Document:

Exhibit 10.4

 

Execution
Version

 

ASSET PURCHASE AGREEMENT

 

BETWEEN

 

LAMTEC CORPORATION,

 

COMPAC CORPORATION

 

AND

 

TRIMAS COMPANY LLC

 

 

Dated as of December 8,
2008

 

 

TABLE
OF CONTENTS

 

	
  Sections

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Sale and Purchase Obligations

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Sale and Purchase of Assets

  	
  5

  
	
   

  	
  2.2

  	
  Excluded Assets

  	
  5

  
	
   

  	
  2.3

  	
  Assumption of Liabilities

  	
  6

  
	
   

  	
  2.4

  	
  Excluded Liabilities

  	
  6

  
	
   

  	
  2.5

  	
  Consideration

  	
  6

  
	
   

  	
  2.6

  	
  Purchase Price Adjustment

  	
  7

  
	
   

  	
  2.7

  	
  Transfer Taxes; Prorations and Adjustments

  	
  7

  
	
   

  	
  2.8

  	
  Escrow Funds

  	
  7

  
	
   

  	
  2.9

  	
  Allocation of Purchase Price

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Closing

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  The Closing

  	
  8

  
	
   

  	
  3.2

  	
  Closing Deliveries of Seller

  	
  8

  
	
   

  	
  3.3

  	
  Closing Deliveries of Buyer

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and Warranties of Seller

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Organization; Power and Authority; Authorization; Due Execution; No
  Conflicts

  	
  10

  
	
   

  	
  4.2

  	
  Title to and Condition of Purchased Assets

  	
  10

  
	
   

  	
  4.3

  	
  Claims; Litigation; Compliance with Laws

  	
  11

  
	
   

  	
  4.4

  	
  Permits; Licenses

  	
  11

  
	
   

  	
  4.5

  	
  Assigned Agreements

  	
  11

  
	
   

  	
  4.6

  	
  Proprietary Rights

  	
  12

  
	
   

  	
  4.7

  	
  Taxes

  	
  12

  
	
   

  	
  4.8

  	
  Environmental Matters

  	
  12

  
	
   

  	
  4.9

  	
  Consents

  	
  12

  
	
   

  	
  4.10

  	
  Brokers

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Representations and Warranties of Buyer

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Organization; Power and Authority; Authorization; Due Execution; No
  Conflicts

  	
  13

  
	
   

  	
  5.2

  	
  Brokers

  	
  14

  
	
   

  	
  5.3

  	
  Financial Ability

  	
  14

  
	
   

  	
  5.4

  	
  Consents

  	
  14

  
	
   

  	
  5.5

  	
  WARN Act

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Buyer Acknowledgement

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  No Other Representations or
  Warranties

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Covenants

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Conduct Through the Closing Date

  	
  15

  
	
   

  	
  7.2

  	
  Bulk Sales Notification Requirements

  	
  15

  

 

2

 

	
   

  	
  7.3

  	
  Consents

  	
  16

  
	
   

  	
  7.4

  	
  Advice of Changes Prior to Closing

  	
  16

  
	
   

  	
  7.5

  	
  Notice of Litigation

  	
  16

  
	
   

  	
  7.6

  	
  Access to Records; Inspection

  	
  16

  
	
   

  	
  7.7

  	
  Exclusivity

  	
  16

  
	
   

  	
  7.8

  	
  Litigation Support

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Conditions Precedent to the Parties Obligations to Close

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Buyer’s Conditions Precedent

  	
  18

  
	
   

  	
  8.2

  	
  Seller’s Conditions Precedent

  	
  18

  
	
   

  	
  8.3

  	
  Mutual Condition Precedent

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Termination

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Indemnification

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Indemnification by Seller and the Shareholder

  	
  19

  
	
   

  	
  10.2

  	
  Indemnification by Buyer

  	
  20

  
	
   

  	
  10.3

  	
  Indemnification Procedures

  	
  20

  
	
   

  	
  10.4

  	
  Survival of Indemnification Obligations

  	
  21

  
	
   

  	
  10.5

  	
  Limitation of Indemnification;
  Other Indemnification Matters

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Post-Closing Transfer of Purchased Assets

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Miscellaneous

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Expenses

  	
  23

  
	
   

  	
  12.2

  	
  Assignment

  	
  23

  
	
   

  	
  12.3

  	
  Notice

  	
  23

  
	
   

  	
  12.4

  	
  Entire Agreement

  	
  24

  
	
   

  	
  12.5

  	
  Press Releases and Announcements

  	
  24

  
	
   

  	
  12.6

  	
  Interpretation

  	
  25

  
	
   

  	
  12.7

  	
  Severability

  	
  25

  
	
   

  	
  12.8

  	
  Counterparts and Effectiveness

  	
  25

  
	
   

  	
  12.9

  	
  Applicable Law

  	
  25

  
	
   

  	
  12.10

  	
  No Third Party Beneficiary

  	
  26

  

 

3

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement is made as of December 8,
2008, between LAMTEC
CORPORATION, a New Jersey corporation (“Buyer”), COMPAC CORPORATION, a Delaware
corporation (“Seller”), and TRIMAS
COMPANY LLC, a Delaware limited liability company (the “Shareholder”).

 

Recitals

 

A.            Seller
is engaged in the insulation and specialty tape business (the “Business”).

 

B.            Buyer
desires to purchase, and Seller desires to sell, certain assets associated with
the Business, subject to the terms and conditions of this Agreement and in
connection with the other transactions contemplated by this Agreement and the
Related Agreements (the “Transactions”).

 

Therefore, the parties agree as follows:

 

1.                                      Definitions.

 

(a)           The
following terms, as used herein, have the following meanings:

 

“Affiliate” of any
particular Person means any other Person controlling, controlled by, or under
common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies or a Person whether through the ownership of voting securities,
contract or otherwise.

 

“Agreement” means this Asset Purchase Agreement
and all exhibits and schedules to this Asset Purchase Agreement, as amended or
supplemented from time to time.

 

“Benefit Plan” means any “employee benefit plan”
(as such term is defined in ERISA §3(3)) and any executive compensation, bonus,
stock purchase, stock option, severance plan, salary continuation, vacation,
sick leave, fringe benefit, incentive, insurance arrangement, or similar
material plan or arrangement for one or more employees that is not subject to
ERISA.

 

“Closing Inventory Book Value” means the book
value of the Inventory as of the Closing Date but without taking into account
the transactions contemplated by this Agreement, determined under GAAP using
Seller’s historical accounting principles for financial statements regarding
the Business, consistently applied.

 

“Code” means the
Internal Revenue Code of 1986, as amended (or any successor thereto).

 

“Consents” means any registration or filing
with, consent or approval of, notice to, or action by any person or
Governmental Authority which is required or necessary in order to permit the
transfer of the Purchased Assets to Buyer or to permit the operation by Buyer
of the Business.

 

“Environmental Laws” means any applicable Law which relates to protection of the environment
from, or the remediation of, pollution, including, those relating to the
release, use, 

 

 

presence,
storage, recycling, treatment, generation, processing, handling, production,
abatement, removal, remediation, exposure to or disposal of hazardous
materials, including, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and regulations thereunder; the Federal
Clean Air Act, as amended, and regulations thereunder; the Resource
Conservation and Recovery Act, as amended, and regulations thereunder; the
Federal Water Pollution Control Act, as amended, and regulations thereunder;
and the Occupational Safety and Health Act of 1970, as amended, and regulations
thereunder; any common law duty or standard of care; and any Permit, as
hereinafter defined.

 

“ERISA” means the Employee Income Retirement Security Act of 1974, as amended.

 

“Escrow Agent” means  RBS
Citizens, National Association, d/b/a Charter One.

 

“GAAP” means United States generally accepted
accounting principles, as in effect from time to time, consistently applied.

 

“Governmental Authority”
means any domestic or foreign government, including any federal, state,
territorial or municipal government, and any government agency, tribunal,
commission or other authority exercising or purporting to exercise executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.

 

“Hazardous Substances”
means, without limitation, any flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum-based materials, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances and any other
conditions or substances defined or regulated under any Environmental Law.

 

“Inventory” means all
inventories of Seller that are used by Seller for the conduct of the Business,
including all finished goods, work in process, raw materials, spare parts and
all other materials and supplies.

 

“Laws” means all
applicable foreign, federal, state, local or municipal laws, zoning and other
statutes, ordinances, rules, regulations, building and other codes, permits and
licenses, court and administrative orders, judgments and decrees and common law
and equitable doctrines.

 

“Liabilities” means all costs, expenses,
charges, debts, liabilities, claims, demands and obligations, whether primary
or secondary, direct or indirect, asserted or unasserted, known or unknown,
accrued or unaccrued, liquidated or unliquidated, due or to become due, fixed,
contingent, absolute or otherwise.

 

“Material Adverse Effect” means any material
adverse effect on the physical condition of the Purchased Assets, taken as a
whole.

 

“Permits” means any and all permits, licenses,
approvals, orders, consents, registrations, qualifications and authorizations
used in the conduct of the Business.

 

“Person” means any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated association, corporation, limited liability company, entity or
governmental entity 

 

2

 

(whether
federal, state, county, city or otherwise and including any instrumentality,
division, agency or department thereof).

