Document:

Employment Agreement between Silver State Bank and Thomas J. Russell

 Exhibit 10.12 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT
AGREEMENT (this “Agreement”) is entered into effective as of this 3rd day of April, 2007, by and between Silver State Bank, a Nevada corporation (the “Bank”), and
Thomas J. Russell, Executive Vice President and Chief Credit Officer (the “Executive”). 
 WHEREAS, the Executive is the Executive Vice President of the Bank, possessing unique skills, knowledge, and experience relating to their business, and the Executive has made and is expected to continue
to make major contributions to the profitability, growth, and financial strength of the Bank and affiliates, and 
 WHEREAS, none of the conditions or events included in the definition of the term “golden parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal Deposit Insurance
Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Bank Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Bank, is contemplated insofar as the Bank or any affiliates are concerned. 
 NOW THEREFORE, in consideration of these premises, 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 1 
 EMPLOYMENT 
 1.1 Employment. The Bank hereby employs the Executive to serve as Executive Vice President according to the terms and conditions of this
Agreement and for the period stated in section 1.3. The Executive hereby accepts employment according to the terms and conditions of this Agreement and for the period stated in section 1.3. 
 1.2 Duties. As Executive Vice President the Executive shall serve under the direction of the Bank’s Chief Executive Officer and in
accordance with the Bank’s Articles of Incorporation and Bylaws, as each may be amended or restated from time to time. The Executive shall serve the Bank faithfully, diligently, competently, and to the best of the Executive’s ability. The
Executive shall exclusively devote full working time, energy, and attention to the business of the Bank and to the promotion of the Bank’s interests throughout the term of this Agreement. Without the written consent of the Bank’s board of
directors, during the term of this Agreement the Executive shall not render services to or for any person, firm, corporation, or other entity or organization in exchange for compensation, regardless of the form in which the compensation is paid and
regardless of whether it is paid directly or indirectly to the Executive. Nothing in this section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance
of the Executive’s duties and responsibilities under this Agreement. 
 1.3 Term. The initial term of employment under
this Agreement shall be three years, commencing April 3rd, 2007. On the first anniversary of the commencement date and at each anniversary thereafter the term of this Agreement shall automatically be extended for one 

 
additional year unless the Bank’s board of directors determines that the term shall not be extended. If the board of directors decides not to extend the
term, the board shall promptly notify the Executive in writing, but this Agreement shall nevertheless remain in force until its existing term expires. The board’s decision not to extend the term shall not – by itself – give the
Executive any rights under this Agreement to claim an adverse change in position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under Articles 4 or 5. References herein to the term of this Agreement mean the
initial term, as the same may be extended. Unless sooner terminated, the Executive’s employment and the term of this Agreement shall terminate when the Executive attains age 65. 
 ARTICLE 2 
 COMPENSATION AND
BENEFITS 
 2.1 Base Salary. In consideration of the Executive’s performance of the obligations under
this Agreement, the Bank shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $155,000.00, payable in semi-monthly installments or otherwise according to the Bank’s regular pay practices. The
Executive’s salary shall be reviewed annually by the Bank’s board of directors or the board’s Compensation Committee. The Executive’s salary shall be increased no more frequently than annually to account for cost of living
increases. At the discretion of the Compensation Committee, the Executive’s salary also may be increased beyond the amount necessary to account for cost of living increases. The Executive’s salary shall not be reduced, however, unless as a
matter of Bank policy a company-wide salary reduction is simultaneously applied equally to all officers. All compensation under this Agreement shall be subject to customary withholding taxes and such other employment taxes as are imposed by law. The
Executive’s salary, as the same may be modified from time to time consistent with this section 2.1, is referred to in this Agreement as the “Base Salary.” 
 2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the Bank the Executive shall be entitled (x) to
participate in any and all officer or employee compensation, bonus, incentive, and benefit plans in effect from time to time, including without limitation plans providing pension, retirement, medical, dental, disability, and group life benefits and
including stock-based compensation, incentive, bonus, or purchase plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for the plans or benefits,
and (y) to receive any and all other fringe benefits provided from time to time. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred performing the obligations under this Agreement, including
but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Bank and reasonable expenses for attendance at annual and other periodic meetings of trade associations.

 2.3 Paid Time Off. The Executive shall be entitled to paid personal time, including vacation and sick leave, in accordance
with policies established from time to time by the Bank, which currently allow for five weeks of personal time each calendar year for an officer of the Executive’s rank and a limited right to carry over from one year to the next unused personal
time. 
  

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 ARTICLE 3 
 EMPLOYMENT TERMINATION 
 3.1 Termination
Because of Death or Disability. (a) Death. The Executive’s employment shall terminate automatically on the date of the Executive’s death. If the Executive’s employment terminates because of the Executive’s
death, the Executive’s estate shall receive any sums due to the Executive as Base Salary and reimbursement of the Executive’s expenses through the end of the month in which death occurred, plus any bonus earned or accrued through the date
of death, including any unvested amounts awarded for previous years, and for twelve months after the Executive’s death the Bank shall assist the Executive’s family with continuing COBRA health care coverage substantially identical to that
provided for the Executive before death. 
 (b) Disability. By delivery of written notice 30 days in advance to the Executive, the
Bank may terminate the Executive’s employment if the Executive is disabled. For purposes of this Agreement the Executive shall be considered “disabled” if an independent physician selected by the Bank and reasonably
acceptable to the Executive or the Executive’s legal representative determines that, because of illness or accident, the Executive is unable to perform the Executive’s duties and will be unable to perform the Executive’s duties for a
period of 90 consecutive days. The Executive shall not be considered disabled, however, if the Executive returns to work on a full-time basis within 30 days after the Bank gives notice of termination due to disability. During the period of
incapacity leading up to the termination of the Executive’s employment under this provision, the Bank shall continue to pay the full Base Salary at the rate then in effect and all perquisites and other benefits (other than bonus) until the
Executive becomes eligible for benefits under any disability plan or insurance program maintained by the Bank, provided that the amount of the Bank’s payments under this section 3.1(b) to the Executive shall be reduced by the sum of the
amounts, if any, payable to the Executive for the same period under any disability benefit or deferred compensation plan covering the Executive. Furthermore, the Executive shall receive any bonus earned or accrued through the date of incapacity,
including any unvested amounts awarded for previous years. 
 3.2 Involuntary Termination for Cause. (a) The Executive’s
rights. The Bank may terminate this Agreement for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and reimbursement of expenses
to which the Executive is entitled when termination becomes effective. 
 (b) Definition of Cause. For purposes of this Agreement
“Cause” means any of the following – 
 1) an act of fraud, embezzlement, or theft by the
Executive in the course of employment, or 
 2) intentional violation of any law or significant policy of the Bank or an
affiliate, including but not limited to violation of the code of conduct or code of ethics of the Bank or Silver State Bancorp, a Nevada corporation of which the Bank is a wholly 

  

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owned subsidiary, which in the Bank’s sole judgement causes material harm to the Bank or affiliate, regardless of whether the violation leads to
criminal prosecution or conviction. For purposes of this Agreement, applicable laws include any statute, rule, regulatory order, statement of policy, or final cease-and-desist order of any governmental agency or body having regulatory authority over
the Bank, or 
 3) gross negligence in the performance of the Executive’s duties, or 
 4) intentional wrongful damage by the Executive to the business or property of the Bank or its affiliates, including without limitation
the reputation of the Bank, which in the Bank’s sole judgment causes material harm to the Bank. For purposes of this Agreement no act or failure to act on the part of the Executive shall be deemed to have been intentional if it was due
primarily to an error in judgment or negligence. An act or failure to act on the Executive’s part shall be considered intentional if it is not in good faith and if it is without a reasonable belief that the action or failure to act is in the
best interests of the Bank, or 
 5) a breach of fiduciary duties or misconduct involving dishonesty, or 
 6) a breach by the Executive of this Agreement that in the sole judgment of the Bank is a material breach, which breach is not corrected
by the Executive within ten days after receiving written notice of the breach, or 
 7) removal of the Executive from office
or permanent prohibition of the Executive from participating in the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or 
 8) the occurrence of any event that results in the Executive being excluded from coverage, or having coverage limited for the Executive as
compared to other executives of the Bank, under the Bank’s blanket bond or other fidelity or insurance policy covering its directors, officers, or employees, or 
 9) conviction of the Executive for or plea of no contest to a felony or conviction of or plea of no contest to a misdemeanor involving
moral turpitude, or the actual incarceration of the Executive for seven consecutive days or more resulting from a judicially imposed criminal sentencing (not incarceration while the Executive is a defendant in a pending criminal proceeding).

 3.3 Voluntary Termination by the Executive Without Good Reason. If the Executive terminates employment without Good Reason,
the Executive shall receive the Base Salary and expense reimbursement to which the Executive is entitled through the date on which termination becomes effective. 
 3.4 Involuntary Termination Without Cause and Voluntary Termination for Good Reason. (a) Termination takes effect after 60 days. With written notice to the Executive 60 days in advance, the
Bank may terminate the Executive’s employment without Cause. With written notice to the Bank 60 days in advance, the Executive may terminate employment for 

  

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Good Reason. Termination shall take effect at the end of the 60-day period, unless in the case of voluntary termination for Good Reason the event or
circumstance constituting Good Reason is cured by the Bank or unless the notice of termination for Good Reason is revoked by the Executive within the 60-day period. If the Executive’s employment terminates involuntarily without Cause or
voluntarily but for Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. 
 (b)
Definition of Good Reason. For purposes of this Agreement “Good Reason” means any of the following occur without the Executive’s written consent, except in connection with termination of the Executive’s
employment for Cause or because of death or disability or termination of the Executive’s employment by the Executive without Good Reason – 
 1) reduction of the Executive’s Base Salary in a manner that is not consistent with section 2.1 (and if Base Salary is reduced in a manner that is not consistent with section 2.1, for purposes of calculating the
Executive’s severance entitlement the term Base Salary shall mean the Executive’s salary without taking the reduction into account), 
 2) reduction of the Executive’s bonus, incentive, and other compensation award opportunities under the benefit plans of the Bank or the Bank’s subsidiaries, unless a company-wide reduction of all
officers’ award opportunities occurs simultaneously, or termination of the Executive’s participation in any officer or employee benefit plan maintained by the Bank or subsidiaries, unless the plan is terminated because of changes in law or
loss of tax deductibility to the Bank for contributions to the plan, or unless the plan is terminated as a matter of Bank policy applied equally to all participants in the plan. References in this Agreement to the Bank’s
“subsidiaries” mean the entities whose accounts are consolidated with those of the Bank in the Bank’s financial statements. 
 3) (x) assignment to the Executive of duties that are materially inconsistent with the Executive’s position as the Bank’s Executive Vice President or that represent a reduction of the Executive’s
authority, or (y) failure to appoint or reappoint the Executive as Executive Vice President or Chief Credit Officer of the Bank, 
 4) failure to obtain an assumption of the Bank’s obligations under this Agreement by any successor to the Bank, regardless of whether such entity becomes a successor as a result of a merger, consolidation, sale
of assets, or other form of reorganization, 
 5) a material breach of this Agreement by the Bank that is not corrected within
a reasonable time, or 
 6) relocation of the Bank’s principal executive offices or requiring the Executive to change the
Executive’s principal work location to any location that is more than 30 miles from the location of the Bank’s principal executive offices on the date of this Agreement. 
  

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 3.5 Notice. Any purported termination by the Bank or by the Executive shall be communicated
by written notice of termination to the other. The notice must state the specific termination provision of this Agreement relied upon. The notice must also state the date on which termination shall become effective, which shall be a date not earlier
than the date of the termination notice. If termination is for Cause or with Good Reason, the notice must state in reasonable detail the facts and circumstances forming the basis for termination of the Executive’s employment. 
 ARTICLE 4 
 SEVERANCE COMPENSATION 
 4.1 Continued Salary and Bonus Compensation after Termination
Without Cause and Termination for Good Reason. (a) Subject to the possibility that continued Base Salary and bonus compensation for the first six months after employment termination might be delayed under section 4.1(b), if the
Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment for Good Reason, the Executive shall for the unexpired term of this Agreement continue to receive (x) the Base
Salary in effect at employment termination and (y) an annual bonus equal to the bonus earned for the calendar year ended immediately before the year in which the employment termination occurs, regardless of when the bonus earned for the
preceding calendar year is paid and regardless of whether all or part of the bonus is subject to elective deferral or vesting. However, the Executive shall not be entitled to continued participation in the Bank’s or a subsidiary’s
retirement plan(s) or any stock-based plans. The Bank and the Executive acknowledge and agree that the compensation and benefits under this section 4.1 shall not be payable if compensation and benefits are payable or shall have been previously paid
to the Executive under Article 5 of this Agreement. 
 (b) If when employment termination occurs the Executive is a specified employee within
the meaning of section 409A of the Internal Revenue Code of 1986, and if the continued compensation and benefits under section 4.1(a) would be considered deferred compensation under section 409A, and finally if an exemption from the six-month delay
requirement of section 409A(a)(2)(B)(i) is not available, the Executive’s compensation and benefits under section 4.1(a) for the first six months after employment termination shall be paid to the Executive in a single lump sum on the first day
of the seventh month after the month in which the Executive’s employment terminates. References in this Agreement to section 409A of the Internal Revenue Code of 1986 include rules, regulations, and guidance of general application issued by the
Department of the Treasury under Internal Revenue Code section 409A. 
 ARTICLE 5 
 CHANGE IN CONTROL BENEFITS 
 5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and if within 12 months thereafter the
Executive’s employment terminates involuntarily but without Cause or voluntarily but for Good Reason, the Bank shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to three times the Executive’s
annual compensation. For this purpose annual compensation means (x) the Executive’s Base Salary on the date of the Change in Control or on the date of the Executive’s 

