seeks an order, injunction or other equitable relief or relief for other than money damages against the
Indemnitee and the Indemnitee shall be indemnified for all costs and expenses related to the defense or settlement of such claim subject to the limitations set forth in this Agreement. If the Indemnitor fails to notify the Indemnitee within fifteen
(15) days after receipt of notice that the Indemnitor elects to defend the Indemnitee pursuant to this Section 7.04, or if the Indemnitor elects to defend the Indemnitee pursuant to this Section 7.04 but fails

  
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to diligently prosecute or settle the claim, which failure continues for ten (10) days after notice to the Indemnitor from the Indemnitee of such failure, then the Indemnitee against which
such claim has been asserted will have the right to undertake, and the cost and expense thereof will constitute Losses, the defense, compromise or settlement of such claim on behalf of and for the account and risk of the Indemnitor; provided,
however, that such claim shall not be compromised or settled without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld, conditioned or delayed. 

7.05 Determination of Loss Amount. For purposes of this ARTICLE VII, the determination as to whether the breach of any representation or
warranty has occurred and the amounts of such Losses suffered shall be made without regard to any materiality, Material Adverse Effect or similar materiality qualification contained in such representation or warranty giving rise to the claim for
indemnity hereunder. The following shall apply to all Losses: 
 (a) The amount of any Purchaser or Sellers Losses payable
hereunder shall be reduced by any insurance proceeds which the Indemnified Party actually collects with respect to the event or occurrence giving rise to such Purchaser’s Losses or Sellers Losses net of any out-of-pocket costs and expenses paid
to third parties (including, without limitation, reasonable costs and expenses of outside legal counsel) incurred in connection with the collection of such amounts. If the Indemnified Party both collects proceeds from any insurance company and
receives a payment from the Indemnifying Party or the Escrow Account hereunder, and the sum of such proceeds, net of out-of-pocket collection costs and expenses, is in excess of the Purchaser Losses or Sellers Losses with respect to the matter that
is the subject of the indemnity, then the Indemnified Party shall promptly refund to the Indemnifying Party or the Escrow Account, as the case may be, the amount of such excess. 

(b) In no event shall the Purchaser Indemnified Parties be entitled to recover any Purchaser Losses with respect to any matter to the
extent (and only to the extent) it was included in the calculation of Final Purchase Price including the final determination of Net Working Capital, Indebtedness and Transaction Expenses (all as of the Closing Date) including the amount of any
reserves or accruals reflected as a current liability on the balance sheet used in preparing the final Net Working Capital which relate to the facts giving rise to such Purchaser Losses. 

ARTICLE VIII 
 TAX MATTERS 
 8.01 Tax Returns. 

(a) Responsibility for Filing Tax Returns. The Sellers shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company for all periods ending prior to or including the Closing Date the due date of which (including extensions) is after the Closing Date. Each such Tax Return shall be prepared and filed in a manner consistent with past practice,
except as otherwise required by applicable Laws. At least thirty (30) days prior to the 

  
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date on which each such Tax Return is filed, the Sellers shall submit such Tax Return to the Purchaser for the Purchaser’s review. If the Purchaser disputes any item on such Tax Return, it
shall notify the Sellers of such disputed item (or items) and the basis for its objection. The parties shall act in good faith to resolve any such dispute prior to the date on which the relevant Tax Return is required to be filed. If the parties
cannot resolve any disputed item, the item in question shall be resolved by an independent accounting firm mutually acceptable to the Sellers and the Purchaser. The fees and expenses of such accounting firm shall be borne equally by the Sellers and
the Purchaser. 
 (b) With respect to any Tax Returns filed with respect to any taxable periods (or portions thereof) ending on
or before the Closing Date (“Pre-Closing Taxable Periods”) the Sellers shall be responsible for the Pre-Closing Taxes due in respect of such Tax Returns, except to the extent the Pre-Closing Taxes were taken into consideration in
calculating the Net Working Capital. 
 8.02 Tax Indemnification. 

(a) Indemnification by the Sellers. From and after the Closing Date, the Sellers shall, jointly and severally, indemnify the
Purchaser Indemnified Parties (each a “Tax Indemnified Purchaser Party” and collectively, the “Tax Indemnified Purchaser Parties”) against and hold harmless from any and all liabilities, losses, damages, claims,
costs, expenses, interest, awards, judgments and penalties (including, without limitation, reasonable fees for both in-house and outside counsel, accountants and other outside consultants) suffered or incurred (each a “Tax Loss” and
collectively, the “Tax Losses”) arising out of (i) Taxes payable by or with respect to the operations of the Company for periods or portions thereof ending on or before the Closing Date, other than any Section 338(h)(10)
Tax Liability (“Pre-Closing Taxes”); (ii) Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company was a member prior to the Closing Date by reason of liability under Treasury
Regulation §1.1502-6, Treasury Regulation §1.1502-78 or comparable provision of foreign, state or local Tax law; (iii) without duplication, Taxes imposed on a Tax Indemnified Purchaser Party as a result of a breach of a representation
or warranty set forth in Section 4.08 (Tax Matters); provided, that for purposes of this Section 8.02(a)(iii) only, any breach of a representation, warranty, covenant or agreement shall be determined without reference
to any materiality qualifier with respect thereto; (iv) Taxes arising out of any transactions contemplated by this Agreement (other than any Section 338(h)(10) Tax Liability); and (v) Taxes or other payments required to be paid after
the date hereof by the Company to any party under any Tax Sharing Agreement (whether written or not) or by reason of being a successor-in-interest or transferee of another entity. 

(b) Indemnification by the Purchaser. From and after the Closing Date, the Purchaser shall indemnify the Sellers Indemnified
Parties (each a “Tax Indemnified Sellers Party” and collectively, the “Tax Indemnified Sellers Parties”) against and hold harmless from any and all Tax Losses arising out of Taxes of the Company for periods or
portions thereof beginning after the Closing Date (“Post-Closing Taxes”) other than amounts for which a Tax Indemnified Purchaser Party is indemnified by the Sellers under Section 8.02(a) (Tax Indemnification by the
Sellers). 

  
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 8.03 Tax Indemnification Procedures. 

(a) After the Closing, the Purchaser and the Sellers, as the case may be, shall promptly notify the other party in writing of any demand,
claim or notice of the commencement of an audit received by such party from any Governmental Entity or any other Person with respect to Taxes for which such other party is liable pursuant to Section 8.02 (Tax Indemnification);
provided, however, that a failure to give such notice will not affect such other party’s rights to indemnification under this ARTICLE VIII, except to the extent that such party is actually prejudiced thereby. Such notice
shall contain factual information (to the extent known) describing the asserted Tax liability and shall include copies of the relevant portion of any notice or other document received from any Governmental Entity or any other Person in respect of
any such asserted Tax liability. 
 (b) Payment by an indemnitor of any amount due to an indemnitee under this ARTICLE
VIII shall be made within ten (10) days following written notice by the indemnitee that payment of such amounts to the appropriate Governmental Entity or other applicable third party is due by the indemnitee, provided that the indemnitor
shall not be required to make any payment earlier than five (5) Business Days before it is due to the appropriate Governmental Entity or applicable third party. In the case of a Tax that is contested in accordance with the provisions of
Section 8.04, payment of such contested Tax will not be considered due earlier than the date a “final determination” to such effect is made by such Governmental Entity or a court. For this purpose, a “final
determination” shall mean a settlement, compromise, or other agreement with the relevant Governmental Entity, whether contained in an Internal Revenue Service Form 870 or other comparable form, or otherwise, or such procedurally later event,
such as a closing agreement with the relevant Governmental Entity, an agreement contained in Internal Revenue Service Form 870-AD or other comparable form, an agreement that constitutes a “determination” under Section 1313(a)(4) of
the Code, a deficiency notice with respect to which the period for filing a petition with the Tax Court or the relevant state, local or foreign tribunal has expired or a decision of any court of competent jurisdiction that is not subject to appeal
or as to which the time for appeal has expired. 
 8.04 Tax Contests; Cooperation. 

(a) After the Closing Date, except as provided in Sections 8.04(b) and 8.04(c) (Tax Contests; Cooperation) below, the
Purchaser shall control the conduct, through counsel of its own choosing, of any audit, claim for refund, or administrative or judicial proceeding involving any asserted Tax liability or refund with respect to the Company (any such audit, claim for
refund, or proceeding relating to an asserted Tax liability referred to herein as a “Contest”), including with respect to the Section 338(h)(10) Election. 
 (b) In the case of a Contest after the Closing Date that relates solely to Taxes for which the Purchaser is indemnified under Section 8.02(a) (Tax Indemnification by the Sellers), the Sellers
shall control the conduct of such Contest, but the Purchaser shall have the right to participate in such Contest at its own expense, and the Sellers shall not be able to settle, compromise and/or concede any portion of such Contest that is
reasonably likely to affect the Tax liability of the Company for any taxable year (or portion thereof) beginning after the Closing Date without the reasonable consent of the Purchaser, which consent shall not be unreasonably

  
 30 

 
withheld, delayed or conditioned; provided, that if the Sellers fail to assume control of the conduct of any such Contest within a reasonable period following the receipt by the Sellers of
notice of such Contest, the Purchaser shall have the right to assume control of such Contest and shall be able to settle, compromise and/or concede such Contest in its sole discretion. 

(c) In the case of a Contest after the Closing Date that relates both to Taxes for which the Purchaser is indemnified under
Section 8.02(a) (Tax Indemnification by the Sellers) and Taxes for which the Purchaser is not indemnified under Section 8.02(a) (Tax Indemnification by the Sellers), the Purchaser shall control the conduct of such Contest,
but the Sellers shall have the right to participate in such Contest at its own expense, and the Purchaser shall not settle, compromise and/or concede such Contest without the consent of the Sellers, which consent shall not be unreasonably withheld,
delayed or conditioned. 
 (d) The Purchaser and the Sellers agree to furnish or cause to be furnished to each other, upon
request, as promptly as practicable, such information (including access to books and records) and assistance relating to the Company as is reasonably requested for the filing of any Tax Returns and the preparation, prosecution, defense or conduct of
any Contest. The Purchaser and the Sellers shall reasonably cooperate with each other in the conduct of any Contest or other proceeding involving or otherwise relating to the Company (or its income or assets) with respect to any Tax and each shall
execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 8.04(d). Any information obtained under this Section 8.04(d) shall be kept confidential, except as may
be otherwise necessary in connection with the filing of Tax Returns or in the conduct of a Contest or other Tax proceeding. 

8.05 Straddle Periods. For purposes of this Agreement, in the case of any Taxes payable by the Company with respect to any Tax period
that begins before and ends after the Closing Date (a “Straddle Period”), the portion of any such Taxes that constitutes Pre-Closing Taxes shall: (i) in the case of Taxes that are either (x) based upon or related to income
or receipts, or (y) imposed in connection with any sale, transfer or assignment or any deemed sale, transfer or assignment of property (real or personal, tangible or intangible), be deemed equal to the amount that would be payable if the Tax
year or period ended on the Closing Date; and (ii) in the case of Taxes (other than those described in clause (i) above) that are imposed on a periodic basis with respect to the business or assets of the Company or otherwise measured by
the level of any item, be deemed to be the amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding Tax period) multiplied by a fraction
the numerator of which is the number of calendar days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. For purposes of clause (i) of the
preceding sentence, any exemption, deduction, credit or other item (including, without limitation, the effect of any graduated rates of Tax) that is calculated on an annual basis shall be allocated to the portion of the Straddle Period ending on the
Closing Date on a pro rata basis determined by multiplying the total amount of such item allocated to the Straddle Period times a fraction, the numerator of which is the number of calendar days in the portion of the Straddle Period ending on the
Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. In the case of any Tax based upon or measured by capital (including net worth or long-term debt) or intangibles, any amount thereof required to
be 

  
 31 

 
allocated under this Section 8.05 shall be computed by reference to the level of such items on the Closing Date. 