 

“Proprietary Rights” means all of the following
items owned by, issued to or licensed to, Seller or used by or necessary for
the conduct of the Business as conducted, as contemplated to be conducted or as
has ever been conducted at any time, along with all income, royalties, damages
and payments due or payable at the Closing or thereafter, including damages and
payments for past, present or future infringements or misappropriations
thereof, the right to sue and recover for past infringements or
misappropriations thereof and any and all corresponding rights or interests
that, now or hereafter, may be secured throughout the world:  (i) patents, patent applications, patent
disclosures and inventions (whether or not patentable and whether or not
reduced to practice) and any reissue, continuation, continuation-in-part,
division, revision, extension or reexamination thereof; (ii) trademarks,
service marks, trade dress, logos, trade names and corporate names, together
with all translations, adaptations, derivations, and combinations, including
all goodwill associated therewith; (iii) copyrights, registered or
unregistered and copyrightable works; (iv) mask works; (v) all
registrations, applications and renewals for any of the foregoing; (vi) trade
secrets and confidential information (including ideas, formulae, compositions,
know-how, manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, financial, business and marketing information and plans, and
customer and supplier lists, pricing and cost information, and related
information); (vii) computer software and software systems (including
data, databases and related documentation); (viii) other proprietary
rights; (ix) licenses or other agreements to or from third parties
regarding the foregoing; and (x) all copies and tangible embodiments of
the foregoing (in whatever form or medium), in each case including the items
set forth on Schedule 4.6.

 

“Related Agreement” means the Bill of Sale, the
Assignment and Assumption Agreement, the Escrow Agreement and all other
agreements, instruments and certificates delivered in connection with this
Agreement or the Transactions, and all exhibits and schedules thereto, each as
amended or supplemented from time to time.

 

“Target Closing Inventory Book Value” means
$8,451,000.

 

“Tax Return” means any
return, declaration, report, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

 

“Taxes” includes (i) all
present and future federal, state, local or foreign taxes, surtaxes, duties,
levies, imposts, rates, fees, assessments, withholdings, dues and other charges
of any nature imposed by any Governmental Authority, including income, capital
(including large corporations), withholding, consumption, sales, gross
receipts, use, transfer, goods and services or other value-added, single
business, environmental, excise, customs, anti-dumping, countervail, net worth,
stamp, registration, franchise, payroll, employment, health, education,
business, school, property, local improvement, development, education
development and occupation taxes, surtaxes, duties, levies, imposts, rates,
fees, assessments, withholdings, dues and charges, (ii) any Liability for
the payment of any amounts of the type described in clause (i) as a result
of being a member of an affiliated, combined, consolidated, or unitary group
for any tax period, (iii) any 

 

3

 

Liability
for the payment of any amounts of the type described in clause (i) as a
result of being a Person required by law to withhold or collect taxes imposed
on another Person, (iv) any Liability for the payment of amounts described
in clause (i), (ii) or (iii) as a result of being a transferee of, or
a successor in interest to, any Person or as a result of an express or implied
obligation to indemnify any Person, and (v) any and all interest, fines,
penalties, additions to tax and additional amounts imposed in connection with
or with respect to any amounts described in clause (i), (ii), (iii) or
(iv).

 

(b)           In
addition, the following terms, as used herein, have the meanings set forth in
the applicable provisions referenced below:

 

	
  “Adjustable Cash
  Purchase Price”

  	
   

  	
  Section 2.5(b)

  
	
  “Assigned Agreements”

  	
   

  	
  Section 2.1(d)

  
	
  “Assignment and
  Assumption Agreement”

  	
   

  	
  Section 3.2(b)

  
	
  “Assumed Liabilities”

  	
   

  	
  Section 2.3

  
	
  “Basket”

  	
   

  	
  Section 10.5(a)

  
	
  “Bill of Sale”

  	
   

  	
  Section 3.2(a)

  
	
  “Business”

  	
   

  	
  Recital A

  
	
  “Buyer”

  	
   

  	
  Introductory Paragraph

  
	
  “Buyer Indemnified
  Parties”

  	
   

  	
  Section 10.1

  
	
  “Cash Purchase Price”

  	
   

  	
  Section 2.5(b).

  
	
  “Closing”

  	
   

  	
  Section 3.1

  
	
  “Closing Date”

  	
   

  	
  Section 3.1

  
	
  “Company Transaction”

  	
   

  	
  Section 7.7

  
	
  “Confidentiality
  Provisions”

  	
   

  	
  Section 12.4

  
	
  “Escrow Agreement”

  	
   

  	
  Section 3.2(c)

  
	
  “Escrow Claim Amount”

  	
   

  	
  Section 2.8

  
	
  “Escrow Funds”

  	
   

  	
  Section 2.5(b)

  
	
  “Escrow Period”

  	
   

  	
  Section 2.8

  
	
  “Excluded Assets”

  	
   

  	
  Section 2.2

  
	
  “Excluded Liabilities”

  	
   

  	
  Section 2.4

  
	
  “Extension Period”

  	
   

  	
  Section 11

  
	
  “Indemnified Party”

  	
   

  	
  Section 10.3

  
	
  “Indemnifying Party”

  	
   

  	
  Section 10.3

  
	
  “Losses”

  	
   

  	
  Section 10.1

  
	
  “Material Adverse
  Effect”

  	
   

  	
  Section 4.3

  
	
  “Parent”

  	
   

  	
  Section 12.4

  
	
  “Permitted Liens”

  	
   

  	
  Section 7.1(d)

  
	
  “Purchased Assets”

  	
   

  	
  Section 2.1

  
	
  “Purchase Price”

  	
   

  	
  Section 2.5

  
	
  “Purchase Price
  Adjustment Amount”

  	
   

  	
  Section 2.6(a)

  
	
  “Purchase Price
  Allocation”

  	
   

  	
  Section 2.8

  
	
  “Rejected Inventory”

  	
   

  	
  Section 2.8

  
	
  “Removal Period”

  	
   

  	
  Section 11

  
	
  “Seller”

  	
   

  	
  Introductory Paragraph

  
	
  “Seller Consents”

  	
   

  	
  Section 7.3

  
	
  “Seller’s Facility”

  	
   

  	
  Section 4.4

  

 

4

 

	
  “Shareholder”

  	
   

  	
  Introductory Paragraph

  
	
  “Storage Fee”

  	
   

  	
  Section 11

  
	
  “Transactions”

  	
   

  	
  Recital B

  
	
  “WARN Act”

  	
   

  	
  Section 5.5

  

 

2.                                      Sale
and Purchase Obligations.

 

2.1          Sale and Purchase of Assets.

 

Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall sell, assign,
transfer and deliver to Buyer, and Buyer shall purchase from Seller the
following assets of Seller (the “Purchased Assets”):

 

(a)           all Inventory;

 

(b)           all of Seller’s equipment used in connection with the Business (in each
case where applicable, together with only such fittings or wiring beyond the
switch gears as agreed to by Buyer and Seller in writing), computer equipment
and motor vehicles, as well as all manufacturers’ warranties associated with
such items;

 

(c)           the Proprietary Rights set forth on Schedule 4.6; and

 

(d)           all of Seller’s rights, title and interest in,
to or under the contracts described on Schedule 2.1(d) (the “Assigned
Agreements”).

 

Notwithstanding anything in
this Agreement to the contrary, no contract, agreement, or license, of Seller
that is part of the Purchased Assets and that is not capable of being
delegated, assigned or transferred to Buyer without the consent or waiver of
another party, or under which any delegation, assignment transfer or purported
delegation, assignment or delegation to Buyer would constitute a violation,
breach or default, shall be delegated, assigned or transferred to Buyer without
having first obtained such required consent or waiver and, to the extent such
consents and approvals are not obtained and in full force and effect as of the
Closing Date and Buyer nevertheless proceeds to close the Transactions, Seller
shall use commercially reasonable efforts to cooperate with Buyer after the
Closing (i) to establish lawful arrangements which result in the benefits
and obligations under such contracts, agreements, and licenses being
apportioned in a manner that is consistent with the purpose and intention of
this Agreement and (ii) if so requested by Buyer and at Buyer’s expense,
to obtain any such consents and waivers, and enforce Seller’s rights under such
contracts, agreements, and licenses on behalf and for the benefit of, and as
directed by, Buyer.

 

2.2                               Excluded Assets.

 

Notwithstanding anything herein to the contrary, Seller is not selling
to Buyer and Buyer shall not acquire any interests in, and the term “Purchased
Assets” shall not include, any assets, rights or claims of Seller that are
not explicitly set forth in Section 2.1 above (the “Excluded
Assets”).  The Excluded Assets shall
include, without limitation:

 

(a)           all of Seller’s cash, cash equivalents and
notes receivable;

 

5

 

(b)           all accounts receivable of
Seller;

 

(c)           all
assets of Seller that are related to Seller’s corporate governance and
reporting, including, without limitation, Seller’s organizational documents,
Tax Returns, claims for Tax refunds and financial reports that encompass more
than just the operations of the Business;

 

(d)           Seller’s Benefit Plans, including any underlying
assets, agreements and policies;

 

(e)           all records or files that relate to human
resources, safety, or environmental matters, or that are necessary for
Seller to support any prior or future filings with any Governmental Authority,
including any such records or files contained on the computer equipment set
forth in Section 2.1(b);

 

(f)            Seller’s
rights under this Agreement;

 

(g)           all assets set forth on Schedule
2.2(g);

 

(h)           all Seller’s prepayments or
overpayments of any Taxes; and

 

(i)            all other assets of Seller
other than the Purchased Assets.

 

2.3          Assumption of Liabilities.

 

Buyer shall assume, become
liable for and pay or perform when due (a) Seller’s obligations
arising or accruing after the Closing under the Assigned Agreements and (b) all
other Liabilities or obligations arising from the post-Closing operation or
ownership of the Purchased Assets (the “Assumed
Liabilities”).

