algi20130918

0001437749-13-012095.txt : 20130918 0001437749-13-012095.hdr.sgml : 20130918 20130918164613 ACCESSION NUMBER: 0001437749-13-012095 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20130913 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Material Modifications to Rights of Security Holders ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130918 DATE AS OF CHANGE: 20130918 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN LOCKER GROUP INC CENTRAL INDEX KEY: 0000008855 STANDARD INDUSTRIAL CLASSIFICATION: PARTITIONS, SHELVING, LOCKERS & OFFICE AND STORE FIXTURES [2540] IRS NUMBER: 160338330 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-00439 FILM NUMBER: 131103953 BUSINESS ADDRESS: STREET 1: 2701 REGENT BLVD. STREET 2: SUITE 200 CITY: DFW AIRPORT STATE: TX ZIP: 75261 BUSINESS PHONE: (817) 329-1600 MAIL ADDRESS: STREET 1: P.O. BOX 169 CITY: COPPELL STATE: TX ZIP: 75019 FORMER COMPANY: FORMER CONFORMED NAME: AVM CORP DATE OF NAME CHANGE: 19850520 8-K 1 algi20130918_8k.htm FORM 8-K algi20130918_8k.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 13, 2013

American Locker Group Incorporated

(Exact name of registrant as specified in its charter)

Delaware

0-439

16-0338330

(State of

incorporation)

(Commission File

Number)

(IRS Employer

Identification Number)

2701 Regent Blvd., Suite 200

DFW Airport, Texas 75261

(Address of principal executive offices)

Registrant’s telephone number, including area code: (817) 329-1600

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the reporting obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act

☐	Soliciting material pursuant to Rule 14a-12 of the Exchange Act

☐	Pre-commencement communications pursuant to Rule 14d-2(b) Exchange Act

☐	Pre-commencement communications pursuant to Rule 13e-4(c) Exchange Act

Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement

On September 13, 2013, American Locker Group Incorporated (the “Company”) entered into a Purchase Agreement with certain investors pursuant to which the Company sold 60,000 shares of its newly authorized Series C Preferred Stock for aggregate consideration of $300,000. The Purchase Agreement contains customary representations and warranties made by the Company and by each investor. In addition, the Company agreed to comply with the reporting obligations set forth in Rule 144 promulgated under the Securities Act of 1933, as amended, and to timely file all reports and other documents required of the Company under the rules and regulations of the Securities and Exchange Commission in order to permit the investors to benefit from certain rules promulgated under such regulations that may permit the investors to sell their shares of Series C Preferred Stock to the public without registration.

This description of the Purchase Agreement is qualified in its entirety by reference to the complete text of the Purchase Agreement, which is attached hereto as Exhibit 10.1.

Forbearance Agreement

The Company had previously entered into that certain Loan Agreement dated December 8, 2010 (as amended, the “Loan Agreement”) by and among the Company, certain of its subsidiaries and Bank of America, N.A. (“Lender”). As disclosed in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013, the Company was in violation of certain financial covenants, specifically a debt service coverage ratio and a funded debt-to-EBITDA ratio, that it is required to meet pursuant to the Loan Agreement.

On September 13, 2013, the Company entered into a Forbearance Agreement (the “Forbearance Agreement”) with Lender pursuant to which Lender has waived the Company’s obligation to meet such financial covenants through November 30, 2013 (the “Forbearance Expiration Date”) and to forbear from enforcing its remedies against the Company with respect to its failure to comply with such financial covenants until and through the Forbearance Expiration Date. The Company will not have the right to take any advances under any loan until various conditions contained in the Forbearance Agreement have been satisfied.

The Forbearance Agreement expires on the Forbearance Expiration Date. In connection with the Forbearance Agreement, the Company paid the Lenders a fee of $15,200. This description of the Forbearance Agreement is qualified in its entirety by reference to the complete text of the Forbearance Agreement, which is attached hereto as Exhibit 10.2.

Item 3.02 Unregistered Sales of Equity Securities

On September 13, 2013, the Company issued 60,000 shares of its newly authorized Series C Preferred Stock to certain investors pursuant to a Purchase Agreement executed with those investors. The purchase price was $5.00 per share for aggregate consideration of $300,000. Net proceeds from the offering will be used by the Company to fund working capital and for general corporate purposes.

The issuance and sale of the Series C Preferred Stock was made in reliance on Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended. The recipients of the Series C Preferred Stock, each of whom is an accredited investor, represented their intentions to acquire the stock for investment only and not with a view to or for sale in connection with any distribution thereof.

This Current Report on Form 8-K does not constitute an offer to sell the Series C Preferred Stock or any other securities of the Company.

Item 3.03 Material Modifications to Rights of Security Holders

The information with respect to the terms of the Series C Preferred Stock set forth in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.

On September 13, 2013, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware setting forth the terms of the Series C Preferred Stock.

The Series C Preferred Stock ranks senior to all of the Company’s other classes and series of capital stock, including its common stock. The Company cannot create or issue any class of stock ranking, with respect to dividends or distribution of assets upon liquidation, senior to or on parity with the Series C Preferred stock unless the persons holding more than 60% of the outstanding shares of Series C Preferred Stock (the “Majority of Holders”) have consented to such creation or issuance.

Under the terms of the Series C Preferred Stock, if the dividend on the Series C Preferred Stock for any dividend period has not been paid or set apart in full, the Company cannot purchase or redeem any shares of any class of capital stock (except the Series C Preferred Stock) without the consent of a Majority of Holders.

In addition, in the event the Company liquidates, dissolves or winds-up its business and affairs, either voluntarily or involuntarily, the Company is required to pay the holders of the Series C Preferred Stock a liquidating distribution of $5.00 per share, plus all accrued but unpaid dividends, before any distribution or payment may be made to the holders of shares of any other classes of capital stock.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year

On September 13, 2013, the Company filed the Certificate of Designation with the Secretary of State of the State of Delaware to authorize the issuance of up to 100,000 shares of Series C Preferred Stock and to establish the relative rights, preferences, qualifications, limitations and restrictions of such Series C Preferred Stock. The Certificate of Designation became effective upon such filing. The rights, preferences and privileges of the Series C Preferred Stock are as follows:

Dividends. Holders of Series C Preferred Stock are entitled to receive cash dividends at the annual rate of 6% per share and will be paid in preference to the holders of any other class or series of capital stock. Such dividends will begin accruing on the date of issuance and will be paid only when and if a dividend payment is declared by the Board of Directors. If the dividend has not been paid or set apart in full, the Company cannot purchase or redeem any class of capital stock (except the Series C Preferred Stock) unless the Majority of Holders have given their consent.

Redemption. The Company may redeem the Series C Preferred Stock at any time, in whole or in part, for $5.00 per share, plus accrued and unpaid dividends. The Company may exercise such redemption right by providing notice to the holders of the Series C Preferred Stock at least 20, but not more than 50, days prior to the date on which such redemption is to occur. If the Company elects to redeem a portion, but not all, of the outstanding Series C Preferred Stock, such redemption may be made pro rata, by lot or in such other equitable manner as determined by the Board of Directors.

Amendment of Certificate of Designation. Without the consent of a Majority of Holders, the Company may not: amend or change the Certificate of Designation in a manner that affects adversely the rights and preferences of the holders of Series C Preferred Stock; authorize or issue any class of stock ranking senior to, or on a parity with, the Series C Preferred Stock with respect to payment of dividends or distribution of assets; or authorize the merger or consolidation of the Company or the sale of all or substantially all of its assets.

Voting Rights. The holders of Series C Preferred Stock shall have no voting rights, except upon matters for which a class vote is specifically required by law or as provided in the Certificate of Designation.

Conversion. Any time after January 11, 2014, a holder of Series C Preferred Stock may convert each share of such stock into the number of shares of the Company’s common stock as is determined by dividing $5.00 by the average of the closing price of the Company’s common stock for the 10 trading days immediately prior to the date of such conversion. Such conversion price may be adjusted from time to time as set forth in the Certificate of Designation.

