Exhibit 4.7
EXECUTION VERSION
SECURITY AGREEMENT
DATED AS OF SEPTEMBER 22, 2005
AMONG
THE LOAN PARTIES FROM TIME TO TIME PARTY HERETO
AND
U.S. BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT
TABLE OF CONTENTS*
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.............................................. 1
Section 1.02. Terms Defined in the UCC................................... 1
Section 1.03. Additional Definitions..................................... 2
Section 1.04. Terms Generally............................................ 10
ARTICLE II
SECURITY INTERESTS
Section 2.01. Grant of Security Interests................................ 10
Section 2.02. Continuing Liability of Each Loan Party.................... 12
Section 2.03. Security Interests Absolute................................ 12
Section 2.04. Maintaining the Account Collateral......................... 14
Section 2.05. Collateral Agent Not Responsible........................... 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Title to Collateral........................................ 14
Section 3.02. Validity, Perfection and Priority of Security Interests.... 14
Section 3.03. No Consents................................................ 15
Section 3.04. Insurance.................................................. 15
Section 3.05. Intellectual Property...................................... 15
ARTICLE IV
COVENANTS
Section 4.01. Delivery of Perfection Certificate; Initial Perfection and
Delivery of Search Reports................................. 16
Section 4.02. Change of Name, Identity, Structure or Location; Subjection
to Other Security Agreements............................... 16
Section 4.03. Further Actions............................................ 17
Section 4.04. Delivery of Instruments, Etc............................... 17
Section 4.05. Certificates of Title...................................... 18
Section 4.06. Insurance.................................................. 18
Section 4.07. Information Regarding Collateral........................... 18
Section 4.08. Covenants Regarding Intellectual Property.................. 18
Section 4.09. Deposit Accounts and Securities Accounts................... 20
Section 4.10. Claims..................................................... 20
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* Table of Contents is not part of the Security Agreement.
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ARTICLE V
GENERAL AUTHORITY; REMEDIES
Section 5.01. General Authority.......................................... 20
Section 5.02. Remedies upon Event of Default............................. 22
Section 5.03. Limitation on Duty of Collateral Agent in Respect
of Collateral.............................................. 25
Section 5.04. Application of Proceeds.................................... 25
ARTICLE VI
COLLATERAL AGENT
Section 6.01. Concerning the Collateral Agent............................ 26
Section 6.02. Appointment of Co-Collateral Agent......................... 26
ARTICLE VII
MISCELLANEOUS
Section 7.01. Notices.................................................... 27
Section 7.02. No Waivers; Non-Exclusive Remedies......................... 27
Section 7.03. Compensation and Expenses of the Collateral Agent;
Indemnification............................................ 28
Section 7.04. Enforcement................................................ 29
Section 7.05. Amendments and Waivers..................................... 30
Section 7.06. Successors and Assigns..................................... 30
Section 7.07. Governing Law.............................................. 30
Section 7.08. Limitation of Law; Severability............................ 30
Section 7.09. Counterparts; Effectiveness................................ 30
Section 7.10. Additional Loan Parties.................................... 31
Section 7.11. Termination; Release of Loan Parties....................... 31
Section 7.12. Entire Agreement........................................... 32
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SCHEDULES:
Schedule 1.01A - Claims
Schedule 1.01B - Excluded Deposit Accounts
Schedule 3.03 - Consents
Schedule 4.01 - Filings to Perfect Security Interests
EXHIBITS:
Exhibit A-1 - Form of Grant of Security Interest in United States
Patents and Trademarks
Exhibit A-2 - Form of Grant of Security Interest in United States Copyrights
Exhibit B - Form of Deposit Account Control Agreement
Exhibit C - Form of Description of Collateral
Exhibit D - Form of Perfection Certificate
Exhibit E - Form of Accession Agreement
ANNEXES:
Annex I - Schedule VI to Perfection Certificate
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SECURITY AGREEMENT dated as of September 22, 2005 (as amended,
modified or supplemented from time to time, this "AGREEMENT") among the LOAN
PARTIES from time to time party hereto, U.S. BANK NATIONAL ASSOCIATION, as
Collateral Agent for the benefit of the Finance Parties referred to herein
(together with its successor or successors in such capacity, the "COLLATERAL
AGENT").
InSight Health Services Corp. ("INSIGHT") intends to issue Senior
Secured Floating Rate Notes due 2011 (together with any Additional Notes (as
defined in the Indenture) and any Exchange Notes (as defined in the Indenture),
and as amended, restated, supplemented or modified from time to time, the
"SENIOR SECURED NOTES") pursuant to an Indenture dated as of the date hereof (as
amended, restated, supplemented or modified from time to time and including any
agreement extending the maturity of, refinancing or otherwise restructuring all
or any portion of the obligations of InSight under such Indenture or any
successor agreement, the "INDENTURE") among InSight and U.S. Bank National
Association, as Trustee (together with its successor or successors in such
capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the
Senior Secured Notes will be guaranteed by InSight Health Services Holdings
Corp. ("HOLDINGS") each of the parties listed on the signature pages hereto as
"Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic
subsidiaries of Holdings that become a party hereto pursuant to Section 7.10
hereof (collectively, the "SUBSIDIARY GUARANTORS" and, together with Holdings,
"GUARANTORS"). Holdings, InSight and the Subsidiary Guarantors are herein
referred to individually as a "LOAN PARTY" and, collectively, as the "LOAN
PARTIES".
The Indenture requires the Loan Parties to secure their obligations
under the Senior Secured Notes and their obligations under any guaranties
thereof through a grant of a first lien security interest over the Collateral
(as defined herein), subject to Permitted Liens. The Indenture further requires
that such security interests in the Collateral be granted pursuant to security
documents to a collateral agent acting for the benefit of the holders from time
to time of the Senior Secured Notes. Consequently the Trustee and the Collateral
Agent have entered into a Collateral Agency Agreement dated as of the date
hereof (as amended, modified or supplemented from time to time, the "COLLATERAL
AGENCY AGREEMENT") which, among other things, governs certain actions of the
Trustee and the Collateral Agent in connection with the Senior Secured Notes and
the Collateral, respectively.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. Terms defined in the introductory section
hereof have the respective meanings set forth therein. Capitalized terms defined
in the Indenture and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.
Section 1.02. Terms Defined in the UCC. Unless otherwise defined
herein or the context otherwise requires, the following terms, together with any
uncapitalized terms used herein which are defined in the UCC, have the
respective meanings provided in the UCC: (i) Accounts, (ii) As-Extracted
Collateral; (iii) Certificated Security; (iv) Chattel Paper;
(v) Documents; (vi) Financial Asset; (vii) Instruments; (viii) Inventory; (ix)
Investment Property; (x) Payment Intangibles; (xi) Proceeds; (xii) Securities
Account; (xiii) Securities Intermediary; (xiv) Security; (xv) Security
Certificate; (xvi) Security Entitlements; and (xvii) Uncertificated Security.
Section 1.03. Additional Definitions. The following additional terms,
as used herein, have the following respective meanings:
"ACCOUNT CONTROL AGREEMENT" means (i) with respect to a Deposit
Account, a deposit account control agreement, substantially in the form of
Exhibit B hereto (or in such other form as to which an opinion of counsel is
delivered to the Collateral Agent opining that such agreement is sufficient to
grant the Collateral Agent a perfected security interest under the UCC in such
Deposit Account), among one or more Loan Parties, the Collateral Agent and the
bank which maintains such Deposit Account and (ii) with respect to a Securities
Account, a securities account control agreement, substantially in the form of
Exhibit B to the Pledge Agreement (or in such other form as to which an opinion
of counsel is delivered to the Collateral Agent opining that such agreement is
sufficient to grant the Collateral Agent a perfected security interest under the
UCC in such Securities Account), among one or more Loan Parties, the Collateral
Agent and the Securities Intermediary which maintains such Securities Account,
in each case as the same may be amended, modified or supplemented from time to
time.
"CAPITAL STOCK" has the meaning given to it in the Indenture.
"CLAIMS" means all "commercial tort claims" (as defined in the UCC),
including, without limitation, each of the claims described on Schedule 1.01A
hereto, as such Schedule may be amended, modified or supplemented from time to
time.
"COLLATERAL" has the meaning set forth in Section 2.01 of this
Agreement.
"COLLATERAL ACCOUNTS" means one or more Securities Accounts or Deposit
Accounts established with or in the possession or under the control of the
Collateral Agent into which cash, Cash Equivalents and similar assets (other
than cash, Cash Equivalents and similar assets constituting Receivables or
Related Assets) or Proceeds (including Proceeds of insurance policies, awards of
condemnation or other compensation) of any Collateral are deposited from time to
time, collectively.
"COLLATERAL AGENT" means U.S. Bank National Association, in its
capacity as collateral agent for the Finance Parties, and its successor or
successors in such capacity.
"COMPUTER HARDWARE" means all computer and other electronic data
processing hardware of a Loan Party, whether now or hereafter owned, licensed or
leased by such Loan Party, including, without limitation, all integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related computer hardware, all
documentation, flowcharts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes associated with any of the foregoing and all
options, warranties, services contracts, program
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services, test rights, maintenance rights, support rights, renewal rights and
indemnifications relating to any of the foregoing.
"COPYRIGHT" means any of the following, whether now existing or
hereafter arising, created or acquired:
(i) the United States and foreign copyrights described on Schedule VI
to any Loan Party's Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time) and any renewals
thereof;
(ii) all other common law and/or statutory rights in all copyrightable
subject matter under the Laws of the United States or any other country
(whether or not the underlying works of authorship have been published);
(iii) all registrations and applications for registration of any such
copyright in the United States or any other country, including
registrations, recordings, supplemental, derivative or collective work
registrations and pending applications for registrations in the United
States Copyright Office or any other country;
(iv) all tangible property embodying or incorporating any or all of
the foregoing, whether in completed form or in some lesser state of
completion, and all masters, duplicates, drafts, versions, variations and
copies thereof, in all formats;
(v) all claims for, and rights to sue for, past, present and future
infringement of any of the foregoing;
(vi) all income, royalties, damages and payments now or hereafter due
or payable with respect to any of the foregoing, including, without
limitation, damages and payments for past, present or future infringements
thereof and payments and damages under all Copyright Licenses in connection
therewith; and
(vii) all rights in any of the foregoing, whether arising under the
Laws of the United States or any foreign country or otherwise, to copy,
record, synchronize, broadcast, transmit, perform and/or display any of the
foregoing or any matter which is the subject of any of the foregoing in any
manner and by any process now known or hereafter devised.
"COPYRIGHT LICENSE" means any written agreement now or hereafter in
existence granting to any Loan Party any rights, whether exclusive or
non-exclusive, to use another Person's copyrights or copyright applications, or
pursuant to which any Loan Party has granted to any other Person, any right,
whether exclusive or non-exclusive, with respect to any Copyright, whether or
not registered, including, without limitation, the Copyright Licenses described
on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule
may be amended, modified or supplemented from time to time).
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
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"DEPOSIT ACCOUNTS" means all "deposit accounts" (as defined in the
UCC), whether or not evidenced by an Instrument, and all certificates and
Instruments, if any, from time to time representing, evidencing or deposited
into such deposit accounts.
"EQUIPMENT" means all "equipment" (as defined in the UCC), including
all items of machinery, equipment, Computer Hardware, furnishings and fixtures
of every kind, whether or not affixed to real property, as well as all motor
vehicles, automobiles, trucks, trailers, railcars, barges and vehicles of every
description, handling and delivery equipment, all additions to, substitutions
for, replacements of or accessions to any of the foregoing, all attachments,
components, parts (including spare parts) and accessories whether installed
thereon or affixed thereto and all fuel for any thereof and all options,
warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights and indemnifications relating to any
of the foregoing.
"EVENT OF DEFAULT" means an "Event of Default" as defined in the
Indenture.
"EXCLUDED DEPOSIT ACCOUNTS" means each of the Deposit Accounts that
are excluded from the requirements of Sections 4.01 and 4.12 only (including
accounts constituting Receivables and Related Assets), and, as of the Issue
Date, listed on Schedule 1.01B hereto.
"EXCLUDED EQUIPMENT" means at any date any Equipment of a Loan Party
which is subject to, or secured by, a Capital Lease Obligation or Purchase Money
Indebtedness if and to the extent that (i) the express terms of a valid and
enforceable restriction in favor of a Person who is not a Group Company
contained in the agreements or documents granting or governing such Capital
Lease Obligation or Purchase Money Indebtedness prohibits, or requires any
consent or establishes any other conditions for, an assignment thereof, or a
grant of a security interest therein, by a Loan Party and (ii) such restriction
relates only to the asset or assets acquired by a Loan Party with the Proceeds
of such Capital Lease Obligation or Purchase Money Indebtedness and attachments
thereto or substitutions therefor; provided that all Proceeds paid or payable to
any Loan Party from any sale, transfer or assignment or other voluntary or
involuntary disposition of such Equipment and all rights to receive such
Proceeds shall be included in the Collateral to the extent not otherwise
required to be paid to the holder of the Capital Lease Obligation or Purchase
Money Indebtedness secured by such Equipment.
"EXCLUDED SECURITIES ACCOUNTS" means each of the Securities Accounts
that are excluded from the requirements of Sections 4.01 and 4.12 only
(including accounts constituting Receivables and Related Assets), and, as of the
Issue Date, listed on Schedule 1.01B hereto.
"EXEMPT DEPOSIT ACCOUNTS" means (i) Deposit Accounts the balance of
which consists exclusively of (A) withheld income taxes and federal, state or
local employment taxes in such amounts as are required in the reasonable
judgment of a Loan Party to be paid to the Internal Revenue Service or state or
local government agencies within the following two months with respect to
employees of any of the Loan Parties and (B) amounts required to be paid over to
an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or
for the benefit of employees of one or more Loan Parties, and (ii) all
segregated Deposit Accounts constituting (and the balance of which consists
solely of funds set aside in connection with) taxes accounts, payroll accounts
and trust accounts.
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"FAIR MARKET VALUE" has the meaning given to it in the Indenture.
"FINANCE PARTY" means each Noteholder, the Trustee, the Collateral
Agent, each Indemnitee and their respective successors and assigns, and "FINANCE
PARTIES" means any two or more of them, collectively.
"GENERAL INTANGIBLES" means all "general intangibles" (as defined in
the UCC) and also means and includes (i) all Payment Intangibles and other
obligations and indebtedness owing to any Loan Party (other than any such
Payment Intangibles and other obligations and indebtedness comprising
Receivables and Related Assets), from whatever source arising, (ii) all Claims,
Judgments and/or Settlements, (iii) all rights or claims in respect of refunds
for taxes paid, (iv) all rights in respect of any pension plans or similar
arrangements maintained for employees of any Loan Party or any member of the
ERISA Group, (v) all interests in limited liability companies and/or
partnerships which interests do not constitute Securities and (vi) all
Supporting Obligations of any kind given by any Person with respect to all or
any of the foregoing.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GROUP COMPANY" means any of Holdings, InSight or their respective
Subsidiaries (regardless of whether or not consolidated with Holdings or InSight
for purposes of GAAP), and "GROUP COMPANIES" means all of them, collectively.
