Document:

Assignment and Assumption of Equipment Lease

 Exhibit 10.2 
  
 Assignment and Assumption of Equipment Lease 
  
 This ASSIGNMENT AND ASSUMPTION OF EQUIPMENT LEASE (this “Agreement”) is entered into as of October 31, 2003 (the
“Effective Date”) by and among Veri-Tek International Corp., a Michigan corporation (“Assignor”), Quantum-Veritek, Inc., a Michigan corporation (“Assignee”), and Pontiac Trail, LLC, a Michigan limited liability company
(“Lessor”). Assignor, Assignee and Lessor are referred to collectively herein as the “Parties.” 
  
 WITNESSETH: 
  
 WHEREAS, Assignor, as “Lessee,” and Lessor are parties to that equipment lease dated effective as of August 30, 2002 (the “Equipment Lease”), presently covering certain equipment described further in the Equipment Lease
attached hereto as Exhibit A; and 
  
 WHEREAS, Assignor, as
“Seller,” and Assignee, as “Buyer,” are parties to an Asset Purchase Agreement dated October 14, 2003 (the “Purchase Agreement”), pursuant to which, subject to the terms and conditions set forth therein, Assignee
purchases substantially all of the assets and assumes substantially all of the liabilities of Assignor; and 
  
 WHEREAS, simultaneously with the closing of the transactions contemplated by the Purchase Agreement, the Parties mutually desire (a) that Assignor assign
all of its right, title and interest in, under and to the Equipment Lease to Assignee, (b) that Assignee assume all of Assignor’s obligations under the Equipment Lease, and (b) that Lessor consent to the assignment contemplated hereby, all on
the terms and conditions hereinafter set forth. 
  
 NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and adequacy of which are expressly acknowledged, the Parties agree as follows: 
  
 1. Assignment and Assumption. 
  

	 	(a)	Effective as of the Effective Date, Assignor hereby assigns, transfers and sets over unto Assignee all of Assignor’s right, title and interest in, under and to the Equipment
Lease. Assignor will deliver possession of the equipment to Assignee on the Effective Date. 

  

	 	(b)	 Assignee hereby accepts the foregoing assignment and hereby agrees to perform all of the terms and conditions of the Equipment Lease to be performed on the part of
Assignor and assumes all of the liabilities and obligations of Assignor under the Equipment Lease, arising or accruing on or after the Effective Date, including, without limitation, liability for the payment of rent and for the due performance of
all the 

  

 
terms, covenants and conditions of the Assignor pursuant to the Equipment Lease. 
  

	 	2.	Consent to Assignment. Effective as of the Effective Date, Lessor hereby (a) consents to the assignment effected hereby and (b) agrees to recognize Assignee as the lessee
under the Equipment Lease and thereby establish direct privity of contract with Assignee. 

  

	 	3.	Miscellaneous, 

  

	 	(a)	Headings. The section headings used herein are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

  

	 	(b)	Governing law. This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan without regard to conflicts of law principles.

  

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

  
 [Remainder of Page Intentionally Left
Blank; Signature Blocks Follow] 
  

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

  

			
	LESSOR:
	
	PONTIAC TRAIL, LLC
		
	By:	 	 /s/ James C. Juranitch

	 	 	 James C. Juranitch

	Its:	 	Member
	
	ASSIGNOR:
	
	 Veri-Tek International Corp.,
 a Michigan
corporation

		
	 By:
	 	 /s/ James C. Juranitch

	 	 	 James C. Juranitch

	Its:	 	President
	
	ASSIGNEE:
	
	 QUANTUM-VERITEK, INC.,
 a Michigan
corporation

		
	 By:
	 	 /s/ Michael C. Azar

	 	 	 Michael C. Azar

	Its:	 	Vice President, Secretary

  

 EQUIPMENT LEASE 
  
 THIS EQUIPMENT LEASE is executed and delivered as of the 31 day of October, 2003, effective as of August 30, 2002, by and
between Pontiac Trail, LLC, a Michigan limited liability company (“Lessor”), Veri-Tek International Corp., a Michigan corporation (“Lessee”). 
  
 INTRODUCTION 
  
 Lessor is the owner of certain equipment described on Attachment I hereto. Lessee desires to lease the equipment from Lessor on the terms and
conditions set forth herein. The parties are entering into this lease to set forth their covenants and undertakings as to the lease of the equipment contemplated herein. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged
and agreed by the parties, and intending to be legally bound, Lessor and Lessee hereby agree as follows: 
  
 1. Certain Definitions. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to them in
Attachment II hereto. 
  
 2. Agreement of Leasing.
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, at the rental and subject to the other terms and conditions contained herein, the Equipment. 
  
 3. Term. This Lease is for a term commencing on August 30, 2002 and ending on August 30, 2007 (the
“Term”). This Lease may be terminated prior to the end of the Term as provided in Section 10. 
  