Liquidation Preference. In the event of a “liquidation event,” the holders of Series C Preferred Stock are entitled to receive, in cash, a liquidating distribution of $5.00 per share, plus all accrued but unpaid dividends, before any distribution or payment may be made to the holders of shares of any other classes of capital stock. A “liquidation event” means a sale or other disposition of all or substantially all of the assets of the Company, a voluntary or involuntary liquidation or dissolution; the merger or consolidation of the Company in which the Company’s stockholders own less than 50% of the outstanding voting securities of the surviving entity; or any transaction involving the transfer of shares of capital stock of the Company in which the stockholders immediately prior to the transaction own less than 50% of the voting securities.

This description is qualified in its entirety by reference to the copy of the Certificate of Designation, which is attached hereto as Exhibit 3.1.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

3.1 Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock filed with Delaware Secretary of State on September 13, 2013

10.1 Purchase Agreement dated September 13, 2013 by and among American Locker Group Incorporated and certain investors

10.2 Forbearance Agreement dated September 13, 2013 by and among American Locker Group Incorporated, certain of its subsidiaries and Bank of America, N.A.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERICAN LOCKER GROUP INCORPORATED

Date: September 18, 2013	By:	/s/ Anthony B. Johnston
		Anthony B. Johnston
		Chairman of the Board and Chief Executive Officer

EX-3 2 ex3-1.htm EXHIBIT 3.1 ex3-1.htm

Exhibit 3.1

AMERICAN LOCKER GROUP INCORPORATED

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

SERIES C PREFERRED STOCK

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

American Locker Group Incorporated, a Delaware corporation (the “Corporation”), in accordance with the provisions of Sections 103 and 151 of the Delaware General Corporation Law (the “DGLC”) does hereby certify that pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the Corporation, the following resolution creating a series of 100,000 shares of Preferred Stock designated as “Series C Preferred Stock” was adopted by the Board of Directors at a meeting duly convened on September 12, 2013:

RESOLVED, that the Chief Executive Officer and or President of the Corporation be and hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the following resolution and the provisions of the DGLC; and

FURTHER RESOLVED, that pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

A. Designation and Amount. A series of Preferred Stock is established and given the distinctive designation “Series C Preferred.” This series is to consist of 100,000 shares, of which the relative rights and preferences, and the qualifications, limitations or restrictions of such rights and preferences, shall be as follows:

B. Definitions. As used in herein, unless the context otherwise requires, the following terms have the respective meanings set forth below:

“Closing Price” of the Common Stock, means, as of any date of determination, the last quoted sales price on that date for a share of the Common Stock or such other securities in the over-the-counter market as reported by OTCBB or OTCQB or a similar organization or if the Common Stock is not so quoted, the market price of the Common Stock or such other securities on that date as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose.

“Common Stock” shall mean the common stock of the Corporation, $1.00 par value per share.

“Conversion Date” shall mean January 11, 2014.

“Conversion Price” shall mean the average of the Closing Price for one share of Common Stock for ten (10) consecutive Trading Days ending on the Trading Day occurring immediately prior to the Conversion Date.

“Liquidating Event” shall mean any (i) sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation; (ii) any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; (iii) any merger, consolidation, share exchange, or reorganization of the Corporation in which the persons who are stockholders of the Corporation, immediately before such merger, consolidation, share exchange, or reorganization own less than 50% of the outstanding voting securities of the surviving entity in such merger, consolidation, share exchange, or reorganization; or (iv) any transaction or series of related transactions to which the Corporation is a party involving the transfer of shares of capital stock of the Corporation if, as a result of such transfer, the persons who are stockholders of the Corporation immediately before such transfer, own less than 50% of the aggregate shares of capital stock of the Corporation entitled to vote on matters submitted to the holders of Common Stock of the Corporation; provided, however, that a Liquidating Event shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash or other property is received by the Corporation or any successor or indebtedness of the Corporation is cancelled or converted or a combination thereof.

“Majority of the Holders” shall mean persons holding more than 60% of the outstanding shares of Series C Preferred.

“Series C Original Issue Price” shall mean $5.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalizations with respect to the Series C Preferred.

“Series C Redemption Price” shall mean the sum of $5.00 per share of Series C Preferred.

“Trading Day” shall mean a day on which the Common Stock: (a) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and (b) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.

C. Dividends. The holders of Series C Preferred shall be entitled to receive, out of the funds of the Corporation legally available therefor, and the Corporation shall be bound to pay thereon, in preference to the holders of any other class of capital stock, or series thereof, of the Corporation, including, without limitation, the Common Stock, cash dividends at the annual rate of 6% per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C Preferred). Whether or not declared, such dividends shall commence to accrue on the date any shares of the Series C Preferred are first issued and become outstanding; provided, however, that except as set forth in Section C or Section F, such accruing Dividends shall be payable only when and if declared by the Board of Directors, and the Corporation shall be under no obligation to pay such accruing Dividends. Dividends shall be cumulative, so that if, at any time, dividends upon the outstanding Series C Preferred shall not have been paid and a sum sufficient for the payment thereof set apart for such payment, the amount of the deficiency shall accrue and the aggregate deficiency shall be fully paid, or dividends in such amount declared and a sum sufficient for the payment thereof set apart for such payment, for all prior periods before any sum or sums shall be paid or set aside as dividends for any other class, or series thereof, of capital stock of the Corporation. If the dividend on the Series C Preferred for any dividend period shall not have been paid or set apart in full, no asset which is by law available for the payment of dividends shall be paid or set aside for the purchase or redemption of any class of capital stock (except the Series C Preferred), or any series thereof, of the Corporation, unless a Majority of the Holders give their written consent. Notwithstanding the foregoing, nothing contained herein shall restrict the ability of the Corporation to purchase or redeem shares of Series C Preferred.

D. Redemption.

1. Optional Redemption. Subject to the provisions of this Section D, and applicable law, the Company shall have the right, but not the obligation, to redeem the Series C Preferred at any time, in whole or in part, at a price per share equal to the Redemption Price plus accrued and unpaid dividends. The redemptions made pursuant to this Section D shall be made from each holder of record on the date of the notice of redemption, on a pro rata basis, at the Redemption Price.

2. Redemption Procedure.

(a) Notice of every redemption of Series C Preferred shall be given by mailing such notice not less than twenty (20) nor more than fifty (50) days prior to the date on which such redemption is to occur (the “Redemption Date”) to each holder of record of shares of Series C Preferred to be so redeemed, and shall be sufficiently given if the Corporation shall cause a copy thereof to be mailed to such holders of record at their respective addresses as the same shall appear on the books of the Corporation, by first class mail, postage prepaid; provided, however, that the failure to mail such notice to one or more of such holders shall not affect the validity of such redemption as to the holders to whom the notice was mailed. If less than all of the outstanding Series C Preferred is to be redeemed, the redemption may be made pro rata, by lot or in such other equitable manner as may be prescribed by resolution of the Board of Directors.

(b) Subject to the foregoing and to the provisions contained in this Section D, the Board of Directors shall have full power and authority to prescribe the terms and conditions upon which Series C Preferred shall be redeemed from time to time.

(c) If any such notice of redemption shall have been duly given or if the Corporation shall have granted to a bank or trust company an irrevocable written authorization promptly to give or complete such notice and pay all amounts due to holders of shares (as evidenced by a list of holders of such shares certified by the president or a vice president and by the secretary or an assistant secretary of the Corporation) called for redemption and if, on or before the Redemption Date specified therein, all funds necessary for such redemption (including an amount equal to any accrued but unpaid dividends thereon to the Redemption Date) shall have been deposited by the Corporation with such bank or trust company designated in such notice, in trust for the pro rata benefit of the holders of the shares so called for redemption, then, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, from and after the time of such deposit (or from and after the redemption date if such notice shall fail to state that the holders of the shares called for redemption may receive their redemption price at any time after such deposit), all shares with respect to which such deposit shall have been made shall no longer be deemed to be outstanding and all rights with respect to such shares shall cease and terminate, except for the right of the holders of the certificates, upon surrender thereof, to receive the Series C Redemption Price, plus all accumulated but unpaid dividends, out of the funds so deposited, without interest. Any interest accrued on such funds shall be paid to the Corporation from time to time.

(d) Any funds so set aside or deposited, as the case may be, and unclaimed at the end of six years from such Redemption Date shall be released or repaid to the Corporation to be held for the benefit of such holder, after which the holders of the shares so called for redemptions shall look only to the Corporation for the payment thereof.