"GUARANTEE" means the guarantee by any Guarantor of the Note
Obligations.
"INDEBTEDNESS" has the meaning set forth in the Indenture.
"INDEMNITEE" has the meaning set forth in Section 7.03(c) of this
Agreement.
"INTELLECTUAL PROPERTY" means all Patents, Trademarks, Copyrights,
Software, Licenses, rights in intellectual property, goodwill, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how, domain names, mask works, customer lists, vendor lists, subscription
lists, data bases and related documentation, registrations, franchises and all
other intellectual or other similar property rights.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means a Grant of Security
Interest in United States Patents and Trademarks or a Grant of Security Interest
in United States Copyrights (as the context may require) substantially in the
form of Exhibit A-1 or A-2 to this Agreement, respectively, between one or more
Loan Parties and the Collateral Agent, as the same may be amended, modified or
supplemented from time to time.
"ISSUE DATE" means September 22, 2005.
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"JUDGMENTS" means all judgments, decrees, verdicts, decisions or
orders issued in resolution of or otherwise in connection with a Claim, whether
or not final or subject to appeal, and including all rights of enforcement
relating thereto and any and all Proceeds thereof.
"LAW" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.
"LICENSE" means any Patent License, Trademark License, Copyright
License, Software License or other license or sublicense as to which any Loan
Party is a party (other than those license agreements constituting Excluded
Contracts; provided that rights to payments under any such license shall be
included in the Collateral to the extent permitted thereby or by Section 9-406
and 9-408 of the UCC).
"LIQUID INVESTMENTS" has the meaning set forth in Section 2.05 of this
Agreement.
"MATERIAL ADVERSE EFFECT" means (i) any material adverse effect upon
the business, assets, properties, liabilities, results of operations or
financial condition of Holdings, InSight and the Restricted Subsidiaries, taken
as a whole, (ii) a material adverse effect on the ability of a Loan Party to
consummate the transactions contemplated by the Note Documents to occur on the
Issue Date, (iii) a material adverse effect on the ability of any Loan Party to
perform any of its obligations under any Note Document to which it is a party or
(iv) a material adverse effect on the rights and benefits of the Finance Parties
under any Note Document.
"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"NEGLIGIBLE ECONOMIC VALUE" shall mean the economic value of the
Intellectual Property, in the reasonable business judgment of the Loan Parties,
is such that the expense to maintain, defend, use, register, or prosecute the
Intellectual Property is less than, or approximately equivalent to, the economic
value received by the Loan Parties from the Intellectual Property.
"NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the
Registration Rights Agreement related thereto and the Collateral Documents, in
each case including all exhibits and schedules thereto, and all other
agreements, documents and instruments relating to the Senior Secured Notes, in
each case as the same may be amended, modified or supplemented from time to time
in accordance with the provisions thereof.
"NOTEHOLDERS" means the holders from time to time of the Senior
Secured Notes.
"PATENT" means any of the following:
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(i) the United States and foreign patents described on Schedule VI to
any Loan Party's Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time) and any renewals
thereof;
(ii) all other letters patent and design letters patent of the United
States or any other country;
(iii) all applications filed or in preparation for filing for letters
patent and design letters patent of the United States or any other country
including, without limitation, applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States or
any other country or political subdivision thereof;
(iv) all reissues, divisions, continuations, continuations-in-part,
revisions, renewals or extensions thereof;
(v) all claims for, and rights to sue for, past, present or future
infringement of any of the foregoing;
(vi) all income, royalties, damages and payments now or hereafter due
or payable with respect to any of the foregoing, including, without
limitation, damages and payments for past, present or future infringements
thereof and payments and damages under all Patent Licenses in connection
therewith; and
(vii) all rights corresponding to any of the foregoing whether arising
under the Laws of the United States or any foreign country or otherwise.
"PATENT LICENSE" means any written agreement now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, with respect to any Person's patent or any invention now or
hereafter in existence, whether or not patentable, or pursuant to which any Loan
Party has granted to any other Person, any right, whether exclusive or
non-exclusive, with respect to any Patent or any invention now or hereafter in
existence, whether or not patentable and whether or not a Patent or application
for Patent is in or hereafter comes into existence on such invention, including,
without limitation, the Patent Licenses described on Schedule VI to any Loan
Party's Perfection Certificate (as each such schedule may be amended, modified
or supplemented from time to time).
"PERFECTION CERTIFICATE" means with respect to each Loan Party a
certificate, substantially in the form of Exhibit D hereto, completed and
supplemented with the schedules and attachments contemplated thereby to the
reasonable satisfaction of the Collateral Agent.
"PERMITTED LIEN" means any Lien permitted under Section 1.01 the
Indenture.
"PLEDGED ACCOUNT BANK" has the meaning set forth in Section 2.04(a).
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed and whether tangible or intangible.
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"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of InSight or any of
its Restricted Subsidiaries incurred for the purpose of financing all or any
part of the purchase price of property, plant or equipment used in the business
of InSight or any Restricted Subsidiary or the cost of installation,
construction or improvement thereof, and the payment of any sales or other taxes
associated therewith.
"RECORDABLE INTELLECTUAL PROPERTY" means Intellectual Property the
transfer of which is required to be recorded in the United States Patent and
Trademark Office or the United States Copyright Office in order to be effective
against subsequent third party transferees; provided that the following shall
not be considered "RECORDABLE INTELLECTUAL PROPERTY" hereunder: (i) unregistered
United States Copyrights, (ii) unregistered United States Trademarks and (iii)
non-exclusive Licenses.
"RESTRICTED SUBSIDIARY" has the meaning set forth in the Indenture.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., and its successors.
"SECURITY INTERESTS" means the security interests in the Collateral
granted under this Agreement securing the Note Obligations.
"SETTLEMENTS" means all right, title and interest of a Loan Party in,
to and under any settlement agreement or other agreement executed in settlement
or compromise of any Claim, including all rights to enforce such agreements and
all payments thereunder or arising in connection therewith.
"SOFTWARE" means all "software" (as defined in the UCC), and also
means and includes all software programs, whether now or hereafter owned,
licensed or leased by a Loan Party, designed for use on Computer Hardware,
including, without limitation, all operating system software, utilities and
application programs in whatever form and whether or not embedded in goods, all
source code and object code in magnetic tape, disk or hard copy format or any
other listings whatsoever, all firmware associated with any of the foregoing all
documentation, flowcharts, logic diagrams, web pages, manuals, specifications,
training materials, charts and pseudo codes associated with any of the
foregoing, and all options, warranties, services contracts, program services,
test rights, maintenance rights, support rights, renewal rights and
indemnifications relating to any of the foregoing.
"SOFTWARE LICENSE" means any agreement (including any agreement
constituting a Copyright License, Patent License and/or Trademark License) now
or hereafter in existence granting to any Loan Party any right, whether
exclusive or non-exclusive, to use another Person's Software, or pursuant to
which any Loan Party has granted to any other Person, any right, whether
exclusive or non-exclusive, to use any Software, whether or not subject to any
registration.
"SUPPORTING OBLIGATION" means a guarantee or other secondary
obligation supporting, or any Lien securing, the payment or performance of one
or more General Intangibles, Documents, Assigned Agreements or Investment
Property.
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"TRADEMARK" means any of the following:
(i) the United States and foreign trademarks described on Schedule VI
to any Loan Party's Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time) and any renewals
thereof;
(ii) all other trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, logos, slogans, certification marks, collective marks, brand names
and trade dress which are or have been used in the United States or in any
state, territory or possession thereof, or in any other place, nation or
jurisdiction, along with all prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and any other
source or business identifiers, and general intangibles of like nature, and
the rights in any of the foregoing which arise under applicable Law;
(iii) the goodwill of the business symbolized thereby or associated
with each of the foregoing;
(iv) all registrations and applications in connection therewith,
including, without limitation, registrations and applications in the United
States Patent and Trademark Office or in any similar office or agency of
the United States, any state thereof or any other country or any political
subdivision thereof, but excluding in all cases all intent-to-use United
States trademark applications for which an amendment to allege use or
statement of use has not been filed under 15 U.S.C. Section 1051(c) or 15
U.S.C. Section 1051(d), respectively, or if filed, has not been deemed in
conformance with 15 U.S.C. Section 1051(a) or examined and accepted,
respectively, by the United States Patent and Trademark Office, provided
that upon such filing and acceptance, such intent-to-use applications shall
be included in the definition of Trademark;
(v) all reissues, extensions and renewals thereof;
(vi) all claims for, and rights to sue for, past, present or future
infringements of any of the foregoing;
(vii) all income, royalties, damages and payments now or hereafter due
or payable with respect to any of the foregoing, including, without
limitation, damages and payments for past, present or future infringements
thereof and payments and damages under all Trademark Licenses in connection
therewith; and
(viii) all rights corresponding to any of the foregoing whether
arising under the Laws of the United States or any foreign country or
otherwise.
"TRADEMARK LICENSE" means any written agreement now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, to use another Person's trademarks or trademark applications, or
pursuant to which any Loan Party has granted to any other Person, any right,
whether exclusive or non-exclusive, to use any Trademark, whether or not
registered, including, without limitation, the Trademark Licenses described on
Schedule VI to any Loan Party's Perfection Certificate (as each such schedule
may be amended,
9
modified or supplemented from time to time) and the rights to prepare for sale,
sell and advertise for sale, all of the inventory now or hereafter owned by any
Loan Party and now or hereafter covered by such license agreements.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
Law, the perfection, the effect of perfection or non-perfection or the priority
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
"US SUBSIDIARY" means with respect to any Person each Subsidiary of
such Person which, at the time of determination, is incorporated in or organized
under the Laws of the United States of America, any State thereof or the
District of Columbia, and "US SUBSIDIARIES" means all of them, collectively.
Section 1.04. Terms Generally. Terms defined in the introductory
paragraphs hereof and the definitions in Section 1.03 shall apply equally to
both the singular and plural forms of the terms defined. Wherever the context
may require, any pronouns shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
otherwise stated herein or the context shall otherwise require. Unless otherwise
expressly provided herein, the word "day" means a calendar day.
ARTICLE II
SECURITY INTERESTS
Section 2.01. Grant of Security Interests. To secure the due and
punctual payment of all Note Obligations, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due, in accordance with the terms thereof and to
secure the performance of all of the obligations of each Loan Party hereunder
and the other Loan Parties hereunder and under the other Note Documents, each
Loan Party hereby grants to the Collateral Agent for the benefit of the Finance
Parties a security interest in, and each Loan Party hereby pledges and mortgages
to the Collateral Agent for the benefit of the Finance Parties, all of such Loan
Party's right, title and interest in, to and under the following, whether now
owned or existing or hereafter acquired, created or arising, whether tangible or
intangible, and regardless of where located (other than any item which on any
date constitutes an Excluded Contract or Excluded Equipment) (all of which are
herein collectively called the "COLLATERAL"):
(i) all Inventory;
(ii) all General Intangibles;
(iii) all Intellectual Property;
10
(iv) all Documents and all Supporting Obligations of any kind given by
any Person with respect thereto;
(v) all Chattel Paper;
(vi) all Equipment;
(vii) all Investment Property and all Supporting Obligations of any
kind given by any Person with respect thereto;
(viii) all Deposit Accounts (other than Excluded Deposit Accounts and
Exempt Deposit Accounts);
(ix) the Collateral Accounts, all cash and other property deposited
therein or credited thereto from time to time, the Liquid Investments made
pursuant to Section 2.07 and other monies and property of any kind of any
Loan Party maintained with or in the possession of or under the control of
the Collateral Agent;
(x) all Securities Accounts;
(xi) all books and records (including, without limitation, customer
lists, credit files, computer programs, printouts and other computer
materials and records) of each Loan Party pertaining to any of the
Collateral; and
(xii) all Proceeds of all or any of the Collateral described in
clauses (i) through (xii) hereof;
provided, however, that, the Collateral shall not include (i) any Voting Stock
that is issued by a Foreign Subsidiary (that is a corporation for United States
federal income tax purposes) and owned by any Loan Party, if and to the extent
that the inclusion of such Voting Stock in the Collateral would cause the
Collateral pledged by such Loan Party hereunder or under any other Note Document
to include in the aggregate more than 65% of the total combined voting power of
all classes of Voting Stock of such Foreign Subsidiary, (ii) assets securing
Purchase Money Indebtedness or Capital Lease Obligations permitted to be
incurred pursuant to the Indenture, (iii) Excluded Contracts, (iv) any Capital
Stock owned by any Loan Party and issued by an entity that is not a Wholly Owned
Subsidiary of such Loan Party to the extent (and only with respect to such
portion of such Capital Stock that would be prohibited as referred to below)
that any joint venture agreement, between or among any Loan Party and one or
more third parties with respect to a Permitted Joint Venture, by the express
terms of a valid and enforceable restriction in favor of such third parties
prohibits, or requires any consent for, the granting of a security interest in
such Capital Stock by such Loan Party, (v) any Capital Stock and other
securities of InSight, any of its Subsidiaries or any of Holdings' Subsidiaries
to the extent that the pledge of such Capital Stock or other securities to
secure the Note Obligations would cause InSight, such Subsidiary or such
Subsidiary of Holdings, as the case may be, to be required to file separate
financial statements with the Commission pursuant to Rule 3-16 of Regulation S-X
(as in effect from time to time), (vi) all Receivables and Related Assets and
(vii) any proceeds or products from any and all of the foregoing unless such
proceeds or products would otherwise constitute Collateral.
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Notwithstanding the foregoing, if granting or perfecting any Lien to
secure the Note Obligations on any Collateral cannot be granted or perfected
under applicable law, none of InSight or the Guarantors will be required to
grant or perfect, as applicable, such Lien.
Section 2.02. Continuing Liability of Each Loan Party. Anything herein
to the contrary notwithstanding, no Loan Party shall by virtue of this Agreement
be relieved of any obligation to observe and perform the terms and conditions to
be observed and performed by it under any contract, agreement, warranty or other
obligation with respect to the Collateral. Neither the Collateral Agent nor any
Finance Party shall have any obligation or liability under any such contract,
agreement, warranty or obligation by reason of or arising out of this Agreement
or the receipt by the Collateral Agent or any Finance Party of any payment
relating to any Collateral, nor shall the Collateral Agent or any Finance Party
be required to perform or fulfill any of the obligations of any Loan Party with
respect to any of the Collateral, to make any inquiry as to the nature or
sufficiency of any payment received by it or the sufficiency of the performance
of any party's obligations with respect to any Collateral. Furthermore, neither
the Collateral Agent nor any Finance Party shall be required to file any claim
or demand to collect any amount due or to enforce the performance of any party's
obligations with respect to the Collateral.