 4. Rental and Certain Other Payments. 
  
 (a) Lessee agrees to pay to Lessor as rental for the Equipment (the “Rent”) an amount equal to Four Thousand Six Hundred Sixty
Three Dollars ($4663.00) per month, payable not later than the first day of each month. 
  
 (b) Lessee shall also pay (or reimburse Lessor for) any and all Taxes imposed with respect to or relating to the Equipment or on the
rental, lease, ownership, possession, return, disposition, use, or operation of the Equipment except only taxes on or measured by Lessor’s net income (and not imposed in lieu of ad valorem taxation) and Michigan single business taxes. Lessee
shall fully comply with all Laws requiring the filing of any Return (ad valorem or otherwise) in respect of the Equipment or furnishing information for the purpose of taxation. Licensee shall also pay any licensing and registration fees relating to
the Equipment. 
  
 (c) In the event a Rent
payment or any other amount payable by Lessee under this Lease is not paid when due hereunder Lessee promises to pay interest to Lessor upon each delayed payment calculated at the rate of one percent (1%) per month, or any part thereof, commencing
one (I) month after the due date of the first delayed payment. Lessee shall reimburse Lessor for all costs and expenses (including reasonable attorneys’ fees) incurred by Lessor in collecting, or attempting to collect, any Rent or other amounts
due and owing under this Lease and not timely paid by Lessee. 
  
 (d) All Rent and other amounts payable by Lessee to Lessor under this Lease shall be paid to Lessor at its office or at such other place as Lessor may from time to time specify in writing. Lessee’s obligations to
pay Rent and other amounts payable under this Lease shall be absolute and unconditional, shall be paid in full when due without any setoff, counterclaim, recoupment, withholding, deduction, abatement, defense or other right or remedy of Lessee
whatsoever. 
  
 5. Use; Maintenance and Operation; Inspection;
Return of Equipment 
  
 (a) Lessee agrees to
use and operate the Equipment solely for its intended use, in a careful and proper manner, and in compliance with all applicable Laws. Lessee shall employ and have absolute control and supervision over all operators of the Equipment and shall not
permit any Person to operate the Equipment unless such Person has been properly trained, and is competent, to do so. 
  
 (b) Lessee acknowledges and agrees that the Equipment, its operation, the products manufactured using the Equipment may be subject
requirements under various Laws. It shall be Lessee’s responsibility to determine and fully comply with all such Laws at its own expense. 
  
 (c) Lessee, at its own expense, will maintain, service and repair the Equipment to the extent necessary to maintain such Equipment in good
repair (ordinary wear and tear excepted), working order and operating condition, and in compliance with all applicable Laws and all applicable manufacturer service manuals with respect to the use, maintenance, condition and operation of the
Equipment. 
  
 (d) Lessee shall not, without the
prior written consent of Lessor, alter, add to or improve the Equipment. Any replacements, alterations, additions or improvements made by Lessee to or upon the Equipment shall be considered accessions to the Equipment and title thereto shall be
immediately vested in Lessor, without cost or expense to Lessor. 
  
 (e) Lessor and Lessee intend that the Equipment is and shall be used and remain at the current premises, and any relocation shall require the consent of Lessor and shall be at the expense of Lessee. Upon reasonable
notice, Lessor and its representatives shall have the right to enter upon the premises for the purpose of, and may, inspect the Equipment and the manner in which it is being used at any time. 
  
 (f) At the expiration or termination of the Term, Lessee
shall, at its sole cost and expense, and as promptly as practicable, return the Equipment in good repair (ordinary wear and tear excepted), working order and operating condition, to Lessor. 
  
 6. Insurance. Lessee assumes the entire risk of loss, theft or damage
to the Equipment, whether or not covered by insurance. Lessee agrees to keep the Equipment insured to protect all interests of Lessor, at Lessee’s expense, against all risks of loss or damage from any cause whatsoever for not less than full
replacement value thereof and to purchase sufficient insurance to cover the liability of Lessor for public liability and property damage. The insurance policies and the proceeds therefrom shall be the sole property of Lessor and Lessor shall be
named as an insured in all said policies and as sole loss payee in the policies insuring the Equipment. Each policy shall expressly provide that the insurance cannot be canceled without thirty (30) days prior written notice to Lessor. Lessee hereby
appoints Lessor as Lessee’s attorney-in-fact to make claim for, receive payment of and execute and endorse all documents, checks or drafts for loss or damage or return premium under any insurance policy issued on or in respect of the Equipment.