3. Cancellation of Redeemed Shares. Any shares of Series C Preferred redeemed, purchased or otherwise acquired by the Corporation shall be deemed canceled and may not under any circumstances thereafter be reissued as Series C Preferred or any other class of capital stock, or otherwise disposed of by the Corporation, and the Corporation shall from time to time and at least once each year cause all such shares to be canceled in the manner provided by law.

E. Voting Rights.

1. Class Voting. So long as any shares of Series C Preferred shall be outstanding, the Corporation shall not, without the affirmative vote of a Majority of the Holders, voting as a class, amend, alter or change the powers, preferences or rights given to the holders of any of the Series C Preferred so as to affect adversely the preferences, special rights or powers of any of the Series C Preferred, or authorize, create or issue any class of stock ranking, either as to payment of dividends or distribution of assets, senior to, or on a parity with, any of the Series C Preferred outstanding or authorize the merger or consolidation of the Corporation or the sale of all or substantially all of its assets.

2. Matters Submitted to Holders of Common Stock. The holders of Series C Preferred shall have no voting rights, except upon matters for which a class vote is specifically required by law or as provided in this Section E.

F. Conversion

1. Optional Conversion. After the Conversion Date, the registered holders (or their permitted assignees or transferees) of the Series C Preferred shall have the option to convert each share of Series C Preferred into that number of shares of Common Stock as is determined by dividing (i) the Series C Original Issuance Price by (ii) the Conversion Price. The shares into which each share of Series C Preferred shall be convertible (the “Underlying Shares”), and the Conversion Price, shall be subject to adjustment from time to time, as provided herein.

2. Exercise of Optional Conversion Privilege. To exercise the conversion privilege, the registered holder (or his permitted assignees) hereof shall surrender to the Corporation the certificates evidencing the shares of Series C Preferred to be converted, accompanied by duly executed instruments of assignment and transfer in blank, if required by the Corporation. In addition, the shares of Series C Preferred surrendered for conversion shall be accompanied by a written letter of instruction, executed by the holder of such shares, which requests such conversion and states the name, address and taxpayer identification number of the person in whose name certificates of Common Stock are to be issued and registered. Upon such surrender, the Corporation shall issue and deliver to the holder of the shares of Series C Preferred surrendered for conversion a certificate or certificates for the full number of Underlying Shares issuable hereunder. The person in whose name the certificate(s) for Common Stock is to be issued shall be deemed to have become a holder of record of such Common Stock on the date of surrender. Such conversion shall be deemed to have been made as of the close of business on the date that shares of Series C Preferred shall have been surrendered for conversion. The rights of the holder of such shares of Series C Preferred surrendered for conversion, as a holder thereof, shall cease at such time, and the person or persons entitled to receive shares of Common Stock upon conversion shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock as of the close of business on such date.

If any shares of Series C Preferred are surrendered for conversion on a date when the stock record and transfer books of the Corporation shall be closed, the person in whose name the certificate or certificates of Common Stock for such shares are to be issued shall be deemed the record holder thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock record and transfer book are open, and the Shares of Series C Preferred surrendered shall not be deemed to have been converted into Common Stock until such time for purposes of determining whether any rights attach or dividends are payable thereon.

3. Adjustment of Underlying Shares Following Adjustment in Conversion Price. The Conversion Price shall be subject to adjustment from time to time as provided in Section F(4). Upon each adjustment of the Conversion Price, except pursuant to Section F(4)(c) and F(4)(d), holders of Series C Preferred shall thereafter be entitled to convert each share of Series C Preferred into the number of shares of Common Stock (calculated to the nearest whole shares pursuant to Section F(4)(d)) determined by dividing the Series C Original Issue Price by the Conversion Price resulting from such adjustment.

4. Conversion Price Adjustments. The Conversion Price shall be subject to adjustment from time to time as set forth below.

(a) Stock Dividends, Etc. If the number of shares of Common Stock outstanding at any time after the date of issuance of the Series C Preferred is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then immediately after the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend or the effective date of such subdivision or split-up, as the case may be, the Conversion Price shall be appropriately adjusted to reflect such actions (unless the Conversion Price already reflects such action).

(b) Combination of Stock. If the number of shares of Common Stock outstanding at any time after the date of issuance of the Series C Preferred is decreased by a combination of the outstanding shares of Common Stock, then, immediately after the effective date of such combination, the Conversion Price shall be appropriately adjusted to reflect such actions (unless the Conversion Price already reflects such action).

(c) Reorganizations, etc. Subject to the provisions of Section G, in case of any capital reorganization of the Corporation, or of any reclassification of the Common Stock, or in case of the consolidation of the Corporation with or the merger of the Corporation with any other person or of the sale, lease or other transfer of all or substantially all of the assets of the Corporation to any other person, the Series C Preferred shall, after such capital reorganization, reclassification, consolidation, merger, sale, lease or other transfer, be convertible into the number of shares of stock or other securities or property to which the Common Stock issuable (at the time of such capital reorganization, reclassification, consolidation, merger, sale, lease or other transfer) upon conversion of the Series C Preferred would have been entitled to receive upon such capital reorganization, reclassification, consolidation, merger, sale, lease or other transfer if such exercise had taken place; and in any such case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the holder of the Series C Preferred shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the conversion of the Series C Preferred. The subdivision or combination of shares of Common Stock issuable upon conversion of the Series C Preferred at any time outstanding into a greater or lesser number of shares of Common Stock (whether with or without par value) shall not be deemed to be a reclassification of the Common Stock of the Corporation for the purposes of this clause (c).

(d) Rounding of Calculations; Minimum Adjustment. All calculations under this Section F shall be made to the nearest cent or to the nearest whole share, as the case may be. Any provision of this Section F(4) to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than $0.01, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or more. In case the Corporation shall at any time issue shares of Common Stock in any transaction described in Section F(4)(a) or F(4)(b), such amount of $0.01 per share (as theretofore increased or decreased, if such amount shall have been adjusted in accordance with the provisions of this Section F(4)(d)) shall forthwith be proportionately increased in the case of a transaction described in Section F(4)(b) or decreased in the case of a transaction described in Section F(4)(a) so as appropriately to reflect such transaction.

(e) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section F(4) shall require that an adjustment shall become effective immediately after a record date for an event, the Corporation may defer until the occurrence of such event the issuance of additional shares of Common Stock or other property issuable or deliverable upon exercise by reason of the adjustment required by such event over and above the shares of Common Stock or other property issuable or deliverable upon such exercise before giving effect to such adjustment; provided, however, that the Corporation upon request shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares or other property, and such cash, upon the occurrence of the event requiring such adjustment.

(f) Information Regarding Adjustments. Whenever the Conversion Price shall be adjusted as provided in Section F(4), the Corporation shall forthwith file at the offices of the Corporation a statement showing in detail the facts requiring such adjustment and stating whether the adjustment was made in the Conversion Price, the amount of both the Conversion Price, and the new number of Underlying Shares issuable that shall be in effect after such adjustment, and the Corporation shall also cause a copy of such statement to be given to the holders of the Series C Preferred. Each such statement shall be signed by the Corporation’s chief financial or accounting officer. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section F(4)(g).

(g) Notice to Holders. In the event the Corporation shall propose to take any action of the type described in clause (c) of Section F(4), the Corporation shall give notice to the holders of the Series C Preferred, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Conversion Price and the number, kind or class of shares or other securities or property that shall be deliverable upon conversion of the Series C Preferred. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action.

G. Liquidation Preference.

Subject to the remaining provisions of this Section G, in the event of any Liquidating Event, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares of Series C Preferred shall be entitled to receive, out of the remaining net assets of the Corporation, an amount per share equal to the Series C Redemption Price, plus all accrued but unpaid dividends thereon, in cash for each outstanding Released Share, before any distribution or payment shall be made to the holders of shares of any other classes of capital stock of the Corporation. Upon the occurrence of a Liquidating Event, and after payment or provision for payment of the debts and other liabilities of the Corporation, if the assets of the Corporation available for distribution to the stockholders shall be insufficient to permit the payment to the holders of shares of Series C Preferred of an amount equal to the Series C Redemption Price, plus all accrued but unpaid dividends, then the entire assets of the Corporation shall be distributed ratably among the holders of Series C Preferred then outstanding and entitled to a distribution according to the numbers of shares held by each. After payment in full to the holders of Series C Preferred, the holders of Common Stock shall be entitled, to the exclusion of the holder of Series C Preferred, to share ratably in the remaining assets of the Corporation in accordance with the numbers of shares held by each (determined on an as-converted basis).