  

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employment termination (at whichever date the Executive’s Base Salary is greater and disregarding any salary reduction that is not consistent with
section 2.1), plus (y) any bonus awarded for the most recent whole calendar year before the year in which the Change in Control occurred or for the most recent whole calendar year before the year in which employment termination occurred
(whichever is greater), regardless of whether the bonus is paid in the year earned or in a later calendar year and regardless of whether the bonus is subject to elective deferral or vesting. Annual compensation shall be calculated without regard to
any deferrals under qualified or nonqualified plans, but annual compensation shall not include interest or other earnings credited to the Executive under qualified or nonqualified plans. The amount payable to the Executive hereunder shall not be
reduced to account for the time value of money or discounted to present value. The payment required under this paragraph (a) is payable no later than five business days after termination of the Executive’s employment, or on the first day
of the seventh month after the month in which employment termination occurs if the Executive is considered a specified employee under section 4.1(b). If the Executive’s employment terminates before a Change in Control occurs but after
discussions with a third party regarding a Change in Control commence, and if those discussions ultimately conclude with a Change in Control, then for purposes of this Employment Agreement termination of the Executive’s employment shall be
deemed to have occurred after the Change in Control. If the Executive receives payment under section 5.1 the Executive shall not be entitled to continued Base Salary under section 4.1 of this Agreement. 
 5.2 Change in Control Defined. For purposes of this Agreement a “Change in Control” shall be deemed to have
occurred upon the happening of any of the following events: 
 1. the consummation of a reorganization, merger, or
consolidation of Silver State Bancorp, a Nevada corporation of which the Bank is a wholly owned subsidiary, with one or more other persons, other than a transaction following which: 
 (i) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in Silver State Bancorp; and 
 (ii) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to
vote generally in the election of directors of Silver State Bancorp; 
 2. the acquisition of all or substantially all of the
assets of Silver State Bancorp or beneficial ownership (within the meaning of Rule 13d-3 promulgated under 

  

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the Exchange Act) of 25% or more of the outstanding securities of Silver State Bancorp entitled to vote generally in the election of directors by any person
or by any persons acting in concert; 
 3. a complete liquidation or dissolution of Silver State Bancorp; 
 4. the occurrence of any event if, immediately following such event, at least 50% of the members of the Board of Directors of Silver State
Bancorp do not belong to any of the following groups: 
 (i) individuals who were members of the Board of Directors of Silver
State Bancorp on the date of this Agreement; or 
 (ii) individuals who first became members of the Board of Directors of
Silver State Bancorp after the date of this Agreement either: 
 (a) upon election to serve as a member of the Board of
Directors of Silver State Bancorp by affirmative vote of three-quarters of the members of such board, or of a nominating committee thereof, in office at the time of such first election; or 
 (b) upon election by the shareholders of the Board of Directors of Silver State Bancorp to serve as a member of such board, but only if
nominated for election by affirmative vote of three-quarters of the members of the Board of Directors of Silver State Bancorp, or of a nominating committee thereof, in office at the time of such first nomination; 
 provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest or other actual
or threatened solicitation of proxies or consents other than by or on behalf of the Board of Directors of Silver State Bancorp; or 
 5. any event which would be described in section 1, 2, 3, or 4 if the term “Silver State Bank” were substituted for the term “Silver State Bancorp” therein. 
 In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Bank, Silver State Bancorp, or a subsidiary of either of them, by the Bank,
Silver State Bancorp, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this section, the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2)
of the Exchange Act. 
 5.3 Internal Revenue Code Section 280G. The Bank and the Executive intend that all benefits
payable to the Executive as the result of a Change in Control, whether payable under this Agreement or under any other benefit, compensation, or incentive plan or arrangement with the Bank or Silver State Bancorp, shall not be subject to the excise
tax under sections 280G and 4999 of the Internal Revenue Code of 1986 and shall be deductible by the Bank and Silver State 

  

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Bancorp. If all or any portion of the benefits payable to the Executive under this Agreement, either alone or together with other benefits to which the
Executive is entitled, constitute “excess parachute payments” within the meaning of Code section 280G and are therefore subject to the excise tax imposed by Code section 4999 or loss of the compensation deduction as the result of Code
section 280G, the Bank and the Executive agree that benefits payable under this Agreement shall be reduced as necessary for the purpose of avoiding application of Code sections 280G and 4999, unless an exemption from sections 280G and 4999 for
benefits payable under this Agreement is established to the Bank’s satisfaction before the Change in Control occurs. If reduction of benefits under this Agreement and other benefit, compensation, or incentive plans or arrangements to which the
Executive is a party with the Bank or Silver State Bancorp is not sufficient to avoid application of Code sections 280G and 4999, the Executive acknowledges and agrees that benefits under this Agreement may be eliminated altogether. The amount of
the benefit reduction under this section 5.3 shall be determined by the Bank or Silver State Bancorp, whose determination shall be conclusive and binding on the Bank and the Executive. 
 ARTICLE 6 
 CONFIDENTIALITY AND
CREATIVE WORK 
 6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any
person, firm, or corporation any confidential information of any nature concerning Silver State Bancorp, the Bank or their business, or anything connected therewith. As used in this Article 6 the term “confidential
information” means all of the Bank’s and the Bank’s affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement,
including but not limited to – 
 (a) the whole or any portion or phase of any business plans, financial information,
purchasing data, supplier data, accounting data, or other financial information, 
 (b) the whole or any portion or phase of
any research and development information, design procedures, algorithms or processes, or other technical information, 
 (c)
the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information, and 
 (d) trade secrets, as defined from time to time by the laws of the State of Nevada. 
 Notwithstanding the foregoing, confidential information excludes information that – as of the date hereof or at any time after the date hereof – is published
or disseminated without obligation of confidence or that becomes a part of the public domain (x) by or through action of the Bank, or (y) otherwise than by or at the direction of the Executive. This section 6.1 does not
prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s
authority. 
  

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 6.2 Return of Materials. The Executive agrees to deliver or return to the Bank upon
termination, upon expiration of this Agreement, or as soon thereafter as possible, all written information and any other similar items furnished by the Bank or prepared by the Executive in connection with the Executive’s services hereunder. The
Executive will retain no copies thereof after termination of this Agreement or termination of the Executive’s employment. 
 6.3
Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive
during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank. The Executive hereby assigns to the Bank all rights, title, and
interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws. 
 6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement
the term “affiliate” of the Bank includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Bank. The rights and obligations set forth
in this Article 6 shall survive termination of this Agreement. 
 6.5 Injunctive Relief. The Executive acknowledges that it is
impossible to measure in money the damages that will accrue to the Bank if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank institutes an action to enforce the provisions hereof, the Executive hereby
waives the claim or defense that an adequate remedy at law is available to the Bank, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. The confidentiality and remedies provisions of
this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure,
misuse, or misappropriation of trade secrets or proprietary or confidential information. 
 6.6 Supported by Consideration and Reasonable
in Scope and Duration. The Executive acknowledges that the obligations in Article 6 are supported by valuable consideration, including the consideration set forth in Article 2. The Executive further acknowledges that the obligations in
Article 6 are reasonable in scope and duration, are necessary for the protection of the Bank, and that a lesser scope and duration would not adequately protect the Bank. 
 ARTICLE 7 
 COMPETITION AFTER EMPLOYMENT
TERMINATION 
 7.1 Covenant Not to Solicit Employees. The Executive agrees not to solicit the services of
any officer or employee of the Bank or affiliates for one year after the Executive’s employment termination. 
  

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 7.2 Covenant Not to Compete. (a) The Executive covenants and agrees not to compete
directly or indirectly with the Bank or affiliates for one year after employment termination. For purposes of this section – 
  

	 	1)	 	the term “compete” means 

  

	 	(a)	 	providing financial products or services on behalf of any financial institution for any person residing in the territory, 

  

	 	(b)	 	assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the
territory, or 

  

	 	(c)	 	inducing or attempting to induce any person who was a customer of the Bank or an affiliate at the date of the Executive’s employment termination to seek financial products or
services from another financial institution. 

  

	 	2)	 	the words “directly or indirectly” means – 

  

	 	(a)	 	acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Bank or an affiliate in the territory, or

  

	 	(b)	 	communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank or an affiliate when the
Executive’s employment terminated. 

  

	 	3)	 	the term “customer” means any person to whom the Bank or an affiliate is providing financial products or services on the date of the Executive’s employment
termination. 

  

	 	4)	 	the term “financial institution” means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is
engaging in activities that are financial in nature or incidental to such financial activities as described in section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or any of its affiliated Banks. 

  

	 	5)	 	“financial product or service” means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is
financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company Act of 1956 and that is offered by Silver State Bancorp or an affiliate on the date of the Executive’s employment termination,
including but not limited to banking activities and activities that are closely related and a proper incident to banking. 

  

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	 	6)	 	the term “person” means any individual or individuals, corporation, partnership, fiduciary or association. 

  

	 	7)	 	the term “territory” means the area within a 15-mile radius of any office of the Bank or its affiliates at the date of the Executive’s employment termination.

 (b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without
limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as
modified, are legal and enforceable to the fullest extent permitted under applicable law. 
 7.3 Injunctive and Other Relief.
Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or
more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s remedies for a material breach or threatened breach of this Article 7 include but are not limited to (x) forfeiture of any
money representing accrued salary, contingent payments, or other fringe benefits due and payable to the Executive, (y) forfeiture of any severance benefits under section 4.1 of this Employment Agreement, and (z) a suit in
equity by the Bank to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any
such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank from pursuing any other or additional remedies for the breach or threatened breach. 
 7.4 Potential Payment for Voluntary Termination. If before the end of the term of this Agreement the Executive voluntarily terminates
employment after the board decides under section 1.3 not to extend the term of this Agreement, the Bank shall pay or cause to be paid to the Executive an amount equal to (i) the Executive’s Base Salary as of the date of the
Executive’s employment termination plus (ii) any bonus awarded for the most recent whole calendar year before the year in which employment termination occurred, which shall be paid in equal monthly installments over the 12 months following
the Executive’s employment termination. The payment under this section 7.4 is distinct from any severance benefits to which the Executive may be entitled after voluntary employment termination. If the Executive does not comply with the
covenants in sections 7.1 and 7.2 however, the Executive shall forfeit any remaining benefits under this section 7.4. In addition to any other remedies that the Bank may have under this Agreement, at law or in equity, in the event that the Executive
violates any provision of sections 7.1 and 7.2 above, the Executive shall pay to the Bank whatever has been paid to him pursuant to section 7.4. 
 7.5 Article 7 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 7 shall survive termination of this Agreement. However, Article 7 shall become null and void
effective immediately upon a Change in Control. 
  

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 7.6 Supported by Consideration and Reasonable in Scope and Duration. The Executive
acknowledges that the obligations in Article 7 are supported by valuable consideration, including the consideration set forth in Article 2. The Executive further acknowledges that the obligations in Article 7 are reasonable in scope and duration,
are necessary for the protection of the Bank, and that a lesser scope and duration would not adequately protect the Bank. 
 ARTICLE 8 
 MISCELLANEOUS 
 8.1 Successors and Assigns. (a) This Agreement is binding on successors. This Agreement shall be binding upon the Bank and any
successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise. But this Agreement and the Bank’s
obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business
or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform if no such succession had occurred. 
 (b) This Agreement is enforceable by the Executive’s heirs. This Agreement will inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees. 
 (c) This
Agreement is personal in nature and is not assignable. This Agreement is personal in nature. Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this
Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security
interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this section 8.1, the Bank shall have no liability to pay
any amount to the assignee or transferee. 
 8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under
and governed by the internal laws of the State of Nevada, without giving effect to any conflict of laws provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Nevada. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in the State of Nevada. Any actions or proceedings instituted under
this Agreement shall be brought and tried solely in courts located in Clark County, Nevada or in the federal court having jurisdiction in Henderson, Nevada. The Executive expressly waives the right to have any such actions or proceedings brought or
tried elsewhere. 
 8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the
employment of the Executive by the Bank. Any oral or written statements, 

  

 13 

 
representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded,
revoked, and rendered null and void by the parties. 
 8.4 Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly
addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the Board of Directors, Silver State Bank,
400 North Green Valley Parkway, Henderson, Nevada 89074. 
 8.5 Severability. If there is a conflict between any provision of
this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If
any provision of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly
be contrary to the intentions of the parties or would result in an injustice. 
 8.6 Captions and Counterparts. The captions in
this Agreement are solely for convenience. The captions in no way define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument. 
 8.7 No Duty to Mitigate. The Bank hereby acknowledges that it
will be difficult and could be impossible (x) for the Executive to find reasonably comparable employment after employment termination, and (y) to measure the amount of damages the Executive may suffer as a result of
termination. Additionally, the Bank acknowledges that its general severance pay plans do not provide for mitigation, offset, or reduction of any severance payment received thereunder. The Bank further acknowledges that the payment of severance
benefits under this Agreement is reasonable and shall be liquidated damages. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, the amount of any payment
provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination. 
 8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by
an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of
this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. 
  