Section 2.03. Security Interests Absolute. All rights of the
Collateral Agent, all security interests hereunder and all obligations of each
Loan Party hereunder are unconditional and absolute and independent and separate
from any other security for or guaranty of the Note Obligations, whether
executed by such Loan Party, any other Loan Party or any other Person. Without
limiting the generality of the foregoing, the obligations of each Loan Party
hereunder shall not be released, discharged or otherwise affected or impaired
by:
(i) any extension, renewal, settlement, compromise, acceleration,
waiver or release in respect of any Note Obligation under any other Note
Document or any other agreement or instrument evidencing or securing any
Note Obligation, by operation of Law or otherwise;
(ii) any change in the manner, place, time or terms of payment of any
Finance obligation or any other amendment, supplement or modification to
any Note Document or any other agreement or instrument evidencing or
securing any Note Obligation;
(iii) any release, non-perfection or invalidity of any direct or
indirect security for any Note Obligation, any sale, exchange, surrender,
realization upon, offset against or other action in respect of any direct
or indirect security for any Note Obligation or any release of any other
obligor or Loan Parties in respect of any Note Obligation;
(iv) any change in the existence, structure or ownership of any Loan
Party, or any insolvency, bankruptcy, reorganization, arrangement,
readjustment, composition, liquidation or other similar proceeding
affecting a Loan Party or its assets or any resulting disallowance, release
or discharge of all or any portion of any Note Obligation;
(v) the existence of any claim, set-off or other right which any Loan
Party may have at any time against any other Loan Party, any Finance Party
or any other
12
Person, whether in connection herewith or any unrelated transaction;
provided that nothing herein shall prevent the assertion of any such claim
by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against any
Loan Party for any reason of any Note Document or any other agreement or
instrument evidencing or securing any Note Obligation or any provision of
applicable Law or regulation purporting to prohibit the payment by any Loan
Party of any Note Obligation;
(vii) any failure by any Finance Party: (A) to file or enforce a claim
against any Loan Party or its estate (in a bankruptcy or other proceeding);
(B) to give notice of the existence, creation or incurrence by any Loan
Party of any new or additional indebtedness or obligation under or with
respect to the Note Obligations; (C) to commence any action against any
Loan Party; (D) to disclose to any Loan Party any facts which such Finance
Party may now or hereafter know with regard to any Loan Party; or (E) to
proceed with due diligence in the collection, protection or realization
upon any collateral securing the Note Obligations;
(viii) any direction as to application of payment by any Loan Party or
any other Person;
(ix) any subordination by any Finance Party of the payment of any Note
Obligation to the payment of any other liability (whether matured or
unmatured) of any Loan Party to its creditors;
(x) any act or failure to act by the Collateral Agent or any other
Finance Party under this Agreement or otherwise which may deprive any Loan
Party of any right to subrogation, contribution or reimbursement against
any other Loan Party or any right to recover full indemnity for any
payments made by such Loan Party in respect of the Note Obligations; or
(xi) any other act or omission to act or delay of any kind by any Loan
Party or any Finance Party or any other Person or any other circumstance
whatsoever which might, but for the provisions of this clause, constitute a
legal or equitable discharge of any Loan Party's obligations hereunder
(other than final payment in full of the Note Obligations).
Each Loan Party has irrevocably and unconditionally delivered this
Agreement to the Collateral Agent, for the benefit of the Finance Parties, and
the failure by any other Person to sign this Agreement or a security agreement
similar to this Agreement or otherwise shall not discharge the obligations of
any Loan Party hereunder.
This Agreement shall remain fully enforceable against each Loan Party
irrespective of any defenses that any other Loan Party may have or assert in
respect of the Note Obligations, including, without limitation, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, except that a Loan Party may
assert the defense of final payment in full of the Note Obligations.
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Section 2.04. Maintaining the Account Collateral. (a) Each Loan Party
will maintain Deposit Accounts (other than Excluded Deposit Accounts and Exempt
Deposit Accounts) only with the financial institution acting as Collateral Agent
hereunder or with a financial institution (a "PLEDGED ACCOUNT BANK") that has
entered into an Account Control Agreement with such Loan Party and the
Collateral Agent.
(b) Each Loan Party will maintain Securities Accounts (other than
Excluded Securities Accounts and Exempt Securities Accounts) only with the
financial institution acting as Collateral Agent hereunder or with a financial
institution that has entered into an Account Control Agreement with such Loan
Party and the Collateral Agent.
Section 2.05. Collateral Agent Not Responsible. The Collateral Agent
shall not be responsible for proper application by any Loan Party of any amount
distributed to such Loan Party pursuant to this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants that:
Section 3.01. Title to Collateral. Such Loan Party has good and
marketable title to, or valid license or leasehold interests in, all of the
Collateral in which it has granted a security interest hereunder, free and clear
of any Liens other than (i) Permitted Liens, (ii) Liens in respect of motor
vehicles that will be terminated by the Loan Party after the Issue Date in
accordance with Section 4.07 hereof and (iii) Liens in respect of which such
Loan Party has delivered UCC-3 termination statements or partial release
financing statements on the Issue Date. No Collateral having a value
individually or collectively in excess of $250,000 (other than Inventory in
transit or Inventory in the possession of a carrier or similar bailee as to
which the provisions of Section 4.04 of this Agreement have been complied with)
is in the possession or control of any Person asserting any claim thereto or
security interest therein (other than financial institutions under an Account
Control Agreement), except that the Collateral Agent or its designee may have
possession and/or control of Collateral as contemplated hereby and by the other
Note Documents.
Section 3.02. Validity, Perfection and Priority of Security Interests.
(a) The Security Interests constitute valid security interests under
the UCC securing the Note Obligations.
(b) When UCC-1 financing statements naming the Collateral Agent as
secured party and containing a description of the Collateral in the form
specified in Exhibit C hereto shall have been filed in the respective offices
specified in Schedule 4.01 hereto, the Security Interests will constitute
perfected security interests in all right, title and interest of each Loan Party
in the Collateral to the extent that a security interest therein may be
perfected by filing pursuant to the UCC, prior to all other Liens and rights of
others therein except for Permitted Liens.
14
(c) When each Intellectual Property Security Agreement has been filed
with the United States Patent and Trademark Office and/or with the United States
Copyright Office, the Security Interests will (assuming that the financing
statements referred to in paragraph (b) above have been filed in the appropriate
filing offices) constitute perfected security interests in all right, title and
interest of such Loan Party in the Recordable Intellectual Property therein
described to the extent that a security interest therein may be perfected by
filing in such office, prior to all other Liens and rights of others therein
except for Permitted Liens.
(d) When each Account Control Agreement has been executed and
delivered to the Collateral Agent, the Security Interests will constitute
perfected security interests in all right, title and interest of the Loan
Parties in the Deposit Accounts and Securities Accounts, as applicable, subject
thereto, prior to all other Liens and rights of others therein and subject to no
adverse claims except for Permitted Liens.
Section 3.03. No Consents. No consent of any other Person (including,
without limitation, any stockholder or creditor of such Loan Party or any of its
Subsidiaries) and no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
Governmental Authority is required to be obtained by the Loan Party in
connection with the execution, delivery or performance of this Agreement, or in
connection with the exercise of the rights and remedies of the Collateral Agent
pursuant to this Agreement, except (i) as may be required to perfect (as
described in Schedule 4.01 hereto) and maintain the perfection of the security
interests created hereby, (ii) with respect to vehicles represented by a
certificate of title, (iii) in connection with the disposition of the Collateral
by Laws affecting the offering and sale of securities generally or as described
in Schedule 3.03 hereto, (iv) certain remedial actions may be limited by
applicable Laws or (v) as contemplated by the definition of Excluded Contracts;
provided, however, that (i) the registration of Copyrights in the United States
Copyright office may be required to obtain a security interest therein that is
effective against subsequent transferees under United States Federal copyright
law and (ii) to the extent that recordation of the Security Interests in the
United States Patent and Trademark Office or the United States Copyright Office
is necessary to perfect the Security Interests or to render the Security
Interests effective against subsequent third parties, such recordations will not
have been made with respect to the items that are not Recordable Intellectual
Property.
Section 3.04. Insurance. On the Issue Date, each Loan Party's
insurance complies with the provisions of Section 4.09.
Section 3.05. Intellectual Property.
(a) Schedule VI to the Loan Party's Perfection Certificate, attached
hereto as Annex I is a true, correct and complete list of all Copyrights and
Copyright Licenses owned by the Grantors as of the date hereof.
(b) Schedule VI to the Loan Party's Perfection Certificate, attached
hereto as Annex I is a true, correct and complete list of all Patents and Patent
Licenses owned by the Grantors as of the date hereof.
15
(c) Schedule VI to the Loan Party's Perfection Certificate, attached
hereto as Annex I is a true, correct and complete list of all Trademarks and
Trademark Licenses owned by the Grantors as of the date hereof.
(d) Except as set forth in Schedule VI to the Loan Party's Perfection
Certificate, attached hereto as Annex I, none of the Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which any
Grantor is the licensor or franchisor.
(e) Each Loan Party is the exclusive owner of the entire right, title,
and interest in and to, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No claim has
been asserted or is pending by any Person challenging or questioning the use by
any Loan Party of any of the Intellectual Property owned by any Loan Party or
the validity, enforceability or effectiveness of any of the Intellectual
Property owned by any Loan Party or the Loan Party's rights to any Intellectual
Property, nor does any Loan Party know of any basis for any such claim, except
as otherwise set forth in the Indenture. The use by the Loan Parties of the
Intellectual Property does not infringe or misappropriate the Intellectual
Property rights of any Person in any respect, nor does any Loan Party know of
any basis for any such claim, except as otherwise set forth in the Indenture. No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or any Loan Party's
rights in, any Intellectual Property.
ARTICLE IV
COVENANTS
Each Loan Party covenants and agrees that until the payment in full of
all Note Obligations, other than contingent indemnification obligations for
which no claim has been made, such Loan Party will comply with the following:
Section 4.01. Delivery of Perfection Certificate; Initial Perfection
and Delivery of Search Reports. On or prior to the Issue Date, such Loan Party
shall (i) deliver its Perfection Certificate to the Collateral Agent, and (ii)
cause all filings and recordings specified in Schedule 4.01 hereto to be
delivered to the Collateral Agent for filing or recording, as applicable, within
the time periods specified in such schedule. The information set forth in the
Perfection Certificate shall be correct and complete in all material respects as
of the Issue Date. The Loan Parties represent and warrant that duly executed
Account Control Agreements with respect to each of the Loan Parties' Deposit
Accounts (other than Exempt Deposit Accounts and Excluded Deposit Accounts, with
respect to which no Account Control Agreements shall be required hereunder), if
any, and Securities Accounts (other than Excluded Securities Accounts), if any,
have been delivered to the Collateral Agent and are in full force and effect.
Section 4.02. Change of Name, Identity, Structure or Location;
Subjection to Other Security Agreements. Such Loan Party will not change its
name, identity, structure or location (determined as provided in Section 9-307
of the UCC) in any manner, and shall not become bound, as provided in Section
9-203(d) of the UCC, by a security agreement entered into by another Person, in
each case, unless it shall have given the Collateral Agent not less than 10
days' prior notice thereof. Such Loan Party shall not in any event change the
location of its chief executive office or its name, identity, structure or
location (determined as provided in
16
Section 9-307 of the UCC), or become bound, as provided in Section 9-203(d) of
the UCC, by a security agreement entered into by another Person, if such change
would cause the Security Interests in any Collateral to lapse or cease to be
perfected unless such Loan Party has taken on or before the date of lapse all
actions necessary to ensure that the Security Interests in the Collateral do not
lapse or cease to be perfected.
Section 4.03. Further Actions. Each Loan Party will, from time to time
at its expense and in such manner and form as the Collateral Agent may
reasonably request, execute, deliver, file and record any financing statement,
instrument, document, agreement or other paper and take any other action
(including, without limitation, any filings of financing or continuation
statements under the UCC and any filings with the United States Patent and
Trademark Office and the United States Copyright Office) that from time to time
may be reasonably necessary or advisable under the UCC or with respect to
Recordable Intellectual Property, or that the Collateral Agent may reasonably
request, in order to create, preserve, perfect, confirm or validate the Security
Interests or to enable the Collateral Agent and the Finance Parties to obtain
the full benefit of this Agreement or to exercise and enforce any of its rights,
powers and remedies created hereunder or under applicable Law with respect to
any of the Collateral. To the extent permitted by applicable Law but without
limiting such Loan Party's obligations to itself comply with the first sentence
of this Section 4.03, such Loan Party hereby authorizes the Collateral Agent to
file, in the name of such Loan Party or otherwise and without the signature or
other separate authorization or authentication of such Loan Party appearing
thereon, such UCC financing statements or continuation statements as the
Collateral Agent may reasonably deem necessary or appropriate to further perfect
or maintain the perfection of the Security Interests. Such Loan Party agrees
that a carbon, photographic, photostatic or other reproduction of this Agreement
or of a financing statement is sufficient as a financing statement. The Loan
Parties shall pay the costs of, or incidental to, any recording or filing of any
financing or continuation statements or other assignment documents concerning
the Collateral.
Section 4.04. Delivery of Instruments, Etc. Such Loan Party will
promptly deliver each Instrument and each Certificated Security (other than (i)
Cash Equivalents held in a Deposit Account or a Securities Account and subject
to an effective Account Control Agreement unless maintained with the Collateral
Agent or as otherwise required by Section 4.13 hereof, (ii) Instruments and
Certificated Securities not constituting Collateral, (iii) Instruments or
Certificated Securities received in connection with bankruptcy or reorganization
of suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers in the ordinary course of business
and (iv) Instruments and Certificated Securities having individually, a face
amount of less than $250,000) to the Collateral Agent, appropriately indorsed to
the Collateral Agent; provided that so long as no Event of Default shall have
occurred and be continuing, and except as required by any other Note Document,
such Loan Party may (unless otherwise provided in Section 2.04(b)) retain for
collection in the ordinary course of business any Instruments received by it in
the ordinary course of business, and the Collateral Agent shall, promptly upon
request of such Loan Party, make appropriate arrangements for making any other
Instrument or Certificated Security pledged by such Loan Party available to it
for purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate to the Collateral Agent, against a
trust receipt or like document).
17
Section 4.05. Certificates of Title. Within 90 days following the
Issue Date (or such later date as the Collateral Agent may agree in its sole
discretion), such Loan Party shall in the case of Equipment constituting one or
more titled vehicles deliver to the Collateral Agent any and all certificates of
title, applications for title or similar evidence of ownership of such Equipment
and shall cause the Collateral Agent to be named as sole lienholder on any such
certificate of title or other evidence of ownership.