 

2.4          Excluded Liabilities.

 

(a)           Buyer shall not assume or become liable for, and Seller shall continue
to be responsible for and pay or perform when due, any Liabilities of Seller
other than the Assumed Liabilities (the “Excluded Liabilities”).

 

2.5          Consideration.

 

(a)           The total consideration (the “Purchase
Price”) for the Purchased Assets will be (i) $25,000,000 (as may be
adjusted in accordance with Section 2.6) and (ii) plus or
minus the net amount of prorations required under Section 2.7.  Buyer shall also assume the Assumed
Liabilities at the Closing.

 

(b)           At the Closing, Buyer shall
pay the Purchase Price to Seller as follows: (i) $14,700,000 in cash by
wire transfer to an account designated in writing by Seller at least two (2) business
days prior to the Closing (the “Cash Purchase Price”), (ii) an
amount equal to $10,000,000 (as may be adjusted in accordance with Section 2.6)
(the “Adjustable Cash Purchase Price”), multiplied by 0.825, in cash by
wire transfer to an account designated in writing by 

 

6

 

Seller at least two (2) business days prior to
the Closing, (iii) $300,000 in cash by wire transfer to the Escrow Agent
(the “Escrow Funds”), (iv) paying and discharging all amounts
required under Section 2.7, and (v) the balance of the
Purchase Price to be paid by execution and delivery of the Assignment and
Assumption Agreement.

 

2.6                               Purchase
Price Adjustment.

 

(a)           On the business day before the
Closing Date, Buyer and Seller shall determine the Closing Inventory Book
Value, which determination shall be final and binding on the parties.  The Purchase Price will be (i) decreased by the amount, if any, by
which the Closing Inventory Book Value is less than the Target Closing
Inventory Book Value, or (ii) increased by the amount, if any, by which
the Closing Inventory Book Value is greater than the Target Closing Inventory
Book Value. The net amount that is a decrease or an increase to the Purchase
Price as contemplated in this Section 2.6 is referred to herein as
the “Purchase Price Adjustment Amount.”

 

(b)           To the extent that the
Purchase Price is (i) reduced as contemplated hereby, the Adjustable Cash
Purchase Price shall be reduced by the Purchase Price Adjustment Amount, or (ii) increased
as contemplated hereby, the Adjustable Cash Purchase Price shall be increased
by the Purchase Price Adjustment Amount.

 

2.7          Transfer Taxes; Prorations and
Adjustments.

 

All federal, state and local
sales, use, excise, documentary, stamp taxes and all other Taxes, duties, or
fees properly payable on and in connection with Seller’s conveyance,
assignment, transfer or delivery of the Purchased Assets to Buyer, whether
levied on Buyer or Seller, shall be borne equally by Buyer and Seller.  The parties will also prorate such other
amounts related to the Purchased Assets as of the Closing Date as they deem
appropriate.

 

2.8                               Escrow
Funds.

 

If a customer of the Business (other than any of Buyer’s
Affiliates) returns or rejects Inventory (excluding raw materials) included in
the Purchased Assets during the Escrow Period (“Rejected Inventory”),
then, subject to the terms of the Escrow Agreement, Buyer may make a claim,
during the first twelve (12) months following the Closing Date (the “Escrow
Period”), to recover from the Escrow Funds an amount equal to the amount
credited or refunded to the customer (the “Escrow Claim Amount”). Buyer’s
sole source of recovery under this Section 2.8 will be the Escrow
Funds.  Seller will use its reasonable
best efforts to close out or reduce consigned Inventory prior to the Closing.

 

2.9                               Allocation
of Purchase Price.

 

Prior to the Closing Date, Buyer and Seller shall
allocate the Purchase Price, the Assumed Liabilities, and all other relevant
items (including, for example, any adjustments or additions to the Purchase
Price), in accordance with Section 1060 of the Code (and any similar
provision of state, local or foreign law, as appropriate) (the “Purchase
Price Allocation”).  A schedule
setting forth the parties’ agreement on such Purchase Price Allocation shall be
agreed upon by the parties prior to the Closing; provided that the Purchase
Price Allocation shall 

 

7

 

allocate $8,500,000 to
Seller’s goodwill and the Proprietary Rights
included as part of the Purchased Assets.  In the event that, after the Purchase Price
Allocation is determined, the Purchase Price is adjusted, the Purchase Price
Allocation shall also be adjusted.  To
the extent permitted by the Code or other applicable tax law, any adjustments
to the Purchase Price shall be allocated, to the extent possible, to the
classes of assets that were the subject of the adjustments to the Purchase
Price.  The Purchase Price Allocation,
including any adjustments thereto, will be binding on Buyer and Seller.  Each of the Parties shall file all Tax
Returns (including amended returns, claims for refunds, and IRS Form 8594)
in a manner consistent with the Purchase Price Allocation, including any
adjustments thereto.  No party will take
any position (whether in audits or similar proceedings, Tax Returns, refund
claims, or otherwise) that is inconsistent with such allocation, except as required
to do so by applicable Law.  Each of
Buyer and Seller (and Seller’s Affiliates, as applicable) will use its
commercially reasonable best efforts to sustain such allocation in any
subsequent audit, similar proceeding, appeal, or court proceeding.

 

3.                                      Closing.

 

3.1          The Closing.

 

Unless earlier terminated pursuant to Section 9,
the parties agree that the Closing under this Agreement will be held on the
later of  February 9, 2009  or on the fifth business day after the satisfaction or
waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby, or at such other place, day and time as Buyer
and Seller shall mutually agree upon. The consummation of the transactions
contemplated by this Agreement shall be deemed to be effective at such place,
day and time as agreed to by the parties and are sometimes referred to in this
Agreement as the “Closing,” and such date is sometimes referred to as
the “Closing Date.”

 

3.2          Closing Deliveries of Seller.

 

At the Closing, Seller shall, in addition to other
items specified elsewhere in this Agreement, take the following actions:

 

(a)           Seller will execute and deliver to Buyer a bill
of sale for the Purchased Assets in the form of the attached Exhibit 3.2(a) (the
“Bill of Sale”).

 

(b)           Seller will execute and deliver an assignment
and assumption agreement in the form of the attached Exhibit 3.2(b) (the
“Assignment and Assumption
Agreement”).

 

(c)           Seller will execute and
deliver an escrow agreement in the form of the attached Exhibit 3.2(c) (the
“Escrow Agreement”).

 

(d)           Seller will execute and
deliver certificates of title with respect to all titled property which is
included in the Purchased Assets.

 

(e)           Seller will deliver payoff
letters and releases of all encumbrances on any of the Purchased Assets,
including, all required UCC-3 termination statements or other evidences of
discharge satisfactory to Buyer.

 

8

 

(f)                                    Seller will deliver a copy of Seller’s
articles of incorporation and bylaws, certified as a true and correct copy by
Seller’s secretary (or other authorized officer).

 

(g)                                 Seller will deliver a certificate of
standing showing that Seller is duly incorporated, validly existing and in good
standing in the state of Delaware as of a date  within
five (5) business days of the Closing Date.

 

(h)                                 Seller will deliver certified resolutions
of Seller’s board of directors and the Shareholder’s managers approving the
Transactions and the execution, delivery and performance of this Agreement and
the Related Agreements to which Seller is a party.

 

(i)                                     Seller will have provided Buyer evidence
that all Seller Consents have been obtained or given in accordance with this Agreement.

 

(j)                                     Seller will execute and deliver to Buyer
a certificate stating that the conditions set forth in Section 8.1(a),
(b) and (c) have been satisfied.

 

3.3                               Closing Deliveries of
Buyer.

 

At the Closing, Buyer shall, in addition to other
items specified elsewhere in this Agreement, take the following actions:

 

(a)                                  Buyer will pay the Cash Purchase Price in
accordance with Section 2.5.

 

(b)                                 Buyer will pay the Adjustable Cash
Purchase Price in accordance with Section 2.5.

 

(c)                                  Buyer will execute and deliver the
Assignment and Assumption Agreement.

 

(d)                                 Buyer will execute and deliver the Escrow
Agreement.

 

(e)                                  Buyer will execute and deliver a New
Jersey resale exemption certificate for the purchase of the Inventory.

 

(f)                                    Buyer will deliver a copy of Buyer’s
articles of incorporation and bylaws, certified as a true and correct copy by
Buyer’s secretary (or other authorized officer).

 

(g)                                 Buyer will deliver governmental
certificates showing that Buyer is duly organized, validly existing and in good
standing in the state of New Jersey as of a date within five (5) business
days of the Closing Date.

 

(h)                                 Buyer will deliver certified resolutions
of Buyer’s board of directors approving the Transactions and the execution,
delivery and performance of this Agreement and the Related Agreements to which
Buyer is a party.

 

(i)                                     Buyer will execute and deliver to Seller
a certificate stating that the conditions set forth in Section 8.2(c) and
(d) have been satisfied.

 

9

 

4.                                      Representations and
Warranties of Seller.

 

Seller represents and warrants to Buyer that the
statements made in this Section 4 are true and correct as of the
date of this Agreement and will be true and correct as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section 4), except as set forth
in the schedules to be delivered by Seller to Buyer upon execution of this
Agreement by Seller and Buyer.

 

4.1                               Organization; Power and
Authority; Authorization; Due Execution; No Conflicts.

 

(a)                                  Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of Delaware.  Seller has the requisite
corporate power and authority to (i) own and operate the Purchased Assets,
(ii) carry on the Business as it is presently being conducted, (iii) enter
into this Agreement and the Related Agreements to which it is a party, and (iv) consummate
the Transactions.