8.06 Coordination; Survival. Claims for indemnification with respect to Taxes shall be governed exclusively by this ARTICLE VIII
and the provisions of ARTICLE VII (Indemnification) (other than the exception in clause (i) of the first sentence of Section 7.01 (Survival of Representations, Warranties, Covenants, Agreements and Other Provisions),
Section 7.02(d) (Indemnification for the Benefit of the Purchaser) and Section 7.05 (Determination of Loss Amount)), shall not apply. The indemnification provisions of this ARTICLE VIII shall survive until the date
which is sixty (60) days following the date upon which the liability to which any claim under such indemnification provisions may relate is barred by the applicable statute of limitations (including all periods of extension, whether automatic
or permissive), provided, however, if no statute of limitations is applicable to any Tax, then the indemnification provisions of this Article VIII upon which the liability to which any claim under such Tax may relate shall terminate on the date
which is thirty six (36) months after the date hereof. Any Tax matter as to which a claim has been asserted by written notice satisfying the requirements of Section 8.03 (Tax Indemnification Procedures) and within the time
limitation applicable by reason of the immediately preceding sentence that is pending or unresolved at the end of such time limitation shall continue to be covered by this ARTICLE VIII notwithstanding such time limitations until such matter
is finally terminated or otherwise resolved by the parties under this Agreement, by an arbitration or by a court of competent jurisdiction and any amounts payable hereunder are finally determined and paid. Notwithstanding anything else in this
Article VIII and Article VII (Indemnification) to the contrary, all Tax Losses indemnified by Sellers under this Article VIII shall be included in the calculation of the Cap under Section 7.02(b) (Indemnification for the Benefit of the
Purchaser). 
 8.07 Section 338(h)(10) Election. 
 (a) Upon the request of the Purchaser, the Sellers shall join with the Purchaser in making an election under Section 338(h)(10) of the Code and any corresponding or similar elections under state,
local or foreign Tax Law (collectively, the “Section 338(h)(10) Election”) with respect to the purchase and sale of the stock of the Company hereunder. Any such request shall be made by the Purchaser in writing no later than 90 days
after the Closing Date. In the event Purchaser does not request that the Sellers join in making the Section 338(h)(10) Election, the remainder of the provisions of this Section 8.07 shall not apply. 

(b) The Purchaser shall prepare and file all forms and documents required in connection with the Section 338(h)(10) Election. For the
purpose of making the Section 338(h)(10) Election the Purchaser and the Sellers each shall execute two copies of Internal Revenue Service Form 8023 (or successor form) at least ten (10) days prior to the date such form is required to be
filed. The Sellers shall execute (or cause to be executed) and deliver to the Purchaser such additional documents or forms as are reasonably requested to complete the Section 338(h)(10) Election at least ten days prior to the date such
documents or forms are required to be filed. 
 (c) The Purchaser shall prepare a schedule setting forth (i) the
“aggregate deemed sales price,” within the meaning of Treasury Regulations Sections 1.338-4 (the “ADSP”), and (ii)

  
 32 

 
an allocation of the ADSP among the assets of the Company, which schedule shall be prepared in accordance with Section 338 of the Code and the applicable Treasury Regulations or comparable
provisions of any other applicable Law (the “ADSP Allocation”). The Purchaser shall deliver a draft of the ADSP Allocation to the Sellers for the Sellers approval, which approval shall not be unreasonably withheld, delayed or
conditioned. The Purchaser and the Sellers and their respective Affiliates shall be bound by the Section 338(h)(10) Election and the ADSP Allocation for all Tax purposes. The Purchaser and the Sellers shall file, and shall cause their
respective Affiliates to file, all Tax Returns in a manner consistent with the Section 338(h)(10) Election and the ADSP Allocation and shall take no position contrary thereto unless required to do so by applicable Tax Laws or a final
determination (as defined in Section 8.03(b)). 
 (d) No later than sixty (60) days after delivering the ADSP
Allocation, the Sellers shall deliver to the Purchaser a schedule setting forth the Section 338(h)(10) Tax Liability and the Section 338(h)(10) Indemnification Amount (the “Section 338(h)(10) Tax Schedule”). The Purchaser
shall cooperate with the Sellers in preparing such calculations and shall provide the Sellers and its attorneys, accountants and consultants, reasonable access to the supporting documentation for the calculation of the Section 338(h)(10) Tax
Liability and the Section 338(h)(10) Indemnification Amount. If the Purchaser disagrees with the Sellers’ calculation of the Section 338(h)(10) Tax Liability or the Section 338(h)(10) Indemnification Amount and the parties cannot
resolve any disputed item within 30 days after the Sellers deliver the Section 338(h)(10) Tax Schedule, the item(s) in question shall be resolved by an independent accounting firm mutually acceptable to the Sellers and the Purchaser. The
Purchaser shall pay the Sellers the amount of the Section 338(h)(10) Indemnification Amount (if any) no later than five (5) days prior to the due date for the filing of the United States federal income Tax Returns of the Sellers for the
taxable year that includes the Closing Date (after giving effect to automatic extensions, but only if exercised by Sellers); provided, that if the independent accounting firm renders its decision after such date, the Purchaser shall not be
required to pay the Section 338(h)(10) Indemnification Amount until three days after such firm renders its decision. 

ARTICLE IX 

DEFINITIONS 
 9.01 Definitions. For purposes of this Agreement, the following terms when used herein shall have the respective meanings set forth below: 

“Accounting Methodology” means the accounting principles, methods and practices utilized in preparing the Reviewed
Financial Statements, applied on a consistent basis. 
 “Action” means any action, claim, charge, complaint,
inquiry, investigation, examination, hearing, petition, suit, arbitration, mediation or other proceeding, in each case before any Governmental Entity, whether civil, criminal, administrative or otherwise, in law or in equity. 

“Affiliates” of any particular Person means any other Person controlling, controlled by or under common control with
such particular Person, where “control” means the 

  
 33 

 
possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise. 

“Balance Sheet and Working Capital Schedule Rules” means, collectively, the Accounting Methodology and the rules set
forth on Exhibit E; provided that in the event of any conflict between the Accounting Methodology and the rules set forth on Exhibit E, the rules set forth on Exhibit E shall apply. 

“Business Day” means any day except Saturday, Sunday or any day on which banks are generally not open for business in
the city of New York, New York. 
 “Contract” means any contract, agreement, arrangement, note, bond, mortgage,
leases, sublease, license or other agreement legally binding on the Company. 
 “Current Assets” means, as of
any date, the consolidated current assets of the Company, which current assets shall include only the line items set forth on the Working Capital Schedule under the heading “Current Assets” or in the Balance Sheet and Working
Capital Schedule Rules, and no other assets. 
 “Current Liabilities” means, as of any date, the consolidated
current liabilities of the Company, which current liabilities shall include only the line items set forth on the Working Capital Schedule under the heading “Current Liabilities” or in the Balance Sheet and Working Capital Schedule
Rules, and no other liabilities. 
 “Environmental Permits” means all Permits issued pursuant to Environmental
Laws. 
 “Environmental Laws” means all federal, state, local and foreign Laws concerning pollution or
protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of or exposure to any hazardous materials, substances or wastes, as such requirements are enacted and in effect on or prior to the Closing Date. 

“Fundamental Representations” means Sections 3.01 (Authorization; No Breach), 3.03 (Title to Shares),
3.05 (Brokerage), 4.02 (No Subsidiaries), 4.03 (Authorization; No Breach), 4.04 (Capital Stock) and 4.20 (Brokerage). 
 “GAAP” means United States generally accepted accounting principles applied in a manner consistent with those used in preparing the Latest Balance Sheet. 

“Governmental Entity” means any federal, national, state, foreign, provincial, local or other government or any
governmental, regulatory, administrative or self-regulatory authority, agency, bureau, board, commission, court, judicial or arbitral body, department, political subdivision, tribunal or other instrumentality thereof. 

“Indebtedness” means, without duplication, all obligations of the Company: (i) for borrowed money, whether current,
short-term or long-term, secured or unsecured; (ii) evidenced 

  
 34 

 
by bonds, debentures, notes or similar instruments; (iii) under conditional sale, title retention or similar agreements or arrangements creating an obligation of the Company with respect to
the deferred purchase price of property (including “earn-out” payments, excluding accounts payable and other current liabilities incurred in the ordinary course of business); (iv) all guarantees by the Company on account of
indebtedness of any other Person (including so called take or pay or keep well agreements); (v) all obligations, contingent or otherwise, of the Company as an account party in respect of letters of credit; (vi) all obligations, contingent
or otherwise, of the Company in respect of bankers’ acceptances; (vii) in respect of interest rate and currency obligation swaps, collars, caps, hedges or similar arrangements; (viii) in respect of any bank overdrafts; and
(ix) in respect of any lease (or other arrangement conveying the right to use) real or personal property, or combination thereof, which liabilities are required to be classified and accounted for under GAAP as capital leases. For the avoidance
of doubt, the term “Indebtedness” shall include any accrued interest on any of the foregoing and any prepayment penalties, premiums, breakage costs, fees and other costs and expenses associated with the repayment of any of the foregoing
whether or not repaid at Closing. 
 “Intellectual Property” means any of the following, as they exist anywhere
in the world, whether registered or unregistered: (a) patents, patentable inventions and other patent rights (including any divisions, continuations, continuations-in-part, reissues, reexaminations and interferences thereof);
(b) trademarks, service marks, trade dress, trade names, taglines, brand names, logos and corporate names and all goodwill related thereto; (c) copyrights, mask works and designs; (d) trade secrets, know-how, inventions, processes,
procedures, databases, confidential business information and other proprietary information and rights; (e) computer software programs, including all source code, object code, specifications, designs and documentation related thereto; and
(f) domain names, Internet addresses and other computer identifiers. 
 “knowledge” means, with respect to
Sellers, the actual knowledge of Thomas Rowe and Mary Jennifer Rowe and with respect to the Company, the actual knowledge of Thomas Rowe, Mary Jennifer Rowe and John Mitchell assuming the reasonable discharge of such Person’s duties in a
professional manner. 
 “Laws” means the common law and any law, treaty, statute, ordinance, zoning ordinance
or variance, subdivision ordinance, rule, regulation, code, policy, executive order or other requirement or procedure enacted, adopted, promulgated or applied by any Governmental Entity, including any applicable order, judgment, injunction, awards,
stipulations, Permits, opinions, decrees or writs. 
 “Leased Real Property” means all those parcels of real
property or portions thereof, together with those buildings, structures, improvements and fixtures thereon, which the Company uses or occupies or has the right to use or occupy, now or in the future, pursuant to a lease, sublease or other agreement
(each, a “Real Property Lease”, which term shall for purposes of this Agreement, include the Headquarters Lease and Packaging Facility Lease). 
 “Liens” all mortgages, liens, pledges, security interests, charges, claims, leases, easements, covenants, rights of way, title defects, encroachments, adverse claims of ownership or use,
encroachments and other survey defects, charges, options to purchase or lease or acquire 

  
 35 

 
any interest, conditional sales agreement, restrictions (whether on voting, sale, transfer, disposition or otherwise) and encumbrances of any nature whatsoever. 

“Material Adverse Effect” means any event, occurrence, circumstance, development, condition, fact, change or effect that
has had, or would reasonably be expected to have, either individually or in the aggregate, a material adverse effect on the assets, liabilities, financial condition or results of operations of the Company or that materially impairs the ability of
the Company to consummate the transactions contemplated by this Agreement, but shall exclude any event, occurrence, circumstance, development, condition, fact, change or effect resulting or arising from: (i) any change in any Laws or GAAP or
any interpretation thereof, to the extent the Company is not disproportionately affected thereby relative to other Persons in the business in which the Company operates; (ii) any change in U.S. general economic conditions or economic,
financial, market or political conditions, including interest rates, exchange rates, securities or commodity prices, in each case, to the extent the Company is not disproportionately affected thereby relative to other Persons in the business in
which the Company operates; (iii) any change in the industries or markets in which the Company operates, but only (A) if such changes are not specifically related to the Company and (B) to the extent the Company is not
disproportionately affected thereby relative to other Persons in the business in which the Company operates; (iv) the effect of any natural disaster, war, act of terrorism, civil unrest or similar event that does not disproportionately impact
the Company relative to other Persons in the business in which the Company operates; (v) any action taken or any omission to act by the Company with the express written consent of the Purchaser. 

“Net Working Capital” means the consolidated Current Assets of the Company as of the close of business on the Closing
Date minus the consolidated Current Liabilities of the Company as of the close of business on the Closing Date, in each case without giving effect to the transaction contemplated by this Agreement. 