Section 4.06. Insurance. On or prior to the Issue Date, such Loan
Party will cause the Collateral Agent to be named as an insured party and loss
payee, effective at all times on and after the Issue Date, on each insurance
policy covering risks relating to any of its Inventory and Equipment. No such
insurance policy shall purport to include any liability on the part of the
Collateral Agent and the Finance Parties for insurance premiums and each such
insurance policy shall provide that the insurer shall provide at least 30 days
(10 days in the case of non-payment of premium) prior written notice to the
Collateral Agent of any proposed cancellation, termination or material
modification thereof. Such Loan Party hereby appoints the Collateral Agent as
its attorney in fact, effective during the continuance of an Event of Default,
to make proof of loss, claims for insurance and adjustments with insurers, and
to execute or endorse all documents, checks or drafts in connection with
payments made as a result of any such insurance policies.
Such Loan Party assumes all liability and responsibility in connection
with the Collateral acquired by it and the liability of such Loan Party to pay
the Note Obligations shall in no way be affected or diminished by reason of the
fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Loan Party.
Section 4.07. Information Regarding Collateral. Such Loan Party will,
promptly upon request, provide to the Collateral Agent all information and
evidence it may reasonably request concerning the Collateral to enable the
Collateral Agent to enforce the provisions of this Agreement.
Section 4.08. Covenants Regarding Intellectual Property. Except in the
case of subparagraphs (a), (b), (c), (e) and (f) below where the failure to do
so could not reasonably be expected to have a Material Adverse Effect and
subject to the rights of Loan Parties to dispose of assets and property in
accordance with the Indenture:
(a) Such Loan Party (either itself or through licensees) will, for
each Patent, not do any act, or omit to do any act, whereby any Patent may
become invalidated or dedicated to the public, and shall continue to mark
any products covered by a Patent as required by the patent laws of all
applicable jurisdictions.
(b) Such Loan Party (either itself or, if permitted by Law, through
its licensees or its sublicensees) will, for each Trademark, (i) maintain
such Trademark in full force free from any claim of abandonment or
invalidity from non-use, material alteration, naked licensing or
genericide, (ii) display such Trademark with proper notice, including
notice of federal registration to the extent permitted by applicable Law
and consistent with past practice, (iii) not knowingly use or knowingly
permit the use of such
18
Trademark in violation of any third party rights and (iv) not permit any
assignment in gross of such Trademark.
(c) Such Loan Party (either itself or through licensees) will, for
each work covered by a Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice.
(d) Such Loan Party shall promptly notify the Collateral Agent if it
knows or has reason to know that any Patent, Trademark or Copyright (or any
application or registration relating thereto) may become abandoned or
dedicated to the public, or of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent
and Trademark Office, the United States Copyright Office or any court,
other than ordinary course United States Patent and Trademark Office
actions) regarding such Loan Party's ownership of any Patent, Trademark,
Copyright or Software, its right to register the same or to keep, use or
maintain the same.
(e) Such Loan Party will take all commercially reasonable steps at its
sole cost, expense and risk to file, maintain and pursue each application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to preserve and maintain all common law
rights in any Trademarks and each registration of the Patents, Trademarks
and Copyrights, including filing and paying fees for applications for
renewal, reissues, divisions, extensions, revisions, continuations,
continuations-in-part, affidavits of use, affidavits of incontestability
and maintenance, and, unless such Loan Party shall reasonably determine
that any such action would be of Negligible Economic Value, to initiate
opposition, interference, reexamination and cancellation proceedings
against third parties.
(f) If any rights to any Patent, Trademark, Copyright, Software or
License relating thereto is believed infringed, misappropriated, breached
or diluted by a third party, such Loan Party shall notify the Collateral
Agent promptly after it learns thereof and shall, unless such Loan Party
shall reasonably determine that any such action would be of Negligible
Economic Value, promptly take such action at its sole cost, expense and
risk as is consistent with past practice of such Loan Party to enforce its
rights and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as such Loan
Party shall reasonably deem appropriate under the circumstances to protect
such Patent, Trademark, Copyright, Software or License. Such Loan Party
will take all actions reasonably necessary to prevent any of the
Intellectual Property from becoming forfeited, abandoned, dedicated to the
public, invalidated or impaired in any way.
(g) Within 45 days after the end of each fiscal quarter of InSight,
each Loan Party will (i) inform the Collateral Agent of: (1) all
applications for Patents, Trademarks or Copyrights filed during such fiscal
quarter by such Loan Party or by any agent, employee, licensee or delegate
on its behalf with the United States Patent and Trademark Office or the
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision
19
thereof and (2) any newly registered Intellectual Property acquired by such
Loan Party during such fiscal quarter and (ii) upon request of the
Collateral Agent, execute any and all agreements, instruments, documents
and papers as the Collateral Agent may reasonably request to evidence the
Security Interests in the foregoing described in clause (i) of this
Section, including without limitation, such registrations, licenses,
applications, any resulting Patent, Trademark or Copyright and the goodwill
or accounts and general intangibles of such Loan Party relating thereto or
represented thereby, and such Loan Party hereby appoints the Collateral
Agent its attorney-in-fact to execute and file such writings for the
foregoing purposes.
(h) Prior to the Collateral Agent's giving of notice to the Loan
Parties during the continuance of an Event of Default, the Loan Parties
shall have the exclusive right to sue for past, present and future
infringement of the Intellectual Property including the right to seek
injunctions and/or money damages, in an effort by the Loan Parties to
protect the Intellectual Property against encroachment by third parties,
provided, however:
(i) Any money damages awarded or received by the Loan Parties on
account of such suit (or the threat of such suit) shall constitute
Collateral.
(ii) Following written notice given by the Collateral Agent to
the Loan Parties during the continuance of any Event of Default, the
Collateral Agent may terminate or limit the Loan Parties' rights under
this Section 4.11(j).
Section 4.09. Deposit Accounts and Securities Accounts. No Loan Party
shall establish after the date hereof or permit to exist any Deposit Account
(other than Exempt Deposit Accounts or Excluded Deposit Accounts) or any
Securities Account (other than Excluded Securities Accounts and except any such
account maintained with the Collateral Agent or constituting Collateral
Accounts) without promptly delivering to the Collateral Agent a fully executed
Account Control Agreement with respect to such account. Subject to Section
2.04(b) hereof and the rights of the Collateral Agent under Article V hereof,
each Loan Party shall cause all cash (other than cash constituting Receivables
or Related Assets) and cash Proceeds of Collateral hereunder to be deposited in
a Deposit Account maintained with the Collateral Agent or with respect to which
an effective Account Control Agreement has been delivered to the Collateral
Agent.
Section 4.10. Claims. In the event any Claim constituting Collateral
in excess of $1,000,000 arises or otherwise becomes known after the date hereof,
the applicable Loan Party will deliver to the Collateral Agent a supplement to
Schedule 1.01A hereto describing such Claim and expressly subjecting such Claim,
all Judgments and/or Settlements with respect thereto and all Proceeds thereof
to the Security Interests hereunder.
ARTICLE V
GENERAL AUTHORITY; REMEDIES
Section 5.01. General Authority. Each Loan Party hereby irrevocably
appoints the Collateral Agent and any officer or agent thereof as its true and
lawful attorney-in-fact, with
20
full power of substitution, in the name of such Loan Party, the Collateral
Agent, the Finance Parties or otherwise, for the sole use and benefit of the
Collateral Agent and the Finance Parties, but at such Loan Party's expense, to
the extent permitted by Law and subject to the Collateral Agency Agreement, to
exercise at any time and from time to time while an Event of Default has
occurred and is continuing all or any of the following powers with respect to
all or any of the Collateral, all acts of such attorney being hereby ratified
and confirmed; such power, being coupled with an interest, is irrevocable until
the Note Obligations (other than contingent indemnification obligations for
which no claim has been made) are paid in full:
(i) to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to carry out
the terms of this Agreement;
(ii) to receive, take, endorse, assign and deliver any and all checks,
notes, drafts, acceptances, documents and other negotiable and
non-negotiable Instruments taken or received by such Loan Party as, or in
connection with, Collateral;
(iii) to commence, settle, compromise, compound, prosecute, defend or
adjust any Claim, suit, action or proceeding with respect to, or in
connection with, the Collateral;
(iv) to sell, transfer, assign or otherwise deal in or with the
Collateral or the Proceeds or avails thereof, including, without
limitation, for the implementation of any assignment, lease, License,
sublicense, grant of option, sale or other disposition of any Patent,
Trademark, Copyright or Software or any action related thereto, as fully
and effectually as if the Collateral Agent were the absolute owner thereof;
(v) to extend the time of payment of any or all of the Collateral and
to make any allowance and other adjustments with respect thereto; and
(vi) to do, at its option, but at the expense of such Loan Party, at
any time or from time to time, all acts and things which the Collateral
Agent deems necessary to protect or preserve the Collateral and to realize
upon the Collateral.
Section 5.02. Remedies upon Event of Default.
(a) If any Event of Default has occurred and is continuing, the
Collateral Agent may, in addition to all other rights and remedies granted to it
in this Agreement and any other agreement securing, evidencing or relating to
the Note Obligations: (i) exercise on behalf of the Finance Parties all rights
and remedies of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, (ii) without
demand of performance or other demand or notice of any kind (except as herein
provided or as may be required by mandatory provisions of Law) to or upon any
Loan Party or any other Person (all of which demands and/or notices are hereby
waived by each Loan Party), (A) withdraw all cash and Liquid Investments in the
Collateral Accounts and apply such cash and Liquid Investments and other cash,
if any, then held by it as Collateral as specified in Section 5.04, (B) give
notice and take sole possession and control of all amounts on deposit in or
credited to any Deposit Account (other than an Excluded Deposit Account or an
Exempt Deposit Account) or Securities Account
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(other than an Excluded Securities Account) pursuant to the
related Account Control Agreement and apply all such funds as specified in
Section 5.04 hereof and (C) if there shall be no such cash, Liquid Investments
or other amounts or if such cash, Liquid Investments and other amounts shall be
insufficient to pay all the Note Obligations in full or cannot be so applied for
any reason or if the Collateral Agent determines to do so, collect, receive,
appropriate and realize upon the Collateral and/or sell, assign, give an option
or options to purchase or otherwise dispose of and deliver the Collateral (or
contract to do so) or any part thereof at public or private sale, at any office
of the Collateral Agent or elsewhere in such manner as is commercially
reasonable and as the Collateral Agent may deem best, for cash, on credit or for
future delivery, without assumption of any credit risk and at such price or
prices as the Collateral Agent may deem satisfactory.
(b) The Collateral Agent shall give each Loan Party not less than 10
days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. Any such notice shall (i) in the case of a public sale, state
the time and place fixed for such sale, (ii) in the case of a private sale,
state the day after which such sale may be consummated, (iii) contain the
information specified in UCC Section 9-613, (iv) be authenticated and (v) be
sent to the parties required to be notified pursuant to Section 9-611(c) of the
UCC; provided that, if the Collateral Agent fails to comply with this sentence
in any respect, its liability for such failure shall be limited to the liability
(if any) imposed on it as a matter of law under the UCC. The Collateral Agent
and each Loan Party agree that such notice constitutes reasonable notification
within the meaning of Section 9-611 of the UCC. Except as otherwise provided
herein, each Loan Party hereby waives, to the extent permitted by applicable
Law, notice and judicial hearing in connection with the Collateral Agent's
taking possession or disposition of any of the Collateral.
(c) The Collateral Agent or any Finance Party may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). Each Loan Party will execute and deliver such documents and take such
other action as the Collateral Agent deems necessary or advisable in order that
any such sale may be made in compliance with Law. Upon any such sale, the
Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
hold the Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix in the notice of such sale. At any such sale, the Collateral may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may
determine. The Collateral Agent shall not be obligated to make any such sale
pursuant to any such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned without further notice. In the case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Collateral Agent until the selling price is paid by the
purchaser thereof, but the Collateral Agent shall not incur any liability in the
case of the failure of such
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purchaser to take up and pay for the Collateral so sold and, in the case of any
such failure, such Collateral may again be sold upon like notice.
(d) For the purpose of enforcing any and all rights and remedies under
this Agreement, the Collateral Agent may, if any Event of Default has occurred
and is continuing, (i) require each Loan Party to, and each Loan Party agrees
that it will, at its expense and upon the request of the Collateral Agent,
forthwith assemble, store and keep all or any part of the Collateral as directed
by the Collateral Agent and make it available at a place designated by the
Collateral Agent which is, in the Collateral Agent's opinion, reasonably
convenient to the Collateral Agent and such Loan Party, whether at the premises
of such Loan Party or otherwise, it being understood that such Loan Party's
obligation so to deliver the Collateral is of the essence of this Agreement and
that, accordingly, upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific
performance by such Loan Party of such obligation; (ii) to the extent permitted
by applicable Law, enter, with or without process of law and without breach of
the peace, any premise where any of the Collateral is or may be located, and
without charge or liability to any Loan Party, seize and remove such Collateral
from such premises; (iii) have access to and use such Loan Party's books and
records relating to the Collateral; and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by such Loan Party, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Collateral Agent deems appropriate and, in connection with such
preparation and disposition, use without charge any Intellectual Property or
technical process used by such Loan Party. The Collateral Agent may also render
any or all of the Collateral unusable at any Loan Party's premises and may
dispose of such Collateral on such premises without liability for rent or costs.
(e) Without limiting the generality of the foregoing, if any Event of
Default has occurred and is continuing:
(i) the Collateral Agent may (subject to the express terms of any
valid and enforceable restriction in favor of a Person who is not a Group
Company that prohibits, requires any consent, or establishes any other
conditions for, a license thereof) license, or sublicense, whether general,
special or otherwise, and whether on an exclusive (if consistent with past
business practices) or non-exclusive basis, any Patents, Trademarks,
Copyrights or Software included in the Collateral throughout the world for
such term or terms, on such conditions and in such manner as the Collateral
Agent shall in its sole and commercially reasonable discretion determine;
(ii) the Collateral Agent may (without assuming any obligations or
liability thereunder), at any time and from time to time, enforce (and
shall have the exclusive right to enforce) against any licensor,
sublicensor, licensee or sublicensee all rights and remedies of any Loan
Party in, to and under any License and take or refrain from taking any
action under any provision thereof, and each Loan Party hereby releases the
Collateral Agent and each of the Finance Parties from, and agrees to hold
the Collateral Agent and each of the Finance Parties free and harmless from
and against any claims arising out of, any lawful action so taken or
omitted to be taken with respect thereto;
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(iii) upon request by the Collateral Agent, each Loan Party will use
its commercially reasonable efforts to obtain all requisite consents or
approvals by the licensor, sublicensor, licensee or sublicensee of each
License to effect the assignment of all of such Loan Party's right, title
and interest thereunder to the Collateral Agent or its designee and will
execute and deliver to the Collateral Agent a power of attorney, in form
and substance reasonably satisfactory to the Collateral Agent, for the
implementation of any lease, assignment, License, sublicense, grant of
option, sale or other disposition of a Patent, Trademark, Copyright or
Software; and
(iv) the Collateral Agent may direct each Loan Party to refrain, in
which event each such Loan Party shall refrain, from using or practicing
any Trademark, Patent, Copyright or Software in any manner whatsoever,
directly or indirectly, and shall, if requested by the Collateral Agent,
change such Loan Party's name to eliminate therefrom any use of any
Trademark and will execute such other and further documents as the
Collateral Agent may request to further confirm this change and transfer
ownership of the Trademarks, Patents, Copyrights, Software and
registrations and any pending applications therefor to the Collateral
Agent.