 

(b)                                 This Agreement
and the Related Agreements to which Seller is a party have been duly authorized
by Seller and by all necessary corporate action on the part of Seller, and no
other proceedings are necessary on the part of Seller to authorize the
execution, delivery and performance of this Agreement and the Related
Agreements.  This Agreement and the Related Agreements to which
Seller is a party, when executed and delivered, will constitute the legal,
valid and binding obligation of Seller, enforceable against Seller in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting enforcement of creditors’ rights generally and by general
principles of equity (whether applied in a proceeding at Law or in equity).

 

(c)                                  Seller’s execution, delivery and
performance of this Agreement and the Related Agreements to which it is a party
and the consummation of the Transactions by Seller do not and will not conflict
with, result in a violation or breach of, constitute a default (or an event
which with the giving of notice or the lapse of time or both would constitute a
default) or give rise to any right of termination, amendment, cancellation or
acceleration of any right or obligation of Seller under, or result in any loss
of any material benefit to which Seller is entitled, or result in the creation
or imposition of any lien upon any of the Purchased Assets, under the terms of (i) Seller’s
articles of incorporation or bylaws, (ii) any Law applicable to Seller or
binding on the Purchased Assets, or (iii) any agreement, indenture, deed
of trust, mortgage, loan agreement or other instrument to which Seller is a
party or by which Seller or the Purchased Assets may be bound, except, in the
case of (ii) and (iii) above, as would not reasonably be expected to
have a Material Adverse Effect.

 

4.2                               Title to and Condition of
Purchased Assets.

 

(a)                                  Seller has, and at the Closing Buyer will
receive, good, valid and marketable title or license to each and all of the Purchased
Assets, free and clear of all security interests, mortgages, liens (statutory
or otherwise), pledges, charges, imperfections of title, restrictions, prior
assignments, easements, leases, licenses or sublicenses, options, rights of
first 

 

10

 

refusal or first offer and encumbrances of any nature
(including any conditional sale of other title retention agreement and any
lease having substantially the same effect as any of the foregoing and any
assignment or deposit arrangement in the nature of a security device), except
for the liens, encumbrances and leases identified on Schedule 4.2(a) to
this Agreement.

 

(b)                                 The Purchased Assets constitute all
material properties, assets and rights used in the conduct of the Business. The
tangible Purchased Assets are in good operating condition (subject to normal
wear and tear and routine maintenance), and are suitable for the purposes for
which they are presently used.

 

(c)                                  The Inventory was acquired and has been
maintained in the ordinary course of business and consists of items of a
quality useable or saleable in the ordinary course of business.

 

4.3                               Claims; Litigation;
Compliance with Laws.

 

(a)                                  Except as set forth on Schedule 4.3,
there are no material actions, suits, proceedings, orders, judgments, decrees
or investigations before or by any Governmental Authority, pending or, to
Seller’s knowledge, threatened against (i) Seller or the Business, (ii) any
of the Purchased Assets or (iii) Seller’s ability to consummate the
Transactions.

 

(b)                                 Seller does not own, and is not
operating, the Business or the Purchased Assets, and Seller is not carrying on
or conducting the Business, in violation of any Law presently in effect which
has or would reasonably be expected to have a Material Adverse Effect.

 

4.4                               Permits; Licenses.

 

Schedule 4.4 sets forth all material Permits Seller has with
respect to the Business or the Purchased Assets (other than Permits that relate
specifically to the operation of the Business at Seller’s Hackettstown, New
Jersey facility (“Seller’s Facility”)). 
Except as set forth on Schedule 4.4, Seller has all Permits
required under any Law for the operation of the Business and the ownership and
operation of the Purchased Assets, except where such failure to hold a Permit
would not reasonably be expected to have a Material Adverse Effect or where
such Permits relate specifically to the operation of the Business at Seller’s
Facility.  Except as set forth on Schedule
4.4, Seller is in compliance in all material respects with all Permits, and
to Seller’s Knowledge, Seller is neither in default nor has it received any
written notice of any claim of default with respect to any such Permit, except
where such a default or notice relates specifically to the operation of the
Business at Seller’s Facility.

 

4.5                               Assigned Agreements.

 

Except as set forth on Schedule 4.5, each of
the Assigned Agreements is valid, binding and enforceable in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting enforcement of
creditors’ rights generally and by general principles of equity (whether
applied in a proceeding at Law or in equity). 
Except as set forth on Schedule 4.5, Seller is not, and, to
Seller’s Knowledge, no other party is, in breach or default under the Assigned
Agreements nor has any such default been asserted by any such party in writing.

 

11

 

4.6                               Proprietary Rights.

 

Schedule 4.6 contains a list of all Proprietary Rights that are
included in the Purchased Assets.  To
Seller’s Knowledge, the Proprietary Rights listed on Schedule 4.6 do not
infringe, violate or constitute an unauthorized use or misappropriation of any
rights of any Person. As of the date hereof, Seller is not the subject of any
pending or, to Seller’s Knowledge, threatened legal proceedings which involve a
claim of infringement, misappropriation, unauthorized use, or violation of any
such Proprietary Rights by any Person against Seller or challenging the
ownership, use, validity or enforceability of any such Proprietary Rights.

 

4.7                               Taxes.

 

Except as set forth in Schedule 4.7:

 

(a)                                  All Tax Returns of Seller relating to the
Business or the Purchased Assets, have been duly and timely filed or have been
duly and timely extended in accordance with applicable Laws, and such Tax
Returns are true, correct and complete and correctly reflect (or, in the case
of Tax Returns to be filed, will correctly reflect) the facts regarding income,
business, assets, operations, activities, status or other matters of Seller or
other information required to be shown thereon. 
All Taxes owed by Seller or relating to the Business or the Purchased
Assets (whether or not shown on such Tax Returns) have been paid as of the
Closing or will be paid when due and payable. There are no liens for Taxes upon
any of the Purchased Assets.

 

(b)                                 No Tax audits or other administrative
proceedings with respect to Taxes are pending with respect to Seller, the
Business or the Purchased Assets. Seller has not received any written notice of
deficiency or assessment from any Governmental Authority responsible for Taxes
with respect to Liabilities for Taxes which have not been fully paid or finally
settled.

 

(c)                                  Seller is not a “foreign person” within
the meaning of Section 1445(f)(3) of the Code.

 

(d)                                 No waiver of any statute of limitations
with respect to Taxes relating to the Purchased Assets or the Business, is
currently in effect.  There has not been
any agreement to an extension of time made with respect to a Tax assessment or
deficiency with respect to Taxes of Seller, or relating to the Purchased Assets
or the Business.

 

4.8                               Environmental Matters.

 

Except as set forth on Schedule
4.8, to Seller’s Knowledge, Seller has not used any of the Purchased Assets
to produce, generate, store, handle, transport or dispose of any Hazardous
Substance in violation of any Environmental Law.

 

4.9                               Consents.

 

Except as set forth on Schedule 4.9, no
material consent, approval, authorization, license or order of, registration or
filing with, or notice to, any Governmental Authority as of the Closing Date is
necessary to be obtained, made or given by Seller in connection with the
execution, 

 

12

 

delivery and performance
by Seller of this Agreement or the consummation by Seller of the Transactions.

 

4.10                        Brokers.

 

Seller (i) has not dealt with any broker or
finder in connection with the Transactions; (ii) has not caused or created
any Liability to any broker in connection with the Transactions; and (iii) is
not aware of any claim from any third party that it is entitled to brokerage,
finders or other similar fees in connection with the Transactions.

 

5.                                      Representations and
Warranties of Buyer.

 

Buyer represents and warrants to Seller that the
statements made in this Section 5 are true and correct as of the
date of this Agreement and will be true and correct as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section 5).

 

5.1                               Organization; Power and
Authority; Authorization; Due Execution; No Conflicts.

 

(a)                                  Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws the state of New Jersey.  Buyer has
the requisite corporate  power and
authority to enter into this Agreement and the Related Agreements to which it
is a party and to consummate the Transactions.

 

(b)                                 This Agreement
and the Related Agreements to which Buyer is a party have been duly authorized
by Buyer and by all necessary corporate  action on the
part of Buyer, and no other proceedings are necessary on the part of Buyer to
authorize the execution, delivery and performance of this Agreement and such
Related Agreements.  This Agreement and
the Related Agreements to which Buyer is a party, when executed and delivered,
will constitute the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting enforcement of creditors’ rights generally and by general
principles of equity (whether applied in a proceeding at Law or in equity).

 

(c)                                  Buyer’s
execution, delivery and performance of this Agreement and the Related
Agreements to which it is a party and the consummation of the Transactions by Buyer do not and will not conflict with, result in a breach or
violation of, constitute a default (or an event which with the giving of notice
or the lapse of time or both would constitute a default) or give rise to a
right of termination, amendment, cancellation or acceleration of any right or
obligation of Buyer under, or result in any loss of any benefit to which Buyer
is entitled, or result in the creation or imposition of any lien upon any
assets or properties of Buyer under the terms of (i) Buyer’s articles of
incorporation or bylaws, (ii) any Law applicable to Buyer or binding on
its assets, or (iii) any agreement, indenture, deed of trust, mortgage,
loan agreement or other instrument to which Buyer is a party or which Buyer or
any of its assets or properties may be bound, except, in the case of (ii) and
(iii) above, as would not reasonably be expected to have a material
adverse effect on the consummation of the Transactions.