  

 7. Disclaimer; Inspection by Lessee and Acceptance. 
  
 (a) LESSEE ACKNOWLEDGES AND AGREES THAT LESSEE LEASES THE
EQUIPMENT AS IS AND WITH ALL FAULTS AND THAT LESSOR DOES NOT MAKE ANY WARRANTY OR REPRESENTATION OF ANY KIND, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, AS TO MERCHANTABILITY, OR FITNESS
FOR ANY PURPOSE, USE OR OPERATION, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED BY LESSOR. 
  
 (b) Lessee has, prior to the execution of this Lease, inspected the Equipment and the execution of this Lease constitutes acceptance by
Lessee of the Equipment under this Lease. 
  
 8. Title.
Lessor and Lessee agree that this is an agreement of lease only and nothing herein contained shall be construed as conveying to Lessee any right, title or interest in or to the Equipment except as a Lessee. Lessee agrees to take such action, at its
own expense, as may be necessary to prevent any other Person from acquiring any right to or interest in the Equipment, and shall at all times keep the Equipment free and clear from any legal process or Encumbrances whatsoever (except only any placed
by Lessor). Lessee agrees that it will execute or cause to be executed and file or cause to be filed, at its own expense, any and all instruments which are necessary or appropriate to perfect, confirm and protect the interests of Lessor in and to
the Equipment and this Lease. The Lessee agrees that the Lessor is authorized, at its option, to file financing statements or amendments thereto without the signature of the Lessee with respect to the Equipment and, if a signature is required by
law, then the Lessee appoints Lessor as Lessee’s attorney-in-fact to execute any such financing statements. 
  
 9. Indemnification 
  
 (a) Lessee agrees to pay, indemnify, defend and hold harmless Lessor, its Affiliates and their respective representatives against and in
respect of any Losses relating to, arising from or in connection with: (i) any breach by Lessee of any of its covenants, representations or warranties contained in this Lease; and (ii) the possession, maintenance, repair, use, operation, control,
loss, damage, destruction, leasing, return, surrender, disposition or condition of the Equipment, or any part thereof or any product manufactured, assembled, using the Equipment, including any Product Liability arising from any of the foregoing.

  
 (b) Lessor agrees to pay, indemnify, defend
and hold harmless Lessee against and in respect of any Losses relating to, arising from or in connection with any breach by Lessor of any of its covenants, representations or warranties contained in this Lease. 
  
 (c) The indemnification provisions of this Section are
intended to be supplementary to, and not replace or supersede, any other rights and/or remedies available to the parties under this Lease or applicable Law. The right to indemnification and such other rights and remedies shall be available whether
or not a party shall have exercised its right to terminate this Lease under Section 10 hereof. 
  
 10. Termination. 
  
 This Lease may be
terminated prior to the expiration of the Term as follows: (a) by Lessor and Lessee by mutual written consent; (b) by Lessor or Lessee without notice or other action upon the occurrence of a Bankruptcy Event with respect to the other party or by
Lessor if any execution or other writ or process shall be issued in any proceeding, against the Lessee, whereby the Equipment may be taken or distrained; or (c) by Lessor by notice to Lessee in the event of (i) a Change of Control of Lessee, (ii)
the dissolution or liquidation of Lessee, or (iii) the sale, transfer or assignment of all or substantially all of the assets of Lessee (either in one transaction or a series of related transactions). 
  
 11. Assignment. This Lease shall inure to the benefit of and be
binding upon the parties hereto and the successors and permitted assigns of the parties hereto. Lessor may assign and reassign (whether as security or otherwise) all of its right, title and interest in and to this Lease, the Equipment and/or the
Rent due or to become due to Lessor hereunder. Lessee shall not and shall have no power to, without Lessor’s prior written consent, assign, mortgage, hypothecate or sublease its rights hereunder with respect to the Equipment to any other
Person. 
  

 - 3 - 

 12. Entire Agreement. This Lease supersedes all prior discussions and agreements between or among
the parties hereto with respect to the subject matter hereof and thereof and contains the sole, complete, exclusive and final agreement between the parties hereto with respect to the subject matter hereof. 
  
 13. Waiver. Any term or condition of this Lease may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party hereto of any
term or condition of this Lease, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Lease on any future occasion. 
  
 14. Amendment. This Lease may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto. 
  
 15. No Third Party Beneficiary. Except for Section 9 as provided therein, the terms and provisions of this Lease are intended solely for the benefit of the parties hereto and their respective successors and
permitted assigns, and it is not the intention of the parties hereto to confer third party beneficiary rights upon any other Person. 
  
 16. Liability of Lessor. In the event of any sale or other transfer of Lessor’s interest in the Equipment, Lessor shall be relieved of all
liabilities and obligations of Lessor hereunder arising after the date of such transfer. Notwithstanding anything contained herein to the contrary, Lessor shall have no personal liability in respect of any of the terms, covenants, conditions or
provisions of this Lease, and in the event of a breach or default by Lessor of any of its obligations under this Lease, Lessee and any persons claiming by, through or under Lessee shall look solely to the equity of the Lessor in the Equipment for
the satisfaction of Lessee’s and/or such persons’ remedies and claims for damages. 
  