 14 

 8.9 Payment of Legal Fees. The Bank is aware that after a Change in Control management
could cause or attempt to cause the Bank to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause the Bank to institute litigation seeking to have this Agreement declared unenforceable, or could
take or attempt to take other action to deny Executive the benefits intended under this Agreement. In these circumstances the purpose of this Agreement would be frustrated. It is the Bank’s intention that the Executive not be required to incur
the expenses associated with the enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended to be granted to the Executive
hereunder. It is the Bank’s intention that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that
(x) the Bank has failed to comply with any of its obligations under this Agreement, or (y) the Bank or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or
other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, the Bank irrevocably authorizes the Executive from time to time to retain counsel of the
Executive’s choice, at the Bank’s expense as provided in this section 8.9, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against the Bank or any director, officer,
stockholder, or other person affiliated with the Bank, in any jurisdiction. Despite any existing or previous attorney-client relationship between the Bank and any counsel chosen by the Executive under this section 8.9, the Bank irrevocably consents
to the Executive entering into an attorney-client relationship with that counsel, and the Bank and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected
from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by the Bank on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in
accordance with such counsel’s customary practices, up to a maximum aggregate amount of $350,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. The Bank’s obligation to pay the
Executive’s legal fees under this section 8.9 operates separately from and in addition to any legal fee reimbursement obligation the Bank may have with the Executive under any separate severance, salary continuation, or other agreement. Despite
anything in this section 8.9 to the contrary however, the Bank shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule
359.3 of the Federal Deposit Insurance Bank [12 CFR 359.3]. 
 8.10 Compliance with Internal Revenue Code Section 409A.
The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with section 409A of the Internal Revenue Code of 1986. If when the Executive’s employment terminates the Executive is a
specified employee, as defined in section 409A of the Internal Revenue Code of 1986, and if any payments under this Agreement, including Articles 4 or 5 or section 7.4, will result in additional tax or interest to the Executive because of section
409A, then despite any contrary provision of this Agreement the Executive will not be entitled to the payments until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for
reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the 

  

 15 

 
Executive under section 409A. As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount
of the delayed payments shall be paid to the Executive in a single lump sum. If any provision of this Agreement does not satisfy the requirements of section 409A, such provision shall nevertheless be applied in a manner consistent with those
requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under section 409A, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original
intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision. 
 IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date
first written above. 
  

							
	EXECUTIVE	 		 	SILVER STATE BANK
				
	 /s/ Thomas J. Russell
	 		 	By:	 	 /s/ Corey L. Johnson

	Thomas J. Russell	 		 		 	Corey L. Johnson
		 		 	Its:	 	Chief Executive Officer

  

 16Exhibit 10.32

 EXHIBIT 10.32 
 EXECUTION COPY 
 ASSET PURCHASE AGREEMENT 
 This Agreement, dated as of February 28, 2007, is between C. M. JACKSON ASSOCIATES, INC., a New Jersey corporation (“Seller”),
and SOUTHERN GRAPHIC SYSTEMS, INC., a Kentucky corporation (“Buyer”). 
 RECITALS 
 Seller wishes to sell and transfer to Buyer substantially all of its assets and the business conducted by Seller (the “Business”), and
Buyer wishes to acquire such assets and the Business, in accordance with the terms and conditions of this Agreement (the “Transaction”). 
 The parties therefore agree as follows: 
 ARTICLE I 
 PURCHASE AND SALE OF ASSETS 
 1.1
Agreement to Purchase and Sell. On the terms and conditions contained in this Agreement, Buyer shall purchase from Seller, and Seller shall sell to Buyer, all of Seller’s right, title and interest in the assets, properties and rights
used or held for use in the Business as of the Closing Date (as herein defined) and enumerated in Section 1.2 hereof, wherever located. All of the assets, properties and rights being purchased and sold are collectively referred to as the
“Purchased Assets”. Seller shall transfer and sell all of the Purchased Assets to Buyer free and clear of any liens, debts, mortgages, pledges, charges, title claims, encumbrances or security interests (“Liens”),
other than Permitted Liens (as herein defined). 
 1.2 Enumeration of the Purchased Assets. Subject to Section 1.3, the Purchased
Assets shall consist of the following: 
 (a) all fixed assets, furniture, fixtures, equipment, machinery (and related
supplies and spare parts), computer hardware, automobiles and trucks and all other tangible personal property, including (without limitation) the items listed on Schedule 1.2(a) (the “Equipment”); 
 (b) all raw materials, work in process and finished goods inventories (the “Inventory”), subject to Sections 3.1(b) and
10.7; 
 (c) any claims and rights (and benefits arising therefrom) against suppliers under warranties covering any of the
Inventory or Equipment; 
  

 (d) Seller’s rights under all customer contracts and customer orders (collectively,
the “Customer Contracts”); 
 (e) [INTENTIONALLY OMITTED]; 
 (f) all customer lists, files, process materials (including, without limitation, work orders, prepress proofs (e.g., color keys,
cromalins, etc.) and engraving files) and other business records of the Business; 
 (g) all of Seller’s rights as
licensee under licenses of software used in the Business (the “Software Licenses”); 
 (h) all of
Seller’s patents and patent applications (including all rights with respect to a Project Management System for Packaging Industry for which an application for United States Letters Patent was filed 08-07-2006, application serial number
60/836,080 and for which an application for United States Letters Patent is as yet unfilled, entitled Projects Management System); trademarks, service marks, and registrations thereof and applications therefor; copyrights and registrations thereof
and applications therefor ; computer software owned by Seller; technology; know-how; the name “C. M. Jackson Associates Inc.” (and any variation thereof used by Seller); websites (including www.cmjackson.com); domain names; rights
to image library; and other intellectual property rights (including the right to sue for past infringement); 
 (i) the
leasehold interest of Seller as lessee of the facility located at 133 Williams Drive, Ramsey, NJ (the “Ramsey Facility”) in which the Business currently is operating (the lease of the Ramsey Facility being referred to herein as the
“Ramsey Lease”); 
 (j) [INTENTIONALLY OMITTED] 
 (k) all of Seller’s rights under the contracts listed on Schedule 1.2(k) (the “Other Contracts”); 

(l) prepaid expenses and deposits and all other “current assets” reflected on Seller’s balance sheet (it being
acknowledged, for avoidance of doubt, that Buyer will acquire current assets only in the amount that exists at Closing); 
 (m) to the extent legally assignable or transferable from Seller to Buyer, all of Seller’s rights under all Permits (as herein defined) and Environmental Permits (as herein defined) required for the operation of the Business; and

 (n) all other assets used or held for use in the Business except for those enumerated in Section 1.3. 
  

 2 

 1.3 Excluded Assets. The Purchased Assets shall not include (i) cash or checking or savings
accounts; (ii) accounts receivable; (iii) marketable securities; (iv) rights under contracts other than the Assumed Contracts; (v) assets held in or for any pension, health care or other employee benefit plan for employees of
Seller; (vi) the corporate charter, and minute and stock record books of Seller; (vii) books and records that Seller is required by law to retain, so long as Seller delivers one copy thereof to Buyer, and books and records pertaining
exclusively to Excluded Assets (as herein defined) and Excluded Liabilities (as herein defined); (viii) loans receivable from shareholders, directors, officers and their affiliates; or (ix) off-balance sheet Materials Inventory (as defined
below). The assets referred to in the preceding clauses (i) through (ix) are referred to herein as the “Excluded Assets”. 
 ARTICLE II 
 ASSUMPTION OF LIABILITIES 
 2.1 Assumed Liabilities. Buyer shall assume the following liabilities and obligations of Seller at Closing (the “Assumed Liabilities”): 
 (a) Seller’s liabilities and obligations (but only to the extent that such liabilities and obligations relate to performance after
Closing and only to the extent that such post-Closing performance does not relate to any pre-Closing breach or default by Seller) under (i) the Customer Contracts, the Ramsey Lease, and the Other Contracts (collectively, the “Assumed
Contracts”); (ii) the Software Licenses; and (iii) Permits (as herein defined) and/or Environmental Permits (as herein defined) that are transferred to Buyer; and 
 (b) “accrued vacation” as shown as a current liability on Seller’s balance sheet. 
 2.2 Excluded Liabilities. Except as set forth in Section 2.1, and without implication that Buyer is assuming any liability not expressly
excluded by this Section 2.2, Buyer is not assuming or undertaking to assume and shall have no responsibility for any liabilities or obligations of Seller, actual or contingent, past, present or future (the “Excluded
Liabilities”), including, without limitation, (i) any “current liabilities” reflected on Seller’s balance sheet; (ii) any liabilities for long-term debt or other “long term liabilities” reflected on
Seller’s balance sheet; (iii) any liabilities for taxes; (iv) any liabilities for deferred compensation; (v) any liabilities with respect to compensation, commissions, bonuses, profit sharing, or other compensation plans or
programs; (vi) any retirement liabilities of Seller or liabilities of Seller under pension, savings, health care or other employee benefit plans or programs for Business employees; (vii) any severance liabilities; (viii) bank
overdrafts; (ix) any liabilities incurred by Seller for legal, accounting, audit, investment banking, management consulting, brokerage, finder’s or other fees and expenses in connection with the sale of the Purchased Assets or related
negotiations; (x) any liabilities (including Superfund liabilities) for environmental 

  

 3 

 
contamination at or adjoining real estate owned, leased or operated by Seller, for regulatory noncompliance existing at the Closing Date (as defined below)
or for off-site handling (including without limitation disposal) of wastes or, with respect to laws or regulations relating to protection of human health (including occupational safety) and the environment, for any noncompliance existing at or prior
to the Closing Date; (xi) any liabilities with respect to products of the Business manufactured, or services of the Business provided, before Closing; (xii) any liabilities for customer rebates incurred before Closing; (xiii) any
liabilities of Seller under any leases, licenses, agreements or contracts, oral or written, other than the Assumed Contracts and the Software Licenses; (xiv) any liabilities arising out of or in connection with any violation of any Permit,
Environmental Permit, law or governmental rule or regulation; (xv) any liabilities with respect to litigation or claims pending or threatened against Seller as of the Closing Date; (xvi) any liabilities under any Federal or state civil
rights or similar laws, or the Worker Adjustment and Retraining Notification Act, as amended (the “WARN Act”), resulting from the termination of employment by Seller of employees of the Business or any other employment action taken
by Seller with respect to employees of the Business; or (xvii) any other liabilities of Seller, or any other liabilities associated with the ownership or operation of the Purchased Assets or the Business before the Closing, except the Assumed
Liabilities. 
 ARTICLE III 
 CONSIDERATION; CLOSING 
 3.1 Purchase Price. 
 (a) The aggregate purchase price for the Assets will be $16,650,000 (the “Cash Purchase Price”). SGS will pay the Cash
Purchase Price in three cash installments, as follows: 
 (i) $11,650,000 at Closing. Also at Closing, Buyer shall reimburse
Seller for the amount of Seller’s security deposit held by the landlord with respect to the Ramsey Lease. 
 (ii)
$2,500,000 on the first anniversary of the Closing Date. 
 (iii) $2,500,000 on the second anniversary of the Closing Date;
provided, that $500,000 of this installment (the “EBITDA Holdback”) will only be payable if the Business has achieved a threshold EBITDA Margin of 21% for the second year of operations following Closing. (It being agreed that
“EBITDA Margin” will be calculated and determined in accordance Sections 3.3 and 3.4). 
 The preceding notwithstanding, the
payments contemplated by subsections 3.1(a)(ii) and (iii) are subject to forfeiture in the following circumstances: if Mr. Jackson and/or Mr. Nussbaum voluntarily terminates his employment before the scheduled 

  

 4 

 
expiration of his Leased Employment Agreement (defined below), Seller will forfeit 50% (if there is one terminating employee) or 100% (if there are two
terminating employees) of any remaining portion of the payments contemplated by subsections 3.1(a)(ii) and (iii). In addition, if Robert Jackson voluntarily terminates his employment before the scheduled expiration of his employment agreement with
Buyer and, at the time of Robert Jackson’s voluntary termination Michael Jackson Sr. has not voluntarily terminated his own employment in a manner that would cause a forfeiture, Seller will forfeit 50% of any remaining portion of the payments
contemplated by subsections 3.1(a)(ii) and (iii). For avoidance of doubt, there will be no forfeiture in the event of a termination of employment by reason of death or disability. 
 In the event that Buyer sells the Business to a non-Affiliated third party (by way of a sale of all or substantially all the assets of the Business or a
sale of all or substantially all the assets of Buyer) before the second anniversary of the Closing Date, any amounts payable by Buyer under subsection 3.1(a)(ii) and/or (iii) will become payable upon the date of such sale, subject to any
set-off exercised by Buyer under Section 10.2(f) before such date and/or any forfeiture occurring before such date under Section 3.1(a). In the event that such a sale occurs after the first anniversary of the Closing Date but before the
second anniversary of the Closing Date, whether the EBITDA Holdback is payable upon such sale will be determined on the basis of 2008 EBITDA Margin through the month-end preceding such sale, annualized for all of 2008. 
 (b) Buyer acknowledges that Seller owns certain packaging and shipping materials inventory that is not shown on Seller’s balance
sheet (the “Materials Inventory”), which Buyer will not acquire at Closing and which will constitute an Excluded Asset. At Closing, Seller will identify the Materials Inventory on hand as of the Closing Date. Buyer will pay to
Seller proceeds of sales of the Materials Inventory subject to and in accordance with Section 10.7. 
 (c) Subject to
Section 10.2(f), Buyer shall pay each installment of the Cash Purchase Price by wire transfer of immediately available federal funds to Seller’s account as follows (or to such other account as Seller shall designate by written notice
delivered to Buyer): 
 The Bank of New York 
 ABA Routing No.: 021000018 
 Account Name: R.L. Ecker, P.C. 
 Account No.: 6776702402 
 In escrow for C.M.
Jackson Associates, Inc. 
 (d) The Cash Purchase Price shall constitute the “Consideration”. The Consideration
shall be allocated among the Purchased Assets in the manner proposed by Buyer within 60 days after Closing and approved as promptly as practicable thereafter by Seller, Seller’s approval not to be unreasonably withheld. 
  