(f) In the event of any disposition following the occurrence and
during the continuance of any Event of Default of any Patent, Trademark,
Copyright or Software pursuant to this Article V, each Loan Party shall supply
its know-how and expertise relating to the manufacture and sale of the products
or services bearing Trademarks or the products, services or works made or
rendered in connection with or under Patents, Trademarks, Copyrights or
Software, and its customer lists and other records relating to such Patents,
Trademarks, Copyrights or Software and to the distribution of said products,
services or works, to the Collateral Agent.
(g) If any Event of Default has occurred and is continuing, the
Collateral Agent, instead of exercising the power of sale conferred upon it
pursuant to this Section 5.02, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction, and may in addition institute and maintain such suits and
proceedings as the Collateral Agent may deem appropriate to protect and enforce
the rights vested in it by this Agreement.
(h) If any Event of Default has occurred and is continuing, the
Collateral Agent shall, to the extent permitted by applicable Law, without
notice to any Loan Party or any party claiming through any Loan Party, without
regard to the solvency or insolvency at such time of any Person then liable for
the payment of any of the Note Obligations, without regard to the then value of
the Collateral and without requiring any bond from any complainant in such
proceedings, be entitled as a matter of right to the appointment of a receiver
or receivers (who may be the Collateral Agent) of the Collateral or any part
thereof, and of the profits, revenues and other income thereof, pending such
proceedings, with such powers as the court making such appointment shall confer,
and to the entry of an order directing that the profits, revenues and other
income of the property constituting the whole or any part of the Collateral be
segregated, sequestered and impounded for the benefit of the Collateral Agent
and the Finance Parties, and
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each Loan Party irrevocably consents to the appointment of such receiver or
receivers and to the entry of such order.
(i) Each Loan Party agrees, to the extent it may lawfully do so, that
it will not at any time in any manner whatsoever claim or take the benefit or
advantage of, any appraisal, valuation, stay, extension, moratorium, turnover or
redemption law, or any Law permitting it to direct the order in which the
Collateral shall be sold, now or at any time hereafter in force which may delay,
prevent or otherwise affect the performance or enforcement of this Agreement,
and each Loan Party hereby waives all benefit or advantage of all such Laws.
Each Loan Party covenants that it will not hinder, delay or impede the execution
of any power granted to the Collateral Agent or any other Finance Party in any
Note Document.
(j) Each Loan Party, to the extent it may lawfully do so, on behalf of
itself and all who claim through or under it, including, without limitation, any
and all subsequent creditors, vendees, assignees and lienors, waives and
releases all rights to demand or to have any marshalling of the Collateral upon
any sale, whether made under any power of sale granted herein or pursuant to
judicial proceedings or under any foreclosure or any enforcement of this
Agreement, and consents and agrees that all of the Collateral may at any such
sale be offered and sold as an entirety.
(k) Each Loan Party waives, to the extent permitted by Law,
presentment, demand, protest and any notice of any kind (except the notices
expressly required hereunder or in the other Note Documents) in connection with
this Agreement and any action taken by the Collateral Agent with respect to the
Collateral.
Section 5.03. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof,
neither the Collateral Agent nor the Finance Parties shall have any duty to
exercise any rights or take any steps to preserve the rights of any Loan Party
in the Collateral in its or their possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto, nor
shall the Collateral Agent or any Finance Party be liable to any Loan Party or
any other Person for failure to meet any obligation imposed by Section 9-207 of
the UCC or any successor provision. Each Loan Party agrees that the Collateral
Agent shall at no time be required to, nor shall the Collateral Agent be liable
to any Loan Party for any failure to, account separately to any Loan Party for
amounts received or applied by the Collateral Agent from time to time in respect
of the Collateral pursuant to the terms of this Agreement. Without limiting the
foregoing, the Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, and shall not be liable or
responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Collateral Agent in good faith.
Section 5.04. Application of Proceeds.
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(a) Priority of Distributions. The proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held in the
Collateral Accounts shall be applied as set forth in Section 4.06 of the
Collateral Agency Agreement. The Collateral Agent may make distributions
hereunder in cash or in kind or, on a ratable basis, in any combination thereof.
(b) Deficiencies. It is understood that the Loan Parties shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral and the amount of the Note Obligations.
ARTICLE VI
COLLATERAL AGENT
Section 6.01. Concerning the Collateral Agent. The provisions of
Article VI of the Collateral Agency Agreement shall inure to the benefit of the
Collateral Agent in respect of this Agreement and shall be binding upon all Loan
Parties, all Finance Parties and upon the parties hereto in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Collateral Agent therein set forth:
(i) The Collateral Agent is authorized to take all such action as is
provided to be taken by it as Collateral Agent hereunder and all other
action reasonably incidental thereto. As to any matters not expressly
provided for herein or as to any matters which permit but do not require
action by the Collateral Agent (including, without limitation, the timing
and methods of realization upon the Collateral), the Collateral Agent shall
act or refrain from acting in accordance with written instructions from the
Directing Noteholders as contemplated by the Collateral Agency Agreement
or, in the absence of such instructions or provisions, subject to the terms
of the Collateral Agency Agreement, in accordance with its discretion.
(ii) The Collateral Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of
the Collateral, whether impaired by operation of law or by reason of any
action or omission to act on its part hereunder unless such action or
omission constitutes gross negligence or willful misconduct. The Collateral
Agent shall have no duty to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement or any Note Document by
any Loan Party.
(iii) Any use by the Collateral Agent of the Intellectual Property, as
authorized hereunder in connection with the exercise of the Collateral
Agent's rights and remedies under this Agreement and under the Indenture
shall be coextensive with the Loan Parties' rights thereunder and with
respect thereto and without any liability for royalties or other related
charges.
Section 6.02. Appointment of Co-Collateral Agent. At any time or
times, in order to comply with any legal requirement in any jurisdiction, the
Collateral Agent may in consultation with InSight and, unless an Event of
Default shall have occurred and be continuing,
26
with its consent (not to be unreasonably withheld or delayed) appoint another
bank or trust company or one or more other persons, either to act as co-agent or
co-agents, jointly with the Collateral Agent, or to act as separate agent or
agents on behalf of the Finance Parties with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Collateral Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 6.01). Notwithstanding any
such appointment but only to the extent not inconsistent with such legal
requirements or, in the reasonable judgment of the Collateral Agent, not unduly
burdensome to it or any such co-agent, such Loan Party shall be entitled to deal
solely and directly with the Collateral Agent rather than any such co-agent in
connection with the Collateral Agent's rights and obligations under this
Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Notices.
(a) Unless otherwise specified herein, all notices, requests or other
communications to any party hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered to the address or
facsimile number: (i) in the case of Holdings, InSight, any Subsidiary Guarantor
or any Noteholder or the Trustee, as set forth in Section 13.02 of the
Indenture, (ii) in the case of the Collateral Agent, as set forth on the
signature pages hereof or (iii) in the case of any party, to such other address,
facsimile number or electronic mail address as such party shall hereafter
specify for the purpose of communications hereunder by notice to the other
parties hereto. Each such notice, request or other communication shall be
effective upon the earlier to occur of (i) actual receipt by the intended
recipient and (ii) (A) if delivered by hand or by courier, when signed for by or
on behalf of the intended recipient, (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid and (C) if delivered by
facsimile, when sent and receipt has been confirmed electronically. Rejection or
refusal to accept, or the inability to deliver because of a changed address of
which no notice was given shall not affect the validity of notice given in
accordance with this section.
(b) This Agreement may be transmitted and/or signed by facsimile and,
if so transmitted or signed shall, subject to requirements of Law, have the same
force and effect as a manually-signed original and shall be binding on all Loan
Parties and the Finance Parties. The Collateral Agent may also require that this
Agreement be confirmed by a manually-signed original hereof; provided, however,
that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
Section 7.02. No Waivers; Non-Exclusive Remedies. No failure or delay
on the part of any Finance Party to exercise, no course of dealing with respect
to, and no delay in exercising, any right, power or privilege under this
Agreement or any other Note Document or any other document or agreement
contemplated hereby or thereby and no course of dealing between any Finance
Party and any of the Loan Parties shall operate as a waiver thereof nor shall
any single or partial exercise of any such right, power or privilege hereunder
or under any Note Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein and in the other
27
Note Documents are cumulative and are not exclusive of any other remedies
provided by Law. Without limiting the foregoing, nothing in this Agreement shall
impair the right of any Finance Party to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of any Loan Party other than its indebtedness under the
Note Documents. Each Loan Party agrees, to the fullest extent it may effectively
do so under applicable Law, that any holder of a participation in a Note
Obligation, whether or not acquired pursuant to the terms of any applicable Note
Document, may exercise rights of set-off or counterclaim or other rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of the Loan Party in the amount of such participation.
Section 7.03. Compensation and Expenses of the Collateral Agent;
Indemnification.
(a) Expenses. The Loan Parties, jointly and severally, agree to pay
(i) all reasonable out-of-pocket expenses of the Collateral Agent, including
fees and disbursements of special and local counsel for the Collateral Agent, in
connection with the preparation and administration of this Agreement or any
document or agreement contemplated hereby, any waiver or consent hereunder or
any amendment hereof or any Default or Event of Default or alleged Default or
Event of Default and (ii) all taxes which the Collateral Agent or any other
Finance Party may be required to pay by reason of the security interests granted
in the Collateral (including any applicable transfer taxes) or to free any of
the Collateral from the lien thereof.
(b) Protection of Collateral. If any Loan Party fails to comply with
the provisions of any Note Document, such that the value of any material portion
of Collateral or the validity, perfection, rank or value of any Security
Interest is thereby materially diminished or potentially materially diminished,
after notice to such Loan Party (unless in the reasonable judgment of the
Collateral Agent, the giving of such notice would be impractical) the Collateral
Agent may, but shall not be required to, effect such compliance on behalf of
such Loan Party, and the Loan Parties shall reimburse the Collateral Agent for
the costs thereof within 30 days of receipt of a reasonably detailed written
invoice therefor. All insurance expenses and all expenses of protecting,
storing, warehousing, appraising, handling, maintaining and shipping the
Collateral, or in respect of the sale or other disposition thereof, including
any and all excise, property, sales and use taxes imposed by any state, federal
or local authority on any of the Collateral, or in respect of periodic
appraisals and inspections of the Collateral, shall be borne and paid by the
Loan Parties. If any Loan Party fails to promptly pay any portion thereof when
due, the Collateral Agent may, at its option, but shall not be required to,
after notice to such Loan Party (unless in the reasonable judgment of the
Collateral Agent, the giving of such notice would be impractical) pay the same
and charge the Loan Parties' account therefor, and the Loan Parties agree to
reimburse the Collateral Agent therefor on demand. All sums so paid or incurred
by the Collateral Agent for any of the foregoing and any and all other sums for
which any Loan Party may become liable hereunder and all costs and expenses
(including attorneys' fees, legal expenses and court costs) reasonably incurred
by the Collateral Agent or any Finance Party in enforcing or protecting the
Security Interests or any of their rights or remedies under this Agreement,
shall, together with interest thereon from demand and until paid at the rate
applicable to interest at the highest rate applicable under the Note Documents
in respect of overdue obligations, be additional Note Obligations hereunder.
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(c) Indemnification. Each Loan Party agrees to indemnify the
Collateral Agent, each other Finance Party and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact and their
respective successors and assigns (each, an "INDEMNITEE" and, collectively,
"INDEMNITEES") and hold each Indemnitee harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
suits, judgments, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by,
imposed on or asserted against such Indemnitee in connection with any
investigation or administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any other Collateral Document or in any
other way connected with the enforcement of any of the terms of, or the
preservation of any rights under, this Agreement or any other Collateral
Document or in any way relating to or arising out of the manufacture, ownership,
ordering, purchasing, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), the violation of the Laws of any country, state or other
Governmental Authority, or any tort (including, without limitation, any claims,
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage) or contract claim; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct or that of its affiliates, directors, trustees, agents or employees
as determined by a court of competent jurisdiction in a final, non-appealable
judgment or order. Each Loan Party agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, loss, damage,
penalty, claim, demand, action, judgment or suit, such Loan Party shall assume
full responsibility for the defense thereof. Each Indemnitee agrees to use its
best efforts to notify the Loan Parties of any such assertion of which such
Indemnitee has knowledge.
(d) Contribution. If and to the extent that the obligations of any
Loan Party under this Section 7.03 are unenforceable for any reason, each Loan
Party hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable Law.
(e) Obligations; Survival. Any amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute Note
Obligations. The indemnity obligations of the Loan Parties contained in this
Section 7.03 shall continue in full force and effect notwithstanding the full
payment of all Note Obligations and notwithstanding the discharge thereof.
Section 7.04. Enforcement. The Finance Parties agree that this
Agreement may be enforced only by the action of the Collateral Agent, acting
upon the instructions of the Directing Noteholders, if so required under the
Collateral Agency Agreement, and that no other Finance Party shall have any
right individually to seek to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such rights
and remedies may be exercised by the Collateral Agent for the benefit of the
Finance Parties upon the terms of this Agreement and the Collateral Agency
Agreement.
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Section 7.05. Amendments and Waivers. Any provision of this Agreement
may be amended, changed, discharged, terminated or waived if, but only if, such
amendment or waiver is in writing and is signed by each Loan Party affected by
such amendment, change, discharge, termination or waiver (it being understood
that the addition or release of any Loan Party hereunder shall not constitute an
amendment, change, discharge, termination or waiver affecting any Loan Party
other than the Loan Party so added or released and it being further understood
and agreed that any supplement to Schedule 1.01 delivered pursuant to Section
4.15 hereof shall not require the consent of any Loan Party) and by the
Collateral Agent (with the consent of the Directing Noteholders or the Trustee,
as the case may be, to the extent required by the Collateral Agency Agreement).
Section 7.06. Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and inure to the benefit of the Collateral Agent
and the Finance Parties and their respective successors and assigns. In the
event of an assignment of all or any of the Note Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. No Loan Party shall assign or delegate any
of its rights and duties hereunder without the prior written consent of all of
the Finance Parties.
Section 7.07. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Section 7.08. Limitation of Law; Severability.
(a) All rights, remedies and powers provided in this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of Law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of Law which may
be controlling and be limited to the extent necessary so that they will not
render this Agreement invalid, unenforceable in whole or in part, or not
entitled to be recorded, registered or filed under the provisions of any
applicable Law.