 17. Governing Law. 
  
 This
Lease shall be governed by and construed in accordance with the Laws of the State of Michigan applicable to a contract executed and performed in such State, without giving effect to the conflicts of laws principles thereof. 
  
 18. Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

 - 4 - 

 IN WITNESS WHEREOF, the parties have duly executed this Lease as of the date first above written.

  

			
	 Pontiac Trail, LLC

		
	 By
	 	 /s/ James C. Juranitch

	 	 	 James C. Juranitch

	 Its
	 	 Member

	
	 LESSEE:

	
	 Veri-Tek International Crop.

		
	 By
	 	 /s/ James C. Juranitch

	 	 	 James C. Juranitch

	 Its
	 	 President

  

 - 5 - 

 ATTACHMENT I 
  
 Description of Equipment 
  

	1.	Parflange & dies 

  

	2.	J&L Levels 

  

	3.	Electric Brock bender and cutter 

  

	4.	PTS belt sander 

  

	5.	J&L Metal Brake 

  

	6.	Williams production in process crane hoist 

  

 ATTACHMENT II 
  
 Definitions 
  

	(a)	Certain Definitions. 

  
 “Affiliate” means, in the case of a particular Person, any other Person that directly, or indirectly through one of more intermediaries,
controls, or is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person and words of correlative meanings means the power, direct or indirect, to direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise. 
  
 “Bankruptcy Event” means, with respect to a Person, (a) the adjudication of such Person as bankrupt or insolvent or the filing by such Person of a petition or application to any tribunal for the
appointment of a trustee or receiver for such Person or any substantial part of the assets of such Person, or (b) the commencement of any voluntary or involuntary bankruptcy proceedings, reorganization proceedings or similar proceeding with respect
to such Person or the entry of an order appointing a trustee or receiver or approving a petition in any such proceeding, or (c) the making by such Person of an assignment for the benefit of creditors of all or substantially all of its assets or the
admission by such Person in writing of inability to pay its debts as they become due. 
  
 “Change in Control” means, in the case of Lessee, any event or circumstance in which the majority ownership or the power, direct or indirect, to direct or cause the direction of the management and
policies of Lessee, whether by contract or otherwise, shall be held or exercised by any Person other than the current Person in such position at Lessee. 
  
 “Encumbrance” means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security
interest, mortgage, right of first refusal, proxy, voting agreement or trust, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership. 
  
 “Equipment” means the equipment described in the attachment
to Attachment I hereto and all accessions, replacements, additions, improvements, parts and replacement parts thereof. 
  
 “Laws” means and includes any and all laws, statutes, treaties, rules, regulations, ordinances, principles of common law, and other
pronouncements having the effect of law in the United States of America or any state, county, city or other political subdivision or of any governmental or regulatory authority or any foreign jurisdiction or multinational organization. 

 
 “Lease” means this Lease and the Attachments hereto.

  
 “Liabilities” means any and all indebtedness,
obligations (whether to make payments, to give notices or to perform or not perform any action), commitments, contingencies, and other liabilities of a Person (whether known or unknown, absolute, accrued, contingent, fixed or otherwise and whether
due or to become due, and whether asserted or not asserted) and including, without limitation, any Losses and the existence of any fact, circumstance or contingency which at any time in the future may give rise to any Liability or obligation.

  
 ”Losses” means all Liabilities, damages
(compensatory, consequential, incidental, natural resource and other) losses, penalties, fines, deficiency, forfeitures, assessments, claims, suits, proceedings, investigations, actions, demands, judgments, awards, settlements, arbitrations,
diminution in value, response costs, costs of cleanup, containment and remediation, and other costs and expenses, including amounts paid in settlement, interest, court costs, reasonable attorneys’ fees, and consultants’ and experts’
fees. For purposes of clarity, the parties acknowledge that the term “Losses” is not limited to matters asserted by third parties, but also include Losses incurred or sustained in the absence of third party claims. 
  
 “Person” means any individual, corporation, partnership,
limited liability company, trust, business organization, governmental authority, court, or other entity whatsoever. 
  

 “Product Liability” means and includes any Liability directly attributable to any of the
following: (i) injury, death or damage to person or property (real or personal), (ii) any product liability claim under any theory whatsoever, including, but not limited to, breach of express or implied warranty, defect in design, failure to warn,
negligence, strict liability, violation of Law or other; and (iii) the packaging, shipment, labeling or other characteristics not being in full compliance with all applicable Laws. 
  
 “Return” means all returns, declarations, reports, statements, schedules, notices, forms or other documents
or information required to be filed in respect of the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of any legal requirement relating to any Tax. 
  