 5 

 3.2 The Closing. The closing (the “Closing”) of the sale and purchase of the
Purchased Assets shall take place on February 28, 2007, unless otherwise agreed by the parties; provided, however, that subject to Section 13.1, the date of the Closing shall be automatically extended from time to time for so long as any of the
conditions set forth in Articles VII and VIII shall not be satisfied or waived. The date on which the Closing occurs shall be the “Closing Date”. The Closing shall be deemed to be effective as of 11:59 p.m. (local time) on the
Closing Date. 
 3.3 EBITDA Statement. 
 The amount of the EBITDA Margin will be determined from a calculation for the 12 months ending on the second anniversary of the Closing Date in the form set forth in Exhibit 3.3 (the “EBITDA
Statement”), prepared by Buyer consistent with Buyer’s practices and accounting policies. The EBITDA Statement shall be subject to review and confirmation by Seller. The parties shall cooperate in the determination of the EBITDA
Statement. Buyer shall cause the EBITDA Statement to be delivered to Seller not later than 90 days after the second anniversary of the Closing Date. Seller may confirm that it agrees with the EBITDA Statement at any time following receipt from
Buyer. 
 3.4 Disputes Regarding the EBITDA Statement. Disputes with respect to the EBITDA Statement shall be resolved as follows:

 (a) Seller shall have 30 days after receipt of the EBITDA Statement from Seller (the “Dispute Period”) to
dispute any amounts reflected on the EBITDA Statement (a “Dispute”). If Seller does not give written notice of a Dispute within the Dispute Period to Buyer (a “Dispute Notice”), the EBITDA Statement shall be deemed
to have been accepted and agreed to by Seller in the form in which it was delivered by Buyer, and shall be final and binding upon the parties. If Seller has a Dispute, Seller shall give Buyer a Dispute Notice within the Dispute Period, setting forth
in reasonable detail the elements and amounts with which it disagrees. Within 30 days after delivery of such Dispute Notice (the “Negotiating Period”), the parties shall attempt to resolve such Dispute and agree in writing upon the
final content of the EBITDA Statement. 
 (b) If Buyer and Seller are unable to resolve any Dispute within the Negotiating
Period, the parties shall engage within five days following the end of the Negotiating Period a nationally recognized certified public accounting firm mutually acceptable to Buyer and Seller, who is not rendering (and during the preceding two-year
period has not rendered) audit services in North America to either Seller or Buyer, or their respective Affiliates, to serve as arbitrator (the “Arbitrating Accountant”) to settle such Dispute. In connection with the resolution of
any Dispute, the Arbitrating Accountant shall have access to all documents, 

  

 6 

 
records, work papers, facilities and personnel necessary to perform its function as arbitrator. The arbitration before the Arbitrating Accountant shall be
conducted in accordance with the commercial arbitration rules of the American Arbitration Association. The Arbitrating Accountant’s award with respect to any Dispute shall be final and binding upon the parties hereto, and judgment may be
entered on the award. Seller and Buyer shall each pay one-half of the fees and expenses of the Arbitrating Accountant with respect to any Dispute. 
 (c) Within 5 business days after the EBITDA Statement has been finalized under Section 3.3 or 3.4, Buyer shall pay the EBITDA Holdback to Seller by wire transfer if EBITDA Margin equals or exceeds 21%.

 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF SELLER 
 Seller represents and warrants to Buyer as follows: 
 4.1 Organization, Standing, Qualification, etc. of Seller. Seller is a corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey. Seller is qualified to do business, and is in good standing as a foreign corporation, in each jurisdiction where the ownership or operation of the Purchased Assets or the conduct of the Business requires such
qualification, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in the aggregate, reasonably be expected to impair Seller’s ability to effect the Closing. 
 4.2 Authority, Binding Effect. Seller has the corporate power and authority to enter into this Agreement and all other agreements to which Seller
is a party delivered hereunder (“Seller’s Ancillary Documents”) and to carry out the transactions contemplated hereby and thereby. The sale of the Purchased Assets by Seller to Buyer has been approved by Seller’s
shareholders. The execution and delivery of this Agreement and Seller’s Ancillary Documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of
Seller. This Agreement has been, and Seller’s Ancillary Documents will be, executed and delivered by a duly authorized representative of Seller. This Agreement constitutes, and Seller’s Ancillary Documents when executed and delivered will
constitute, the valid, legal and binding obligation of Seller enforceable in accordance with the terms hereof and thereof, respectively (except to the extent that enforcement is limited by (i) laws pertaining to bankruptcy, reorganization,
insolvency and creditors’ rights generally or (ii) general principles of equity, whether considered in a proceeding in equity or at law). 
  

 7 

 4.3 Non-contravention; Consents. 
 (a) The execution and delivery of this Agreement and Seller’s Ancillary Documents and the consummation of the transactions
contemplated hereby and thereby will not (i) violate, conflict with or result in any breach of any provision of the charter documents or by-laws of Seller, (ii) violate, conflict with or result in any breach of any statute, rule or
governmental regulation applicable to Seller, (iii) violate, conflict with or result in any breach of any order, writ, injunction, judgment or decree or arbitration award binding on Seller or the Purchased Assets, or (iv) violate, conflict
with or result in any breach of, or constitute a default or event of default or result in the creation or imposition of any Lien on any of the Purchased Assets under, any agreement, indenture, mortgage, deed of trust, loan or credit agreement,
debenture, note, bond or other instrument to which Seller is a party or by which it or any of its assets are bound or affected. 
 (b) No consent, approval or authorization of, or declaration or filing with, any governmental authority is required to be made or obtained by Seller in connection with the execution or delivery of this Agreement or Seller’s Ancillary
Documents or the consummation of the transactions contemplated hereby or thereby. No notice is required to be delivered to Seller’s employees under the WARN Act in connection with the Transaction. Except as set forth on Schedule 4.3,
there is no requirement that any party to any Permit or Environmental Permit or to any of the Assumed Contracts or the Software Licenses or to any other agreement, indenture, mortgage, deed of trust, loan or credit agreement, debenture, note or
other instrument to which Seller is a party consent to the transactions contemplated by this Agreement. 
 4.4 Legal Proceedings.
There are no actions, suits, proceedings, or investigations, at law or in equity, or before any governmental agency or other person, pending or, to Seller’s knowledge, threatened against Seller or its assets (i) which question the validity
of this Agreement or any action taken or to be taken hereunder or (ii) which are related to the Business or the Purchased Assets, or the ownership or operation thereof. There are no outstanding judgments, orders, writs, injunctions or decrees
of any court or governmental agency against or affecting the Purchased Assets. 
 4.5 Condition of Certain Purchased Assets.

 (a) The Equipment and the buildings and other improvements constituting the Ramsey Facility are (i) in good operating
condition and repair (ordinary wear and tear excepted) and (ii) to Seller’s knowledge, free of any latent structural or engineering defects. 
 (b) The Inventory is of merchantable quality and is usable and saleable in the ordinary course of business, except for items of obsolete material which have been written down to estimated net realizable value. Except
for items of below standard quality which have been written down to their estimated net realizable value, the Inventory is free from defects in materials and/or workmanship. 
  

 8 

 Except as disclosed on Schedule 4.5(b), all of the Inventory is located at the Ramsey Facility. None of
the Inventory is consigned inventory. 
 4.6 Finders and Brokers. Seller has not employed, paid or become obligated to pay any finder,
broker, agent, management consultant or other intermediary in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. 
 4.7 Assumed Contracts. 
 (a) All of the Customer Contracts as of the date hereof are listed, and as of the Closing Date will be listed, on Schedule 4.7(a) by customer, indicating sales value. 
 (b) Each of the Assumed Contracts is in full force and effect according to its terms. Neither Seller nor, to Sellers’ knowledge, any
third party is in default or breach under any Assumed Contract. No event, occurrence or condition exists which, with the lapse of time, the giving of notice, or both would become a default by Seller or, to Seller’s knowledge, by any third party
under any Assumed Contract. 
 4.8 Ownership of Purchased Assets. Except for liens for current taxes not yet due and payable
(“Permitted Liens”), and except for the Liens set forth on Schedule 4.8 (“Non-Permitted Liens”, all of which Non-Permitted Liens shall be removed before Closing), Seller has good and marketable title to the
Purchased Assets, free and clear of all Liens. 
 4.9 Operation in the Ordinary Course; No Material Adverse Change. 
 (a) Since December 31, 2005, the Business has been conducted in all respects only in the ordinary course. 
 (b) Since December 31, 2005, there has been no material adverse change in the Business or the Purchased Assets. 
  

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 4.10 Intellectual Property, etc. 
 (a) Schedule 4.10(a) identifies all of the following: (i) all patents and pending applications therefor used in the Business;
(ii) all copyrights, registrations thereof and applications therefor used in the Business; (iii) all service marks, trademarks and trade names, including registrations thereof and applications therefor, used in the Business; and
(iv) all licenses of rights in the items referred to in the foregoing clauses (i) through (iii), whether to or by Seller, whether or not used in the Business. The scheduled rights are referred to herein collectively as the
“Intellectual Property.” Except as identified on Schedule 4.10(a) with respect to clause (iv) of the first sentence of this subsection, Seller has not licensed or sublicensed any of the Intellectual Property as a
licensor. 
 (b) (i) Each patent, copyright, service mark, trademark and trade name, and each registration thereof and
application therefor, included in the Intellectual Property exists, is owned by or licensed to Seller, and has been maintained in good standing; (ii) Seller has no knowledge of any claim that any third party asserts ownership rights in any of
the Intellectual Property owned by Seller; (iii) Seller has no knowledge of any claim that Seller’s use of any intellectual property, including the Intellectual Property, infringes any right of any third party; and (iv) Seller has no
knowledge or any reason to believe that any third party is infringing any of Seller’s rights in any of the Intellectual Property. 
 (c) Schedule 4.10(c) lists all of the Software Licenses. 
 4.11 Customers. To Seller’s
knowledge, its business relationships with its customers are satisfactory, and Seller has no knowledge or notice of any termination, cancellation, or adverse change in its business relationship with any customer (or affiliated group of customers)
whose purchases accounted for more than 2% in 2006. 
 4.12 Accuracy of Documents. The documents and/or copies of documents furnished
by Seller to Buyer under this Agreement (including without limitation copies of the Assumed Contracts, the Software Licenses and documents provided in response to Buyer’s November 13, 2006 Due Diligence Request) are complete and accurate
in all material respects. 
 4.13 Taxes. All ad valorem or other taxes imposed on or with respect to the Purchased Assets or the
non-payment of which may give rise to a Lien on any of the Purchased Assets which have or will become due and payable on or before the Closing Date have been or will be timely paid by Seller and all ad valorem or other tax returns which have or will
become due on or before the Closing Date have been or will be timely filed by Seller. All real estate taxes imposed on or with respect to the Ramsey Facility which have or will become payable on or before the Closing Date have been or will be timely
paid. There are no administrative or judicial disputes involving the taxability or valuation of any of the Purchased Assets or the Ramsey Facility. There are no special elections or other conditions in effect with respect to the Business or any of
the Purchased Assets which could impose on Buyer, as transferee of the Purchased Assets or as successor to Seller, any liability for any taxes imposed with respect to the Purchased Assets with respect to periods prior to Closing or upon Seller for
any period. 
  

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 4.14 Financial Statements. Seller’s compiled financial statements for the years ended
December 31, 2005, 2004 and 2003 and unaudited financial statements for the interim period ended September 30, 2006 (the “Financial Statements”) are attached as Schedule 4.14. The Financial Statements have been
prepared from the books and records of Seller in accordance with generally accepted accounting principles consistently applied (“GAAP”) and present fairly the assets, liabilities and financial condition and results of operations as
of each date and for each period covered. 
 4.15 Books and Records. Sellers’ books, accounts and records with respect to the
Business (i) are true, accurate and complete in all material respects, (ii) have been maintained in Seller’s usual, regular and ordinary manner in accordance with GAAP and (iii) properly reflect all material transactions to which
Seller is or has been a party with respect to the Purchased Assets. 
 4.16 Permits. Schedule 4.16 contains a complete and
correct list of every license, permit, registration and governmental approval, agreement and consent applied for, pending by, issued or given to Seller with respect to the Business, except for Environmental Permits (collectively, the
“Permits”). All Permits are in full force and effect, and no other license, permit, registration, governmental approval, agreement or consent (except for Environmental Permits) is required in connection with the ownership of the
Purchased Assets or operation of the Business. 
 4.17 Compliance with Laws. Seller is, with respect to the Business, in compliance in
all material respects with each decree, order or arbitration award or law, statute, or regulation of or agreement with, or Permit from, any Federal, state, or local governmental authority. 
 4.18 Employees. With respect to employees of Seller who are or were employed in the conduct of the Business: 
 (a) Seller is not a party to any collective bargaining agreement or other labor union contract; 
 (b) there is no unfair labor practice complaint against Seller pending or, to Seller’s knowledge, threatened before the National
Labor Relations Board or any comparable state or local or foreign agency with respect to the Business; 
 (c) there is no
labor strike, dispute, slowdown or stoppage actually pending or, to Seller’s knowledge, threatened against or directly affecting the Business; 
  

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 (d) Seller has not experienced any material work stoppage in the last eighteen months
with respect to the Business; and 
 (e) Seller is not a party to any employment agreement. 
 4.19 Environmental. 
 (a) To the best of Seller’s knowledge, Seller is in compliance in all respects with all Environmental Laws. A description of any outstanding notice, citation, inquiry or complaint which Seller has received of any alleged violation of
any Environmental Law or Environmental Permit relating to the Business or the Purchased Assets is contained in Schedule 4.19(a). (As used in the preceding sentence, the term “outstanding” refers to any notice, citation, inquiry or
complaint that pertains to a matter that has not been corrected or otherwise resolved.) To the best of Seller’s knowledge, Seller possesses all Environmental Permits which are currently required for the operation of the Business. All
Environmental Permits issued to Seller with respect to the Purchased Assets or conduct of the Business are listed in Schedule 4.19(a) and Seller is in compliance in all material respects with the provisions of all such Environmental Permits.