“Permits” means any consents, authorizations, registrations, waivers, privileges, exemptions, qualifications, quotas,
certificates, filings, franchises, licenses, notices, permits or rights. 
 “Permitted Liens” means
(i) Liens securing liabilities which are reflected or reserved against in the Latest Balance Sheet to the extent so reflected and to the extent adequate reserves with respect thereto are maintained on the Company’s books in accordance with
GAAP, (ii) Liens for Taxes not yet due and payable or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the Company’s books in accordance with GAAP,
(iii) to the extent not waived by Sellers under the Headquarters Lease or Packaging Facility Lease, statutory Liens of landlords with respect to the Leased Real Property, (iv) Liens of mechanics, materialmen, repairmen, and warehousemen
incurred in the ordinary course of business and not yet delinquent or being contested in good faith and for which adequate reserves have been set aside in accordance with GAAP, (v) zoning, building, and other land-use laws regulating the use or
occupancy of the Leased Real Property that are imposed by a governmental authority having jurisdiction over such Leased Real Property that, individually and in the aggregate, do not and would not materially detract from the value of the Leased Real
Property and other property and assets of the Company or materially interfere with the use thereof as currently used, (vi) easements, covenants, conditions, restrictions, and 

  
 36 

 
other similar non-monetary matters affecting title to the Leased Real Property incurred in the operation of the business of the Company that, individually and in the aggregate, do not and would
not materially detract from the value of the Leased Real Property and other property and assets of the Company or materially interfere with the use thereof as currently used, (vi) Sellers’ mortgages on the Leased Real Property, if any
(viii) Liens arising under workers’ compensation, unemployment insurance, social security, retirement and similar legislation, not yet delinquent or being contested in good faith and for which adequate reserves have been set aside in
accordance with GAAP, (ix) non-exclusive licenses of Intellectual Property and (x) Liens set forth on the Permitted Liens Schedule. 
 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or
a governmental entity or any department, agency or political subdivision thereof. 
 “reasonable efforts” means
reasonable efforts which are commercially reasonable under the circumstances. 
 “Related Person” means, with
respect to any individual, a member of such individual’s immediate family, which shall include such individual’s spouse, parents, children, siblings, aunts, uncles, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law,
brothers-in-law and sisters-in-law, and their respective descendants (whether lineal or adopted). 
 “Section 338(h)(10)
Indemnification Amount” means the sum of (x) the Section 338(h)(10) Tax Liability plus (y) the gross-up amount that the Sellers would be required to receive so that after the payment of Taxes on the receipt of such amounts,
the Sellers would receive a net amount equal to the Section 338(h)(10) Tax Liability; provided, that for purposes of determining the amount described in clause (y), the Sellers’ receipt of the sum of the amounts described in clauses
(x) and (y) shall be treated as an adjustment to the proceeds received by the Sellers pursuant to ARTICLE II (The Closing; Purchase Price Adjustment) hereof. 
 “Section 338(h)(10) Tax Liability” means an amount equal to the excess, if any, of (x) the Sellers’ liability for Taxes resulting from the transactions pursuant to this
Agreement if a Section 338(h)(10) Election is made over (y) the Sellers’ liability for Taxes resulting from the transactions pursuant to this Agreement if a Section 338(h)(10) Election is not made. The determination of such
amount shall (i) take into account the character of the income or gain recognized, (ii) be calculated based upon the Sellers’ actual highest marginal combined federal, state, and local tax rates applicable to such income, assuming
that each of the Sellers is an individual resident of East Moline, Illinois, which rates shall take into account the deductibility of state and local taxes, (iii) be calculated based upon the assumption that the Sellers’ aggregate tax
basis in his or her Shares equals the Company’s aggregate tax basis in its assets, and (iv) be consistent with the ADSP Allocation. 
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 

“Subsidiary” means any corporation or other organization, whether incorporated or unincorporated, (i) of which such
party or any other Subsidiary of such party is a general 

  
 37 

 
partner (excluding partnerships, the general partnership interest of which held by such party or any Subsidiary of such party do not have a majority of the voting interests in such partnership)
or (ii) at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or other body performing similar functions with respect to such corporation or
other organization is directly or indirectly owned or controlled by such party or by any one of more of its Subsidiaries, or by such party and one or more of its Subsidiaries. 
 “Target Net Working Capital” means $12,450,000. 

“Tax” or “Taxes” means (i) any and all federal, state, provincial, local, foreign and other taxes,
levies, fees, imposts, duties, and similar governmental charges (including any interest, fines, assessments, penalties or additions to tax imposed in connection therewith or with respect thereto) including, without limitation (x) taxes imposed
on, or measured by, income, franchise, profits or gross receipts, and (y) ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, capital stock, license, branch, payroll, estimated withholding,
employment, social security (or similar), unemployment, compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes, and customs duties, (ii) any and all liability for the payment
of any items described in clause (i) above as a result of being (or ceasing to be) a member of an affiliated, consolidated, combined, unitary or aggregate group (or being included (or being required to be included) in any Tax Return related to
such group and (iii) any and all liability for the payment of any amounts as a result of any express or implied obligation to indemnify any other person, or any successor or transferee liability, in respect of any items described in clause
(i) or (ii) above. 
 “Tax Returns” means any return, report, information return or other document
(including schedules or any related or supporting information) filed or required to be filed with any governmental entity or other authority in connection with the determination, assessment or collection of any Tax or the administration of any Laws,
regulations or administrative requirements relating to any Tax. 
 “Transaction Documents” means this
Agreement, the Consulting Agreement, the Headquarters Lease, the Packaging Facility Lease, the Escrow Agreement and the other instruments and documents contemplated hereby and thereby. 

“Transaction Expenses” means (i) the fees and expenses of legal counsel, investment bankers, accountants and other
advisors (including any representatives of legal counsel, investment bankers, accountants or other advisors) incurred by the Company prior to the Closing in connection with this Agreement and the consummation of the transactions contemplated hereby
and (ii) any change of control bonus, transaction bonus, discretionary bonus (including the bonus payable to John Mitchell as set forth on the Developments Schedule), “stay put” or other compensatory payments to be made to
employees of the Company at Closing as a result of the execution of this Agreement or consummation of the transactions contemplated hereby or at the discretion of the Company or the Sellers, in each case that remain unpaid as of immediately prior to
the Closing. 

  
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 “Transfer Taxes” means transfer, documentary, sales, use or registration
tax, stamp tax, stock transfer tax, excise tax or other similar tax imposed on the Company or the Sellers as a result of the transactions contemplated by this Agreement, and any penalties or interest with respect to such taxes. 

“Treasury Regulations” means the Treasury regulations promulgated under the Code. 

9.02 Other Definitional Provisions. 
 (a) Accounting Terms. Accounting terms which are not otherwise defined in this Agreement have the meanings given to them under GAAP. To the extent that the definition of an accounting term
defined in this Agreement is inconsistent with the meaning of such term under GAAP, the definition set forth in this Agreement will control. 
 (b) “Hereof,” etc. The terms “hereof,” “herein” and “hereunder” and terms of similar import are references to this Agreement as a whole and not to any
particular provision of this Agreement. Section, clause, Schedule and Exhibit references contained in this Agreement are references to Sections, clauses, Schedules and Exhibits in or to this Agreement, unless otherwise specified. 

(c) Successor Laws. Any reference to any particular Code section or any other Laws or regulation will be interpreted to include any
revision of or successor to that section regardless of how it is numbered or classified. 
 9.03 Cross-Reference of Other
Definitions. Each capitalized term listed below is defined in the corresponding Section of this Agreement: 
  

					
	Term	  	Section	 
	 ADSP
	  	 	8.07(c)	  
	 ADSP Allocation
	  	 	8.07(c)	  
	 Agreement
	  	 	Preamble	  
	 Cap
	  	 	7.02(a)	  
	 Closing
	  	 	2.01	  
	 Closing Date
	  	 	2.01	  
	 Closing Transactions
	  	 	2.03	  
	 COBRA
	  	 	4.15(d)	  
	 Code
	  	 	4.15(a)	  
	 Company
	  	 	Preamble	  
	 Company Adjustment Amount
	  	 	2.04(f)	  
	 Company Contracts
	  	 	4.09(a)	  
	 Company Intellectual Property
	  	 	4.11	  
	 Confidential Information
	  	 	6.04	  
	 Consulting Agreement
	  	 	Recitals	  
	 Contest
	  	 	8.04(a)	  
	 Disclosure Schedules
	  	 	ARTICLE IV	  
	 Electronic Delivery
	  	 	10.11	  

  
 39 

					
	Term	  	Section	 
	 ERISA
	  	 	4.15(a)	  
	 ERISA Affiliate
	  	 	4.15(b)	  
	 Escrow Agent
	  	 	2.03(a)	  
	 Escrow Agreement
	  	 	2.03(a)	  
	 Escrow Amount
	  	 	2.03(b)	  
	 Estimated Cash
	  	 	2.04(a)	  
	 Estimated Indebtedness
	  	 	2.04(a)	  
	 Estimated Net Working Capital
	  	 	2.04(a)	  
	 Estimated Purchase Price
	  	 	1.02(a)	  
	 Estimated Transaction Expenses
	  	 	2.04(a)	  
	 Final Purchase Price
	  	 	1.02(b)	  
	 Financial Statements
	  	 	4.05(a)	  
	 Headquarters Landlord
	  	 	Recitals	  
	 Headquarters Lease
	  	 	Recitals	  
	 Indemnification Threshold
	  	 	7.02(a)	  
	 Indemnitee
	  	 	7.04	  
	 Indemnitor
	  	 	7.04	  
	 Indemnity Escrow Account
	  	 	2.03(b)	  
	 Indemnity Escrow Amount
	  	 	2.03(b)	  
	 Insurance Policies
	  	 	4.19	  
	 IRS
	  	 	4.15(a)	  
	 Latest Balance Sheet
	  	 	4.05(a)	  
	 Losses
	  	 	7.02(a)	  
	 Material Customers
	  	 	4.10(a)	  
	 Material Vendors
	  	 	4.10(b)	  
	 Objection Notice
	  	 	2.04(c)	  
	 Other Material
	  	 	10.09	  
	 Packaging Facility Landlord
	  	 	Recitals	  
	 Packaging Facility Lease
	  	 	Recitals	  
	 Plans
	  	 	4.15(a)	  
	 Post-Closing Taxes
	  	 	8.02(b)	  
	 Pre-Closing Taxable Periods
	  	 	8.01(b)	  
	 Pre-Closing Taxes
	  	 	8.02(a)	  
	 Preliminary Statement
	  	 	2.04(b)	  
	 Purchase Price Adjustment Escrow Account
	  	 	2.03(a)	  
	 Purchase Price Adjustment Escrow Amount
	  	 	2.03(a)	  
	 Purchase Price Adjustments
	  	 	2.04(h)	  
	 Purchaser
	  	 	Preamble	  
	 Purchaser Adjustment Amount
	  	 	2.04(g)	  
	 Purchaser Indemnified Parties
	  	 	7.02(a)	  
	 Purchaser Indemnified Party
	  	 	7.02(a)	  
	 Representatives
	  	 	6.04	  
	 Restricted Period
	  	 	6.02	  
	 Reviewed Financial Statements
	  	 	4.05(a)	  
	 S Corporation
	  	 	4.08(l)	  
	 Schedule
	  	 	ARTICLE IV	  

  
 40 

					
	Term	  	Section	 
	 Section 338(h)(10) Election
	  	 	8.07(a)	  
	 Sellers
	  	 	Preamble	  
	 Sellers Indemnified Parties
	  	 	7.03	  
	 Sellers Indemnified Party
	  	 	7.03	  
	 Shares
	  	 	Recitals	  
	 Straddle Period
	  	 	8.05	  
	 Tax Indemnified Purchaser Parties
	  	 	8.02(a)	  
	 Tax Indemnified Purchaser Party
	  	 	8.02(a)	  
	 Tax Indemnified Sellers Parties
	  	 	8.02(b)	  
	 Tax Indemnified Sellers Party
	  	 	8.02(b)	  
	 Tax Loss
	  	 	8.02(a)	  
	 Tax Losses
	  	 	8.02(a)	  
	 Tax Sharing Agreements
	  	 	4.08(h)	  
	 Transaction Price
	  	 	1.02(a)	  
	 Valuation Firm
	  	 	2.04(c)	  
	 WARN
	  	 	4.21(b)	  

 ARTICLE X 
 MISCELLANEOUS 
 10.01 Press Releases and Communications. Prior to Closing,
no press release or public announcement related to this Agreement or the transactions contemplated herein, or any other public announcement, shall be issued or made by any party hereto without the approval of the Purchaser and the Sellers, unless
required by Laws (in the reasonable opinion of counsel) in which case the Purchaser and the Sellers shall have the right, to the extent practicable, to review and comment on such press release or announcement prior to publication and the parties
hereto shall use reasonable efforts to incorporate such comments therein. 
 10.02 Expenses. Except as otherwise provided
herein, each party shall pay all of its own fees, costs and expenses (including fees, costs and expenses of legal counsel, investment bankers, accountants, brokers or other representatives and consultants and appraisal fees, costs and expenses)
incurred in connection with the negotiation of this Agreement and the other agreements contemplated hereby, the performance of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby;
provided that the Sellers shall bear all Transaction Expenses, which the Purchaser shall pay on behalf of the Sellers and/or the Company as provided in Section 2.03(e) (The Closing Transactions). Notwithstanding the foregoing,
(i) the Purchaser shall pay any and all expenses relating to surveys and title insurance, (ii) the Purchaser and the Sellers shall each be responsible for 50% of the Transfer Taxes, and (iii) the Purchaser and the Sellers shall each
be responsible for 50% of the fees and expenses of the Escrow Agent relating to the Escrow Agreement. 
 10.03 Notices. All
notices, requests, demands and other communications permitted or required to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed conclusively to have been given (i) when
personally delivered, (ii) when sent by facsimile (with hard copy to follow) during a Business Day (or on the next Business Day if sent after the close of normal business hours or on any 

  
 41 

 
non-Business Day), (iii) when sent by electronic mail (with hard copy to follow) during a Business Day (or on the next Business Day if sent after the close of normal business hours or on any
non-Business Day), (iv) one (1) Business Day after being sent by reputable overnight express courier (charges prepaid) or (v) three (3) Business Days following mailing by certified or registered mail, postage prepaid and return
receipt requested. Unless another address is specified in writing, notices, requests, demands and communications to the parties shall be sent to the addresses indicated below: 

Notices to the Purchaser: 
 The Hillman Group, Inc. 
 c/o The Hillman Companies, Inc.