 “Tax” means any and all federal, state, local, foreign, and
other taxes, assessments, fees, duties and governmental charges including income, gross receipts, profits, goods and services, sales, use, ad valorem, single business, transfer, franchise, profits, license, lease, service, service use, withholding,
excise, franchise, business license, occupation, severance, stamp, occupation, premium, property and windfall profits taxes, duties, environmental, alternative minimum, windfall and capital taxes, and all other obligations of the same or a similar
nature to any of the foregoing, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. 
  
 (b) Construction of Certain Terms and Phrases. Unless the context of the Lease otherwise requires, (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Lease;
(iv) the term “Section” refers to the specified Section of this Lease; and (v) the term “including” means “including but not limited to”. This Lease is being entered into by and among competent and sophisticated parties
who are experienced in business matters and represented by counsel and other advisors, and have been reviewed by the parties and their counsel and other advisors. Therefore, any ambiguous language in this Lease will not necessarily be construed
against any particular party as the drafter of the language. 
  

 - 2 -Subordination Agreement

  Exhibit 10.5 
   

			
	

	 	 SUBORDINATION AGREEMENT

	 	 (All Indebtedness and Liens)

  
 Quantum-Veritek, Inc.
(“Borrower”) is indebted to the undersigned (“Creditor”) in the principal sum of Five Million Nine Hundred Thousand Dollars ($5,900,000) evidenced by  ̈ an open account x a promissory note  ̈ other (describe)
N/A         which indebtedness is  ̈ unsecured x
secured by all personal property of Borrower and Creditor is or may become financially interested in Borrower and desires to aid Borrower in obtaining or having continued financial accommodations, whether by way of loan, commitment to loan,
discounting of instruments, extensions of credit or the obtaining of any other financial aid from Comerica Bank (“Bank”). 
  
 In order to induce the Bank to extend or to continue to extend financial accommodations to Borrower from time to time, whether by way of a loan, commitment to loan,
discounting of instruments, extension of credit or otherwise and in consideration of any of these financial accommodations, Creditor agrees as follows: 
  

	1.	Any and all obligations and liabilities of Borrower to Creditor, including, without limit, principal and interest payments, whether direct or indirect, absolute or contingent, joint
or several, secured or unsecured, due or to become due, now existing or later arising and whatever the amount and however evidenced (the “Subordinated Indebtedness”), are subordinated in right of payment to any and all obligations and
liabilities of Borrower to the Bank, including, without limit, principal and interest payments, whether direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or to become due, now existing or later arising and
however evidenced, together with all other sums due thereon and all costs of collecting the same (including, without limit, reasonable attorney fees) for which Borrower is liable (the “Senior Indebtedness”). 

  

	2.	Creditor will not ask for, demand, sue for, take or receive (by way of voluntary payment, acceleration, set-off or counterclaim, foreclosure or other realization on security,
dividends in bankruptcy or otherwise), or offer to make any discharge or release of, any of the Subordinated Indebtedness, and Creditor waives any such rights with respect to the Subordinated Indebtedness nor shall Creditor exercise any rights of
subrogation or other similar rights with respect to the Senior Indebtedness. 

  

	3.	Creditor will not exercise any of Creditor’s rights in any collateral now or later securing the Subordinated Indebtedness. All rights of Creditor in any collateral now or later
securing the Subordinated Indebtedness are subordinated to all rights of the Bank now or later existing in any of the same collateral securing the Senior Indebtedness. Creditor waives all rights to require the Bank to marshall the collateral for the
Senior Indebtedness or any other property the Bank may at any time have as security for the Senior Indebtedness and waives all right to require the Bank to first proceed against any guarantor or other person before proceeding against such
collateral. Creditor shall not contest the validity, priority or perfection of the Bank’s security interest in any collateral in which the Creditor may also have an interest. The priorities of the Bank and the Creditor in such collateral shall
be in accordance with this Agreement, regardless of whether the Bank’s security interest or lien in such collateral is valid or perfected. The Bank may take action to foreclose or otherwise realize upon, or protect its interest in, the
collateral, in accordance with its agreements with the Borrower, at any time, without the consent of Creditor, and Creditor agrees not to interfere in a manner which would defeat the purpose of this Agreement in connection therewith. So long as any
part of the Senior Indebtedness is outstanding, if the Bank has agreed to release its security interest in any of the collateral in connection with the realization of any of its rights with respect to such collateral, the Bank is hereby authorized
as Creditor’s attorney in fact to execute releases and discharges of Creditor’s liens and security interests in such collateral provided that the Bank is releasing or discharging the Bank’s security interest in such collateral as part
of the same transaction and provided that the Bank gives Creditor five (5) days prior written notice of such release during which such five (5) day period Creditor does not sign and deliver to the Bank any such releases and discharges. The
subordination and postponement in priority, operation and effect of the security interests of the Creditor shall have the same force and effect as though the security interests of the Bank had attached and were perfected by filing or otherwise prior
to the time the security interests of the Creditor attached and/or were perfected. Creditor agrees that its liens and security interests in the Collateral shall secure only the Creditor loan and no other obligations or liabilities of Borrower to
Creditor. 