(b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by Law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Finance Parties in order to carry
out the intentions of the parties hereto as nearly as may be possible; and (ii)
the invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provisions in any other
jurisdiction.
Section 7.09. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective with respect to each Loan
Party when the Collateral Agent shall receive counterparts hereof executed by
itself and such Loan Party.
30
Section 7.10. Additional Loan Parties. It is understood and agreed
that any Subsidiary of InSight that is required by any Note Document to execute
a counterpart of this Agreement after the date hereof shall automatically become
a Loan Party hereunder with the same force and effect as if originally named as
a Loan Party hereunder by executing an instrument of accession or joinder
substantially in the form of Exhibit E hereto and delivering the same to the
Collateral Agent. Concurrently with the execution and delivery of such
instrument of accession or joinder, such Subsidiary shall take all such actions
and deliver to the Collateral Agent all such documents and agreements as such
Subsidiary would have been required to deliver to the Collateral Agent on or
prior to the date of this Agreement had such Subsidiary been a party hereto on
the date of this Agreement. Such additional materials shall include, among other
things, an opinion of counsel to the extent required under the Indenture and
supplements to Schedules 1.01A and B, 3.04, 3.05 and 4.01 hereto (which
Schedules shall thereupon automatically be amended and supplemented to include
all information contained in such supplements) such that, after giving effect to
the joinder of such Subsidiary, each of Schedules 1.01A and B, 3.04, 3.05 and
4.01 hereto is true, complete and correct in all material respects with respect
to such Subsidiary as of the effective date of such accession or joinder. The
execution and delivery of any such instrument of accession or joinder, and the
amendment and supplementation of the Schedules hereto as provided in the
immediately preceding sentence, shall not require the consent of any other Loan
Party or Finance Party hereunder. The rights and obligations of each Loan Party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Loan Party as a party to this Agreement.
Section 7.11. Termination; Release of Loan Parties.
(a) Termination. Upon the full payment and performance of all Note
Obligations (other than contingent indemnification obligations), the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Loan Parties. In addition, at any time and from time to time prior to such
termination of the Security Interests, the Collateral Agent may release any of
the Collateral or subordinate its Security Interests therein to Liens in favor
of certain third parties with the prior written consent of the Directing
Noteholders or as provided in Article V of the Collateral Agency Agreement. Upon
any such termination of the Security Interests or release of Collateral, the
Collateral Agent will, upon request by and at the expense of any Loan Party
(and, in the case of a release of Collateral, upon receipt of a written
certification of a Responsible Officer of InSight that the Trustee has received
all documents, if any, required by the Trust Indenture Act and the Indenture)
execute and deliver to such Loan Party such documents as such Loan Party shall
reasonably request to evidence the termination of the Security Interests or the
release of such Collateral, as the case may be. Any such documents shall be
without recourse to or warranty by the Collateral Agent or the other Finance
Parties. The Collateral Agent shall have no liability whatsoever to any other
Finance Party as a result of any release of Collateral by it as permitted by
this Section 7.11. Upon any release of Collateral pursuant to this Section 7.11,
none of the Finance Parties shall have any continuing right or interest in such
Collateral or the Proceeds thereof. Upon satisfaction and discharge of the
Indenture as provided in Article 12 of the Indenture, or legal defeasance or
covenant defeasance of the Indenture as provided in Article 8 of the Indenture
and the Note Obligations under the Note Documents, as applicable, shall be
deemed to be paid in full for purposes of Sections 7.04, 7.05 and this Section
7.11(a).
31
(b) Release of Loan Parties. If any part of the Collateral (x) is
taken by eminent domain, condemnation or other similar circumstances, or (y) is
sold, transferred, otherwise disposed of or liquidated in compliance with the
requirements of the Note Documents (or such sale, transfer, other disposition or
liquidation has been approved in writing by the Directing Noteholders), then in
each such case, such Collateral shall be automatically released from the
Security Interests created hereby and the Collateral Agent, at the request and
expense of such Loan Party, will (upon receipt of a written certification of a
Responsible Officer of InSight that the Trustee has received all documents, if
any, required by the Trust Indenture Act and the Indenture) assign, transfer and
deliver to such Loan Party (without recourse and without representation or
warranty) such of the Collateral as is then being (or has been) so taken, sold,
transferred, disposed of or liquidated as may be in the possession or control of
the Collateral Agent and has not theretofore been released pursuant to this
Agreement and deliver to the applicable Loan Party all documents and other
releases reasonably requested by such Loan Party (including UCC termination
statements) to evidence the release of such Collateral from the Security
Interests. Further, upon the release of a Guarantor from its obligations under
all guaranties of the Note Obligations in accordance with the provisions thereof
and the other Note Documents, such Guarantor (and the Collateral assigned by
such Guarantor pursuant hereto) shall be automatically released from this
Agreement and the Collateral Agent will, upon request by and at the expense of
such Guarantor, execute and deliver to such Guarantor such documents as such
Guarantor shall reasonably request to evidence the release of such Guarantor and
such Collateral.
(c) Other Releases. If property that constitutes either (A) all or
substantially all of the Collateral securing Note Obligations or (B) less than
all or substantially all of the Collateral securing Note Obligations is released
with the consent of the Directing Noteholders in accordance with the Collateral
Agency Agreement, then in each such case, the Collateral Agent, at the request
and expense of the relevant Loan Party, will (upon receipt of a written
certification of a Responsible Officer of InSight that the Trustee has received
all documents, if any, required by the Trust Indenture Act and the Indenture)
duly release from the security interest created hereby and assign, transfer and
deliver to such Loan Party (without recourse and without representation or
warranty) such of the Collateral as is then being (or has been) so released as
maybe in the possession or control of the Collateral Agent and has not
theretofore been released pursuant to this Agreement, and execute and deliver to
such Loan Party such documents and instruments (including UCC termination
statements) as such Loan Party may reasonably request to evidence the release of
such Collateral. In addition, if any Capital Stock or other securities shall,
after the Issue Date, meet the criteria of any of clauses (ii), (iv) or (v) of
the proviso of Section 2.01, such Capital Stock or other securities shall
automatically be deemed to be released from the Collateral and the Lien of this
Agreement and the Collateral Agent shall promptly after receipt of an Officer's
Certificate deliver such Capital Stock or other securities then in its
possession to the applicable Loan Party together with such releases and other
documents as may be reasonably requested by such Loan Party.
Section 7.12. Entire Agreement. This Agreement and the other
Collateral Documents constitute the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, and any contemporaneous oral agreements and understandings
relating to the subject matter hereof and thereof.
32
[Signature Pages Follow]
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first written above.
LOAN PARTIES: INSIGHT HEALTH SERVICES HOLDINGS CORP.
By: /s/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
Title: Executive Vice President and
Chief Financial Officer
INSIGHT HEALTH SERVICES CORP.
By: /s/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
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/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
Title: Executive Vice President and
Chief Financial Officer
MRI ASSOCIATES, L.P.
By: InSight Health Corp., as the general
partner
By: /s/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
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
S-1
By: /s/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
Title: Executive Vice President and
Chief Financial Officer
S-2
PARKWAY IMAGING CENTER, LLC
By: /s/ Marilyn U. MacNiven-Young
------------------------------------
Name: Marilyn U. MacNivenYoung
Title: Manager
INSIGHT HEALTH CORP.
OPEN MRI, INC.
MAXUM HEALTH CORP.
RADIOSURGERY CENTERS, INC.
MAXUM HEALTH SERVICES CORP.
DIAGNOSTIC SOLUTIONS 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.
COMPREHENSIVE MEDICAL IMAGING -
BILTMORE, INC.
COMPREHENSIVE OPEN MRI-EAST MESA, INC.
TME ARIZONA, INC.
COMPREHENSIVE MEDICAL IMAGING -FREMONT,
INC.
COMPREHENSIVE MEDICAL IMAGING-SAN
FRANCISCO, INC.
COMPREHENSIVE OPEN MRI-GARLAND, INC.
IMI OF ARLINGTON, INC.
COMPREHENSIVE MEDICAL IMAGING-
FAIRFAX, INC.
IMI OF KANSAS CITY, INC.
COMPREHENSIVE MEDICAL IMAGING -
BAKERSFIELD, INC.
By: /s/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
Title: Executive Vice President and
Chief Financial Officer
S-3
MAXUM HEALTH SERVICES CORP.
By: /s/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
Title: Executive Vice President and
Chief Financial Officer
By: /s/ Marilyn U. MacNiven-Young
------------------------------------
Name: Marilyn U. MacNiven-Young
Title: Executive Vice President,
General Counsel and Secretary
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/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
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/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
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/ Mitch C. Hill
------------------------------------
Name: Mitch C. Hill
Title: Executive Vice President and
Chief Financial Officer
S-4
COLLATERAL AGENT: U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Jean Clarke
------------------------------------
Name: Jean Clarke
Title: Assistant Vice President
Attention:
Telephone: 212-361-6173
Telecopier: 212-361-6153
S-5
EXHIBIT A-1
to
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY INTEREST
IN UNITED STATES PATENTS AND TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Loan Party Name], [Loan Party Description] (the
"GRANTOR"), having its chief executive office at [Loan Party Notice Address],
hereby grants to [Collateral Agent Name], as Collateral Agent, (the "GRANTEE"),
with offices at [Collateral Agent Notice Address], a security interest in and
mortgages all of the Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "PATENT AND TRADEMARK COLLATERAL"), whether
presently existing or hereafter arising or acquired:
(i) each United States patent and patent application, including each Patent
and patent application referred to on Schedule A hereto;
(ii) each Patent License, including each Patent License listed on Schedule
A hereto;
(iii) each United States trademark, trademark registration and trademark
application, and all of the goodwill of the business connected with the use of,
and symbolized by, each trademark, trademark registration and trademark
application, including each Trademark, Trademark registration and Trademark
application referred to in Schedule B hereto;
(iv) each Trademark License, whether registered or not, including each
Trademark License referred to in Schedule B hereto, and all of the goodwill of
the business connected with the use of, and symbolized by, each Trademark; and
(v) all products and proceeds of the foregoing, including any claim by the
Assignor against third parties for past, present or future infringement of any
Patent, or past, present or future infringement or dilution of any Trademark or
Trademark registration, including any Patent, Trademark or Trademark
registration listed on Schedule A or B hereto, or under any Patent, Trademark or
Trademark registration licensed under any Patent License or Trademark License,
including any such license listed on Schedule A or B hereto, or for injury to
the goodwill associated with any Trademark, Trademark registration or Trademark
License.
THIS GRANT OF SECURITY INTEREST is granted in conjunction with the
security interests granted to the Grantee pursuant to the Security Agreement
among the Grantor, the Grantee and certain other parties dated as of September
22, 2005, as amended, modified or supplemented from time to time (the "SECURITY
AGREEMENT").
THIS GRANT OF SECURITY INTEREST has been granted in conjunction with
the security interest granted to the Grantee under the Security Agreement. The
rights and remedies of the Grantee with respect to the security interest granted
herein are without prejudice to, and are in addition to those set forth in the
Security Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Grant of
Security Interest are deemed to conflict with the Security Agreement, the
provisions of the Security Agreement shall govern.
THIS GRANT OF SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the undersigned have executed this Grant of
Security Interest as of the _______ day of ____________, 200__.
[LOAN PARTY NAME], as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[COLLATERAL AGENT NAME],
as Collateral Agent, as Grantee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STATE OF ___________________)
)
____________ OF ____________)
The foregoing instrument was acknowledged before me this _______ day
of ____________, 20__ by ____________ as ____________ of [LOAN PARTY NAME],
[LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME].
----------------------------------------
Notary Public
My commission expires:
-----------------
Notarial Seal
A-2
Schedule A to Patent and Trademark Grant of Security Interest
PATENTS AND PATENT APPLICATIONS
Serial No. or
Patent No. Date Issue Title Inventor Country Patent Holder
- ------------- ---- ----- ----- -------- ------- -------------
PATENT LICENSES
Licensor Licensee Patent Number(s) Date
- -------- -------- ---------------- ----
A-3
Schedule B to Patent and Trademark Grant of Security Interest
TRADEMARKS
Registration No. Country Issue Date Mark
- ---------------- ------- ---------- ----
TRADEMARK APPLICATIONS
Serial No. Country Filing Date Mark
- ---------- ------- ----------- ----
TRADEMARK LICENSES
Serial or Issue or
Grantor Registration No. Country Filing Date Mark
- ------- ---------------- ------- ----------- ----
A-4
EXHIBIT B-2
to
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Loan Party Name], [Loan Party Description] (the
"GRANTOR"), having its chief executive office at [Loan Party Notice Address],
hereby grants to [Collateral Agent Name], as Collateral Agent (the "GRANTEE"),
with offices at [Collateral Agent Notice Address], a security interest in
mortgages all of the Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "COPYRIGHT COLLATERAL"), whether presently
existing or hereafter arising or acquired:
(i) each United States copyright and any renewals thereof, including
each Copyright listed on Schedule A hereto;
(ii) each Copyright License, including each Copyright License listed
on Schedule A hereto;
(iii) all registrations and applications for registration of any such
copyright in the United States, including registrations, recordings,
supplemental, derivative or collective work registrations and pending
applications for registrations in the United States Copyright Office,
including each Copyright registration and Copyright application listed on
Schedule A hereto;
(iv) all computer programs, web pages, computer data bases and
computer program flow diagrams, including all source codes and object codes
related to any or all of the foregoing;
(v) all tangible property embodying or incorporating any or all of the
foregoing; and
(vi) all products, proceeds and related accounts of the foregoing,
including any claim by the Assignor against third parties for past, present
or future infringement of any Copyright including any Copyright listed on
Schedule A hereto, or under any Copyright licensed under any Copyright
License, including any such license listed on Schedule A hereto, whether
registered or not.
THIS GRANT OF SECURITY INTEREST is granted in conjunction with the
security interests granted to the Grantee pursuant to the Security Agreement
among the Grantor, the Grantee and certain other parties dated as of September
22, 2005, as amended, modified or supplemented from time to time (the "SECURITY
AGREEMENT").
THIS GRANT OF SECURITY INTEREST has been granted in conjunction with
the security interest granted to the Grantee under the Security Agreement. The
rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to, those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Grant of Security Interest
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
THIS GRANT OF SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the undersigned have executed this Grant of
Security Interest as of the _______ day of ____________, 200__.
[LOAN PARTY NAME], as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[COLLATERAL AGENT NAME],
as Collateral Agent, as Grantee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STATE OF ___________________ )
)
____________ OF ____________ )
The foregoing instrument was acknowledged before me this _______ day
of ____________, 20__ by ____________ as ____________ of [LOAN PARTY NAME],
[LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME].