 10590 Hamilton Avenue 
 Cincinnati, OH 45231 

Facsimile:        (513) 851-5531 

Attention:        Max W. Hillman, Jr. 

         James Waters 

with a mandatory copy to (which shall not constitute 

notice to the Purchaser): 
 Oak Hill Capital Management, LLC 
 65 East 55th Street, 32nd Floor

 New York, NY 10022 
 Facsimile:      (212) 838-8411 

Attention:      John R. Monsky 

with a mandatory copy to (which shall not constitute 

notice to the Purchaser): 
 Paul, Weiss, Rifkind, Wharton & Garrison LLP 
 1285 Avenue
of the Americas 
 New York, NY 10019 

Facsimile:      (212) 757-3990 

Attention:      Angelo Bonvino, Esq. 

Notices to the Sellers: 
 Thomas Rowe 
 1814 1st Avenue 

P.O. Box 549 
 Rapids City, Illinois 61278 
 E-mail: Roweqc@gmail.com 

with a mandatory copy to (which shall not constitute 

notice to the Sellers): 

  
 42 

 Califf & Harper, P.C. 

506 15th Street, Suite 600 
 Moline, Illinois 61265 
 Facsimile: (309) 764-7936 

Attention: Harvey A. Levin 
 10.04 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties to this Agreement (whether by operation of Law or otherwise)
without the prior written consent of the other parties to this Agreement and any purported assignment or other transfer without such consent shall be void and unenforceable. Notwithstanding the foregoing, the Purchaser may assign all or any part of
this Agreement (i) to an Affiliate of the Purchaser provided that the Purchaser remains liable for its obligations hereunder, (ii) to any financing source providing financing for the transactions contemplated hereby or (iii) after the
Closing, in connection with a merger, consolidation or sale of all or substantially all of the assets of the Purchaser or the Company. 
 10.05 Further Assurances. From time to time, as and when requested by any party hereto and at such party’s expense, any other party shall execute and deliver, or cause to be executed and delivered,
all such documents and instruments and shall take, or cause to be taken, all such further or other actions as such requesting party may reasonably deem necessary or desirable to evidence and effectuate the transactions contemplated by this
Agreement. 
 10.06 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable Laws, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Laws, such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Agreement. 
 10.07 Construction. The language
used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Person. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof. Each defined term used in this Agreement shall have a comparable meaning when used in its plural
or singular form. The use of the word “including” herein shall mean “including without limitation” and, unless the context otherwise requires, “neither,” “nor,” “any,” “either” and
“or” shall not be exclusive. The specification of any dollar amount or the inclusion of any item in the representations and warranties contained in this Agreement or the Disclosure Schedules or the Exhibits attached hereto is not intended
to imply that the amounts, or higher or lower amounts, or the items so included, or other items, are or are not required to be disclosed (including whether such amounts or items are required to be disclosed as material or threatened) or are within
or outside of the ordinary course of business. The information contained in this Agreement and in the Disclosure Schedules and Exhibits hereto is disclosed solely for purposes of this Agreement, and no information contained herein or therein shall
be deemed to be an admission by any party hereto 

  
 43 

 
to any third party of any matter whatsoever (including any violation of Laws or breach of contract). 
 10.08 Amendment and Waiver. Any provision of this Agreement or the Disclosure Schedules or Exhibits hereto may be amended or waived only in a writing signed by the Purchaser and the Sellers. No waiver of
any provision hereunder or any breach or default thereof shall extend to or affect in any way any other provision or prior or subsequent breach or default. 
 10.09 Complete Agreement. This Agreement and the documents referred to herein contain the complete agreement between the parties hereto and supersede any prior understandings, agreements or
representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. The representations and warranties made by the Sellers in this Agreement, and in the Disclosure Schedules that accompany this
Agreement, supersede, replace and nullify in every respect the data set forth in any other document, material or statement, whether written or oral, made available to the Purchaser (the “Other Material”), and the Purchaser shall not
rely on any data contained in the Other Material for any purpose whatsoever, including as a promise, projection, guaranty, representation, warranty or covenant. 
 10.10 Third-Party Beneficiaries. Except as set forth in Sections 7.02 (Indemnification for the Benefit of the Purchaser), 7.03 (Indemnification by the Purchaser for the Benefit of the
Sellers) and 8.02 (Tax Indemnification), or as otherwise expressly provided herein, nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of this Agreement. 
 10.11 Counterparts; Electronic
Delivery. This Agreement, the other Transaction Documents and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall
constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail (any such delivery, an “Electronic
Delivery”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request
of any party hereto, each other party hereto or thereto shall re-execute the original form of this Agreement and deliver such form to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact
that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense
relates to lack of authenticity. 
 10.12 Governing Law. All issues and questions (including any claims) concerning the
construction, validity, interpretation and enforceability of this Agreement and the Exhibits and Schedules hereto shall be governed by, and construed in accordance with, the Laws of the State of Illinois, without giving effect to any choice of law
or conflict of law rules or provisions (whether of the State of Illinois or any other jurisdiction) that would cause the 

  
 44 

 
application of the Laws of any jurisdiction other than the State of Illinois; provided, however, that any dispute or controversy under Section 2.04 (Purchase Price
Adjustments) shall be resolved in the manner described therein. 
 10.13 Jurisdiction; Service of Process. Any Action or
proceeding (whether in tort, contract or otherwise) arising out of or relating to this Agreement or any transaction contemplated hereby shall be brought or otherwise commenced exclusively in the federal and state courts located in Rock Island
County, Illinois, and each of the parties (i) irrevocably submits to the exclusive jurisdiction of such courts in any such Action or proceeding, (ii) waives any objection it may now or hereafter have to venue or to convenience of forum,
(iii) consents to service of process in any such proceeding in any manner permitted by the Laws of the State of Illinois, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified
pursuant to Section 10.03 (Notices) is reasonably calculated to give actual notice, (iv) agrees that all claims in respect of the Action or proceeding shall be heard and determined only in any such court and (v) agrees not to
bring any Action or proceeding arising out of or relating to this Agreement or any transaction contemplated hereby in any other court. The parties agree that any of them may file a copy of this paragraph with any court as written evidence of the
knowing, voluntary and bargained agreement between the parties irrevocably to waive any objections to venue or to convenience of forum. Process in any Action or proceeding referred to in the first sentence of this Section 10.13 may be
served on any party anywhere in the world. 
 10.14 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES HERETO ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE PARTIES HERETO
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS OR HIS, AS THE CASE MAY BE, LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND
THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. 

  
 45 

 *    *    *    * 

  
 46 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year
first above written. 
  

							
	         Purchaser:
	 		 	THE HILLMAN GROUP, INC.
				
		 		 	By:	 	/s/ James P. Waters
		 		 	Name:	 	James P. Waters
		 		 	Its:	 	 Vice President, Secretary, Treasurer and
 Chief Financial Officer

				
		 		 		 	/s/ Thomas Rowe
	         Sellers:
	 		 		 	THOMAS ROWE
				
		 		 		 	/s/ Mary Jennifer Rowe
		 		 		 	MARY JENNIFER ROWE

 [Signature Page to Stock Purchase Agreement] 

 EXHIBIT A 

CONSULTING AGREEMENT 
 See attached. 

 EXHIBIT B 

HEADQUARTERS LEASE 
 See attached. 

 EXHIBIT C 

PACKAGING FACILITY LEASE 
 See attached. 

 EXHIBIT D 

ESCROW AGREEMENT 
 See attached. 

 EXHIBIT E 

BALANCE SHEET AND WORKING CAPITAL SCHEDULE RULES 

 

	1.	Cash shall be included as a Current Asset. Real Property taxes shall be included as a Current Liability. 

 

	2.	Sellers’ Estimated Transaction Expenses to extent accrued, but not paid shall be included as a Current Liability, but shall not be included in the Working Capital
Schedule (being paid in accordance with Section 2.03(e) of the Agreement). 

  

	3.	Inventory shall be calculated in accordance with FIFO.Development Alliance Agreement

 Exhibit 10.5 

DEVELOPMENT ALLIANCE AGREEMENT 

THIS IS A DEVELOPMENT ALLIANCE
AGREEMENT (“Agreement”), entered into this 10th day of March, 2011, by and among KEYWORKS-KEYEXPRESS, LLC (“KeyWorks”), a Nevada
limited liability company having an address at 1016 W. University Ave., Suite 107, Flagstaff, Arizona 86001, THE HILLMAN GROUP, INC. (“Hillman”), a Delaware corporation
having an address at 10590 Hamilton Ave., Cincinnati, Ohio 45231, and, solely for purposes of Subsection 2.6 (“Additional Agreements”) and Subsection 3.2 (“By Members”) and SECTION 16
(“GENERAL”) the persons identified as Members on the signature pages hereto. 

RECITALS 
 A. KeyWorks is in the business of designing and developing technology for use in key-duplicating kiosk devices, including without limitation do-it-yourself devices; 

B. Hillman is involved in the key duplication business, and owns and markets the AXXESS Precision Key Duplication System®;

 C. Hillman and KeyWorks now wish to work together to enhance Hillman’s key duplication business pursuant to
the terms of this Agreement. 
 NOW THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows. 
 AGREEMENT

 1. DEFINITIONS. Capitalized terms used in this Agreement shall have the following meanings: 

“Assigned Items” shall have the meaning assigned to it in Subsection 9.1 (“Assignment”). 

“Confidential Information” shall have the meaning assigned to it in SECTION 10
(“CONFIDENTIAL INFORMATION”). 
 “Copyrights” shall mean, as they exist
anywhere in the world, all copyrights and mask works, including all renewals and extensions thereof, copyright registrations and applications for registration thereof, and non-registered copyrights, and all rights therein provided by international
treaties or otherwise, that are owned or held by KeyWorks, the Members or the Primary Subcontractors and which relate to the design, development, manufacture, marketing and servicing of Key Machines. 

“Development Plan” shall have the meaning assigned to it in Subsection 6.1(A) (“Traditional Market”).

 “Disclosing Party” shall have the meaning assigned to it in
SECTION 10 (“CONFIDENTIAL INFORMATION”). 

 “Effective Date” shall mean the Closing Date as defined in the TagWorks Purchase
Agreement. 
 “Existing IP” shall have the meaning assigned to it in Subsection 2.2 (“Assignment by
KeyWorks”). 
 “FastKey” shall mean Hillman’s self-serve key-cutting product as exists as of the Effective
Date, or as modified during the Term, but not to include any modifications, enhancements, updates or changes that include any Existing IP or any of the work or Intellectual Property carried out or created in whole or in part by KeyWorks, the Members
or the Primary Subcontractors under this Agreement. 
 “Fee” shall mean any amounts payable to KeyWorks pursuant to this
Agreement. 
 “Hillman Board” shall have the meaning assigned to it in Subsection 4.2
(“ITAB”). 
 “Intellectual Property” shall mean, in any and all jurisdictions throughout the world:
(a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations,
continuations in part, revisions, extensions, and reexaminations thereof; (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, brand names, designs, and rights in telephone numbers, together with
all translations, adaptations, derivations, and combinations thereof, whether registered or unregistered, and all registrations and applications for registration thereof, and all goodwill associated therewith; (c) all copyrightable
works, all copyrights, including all applications, registrations, renewals and extensions in connection therewith; (d) all mask works and all applications, registrations, and renewals in connection therewith; (e) all trade
secrets, and, to the extent confidential, know-how, inventions, processes, procedures, customer lists and personally-identifiable information, databases, confidential business information, ideas, research and development, formulae, notes, technical
data, designs, drawings, specifications, supplier lists; pricing and cost information, business and marketing plans and proposals and other confidential proprietary information and rights (whether or not patentable or subject to copyright, mask
work, or trade secret protection); (f) all computer programs, whether in source code or object code form, all data, database specifications, designs and compilations, and all documentation relating to any of the foregoing;
(g) all domain names (including any sub-domain names), internet addresses and other computer user identifiers and any proprietary rights in and to sites on the world wide web, including proprietary rights in and to any text, graphics,
audio and video files and html or other code incorporated in such sites; (h) all advertising and promotional materials; and (i) all other proprietary rights substantially similar to the foregoing. 