  

	4.	Creditor authorizes and empowers the Bank to demand, enforce payment by legal proceedings, receive and give acquittances for the Subordinated Indebtedness and to exercise all rights
of Creditor in any security (other than a deed of trust, mortgage or security interest covering real property or a principal dwelling) now or later held for the Subordinated Indebtedness. As collateral for the Senior Indebtedness, Creditor hereby
pledges, assigns and 

 grants to Bank a security interest in the Subordinated Indebtedness, any collateral or other security
(other than a deed of trust, mortgage or security interest covering real property or a principal dwelling) for the Subordinated Indebtedness, and all claims or demands of Creditor in connection therewith, with full right on the part of the Bank, in
its own name or in the name of Creditor, to collect and enforce these claims or demands, by suit, proof of debt in bankruptcy, or in any other proceeding involving dissolution, insolvency, liquidation or an adjustment of the indebtedness of
Borrower. The Bank has no obligation to the Creditor to take any steps with regard to these claims or demands, the Subordinated Indebtedness, or any collateral or other security for the Subordinated Indebtedness. 
  

	5.	Should any payment, distribution or security or proceeds from these be received by Creditor upon or with respect to the Subordinated Indebtedness prior to the satisfaction in full
of the Senior Indebtedness, Creditor shall immediately deliver same to the Bank in the form received (except for endorsement or assignment by Creditor where required by the Bank), for application on the Senior Indebtedness (whether or not then due
and in such order of maturity as Bank elects) and, until so delivered, the same shall be held in trust by Creditor as the property of the Bank. 

  

	6.	Creditor represents and warrants that it has not made or permitted to be made and shall not make or permit any assignment, transfer, pledge, or disposition for collateral purposes
or otherwise, of all or any part of the Subordinated Indebtedness or any collateral or other security for the Subordinated Indebtedness so long as this Agreement remains in effect. Creditor shall, on the date of this Agreement or promptly upon
receipt if not yet delivered to Creditor, deliver to the Bank, endorsed if required by the Bank, all notes and other instruments evidencing any Subordinated Indebtedness. Creditor agrees to execute all financing statements deemed necessary by the
Bank to perfect the Bank’s rights and interests under this Agreement. The Bank is to have all the rights and remedies of a secured creditor under the Michigan Uniform Commercial Code, as amended from time to time, with respect to such
interests. Creditor further makes, constitutes and appoints Bank its true and lawful attorney-in-fact with full power of substitution to take any action in furtherance of this Agreement, including, but not limited to, the signing of financing
statements, endorsing of instruments, and the execution and delivery of all documents and agreements necessary to obtain or accomplish any protection for or collection or disposition of any part of any collateral. Such appointment shall be deemed
irrevocable and coupled with an interest. 

  

	7.	This Agreement constitutes a continuing agreement of subordination, even though at times Borrower is not indebted to the Bank. The Bank may continue, in reliance on this Agreement,
without notice to Creditor, to lend monies, extend credit, modify, renew or make other financial accommodations, to or for the account of Borrower until the fifth (5th) day (“effective date”) following written acknowledgment by an officer
of the Bank that the Bank received written notice of revocation of this Agreement from Creditor. Any such notice of revocation shall not be effective as to any Senior Indebtedness existing at the effective date of revocation or any Senior
Indebtedness created after that pursuant to any commitment or agreement of the Bank or pursuant to any Borrower loan (whether advances or readvances by the Bank after the effective date of revocation are optional or obligatory) existing at the
effective date of revocation or any modifications or renewals of any such Senior Indebtedness, whether in whole or in part. Possession by the Bank of any note or other evidence of indebtedness made, endorsed or guaranteed by Borrower shall be
conclusive evidence (but not the only means of establishing) that Borrower is indebted to the Bank. 

  

	8.	Creditor shall indemnify the Bank against all claims, damages, costs, and expenses, including, without limit, reasonable attorneys’ fees, incurred by the Bank in connection
with any suit, claim or action against the Bank arising out of any modification or termination of a Borrower loan or any refusal by the Bank to extend additional credit relating to the revocation of this Agreement. 