----------------------------------------
My commission expires:
Notarial Seal
Notary Public
B-2
Schedule A to Copyright Grant of Security Interest
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Registration No. Country Issue or Filing Date Description
- ------------------------------ ------- -------------------- -----------
B-3
EXHIBIT B to
SECURITY AGREEMENT
FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
[Bank Name] (together with it successors and assigns, the "BANK") has
established and maintains for [Loan Party Name], [Loan Party Description]
(together with its successors and permitted assigns, the "LOAN PARTY"), for the
use of the Loan Party the deposit account listed on Schedule I hereto (the
"ACCOUNT").
The Loan Party and [Collateral Agent Name] (together with its
successor or successors in such capacity, the "COLLATERAL AGENT") entered into a
Security Agreement dated as of September 22, 2005 (as the same may be amended,
supplemented or modified from time to time, the "SECURITY AGREEMENT"), under
which the Loan Party has granted a security interest in favor of the Collateral
Agent in all right, title and interest of the Loan Party in, to and under: (i)
the Accounts; (ii) all checks, money orders, drafts, instruments, electronic
funds transfers and other items and forms of remittance and all funds and other
amounts at any time paid, deposited or credited (whether for collection,
provisionally or otherwise), held or otherwise in the possession or under the
control of, or in transit to, the Bank or any agent or custodian thereof for
credit to or to be deposited in the Account; (iii) all funds and cash balances
or other amounts in or attributable to the Account; and (iv) any and all
proceeds of any of the foregoing (the Account and all of such other items of
collateral being herein referred to collectively as the "DEPOSIT ACCOUNT
COLLATERAL") to secure the payment and performance of the Note Obligations (as
defined in the Security Agreement). Capitalized terms defined or used in the
Security Agreement and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.
The Loan Party desires that the Bank enter into this Deposit Account
Control Agreement (as amended, supplemented or modified from time to time, this
"AGREEMENT") to perfect the security interest of the Collateral Agent in the
Deposit Account Collateral, to vest in the Collateral Agent control of the
Account and to provide for the rights of the parties under this Agreement.
Accordingly, the parties hereto agree as follows:
Section 1. Control by the Collateral Agent. (a) Notwithstanding any
other term or provision of this Agreement or any other agreement between the
Bank and the Loan Party or otherwise, the Bank is hereby authorized and directed
by the Loan Party to, and the Bank agrees that the Bank will comply with
instructions (within the meaning of Section 8-102(a)(12) of the UCC) originated
by the Collateral Agent directing the disposition of funds from time to time in
the Account or as to any other matters relating to the Account or any of the
other Deposit Account Collateral without further consent by the Loan Party
(which instructions may include the giving of stop payment orders for any items
being presented to the Account for payment). The Bank is hereby irrevocably
authorized by the Loan Party to change the designation of the customer on the
Account to the Collateral Agent upon the request of the Collateral Agent, and
the Bank shall so change the customer designation promptly upon such request by
the Collateral Agent.
(b) In addition, effective upon the receipt by the Bank of written
notice from the Collateral Agent that the Collateral Agent is exercising
exclusive control over the Account (such notice being referred to as a
"NOTICE OF EXCLUSIVE CONTROL"), the Bank shall not permit the Loan Party or
any of its Affiliates to withdraw any amounts from, to draw upon or to
otherwise exercise any authority or powers with respect to the Account and
all Deposit Account Collateral related thereto, and the Bank shall not at
any such time honor any instructions of the Loan Party or any of its
Affiliates with respect to the Account, other than those approved in
writing by the Collateral Agent or a court of competent jurisdiction. Until
the receipt by the Bank of a Notice of Exclusive Control, the Loan Party
shall be entitled to present items drawn on and otherwise to withdraw or
direct the disposition of funds from the Account.
Section 2. Maintenance of Account. In addition to, and not in lieu of,
the obligations of the Bank to honor instructions of the Collateral Agent, etc.
as agreed in Section 1 hereof, the Bank agrees to maintain the Account as
follows:
(a) Maintenance of Account Generally. The Bank shall follow its usual
operational procedures for the handling of any checks, money orders,
drafts, instruments, electronic funds transfers or other forms of
remittance and all funds of the Loan Party received in or for credit or
deposit to the Account and shall maintain a record of all such Deposit
Account Collateral.
(b) Interest. Until such time as the Bank receives a Notice of
Exclusive Control delivered by the Collateral Agent in accordance with
Section 1(b) above, the Loan Party may direct the Bank with respect to the
retention and/or distribution of interest and other payments on Deposit
Account Collateral deposited in or credited to the Account. All interest
and other payments on Deposit Account Collateral deposited in or credited
to the Account shall be deposited and retained in the Account or otherwise
distributed as instructed by the Collateral Agent.
(c) Statements and Confirmations. At such time or times as the
Collateral Agent may request, the Bank will promptly report to the
Collateral Agent the amounts received in the Account. Copies of all
statements of account, reports, deposit tickets, deposited items, debit and
credit advices and records and communications concerning the Account and/or
any Deposit Account Collateral deposited therein or credited thereto shall
be sent by the Bank to each of the Loan Party and the Collateral Agent at
their respective addresses referred to in Section 6 below.
(d) Tax Reporting. All items of income, gain, expense and loss
recognized in the Account shall be reported to the Internal Revenue Service
and all state and local taxation authorities under the name and taxpayer
identification number of the Loan Party.
(e) Notices of Adverse Claims. Upon receipt of notice of any lien,
charge or other adverse claim against any Deposit Account Collateral
(including any writ, garnishment, judgment, warrant of attachment,
execution or similar process), the Bank will promptly notify the Collateral
Agent and the Loan Party thereof.
C-2
Section 3. No Liability of Bank. This Agreement shall not subject the
Bank to any obligation or liability except as expressly set forth herein. In
particular, the Bank shall have no duty to investigate whether the obligations
of the Loan Party to the Collateral Agent or any other Finance Party are in
default or whether the Collateral Agent is entitled under the Security Agreement
or otherwise to give any instructions or Notice of Exclusive Control. The Bank
is fully entitled to rely upon such instructions as it believes in good faith to
have originated from the Collateral Agent (even if such instructions are
contrary to or inconsistent with any instructions or demands given by the Loan
Party).
Section 4. Subordination of Lien; Waiver of Set-Off. If the Bank has
or subsequently obtains by agreement, operation of law or otherwise a security
interest or other Lien in the Account or any Deposit Account Collateral
deposited therein or credited thereto, the Bank hereby agrees that such security
interest or other Lien shall be subordinate to the security interest of the
Collateral Agent. The Deposit Account Collateral will not be subject to
deduction, set-off, banker's lien or any other right in favor of any other
Person other than the Collateral Agent, except that the Bank may set off (i) all
amounts due to the Bank in respect of its customary fees and expenses for the
Account, (ii) the amount of any checks, automated clearinghouse transfers or
other forms of remittance that have been credited to the Account and
subsequently returned unpaid and (iii) any overdrafts arising as a result
thereof.
Section 5. Representations, Warranties and Covenants of the Bank. The
Bank hereby represents, warrants and covenants that:
(a) The Bank has established the Account in the name of the Loan
Party. [Except as provided in the foregoing sentence, the] [The] Bank shall
not change the name or account number of the Account without the prior
written consent of the Collateral Agent.
(b) The Account is a "deposit account" as defined in the UCC.
(c) Except for the claims and interest of the Collateral Agent and of
the Loan Party in the Deposit Account Collateral, the Bank does not know of
any claim to, interest in or adverse claim to, the Account or any Deposit
Account Collateral deposited therein or credited thereto.
(d) There are no other agreements entered into between the Bank and
the Loan Party with respect to the Account or any Deposit Account
Collateral deposited therein or credited thereto, and the Bank has not
entered into, and until the termination of this Agreement will not enter
into, any agreement with any other Person relating to the Account and/or
any Deposit Account Collateral deposited therein or credited thereto
pursuant to which it has agreed or will agree to comply with instructions
originated by such other Person as to the disposition of funds in or from
the Account or with respect to any other dealings with any of the Deposit
Account Collateral.
(e) The Bank will not agree that any Person other than the Loan Party
or the Collateral Agent is the Bank's customer with respect to the Account.
C-3
(f) This Agreement constitutes a valid and binding agreement of the
Bank, enforceable against the Bank in accordance with its terms.
(g) The Bank acknowledges that it holds and will hold possession of
the Deposit Account Collateral consisting of instruments and money as
bailee for the Collateral Agent and for the benefit of the Collateral Agent
and the Finance Parties.
Section 6. Notices. All notices, requests or other communications to
any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party:
(i) in the case of the Collateral Agent, at: [Collateral Agent Notice
Address];
(ii) in the case of the Loan Party, at: [Loan Party Notice Address];
and
(iii) in the case of the Bank, at: [Bank Notice Address].
Each such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number specified in
this paragraph and electronic confirmation of receipt is received, (ii) if given
by mail, 48 hours after such communication is deposited, certified mail, return
receipt requested, in the mails with appropriate first class postage prepaid,
addressed as aforesaid, or (iii) if given by other means, when delivered at the
address specified in this paragraph. Rejection or refusal to accept, or the
inability to deliver because of a changed address of which no notice was given
shall not affect the validity of notice given in accordance with this paragraph.
Section 7. Indemnification of the Bank. The Loan Party agrees that (i)
the Bank is released from any and all liabilities to the Loan Party arising from
the terms of this Agreement and the compliance by the Bank with the terms
hereof, except to the extent that such liabilities arise from the Bank's bad
faith, willful misconduct or gross negligence, (ii) neither the Bank nor the
Collateral Agent shall have any liability to the Loan Party for wrongful
dishonor of any items as a result of any instructions of the Collateral Agent
and (iii) the Loan Party, its successors and permitted assigns shall at all
times indemnify the Bank, its affiliates and the respective directors, officers,
trustees, agents and employees of the foregoing (each an "INDEMNITEE") and hold
each Indemnitee harmless from and against any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, suits, judgments, costs
and expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by, imposed on or asserted
against such Indemnitee in connection with any investigation or administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or in any other way connected with the enforcement of any of the terms
hereof, or the preservation of any rights hereunder, or in any way relating to
or arising out of the maintenance, delivery, control, acceptance, possession,
return or other disposition of the Account or any Deposit Account Collateral on
deposit therein or credited thereto, the violation of the Laws of any country,
state or other governmental body or unit, or any tort or contract claim;
provided that no Indemnitee shall have the right to be indemnified hereunder for
such
C-4
Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction in a final, non-appealable judgment or order.
Section 8. Conflicts with Other Agreements. In the event of any
conflict between this Agreement (or any portion hereof) and any other agreement
(including any other agreement between the Bank and the Loan Party with respect
to the Account) now existing or hereafter entered into, the terms of this
Agreement shall control.
Section 9. Amendments and Waivers. Any provision of this Agreement may
be amended, modified or waived if, but only if, such amendment or waiver is in
writing and is signed by the Loan Party, the Collateral Agent and the Bank.
Section 10. Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and inure to the benefit of the Collateral Agent
and the Finance Parties and their respective successors and permitted assigns.
In the event of an assignment of all or any of the Note Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness.
Section 11. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, except as
otherwise required by mandatory provisions of Law. Notwithstanding any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Bank's "jurisdiction" within the meaning of Section 9-304 of the UCC.
Section 12. Severability. (a) All rights, remedies and powers provided
in this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of Law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
Law which may be controlling and be limited to the extent necessary so that they
will not render this Agreement invalid, unenforceable in whole or in part, or
not entitled to be recorded, registered or filed under the provisions of any
applicable Law.
(b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by Law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Collateral Agent and the other
Finance Parties in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provisions in any other jurisdiction.
Section 13. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Collateral Agent shall receive
counterparts hereof executed by itself, the Bank and the Loan Party. Delivery of
an executed counterpart of this Agreement by facsimile shall have the same force
and effect as delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by facsimile
shall also deliver an
C-5
original executed counterpart, but failure to do so shall not affect the
validity, enforceability or binding effect of this Agreement.
Section 14. Termination. Except as hereinafter set forth, the
obligations of the Bank to the Collateral Agent pursuant to this Agreement shall
continue in effect until the Security Interests of the Collateral Agent in the
Deposit Accounts have been terminated pursuant to the terms of the Security
Agreement and the Collateral Agent has notified the Bank of such termination in
writing. The Collateral Agent agrees to provide such notice of termination upon
the request of the Loan Party on or after the termination of the Collateral
Agent's Security Interest in the Account pursuant to the terms of the Security
Agreement. The Bank may terminate this Agreement only upon 30 days' notice to
the Collateral Agent, by canceling the Account and transferring all funds, if
any, deposited in or credited to the Account to another deposit account with
another bank to be designated by the Collateral Agent or otherwise to the order
of the Collateral Agent. After any such termination, the Bank shall nonetheless
be obligated promptly to transfer to such other bank anything from time to time
received in or for credit to the Account. The termination of this Agreement
shall not terminate the Account or alter the obligations of the Bank to the Loan
Party pursuant to any other agreement with respect to the Account.
[Signature Pages Follow]
C-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first written above.
LOAN PARTY: [LOAN PARTY NAME]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Address]
------------------------------
------------------------------
Attention:
-----------------------------
Telephone:
-----------------------------
Telecopier:
----------------------------
COLLATERAL AGENT: [COLLATERAL AGENT NAME], as Collateral
Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Address]
------------------------------
------------------------------
Attention:
-----------------------------
Telephone:
-----------------------------
Telecopier:
----------------------------
DEPOSITARY BANK: [DEPOSITARY BANK NAME]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Address]
------------------------------
------------------------------
Attention:
-----------------------------
Telephone:
-----------------------------
Telecopier:
----------------------------
EXHIBIT C
to
SECURITY AGREEMENT
FORM OF DESCRIPTION OF COLLATERAL
DESCRIPTION FOR FACE OF UCC-1:
[To Follow]
D-1
EXHIBIT D
to
SECURITY AGREEMENT
PERFECTION CERTIFICATE
This Perfection Certificate, dated as of September 22, 2005, is
delivered in connection with the Security Agreement (as amended, restated or
otherwise modified, the "SECURITY AGREEMENT") dated as of September 22, 2005
among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (the "ISSUER"), the
other Grantors identified therein, and U.S. BANK NATIONAL ASSOCIATION, as
Trustee (together with any successor(s) thereto in such capacity, the
"COLLATERAL AGENT" for each of the Finance Parties). All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided for
such terms in the Security Agreement.
The following information is true and complete as of the date hereof,
and is being provided by InSight Health Services Corp. on behalf of the Issuer
and each of the Issuer's wholly-owned U.S. Subsidiaries.
ARTICLE I
NAMES
Section 1.01. The exact corporate names of the Issuer, and each of the
Issuer's U.S. Subsidiaries, directly or indirectly owned (as indicated below),
as such names appear in their respective certificates of incorporation of
formation, as applicable, are as follows:
Section 1.02. Set forth below is each other corporate name, that the
Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries has had in the
last five years, together with the date of the relevant change:
Section 1.03. Except as set forth in Schedule 1 hereto, neither the
Issuer nor any of the Issuer's wholly-owned U.S. Subsidiaries has changed its
identity or corporate structure in any way within the past five years.