 

13

 

5.2                               Brokers.

 

Buyer
(i) has not dealt with any broker or finder in connection with the
Transactions; (ii) has not caused or created any Liability to any broker
or finder in connection with the Transactions; or (iii) is not aware of
any claim from any third party that it is entitled to brokerage, finders or
other similar fees in connection with the Transactions.

 

5.3                               Financial Ability.

 

Buyer has sufficient cash
funds available to pay the Purchase Price, and Buyer’s payment of the Purchase
Price will not render Buyer insolvent.

 

5.4                               Consents.

 

Except as set forth on Schedule 5.4, no
material consent, approval, authorization, license or order of, registration or
filing with, or notice to, any federal, state, local, foreign or other court,
administrative agency or commission, other Governmental Authority or regulatory
body or any other Person as of the Closing Date is necessary to be obtained,
made or given by Buyer in connection with the execution, delivery and
performance by Buyer of this Agreement or the consummation by Buyer of the
Transactions.

 

5.5                               WARN Act.

 

Buyer agrees that it will comply in all respects with
the Federal Worker Adjustment and Retraining Notification Act of 1988, as
amended (the “WARN Act”) and any applicable state plant closing or mass
layoff Laws or regulations.  Seller will
terminate all of its employees affected by the Transactions prior to or at the
Closing, regardless of whether Buyer might subsequently hire such employees.

 

6.                                      Buyer Acknowledgement.

 

6.1                               No Other Representations or Warranties.

 

(a)                                  Buyer
acknowledges and agrees that neither Seller nor the Shareholder have made any
representation or warranty, express or implied, as to the Business or the
Purchased Assets or as to the accuracy or completeness of any information
regarding either the Business or the Purchased Assets furnished or made
available to Buyer and its representatives, except as expressly set forth in
this Agreement.  Except as expressly set
forth in this Agreement, neither Seller nor the Shareholder shall have or be
subject to any Liability to Buyer or any party resulting from the distribution
to Buyer, or Buyer’s use of or reliance on, any such information, documents or
material made available to Buyer in any data rooms, management presentations or
in any other form in expectation of, or in connection with, the transactions
contemplated by this Agreement.

 

(b)                                 Buyer 
acknowledges that as of the date hereof, it has been given the
opportunity to inspect, analyze, review and evaluate all of the Purchased
Assets as it and its representatives have deemed necessary, subject to the
terms hereof.  Except as otherwise
specifically set forth in this Agreement, the Purchased Assets are furnished at
the Closing “AS 

 

14

 

IS,” “WHERE IS” AND, SUBJECT TO THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN  SECTION 4.2, WITH ALL FAULTS AND WITHOUT ANY OTHER
REPRESENTATION OR WARRANTY OF ANY NATURE WHATSOEVER, EXPRESS OR IMPLIED, ORAL
OR WRITTEN, AND IN PARTICULAR, WITHOUT ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.

 

7.                                      Covenants.

 

7.1                               Conduct Through the
Closing Date.

 

Except as otherwise contemplated by this Agreement, or
with written consent of Buyer (which consent will not be unreasonably withheld
or delayed), during the period from the date of this Agreement to the Closing
Date, Seller will use its commercially reasonably efforts to:

 

(a)                                  conduct the Business in
the ordinary course of business as historically conducted;

 

(b)                                 not dispose of any of
the Purchased Assets material to the operation of the Business (other than in
the ordinary course of business) and maintain the Purchased Assets in
substantially the same operating condition and repair, ordinary wear and tear
excepted, as the Purchased Assets are in on the date hereof;

 

(c)                                  not terminate or amend
in any material respect any Assigned Agreement, except in the  ordinary course of business;

 

(d)                                 not mortgage or pledge
any of the Purchased Assets, or create any Lien upon the Purchased Assets
except for such liens set forth on Schedule 7.1(d) (the “Permitted
Liens”); and

 

(e)                                  not agree in writing to
do any of the foregoing.

 

7.2                               Bulk Sales Notification
Requirements.

 

(a)                                  At least ten (10) days prior to the
Closing Date, Buyer shall complete, execute and deliver to the State of New
Jersey, Department of Treasury, Division of Taxation, a “Notification of Sale,
Transfer, or Assignment in Bulk” form, unless Seller waives this requirement in
writing.  Prior to the Closing, Buyer
shall deliver evidence reasonably acceptable to Seller that Buyer has complied
with the bulk sales requirements of the New Jersey, Department of Treasury, Division
of Taxation.

 

(b)                                 At least ten (10) days prior to the
Closing Date, Seller shall complete, execute and deliver to the State of New
Jersey, Department of Treasury, Division of Taxation, an “Asset Transfer Tax
Declaration” form, unless Buyer waives this requirement in writing.  Prior to the Closing, Seller shall deliver
evidence reasonably acceptable to Buyer that Seller has complied with the bulk
sales requirements of the New Jersey, Department of Treasury, Division of
Taxation.

 

15

 

7.3                               Consents.

 

Prior to the Closing Date, Seller will use
commercially reasonably efforts to obtain, in writing, all necessary
governmental and third party approvals, licenses, permits and consents required
in order to enable Seller to (i) authorize and approve this Agreement and
the Related Agreements, and (ii) consummate the Transactions (the “Seller
Consents”), including the items indicated on Schedule 4.9.

 

7.4                               Advice of Changes Prior to
Closing.

 

Between the date of this Agreement and the Closing
Date, the parties will promptly notify each other in writing of any fact which,
if existing or known at the date of this Agreement, would have been required to
be set forth in this Agreement or disclosed pursuant to this Agreement.  Seller shall give Buyer prompt written notice
of any changes in any of the information contained in the representations and
warranties made in Section 4 or elsewhere in this Agreement or the
attached schedules which occurs at or prior to the Closing. No notice or
disclosure provided by Seller pursuant to this Section 7.4,
however, shall be deemed to amend or supplement any schedule hereto or to
prevent or cure any misrepresentation, breach of warranty or breach of
covenant. Notwithstanding the foregoing, if, after receiving notice or
obtaining knowledge of any information under the preceding sentence, Buyer
chooses to consummate the Closing, then any misrepresentation, breach of
warranty or beach of covenant arising therefrom will be deemed irrevocably waived
without remedy.

 

7.5                               Notice of Litigation.

 

Each party shall promptly notify the other in writing
if it receives any notice, or otherwise becomes aware, of any action or
proceeding instituted or threatening before any court or Governmental Authority
by any third party to (i) restrain or prohibit, or obtain damages in
respect of this Agreement, (ii) prevent
the consummation of the sale and purchase of the Purchased Assets or any other
transactions contemplated by this Agreement or the Related Agreements, (iii) cause
the sale and purchase of the Purchased Assets or any of the other transactions
contemplated by this Agreement or the Related Agreements to be rescinded
following consummation, or (iv) affect adversely the right of Buyer to own
the Purchased Assets and to operate the Business (and no such injunction,
judgment, order, decree, ruling or charge will be in effect).

 

7.6                               Access to Records;
Inspection.

 

From the date of this Agreement through the Closing
Date, Buyer and its counsel, accountants and other representatives will be
given full access, upon reasonable notice to Seller and during Seller’s normal
business hours (or such other times designated by Seller), to all of the
premises, personnel, financial and operating data, books, Tax Returns, contracts,
commitments and records of Seller relating to the Business and the Purchased
Assets.

 

7.7                               Exclusivity.

 

Unless this Agreement is terminated pursuant to Section 9,
Seller shall not, directly or indirectly, (i) submit, solicit, initiate,
encourage or discuss any proposal or offer from any Person 

 

16

 

(other than Buyer in
connection with the transactions contemplated hereby) or enter into any
agreement or accept any offer relating to or consummate any (a) reorganization,
liquidation, dissolution or recapitalization of Seller, (b) merger or
consolidation involving Seller, (c) purchase or sale of any Purchased
Assets or capital stock (or any rights to acquire, or securities convertible
into or exchangeable for, any such capital stock) of Seller, except for sales
of Inventory in the ordinary course of business consistent with past practice,
or (d) similar transaction or business combination involving Seller or the
Purchased Assets (each of the foregoing transactions described in clauses (a) through
(d), a “Company Transaction”) or (ii) furnish any information with
respect to, assist or participate in or facilitate in any other manner any
effort or attempt by any Person (other than Buyer) to do or seek to do any of
the foregoing.  Seller agrees to notify
Buyer immediately if any Person makes any written proposal, offer or inquiry
with respect to a Company Transaction.

 

7.8                               Litigation Support.

 

(a)                                  In the event and for so long as any party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand (including any
audit relating to Taxes) in connection with (i) any transaction
contemplated under this Agreement, or (ii) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction relating to the Purchased Assets or the
Business, the other party (and its counsel) will cooperate with the contesting
or defending party and its counsel, in the contest or defense, make available
their personnel, and provide such testimony and access to their books and
records as will be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party
(unless the contesting or defending party is entitled to indemnification
therefor under Section 10).

 

(b)                                 Each party agrees to (i) furnish or
cause to be furnished to other party, at the expense of the requesting party,
as promptly as practicable, such information and assistance relating to the
Business or Purchased Assets as is reasonably necessary for the preparation and
filing of any Tax Return, for the preparation for and proof of facts during any
Tax audit, for the preparation for any Tax protest, for the prosecution or
defense of any suit or other proceeding relating to Tax matters and for the
answer of any governmental or regulatory inquiry relating to Tax matters, (ii) retain
and provide to the requesting party all records (or copies thereof) and other
information that may be reasonably relevant to any such Tax Return, audit, or
examination, proceeding, or determination, and (iii) provide the
requesting party with any final determination of any such audit, or examination,
proceeding, or determination that affects any amount required to be shown on
any Tax Return of the requesting party for any Tax period.  Without limiting the generality of the
foregoing, each party will retain, until the expiration of the applicable
statute of limitation (including any extensions thereof) copies of all Tax
Returns (other than income, franchise or similar Tax Returns), and any
supporting work schedules and other records, relating to the Purchased Assets
or Business for any Tax period (or the portion thereof) ending on or before the
Closing.