 (b) (i) There has been no generation, storage, disposal, treatment or transportation of any Hazardous Materials (as
herein defined) at the Ramsey Facility or at or to any Offsite Facility by or on behalf of Seller in violation of, or which could give rise to any liability or obligation of Seller under, any Environmental Laws; and (ii) there has been no
Release (as herein defined) by Seller or, to the best of Seller’s knowledge, by any other party, at the Ramsey Facility. 
 (c) Schedule 4.19(c) sets forth a complete list of all (i) Offsite Facilities to which Seller has sent Hazardous Materials; (ii) Containers (as herein defined) that are now present at, or have been removed from, the Ramsey
Facility; and (iii) locations of PCB’s and/or asbestos at the Ramsey Facility. All Containers which have been removed from the Ramsey Facility have been removed in accordance with all applicable Environmental Laws. 
 (d) For the purposes of this Agreement: 
 (i) “Containers” means above-ground and underground storage tanks and/or other containers having a capacity of more than 100 gallons; 
 (ii) “Environmental Laws” means all federal, state, and local statutes, ordinances, guides having the effect of law,
rules and regulations, all court orders and decrees and arbitration awards, which pertain to environmental matters or contamination of any type whatsoever. 
  

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 Environmental Laws include, without limitation, those relating to: manufacture, processing, use,
distribution, treatment, storage, disposal, generation or transportation of Hazardous Materials; air, soil, surface or ground water or noise pollution; Releases; protection of wildlife, endangered species, wetlands or natural resources; Containers;
health and safety of employees and other persons; and notification requirements relating to the foregoing; 
 (iii)
“Environmental Permits” means licenses, permits, registrations, governmental approvals, orders, directives, agreements, consents and the like which are required for the operation of the Business under or are issued under
Environmental Laws; 
 (iv) “Facility” means any facility as defined in CERCLA (as herein defined);

 (v) “Hazardous Materials” means pollutants, contaminants, pesticides, petroleum and petroleum products,
radioactive substances, solid, gaseous or liquid wastes or hazardous or extremely hazardous, special, industrial, toxic or otherwise dangerous wastes, substances, chemicals or materials within the meaning of any Environmental Law, including, without
limitation, any (i) “hazardous substance” as defined in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et. seq., as amended and reauthorized (“CERCLA”), and
(ii) any “hazardous waste” as defined in the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C., Sec. 6902 et. seq., and all amendments thereto and reauthorizations thereof; 
 (vi) “Offsite Facility” means any Facility which is not presently, and has not heretofore been, owned, leased, subleased
or occupied by Seller with respect to the Business; and 
 (vii) “Release” means any actual or threatened
spill, discharge, leak, emission, escape, injection, dumping or other release of any Hazardous Materials into the environment, whether or not notification or reporting to any governmental agency was or is required, including without limitation any
Release which is subject to CERCLA or a similar state statute. 
 4.20 Certain Matters Relating to the Ramsey Facility, the Purchased
Assets and the Business. 
 (a) Seller holds a valid leasehold interest in the Ramsey Facility under the Ramsey Lease free
and clear of all Liens except for real estate taxes not delinquent. To the best of Seller’s knowledge, neither the improvements comprising the Ramsey Facility 

  

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nor the conduct of the Business at the Ramsey Facility is in violation of any use or occupancy restriction, limitation, condition or covenant of record or
any zoning or building law, code or ordinance or public utility easement or servitude. To the best of Seller’s knowledge, the improvements comprising the Ramsey Facility are in compliance in all material respects with applicable laws and
regulations. 
 (b) The continued operation of the Ramsey Facility (as it is currently operated) is not dependent on
facilities located at other property, nor is the continued operation of other facilities dependent on the Ramsey Facility. Seller has adequate rights of ingress and egress with respect to the Ramsey Facility. The Ramsey Facility currently is served
by gas and/or electricity, telephone, water, sewage and waste disposal and other utilities adequate to operate such facility at its current rate of operation. 
 (c) There are no condemnation proceedings pending or, to Seller’s knowledge, threatened with respect to any portion of the Ramsey
Facility. 
 (d) Seller does not own any real property. The Ramsey Facility is the only real property leased by Seller (as
lessee) in connection with the Business. Seller does not lease any real property as lessor in connection with the Business. 
 (e) Seller has not received any written notice from, or on behalf of, any insurance carrier issuing policies covering the Business to the effect that (i) insurance rates with respect to the Business will hereafter be substantially
increased (except to the extent that insurance rates may be increased for all similarly situated risks), (ii) there will hereafter be no renewal of an existing policy, or (iii) there will be required or is suggested any material alteration
of the Ramsey Facility or any item of Equipment, purchase of additional equipment or material modification of any of Seller’s methods of conducting the Business. 
 (f) The Purchased Assets are adequate to conduct the Business as it is currently being conducted. 
 4.21 Buyer Obligation under Plans or Non-Assumed Contracts. 
 (a) Buyer will have no liability or obligation under any savings, 401K, profitsharing, pension, retirement or other similar arrangement or
plan maintained by Seller for its employees, and all such plans have been maintained by Seller in accordance with applicable laws. 
 (b) Except for the Assumed Liabilities, Buyer will have no liability or obligation under any contract or agreement entered into by Seller to which Buyer is not a party. 
  

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 4.22 Employee Benefit Plans. 
 (a) Schedule 4.22 is a true and complete list of each employee benefit plan, program or practice, profit sharing, pension,
retirement or other similar arrangement or plan, whether or not subject to ERISA, and including all fringe benefits, programs and practices, and any commitment with respect to which Seller has any liability or obligation relating to employees or
their beneficiaries (each, an “Employee Arrangement”). All Employee Arrangements have been maintained by Seller in accordance with applicable laws. Seller has provided copies of each Employee Arrangement to Buyer. Except as
specifically provided in this Agreement, Seller has not taken any action that may result in Buyer being a party to, or bound by, any Employee Arrangement of Seller, and Buyer shall have no liability arising out of or relating to any Employee
Arrangement of Seller following the consummation of the transactions contemplated hereby. No Employee Arrangement has provided for the payment of retiree welfare benefits. 
 (b) Seller has not incurred (i) any obligation to make any contribution to any “multi-employer plan” as defined in
Section 4001(a) (3) of ERISA or (ii) any withdrawal liability from any multi-employer plan under Section 4201 of ERISA. The Employee Arrangements intended to qualify under Section 401(a) of the Code so qualify and the trusts
maintained pursuant thereto are exempt from federal income taxation under Section 501(a) of the Code, and nothing has occurred with respect to the operation of the Employee Arrangements which could cause the loss of such qualification or
exemption or the imposition of any material liability, penalty, or tax under ERISA or the Code. Seller, and each of the Employee Arrangements are in compliance in all respects with the applicable provisions of ERISA and other applicable laws. There
is no violation of ERISA with respect to the filing of any applicable reports, documents, and notices regarding the Employee Arrangements with the Secretary of Labor, the Secretary of the Treasury or any other governmental agency, or the furnishing
of such documents to the participants or beneficiaries of the Employee Arrangements. All contributions required by law to any Employee Arrangement have been made by Seller without regard to any waivers granted under Section 412 of the Code, and
there are no accumulated funding deficiencies with respect to any of the plans subject to Section 412 of the Code. All unpaid contributions to and all payments due under the Employee Arrangements (except those to be made from a trust qualified
under Section 401(a) of the Code) shall be properly accrued and reflected in the Financial Statements or are disclosed on Schedule 4.22. There are no pending actions, claims or lawsuits which have been asserted or instituted against any
of the Employee Arrangements, the assets of any of the trusts or funds under any of such plans or the plan sponsor or the plan administrator of such plans, or against any fiduciary (as defined in Section 3(21) of ERISA) of the Employee
Arrangements with respect to the operation or administration of such Employee Arrangements (other than routine benefit claims), nor does Seller have knowledge of facts which could form the basis for any such action, claim or lawsuit which could lead
to a material claim against Buyer. There are no pending investigations by any governmental agency involving the Employee Arrangements. 
  

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 ARTICLE V 
 REPRESENTATIONS AND WARRANTIES OF BUYER 
 Buyer represents and warrants to Seller as follows:

 5.1 Organization, Standing, etc. of Buyer. Buyer is a corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Kentucky. 
 5.2 Authority, Binding Effect. Buyer has the corporate power and authority to enter into this
Agreement and all other agreements to which Buyer is a party delivered hereunder (“Buyer’s Ancillary Documents”) and to carry out the transactions contemplated hereby and thereby. The execution and delivery of this Agreement
and Buyer’s Ancillary Documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement has been, and Buyer’s Ancillary
Documents will be, executed and delivered by a duly authorized representative of Buyer. This Agreement constitutes, and Buyer’s Ancillary Documents when executed and delivered will constitute, the valid, legal and binding obligation of Buyer
enforceable in accordance with the terms hereof and thereof, respectively (except to the extent that enforcement is limited by (i) laws pertaining to bankruptcy, reorganization, insolvency and creditors’ rights generally or
(ii) general principles of equity, whether considered in a proceeding in equity or at law). 
 5.3 Compliance with Other Instruments
and Laws, etc.; Consents. The execution and delivery of this Agreement and Buyer’s Ancillary Documents and the consummation of the transactions contemplated hereby and thereby will not (i) violate, conflict with or result in any breach
of any provision of the certificate of incorporation or by-laws of Buyer, (ii) violate, conflict with or result in any breach of any statute, rule or governmental regulation applicable to Buyer, (iii) violate, conflict with or result in
any breach of any order, writ, injunction, judgment or decree or arbitration award binding on Buyer, or (iv) violate, conflict with or result in any breach of, or constitute a default or event of default under, any agreement, indenture,
mortgage, deed of trust, loan or credit agreement, debenture, note or other instrument to which Buyer is a party or by which it or any of its assets are bound or affected. No consent, approval or authorization of or declaration or filing with, any
governmental authority is required to be made or obtained by Buyer in connection with the execution or delivery of this Agreement or Buyer’s Ancillary Documents or the consummation of the transactions contemplated hereby or thereby. There is no
requirement that any party to any agreement, indenture, mortgage, deed of trust, loan or credit agreement, debenture, note or other instrument to which Buyer is a party consent to the transactions contemplated by this Agreement. 
  

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 5.4 Legal Proceedings. There are no actions, suits, proceedings, or investigations, at law or in
equity, or before any governmental agency or other person, pending or, to Buyer’s knowledge, threatened against Buyer which question the validity of this Agreement or any action taken or to be taken hereunder. 
 5.5 Finders and Brokers. Buyer has not employed, paid or become obligated to pay any finder, broker, agent, management consultant or other
intermediary in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby. The preceding sentence notwithstanding, Buyer shall pay the fee of Bill Crowley related to the Transaction. 

ARTICLE VI 
 CONDUCT BEFORE
CLOSING 
 6.1 Seller’s Obligations. 
 (a) Conduct of Business. Except as otherwise expressly provided in this Agreement, during the period from the date of this
Agreement through the Closing Date: 
 (i) Seller shall conduct the Business in the usual and ordinary course, in a manner
consistent with prior practice, and shall use its commercially reasonable efforts to maintain and preserve intact the Business, the Purchased Assets and Seller’s relationships with customers; 
 (ii) Seller shall maintain the Ramsey Facility and the Equipment in good operating condition and repair consistent with the past practice
of the Business; 
 (iii) Seller shall not sell, transfer, encumber or otherwise dispose of any of the Purchased Assets,
except for sales of inventory in the usual and ordinary course of business, and no rights or options shall be given by Seller to any person for the acquisition of the Purchased Assets; 
 (iv) Seller shall maintain casualty and business interruption insurance with a financially sound and reputable insurance company or
companies covering the Ramsey Facility, the Business and the tangible property included in the Purchased Assets; 
 (v) Seller
shall not materially amend, terminate or give notice of termination with respect to any Assumed Contract or Software License or waive any material rights thereunder or directly or indirectly enter into or assume any customer contract, agreement,
obligation or commitment or license of software or intellectual property other than in the usual and ordinary course of business in accordance with past practices; and 
  

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 (vi) Seller shall not change (A) the compensation of Business employees (except for
normal scheduled increases) or (B) the benefits available to any Business employee. 
 (b) Access to Information.
During the period from the date of this Agreement through the Closing Date, Seller shall, during regular business hours, (i) give Buyer and its authorized representatives reasonable access to all employees, books, records, offices and other
facilities and properties of the Business; (ii) permit Buyer to make such inspections (and copies, in the case of records and other written materials) thereof as Buyer may reasonably request; and (iii) furnish Buyer with such financial and
operating data and other information with respect to the Business as Buyer may from time to time reasonably request; provided, however, that any such investigation shall be conducted in such manner as to protect health and safety and
subject to reasonable constraints to minimize disruption of the business and operations of the Business. To the extent permitted by law, Buyer will have the right to inspect the personnel files (other than medical records) of all Business employees
as a part of its due diligence procedures. To the extent employee consent is required in order for Seller to make such records available to Buyer, Seller will use its best efforts to obtain such consent. Buyer shall be entitled to examine the
Purchased Assets, the Ramsey Facility and to conduct (or have conducted) environmental audits and/or assessments and valuation appraisals. Environmental audits and/or a phase I or phase II environmental assessment may, among other things, include
soil and groundwater sampling and confirmation that Seller possesses all necessary Environmental Permits and that the Ramsey Facility is in compliance with applicable Environmental Laws. Buyer acknowledges that all due diligence investigations shall
be conducted at Buyer’s sole cost and expense. 
 (c) No Other Negotiations. During the period from the date of
this Agreement through the Closing Date, Seller shall not, and shall not permit any of its employees, representatives, officers or directors or other authorized agents to, directly or indirectly, encourage, solicit, initiate, engage in, conduct or
continue discussions or negotiations with, or provide any information to, any other entity or person concerning a sale of Seller’s stock or the Business or any of the assets thereof (other than sales of inventory in the ordinary course of
business). 
 (d) Consents; Permits; Environmental Permits. Seller shall use commercially reasonable efforts in good
faith to obtain as promptly as possible written consents to the transfer and assignment to Buyer of the Assumed Contracts and the Software Licenses and, if applicable, any other Purchased Assets transferred pursuant hereto where the approval or
other consent of any other person may be required, all of such required consents and approvals being listed on Schedule 4.3. Seller shall assist and cooperate with Buyer in the transfer of all Permits and Environmental Permits necessary for
the operation of the Ramsey Facility. 
  