“ITAB” shall have the meaning assigned to it in Subsection 4.2 (“ITAB”). 

“Key” shall mean any key or key/sleeve unit that is cut with a Key Machine, including without limitation any Self-Serve Kiosk or
any Non-Traditional Machine. 
 “Key Machines” shall mean key-duplicating kiosk devices, including without limitation
Self-Serve Kiosks and Non-Traditional Machines. 

 “Knowledge” means, when used with respect to KeyWorks, the actual knowledge of the
Members. 
 “Members” shall mean George Hagen, Mark Yeary, Michael Mueller, Richard McWilliams, Robert Semple and Kenneth
Booth, Esq., who directly or indirectly hold membership interests in KeyWorks and such additional members of KeyWorks as shall from time to time exist. 
 “Minimum Fee” shall have the meaning assigned to it in Subsection 11.1(A) (“Minimum Fee”). 
 “Non-Traditional Machine” shall have the meaning assigned to it in Subsection 7.1(A) (“Non-Traditional Market”). 

“Non-Traditional Market” shall mean non-traditional key-duplicating retail stores, such as Target, professional sports outlets,
university bookstores and retail stores that once provided key-duplication services and have discontinued such service such as Things Remembered. 
 “Noncompetition Agreement” means a noncompetition agreement substantially in the form attached hereto as EXHIBIT A
(“NONCOMPETITION AGREEMENT”). 
 “NPDC” shall have the meaning assigned to it
in Subsection 4.3 (“NPDC”). 
 “Patents” shall mean those pending U.S. provisional patent applications
described as such in EXHIBIT B (“ASSIGNED ITEMS”) and all patents that may issue thereon. 
 “Primary Subcontractors” shall mean Ryan Hamblin and Carl Ito. 
 “Receiving Party” shall have the meaning assigned to it in SECTION 10 (“CONFIDENTIAL INFORMATION”). 

“Self-Serve Kiosk” shall have the meaning assigned to it in Subsection 6.1 (“Development of Self-Serve
Kiosk”). 
 “Specifications” shall have the meaning assigned to it in Subsection 6.1(A)
(“Traditional Market”). 
 “Strategy Session” shall have the meaning assigned to it in
Subsection 5.2(A) (“First Strategy Session”). 
 “TagWorks” shall mean TAGWORKS, L.L.C.,
an Arizona limited liability company. 
 “TagWorks Purchase Agreement” shall mean that
certain Membership Interest Purchase Agreement, dated as of the date hereof, by and among Hillman, TagWorks, George L. Hagen, in his capacity as representative, and the sellers named therein. 

“Term” shall have the meaning assigned to it in SECTION 15 (“TERM
AND TERMINATION”). 

 “Trade Secrets” shall mean certain non-public trade secret information known by
KeyWorks, the Members and the Primary Subcontractors regarding the design, development, manufacture, marketing and servicing of Key Machines, including the information described in Exhibit B (“ASSIGNED
ITEMS”)  
 “Trademarks” shall mean those pending U.S. trademark applications
described as such in EXHIBIT B (“ASSIGNED ITEMS”) and all trademark registrations that may issue thereon, and all associated common law rights and all associated goodwill. 

“Traditional Market” shall mean any or all of those entities described as such in EXHIBIT
C (“TRADITIONAL MARKET”). 
 “Traditional Market Additional
Fees” shall mean Hillman’s price increases following the Effective Date of keys or key/sleeve units that are cut with a key-duplicating kiosk device created using the Existing IP or any of the work or Intellectual Property carried
out or created in whole or in part by KeyWorks, the Members or the Primary Subcontractors under this Agreement, including without limitation Self-Serve Kiosks and Non-Traditional Machines; provided, that “Traditional Market Additional
Fees” shall not include any price increases related to increases in cost of goods (other than the roll-out of sleeved keys) and servicing costs, including without limitation the pass-through of commodity inflation. 

2. INTELLECTUAL PROPERTY AND ASSIGNMENT. 

2.1 Ownership. The parties hereby acknowledge that: 
 A. KeyWorks owns the Patents, the Trademarks, the Copyrights and the Trade Secrets; and 
 B. The Patents, the Trademarks, the Copyrights and the Trade Secrets were developed by KeyWorks at an expense of approximately one million dollars ($1,000,000). 

C. Hillman owns FastKey, and notwithstanding anything to the contrary herein, including in SECTION 11
(“FEES AND PAYMENT”), in no event shall any amount be owed or paid to KeyWorks, the Members or any Primary Subcontractor with respect to any FastKey products or any keys cut with FastKey.

 2.2 Assignment by KeyWorks. Upon the Effective Date and in consideration for the timely payment of Fees and other
consideration, KeyWorks hereby irrevocably assigns to Hillman all its right, title and interest in and to the Patents, the Trademarks, the Copyrights and the Trade Secrets (collectively, the “Existing IP”). KeyWorks shall withdraw its
intent-to-use Trademark applications if and when so directed by Hillman, in order to enable Hillman to file its own applications on the Trademarks. 
 2.3 Assignment by Members and Primary Subcontractors. Upon the Effective Date, KeyWorks shall ensure that each Member and each Primary Subcontractor shall irrevocably assign to Hillman his right,
title and interest in and to the Existing IP pursuant to an 

 
assignment agreement in form and substance mutually satisfactory to Hillman and KeyWorks, which shall be no less favorable to Hillman than the terms of the assignments to Hillman by KeyWorks
pursuant to this Agreement. 
 2.4 Documentation. KeyWorks hereby agrees, and shall ensure that each Member and Primary
Subcontractor so agrees, to sign all documents and take all steps at Hillman’s expense as may be reasonably necessary to document the foregoing assignments. KeyWorks hereby grants, and shall ensure that each Member and each Primary
Subcontractor shall grant, to Hillman a power of attorney, coupled with an interest, to execute any and all documents on their behalf and in their name for the purposes of carrying out the terms of the assignment contemplated by this
SECTION 2 (“INTELLECTUAL PROPERTY AND ASSIGNMENT”), to take any and all appropriate actions and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of the assignment contemplated by this SECTION 2 (“INTELLECTUAL PROPERTY AND ASSIGNMENT”). With
respect to any of the Existing IP, that, for any reason, is deemed not to qualify as works made for hire or are deemed not to be effectively assigned to Hillman hereunder, KeyWorks hereby grants, and shall ensure that each Member and each Primary
Subcontractor shall grant, to Hillman a perpetual, worldwide, irrevocable, royalty-free, fully paid-up, exclusive license to use for any and all purposes and in any manner any such Existing IP.  

2.5 Intellectual Property Expense. The parties hereby acknowledge that as part of the approximately one million dollar
($1,000,000) expense incurred by KeyWorks as described in Subsection 2.1(B) included certain legal fees and costs in the preparation and prosecution of the applications for the Patents and Trademarks. KeyWorks agrees that it shall be solely
responsible for and shall pay the first fifty thousand dollars ($50,000) in attorneys’ fees and costs in the prosecution of applications for the Patents and Trademarks after the Effective Date to KeyWorks’ counsel, Kenneth Booth, Esq. of
Booth Udall, LLP, or such other counsel as Hillman and KeyWorks shall jointly select. Hillman agrees that all such fees and costs in excess of fifty thousand dollars ($50,000) shall be borne solely by Hillman. 

2.6 Additional Agreements. The Members hereby agree as follows: 

A. The Members shall capitalize KeyWorks properly in order for KeyWorks to perform its obligations under this Agreement. In
furtherance of, and without limiting the foregoing, following the Effective Date, the Members shall contribute at least $1,000,000 in the aggregate to KeyWorks no later than ten (10) days after the Effective Date. KeyWorks hereby agrees to
expend such capital in a commercially reasonable manner in order to perform its obligations under this Agreement and to facilitate effective development activities and cooperation between the parties. 

B. From the date hereof and through the Effective Date, KeyWorks shall not, without the prior written consent of Hillman
(such consent not to be unreasonably withheld, delayed or conditioned), take or agree to take, or cause any of the Members to take or agree to take, any action that would reasonably be expected to delay or prevent the consummation of the

 
transactions contemplated by this Agreement or hinder the ability of the Members or KeyWorks to perform hereunder. 
 3. NONCOMPETITION. 
 3.1 By KeyWorks. In connection
with the Fees payable hereunder, including the Minimum Fee, upon the Effective Date, KeyWorks hereby agrees that during the Term and during all periods during which Hillman or its affiliates are paying Fees that it shall not compete directly or
indirectly with Hillman in the design, development, duplication, manufacture or marketing of: (a) keys and key-duplicating machines; (b) engraving devices or services; (c) tags; (d) letters, numbers or
signs; or (e) fasteners. The parties hereto agree that the provisions of this Subsection 3.1 (“By KeyWorks”) are an integral part of this Agreement and that neither party would be entering into this Agreement without the
provisions of this Subsection 3.1 (“By KeyWorks”). 
 3.2 By Members. In connection with the Fees
payable hereunder, including the Minimum Fee, upon the Effective Date, each Member shall deliver to Hillman a Noncompetition Agreement signed by each such Member. The parties hereto agree that the provisions of this Subsection 3.2 (“By
Members”) are an integral part of this Agreement and that neither party would be entering into this Agreement without the provisions of this Subsection 3.2 (“By Members”). 

3.3 By Primary Subcontractors. In connection with the Fees payable hereunder, including the Minimum Fee, upon the Effective Date,
KeyWorks shall deliver to Hillman Noncompetition Agreements signed by the Primary Subcontractors. The parties hereto agree that the provisions of this Subsection 3.3 (“By Primary Subcontractors”) are an integral part of this
Agreement and that neither party would be entering into this Agreement without the provisions of this Subsection 3.3 (“By Primary Subcontractors”). 
 3.4 By Future Members. In connection with the Fees payable hereunder, including the Minimum Fee, from time to time during the Term and during all periods during which Hillman or its affiliates are
paying Fees, KeyWorks shall deliver to Hillman Noncompetition Agreements signed by any new Members, which execution shall be a condition to the admission of such person as a member of KeyWorks. The parties hereto agree that the provisions of this
Subsection 3.4 (“By Future Members”) are an integral part of this Agreement and that neither party would be entering into this Agreement without the provisions of this Subsection 3.4 (“By Future Members”).

 3.5 Enforcement. The parties understand and agree that the enforcement of all agreements described in this
SECTION 3 (“NONCOMPETITION”) shall be the responsibility of Hillman; provided, however, that KeyWorks shall cooperate reasonably with Hillman in such regard, at Hillman’s
expense. 
 4. OBJECTIVES AND ORGANIZATION. 

 4.1 Objectives. The parties understand and agree that it is an objective of this
Agreement for the parties to collaborate in the development of innovative and new Key Machine technologies for the Traditional Market and the Non-Traditional Market. 
 4.2 ITAB. 
 A. Responsibilities. In order to better reach the
objectives described in Subsection 4.1 (“Objectives”), the parties hereby establish an “Innovation and Technology Advisory Board” (“ITAB”) which shall have the power to: (a) approve or disapprove the
development “roadmap” for Key Machines; (b) approve or disapprove of the development of potential Key Machines or Key Machines features; (c) approve or disapprove of budgets, schedules and financial matters for Key
Machines; (d) approve or disapprove third party agreements and relationships regarding Key Machines; and (e) approve or disapprove marketing and support plans for Key Machines. The ITAB shall confer and meet regularly, in
person, by telephone or video conference, as may be agreed to from time to time by the parties. The ITAB shall report to the board of directors of Hillman (the “Hillman Board”). Each party shall be free to replace any of its members of the
ITAB upon reasonable notice to the other party after the earlier of: (A) completion of the alpha version of the Self-Serve Kiosk and beta version of the Non-Traditional Machine; or (B) thirty-six (36) months from the
Effective Date. 
 B. Membership. The members of the ITAB shall be reasonably determined by Hillman from time to time.
The initial members of the ITAB shall be as follows: 
 1. Mick Hillman (Hillman) 

2. Dave Jones (Hillman) 
 3. Bob Caulk (Hillman) 
 4. Jim Waters (Hillman) 

5. Maurice Andrien (Hillman) 
 6. George Hagen (KeyWorks) 
 4.3 NPDC. 

A. Responsibilities. In order to assist and make recommendations to the ITAB, the parties hereby establish a “New Product
Development Committee” (“NPDC”) which shall report to the ITAB, and which shall have the power to: (a) propose to the ITAB the development “roadmap” for Key Machines; (b) propose to the ITAB the
development of potential Key Machines or Key Machine features; (c) propose to the ITAB budgets, schedules and financial matters for Key Machines; (d) propose to the ITAB third party agreements and relationships regarding Key
Machines; and (e) propose to the ITAB marketing and support plans for Key Machines. The NPDC shall confer and meet regularly, in person, by telephone or video conference, as may be agreed to from time to time by the parties. Each party
shall be free to 

 
replace any of its members of the NPDC upon reasonable notice to the other party after the earlier of: (A) completion of the alpha version of the Self-Serve Kiosk and beta version of
the Non-Traditional Machine; or (B) thirty-six (36) months from the Effective Date. 
 B. Membership.
The members of the NPDC shall be reasonably determined by Hillman from time to time. The initial members of the NPDC shall be as follows: 
 1. Scott Basham (Hillman) 
 2. Jim McGrane (Hillman) 