 

17

 

8.             Conditions
Precedent to the Parties Obligations to Close.

 

8.1          Buyer’s Conditions Precedent.

 

Buyer’s obligations under this Agreement are subject to the satisfaction at
or before the Closing Date of each of the following conditions (the fulfillment
of any of which may be waived in writing by Buyer):

 

(a)           All terms, covenants and conditions of this Agreement to be complied
with or performed by Seller prior to or on the Closing Date will have been
complied with and performed by Seller, including Seller’s timely taking of all
actions and delivery of all documents required to be taken and delivered by it
under this Agreement (under Section 3.2 or otherwise) and any
Related Agreement to which Seller is a party.

 

(b)           All representations, warranties, disclosures and statements of Seller
contained in this Agreement and any Related Agreement to which Seller is a
party will be true and complete in all material respects (except for those
qualified as to materiality, which shall be true and complete in all respects)
as of the date of this Agreement and the Closing Date.

 

(c)           There
will not have been or occurred any event, change, occurrence or circumstance
affecting the Purchased Assets that has had or would reasonably be expected to
have a Material Adverse Effect.

 

8.2          Seller’s Conditions Precedent.

 

Seller’s obligations under
this Agreement are subject to the satisfaction at, or prior to, the Closing
Date of the following conditions precedent (the fulfillment of any of which may
be waived in writing by Seller):

 

(a)           Seller shall have obtained all Seller Consents.

 

(b)           Any required noticed under the WARN Act, or any applicable state plant
closing or mass layoff Laws or regulations, required to be sent by Seller has
become effective so Seller does not have any Liability under the WARN Act, or
any applicable state plant closing or mass layoff Laws or regulations.

 

(c)           All terms, covenants and conditions of this Agreement to be complied
with or performed by Buyer prior to or on the Closing Date will have been
complied with and performed by Buyer, including Buyer’s timely taking of all
actions and delivery of all documents required to be taken and delivered by it
under this Agreement (under Section 3.2 or otherwise) and any
Related Agreement to which it is a party.

 

(d)           The representations, warranties, disclosures and statements of Buyer
contained in this Agreement and any related agreement to which Buyer is a party
will be true and complete in all material respects (except for those qualified
as to materiality, which shall be true and complete in all respects) as of the
date of this Agreement and on the Closing Date.

 

18

 

8.3          Mutual Condition Precedent.

 

Unless waived in writing by
each party, it will be a further condition to the consummation of the
Transactions that no litigation will have been commenced or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (i) prevent
the consummation of the sale and purchase of the Purchased Assets or any other
transactions contemplated by this Agreement or the Related Agreements, (ii) cause
the sale and purchase of the Purchased Assets or any of the other transactions
contemplated by this Agreement or the Related Agreements to be rescinded
following consummation, or (iii) affect adversely the right of Buyer to
own the Purchased Assets and to operate the Business (and no such injunction,
judgment, order, decree, ruling or charge will be in effect).

 

9.             Termination.

 

This Agreement may be
terminated at any time before the Closing as follows:

 

(a)           At the election of Buyer, by written notice to
Seller, if (i) any of Buyer’s conditions precedent to the Closing, as
specified Section 8.1 or 8.3, has not been satisfied or
waived as of the Closing Date, or (ii) the Closing Date has not occurred
by March 31, 2009.

 

(b)           At
the election of Seller, by written notice to Buyer, if (i) any of Seller’s
conditions precedent to the Closing, as specified Section 8.2 or 8.3,
has not been satisfied or waived as of the Closing Date, or (ii) the
Closing Date has not occurred by March 31, 2009.

 

(c)           If
this Agreement terminates in accordance with this Section 9, it
will be null and void and have no further force or effect, except that each
party will have the right to sue the other for the breach of this Agreement.
The parties’ rights under this Section 9 are cumulative and are in
addition to the other rights and remedies available to them under any other
provision of this Agreement, any other agreement or applicable Law.

 

10.          Indemnification.

 

10.1        Indemnification by Seller and the Shareholder.

 

Regardless of any investigation made at any time by or
on behalf of Buyer or any information Buyer or any of its directors, officers,
employees, representatives, agents, attorneys, accountants, or consultants may
have, Seller and the Shareholder, jointly and severally, shall indemnify,
defend and hold harmless Buyer and each of its Affiliates, shareholders,
directors, officers, employees, agents, accountants, attorneys and
representatives (collectively, with Buyer, the “Buyer Indemnified Parties”)
from and against any demand, claim, action, cause of action, damage, Liability,
loss, cost, debt, deficiency, expense, obligation, Tax, assessment, public
charge, lawsuit, contract, agreement, and undertaking of any kind or nature,
whether known or unknown, fixed, actual, accrued or contingent, liquidated or
unliquidated, and whether or not asserted by a third party (including,
interest, penalties, additional federal, state or local Taxes, reasonable attorneys’ fees and other
costs and expenses incident to this transaction or 

 

19

 

proceedings or
investigations or the defense of any claim, whether or not litigation has
commenced) (“Losses”) arising out of, resulting from, or relating to any
of the following:

 

(a)           any breach by Seller of any of its representations and warranties made
in this Agreement or any other agreement or instrument delivered by Seller
pursuant to this Agreement;

 

(b)           any
breach by Seller of any of its covenants
or agreements made in this Agreement or any other agreement or instrument
delivered by Seller pursuant to this Agreement;

 

(c)           any Excluded Liability or Excluded Asset; and

 

(d)           any Taxes of Seller or Taxes related to the
Purchased Assets or the Business for periods (or portions thereof) ending on or
before the Closing Date.

 

10.2        Indemnification by Buyer.

 

Buyer shall indemnify, defend and hold harmless
Seller, and each of its Affiliates, shareholders, directors, officers,
employees, agents, accountants, attorneys and representatives from and against
any Losses arising out of, resulting from, or relating to any of the following:

 

(a)           any breach by Buyer of any of its representations and warranties made
in this Agreement or any other agreement or instrument delivered by Buyer
pursuant to this Agreement;

 

(b)           any
breach by Buyer of any of its covenants
or agreements made in this Agreement or any other agreement or instrument
delivered by Buyer pursuant to this Agreement; and

 

(c)           any Taxes of Buyer or Taxes related to the Purchased Assets for periods
(or portions thereof) commencing after the Closing Date.

 

10.3        Indemnification Procedures.

 

In the case of any claim asserted by a third party
against a party entitled to indemnification under this Agreement (the “Indemnified
Party”), notice shall be given by the Indemnified Party to the party required
to provide indemnification (the “Indemnifying Party”) promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and the Indemnified Party shall permit the Indemnifying Party
(at the expense of such Indemnifying Party) to assume the defense of any claim
or any litigation resulting therefrom; provided that (i) the counsel for
the Indemnifying Party who shall conduct the defense of such claim or
litigation shall be reasonably satisfactory to the Indemnified Party, (ii) the
Indemnified Party may participate in such defense at such Indemnified Party’s
expense and (iii) the omission by any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its indemnification
obligation under this Agreement, except to the extent that such omission
results in a failure of actual notice to the Indemnifying Party and such
Indemnifying Party is prejudiced as a result of such failure to give
notice.  Except with the prior written
consent of the Indemnified Party, no Indemnifying Party, in the defense of any
such 

 

20

 

claim or litigation,
shall consent to entry of any judgment or enter into any settlement that
provides for injunctive or other non-monetary relief affecting the Indemnified
Party or that does not include as an unconditional term thereof the giving by
each claimant or plaintiff to such Indemnified Party of a release from all
Liability with respect to such claim or litigation.

 

10.4        Survival of Indemnification Obligations.

 

The indemnities provided in this Section 10
shall survive the Closing, except that:

 

(a)           All
representations and warranties contained in this Agreement shall survive the
Closing for a period of six (6) months and then expire except for written
claims made prior to such expiration, and except as otherwise expressly
provided below.

 

(b)           All
representations and warranties regarding taxes (contained in Section 4.7)
shall survive until sixty (60) days following the expiration of the applicable
statute of limitations period.

 

(c)           All
representations and warranties regarding authority to enter into this Agreement
(contained in Sections 4.1 and 5.1) and Seller’s title to the
Purchased Assets (contained in Section 4.2(a)) shall survive
indefinitely.

 

10.5        Limitation of Indemnification; Other Indemnification
Matters.

 

(a)           No
Indemnifying Party will be required to indemnify the other party or pay or
assume any claims with respect to a breach of a representation or warranty
under Section 10.1(a) or 10.2(a), as the case may be,
until the Indemnified Party incurs, is exposed to, or has paid Losses with
respect to such claims for indemnification which, but for this Section 10.5,
would require indemnification or payment or reimbursement by the Indemnifying
Party in an amount in excess of $250,000 in the aggregate (the “Basket”);
provided, however, that when such party is exposed to, has paid,
or has incurred expenses or claims with respect to such claims for
indemnification which, except for the immediately preceding sentence, exceed
the Basket, then such party shall be entitled to be reimbursed by the
Indemnifying Party only for the amount of such claim in excess of the
Basket.  The aggregate Liability of
Seller for indemnification obligations described in Section 10.1(a) shall
not exceed $1,250,000.