Section 1.04. The following is a list of all other names (including
trade names or similar appellations) used by the Issuer or any of the Issuer's
wholly-owned U.S. Subsidiaries or any of their divisions or other business units
at any time during the past five years:
ARTICLE II
TAXPAYER IDENTIFICATION NUMBERS
Section 2.01. The exact corporate taxpayer identification numbers of
the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries are as
follows:
Section 2.02. Set forth below is each other corporate taxpayer
identification number the Issuer and each of the Issuer's wholly-owned U.S.
Subsidiaries has had since its organization together with the date of the
relevant change:
E-1
Section 2.03. The following is a list of all other taxpayer
identification numbers used by the Issuer or any of the Issuer's wholly-owned
U.S. Subsidiaries or any of their divisions or other business units at any time
during the past five years:
Section 2.04. The chief executive offices of the Issuer and each of
the Issuer's wholly-owned U.S. Subsidiaries are located at the following
addresses:
Name Mailing Address County State
- ---- --------------- ------ -----
Section 2.05. The following are all locations where the Issuer and
each of the Issuer's wholly-owned U.S. Subsidiaries maintain any books and
records relating to any of the Collateral consisting of accounts, contract
rights, chattel paper, general intangibles or mobile goods:
Name Mailing Address County State
- ---- --------------- ------ -----
Section 2.06. The following are all the locations where the Issuer and
each of the Issuer's wholly-owned U.S. Subsidiaries maintain any equipment not
identified above:
Name Mailing Address County State
- ---- --------------- ------ -----
Section 2.07. The following are the names and addresses of all persons
other than the Issuer and the Issuer's wholly-owned U.S. Subsidiaries which have
possession of any of the Issuer's or any of the Issuer's U.S. Subsidiaries'
equipment:
Name Mailing Address County State
- ---- --------------- ------ -----
Section 2.08. The following are all the locations where the Issuer and
each of the Issuer's wholly-owned U.S. Subsidiaries maintain any inventory not
identified above (identify whether locations are owned by the Issuer or a
Subsidiary, leased by the Issuer or a subsidiary or are public warehouses):
Name Mailing Address County State
- ---- --------------- ------ -----
Section 2.09. The following are the names and addresses of all persons
or entities other than the Company, such as lessees, consignees, warehousemen or
purchasers of chattel paper, which have possession or are intended to have
possession of any of the Collateral:
E-2
Name Mailing Address County State
- ---- --------------- ------ -----
Of the persons and entities listed above in this clause (h):
(a) The following persons and entities are warehouses which issue
warehouse receipts:
(b) The following persons and entities process or finish inventory or
other goods for the Company:
(c) The following persons and entities hold inventory or other goods
on consignment for the Company:
(d) The following persons and entities have possession of assets of
the Company for the purposes indicated:
ARTICLE III
CONSIGNED INVENTORY
Approximate dollar amount of Inventory of the Issuer and the Issuer's
U.S. Subsidiaries consigned to third parties at any time. $________.
ARTICLE IV
INVENTORY LOCATED OUTSIDE OF U.S.
Approximate dollar amount of inventory of the Issuer and the Issuer's
U.S. Subsidiaries located outside of the United States of America at any time.
$__________.
ARTICLE V
UNUSUAL TRANSACTIONS
Except for those purchases, acquisitions and other transactions
described below, all of the Collateral has been originated by the Issuer and its
wholly-owned U.S. Subsidiaries in the ordinary course of the Company's business
or consists of goods which have been acquired by the Company in the ordinary
course from a person in the business of selling goods of that kind.
Date of Description of
Description of Collateral Acquisition Transaction Seller
- ------------------------- ----------- ------------------
E-3
ARTICLE VI
INTELLECTUAL PROPERTY
The following is a complete list of all patents, copyrights,
trademarks, trade names and servicemarks registered in the name of the Issuer
and its wholly-owned U.S. Subsidiaries:
UNITED STATES:
a. Patents Registration No.
b. Copyrights Registration No.
c. Trademarks, Trade Name
and Service Marks Registration No.
FOREIGN JURISDICTIONS:
a. Patents County of
Registration Registration No.
b. Copyrights County of
Registration Registration No.
c. Trademarks, Trade Name County of
and Service Marks Registration Registration No.
ARTICLE VII
SECURITIES AND INSTRUMENTS
The following is a complete list of all stock, bonds, debentures,
notes and other securities owned by the Issuer and each of its wholly-owned U.S.
Subsidiaries (provide name of issuer, a description of security and value):
Issuer Description of Security Value
- ------ ----------------------- -----
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
The Issuer hereby represents and warrants to each Finance Party that
as of the date hereof, (a) the representations, warranties and statements
contained in Article III of the Security Agreement (together with any schedules
or attachments referred to therein and annexed thereto) are true and correct in
all respects and (b) the Issuer is in compliance with the covenants
E-4
contained in Article IV of the Security Agreement (together with any schedules
or attachments referred to therein and annexed thereto).
E-5
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
September, 2005.
INSIGHT HEALTH SERVICES CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-6
SCHEDULE 1
CHANGES IN IDENTITY OR CORPORATE STRUCTURE
E-7
EXHIBIT E
to
SECURITY AGREEMENT
FORM OF LOAN PARTY ACCESSION AGREEMENT
LOAN PARTY ACCESSION AGREEMENT dated as of ____________ among the NEW
LOAN PARTY referred to herein, and U.S. BANK NATIONAL ASSOCIATION, as Collateral
Agent.
InSight Health Services Corp., a Delaware corporation (together with
its successors and permitted assigns, "INSIGHT"), has issued Senior Secured
Floating Rate Notes due 2011 (together with any Additional Notes referred to
below, the "SENIOR SECURED NOTES") pursuant to an Indenture dated as of
September 22, 2005 (as amended, restated, supplemented or modified from time to
time and including any agreement extending the maturity of, refinancing or
otherwise restructuring all or any portion of the obligations of InSight under
such Indenture or any successor agreement, the "INDENTURE") among InSight, the
guarantors named therein and U.S. Bank National Association, as Trustee
(together with its successor or successors in such capacity, the "TRUSTEE").
The obligations of InSight under and in respect of the Senior Secured
Notes have been guaranteed by InSight Health Services Holdings Corp., a
California corporation (together with its successors and permitted assigns,
"HOLDINGS"), [_______________], and all other direct and indirect wholly-owned
domestic subsidiaries of Holdings pursuant to the Indenture and the Guaranties
and have been secured pursuant to (i) the Security Agreement, dated as of
September 22, 2005 among the Loan Parties (as defined below) and U.S. Bank
National Association, as Collateral Agent (the "SECURITY AGREEMENT"), and (ii)
the Pledge Agreement, dated as of September 22, 2005, among the Loan Parties and
U.S. Bank National Association, as Collateral Agent (the "PLEDGE AGREEMENT").
Each of Holdings, InSight, [__________] and [__________] are referred to in the
Security Agreement and the Pledge Agreement individually as a "LOAN PARTY" and,
collectively, as the "LOAN PARTIES"). Capitalized terms defined in the Security
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for them therein.
[New Loan Party Name], [New Loan Party Description] (the "NEW LOAN
PARTY"), was [formed] [acquired] by [InSight] [Guarantor].
Section 4.12 of the Indenture requires InSight to cause each
Wholly-Owned Restricted Subsidiary (as such term is defined in the Indenture)
that is a Domestic Subsidiary formed or acquired after the Issue Date to become
a party to the Security Agreement as an additional "LOAN PARTY" and to become a
party to the Pledge Agreement as an additional "LOAN PARTY". The Security
Agreement and the Pledge Agreement specify that such additional Subsidiaries may
become "LOAN PARTIES" under each of the Security Agreement and the Pledge
Agreement by execution and delivery of a counterpart of each such Document. To
induce the Noteholders under the Indenture, the New Loan Party has agreed to
execute and deliver this Loan Party Accession Agreement (as the same may be
amended, supplemented or modified from time to time, this "AGREEMENT") in order
to evidence its agreement to become a "LOAN PARTY"
F-1
under each of the Security Agreement and the Pledge Agreement. Accordingly, the
parties hereto agree as follows:
Section 1. Security Agreement. In accordance with Section 7.10 of the
Security Agreement, the New Loan Party hereby (i) agrees that, by execution and
delivery of a counterpart signature page to the Security Agreement in the form
attached hereto as Exhibit A, the New Loan Party shall become a "LOAN PARTY"
under the Security Agreement with the same force and effect as if originally
named therein as a Loan Party (as defined in the Security Agreement), (ii)
acknowledges receipt of a copy of and agrees to be obligated and bound as a
"LOAN PARTY" by all of the terms and provisions of the Security Agreement, (iii)
grants to the Collateral Agent for the benefit of the Finance Parties a
continuing security interest in the Collateral of the New Loan Party (as defined
in the Security Agreement), in each case to secure the full and punctual payment
of the Note Obligations (as defined in the Security Agreement) in accordance
with the terms thereof and to secure the performance of all of the obligations
of each Loan Party under the Indenture and the other Note Documents, (iv)
represents and warrants that each of Schedules 1.01, 3.06 and 4.01 to the
Security Agreement, as amended, supplemented and modified as set forth on
Schedules 1.01, 3.06 and 4.01 hereto, is complete and accurate with respect to
the New Loan Party as of the date hereof after giving effect to the New Loan
Party's accession to the Security Agreement as an additional Loan Party
thereunder and (v) acknowledges and agrees that, from and after the date hereof,
each reference in the Security Agreement to a "LOAN PARTY" or the "LOAN PARTIES"
shall be deemed to include the New Loan Party.
Section 2. Pledge Agreement. In accordance with Section 8.10 of the
Pledge Agreement, the New Loan Party hereby (i) agrees that, by execution and
delivery of a counterpart signature page to the Pledge Agreement in the form
attached hereto as Exhibit B, the New Loan Party shall become a "LOAN PARTY"
under the Pledge Agreement with the same force and effect as if originally named
therein as a Loan Party (as defined in the Pledge Agreement), (ii) acknowledges
receipt of a copy of and agrees to be obligated and bound as a "LOAN PARTY" by
all of the terms and provisions of the Pledge Agreement, (iii) grants to the
Collateral Agent for the benefit of the Finance Parties a continuing security
interest in the Collateral (as defined in the Pledge Agreement) of the New Loan
Party, in each case to secure the full and punctual payment of the Note
Obligations (as defined in the Pledge Agreement) in accordance with the terms
thereof and to secure the performance of all of the obligations of each Loan
Party under the Indenture and the other Note Documents, (iv) represents and
warrants that each of Schedules I, II, III, IV, and V to the Pledge Agreement,
as amended, supplemented and modified as set forth on Schedules I, II, III, IV,
and V hereto, is complete and accurate in all material respects with respect to
the New Loan Party as of the date hereof after giving effect to the New Loan
Party's accession to the Pledge Agreement as an additional Loan Party thereunder
and (v) acknowledges and agrees that, from and after the date hereof, each
reference in the Pledge Agreement to a "LOAN PARTY" or the "LOAN PARTIES" shall
be deemed to include the New Loan Party.
Section 3. Representations and Warranties. The New Loan Party hereby
represents and warrants that:
F-2
(a) This Agreement has been duly authorized, executed and delivered by
the New Loan Party, and each of this Agreement and the Security Agreement
and the Pledge Agreement, as acceded to hereby by the New Loan Party,
constitutes a valid and binding agreement of the New Loan Party,
enforceable against the New Loan Party in accordance with its terms, except
in each case as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by equitable principles
of general applicability (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) Each of the representations and warranties contained in the
Indenture, the Security Agreement, the Pledge Agreement and each of the
other Note Documents applicable to the New Loan Party is true and correct
in all material respects as of the date hereof, with the same effect as
though such representations and warranties had been made on and as of the
date hereof after giving effect to the accession of the New Loan Party as
an additional "LOAN PARTY" under each of the Security Agreement and the
Pledge Agreement.
(c) Attached hereto as Exhibit D is a correct and complete Perfection
Certificate relating to the New Loan Party and its Collateral.
Section 4. Effectiveness. This Agreement and the accession of the New
Loan Party to the Security Agreement and the Pledge Agreement as provided herein
shall become effective with respect to the New Loan Party when (i) the
Collateral Agent shall have received a counterpart of this Agreement duly
executed by such New Loan Party and (ii) the Collateral Agent, as applicable,
shall have received duly executed counterpart signature pages to each of the
Security Agreement and the Pledge Agreement as contemplated hereby.
Section 5. Integration; Confirmation. On and after the date hereof,
each of the Security Agreement and the Pledge Agreement and the respective
Schedules thereto shall be supplemented as expressly set forth herein; all other
terms and provisions of each of the Security Agreement, the Pledge Agreement,
the other Note Documents and the respective Schedules thereto shall continue in
full force and effect and unchanged and are hereby confirmed in all respects.
Section 6. Expenses. The New Loan Party agrees to pay (i) all
reasonable out-of-pocket expenses of the Collateral Agent, including reasonable
fees and disbursements of special and local counsel for the Collateral Agent, in
connection with the preparation, execution and delivery of this Agreement and
any document or agreement contemplated hereby and (ii) all taxes which the
Collateral Agent or any Finance Party may be required to pay by reason of the
security interests granted in the Collateral (including any applicable transfer
taxes).
Section 7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
F-3
Section 8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may
be transmitted and/or signed by facsimile and if so transmitted or signed,
shall, subject to requirements of law, have the same force and effect as a
manually signed original and shall be binding on the New Loan Party, the
Collateral Agent and the other Finance Parties. The Collateral Agent may also
require that this Agreement be confirmed by a manually signed original hereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
[Signature Page Follows]
F-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
INSIGHT HEALTH SERVICES CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[NEW LOAN PARTY NAME]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
COUNTERPART TO SECURITY AGREEMENT
The undersigned hereby executes this counterpart to the Security
Agreement dated as of September 22, 2005 by the Loan Parties party thereto from
time to time in favor of U.S. Bank National Association, as Collateral Agent,
and, as of the date hereof, assumes all of the rights and obligations of a "LOAN
PARTY" thereunder.
Date: [NEW LOAN PARTY NAME]
----------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT B
COUNTERPART TO PLEDGE AGREEMENT
The undersigned hereby executes this counterpart to the Amended and
Restated Pledge Agreement dated as of September 22, 2005 by Loan Parties party
thereto from time to time in favor of U.S. Bank National Association, as
Collateral Agent, and, as of the date hereof, assumes all of the rights and
obligations of a "LOAN PARTY" thereunder.
Date: [NEW LOAN PARTY NAME]
----------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT C
PERFECTION CERTIFICATE