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 (e) Cooperation. Both before and for a reasonable period of time after the
Closing, Seller shall make reasonable efforts and take such actions as may be reasonably requested by Buyer to cooperate with Buyer in assuring a smooth transition for the Business, including without limitation coordinating with Buyer in providing
notice of the transactions contemplated by this Agreement to the customers of the Business. 
 (f) Discharge of Liens.
At or before Closing, Seller shall pay off and discharge all credit lines, loans and debts secured by any of the Purchased Assets or otherwise have any Liens associated with such credit lines, loans and debts discharged. 
 6.2 Joint Obligations. The following shall apply with equal force to Seller and Buyer: 
 (a) Without implication that such laws apply to the transactions contemplated hereby, neither Seller nor Buyer shall comply with the
provisions of the Uniform Commercial Code or similar laws relating to bulk sales or transfers. As an inducement to Buyer to so agree, Seller (i) represents and warrants that Seller will not be rendered insolvent by the transactions contemplated
by this Agreement and (ii) covenants that it will promptly pay and discharge as and when they become due all debts, obligations and liabilities that are Excluded Liabilities. Seller shall indemnify and hold Buyer Indemnitees (as herein defined)
harmless against any liabilities resulting from Buyer’s waiver of any applicable bulk sales laws. 
 (b) Seller and Buyer
shall use their respective commercially reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated hereby as soon as
practicable. 
 (c) Each of Buyer and Seller shall promptly give the other written notice of the existence or occurrence of
any condition known to it which would make any representation or warranty herein contained untrue in any material respect or which might reasonably be expected to prevent the consummation of the transactions contemplated hereby. 
 (d) Neither Buyer nor Seller shall intentionally perform any act which, if performed, or omit to perform any act which, if omitted to be
performed, would prevent or excuse the performance of this Agreement by such party or which would result in any representation or warranty made by it being untrue in any material respect as if originally made on and as of the Closing Date

  

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 (e) Seller and Buyer agree that time is of the essence, and that they will use their
respective commercially reasonable best efforts to consummate the transactions contemplated by this letter on or before February 28, 2007. 
 ARTICLE VII 
 CONDITIONS TO OBLIGATIONS OF BUYER 
 The obligation of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment at or before the Closing of
each of the following conditions: 
 7.1 Performance; No Default. Seller shall have performed, observed and complied in all material
respects with all the obligations and conditions required by this Agreement to be performed, observed or complied with by it at or before the Closing. 
 7.2 Accuracy of Representations and Warranties. The representations and warranties of Seller in this Agreement shall have been true in all material respects when made and shall be true in all material respects
on and as of the Closing Date with the same force and effect as though made on and as of such date. 
 7.3 Litigation. No action,
proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed (other than one instituted, threatened or proposed by Buyer) to enjoin, restrain, prohibit, or obtain damages in respect of this Agreement or the
consummation of the transactions contemplated hereby, if such action, proceeding, investigation, regulation or legislation, in the reasonable judgment of Buyer, would make it inadvisable to consummate such transactions. 
 7.4 No Material Adverse Change. There shall have been no material adverse change in the Purchased Assets, the Ramsey Facility or the Business
since December 31, 2005. 
 7.5 Consents. All third party consents required in connection with the Transaction shall have been
obtained by Seller, without cost to Buyer, or, in the case of Permits and Environmental Permits, if Permits and/or Environmental Permits held by Seller are not transferable, Buyer shall have obtained permits on reasonably similar terms. 

7.6 Certain Deliveries. Seller shall have delivered the following to Buyer: 
 (a) a certified copy of resolutions of Seller’s shareholders approving the sale of the Purchased Assets to Buyer; 
 (b) a certified copy of resolutions of Seller’s Board of Directors authorizing the execution, delivery and performance of this
Agreement and Seller’s Ancillary Documents and the performance of the transactions contemplated hereby and thereby; 
  

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 (c) the written opinion of Robert L. Ecker, Esq., counsel to Seller, dated as of the
Closing Date, in substantially the form of Exhibit 7.6(c); 
 (d) the guaranty of each of Michael Jackson and Larry Nussbaum,
guaranteeing the post-Closing obligations of Seller hereunder and under Seller’s Ancillary Documents, in substantially the form of Exhibit 7.6(d); and 
 (e) an estoppel certificate, substantially in the form of Exhibit 7.6(e), with respect to the Ramsey Lease. 
 7.7 Certain Other Agreements. 
 (a) Buyer shall have entered into leased employee agreements with Graphica
Associates and Michael C. Jackson, and with Graphics Unlimited and Larry Nussbaum, respectively (the “Leased Employee Agreements”), providing for (i) a two-year term for Mr. Jackson and a three-year term for Mr. Nussbaum;
(ii) an annual salary of $275,000; (iii) a covenant not to compete with Buyer or solicit its customers or employees for three years following Closing or termination of the Leased Employee Agreement, whichever is longer; and (iii) such
other terms and conditions as are mutually agreeable to the parties. 
 (b) Seller shall have released each of its employees
to whom Buyer offers employment from their respective employment agreements (if any), and all obligations thereunder, with Seller. 
 7.8
Materials Inventory. [INTENTIONALLY OMITTED]. 
 7.9 Proceedings Satisfactory to Counsel. All proceedings taken by Seller and all
instruments executed and delivered by Seller in connection with the Transaction at or before the Closing (excluding this Agreement and agreements and instruments the forms of which are attached hereto as Exhibits) shall be reasonably satisfactory in
form to counsel for Buyer. 
 ARTICLE VIII 
 CONDITIONS TO OBLIGATIONS OF SELLER 
 The obligation of Seller to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment at or before the Closing of each of the following conditions: 
 8.1
Performance; No Default. Buyer shall have performed, observed and complied in all material respects with all the obligations and conditions required by this Agreement to be performed, observed or complied with by it at or before the Closing.

  

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 8.2 Accuracy of Representations and Warranties. The representations and warranties of Buyer in
this Agreement shall have been true in all material respects when made and shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of such date. 
 8.3 Litigation. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed (other than one
instituted, threatened or proposed by Seller) to enjoin, restrain, prohibit, or obtain damages in respect of this Agreement or the consummation of the transactions contemplated hereby, if such action, proceeding, investigation, regulation or
legislation, in the reasonable judgment of Seller, would make it inadvisable to consummate such transactions. 
 8.4 Certain
Deliveries. Buyer shall have delivered the following to Seller: 
 (a) a certified copy of resolutions of Buyer’s
Board of Directors authorizing the execution, delivery and performance of this Agreement and Buyer’s Ancillary Documents and the performance of the transactions contemplated hereby and thereby; and 
 (b) the written opinion of the General Counsel of Buyer, dated as of the Closing Date, in substantially the form of Exhibit 8.4(b).

 (c) the guaranty of SGS International, Inc. (the “Guarantor”), guaranteeing the post-Closing obligations of Buyer
under Section 3.1(a), in substantially the form of Exhibit 8.4(c). 
 8.5 Proceedings Satisfactory to Counsel. All proceedings
taken by Buyer and all instruments executed and delivered by Buyer in connection with the Transaction at or before the Closing (excluding this Agreement and agreements and instruments the forms of which are attached hereto as Exhibits) shall be
reasonably satisfactory in form to counsel for Seller. 
 ARTICLE IX 
 DELIVERIES AT THE CLOSING 
 9.1 Seller’s Deliveries. Subject to the
fulfillment or waiver of the conditions set forth in Article VIII, Seller shall, at Seller’s expense (i) deliver to Buyer the documents specified in Article VII and physical possession where located of the Purchased Assets and
(ii) execute and/or deliver to Buyer all of the following: 
 (a) a Bill of Sale substantially in the form of Exhibit
9.1(a); 
  

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 (b) a Certificate of the Secretary or an Assistant Secretary of Seller certifying as to
the incumbency and attached specimen signature of officers of Seller executing this Agreement and Seller’s Ancillary Documents; 
 (c) a certificate of good standing (or the equivalent) of Seller, issued by the Secretary of State (or equivalent officer) of New Jersey; 
 (d) a closing certificate duly executed by an authorized officer on behalf of Seller, under which such officer represents and warrants to Buyer that the representations and warranties to Buyer made by Seller were true
and correct when made and are true and correct in all material respects as of the Closing Date (or, if any such representation or warranty was or is untrue in any material respect, specifying the respect in which the same was or is untrue), and that
all covenants required by the terms hereof to be performed by Seller on or before the Closing Date, to the extent not waived by Buyer in writing, have been performed in all material respects (or, if any such covenant has not been performed in all
material respects, specifying the respect in which such covenant has not been performed); 
 (e) certificates of title with
respect to any vehicles included in the Purchased Assets; 
 (f) releases (including UCC-3 termination statements) of all
Liens (other than Permitted Liens) to which the Purchased Assets are subject; 
 (g) the estimated amount (based on tax rates
for the most recent period for which such rates are known) required to pay personal property taxes with respect to the Purchased Assets and real property taxes with respect to the Ramsey Lease through the Closing Date which are not allocable to
Buyer under Section 12.1 (the “Estimated Property Tax Amount”); 
 (h) all consents required for the
assignment of the Assumed Contracts and Software Licenses and assignment or transfer of any other Purchased Assets; 
 (i)
evidence of Seller’s termination of its right to use the name “C. M. Jackson Associates Inc.”; 
 (j) a
statement of the amount of the Materials Inventory as of the Closing Date and a listing of the items constituting the Materials Inventory as of the Closing Date; and 
 (k) all other documents reasonably required from Seller to consummate the transactions contemplated hereby. 
  

 23 

 9.2 Buyer’s Deliveries. Subject to the fulfillment or waiver of the conditions set forth in
Article VII, Buyer shall, at Buyer’s expense, execute and/or deliver to Seller the documents specified in Article VIII and all of the following: 
 (a) sales tax exemption certificates, as applicable; 
 (b) a Certificate of the Secretary or
an Assistant Secretary of Buyer certifying as to the incumbency and attached specimen signature of officers of Buyer (and/or other authorized signatories) executing this Agreement and Buyer’s Ancillary Documents; 
 (c) a certificate of good standing (or the equivalent) of Buyer, issued by the Secretary of State of Kentucky; 
 (d) a closing certificate duly executed by an authorized officer (or other authorized signatory) on behalf of Buyer, under which such
officer (or other authorized signatory) represents and warrants to Seller that Buyer’s representations and warranties to Seller were true and correct when made and are true and correct in all material respects as of the Closing Date (or, if any
such representation or warranty was or is untrue in any material respect, specifying the respect in which the same was or is untrue), and that all covenants required by the terms hereof to be performed by Buyer on or before the Closing Date, to the
extent not waived by Seller in writing, have been performed in all material respects (or, if any such covenant has not been performed in all material respects, specifying the respect in which such covenant has not been performed); and 
 (e) all other documents reasonably required from Buyer to consummate the transactions contemplated hereby. 
 9.3 Joint Deliveries. Subject to the fulfillment or waiver of the conditions set forth in Articles VII and VIII, Seller and Buyer shall execute
and deliver the following documents: 
 (a) an Assignment and Assumption Agreement in substantially the form of Exhibit
9.3(a); 
 (b) a Cross-Receipt in substantially the form of Exhibit 9.3(b); and 
 (c) an Assignment and Assumption of Lease with respect to the Ramsey Lease in a form acceptable to the landlord, Seller and Buyer.