3. Rob Lackman (Hillman) 
 4. Terry Rowe (Hillman) 
 5. Chip Church (Hillman) 

6. Dan Smercina (Hillman) 
 7. George Hagen (KeyWorks) 
 8. Mike Mueller (KeyWorks) 

9. Mark Yeary (KeyWorks) 

5. STRATEGY SESSIONS. 
 5.1 Process. The ITAB and the NPDC shall operate under a formal innovation and new product development process as agreed to by the parties and directed towards Key Machines, and which shall
consider, without limitation: (a) initial feasibility research and project authorization; (b) intellectual property and market analysis; (c) proof of concept; (d) pilot testing; and (e) new
product launch. The duties and procedures of the ITAB and the NPDC may be modified from time to time in the ordinary course of business by the Hillman Board. 
 5.2 Purpose of Strategy Sessions. 
 A. First Strategy Session. The
parties shall use their best efforts to ensure that the ITAB, the NPDC and other critical members of the Hillman and KeyWorks teams shall engage in a first strategy planning session (the “Strategy Session”) to take place within thirty
(30) days of the Effective Date. Such Strategy Sessions shall take place in the Phoenix, Arizona, metropolitan area, and shall be facilitated by an outside new products development group to be agreed to by the parties. The cost of such
facilitator (which shall not exceed thirty thousand dollars ($30,000)) shall be shared equally by the parties. The Strategy Session shall focus on a “Stage Gate” or equivalent development process for the Self-Serve Kiosk. The objectives of
the Strategy Session shall include: (i) establishing specific development goals; (ii) setting return on investment objectives; and (iii) setting key performance indicators. 

 B. Additional Strategy Sessions. The parties may agree from time to time upon
additional Strategy Sessions for the Non-Traditional Machine and other development efforts in the future. 
 6.
SELF-SERVE KIOSK. 
 6.1 Development of Self-Serve Kiosk. 

A. Traditional Market. 
 1. Status. The parties understand and agree that the initial focus of the development process for the Self-Serve Kiosk shall be to integrate facilitating technology to cut the best-selling Keys;
provided, however, that it is the intention of the parties that such technology will allow for easy expansion to include additional Keys for use with the Self-Serve Kiosk. 
 2. Development Planning Process. Subject to successful completion of the first Strategy Session, the parties shall establish and agree to in writing to a development plan (the “Development
Plan”) for the first Key Machine which shall be developed by the parties for the Traditional Market (the “Self-Serve Kiosk”). The specifications and features (“Specifications”) thereof shall be subject to approval by the
ITAB and the NPDC, and provided further that such Specifications shall first be provided to and approved by one (1) or more specific potential customers. 
 B. Development. All Intellectual Property developed by KeyWorks, its employees and independent contractors, the Members and the Primary Subcontractors in the development of the Self-Serve Kiosk
shall be subject to SECTION 9 (“INTELLECTUAL PROPERTY RIGHTS”). 
 C. Timing and Cost. The timing and cost of the development work to be carried out for the Self-Serve Kiosk pursuant to the Development Plan shall be subject to the “Stage Gating”
procedure described in Subsection 5.2(A) (“First Strategy Session”) and approved by the ITAB: 
 1. Alpha
Version. Once the Development Plan for the Self-Serve Kiosk has been approved by the ITAB, the parties shall use their best efforts to complete development of an alpha-test version of the Self-Serve Kiosk within one hundred and eighty
(180) days from such approval. Subject to the timely payment by Hillman of Fees, the cost of development of such alpha version shall be the responsibility of KeyWorks. 
 2. Later Versions. The parties hereby acknowledge that timely completion of other versions of the Self-Serve Kiosk, including without limitation beta test and commercial versions, shall depend in
whole or in part on the decisions of corresponding customers. Where the alpha-test version of the Self-Serve Kiosk is approved by a corresponding customer, however, and where the ITAB and the NPDC have approved a pilot beta-test version, then
KeyWorks shall provide the management and supervision to build, monitor and improve 

 
such beta-test version of the Self-Serve Kiosk. In such case, Hillman shall provide all necessary materials and personnel to build such beta version and shall be responsible for all associated
costs. 
 3. Manufacturer. KeyWorks shall, and shall ensure that each Member shall, be available to assist Hillman in
devising a manufacturing strategy for Key Machines. It is further the expectation of the parties that Cline Labs Inc. shall be engaged as an engineering resource and potentially a manufacturing contractor. 

6.2 Contributions. The parties understand and agree that each shall provide or license without charge all necessary hardware,
software and Intellectual Property as is reasonably necessary or desirable to complete development of the Self-Serve Kiosk pursuant to the Development Plan. 
 7. Non-Traditional Machine. 
 7.1 Non-Traditional Machine.

 A. Non-Traditional Market. Where the parties have agreed that reasonably sufficient progress has been made in the
development and rollout of the Self-Serve Kiosk as described in SECTION 6 (“SELF-SERVE KIOSK”), then in such case the parties shall thereupon design and develop a Key
Machine for the Non-Traditional Market (the “Non-Traditional Machine”), but that the Specifications thereof shall be subject to approval by the ITAB and the NPDC, and provided further that such Specifications shall first be provided to and
approved by one (1) or more specific potential customers. The parties understand and agree that all development costs and expenses of such Non-Traditional Machines (including no more than one (1) alpha unit and between five (5) and
ten (10) beta units) shall be paid by KeyWorks. 
 B. Development. All Intellectual Property developed by KeyWorks,
its employees and independent contractors, the Members and the Primary Subcontractors in the development of such Non-Traditional Machine shall be subject to SECTION 9 (“INTELLECTUAL PROPERTY
RIGHTS”). 
 7.2 Contributions. The parties understand and agree that each shall provide or
license without charge all necessary hardware, software and intellectual property as is reasonably necessary or desirable to complete development of the Non-Traditional Machine pursuant to its Development Plan. 

8. MARKETING. 
 8.1 Traditional Market Accounts. Hillman shall be primarily responsible for marketing the Self-Serve Kiosk in the Traditional Market, but that KeyWorks shall reasonably
assist with pilot testing and similar matters. 
 8.2 Non-Traditional Market Accounts. The parties shall
coordinate efforts for marketing the Non-Traditional Machine in the Non-Traditional Market. 

 8.3 Expenses. After the Effective Date, Hillman shall ensure that TagWorks shall
agree to allow KeyWorks to continue to occupy its current office space at TagWorks’ facility in Tempe, Arizona, without charge until such time as TagWorks shall terminate such right on no less than six (6) months’ written notice to
KeyWorks. Otherwise, each party shall bear its own office and administrative costs. 
 8.4 Services. Prior to first sale
of any Key Machines, the parties shall agree to a service plan to service such Key Machines in the field, and KeyWorks shall provide reasonable job training instructions and knowledge transfer to facilitate completion of such plan. 

9. INTELLECTUAL PROPERTY RIGHTS. 

9.1 Assignment. In consideration of Hillman’s performance hereunder, KeyWorks hereby agrees, and shall ensure that each
Member and each Primary Subcontractor shall agree, to disclose promptly and in writing and to irrevocably assign to Hillman all right, title and interest in and to all the following (the “Assigned Items”): (a) all Intellectual
Property made, conceived, developed or reduced to practice by KeyWorks and its employees and independent contractors, or any such Member or Primary Subcontractor during the Term with respect to Keys or Key Machines; and (b) all
information developed or learned by KeyWorks, or any such Member or Primary Subcontractor during the Term, regarding research, development, new products, marketing and selling Keys or Key Machines. 

9.2 Continuing Assurances. KeyWorks hereby agrees, and shall ensure that each Member and each Primary Subcontractor shall agree,
to cooperate with Hillman or its designees, both during and after the Term of this Agreement, in the procurement and maintenance of Hillman’s rights described in Subsection 9.1 (“Assignment”), and to execute, when requested,
any other documents reasonably necessary to document the corresponding assignments of the Assigned Items. KeyWorks hereby grants, and shall ensure that each Member and each Primary Subcontractor agrees to grant, to Hillman a power of attorney,
coupled with an interest, to execute any and all documents on their behalf and in their name for the purposes of carrying out the terms of the assignment contemplated by this SECTION 9 (“INTELLECTUAL
PROPERTY RIGHTS”), to take any and all appropriate actions and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of the assignment contemplated by
this SECTION 9 (“INTELLECTUAL PROPERTY RIGHTS”). With respect to any of the Assigned Items, that, for any reason, are deemed not to qualify as works made for hire or
are deemed not to be effectively assigned to Hillman hereunder, KeyWorks hereby grants, and shall ensure that each Member and each Primary Subcontractor agrees to grant, to Hillman a perpetual, worldwide, irrevocable, royalty-free, fully paid-up,
exclusive license to use for any and all purposes and in any manner any such Assigned Items. 
 10. CONFIDENTIAL
INFORMATION. 
 10.1 Protection. Each party (the “Disclosing Party”) may from time to time
during the Term disclose to the other party (the “Receiving Party”) certain non-public information regarding the Disclosing Party’s business, including technical, marketing, financial, personnel,

 
planning and other information (“Confidential Information”). The term “Confidential Information” expressly includes the Trade Secrets and the work or Intellectual Property
carried out or created in whole or in part by KeyWorks, the Members or the Primary Subcontractors under this Agreement. 

10.2 Confidential Nature of Terms of Agreement. Each party agrees not to disclose the terms of this Agreement to any third party
except as required by law, stock listing rules or regulatory authority, in order to enforce such party’s rights hereunder, or under obligation of confidence to employees, shareholders, advisors, attorneys, accountants or investment
professionals. 
 10.3 Protection of Confidential Information. The Receiving Party shall not disclose the Confidential
Information of the Disclosing Party, and shall not use the Confidential Information of the Disclosing Party for any purpose not expressly permitted by this Agreement. The Receiving Party shall limit the disclosure of the Confidential Information of
the Disclosing Party to the employees, shareholders or agents of the Receiving Party who have a need to know such Confidential Information for purposes of this Agreement, and who are, with respect to the Confidential Information of the Disclosing
Party, bound by confidentiality terms no less restrictive than those contained herein. The Receiving Party shall provide copies of such written agreements to the Disclosing Party upon request; provided, however, that such agreement copies shall
themselves be deemed the Confidential Information of the Receiving Party. 
 10.4 Exceptions. Notwithstanding anything
herein to the contrary, Confidential Information shall not be deemed to include any information which: (a) was already lawfully known to the Receiving Party without obligation of confidence at the time of disclosure by the Disclosing
Party as reflected in the written records of the Receiving Party (other than Trade Secrets or the work or Intellectual Property carried out or created in whole or in part by KeyWorks, the Members or the Primary Subcontractors under this Agreement);
(b) was or becomes lawfully known to the general public without breach of this Agreement; (c) is independently developed by the Receiving Party without access to, or use of, the Confidential Information; (d) is
approved in writing by the Disclosing Party for disclosure by the Receiving Party; (e) is required to be disclosed in order for the Receiving Party to enforce its rights under this Agreement; or (f) is required to be
disclosed by law or by the order of a court or similar judicial or administrative body; provided, however, that the Receiving Party shall notify the Disclosing Party of such requirement, and shall cooperate reasonably with the Disclosing Party, at
the Disclosing Party’s expense, in the obtaining of a protective or similar order with respect thereto. 
 10.5 Return
of Confidential Information. The Receiving Party shall return to the Disclosing Party, destroy or erase all Confidential Information of the Disclosing Party in tangible form upon the expiration or termination of this Agreement, whichever comes
first, and in both cases, the Receiving Party shall at the Disclosing Party’s request certify in writing that it has done so. 
 11.
FEES AND PAYMENT. 