In the event of any Liquidating Event, if any portion of the consideration payable to the stockholders of the Corporation is placed into escrow and/or is payable to the stockholders of the Corporation subject to contingencies, the definitive transaction agreement entered into in connection with the Liquidating Event shall provide that (a) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Section G as if the Initial Consideration were the only consideration payable in connection with such Liquidating Event and (b) any additional consideration that becomes payable to the stockholders of the Corporation upon release from escrow or satisfaction of contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Section G after taking into account the previous payment of the Initial Consideration as part of the same transaction.

No provision of this Section G shall in any manner, prior to any sale of all or substantially all of the assets of the Corporation or any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, create or be considered or deemed to create any restriction upon the surplus of the Corporation or prohibit the payment of dividends on the capital stock of the Corporation out of the funds of the Corporation legally available therefor, nor shall any such restriction or prohibition be in any manner implied from the provisions of this Section G.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date first written above.

AMERICAN LOCKER GROUP INCORPORATED

/s/ Anthony B. Johnston

Name: Anthony B. Johnston

Title: Chief Executive Officer

EX-10 3 ex10-1.htm EXHIBIT 10.1 ex10-1.htm

Exhibit 10.1

EXECUTION COPY

PURCHASE AGREEMENT

AMERICAN LOCKER GROUP INCORPORATED

This PURCHASE AGREEMENT (this “Agreement”), dated September 13, 2013, is made and entered into by and among American Locker Group Incorporated, a Delaware corporation, and the persons identified on Schedule 2.1 hereto.

In consideration of the mutual promises and conditions contained herein, the parties hereto hereby agree and covenant as follows:

ARTICLE I.

DEFINITIONS

1.1 The terms defined in this Section 1.1 shall have for all purposes of this Agreement the respective meanings specified in this Section 1.1.

“Agreement” shall mean this Purchase Agreement as originally executed or as it may be amended from time to time.

“Certificate of Designation” means that certain Certificate of Designation of Preferences, Rights and Limitations Of Series C Preferred Stock in the form of Exhibit A hereto.

“Closing” shall mean the consummation of the purchase and sale of the Issued Preferred Stock.

“Closing Date” shall mean September 13, 2013.

“Common Stock” shall mean the common stock, $1.00 par value per share, of the Company.

“Company” shall mean American Locker Group Incorporated, a Delaware corporation, and shall also include its successors and assigns.

“Issued Preferred Stock” shall mean the 60,000 shares of the Preferred Stock which shall be issued by the Company to Purchasers at the Closing and which shall have the terms set forth in the Certificate of Designation.

“Majority of the Holders” shall mean a vote of the holders of greater than 60% of the outstanding shares of Preferred Stock; provided, however, that, if some or all of the Preferred Shares have been converted into Shares, Majority of the Holders shall mean a vote of the holders of greater than 60% of the Shares, giving pro forma effect to the conversion of all outstanding shares of Preferred Stock, whether or not actually issued and outstanding.

“Person” shall have the meaning attributed to it in the 1933 Act of 1933.

“Preferred Stock” shall mean the Series C Preferred Stock, $1.00 par value per share, of the Company, with the terms as set forth in the Certificate of Designation.

“Purchasers” shall mean the persons named on Schedule 2.1 hereto, and “Purchaser” means any one of the Purchasers.

“SEC” shall mean the Securities and Exchange Commission of the United States or any governmental department, bureau, commission or agency succeeding to the functions of the SEC.

“Shares” shall mean those shares of Common Stock which shall be issuable by the Company to Purchasers upon conversion of the Preferred Stock, subject to adjustment upon certain events.

“1933 Act” shall mean the Securities Act of 1933, as amended.

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

ARTICLE II.

AGREEMENT OF PURCHASE AND SALE

2.1 Purchase and Sale of Preferred Stock. At the Closing, the Company shall issue and sell to each Purchaser and, subject to the terms and conditions hereof and in reliance upon the representations and warranties of the Company contained herein, each Purchaser, severally and not jointly, agrees to purchase from the Company, the shares of Preferred Stock at the respective purchase price set forth opposite the name of each Purchaser on Schedule 2.1 hereto.

2.2 Closing. The Closing shall be held on the Closing Date at 10:00 a.m. at the offices of Hallett & Perrin, P.C., 1445 Ross Avenue, Suite 2400, Dallas, Texas 75202, or at such other place as may be mutually agreed to by the Company and Purchasers. At the Closing, each party also shall execute and deliver such other appropriate and customary documents as the other parties reasonably may request for the purpose of consummating the transactions contemplated by this Agreement. All actions taken at Closing shall be deemed to have been taken simultaneously.

2.3 Delivery of and Payment. At the Closing, the Company will issue, execute and deliver to Purchasers share certificates evidencing the Issued Preferred Stock against payment of the aggregate purchase price specified in Section 2.1 in immediately available funds payable to the Company.

2.4 Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional actions as any party reasonably may deem to be practical and necessary in order to consummate the transactions contemplated by this Agreement and to vest more fully in Purchasers’ ownership of the Issued Preferred Stock.

2.5 Separate Sales. The sales hereunder to Purchasers are to be separate sales, and no Purchaser is to be responsible for the acts or defaults of any of the other Purchasers. Each Purchaser agrees that neither any Purchaser nor the respective controlling Persons, officers, directors, partners, agents, or employees of any Purchaser shall be liable to any other Purchaser for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the Issued Preferred Stock.

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Purchasers as of the Closing Date as follows:

3.1 Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority (corporate and other) to enter into and perform this Agreement, to issue the Issued Preferred Stock and to carry out the terms hereof.

3.2 Authorization. This Agreement has been duly authorized, has been duly and validly executed and delivered at the Closing and is the legal, valid and binding obligation of the Company, enforceable in accordance with its terms. The issuance of the Issued Preferred Stock and the issuance of the Shares has been duly and validly authorized and, the Shares, when issued and delivered upon conversion of the Issued Preferred Stock, will be validly issued, fully paid and nonassessable and free of the preemptive rights (statutory or contractual) of stockholders other than the Purchasers.

3.3 Power and Authority. The Company has the power and authority (corporate and other), and possess all licenses and permits, required by governmental authorities, to own, lease and operate its properties and assets and to carry on its business as currently being conducted.

3.4 Compliance with Other Instruments. Neither the execution and delivery by the Company of this Agreement, nor the consummation by the Company of the transactions contemplated hereby, will violate, breach, be in conflict with, or constitute a default under, or permit the termination or the acceleration of maturity of, or result in the imposition of any lien, claim, or encumbrance upon any property or asset of the Company, or any note, bond, indenture, mortgage, deed of trust, evidence of indebtedness, lease agreement, loan agreement, other agreement or instrument or any judgment, order, injunction, or decree by which the Company, is bound, to which any of them is a party, or to which any of their assets is subject.

3.5 Necessary Approvals and Consents. No authorization, consent, permit or license or approval of, or declaration, registration, or filing with, any person or governmental or regulatory authority or agency is necessary for the execution and delivery by the Company of this Agreement and the other agreements executed or required to be executed by it in connection with this Agreement, the consummation by the Company of the transactions contemplated by this Agreement, or the valid execution, issuance and sale of the Issued Preferred Stock or the valid issuance and delivery of the Shares.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

Each Purchaser, severally and not jointly, represents and warrants to the Company as of the Closing Date as follows:

4.1 Acquired for Investment. The Purchaser is acquiring the Issued Preferred Stock for its own account and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the 1933 Act, of the Issued Preferred Stock; provided that the Purchaser may transfer all or any portion of the Issued Preferred Stock to another person or entity that is an “accredited investor” within the mean of the 1933 Act, and the rules promulgated thereunder.

4.2 Restrictive Legend. The Purchaser has been informed and understands that the Preferred Stock issued pursuant to this Agreement and the Shares issued upon conversion of the Issued Preferred Stock, if such issuances are not registered under the 1933 Act, shall bear a restrictive legend substantially as follows:

The shares represented by this Certificate have not been registered under the Securities Act of 1933 or under any applicable state securities laws. The shares may not be offered for sale, sold, assigned, transferred or pledged without registration under the Securities Act of 1933 and any applicable state securities laws or without an opinion of counsel satisfactory to the Company that registration is not required.