  

 24 

 ARTICLE X 
 POST-CLOSING AGREEMENTS 
 10.1 Further Assurances and Assistance. Seller shall, from time to
time, at the request of Buyer, execute and deliver such further instruments of transfer and assignment and take such other action as Buyer may reasonably request in order to vest in Buyer title to all of the Purchased Assets and to consummate the
transactions contemplated hereby. 
 10.2 Indemnification. 
 (a) General. From and after the Closing, the parties shall indemnify each other as provided in this Section 10.2. For the
purposes of this Section 10.2, each party shall be deemed to have remade all of its representations and warranties contained in this Agreement at the Closing with the same effect as if originally made at the Closing. An
“Affiliate” means any person or entity controlling, controlled by, or under common control with, Buyer or Seller, as applicable. 
 (b) Seller’s Indemnification Obligations. Seller agrees to defend, indemnify and hold harmless Buyer and its Affiliates and their respective successors and permitted assigns (the “Buyer
Indemnitees”) from and against any and all losses, obligations, liabilities, damages and claims (“Damages”), together with any and all related costs and expenses (including reasonable legal and accounting fees), which may
be asserted against or sustained or incurred by Buyer Indemnitees in connection with, relating to or arising out of: 
 (i)
the ownership or operation of the Purchased Assets or the Business by Seller before the Closing; 
 (ii) the Excluded
Liabilities or any claim against Buyer with respect to the Excluded Liabilities; 
 (iii) the failure of Seller to discharge
when due any liability or obligation of Seller other than the Assumed Liabilities, or any claim against Buyer with respect to any liability or obligation of Seller other than the Assumed Liabilities; 
 (iv) any breach of any of the representations and/or warranties made by Seller in this Agreement or in any closing document delivered by
Seller to Buyer in connection with this Agreement; 
 (v) any breach by Seller of, or failure by Seller to comply with, any of
its covenants or obligations under this Agreement (including, without limitation, its obligations under this Section 10.2(b)); 
 (vi) without limiting the generality of the foregoing, any tax, assessment or similar charge (and any interest or penalty thereon or addition thereto) imposed on or with respect to or non-payment of which would result in the imposition of
any 

  

 25 

 
Lien on any of the Purchased Assets or the Ramsey Facility with respect to any tax period which ended prior to or includes the Closing Date, to the extent
attributable to the portion of such tax period to and including the Closing Date; and 
 (vii) without limiting the generality
of the foregoing, (A) any transportation of Hazardous Materials or other materials to an Offsite Facility or handling, storage, treatment or disposal of Hazardous Materials or other materials at an Offsite Facility by or on behalf of Seller, or
any of its predecessors, or any Release of such Hazardous Materials or other materials occurring at any Offsite Facility; (B) any violation by Seller of, alleged violation by Seller of, or liability of Seller under any Environmental Law or
Environmental Permit occurring before the Closing and, if continuing at the Closing, until such time as such violation is corrected; (C) the exposure of (and resulting consequences to) any persons, including, without limitation, employees of
Seller, to any Hazardous Materials in connection with the conduct of the Business by Seller before the Closing; or (D) any generation, storage, use, handling, treatment, transportation, disposal or Release of Hazardous Materials by Seller in
connection with the conduct of the Business, or otherwise occurring as a consequence of Seller’s actions at the Ramsey Facility or any other location owned, leased or operated by Seller; 
 provided, that Buyer shall give Seller prompt written notice of the occurrence of any of the foregoing matters, shall not voluntarily pay any such claim or voluntarily
sustain or incur any such loss, obligation, liability or damage without Seller’s prior written consent, and shall give Seller full opportunity to defend any such claim. 
 (c) Limitations on Seller’s Indemnification Obligations. Seller’s indemnification obligations under the provisions of
Section 10.2(b) are subject to the following limitations: 
 (i) Buyer Indemnitees shall not be entitled to
indemnification with respect to matters set forth in Section 10.2(b)(iv) until the total amount for which Buyer Indemnitees are entitled to indemnification, but for this Section 10.2(c)(i), exceeds $10,000, and then only for the excess
over $10,000; 
 (ii) with the exception of the representations and warranties contained in Sections 4.13 (Taxes) and 4.19
(Environmental), Buyer Indemnitees shall not be entitled to indemnification with respect to a breach of any of Seller’s representations and warranties unless such claim has been asserted by a Buyer Indemnitee by written notice delivered to
Seller on or before the second anniversary of the Closing Date; 
  

 26 

 (iii) the aggregate liability of Seller in connection with its indemnification
obligations under Section 10.2(b)(iv) shall not exceed the Consideration; 
 (iv) Buyer Indemnitees shall not be entitled
to indemnification with respect to a breach of Seller’s representations and warranties contained in Section 4.13 (Taxes), unless such claim has been asserted by a Buyer Indemnitee by written notice to Seller before the date that is 90 days
after the expiration of the applicable statute of limitations; and 
 (v) notwithstanding any other provision in this
Section 10.2, with the exception of liabilities related to a violation of any Environmental Laws at Offsite Facilities or Release of Hazardous Materials or other materials at Offsite Facilities with respect to which Seller’s
indemnification obligations shall continue indefinitely, Buyer Indemnitees shall not be entitled to indemnification relating to Environmental Laws or Hazardous Materials, to the extent the claim for indemnification is first asserted by a Buyer
Indemnitee after the fifth anniversary of the Closing Date. 
 (d) Buyer’s Indemnification Obligations. Buyer
agrees to defend, indemnify and hold harmless Seller, its Affiliates and their respective successors and permitted assigns (the “Seller Indemnitees”) from and against any and all Damages, together with any and all related costs and
expenses (including reasonable legal and accounting fees), which may be asserted against or sustained or incurred by Seller Indemnitees in connection with, relating to or arising out of (i) the ownership or operation of the Purchased Assets by
Buyer after the Closing, (ii) Buyer’s failure to perform or discharge when due the Assumed Liabilities or (iii) any breach of any of the representations, warranties, covenants and agreements made by Buyer in this Agreement; provided
that Seller shall give Buyer prompt written notice of the occurrence of any of the foregoing matters, shall not voluntarily pay any such claim or voluntarily sustain or incur any such loss, obligation, liability or damage without Buyer’s prior
written consent, and shall give Buyer full opportunity to defend any such claim. 
 (e) Environmental Investigations.
With regard to any environmental matter for which Seller may have an indemnification obligation described in Section 10.2(b), Buyer shall: 
 (i) provided it has received reasonable prior notice, and subject to the consent and rights of the owner of the Ramsey Facility, permit Seller access to the Ramsey Facility during normal business hours to conduct its
own investigation or testing with regard to the matter; provided, that Seller shall provide the results of any such investigation or testing, including analytical data, to Buyer; 
  

 27 

 (ii) if requested by Seller, provide Seller with the results, including analytical data,
of any investigation or testing conducted by Buyer or, if available to Buyer, any third party; 
 (iii) except as may
otherwise be required by law, not contact any governmental authority without prior notice to, and consultation with, Seller; 
 (iv) allow Seller a reasonable opportunity to participate in any discussions or negotiations with any governmental authority concerning such matter; and 
 (v) if corrective action is required in any such matter, give Seller a reasonable opportunity to develop and implement a plan of
corrective action, such plan to be subject to Buyer’s approval, and, if requested by Seller, reasonably cooperate with Seller, at Seller’s expense, in the development and implementation of such plan on a cost-effective basis. Any such plan
of action shall be constructed so as to cause the minimum amount of disruption to the Business and the minimum adverse effect on the ongoing operations of the Business. 
 (f) Set-Off. If any amount remains due by Seller to a Buyer Indemnitee pursuant to Section 10.2 (the “Outstanding
Indemnity”), then Buyer may, without limiting any other rights and remedies it may have, at its option, set off such Outstanding Indemnity against any amount due by Buyer pursuant to Section 3.1(a), 3.1(b) and /or 10.7, until the
Outstanding Indemnity has been completely paid by Seller or set off pursuant to this Section 10.2(f). 
 10.2A Discharge of
Obligations. Seller covenants to promptly pay and discharge as and when they become due all debts, obligations and liabilities that are Excluded Liabilities, including without limitation trade and other accounts payable. For avoidance of doubt,
Seller acknowledges and agrees that Seller shall indemnify the Buyer Indemnitees pursuant to Section 10.2(b) with respect to Seller’s failure to discharge when due any such trade and other accounts payable, or a claim against Buyer with
respect to such trade and other accounts payable, and that Buyer shall have the right to set off any Outstanding Indemnity attributable to such trade and other accounts payable against any amount due by Buyer pursuant to Section 3.1(a), 3.1(b)
and /or 10.7. Without limiting Seller’s obligations or Buyer’s rights as set forth in the preceding two sentences, but for clarification, Buyer has no obligation to pay on Seller’s behalf any account payable that is an Excluded
Liability and, to the extent that any party to whom such account payable is owed seeks payment from Buyer, Buyer will not pay on Seller’s behalf any account payable that is an Excluded Liability that is being disputed by Seller in good faith
without the prior written consent of Seller. 
  

 28 

 10.3 Non-competition Covenant. 
 (a) Seller agrees that, for the period commencing on the Closing Date and ending on the date that is three years after the Closing Date,
neither it nor any of its Affiliates will, directly or indirectly, in any way: 
 (i) engage in, have any investment in any
entity that engages in, or participate in, anywhere in North America, the manufacture, production, sale or supply of design or creative, production art or pre-press, packaging management, project tracking or digital asset management products or
services; 
 (ii) persuade or attempt to persuade any customer of Buyer that formerly was a customer of the Business (while
owned by Seller) to restrict, limit or discontinue purchasing any products or services supplied by Buyer to any such customer or to reduce the amount of business which any such customer has customarily done with Buyer in respect of the Business or
solicit or take away, or attempt to solicit or take away, from Buyer any of its customers in respect of the Business; 
 (iii)
solicit, hire or engage the services of any former employee of Seller then employed by Buyer, or persuade or attempt to persuade any such individual to terminate his or her employment with Buyer; or 
 (iv) use for its own benefit or the benefit of any person or entity or disclose to any person or entity other than Buyer (or Buyer’s
Affiliates) any information whatsoever concerning the Business. The foregoing provisions of this clause (iv) shall not apply to information (x) which is in the public domain or independently received from a third party with a right to
disclose such information or (y) to the extent that disclosure is required by law, provided that, if disclosure is so required, Seller shall promptly advise Buyer so that Buyer may seek appropriate legal or equitable relief. 
 (b) Seller acknowledges and agrees that the provisions of Section 10.3(a) are reasonable and necessary for Buyer’s protection.
Seller further acknowledges and agrees that Buyer’s remedy at law for breach of the covenants contained in Section 10.3(a) is inadequate and that Buyer, its successors and assigns, shall be entitled to injunctive relief for any breach or
violation thereof. 
 (c) The time period, geographical area and scope of restrictions on the activities of Seller and its
Affiliates under Section 10.3(a) are divisible, so that if any provision of Section 10.3(a) is invalid, that provision shall be automatically modified to the extent necessary to make it valid. 
 (d) Seller and/or any of its Affiliates may, without breaching the covenants contained in Section 10.3(a), hold up to five percent of
the outstanding shares of any publicly held entity or publicly traded investment company, or acquire and operate any 

  

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business less than fifteen percent of the consolidated revenues of which are derived from activities that otherwise would breach the covenant contained in
Section 10.3(a). 
 (e) In the event that Buyer defaults on its payment obligation under Section 3.1(a)(ii) or
(iii) and the amount due under Section 3.1(a)(ii) or (iii) has not been paid to Seller by or on behalf of Buyer or the Guarantor within 90 days following the applicable due date, the covenants contained in Section 10.3(a) shall
cease to have effect at the expiration of such 90-day period. If such covenants cease to have effect pursuant to the preceding sentence, Buyer shall relinquish the right to use the name “C.M. Jackson Associates, Inc.” if Buyer is no longer
using such name or, if Buyer is still using such name, Seller may adopt and use a name that contains the words “Jackson” and/or “Nussbaum” and variations thereof, so long as such name is not confusingly similar to “C.M.
Jackson Associates, Inc.” and is accepted for registration under applicable New Jersey law. For avoidance of doubt, Buyer shall not be deemed to have defaulted on its payment obligation if its non-payment of all or any portion of the amount due
under Section 3.1(a)(ii) or (iii) is the result of Buyer having exercised its right of set-off under Section 10.2(f), or is the result of a forfeiture pursuant to Section 3.1(a), or is the result of any other matter being
contested (as described in a writing delivered to Seller) in good faith by Buyer. For further avoidance of doubt, the EBITDA Holdback shall not be deemed to be due and payable until the EBITDA Statement shall have been finalized under
Section 3.3 or 3.4. 
 10.4 Inspection of Records. Seller and Buyer shall, at the expense of the other party, each make their
books and records available for inspection by the other party, or by its duly accredited representatives, for reasonable business purposes (including, without limitation, the defense of litigation) at all reasonable times during normal business
hours, for a seven year period after the Closing Date, with respect to all operations and transactions of the Business occurring before and those relating to the Closing, the Purchased Assets, the Assumed Liabilities and, as appropriate, matters
relating to the parties’ post-Closing obligations hereunder. The right of inspection under this Section includes the right to make extracts or copies at the inspecting party’s expense subject to such confidentiality agreement as the other
party may reasonably require. The representatives of a party inspecting the records of the other party shall be reasonably satisfactory to the other party. Neither party shall destroy any such books and records during, or following the conclusion
of, such seven-year period without first offering to transfer such books and records to the other party at the expense of the party to which such offer is made. If such offer is not accepted within 30 days, such books and records may be destroyed.

 10.5 Third Party Claims. The parties shall cooperate with each other (including, without limitation, making their respective
employees available to serve as witnesses) with respect to the defense of any claims or litigation made or commenced by third parties after the Closing, subject to the indemnification provisions contained in Section 10.2; provided that the
party requesting cooperation shall reimburse the other party for the other party’s reasonable out-of-pocket costs and expenses of furnishing such cooperation. 
  

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 10.6 Accounts Receivable. For avoidance of doubt, the accounts receivable of the Business as of
the Closing Date (“Seller’s Receivables”) are an Excluded Asset. Buyer shall have no obligation to collect Seller’s Receivables and they shall remain the sole responsibility of Seller. 
 10.7 Materials Inventory. Materials Inventory shall constitute an Excluded Asset and any commitments made by Seller with respect to Materials
Inventory shall constitute an Excluded Liability and shall remain Seller’s sole responsibility; provided, that, for a period of fifteen months following Closing, Buyer will, as Materials Inventory is ordered by and shipped to customers, invoice
customers on Seller’s behalf and shall use commercially reasonable efforts to collect on Seller’s behalf the proceeds of sales of Materials Inventory (“Materials Inventory Proceeds”) . Buyer shall use its usual, ordinary course
procedures (or, at Buyer’s discretion, the procedures used by Seller before Closing) with respect to such invoicing and collection activities, and shall in no event be obligated to put forth any effort with respect to the collection of
Materials Inventory Proceeds that it would not put forth with respect to the collection of Buyer’s own accounts receivable. Buyer shall in no event have any liability to Seller with respect to (i) any failure to collect Materials Inventory
Proceeds or (ii) any act or omission in connection with the collection of Materials Inventory Proceeds. 
 Buyer will pay to Seller the Materials Inventory Proceeds monthly following receipt by Buyer thereof, less a monthly fee of $1,000.00. The payment will be made by the 15th of the following month for the previous month. To the extent that Materials Inventory Proceeds for a particular month are less than $1,000, Buyer will invoice
Seller for the difference between $1,000 and the amount of Materials Inventory Proceeds for such month and Seller will pay such amount to Buyer promptly upon receipt of such invoice. Following Closing, Buyer will be solely responsible for making
commitments for packaging and shipping materials inventory, for managing such inventory, for invoicing customers with respect thereto and for payment to applicable third parties. 
  