  

	9.	Creditor delivers this Agreement based solely on Creditor’s independent investigation of (or decision not to investigate) the financial condition of Borrower and is not relying
on any information furnished by the Bank. Creditor assumes full responsibility for obtaining any further information concerning Borrower’s financial condition, the status of the Senior Indebtedness or any other matter which Creditor may deem
necessary or appropriate now or later. Creditor waives any duty on the part of the Bank, and agrees that Creditor is not relying upon nor expecting the Bank to disclose to Creditor any fact now or later known by the Bank, whether relating to the
operations or condition of Borrower, the existence, liabilities or financial condition of any guarantor of the Senior Indebtedness, the occurrence of any default with respect to the Senior Indebtedness, or otherwise, notwithstanding any effect such
fact may have upon Creditor’s risk or Creditor’s rights against Borrower. Creditor knowingly accepts the full range of risk encompassed in this Agreement, which risk includes, without limit, the 

  

 2 

 possibility that Borrower may incur Senior Indebtedness to the Bank after the financial condition of
Borrower, or its ability to pay Borrower’s debts as they mature, has deteriorated. Creditor acknowledges and agrees that the Bank’s rights under this Agreement are not conditioned upon pursuit by the Bank of any remedy the Bank may have
against Borrower or any other person or any other security. The absence of Borrower’s signature at the end of this Agreement shall in no way impair or affect the validity of this Agreement. 
  

	10.	The Bank, in its sole discretion, without notice to Creditor, may release, exchange, enforce and otherwise deal with any security now or later held by the Bank for payment of the
Senior Indebtedness or release any party now or later liable for payment of the Senior Indebtedness without affecting in any manner the Bank’s rights under this Agreement. Creditor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any asset(s), whether realty or personalty, to secure payment of the Senior Indebtedness, and Creditor is not relying upon assets in which the Bank has or may have a lien or security interest
for payment of the Senior Indebtedness. 

  

	11.	Notwithstanding any prior revocation, termination, surrender, or discharge of this Agreement in whole or in part, the effectiveness of this Agreement shall automatically continue or
be reinstated in the event that any payment received or credit given by the Bank in respect of the Senior Indebtedness is returned, disgorged, or rescinded under any applicable state or federal law, including, without limitation, laws pertaining to
bankruptcy or insolvency, in which case this Agreement, shall be enforceable against the Creditor as if the returned, disgorged, or rescinded payment or credit had not been received or given by the Bank, and whether or not the Bank relied upon this
payment or credit or changed its position as a consequence of it. In the event of continuation or reinstatement of this Agreement, the Creditor agrees upon demand by the Bank to execute and deliver to the Bank those documents which the Bank
determines are appropriate to further evidence (in the public records or otherwise) this continuation or reinstatement, although the failure of the Creditor to do so shall not affect in any way the reinstatement or continuation.

  

	12.	Creditor waives any right to require the Bank to: (a) proceed against any person or property; (b) give notice of the terms, time and place of any public or private sale of personal
property security held from Borrower or any other person, or otherwise comply with the provisions of Section 9-611 or 9-621 of the Michigan or other applicable Uniform Commercial Code, as the same may be amended, revised or replaced from time to
time; or (c) pursue any other remedy in the Bank’s power. Creditor waives notice of acceptance of this Agreement and presentment, demand, protest, notice of protest, dishonor, notice of dishonor, notice of default, notice of intent to
accelerate or demand payment of any Senior Indebtedness, any and all other notices to which the undersigned might otherwise be entitled, and diligence in collecting any Senior Indebtedness, and agrees that the Bank may, once or any number of times,
modify the terms of any Senior Indebtedness, compromise, extend, increase, accelerate, renew or forbear to enforce payment of any or all Senior Indebtedness, or permit the Borrower to incur additional Senior Indebtedness, all without notice to
Creditor and without affecting in any manner the unconditional obligations of Creditor under this Agreement. 

  

	13.	Creditor acknowledges that the Bank has the right to sell, assign, transfer, negotiate or grant participations or any interest in, any or all of the Senior Indebtedness and any
related obligations, including without limit this Agreement. In connection with the above, but without limiting its ability to make other disclosures to the full extent allowable, the Bank may disclose all documents and information which the Bank
now or later has or acquires relating to Creditor and this Agreement, however obtained. Creditor further agrees that the Bank may disclose such documents and information to Borrower. Creditor further agrees that the Bank may provide information
relating to this Agreement or relating to Creditor to the Bank’s parent, affiliates, subsidiaries and service providers. 

  

	14.	No waiver or modification of any of its rights under this Agreement shall be effective unless the waiver or modification shall be in writing and signed by an authorized officer on
behalf of the Bank. Each waiver or modification shall be a waiver or modification only with respect to the specific matter to which the waiver or modification relates and shall in no way impair the rights of the Bank or the obligations of Creditor
to the Bank in any other respect. 

  

	15.	This Agreement shall bind and be for the benefit of Creditor and the Bank and their respective successors and assigns, and shall be construed according to the laws of the State of
Michigan, without regard to conflict of laws principles. If this Agreement is executed by two or more persons, it shall bind each of them individually as well as jointly. 