4.3 Organization and Standing. Such Purchaser, if not a natural person, is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority (corporate and other) to enter into and perform this Agreement and to carry out the terms hereof.

4.4 Authorization. This Agreement has been duly and validly authorized, executed and delivered by such Purchaser and is the legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms.

4.5 Investment Representations.

(a) The Purchaser, if not a natural person, was not formed for the purpose of purchasing the Issued Preferred Stock.

(b) The Purchaser is an “accredited investor” as defined in Rule 501(a) promulgated under the Act.

(c) The Purchaser acknowledges that the sale of the Issued Preferred Stock by the Company has not been registered under the 1933 Act or qualified under applicable state securities laws and understands the restrictions on resale of such securities imposed by the 1933 Act. The Purchaser also acknowledges that the Company has no obligation to register the Issued Preferred Stock or the Shares, except as otherwise contemplated herein. The Purchaser also understands that there is no public market for the Issued Preferred Stock or Shares and that there may never be a public market therefor, and that even if such a market develops, the Purchaser may never be able to sell or dispose of such securities and may thus have to bear the risk of investment in such securities for a substantial period of time or forever.

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ARTICLE V.

COVENANTS

5.1 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC, which may permit the sale of the Shares to the public without registration, the Company agrees to:

(a) Make and keep public information available as those terms are understood and defined in Rule 144 promulgated by the SEC under the 1933 Act, at all times after ninety (90) days after the effective date of the first registration under the 1933 Act filed by the Company for an offering of its securities to the general public;

(b) File with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act at any time after it has become subject to the reporting requirements thereunder;

(c) So long as a Person owns any Shares, furnish to such Persons promptly upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after 90 days after the effective date of the first registration statement under the 1933 Act filed by the Company for an offering of its securities to the general public), and of the 1933 Act and the 1934 Act (at any time after it has become subject to the reporting requirements thereunder), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as any holder of Shares may reasonably request in availing itself of any rule or regulation of the SEC allowing a Person to sell any such securities without registration.

ARTICLE VI.

WAIVER; AMENDMENTS

Upon the written consent of a Majority of the Holders, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived or any of such provisions, covenants or conditions may be modified. No course of dealing between any Purchasers and any other party hereto, or any failure or delay on the part of a Purchaser in exercising any rights or remedies under this Agreement, shall operate as a waiver of any rights or remedies of any Purchasers. No single or partial exercise of any rights or remedies under this Agreement shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder.

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ARTICLE VII.

MISCELLANEOUS PROVISIONS

7.1 Survival of Covenants; Successors and Assigns.

(a) All representations and warranties of the Company contained herein, in the Schedules hereto, or in any exhibit, certificate, document or instrument delivered pursuant to this Agreement, shall survive the Closing and shall continue in full force and effect for one (1) year after the Closing Date.

(b) The parties hereto understand and agree that this Agreement contains obligations, agreements and covenants that are intended to and shall continue after the Closing and except as otherwise provided herein, all covenants, agreements and obligations made herein, and in instrument, documents or certificates delivered in connection herewith or on behalf of the Company, shall survive the execution and delivery of this Agreement and the purchase of the Issued Preferred Stock and shall bind and inure to the benefit of the Company and its successors and assigns and the holders of the Preferred Stock and the Shares from time to time.

7.2 Notices. Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by telecopy. Each notice or communication that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by hand, courier service or telecopy, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed as follows:

If to the Company:

(a) For delivery: American Locker Group Incorporated

2701 Regent Blvd

Suite 200

DFW Airport, Texas 75261

Attn: President

Telephone No.: (817) 329-1600

(b) For mail: American Locker Group Incorporated

PO Box 169

Coppell, Texas 75019-0169

Attn: President

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If to a Purchaser: To the address set forth on Schedule 2.1 hereto

Any party may change its address for notice by written notice to the other parties hereto.

7.3 Descriptive Headings. The descriptive headings herein have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provisions hereof.

7.4 Further Documents. The Company agrees to execute and deliver to the Purchasers, promptly upon a request, all such further instruments as it may reasonably deem necessary or appropriate in order to effectuate the purpose of this Agreement.

7.5 Governing Law. This Agreement, the Issued Preferred Stock and the other documents and instruments executed hereunder are performable in Dallas County, Texas, and shall be interpreted and construed in accordance with, under and governed by, the laws of the State of Delaware.

7.6 Counterparts. This Agreement may be executed in one or more counterparts, including by facsimile or portable document format (pdf), each of which shall for all purposes be deemed an original and all of which shall constitute the same instrument but only one of which need be produced.

7.7 Binding Effect. This Agreement, including, but not limited to, the rights and conditions contained herein in connection with disposition of the Shares, shall be binding upon the parties hereto, together with their respective executors, administrators, successors, personal representatives, heirs and assigns.

7.8 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof, and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

7.9 Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter hereof.

7.10 Changes, Modifications or Waivers. No change or modification of this Agreement shall be valid or binding upon the parties hereto, nor shall any waiver of any term or condition in the future be so binding, unless such change or modification or waiver shall be in writing and signed by the parties hereto.

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IN WITNESS WHEREOF, the Company and the Purchasers have caused this Agreement to be executed as of the date first above written.

COMPANY:

AMERICAN LOCKER GROUP INCORPORATED

a Delaware corporation

By: /s/ Anthony B. Johnston

Name: Anthony B. Johnston

Title: President

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PURCHASERS:

/s/ Paul Luber

Paul Luber

Address: 2101 East Glendale Ave

Whitefish Bay, Wisconsin 53211

/s/ Mitch Almy

Mitch Almy

Address: 3930 NE 26^th Ave

Portland, Oregon 97212

/s/ Don Dunn

Don Dunn

Address: 1201 Lincoln Mall, Suite 102

Lincoln, Nebraska 68508

/s/ Lawrence Goldstein

Lawrence Goldstein

Address: 1865 Palmer Avenue

Larchmont, NY 10538

Signature Page – Purchase Agreement

EXHIBIT A

Certificate of Designation of Preferences, Rights and Limitations Of Series C Preferred Stock

Schedule 2.1

Purchase Obligation of Investors

Name and Address	Shares of Preferred Stock	Purchase Price

Paul Luber	20,000	$100,000
2101 East Glendale Ave
Whitefish Bay, Wisconsin 53211

Mitch Almy	20,000	$100,000
3930 NE 26^th Ave
Portland, Oregon 97212

Don Dunn	10,000	$50,000
1201 Lincoln Mall, Suite 102
Lincoln, Nebraska 68508

Lawrence Goldstein	10,000	$50,000
1865 Palmer Avenue
Larchmont, NY 10538

EX-10 4 ex10-2.htm EXHIBIT 10.2 ex10-2.htm

Exhibit 10.2

FORBEARANCE AGREEMENT

The parties to this FOREBEARANCE AGREEMENT (this "Agreement"), dated as of August 1, 2013, but effective as of August 1, 2013 (the "Forbearance Date"), are BANK OF AMERICA, N.A. ("Lender"), AMERICAN LOCKER GROUP INCORPORATED, a Delaware corporation (“Locker Group Borrower”), AMERICAN LOCKER SECURITY SYSTEMS, INC., a Delaware corporation (“Security Borrower”), SECURITY MANUFACTURING CORPORATION, a Delaware corporation (“Manufacturing Borrower”), and CANADIAN LOCKER COMPANY LIMITED, a corporation incorporated under the federal laws of Canada (“Canadian Borrower”)(Locker Group Borrower, Security Borrower, Manufacturing Borrower and Canadian Borrower are collectively referred to herein as “Borrower”). For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Background.