 

(b)           None
of the parties will have any Liability to another party under this Section 10
for any Loss to the extent (i) such Loss relates to a Liability or matter
with respect to which the aggrieved party has made recovery from a Person other
than another party to this Agreement (to the extent of such recovery), (ii) such
Loss would not have arisen but for a voluntary act or omission after the
Closing by the aggrieved party or at the request of the aggrieved party, or (iii) such
Loss relates to any breach or inaccuracy of any representation or warranty by
the other party of which the aggrieved party had knowledge immediately before
the Closing, including, without limitation, any matter disclosed on the
schedules attached hereto.

 

(c)           No
party shall be entitled to recover Losses in respect of any claim or otherwise
obtain reimbursement or restitution more than once with respect to any claim
hereunder.  In no event shall Buyer be
entitled to recover or make a claim for any amounts in respect of
consequential, incidental or indirect damages, lost profits or punitive damages
and, in 

 

21

 

particular, no “multiple
of profits” or “multiple of cash flow” or similar valuation methodology shall
be used in calculating the amount of any Losses, unless such Losses are
actually received by a third party.

 

(d)           If
any party makes any indemnification payment by reason of the Transactions
contemplated by this Agreement or under any other theory of recovery, such
party shall be subrogated, to the extent of such payment and to the extent
permitted by Law, to any rights and remedies of the aggrieved party to recoup
amounts paid from third parties with respect to the matters giving rise to
indemnification hereunder.

 

(e)           Except
as expressly set forth in a Related Agreement, the parties’ sole and exclusive
remedies with respect to any and all claims relating to the subject matter of
this Agreement shall be pursuant to the indemnification provisions set forth in
this Section 10; provided that nothing in this Section 10
will limit rights or remedies expressly provided for in any other agreement
executed pursuant to this Agreement or rights or remedies which, as a matter of
applicable Law or public policy, cannot be limited or waived.

 

(f)            The
amount of any and all Losses under this Section 10 shall be
determined net of any amounts recovered by the Indemnified Party under
insurance policies, indemnities or other reimbursement arrangements with
respect to such Losses.

 

11.          Post-Closing
Transfer of Purchased Assets.

 

Following the
Closing Date, Buyer shall have sixty (60) days (the “Removal Period”) to
remove the Purchased Assets from Seller’s Facility without being responsible to
pay Seller any storage fees. If Buyer maintains the Purchased Assets at Seller’s
Facility beyond the Removal Period, Buyer shall elect to use the Seller’s
Facility for an additional period of thirty (30) days (the “Extension Period”).  Buyer may renew the Extension Period for
successive periods of thirty (30) days (each an “Extension Period”);
provided that the total Extension Periods do not exceed 180 days after the
Closing Date.  For each Extension Period,
Buyer shall pay Seller in advance an amount equal to $4.50 per square foot that
Buyer uses of the Seller’s Facility, which includes Taxes, insurance, ordinary
maintenance costs and utility costs relating to the Seller’s Facility (the “Storage
Fee”).  This Storage Fee is based on
Buyer’s estimated use of approximately 20,000 square feet.  Without the prior written consent of Seller,
Buyer may not use more than 25,000 square feet of the Seller’s Facility.  During each Extension Period, Buyer shall be
obligated to pay Seller for all extraordinary costs and damages to Seller’s
Facility resulting from Buyer’s short term occupancy of Seller’s Facility, and
Buyer’s use of Seller’s Facility shall be limited to storage of the Purchased
Assets.  To the extent Buyer desires to
occupy Seller’s Facility for more than 180 days after the Closing Date, Buyer
and Seller may separately negotiate the terms for such additional
occupancy.  At all times, Buyer shall be
responsible to pay for all costs associated with the removal of the Purchased
Assets from Seller’s Facility, including any necessary repairs to Seller’s
Facility arising from or relating to the removal of the Purchased Assets.  Buyer shall fully indemnify and save Seller
harmless from any and all Liabilities which may be incurred by Seller arising
out of Buyer’s use of Seller’s Facility, including any injuries to person or
property.   If Seller notifies Buyer that
a third party is interested in leasing substantially all of the space within
the Seller’s Facility, then Buyer will use its best efforts to expedite Buyer’s
departure from the Seller’s Facility.

 

22

 

12.          Miscellaneous.

 

12.1        Expenses.

 

Except as otherwise provided
in this Agreement, each party will pay its own expenses incident to the
preparation and carrying out of this Agreement, any due diligence, and the
Transactions, including all fees of counsel, accountants, investment bankers
and other experts.

 

12.2        Assignment.

 

  This Agreement will be binding upon and inure
to the benefit of the parties and their respective successors and assigns.  No party may assign its rights, privileges or
obligations under this Agreement without the prior written consent of the other
party, and any attempted assignment without the written consent of the other
party will be void.

 

12.3        Notice.

 

Any notice or communication
under this Agreement will be in writing and either delivered personally, sent
by certified or registered mail, postage prepaid, delivered by a recognized
overnight courier service, or transmitted via facsimile with confirmation
receipt of such notice, addressed as follows:

 

	
   

  	
  If to Seller:

  	
  COMPAC CORPORATION

  
	
   

  	
   

  	
  c/o TRIMAS COMPANY LLC

  
	
   

  	
   

  	
  39400 Woodward Avenue,
  Suite 130

  
	
   

  	
   

  	
  Bloomfield Hills,
  Michigan 48034

  
	
   

  	
   

  	
  Attn: Joshua Sherbin

  
	
   

  	
   

  	
  Fax No.: (248) 631-5502

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Honigman Miller
  Schwartz and Cohn LLP

  
	
   

  	
   

  	
  2290 First National
  Building

  
	
   

  	
   

  	
  660 Woodward Avenue

  
	
   

  	
   

  	
  Detroit, Michigan 48226

  
	
   

  	
   

  	
  Attention: Donald J. Kunz

  
	
   

  	
   

  	
  Fax: (313) 465-7455

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Shareholder:

  	
  TRIMAS
  COMPANY LLC

  
	
   

  	
   

  	
  39400 Woodward Avenue,
  Suite 130

  
	
   

  	
   

  	
  Bloomfield Hills,
  Michigan 48034

  
	
   

  	
   

  	
  Attn: Joshua Sherbin

  
	
   

  	
   

  	
  Fax No.: (248) 631-5502

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Honigman Miller
  Schwartz and Cohn LLP

  

 

23

 

	
   

  	
   

  	
  2290 First National
  Building

  
	
   

  	
   

  	
  660 Woodward Avenue

  
	
   

  	
   

  	
  Detroit, Michigan 48226

  
	
   

  	
   

  	
  Attention: Donald J. Kunz

  
	
   

  	
   

  	
  Fax: (313) 465-7455

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Buyer:

  	
  LAMTEC Corporation

  
	
   

  	
   

  	
  700 Bartley-Chester
  Road, P.O. Box 37

  
	
   

  	
   

  	
  Flanders, New Jersey
  07836-0037

  
	
   

  	
   

  	
  Attn: Mr. John
  Post, President

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  McFall,
  Layman & Jordan, P.C.

  
	
   

  	
   

  	
  134 Broadway

  
	
   

  	
   

  	
  Bangor, PA 18013

  
	
   

  	
   

  	
  Attn: David J. Jordan
  Jr.

  
	
   

  	
   

  	
  Fax No.: (610) 588-3455

  

 

or to such other address as may be furnished in writing by either party
in the preceding manner.

 

12.4        Entire Agreement.

 

This Agreement and the
confidentiality provisions set forth in the letter agreement dated June 18,
2008, between Buyer and the TriMas Corporation, a Delaware corporation (the “Parent”)
(the “Confidentiality Provisions”) constitute the entire agreement between
the parties with respect to the subject matter of this Agreement.  The Confidentiality Provisions shall
terminate and shall be of no further force or effect effective upon the Closing
Date.  No waiver, amendment or other
modification of this Agreement will be valid unless evidenced by a writing
signed by the party or parties whose rights or obligations are affected by such
waiver, amendment or modification.

 

12.5        Press Releases and Announcements.

 

Except for any public disclosure which either party in
good faith believes is required by applicable Laws (in which case, if
practicable, the disclosing party will give the other party an opportunity to
review and comment upon such disclosure before it is made):

 

(a)           prior
to the Closing, no press releases related to this Agreement or the Transactions
or other announcements generally to the employees, customers or other Persons
having business relationships with Seller (it being understood that Buyer will
have the right to contact such Persons in connection with their investigation
of the Business and Seller with the prior written approval of Seller) will be
issued or made without the mutual approval of Seller and Buyer; and

 

24

 

(b)           after
the Closing, Seller will not make any press release or other public
announcement of or with respect to this Agreement or the Transactions without
Buyer’s written consent.

 

12.6        Interpretation.

 

(a)           This Agreement is being entered into among competent and experienced
business persons, represented by counsel, and have been reviewed by the parties
and their counsel. Therefore, any ambiguous language in this Agreement will not
necessarily be construed against any particular party as the drafter of such
language.

 

(b)           Any statement under this Agreement made by Seller to its knowledge will
be deemed to have been made to the actual conscious awareness of Lynn Brooks.

 

(c)           The captions and headings contained in this Agreement are solely for
convenience of reference and will not affect the interpretation of any
provision of this Agreement.

 

(d)           All references in this Agreement to section numbers, schedules or
exhibits are references to the sections in, or schedules or exhibits to, as
applicable, this Agreement.