  

 3 

	16.	The term “Borrower”, as used in this Agreement, includes any person, corporation, partnership or other entity which succeeds to the interests or business of Borrower named
above, and the terms “Senior Indebtedness” and “Subordinated Indebtedness” include indebtedness of any successor Borrower to the Bank and Creditor. 

  

	17.	Creditor agrees to reimburse the Bank upon demand for any and all costs and expenses (including, without limit, court costs, legal fees, and reasonable attorney fees whether inside
or outside counsel is used, whether or not suit is instituted and, if instituted, whether at the trial or appellate level, in a bankruptcy, probate or administrative proceeding, or otherwise) incurred in enforcing any of the duties and obligations
of Creditor under this Agreement. 

  

	18.	Creditor waives any defense against the enforceability of this Agreement based upon or arising by reason of the application by Borrower of the proceeds of any Indebtedness for
purposes other than the purposes represented by Borrower to the Bank or intended or understood by the Bank or Creditor. Creditor waives all rights to require the Bank to marshall the Collateral or any other property the Bank may at any time have as
security for the Indebtedness and waives all right to require the Bank to first proceed against any guarantor or other person before proceeding against the Collateral. 

  

	19.	The relative priorities of the Bank and Creditor in the Collateral as set forth in this Agreement control irrespective of the time, method or order of attachment or perfection of
the liens and security interests acquired by the parties in the Collateral and irrespective of the priorities as would otherwise be determined by reference to the Uniform Commercial Code or other applicable laws. Creditor shall not contest the
validity, priority or perfection of the Bank’s security interest in the Collateral (regardless of whether the Bank’s security interest in the Collateral is valid or perfected). The priorities of any liens or security interests of the
parties in any property of the Borrower other than the Collateral are not affected by this Agreement and shall be determined by reference to applicable law. The Bank’s rights under this Agreement are in addition to, and not in substitution of,
its rights under any other subordination agreement with Creditor. 

  

	20.	Special Provisions: Notwithstanding anything to the contrary in this Agreement, Creditor may ask for, demand, sue for, take or receive from Borrower, the regularly scheduled
payments of interest (but not prepayments, whether voluntary or by acceleration or otherwise) which may come due under the above-described promissory note (“Note”); provided, however, that Creditor may not ask for, demand, sue for, take or
receive from Borrower any such payments after Creditor is given written notice by the Bank that a Default or Event of Default exists or has occurred under any note(s), guaranty(ies), and/or agreement(s) between the Bank and the Borrower or that any
loan(s) between Borrower and Bank has (have) been called. All such payments due Creditor under the Note must be suspended until such time (if ever) as Creditor receives subsequent written notice from the Bank stating that the Default has been cured
and/or the loan(s) has (have) been paid. The Bank agrees to give Borrower copies of the notices, but the Bank’s failure to do so shall not affect its rights under this Agreement or any other Agreement with Borrower. 

  
 The Note may not be modified or prepaid or accelerated without the prior
written consent of the Bank. 
  
 THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT
THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT. 
  
 IN WITNESS WHEREOF, Creditor has caused this Agreement to be executed as of November 3, 2003. 
  
  

			
	 QUANTUM VALUE PARTNERS.L.P.

	 [CREDITOR]

		
	 BY:
	 	 Quantum Value Management, LLC, its General Partner

		
	 BY:
	 	 /s/ Michael Azar

	 ITS:
	 	 Managing Member

  

 4 

 BORROWER’S ACKNOWLEDGMENT 
  
 Quantum-Veritek, Inc. (“Borrower”) accepts notice of subordination created by this Agreement and agrees that it will take no
action inconsistent with this Agreement and that, except as permitted by this Agreement or with the prior written approval of Bank, no payment or distribution shall be made by Borrower on or with respect to the Subordinated Indebtedness, so long as
this Agreement remains in effect. Borrower agrees that the Bank may, at its option, without notice and without limiting Bank’s other rights, upon any breach by Creditor of, or purported termination by the Creditor of, this Agreement, declare
all Senior Indebtedness to be immediately due and payable and/or terminate any commitments of Bank to Borrower. 
  

									
	 QUANTUM-VERITEK. INC.

	 	 BORROWER’S ADDRESS

	 [BORROWER]
	 	 	 	 
			
	 BY:
	 	 /s/ James C. Juranitch

	 	 30120 West Pontiac

	 	 	 SIGNATURE OF
	 	 STREET ADDRESS

					
	 ITS:
	 	 Pres/CEO

	 	 Wixom

	 	 Michigan

	 	 48393

	 	 	 TITLE (IF APPLICABLE)
	 	 CITY
	 	 STATE
	 	 ZIP

			
	 	 	 	 	 Dated: November 3, 2003

  

 5

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