 11.1 Fees. Hillman shall pay certain Fees to KeyWorks as follows: 

A. Minimum Fee. Subject to Subsection 15.4 (“Effect”), Hillman shall pay a minimum Fee (“Minimum Fee”)
of five hundred thousand dollars ($500,000) per annual period commencing on the Effective Date (paid monthly in equal installments) for ten (10) years from the Effective Date of this Agreement. Except as provided in Subsection 15.4
(“Effect”), the parties understand and agree that such obligation shall survive for the full ten (10) year period, regardless of any expiration or termination of this Agreement. The parties further understand and agree that the
Minimum Fee is not cumulative, and any actual Fees offset against it that exceed the Minimum Fee shall not be “rolled over” into any subsequent month or year. The Minimum Fee shall be offset by any amounts paid under Subsection 11.1(B)
(“Fee Calculation”) hereunder. 
 B. Fee Calculation. Subject to Subsection 11.1(A) (“Minimum
Fee”) and Subsection 15.4 (“Effect”), the Fee shall be calculated as follows: 
 1. Traditional
Market. For all activities in the Traditional Market, the Fee shall be: 
  

	 	(a)	One cent ($.01) for sales by Hillman of each key unit that is cut with a key-duplicating kiosk device created using the Existing IP or any of the work or
Intellectual Property carried out or created in whole or in part by KeyWorks, the Members or the Primary Subcontractors under this Agreement, including without limitation any Self-Serve Kiosk or any Non-Traditional Machine; and

  

	 	(b)	Twenty-five percent (25%) of the Traditional Market Additional Fees. 

2. Non-Traditional Market. For all activities in the Non-Traditional Market, the Fee shall be ten percent (10%) of all
wholesale amounts owed or paid for keys or key/sleeve units that are cut with a key-duplicating kiosk device created using the Existing IP or any of the work or Intellectual Property carried out or created in whole or in part by KeyWorks, the
Members or the Primary Subcontractors under this Agreement, including without limitation any Self-Serve Kiosk or any Non-Traditional Machine. 
 11.2 Payment. Hillman shall pay all Fees for the full Term of this Agreement, but, subject to Section 15.4 (“Effect”), Minimum Fees shall apply only for the first ten
(10) years of the Term as described in Subsection 11.1(A) (“Minimum Fee”). All Fees (including without limitation Minimum Fees) shall be paid on a monthly basis, fifteen (15) days in arrears, and all such Fee payments
shall be accompanied by written documentation reasonably sufficient to explain the amount and calculation of such Fees. Any late payment of Fees shall bear interest at a rate of one and one-half percent (1.5%) for each month or partial month,
or the highest rate allowed by law, whichever is lower. Any failure to pay Fees timely may also be deemed a material breach of this Agreement. 

 11.3 Other Keys. There shall be no Fee owed or paid on sales of any key (other than
as provided in Subsection 11.1(B)(1) (“Traditional Market”) and Subsection 11.1(B)(2) (“Non-Traditional Market”)), including without limitation any keys processed through the AXXESS system currently sold by Hillman
or FastKey. 
 11.4 Audit. Hillman shall maintain complete, clear and accurate books and records describing:
(a) all sales of Key Machines and Keys and any other keys subject to this Agreement; and (b) amounts owed or paid to KeyWorks with respect thereto. KeyWorks shall have the right to conduct an audit of all such books and
records (through an independent third party auditor selected by KeyWorks), and to obtain true and correct photocopies thereof, during regular business hours at Hillman’s offices and in such a manner as not to interfere unreasonably with
Hillman’s normal business activities. In no event shall such audits be conducted hereunder more frequently than once every twelve (12) calendar months. If any such audit shall have been determined to have resulted in an underpayment of
Fees hereunder, Hillman shall promptly pay KeyWorks such underpaid amount, together with interest thereon at a rate of one and one-half percent (1.5%) per month or partial month during which each such amount was owed and unpaid, or the highest
rate allowed by law, whichever is lower. If the amount of such underpayment exceeds seven and one half percent (7.5%) of amounts otherwise paid, then Hillman shall also immediately reimburse KeyWorks for KeyWorks’ expenses associated with
such audit. This Subsection 11.4 (“Audit”) shall survive the expiration or termination of this Agreement. 
 12.
RELATIONSHIP. KeyWorks’ relationship with Hillman shall be that of an independent contractor and nothing in this Agreement shall be construed to create a partnership, joint venture, or employer-employee relationship. Neither
KeyWorks nor Hillman is an agent of the other and neither is authorized to make any representation, contract or commitment on behalf of the other. KeyWorks, the Members and Primary Subcontractors shall not be entitled to any of the benefits which
Hillman may make available to its employees, such as group insurance, profit-sharing or retirement benefits. KeyWorks shall be solely responsible for all tax returns and payments required to be filed with or made to any federal, state or local tax
authority with respect to performance of services and receipt of fees under this Agreement. Hillman shall not withhold or make payments for Social Security, or any unemployment, disability or worker’s compensation insurance on KeyWorks, the
Members or Primary Subcontractors behalf. 
 13. REPRESENTATIONS AND WARRANTIES. 

13.1 By KeyWorks. KeyWorks hereby represents and warrants that as of the date hereof and during the Term of this Agreement and
thereafter: (a) the Existing IP and the Assigned Items as delivered by KeyWorks and each Member shall be original works of KeyWorks, the Members, and/or the Primary Subcontractors, as applicable; (b) all right, title and
interest in the Existing IP and the Assigned Items is owned by KeyWorks and/or the Members and shall not be subject to any restrictions or to any mortgages, liens, pledges, security interests, encumbrances or encroachments; (c) neither
KeyWorks nor any Member or Primary Subcontractor has granted or shall grant, directly or indirectly, any rights or interests whatsoever in the Existing IP and the Assigned Items to third parties; (d) KeyWorks has taken all reasonable

 
actions to maintain and protect each item of Existing IP; (e) the Existing IP is all of the Intellectual Property related to Keys and Key Machines that KeyWorks, the Members
and/or the Primary Subcontractors have any right, title and interest in and to; (f) to the Knowledge of KeyWorks, use of the Existing IP as contemplated under this Agreement does not infringe or otherwise violate any Intellectual
Property or other proprietary rights of any person, to the Knowledge of KeyWorks, there is no action pending or threatened alleging any infringement or violation or challenging KeyWorks’ or any of the Members’ rights in or to any Existing
IP and, to the Knowledge of KeyWorks, there is no existing fact or circumstance that would be reasonably expected to give rise to any such action; (g) to the Knowledge of KeyWorks, no person is infringing or otherwise violating any
Existing IP; (h) each present or past employee or contractor of KeyWorks who developed any Existing IP has executed a valid and enforceable contract with KeyWorks that conveys to KeyWorks any and all right, title and interest in and to
all Intellectual Property developed by such person in connection with such person’s employment or engagement by KeyWorks and true and correct copies of such agreements are included in EXHIBIT D
(“DEVELOPMENT AGREEMENTS”) hereto; (i) KeyWorks and each Member have full right and power to enter into and perform this Agreement without the consent of, or any notice to, any third
party; (j) the execution, delivery and performance of this Agreement by KeyWorks and each Member does not conflict with or result in the breach of any agreement to which KeyWorks or any Member is bound or result in the loss of any rights
in and to the Existing IP (other than pursuant to the assignment of the Existing IP to Hillman as provided in this Agreement); (l) all right, title and interest in and to the Existing IP and any Intellectual Property developed pursuant
to this Agreement can be freely assigned and licensed without the consent of any third party; and (m) KeyWorks and each Member shall take all reasonable precautions to prevent injury to any persons (including employees of Hillman) or
damage to property (including Hillman’s property). 
 13.2 By Hillman. Hillman hereby represents and warrants
as of the date hereof and during the Term of this Agreement and thereafter that: (a) Hillman has full right and power to enter into and perform this Agreement without the consent of, or any notice to, any third party; and
(b) Hillman shall take all necessary precautions to prevent injury to any persons (including employees of KeyWorks) or damage to property (including Hillman’s property). 

13.3 Disclaimer. OTHER THAN AS STATED IN THIS SECTION 13 (“REPRESENTATIONS AND WARRANTIES”) ALL GOODS AND SERVICES UNDER
THIS AGREEMENT ARE PROVIDED ON AN “AS IS” BASIS, AND NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER PARTY OR ANY THIRD PARTY. EACH PARTY HEREBY DISCLAIMS ALL SUCH OTHER WARRANTIES, EXPRESS, IMPLIED, STATUTORY, ARISING FROM CUSTOM OR TRADE
OR OTHERWISE AND INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS. 
 14. LIMITATION OF LIABILITY. OTHER THAN FOR DAMAGES ARISING FROM A BREACH OF SECTION 10 (“CONFIDENTIAL INFORMATION”) OR OF SECTION 3
(“NONCOMPETITION”), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE 

 
OTHER PARTY OR ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SIMILAR DAMAGES (INCLUDING LOST PROFITS), REGARDLESS OF HOW ARISING AND REGARDLESS OF WHETHER NOTIFIED BEFOREHAND OF
THE POSSIBILITY OF SUCH DAMAGES. 
 15. TERM AND TERMINATION. 

15.1 Termination. The term of this Agreement (“Term”) shall continue for seventeen (17) years from the Effective
Date, unless earlier terminated by either party as hereinafter provided. 
 15.2 Material Breach. Either party may
terminate this Agreement at any time upon delivery of written notice for the material breach hereof by the other party which breach has remained uncured for a period of thirty (30) days after the date of written notice thereof.

 15.3 Termination Before Effective Date. In the event the TagWorks Purchase Agreement is terminated pursuant to its
terms prior to the closing thereof, this Agreement shall automatically (without the action of any person) and simultaneously terminate (the “Pre-Closing Termination”). In the event of such Pre-Closing Termination, neither party shall have
any liability to any other party pursuant to this Agreement (including any obligation to pay any Fees hereunder). 
 15.4
Effect. Subject to Subsection 15.3 (“Termination Before Effective Date”), where this Agreement has expired or been terminated for any reason, each party shall retain its rights existing at such date, and without limiting the
generality of the foregoing, the obligation to pay Minimum Fees shall survive any such expiration or termination; provided that such Fees (including, without limitation, any Minimum Fee) shall not be payable if KeyWorks or any of the Members
or any of the Primary Subcontractors breaches its or his obligations under Subsection 2.6 (“Additional Agreements”) or SECTION 3 (“NONCOMPETITION”). Subject to Subsection
15.3 (“Termination Before Effective Date”), where this Agreement has expired or been terminated, KeyWorks shall, and shall ensure that each Member and each Primary Contractor promptly assigns, to Hillman all right title and interest in
and to any Intellectual Property owned or held by such party that is related to Keys or Key Machines developed pursuant to this Agreement to the extent any such Intellectual Property has not yet been assigned to Hillman as of the date of such
expiration or termination. 
 16. GENERAL. 
 16.1 Law and Mediation. 
 A. Choice of Law. The substantive laws of
the State of Delaware as apply to contracts entered into and performed in Delaware between Delaware residents shall apply to any 

 
disputes arising hereunder and without regard to conflicts of law principles. The United Nations Convention for Contracts for the International Sale of Goods shall not apply to this Agreement.

 B. Jurisdiction. Any dispute under this Agreement shall be subject to the sole jurisdiction of the State and Federal
courts located in Wilmington, Delaware, and the parties hereby submit to the personal jurisdiction of such courts. 
 C.
Mediation. Prior to the commencement of any litigation regarding any dispute under this Agreement, the complaining party shall offer the other party the opportunity to engage in non-binding mediation of no less than five (5) days, to take
place in Phoenix, Arizona, before a neutral mediator, prior to the commencement of any legal proceedings. Where the parties agree to such mediation, the mediator’s fee shall be shared equally by the parties. 

D. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES HERETO ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A
COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. 
 16.2 Severability. In case any of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If any of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be 

 
construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear. 

16.3 Assignment. 
 A. Consent. Neither party shall assign any rights or obligations under this Agreement, either in whole or in part, without the prior, written consent of the other party, which shall not be
unreasonably withheld. A change in control of the majority of equity ownership of KeyWorks shall be deemed an assignment hereunder; provided, however, that sales or purchases solely within the current membership group of KeyWorks shall not be
deemed a change in control. Notwithstanding the foregoing, Hillman may assign this Agreement: (a) to an affiliate or; (b) after the Effective Date, in connection with a merger, consolidation or sale of all or substantially
all of the assets of Hillman or TagWorks; provided, that in each case, Hillman remains liable for its obligations hereunder. 
 B. Effect. Where this Agreement has been assigned by KeyWorks (with Hillman’s prior, written consent), both KeyWorks and the assignee shall remain fully responsible for performance under this
Agreement. 
 16.4 Notices. All notices, requests and other communications under this Agreement shall be in writing, and
shall be: (a) mailed by registered or certified mail, postage prepaid and return receipt requested; (b) delivered by hand; or (c) sent by facsimile or electronic mail (with hard copy to follow immediately pursuant
to the means described in Subsection 16.4(a) and 
 Subsection 16.4(b)) to the CEO of the party to whom such notice is
required or permitted to be given. The mailing address for notice to either party shall be the address shown in the first paragraph of this Agreement. Any party may change its mailing address by notice as provided herein. 