(i) Term Loan. Lender is the holder of that certain Loan Agreement, dated December 8, 2010 (as amended, supplemented, renewed or extended by one or more documents, the “Original Loan Agreement”), executed by Borrower in favor of Lender, in the original principal amount of $1,000,000.00 (the “Facility No. 1 Loan”), with a final stated maturity date (including all prior renewals or extensions) of December 15, 2015 (the “Original Maturity Date”). The Original Loan Agreement was modified and extended by that certain (i) Amendment No. 1 to Loan Agreement, dated October 27, 2011 (the “First Amendment”), executed by Borrower and Lender, in which, among other things, the Original Maturity Date for Facility No. 3 (defined below) was amended to December 8, 2012, and a $500,000.00 draw note was created, and (ii) Amendment No. 2 to Loan Agreement, dated September 28, 2012 (the “Second Amendment”), executed by Borrower and Lender, in which, among other things, the Original Maturity Date was extended to October 31, 2013. The Original Loan Agreement, First Amendment and Second Amendment, as they have or may have been renewed, extended, amended, or supplemented by one or more documents, if any, dated before the Forbearance Date, are collectively referred to herein as the “Loan Agreement”. The security for payment of the Facility No. 1 Loan includes, without limitation, that certain (i) Security Agreement (Multiple Use), dated December 8, 2010 (the “Security Agreement”), executed by Borrower in favor of Lender, and (ii) General Security Agreement, dated December 9, 2010 (the “General Security Agreement”). The Security Agreement and General Security Agreement, as they may have been renewed, extended, amended or supplemented by one or more documents, if any, dated before the Forbearance Date, are referred to herein as the “Facility No 1. Collateral Documents”, and reference is made to the Facility No. 1 Collateral Documents for all purposes. The Facility No. 1 Collateral Documents cover the personal property therein described.

(ii) Draw Note. Pursuant to the Loan Agreement and the First Amendment, Lender and Borrower entered into a certain draw note in the original principal amount of $500,000.00 (the “Facility No. 2 Loan”), with a final stated maturity date of October 27, 2012 (as extended to October 31, 2013 pursuant to the Second Amendment). The security for payment of the Facility No. 2 Loan includes, without limitation, the (i) Security Agreement and the General Security Agreement, as they may have been renewed, extended, amended or supplemented by one or more documents, if any, dated before the Forbearance Date, are referred to herein as the “Facility No. 2 Collateral Documents”, and reference is made to the Facility No. 2 Collateral Documents for all purposes. The Facility No. 2 Collateral Documents cover the personal property therein described.

(iii) Line of Credit. Pursuant to the Loan Agreement, Lender and Borrower entered into that certain line of credit in the original principal amount of $2,500,000.00 (the “Facility No. 3 Loan”), with a final stated maturity date of December 8, 2015, as amended to October 31, 2013 pursuant to the Second Amendment. The security for payment of the Facility No. 3 Loan includes, without limitation, the (i) Security Agreement, and (ii) the General Security Agreement, as they may have been renewed, extended, amended or supplemented by one or more documents, if any, dated before the Forbearance Date, are referred to herein as the “Facility No. 3 Collateral Documents”, and reference is made to the Facility No. 3 Collateral Documents for all purposes. The Facility No. 3 Collateral Documents cover the personal property therein described.

Forbearance Agreement

American Locker Group, et al.

(iv) Master Lease. Lender is the Lessor under that certain Master Lease Agreement (MLA #21806-90000), dated July 9, 2012 (the “MLA”), by and between Lender, as lessor, and Locker Group Borrower, Security Borrower, Manufacturing Borrower and Canadian Borrower as co-lessees. In addition, Lender holds that certain (i) Warranty Bill of Sale, dated August 21, 2012 (“BOS 1’), by and between Lender, as buyer, and Manufacturing Borrower, as seller; (ii) Warranty Bill of Sale, dated August 21, 2012 (“BOS 2’), by and between Lender, as buyer, and Locker Group Borrower, as seller; (iii) Warranty Bill of Sale, dated March 11, 2013 (“BOS 3’), by and between Lender, as buyer, and Manufacturing Borrower, as seller; (iv) Warranty Bill of Sale, dated March 11, 2013 (“BOS 4’), by and between Lender, as buyer, and Locker Group Borrower, as seller. The Master Lease is further evidenced by that certain Subordination of Landlord’s Lien, dated August 27, 2012 (the “Subordination’), granted by BV DFWA I, LP, a Texas limited partnership, as landlord, and Lender, lender

(v) Definitions. The Facility No. 1 Loan, Facility No. 2 Loan, Facility No. 3 Loan and the MLA are collectively referred to herein as the “Loans”. The Facility No. 1 Collateral Documents, Facility No. 2 Collateral Documents and Facility No. 3 Collateral Documents are collectively referred to herein as the “Collateral Documents”.

2. Acknowledgment of Default of Loans. Borrower acknowledges that Borrower is in default under the Loan Agreement (including the Loans) for failure to meet various financial covenants. Borrower further acknowledges that, in exchange for the covenants as described herein, Lender has agreed to refrain from exercising any remedies afforded to it under Texas law, including but not limited to, foreclosure of any collateral to collect the indebtedness on the Loans for a period expiring on November 30, 2013 (the “Forbearance Expiration Date”). This Agreement does not replace the Loan Agreement, the Loans, Collateral Documents, or any of the Loan Documents (defined below), and the term of the Loan Documents shall not be amended or extended, except as may be set forth herein.

The Loan Agreement, the First Amendment, the Second Amendment, the Loans, the Collateral Documents, the BOS 1, BOS 2, BOS 3, BOS 4, Subordination, this Agreement, and any other document now or hereafter securing, guaranteeing, evidencing or executed in connection with the Loans, as such documents may have been or may be herein or hereafter renewed, extended, amended or supplemented, are herein together called the "Loan Documents". Lender is entitled to the benefits of the Loan Documents. The Loan Documents shall remain unchanged, except as modified by this Agreement.

3. Forbearance Expiration Date. Borrower and Lender hereby agree that, so long as Borrower complies with the terms and conditions of this Agreement and the Loan Documents, the Loan Agreement and the Loans shall be paid as described in the Loan Agreement, and the term of this Agreement shall expire on the Forbearance Expiration Date.

4. No Further Advances. Notwithstanding anything in the Loan Documents to the contrary, until (i) a satisfactory field exam is performed on the collateral, (ii) Borrower has evidenced Borrowing Base availability to Lender’s satisfaction, (iii) Borrower is in compliance with the Discrete Quarterly Basic Fixed Charge Coverage Ratio, and (iv) Borrower is otherwise in full compliance with the terms and conditions of this Agreement and the Loan Documents, Borrower shall have no right to take any advances on any of the Loans.

5. Covenants of Borrower. In addition to the other covenants of Borrower in the Loan Documents, Borrower hereby covenants and agrees as follows:

(i) Temporary Waiver of Debt to EBITDA Ratio. Notwithstanding the provisions of Section 9.3 of the Loan Agreement, Lender hereby agrees to temporarily waive the Funded Debt to EBITDA Ratio (as defined in the Loan Agreement) through and including the Forbearance Expiration Date; and

Forbearance Agreement

American Locker Group, et al.

(ii) Discrete Quarterly Basic Fixed Charge Coverage Ratio. Notwithstanding the provision of Section 9.4 of the Loan Agreement, Borrower shall maintain a Basic Fixed Charge Coverage Ratio (as defined in the Loan Agreement) of 0.70:1:00 for the discrete quarter ending June 30, 2013, and 1.25:1.00 for the discrete quarter ending September 30, 2013. Thereafter, Borrower shall maintain the Basic Fixed Charge Coverage Ratio as set forth in the Loan Agreement.

(iii) Borrowing Base Certificates. Borrower shall continue to provide borrowing certificates to Lender in form and substance acceptable to Lender on the dates provided for in the Loan Agreement.

6. Costs and Expenses. Borrower hereby agrees to pay to Lender a forbearance fee equal to Fifteen Thousand Two Hundred and No/100s Dollars ($15,200.00) upon Borrower’s execution of this Agreement. In addition, to the extent not prohibited by applicable law, Borrower shall in each instance within five (5) days after request by Lender pay, or reimburse Lender for, all costs and expenses reasonably paid or incurred by Lender from time to time to related to the Loan Documents. Further, Borrower hereby agrees to pay to Lender, within five (5) days of written request, the legal fees charged to Lender in connection with the preparation of this Agreement and any other documents in connection with this Agreement.