 

12.7        Severability.

 

If any provision of this
Agreement is determined to be contrary to law or unenforceable by any court of
law, the provision will be reformed to provide the maximum expression of the
intent of the parties permissible under law.

 

12.8        Counterparts and Effectiveness.

 

This Agreement may be executed
in counterparts (each of which shall be deemed an original, but all of which
take together shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.  The
exchange of copies of this Agreement and of signature pages by facsimile
or electronic transmissions shall constitute effective execution and delivery
of this Agreement as to the parties and may be used in lieu of the original
Agreement for all purposes.  Signatures
of the parties transmitted by facsimile or electronic transmission shall be
deemed to be their original signatures for all purposes.

 

12.9        Applicable Law.

 

This Agreement will be
construed in accordance with and governed by the laws of the State of Michigan
without giving effect to principles of conflicts of law.  Any party bringing a legal action or
proceeding against any other party arising out of or relating to this Agreement
shall bring the legal action or proceeding in the United States District Court
for the Eastern District of Michigan or in any court of the State of Michigan
sitting in Oakland County, Michigan. Each party waives, to the fullest extent
permitted by law, any objection that it may now or later have to the laying of
venue of any legal action or proceeding arising out of or relating to this
Agreement and any claim that any action or proceeding has been brought in an 

 

25

 

inconvenient forum.  Each party submits and consents to the
exclusive jurisdiction of such courts, along with their respective appellate
courts, for the purposes of all legal actions and proceedings arising out of or
relating to this Agreement.

 

12.10      No Third Party Beneficiary.

 

This Agreement is for the sole benefit of the parties
hereto, and nothing herein expressed or implied shall give or be construed to
give any Person other then the parties hereto any legal or equitable rights
hereunder.

 

                The parties have executed this Asset Purchase
Agreement as of the date first written above.

 

 

	
   

  	
  BUYER

  
	
   

  	
   

  
	
   

  	
  LAMTEC CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   s/s John Post

  
	
   

  	
  Name:

  	
   John Post

  
	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPAC
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Joshua A.
  Sherbin

  
	
   

  	
  Name:

  	
  Joshua A. Sherbin

  
	
   

  	
  Its: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SHAREHOLDER

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIMAS
  COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Grant H.
  Beard

  
	
   

  	
  Name:

  	
  Grant H. Beard,

  
	
   

  	
  Its: President and CEO
  of TriMas 

  
	
   

  	
  Corporation, its sole
  member

  
				

 

26Exhibit 4.10

 

FOURTH SUPPLEMENTAL INDENTURE
 
This Fourth Supplemental Indenture (this “Fourth Supplemental Indenture”), dated as of December 16, 2008, among WNYI, LLC, a New York limited liability company (the “Guaranteeing Subsidiary”), a subsidiary of InSight Health Services Corp. (or its permitted successor), a Delaware corporation (the “Company”), InSight Health Services Holdings Corp., a Delaware corporation, the Subsidiary Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, a national banking association as trustee under the Indenture referred to below (the “Trustee”).
 
WITNESSETH
 
WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (as amended and supplemented from time to time, the “Indenture”), dated as of September 22, 2005 providing for the issuance of an aggregate principal amount of $315.0 million of Senior Secured Floating Rate Notes due 2011 (the “Notes”);
 
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guarantee”); and
 
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Fourth Supplemental Indenture.
 
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
 
1.  Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
 
2.  Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as follows:
 
(a)  Along with all other Guarantors, to jointly and severally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:
 
(i)  the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other 

 

1

 
obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and
 
(ii)  in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately.
 
(b)  The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance that might otherwise constitute a legal or equitable discharge or defense of a guarantor.
 
(c)  The following are hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever.
 
(d)  This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.
 
(e)  If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.
 
(f)  The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.
 
(g)  As between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Six of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee.

 

2

 

3.  Execution and Delivery.  The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee.
 
4.  Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms.
 
Except as otherwise provided in Section 5.01(b) of the Indenture, a Subsidiary Guarantor may not consolidate with or merge with or into any other Person or convey, sell, assign, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any other Person (other than the Company or another Subsidiary Guarantor) unless:
 
(i)  subject to the provisions of the second to the last paragraph of this Section 4, the Person formed by or surviving such consolidation or merger (if other than such Subsidiary Guarantor) or to which such properties and assets are transferred assumes all of the obligations of such Subsidiary Guarantor under the Indenture, its Guarantee to Security Documents and the Registration Rights Agreement, pursuant to agreements in form and substance reasonably satisfactory to the Trustee;
 
(ii)  immediately after giving effect to such transaction, no Default or Event of Default has occurred and is continuing; and
 
(iii)  the Subsidiary Guarantor delivers, or causes to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that such transaction complies with the requirements of this Indenture.
 
For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.
 
In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be performed by a Guarantor, such successor Person shall succeed to and be substituted for a Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Guarantees theretofore and thereafter issued in 

 

3

 

accordance with the terms of the Indenture as though all of such Guarantees had been issued at the date of the execution hereof.
 
5.  Releases.
 
(a)  A Subsidiary Guarantor will be deemed automatically and unconditionally released and discharged from all of its obligations under its Guarantee without any further action on the part of the Trustee or any Holder of the Notes upon a sale or other disposition to a Person not an Affiliate of the Company of all of the Capital Stock of, or all or substantially all of the assets of, such Subsidiary Guarantor, by way of merger, consolidation or otherwise, which transaction is carried out in accordance with Section 4.10 hereof; provided that any such termination shall occur (x) only to the extent that all obligations of such Subsidiary Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure any Indebtedness of the Company shall also terminate upon such sale, disposition or release and (y) only if the Trustee is furnished with written notice of such release together with an Officers’ Certificate from such Subsidiary Guarantor to the effect that all of the conditions to release in this Section 5 have been satisfied.
 
(b) Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in Article Eleven of the Indenture.
 
6.  No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Parent, the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Parent, the Company or the Subsidiary Guarantors under the Notes, the Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.
 
7.  NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS FOURTH SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
 
8.  Counterparts. The parties may sign any number of copies of this Fourth Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
 
9.  Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

 

4

 

10.  Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fourth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.
 

[Remainder of Page Left Intentionally Blank]

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed and attested, all as of the date first above written.
 

	
  Dated:
  December 16, 2008

  	
   

  
	
   

  	
  WNYI, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  InSight
  Health Corp., as the sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INSIGHT HEALTH SERVICES
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INSIGHT HEALTH SERVICES HOLDINGS
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILKES-BARRE IMAGING,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  InSight Health Corp., as
  the sole member and sole 

  
	
   

  	
   

  	
  manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
				

 

6

 

	
   

  	
  MRI
  ASSOCIATES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  InSight
  Health Corp., as the general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VALENCIA
  MRI, LLC

  
	
   

  	
  ORANGE
  COUNTY REGIONAL PET CENTER - IRVINE, LLC

  
	
   

  	
  SAN FERNANDO
  VALLEY REGIONAL PET CENTER, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  InSight
  Health Corp., as the sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith S.
  Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARKWAY
  IMAGING CENTER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith S.
  Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Manager

  

 

7

 

	
   

  	
  INSIGHT
  HEALTH CORP.

  
	
   

  	
  OPEN MRI,
  INC.

  
	
   

  	
  MAXUM HEALTH
  CORP.

  
	
   

  	
  MAXUM HEALTH
  SERVICES CORP.

  
	
   

  	
  MAXUM HEALTH
  SERVICES OF NORTH TEXAS, INC.

  
	
   

  	
  MAXUM HEALTH
  SERVICES OF DALLAS, INC.

  
	
   

  	
  NDDC, INC.

  
	
   

  	
  SIGNAL
  MEDICAL SERVICES, INC.

  
	
   

  	
  INSIGHT
  IMAGING SERVICES CORP.

  
	
   

  	
  COMPREHENSIVE
  MEDICAL IMAGING, INC.

  
	
   

  	
  COMPREHENSIVE
  MEDICAL IMAGING CENTERS, INC.

  
	
   

  	
  TME ARIZONA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith S.
  Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  

 

8

 

	
   

  	
  COMPREHENSIVE OPEN MRI-CARMICHAEL/FOLSOM,
  LLC

  
	
   

  	
  SYNCOR DIAGNOSTICS
  SACRAMENTO, LLC

  
	
   

  	
  SYNCOR DIAGNOSTICS
  BAKERSFIELD, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comprehensive Medical
  Imaging, Inc. and

  
	
   

  	
   

  	
  Comprehensive Medical
  Imaging Centers, Inc., as the 

  
	
   

  	
   

  	
  members

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PHOENIX REGIONAL PET
  CENTER-THUNDERBIRD, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comprehensive Medical
  Imaging Centers, Inc., as the sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MESA MRI

  
	
   

  	
  MOUNTAIN VIEW MRI

  
	
   

  	
  LOS GATOS IMAGING CENTER

  
	
   

  	
  WOODBRIDGE MRI

  
	
   

  	
  JEFFERSON MRI-BALA

  
	
   

  	
  JEFFERSON MRI

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Comprehensive Medical
  Imaging, Inc. and

  
	
   

  	
   

  	
  Comprehensive Medical
  Imaging Centers, Inc., as the 

  
	
   

  	
   

  	
  members

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Keith S. Kelson

  
	
   

  	
  Name:

  	
  Keith S.
  Kelson

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
						

 

9

 

	
   

  	
  U.S. Bank National Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John J. Doherty

  
	
   

  	
  Name:

  	
  John J.
  Doherty

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

10

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