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 ARTICLE XI 
 EMPLOYEES 
 11.1 Seller’s Employees. Buyer shall not be obligated to offer employment to
any employee of the Business (subject to Sections 1.2(j), 7.7(a) and 11.2(a)), but Buyer shall have the right to offer employment to, and hire, any or all employees of the Business, on terms and conditions established by Buyer in its sole
discretion. Nothing in this Agreement shall prevent Buyer from employing at any time after the Closing any Business employee who is not employed by Buyer effective on the date following the Closing Date. As between Seller and Buyer (and subject to
Section 11.2), Seller shall be solely responsible for (a) all matters relating to any employees to whom Buyer does not offer employment or who do not accept Buyer’s offer of employment and (b) all matters relating to any events
that occurred on or before the Closing Date. 
 11.2 Certain Employees. 
 (a) Buyer shall offer to enter into a two-year employment agreement, effective upon Closing, with each of Susanne Jackson, Helen Jackson,
Robert Jackson and Michael Jackson Jr. (the “Designated Employees”). Such agreements will contain a covenant not to compete with Buyer or solicit Buyer’s customers or employees for three years following Closing or termination
of the employment agreement, whichever is longer, and such other terms and conditions as are mutually agreeable to the parties. The preceding sentence notwithstanding, Buyer shall not be obligated to offer to any Designated Employee terms,
conditions and/or benefits of employment which in the aggregate exceed the current level of such Designated Employee’s terms, conditions and benefits of employment. 
 (b) [INTENTIONALLY OMITTED]. 
 11.3 Workers’ Compensation. Seller shall be responsible for and pay any and all workers’ compensation and other similar statutory claims asserted by or with respect to any Business employees in respect of any injury or
other compensable event or occupational illness or disease which occurred or is attributable to any event, state of facts or condition which existed or occurred in whole before the Closing. Buyer shall be responsible for and pay any and all
workers’ compensation and other similar statutory claims asserted by or with respect to any Business employees hired by Buyer in respect of any injury or other compensable event or occupational illness or disease which occurred or is
attributable to any event, state of facts or condition which existed or occurred in whole after the Closing. If any such injury or other compensable event or occupational illness or disease of a Business employee who is employed by Seller before the
Closing and by Buyer after the Closing is attributable in part to causes occurring before the Closing and in part to causes after the Closing and is the basis of a workers’ compensation or other similar statutory claim, the liability for any
such claims shall be shared by Seller and Buyer in the proportion of the periods of exposure in respect of the occupational illness or disease of such Business employee which occurred before the Closing and that which occurred after the Closing.
Buyer’s obligations under this Section 11.3 shall not preclude Buyer’s right to indemnification under Article X for any breach of any representation or warranty made by Seller in this Agreement. 
  

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 11.4 Seller’s 401K Plan. Promptly following Closing, Seller shall terminate Seller’s
401K plan (“Seller’s Plan”) and shall submit Seller’s Plan to the Internal Revenue Service for determination of its tax qualified status. Upon receipt by Seller of a favorable determination letter from the Internal Revenue
Service, which Seller shall deliver to Buyer, participants in Seller’s Plan who are then Buyer’s employees will be eligible to roll over their distributions from Seller’s Plan into Buyer’s 401K plan. 
 ARTICLE XII 
 TAXES, FEES, ETC.

 12.1 Proration of Taxes. Personal property taxes with respect to the Purchased Assets and real property taxes with respect to
the Ramsey Facility shall be pro-rated to the Closing Date. Buyer shall timely pay the personal and real property taxes for which it is responsible and will collect from or refund to Seller, as the case may be, the amount by which the Estimated
Property Tax Amount differs from the amount of property taxes properly allocated to Seller. 
 12.2 Transfer Taxes and Fees. Except as
expressly provided otherwise herein, all sales and use taxes, recording taxes and fees, personal property title application fees, patent application and copyright registration fees and other such fees payable in connection with the sale, transfer
and delivery of the Purchased Assets shall be borne by the party legally or customarily responsible for payment of such taxes and fees. Seller and Buyer will cooperate in good faith to lawfully minimize sales, transfer and similar taxes imposed on
or with respect to the transactions contemplated by this Agreement. 
 ARTICLE XIII 
 TERMINATION 
 13.1 Right to
Terminate. This Agreement may be terminated at any time before the Closing by prompt notice given in accordance with Section 14.2: 
 (a) by the mutual written consent of Buyer and Seller; or 
 (b) by Buyer or Seller if the
Closing shall not have occurred at or before 11:59 p.m. on February 28, 2007. 
 13.2 Rights and Remedies. If this Agreement is
terminated under Section 13.1, neither party shall have any claim against the other except if the circumstances giving rise to such termination were caused by the other party’s material breach of its obligations under this Agreement, in
which event termination under Section 13.1 shall not be deemed or construed as limiting or denying any 

  

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legal or equitable right or remedy of such party, and such party shall be entitled to recover, without limitation, its costs and expenses which are incurred
in pursuing its rights and remedies (including reasonable attorneys’ fees). 
 ARTICLE XIV 
 MISCELLANEOUS 
 14.1 Expenses.
Except as expressly provided otherwise herein, each party shall bear all expenses, costs and fees incurred by such party (including, without limitation, the fees of attorneys, accountants, investment bankers, management consultants, brokers and
other advisors) in the preparation and execution of this Agreement and compliance herewith, whether or not the transactions contemplated hereby shall be consummated. The preceding sentence notwithstanding, Buyer shall be responsible for paying the
fee of Bill Crowley with respect to the Transaction, but only if Closing occurs. 
 14.2 Notices. All notices required or permitted to
be given hereunder shall be in writing and may be delivered by hand, by facsimile, by nationally recognized private courier, or by United States mail. Notices delivered by mail shall be deemed given seven business days after being deposited in the
United States mail, postage prepaid, registered or certified mail. Notices delivered by hand, by facsimile, or by nationally recognized private courier shall be deemed given on the first business day following receipt; provided,
however, that a notice delivered by facsimile shall only be effective if such notice is also delivered by hand, or deposited in the United States mail, postage prepaid, registered or certified mail, on or before two business days after its
delivery by facsimile. All notices shall be addressed as follows: 
  

			
	 If to Buyer:
	  	Southern Graphic Systems, Inc.
		  	626 West Main Street
		  	Suite 500
		  	Louisville, Kentucky 40202
		  	Attention: President
		  	Fax: (502) 634-5298
		
	 If to Seller:
	  	Jackson Partners, Inc.
		  	c/o C. Michael Jackson, Sr.
		  	57 Chardavoyne Road
		  	Warwick, New York 10990
		  	Fax: (845) 258-1242

 14.3 Successors; Benefit; Survival. This Agreement shall inure to the benefit of, and be
binding on and enforceable against, the successors and assigns of the respective parties hereto. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties and their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, including, without limitation, any third party beneficiary rights. The provisions of Articles X, XI, XII, 

  

 34 

 
and XIV and the representations and warranties made, and the indemnification obligations undertaken, by Buyer and Seller in this Agreement shall survive the
Closing. 
 14.4 Severability. The invalidity of any provision of this Agreement or portion of a provision shall not affect the
validity of any other provision of this Agreement or the remaining portion of the applicable provision. 
 14.5 Waiver of Jury Trial.
Each of the parties waives any rights to a jury trial in connection with any suit, action or proceeding seeking enforcement of such party’s rights under this Agreement. 
 14.6 Counterparts. This Agreement may be executed in any number of counterparts, which together shall constitute one and the same document.

 14.7 Governing Law. The laws of the State of New Jersey, without reference to its principles of conflicts of laws, shall govern the
validity, interpretation, construction and effect of this Agreement. 
 14.8 Headings. The headings in this Agreement are for
convenience of reference only and shall not affect its interpretation or construction. 
 14.9 Entire Agreement; Amendment. This
Agreement (including the Exhibits and Schedules hereto), as to its subject matter, exclusively and completely states the rights and duties of the parties, sets forth their entire understanding, and supersedes any prior understandings, agreements,
promises, representations or warranties whether oral or written. It may be amended only by another written agreement duly executed by the parties. 
 14.10 Publicity. Neither Seller nor Buyer will issue or approve a news release or other public announcement concerning the Transaction without the prior approval of the other as to the contents of such announcement and its release,
which approval will not be unreasonably withheld. Notwithstanding the preceding sentence, nothing contained in this Section shall prohibit Buyer and/or its parent, SGS International, Inc., from making all disclosures which may be required by stock
exchange rules or federal or state securities laws. 
 14.11 Assignment. Neither Buyer nor Seller shall assign its rights and
obligations under this Agreement without the other party’s prior written consent, which will not be unreasonably withheld; provided, that Buyer may assign its rights and/or obligations hereunder to an Affiliate without Seller’s prior
consent. 
 14.12 Letter of Intent Terminated. The letter of intent dated November 9, 2006 among Messrs. Michael Jackson, Larry
Nussbaum, Seller and Buyer shall be terminated effective as of the date of this Agreement and shall have no further force or effect. 
  

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 14.13 Definitions. The following terms are defined in the following sections of this Agreement:

  

			
	 Defined Term
	  	Where Found
		
	 Affiliate
	  	10.2(a)
	 Arbitrating Accountant
	  	3.4(b)
	 Assumed Contracts
	  	2.1(a)
	 Assumed Liabilities
	  	2.1
	 Business
	  	Recitals
	 Buyer
	  	Preamble
	 Buyer Indemnitees
	  	10.2(b)
	 Buyer’s Ancillary Documents
	  	5.2
	 Cash Purchase Price
	  	3.1(a)
	 CERCLA
	  	4.19(d)(v)
	 Closing
	  	3.2
	 Closing Date
	  	3.2
	 Closing Statement
	  	3.3(a)
	 Consideration
	  	3.1(b)
	 Containers
	  	4.19(d)(i)
	 Contract Prepayments
	  	1.2(e)
	 Customer Contracts
	  	1.2(d)
	 Damages
	  	10.2(b)
	 Designated Employees
	  	11.2(a)
	 Dispute
	  	3.4(a)(i) and (ii)
	 Dispute Notice
	  	3.4(a)(i) and (ii)
	 Dispute Period
	  	3.4(a)(i) and (ii)
	 EBITDA Holdback
	  	3.1(a)(iii)
	 EBITDA Margin
	  	3.1(a)(iii)
	 EBITDA Statement
	  	3.3
	 Employee Arrangement
	  	4.22(a)
	 Environmental Laws
	  	4.19(d)(ii)
	 Environmental Permits
	  	4.19(d)(iii)
	 Equipment
	  	1.2(a)
	 Estimated Property Tax Amount
	  	9.1(g)
	 Excluded Assets
	  	1.3
	 Excluded Liabilities
	  	2.2
	 Facility
	  	4.19(d)(iv)
	 Financial Statements
	  	4.14
	 GAAP
	  	4.14
	 Guarantor
	  	8.4(c)
	 Hazardous Materials
	  	4.19(d)(v)
	 Intellectual Property
	  	4.10(a)

  

 36 

			
	 Inventory
	  	1.2(b)
	 Leased Employee Agreements
	  	7.7(a)
	 Liens
	  	1.1
	 Materials Inventory
	  	3.1(b)
	 Materials Inventory Proceeds
	  	10.7
	 Negotiating Period
	  	3.4(b)
	 Non-Permitted Liens
	  	4.8
	 Offsite Facility
	  	4.19(d)(vi)
	 Other Contracts
	  	1.2(k)
	 Outstanding Indemnity
	  	10.2(f)
	 Permits
	  	4.16
	 Permitted Liens
	  	4.8
	 Purchased Assets
	  	1.1
	 Ramsey Facility
	  	1.2(i)
	 Ramsey Lease
	  	1.2(i)
	 RCRA
	  	4.19(d)(v)
	 Release
	  	4.19(d)(vii)
	 Seller
	  	Preamble
	 Seller Indemnitees
	  	10.2(d)
	 Seller’s Ancillary Documents
	  	4.2
	 Seller’s Receivables
	  	10.7
	 Software Licenses
	  	1.2(g)
	 Transaction
	  	Recitals
	 WARN Act
	  	2.2

 [SIGNATURE PAGE FOLLOWS] 
  

 37 

 Each of the parties therefore has caused this Agreement to be executed by its duly authorized
representative. 
  

			
	C. M. JACKSON ASSOCIATES INC.
		
	By	 	 /s/ Michael C. Jackson

	Name:	 	Michael C. Jackson
	Title:	 	President
	
	SOUTHERN GRAPHIC SYSTEMS, INC.
		
	By:	 	 /s/ Henry R. Baughman

	Name:	 	Henry R. Baughman
	Title:	 	President and CEO

 The undersigned have signed this Agreement in their individual capacities only for purposes
of Section 14.12 and to acknowledge the forfeiture provisions set forth in Section 3.1(a). 
  

	
	 /s/ Michael Jackson Sr.

	Michael Jackson Sr.
	
	 /s/ Larry Nussbaum

	Larry Nussbaum

  

 38

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