7. Obligors; Binding Effect; Construction. The Loan is the joint and several obligation of each party named Borrower herein. Borrower is sometimes called an "Obligor" herein. If pledgor(s) is/are other than Borrower and are signatories hereto, such party or parties are also herein called "Obligors," and each such party consents to this Agreement and ratifies and confirms its obligations under the Loan Documents, which obligations are not amended hereby unless specifically enumerated herein. Lender is not required, before enforcing the liability of any Obligor, to assert or exhaust its remedies against any other Obligor or against any security. All provisions of the Loan Agreement and the other Loan Documents remain in full force and effect as therein written, except as expressly modified by this Agreement. To the extent of any conflict between the Loan Agreement (or any earlier modification) or any of the Loan Documents and this Agreement, this Agreement shall control. If any Obligor is a corporation, partnership or other legal entity, such party and the person(s) signing for it represent and warrant to Lender that this Agreement has been duly executed and delivered by such party's duly authorized representative(s). This Agreement binds and benefits the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns (provided, that no party but Lender may assign its rights hereunder without Lender's prior written consent). As used herein, the masculine gender includes each other gender and the singular number includes the plural, and vice versa, unless the context otherwise requires, and the term "person" and words importing persons shall include firms, associations, partnerships (including limited partnerships), joint ventures, trusts, corporations and other legal entities, including public or governmental bodies, agencies or instrumentalities, as well as natural persons. Headings and titles used in this Agreement are only for convenience and shall be disregarded in construing it. The date or dates of the acknowledgments indicate the date(s) of execution of this Agreement but execution is as of the Forbearance Date, and for purposes of identification and reference the date of this Agreement is the Forbearance Date. This Agreement may be executed in several identical counterparts all of which shall constitute one and the same instrument. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS MODIFIED HEREBY, SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE UNITED STATES FEDERAL LAW.

8. Liens. By this Agreement, all liens, security interests, assignments, superior titles, rights, remedies, powers, equities and priorities securing the Loan (collectively, the "Liens"), including but not limited to those under the Collateral Documents, are hereby ratified and confirmed as valid, subsisting and continuing to secure the Loans. Nothing in this Agreement shall in any manner diminish, impair or extinguish any of the Liens or the Loan Documents or the debt evidenced by the Loan Documents or be construed as a novation in any respect. The Liens are not waived.

9. Certain Warranties and Covenants. Borrower warrants and represents to Lender that the indebtedness evidenced by the Loans is subject to no credit, charge, claim, or right of offset or deduction of any kind whatsoever; and, to the extent not prohibited by applicable law, Obligors release and discharge Lender and its parent corporations, subsidiaries and affiliates, and all past, present and future trustees under the Collateral Documents, and its and their predecessors, successors, assigns, officers, managers, directors, shareholders, employees, agents, attorneys, heirs, and representatives, jointly and severally from any and all claims and causes of action, whether known or unknown and whether now existing or hereafter arising, that have at any time been owned or claimed, or that are hereafter owned or claimed, by Obligors or any of them (other than claims for funds, if any, now on deposit with Lender), and that arise out of any one or more circumstances or events that occurred prior to the time of execution of this Agreement. The Loan Documents and the obligations thereunder are ratified and acknowledged as valid, subsisting and enforceable, subject to no offsets, claims or defenses. The execution of this Agreement by Lender is not intended nor shall it be construed as an actual or implied waiver of: (a) any default under any of the Loan Documents; (b) any requirement under any of the Loan Documents except to the extent of the amendments specified in this Agreement; (c) any right to demand payment or accelerate maturity contained in any Loan Documents; or (d) any rights Lender may have against any person not a party hereto. It shall be a default under each of the Loan Documents, subject to the applicable grace period (if any) under the Loan Documents, entitling Lender to exercise any and all rights and remedies provided therein or at law or in equity, including but not limited to the right to declare the entire unpaid balance of principal and accrued interest under the Loan Agreement to be immediately due and payable (and upon such declaration the same shall be immediately due and payable), if any Obligor fails to make any payment, or to perform any covenant or agreement, in this Agreement or the Loan Documents or if any statement, representation or warranty in this Agreement or the Loan Documents is false, misleading or erroneous in any material respect. If Borrower fails to comply with any of Borrower’s obligations under this Agreement or the Loan Documents, Lender may, without waiving the default, but shall never be obligated to, perform or cause performance thereof at Borrower’s expense. All expenses thus paid by Lender shall automatically and without notice become a part of the obligations secured by the Collateral Documents and the Loan Documents, shall be demand obligations of Borrower to Lender and shall bear interest, from the date of Lender's payment until repaid to Lender, payable on demand, at the default rate, and Lender (but not Borrower or any other Obligor) shall be fully subrogated to the rights of the person or entity receiving such payment. Obligors acknowledge that Lender has not committed or agreed, and is under no obligation, to refinance the Loans or to extend the maturity date of the Loans beyond that stated above. Lender may assign the Loans and the Loan Documents or participation interests therein and may disclose in confidence to prospective or actual assignees or participants such financial and other information regarding Obligors and any guarantor as Lender may deem necessary or advisable.

Forbearance Agreement

American Locker Group, et al.

10. Controlling Agreement. The parties intend to comply with applicable usury laws. All existing and future agreements regarding the debt evidenced by the Loan Agreement are hereby limited and controlled by the provisions of this paragraph. In no event (including but not limited to prepayment, default, demand for payment, or acceleration) shall the interest taken, reserved, contracted for, charged or received under the Loan Agreement or otherwise exceed the Maximum Rate. If from any possible construction of any document, interest would otherwise be payable in excess of the Maximum Amount, such document shall be automatically reformed and the interest payable automatically reduced to the Maximum Rate, without necessity of execution of any amendment or new document. If Lender ever receives interest in an amount which apart from this provision would exceed the Maximum Amount, the excess shall, without penalty, be applied to principal of the Loans in inverse order of maturity of installments or be refunded to the payor if the Loans are paid in full. Lender does not intend to charge or receive unearned interest on acceleration. All interest paid or agreed to be paid shall be spread throughout the full term (including extensions) of the Loans so that the amount of interest does not exceed the Maximum Rate.

11. Continuing Validity. This Agreement is in renewal, extension and/or modification, but not in extinguishment or novation, of the indebtedness evidenced by the Loans and Loan Agreement. Except as expressly modified in this Agreement, the terms of the Loan Documents shall remain unchanged and in full force and effect until the indebtedness evidenced by the Loans and Loan Agreement has been paid in full. In the event of any conflict between the terms of this Agreement and the terms of the Loan Documents, the terms of this Agreement shall control and the Loan Documents shall be construed accordingly. Consent by Lender to this Agreement does not waive Lender's right to require strict performance of the Loan Documents as modified in this Agreement or obligate Lender to make any future modifications. Nothing in this Agreement shall constitute a satisfaction or extinguishment of the Loan Agreement or the Loan Documents secured by the Liens. It is the intention of Lender to retain as liable all parties for the indebtedness evidenced by the Loan Agreement, and all parties, makers, endorsers and guarantors of the Loan Agreement, including accommodation parties, unless a party is expressly released by Lender in writing. Any maker, endorser or guarantor, including accommodation makers, shall not be released by virtue of this Agreement. If any person who signed the original Loan Agreement and the Loan Documents does not sign this Agreement, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing person consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension or modification, but also to all such subsequent extensions and modifications.

Forbearance Agreement

American Locker Group, et al.

12. Cross-default; Cross-Collateralization. All collateral which Lender may at any time acquire from either Borrower and/or Obligors from any source in connection with any indebtedness owing to Lender by Borrower and/or Obligors, or any present or future obligation of Borrower and/or Obligors to Lender, shall constitute security for each and every obligation without apportionment or designation as to particular obligations, and all obligations, however and whenever occurred, shall be secured by such collateral howsoever and whensoever acquired, and it is the express intent of the parties to this Agreement that all past, present or future advances made by Lender to Borrower and/or Obligors shall be so cross-collateralized and Lender shall have no obligation to list any of such collateral described in or referred to in this Agreement upon any of the documents executed in conjunction with the indebtedness of Borrower and/or Obligors upon any future notes or extensions of credit, it being the intention of the parties to this Agreement that all such transactions shall be collateralized by the collateral and the documents executed in conjunction herewith. Lender shall have the right, in its sole discretion, to determine the order in which Lender's rights or remedies against any of the collateral are to be exercised and which type or portions of collateral are to be proceeded against and the order of application of the proceeds of any such collateral as against particular obligations. As such, any default by Borrower under the Loan Documents or this Agreement shall be a default under any other loan documents evidencing indebtedness owing by Borrower and/or Obligors to Lender, and any default under any other loan documents evidencing indebtedness owing by Borrower and/or Obligors to Lender or this Agreement shall be a default under the Loan Documents. As such, Borrower hereby acknowledges that a default under the Facility #1 Loan shall constitute a default under the Facility #2 Loan, Facility #3 Loan and MLA, a default under the Facility #2 Loan shall constitute a default under the Facility #1 Loan, Facility #3 Loan and MLA, a default under the Facility #3 Loan shall constitute a default under the Facility #1 Loan, Facility #2 Loan and MLA, and a default under the MLA, shall constitute a default under the Facility #1 Loan, Facility #2 Loan and Facility #3 Loan. For purposes of this Agreement, "Obligor" shall mean any guarantor, any party pledging collateral to Lender, or, if Borrower is comprised of the trustees of a trust, any trustor.