16.5 Injunctive Relief. Any breach of this Agreement by either party may result in irreparable and continuing damage for which
there may be no adequate remedy at law, and either party shall therefore be entitled to obtain injunctive relief as well as such other and further relief as may be appropriate. 

16.6 Survival. Subject to Section 15.3 (“Termination Before Effective Date”), the provisions of
SECTION 1 (“DEFINITIONS”), SECTION 9 (“INTELLECTUAL PROPERTY RIGHTS”), SECTION 10
(“CONFIDENTIAL INFORMATION”), SECTION 11 (“FEES AND PAYMENT”), SECTION 13 (“REPRESENTATIONS
AND WARRANTIES”), SECTION 14 (“LIMITATION OF LIABILITY”), Subsection 15.4 (“Effect”) and SECTION 16
(“GENERAL”) shall survive any expiration or termination of this Agreement. 
 16.7 Export and
Compliance with Law. Neither party shall export, directly or indirectly, any U.S. source technical data or any products utilizing such data to countries outside the United States, which export may be in violation of the United States export laws
or regulations. Each party agrees that its performance hereunder shall at all times comply with all applicable laws, rules, regulations or ordinances of the United States and all other jurisdictions. 

 16.8 Waiver. No waiver by either party of any breach of this Agreement shall be a
waiver of any preceding or succeeding breach. No waiver by either party of any right under this Agreement shall be construed as a waiver of any other right. Neither party shall be required to give notice to enforce strict adherence to all terms of
this Agreement. 
 16.9 Headings. The section headings appearing in this Agreement are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or extent of such section or in any way affect this Agreement. 
 16.10 Entire Agreement. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions
between the parties. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing and signed by the party affected. 

16.11 Counterparts. This Agreement may be executed by the parties in separate counterparts and by facsimile, each of which, when
so executed and delivered, shall be enforceable against the parties actually executing such counterparts, and all of which, when taken as a whole, shall constitute one and the same instrument. 

 IN WITNESS WHEREOF, the parties have
caused this Development Alliance Agreement to be executed by their duly authorized representatives as of the Effective Date. 

			
	
	 THE HILLMAN GROUP, INC.

		
	BY:	 	/s/ James P. Waters
		
	TITLE:	 	Chief Financial Officer
		
	DATE:	 	3/10/11
	
	KEYWORKS-KEYEXPRESS, LLC
		
	BY:	 	/s/ George L. Hagen
		
	TITLE:	 	Managing Member
		
	DATE:	 	3/10/11

 MEMBERS (SOLELY FOR PURPOSES
OF SUBSECTION 2.6 (“ADDITIONAL AGREEMENTS”), SUBSECTION 3.2 (“BY MEMBERS”) AND SECTION 16
(“GENERAL”)): 

			
	
	GEORGE L. HAGEN
		
	BY:	 	/s/ George L. Hagen
		
	TITLE:	 	CEO & Managing Member
		
	DATE:	 	3/10/11
		
	ADDRESS:	 	 
	
	MARK YEARY
		
	BY:	 	/s/ Mark Yeary
		
	TITLE:	 	Member
		
	DATE:	 	3/10/11
		
	ADDRESS:	 	 
	
	MICHAEL MUELLER
		
	BY:	 	/s/ Michael Mueller
		
	TITLE:	 	Member
		
	DATE:	 	3/10/11
		
	ADDRESS:	 	 

			
	
	RICHARD P. MCWILLIAM
		
	BY:	 	/s/ Richard P. McWilliam
		
	TITLE:	 	Member
		
	DATE:	 	3/11/11
		
	ADDRESS:	 	 
	
	ROBERT SEMPLE
		
	BY:	 	/s/ Robert Semple
		
	TITLE:	 	Member
		
	DATE:	 	3/10/11
		
	ADDRESS:	 	 
	
	KENNETH BOOTH, ESQ.
		
	BY:	 	/s/ Kenneth Booth
		
	TITLE:	 	Member
		
	DATE:	 	3/10/11
		
	ADDRESS:	 	 

 EXHIBIT A 

NONCOMPETITION AGREEMENT 

THIS NONCOMPETITION AGREEMENT (this “Agreement”) is entered into as of
            , 20            the (“Effective Date”), by and between THE HILLMAN
GROUP, INC. (“Hillman”) and the undersigned             (“Developer”). 

RECITALS 

A. Hillman has entered into that certain Development Alliance Agreement with KeyWorks-KeyExpress, LLC of which Developer is a
member or subcontractor (the “Development Alliance Agreement”). 
 B. Such Development Alliance
Agreement calls for the execution of this Agreement by Hillman and Developer. 
 C. Capitalized terms used but not
otherwise defined herein shall have the meanings provided for such terms under the Development Alliance Agreement. 

AGREEMENT 

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and agreements in the Development Alliance Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Developer hereby covenants and agrees as follows: 
 1. General. Without the prior written consent of Hillman, Developer shall not during any period during which Hillman or its affiliates are paying “Fees” (as defined in the Development
Alliance Agreement) to KeyWorks-KeyExpress, LLC, compete directly or indirectly with Hillman in the design, development, duplication, manufacture or marketing of: (i) keys and key-duplicating machines; (ii) engraving devices
or services; (iii) tags; (iv) letters, numbers or signs; or (v) fasteners. Provided, however, that nothing herein shall be deemed to prevent Developer from acquiring through market purchases and owning, solely as
an investment, less than three percent (3%) in the aggregate of the equity securities of any class of any issuer whose shares are registered under the Securities Exchange Act of 1934, as amended, and are listed or admitted for trading on any
United States national securities exchange or are quoted on the National Association of Securities Dealers Automated Quotation System, or any similar system of automated dissemination of quotations of securities prices in common use, so long as
Developer is not a member of any “control group” (within the meaning of the rules and regulations of the United States Securities and Exchange Commission) of any such issuer. 
 2. Notices. Any notice or other communication required or permitted to be given to any party hereunder shall be in writing and shall be given to such party at such party’s address set forth
below, or such other address as such party may hereafter specify by notice in writing to the other party. Any such notice or other communication shall be addressed as aforesaid and given 

 
by: (a) certified mail, return receipt requested, with postage prepaid; (b) hand delivery; or (c) reputable overnight courier such as FedEx or DHL. 

To Developer: 

To Hillman: 
 3. Separate
Covenants. This Agreement shall be deemed to consist of a series of separate covenants, one for each city, county and state included within the United States of America. The parties expressly agree that the character, duration and geographical
scope of this Agreement are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed. However, should a determination nonetheless be made by a court of competent jurisdiction at a later date that
the character, duration or geographical scope of this Agreement is unreasonable in light of the circumstances as they then exist, then it is the intention and the agreement of Hillman and Developer that this Agreement shall be construed by the court
in such a manner as to impose only those restrictions on the conduct of Hillman and Developer that are reasonable in light of the circumstances as they then exist and as are necessary to assure Hillman and its affiliates of the intended benefit of
this Agreement. If, in any proceeding, a court shall refuse to enforce all of the separate covenants deemed included herein because, taken together, they are more extensive than necessary to assure Hillman and its affiliates of the intended benefit
of this Agreement, it is expressly understood and agreed among the parties hereto that such covenants will remain in full force and effect, first, for the greatest time period and second, in the greatest geographical area that would not render them
unenforceable and that would permit the remaining separate covenants to continue in full force and effect. 
 4. Severability. If any
provision of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not
invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state or other jurisdiction are concerned, as not containing the provision or provisions contravening or invalid under the laws of that
state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 
 5. Governing Law.
This Agreement shall be construed in accordance with and governed by the internal laws (without reference to choice or conflict of laws) of the State of Delaware, as apply to contracts entered into and performed in Delaware between Delaware
residents. 
 6. Amendments and Waivers. 

 (a) This Agreement may be modified only by a written instrument duly executed by each party
hereto that is affected by such modification. 
 (b) No waiver by a party of any default, misrepresentation or breach hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of a warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence. No
failure or delay by a party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided under applicable law. 
 7. Entire Agreement. This Agreement contains the entire understanding of the parties and supersedes all prior agreements and understandings relating to the subject matter hereof. 

8. Counterparts; Facsimile. This Agreement may be executed by the parties in separate counterparts and by facsimile, each of which, when so
executed and delivered, shall be enforceable against the parties actually executing such counterparts, and all of which, when taken as a whole, shall constitute one and the same instrument. 
 9. Section Headings and References. The headings of each section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof. All
references herein to a section are references to a section of this Agreement, unless otherwise specified and include all subparts thereof. 

10. Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, personal
representatives and permitted assigns. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof nor any of the documents executed in connection herewith may be assigned by any party without the
consent of the other parties; provided, however, that Hillman may assign its rights hereunder without the consent of Developer, to any existing or future lender to, or affiliate of, Hillman, and to any person, firm, partnership, corporation,
association or other entity that acquires or succeeds to all or any part of the business of Hillman. No such assignment shall relieve the assigning party of its obligations hereunder if such assignee does not perform such obligations. 

 11. Expenses. Each party hereto shall pay his, her or its own expenses in connection with the
negotiation and execution of this Agreement. 

					
		
	THE HILLMAN GROUP, INC.	  	
			
	BY:	  	 	  	
			
	TITLE:	  	 	  	
			
	DATE:	  	 	  	
		
	[Developer]	  	
			
	BY:	  	 	  	
			
	TITLE:	  	 	  	
			
	DATE:	  	 	  	

 EXHIBIT B 

ASSIGNED ITEMS 
 1. PATENTS 
  

							
	 Application

No.
	  	 Title
	  	Docket
No.	  	 Status

	61/411,148	  	Key Duplication Machine Identification System	  	1178.003	  	 Provisional filed 11/8/2010.

Utility due by 11/8/2011.

				
	61/364,644	  	Key Duplication Packaging and Standard Reference Features	  	1178.008	  	 Provisional filed 7/15/2010.

Utility due by 7/15/2011.

				
	61/413,099	  	Key Duplication Machine Cutting System	  	1178.010	  	 Provisional filed 11/12/2010.

Utility due by 11/12/2011.

				
	61/411,401	  	Two-Key Duplication ID and Cutting Machine with Specialized Clamp	  	1178.011	  	 Provisional filed 11/08/2010.

Utility due by 11/08/2011.

				
	61/432,089	  	Key Duplication Identification Systems and Cutting Machines and Related Methods	  	1178.012	  	 Provisional filed 1/12/2011.

Utility due by 1/12/2012.

 2. TRADE SECRETS 
 The Trade Secrets shall consist of information, including formulas, patterns, compilations, programs, devices, methods, techniques, and processes related to: 

A. The design, development, commercialization, manufacture, sale and service of Keys and Key Machines; 

B. The design, development, commercialization, manufacture, sale and service of key sleeves and related technologies; and

 C. Marketing plans, customers and potential customers for Keys and Key Machines. 

3. TRADEMARKS 
  

							
	 Application

No.
	  	 Title
	  	Docket
No.	  	 Status

	77/968,934	  	KEYWORKS	  	1178.004	  	Notice of Allowance on 10/12/2010 — Statement of Use or Extension of Time due by 4/12/2011.
				
	77/968,974	  	KEYGEN	  	1178.005	  	Notice of Allowance on 10/19/2010 — Statement of Use or Extension of Time due by 4/19/2011.
				
	77/968,978	  	KEYVO	  	1178.006	  	Notice of Allowance on 10/19/2010 — Statement of Use or Extension of Time due by 4/19/2011.
				
	77/968,984	  	NUEKEY	  	1178.007	  	Notice of Allowance on 10/19/2010 — Statement of Use or Extension of Time due by 4/19/2011.
				
	85/065,918	  	Key Express	  	1178.009	  	Office Action received — response due by 3/27/2011.

 EXHIBIT C 

TRADITIONAL MARKET 
  

			
		
	1	  	HOME DEPOT
		
	2	  	WAL-MART
		
	3	  	LOWE’S
		
	4	  	MENARDS CORPORATE OFFICE
		
	5	  	ORCHARD BUILDING SUPPLY
		
	6	  	FRED MEYER CO.
		
	7	  	KMART CORPORATION
		
	8	  	SEARS
		
	9	  	MEIJER INC
		
	10	  	PEP BOYS
		
	11	  	SUTHERLANDS LUMBER & SUPPLY
		
	12	  	MILLS FLEET WHSL SPLY
		
	13	  	CVS PHARMACY
		
	14	  	LONGS DRUG STORES
		
	15	  	BI MART CORP.
		
	16	  	KROGER
		
	17	  	BLAIN SUPPLY
		
	18	  	MCCOY’S BUILDING SUPPLY CENTERS
		
	19	  	CITY MILL
		
	20	  	MINYARDS

 EXHIBIT D 

DEVELOPMENT AGREEMENTS

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