13. Release of Claims. BORROWER (IN THEIR OWN RIGHT AND ON BEHALF OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS) (THE "RELEASING PARTIES") JOINTLY AND SEVERALLY RELEASE, ACQUIT, AND FOREVER DISCHARGE LENDER, AND ITS DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS (THE "RELEASED PARTIES"), TO THE FULLEST EXTENT PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, FROM ANY AND ALL ACTS AND OMISSIONS OF THE RELEASED PARTIES, AND FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, DEMANDS, CONTROVERSIES, COSTS, DEBTS, SUMS OF MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS, DAMAGES, OBLIGATIONS, LIABILITIES, OBJECTIONS, AND EXECUTIONS OF ANY NATURE, TYPE, OR DESCRIPTION WHICH THE RELEASING PARTIES HAVE AGAINST THE RELEASED PARTIES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, GROSS NEGLIGENCE, USURY, FRAUD, DECEIT, MISREPRESENTATION, CONSPIRACY, UNCONSCIONABILITY, DURESS, ECONOMIC DURESS, DEFAMATION, CONTROL, INTERFERENCE WITH CONTRACTUAL AND BUSINESS RELATIONSHIPS, CONFLICTS OF INTEREST, MISUSE OF INSIDER INFORMATION, CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF COLLATERAL, WRONGFUL RELEASE OR FORECLOSURE OF COLLATERAL, FAILURE TO INSPECT, ENVIRONMENTAL DUE DILIGENCE, NEGLIGENT LOAN PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF, VIOLATIONS OF STATUTES AND REGULATIONS OF GOVERNMENTAL ENTITIES, INSTRUMENTALITIES AND AGENCIES (BOTH CIVIL AND CRIMINAL), RACKETEERING ACTIVITIES, SECURITIES AND ANTITRUST LAWS VIOLATIONS, TYING ARRANGEMENTS, DECEPTIVE TRADE PRACTICES, BREACH OR ABUSE OF ANY ALLEGED FIDUCIARY DUTY, BREACH OF ANY ALLEGED SPECIAL RELATIONSHIP, COURSE OF CONDUCT OR DEALING, ALLEGED OBLIGATION OF FAIR DEALING, ALLEGED OBLIGATION OF GOOD FAITH, AND ALLEGED OBLIGATION OF GOOD FAITH AND FAIR DEALING, WHETHER OR NOT IN CONNECTION WITH OR RELATED TO THE LOAN AGREEMENT, AND THE LOAN DOCUMENTS AND THIS AGREEMENT, AT LAW OR IN EQUITY, IN CONTRACT IN TORT, OR OTHERWISE, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED UP TO AND INCLUDING THE DATE OF THIS AGREEMENT (THE "RELEASED CLAIMS"). THE RELEASING PARTIES FURTHER AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE AND EXEMPLARY DAMAGES, DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY, DAMAGES ATTRIBUTABLE TO MENTAL ANGUISH, AND DAMAGES ATTRIBUTABLE TO PAIN AND SUFFERING, AND THE RELEASING PARTIES DO HEREBY WAIVE AND RELEASE ALL SUCH DAMAGES WITH RESPECT TO ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH HAVE OCCURRED AS OF THE MODIFICATION DATE AGAINST ANY OF THE RELEASED PARTIES. THE RELEASING PARTIES REPRESENT AND WARRANT THAT NO FACTS EXIST WHICH COULD PRESENTLY OR IN THE FUTURE SUPPORT THE ASSERTION OF ANY OF THE RELEASED CLAIMS AGAINST THE RELEASED PARTIES. THE RELEASING PARTIES FURTHER COVENANT NOT TO SUE THE RELEASED PARTIES ON ACCOUNT OF ANY OF THE RELEASED CLAIMS, AND EXPRESSLY WAIVE ANY AND ALL DEFENSES THEY MAY HAVE IN CONNECTION WITH THEIR DEBTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS AND THIS AGREEMENT. THIS PARAGRAPH IS IN ADDITION TO AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES IN FAVOR OF THE RELEASED PARTIES.

Forbearance Agreement

American Locker Group, et al.

14. Notice of Final Agreement. THIS AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE LENDER AND BORROWER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE LENDER AND BORROWER. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE LENDER AND BORROWER. THE PARTIES SPECIFICALLY ACKNOWLEDGE AND AGREE THAT THEY HAVE NOT RELIED UPON ANY REPRESENTATION (ORAL OR WRITTEN) IN ENTERING INTO THIS AGREEMENT.

[Signature Pages to Follow]

Forbearance Agreement

American Locker Group, et al.

EXECUTED to be effective as of the Forbearance Date.

Lender:

BANK OF AMERICA, N.A.,

a national banking association

By:/s/ John Clarke_____________________

Name: John Clarke

Title: SVP

Acknowledgment

State of Missouri______________

County of Clay

This instrument was acknowledged before me on September 13, 2013, by John Clarke , the SVP of BANK OF AMERICA, N. A., a national banking association, on behalf of said association.

/s/ Donna J. Rowell

Notary Public in and for the State of Missouri

My commission expires: Feb. 27, 2014

Forbearance Agreement

American Locker Group, et al

Signature Page of Lender

Borrower:

AMERICAN LOCKER GROUP INCORPORATED,

a Delaware corporation

By: /s/ Stephen P. Slay__________________

Stephen P. Slay

CFO

Acknowledgment

STATE OF TEXAS

COUNTY OF Dallas

This instrument was acknowledged before me on Sept. 9 , 2013, by Stephen P. Slay, CFO of AMERICAN LOCKER GROUP INCORPORATED, a Delaware corporation, on behalf of said corporation.

/s/ Taosha T. Smith

Notary Public in and for the State of Texas

My commission expires: May 24, 2016

AMERICAN LOCKER SECURITY SYSTEMS, INC.,

a Delaware corporation

By: /s/ Stephen P. Slay__________________

Stephen P. Slay

CFO

Acknowledgment

STATE OF TEXAS

COUNTY OF Dallas

This instrument was acknowledged before me on Sept. 9 , 2013, by Stephen P. Slay, CFO of AMERICAN LOCKER SECURITY SYSTEMS, INC., a Delaware corporation, on behalf of said corporation.

/s/ Taosha T. Smith

Notary Public in and for the State of Texas

My commission expires: May 24, 2016

Forbearance Agreement

American Locker Group, et al

Signature Page of Borrower

SECURITY MANUFACTURING CORPORATION,

a Delaware corporation

By: /s/ Stephen P. Slay__________________

Stephen P. Slay

CFO

Acknowledgment

STATE OF TEXAS

COUNTY OF Dallas

This instrument was acknowledged before me on Sept. 9 , 2013, by Stephen P. Slay, CFO of SECURITY MANUFACTURING CORPORATION, a Delaware corporation, on behalf of said corporation.

/s/ Taosha T. Smith

Notary Public in and for the State of Texas

My commission expires: May 24, 2016

CANADIAN LOCKER COMPANY LIMITED,

a corporation incorporated under the federal laws of Canada

By: /s/ Stephen P. Slay__________________

Stephen P. Slay

CFO

Acknowledgment

STATE OF TEXAS

COUNTY OF Dallas

This instrument was acknowledged before me on Sept. 9 , 2013, by Stephen P. Slay, CFO of CANADIAN LOCKER COMPANY LIMITED, a Delaware corporation, on behalf of said corporation.

/s/ Taosha T. Smith

Notary Public in and for the State of Texas

My commission expires: May 24, 2016

Forbearance Agreement

American Locker Group, et al

Signature Page of Borrower