Exhibit 10.26

 

EXECUTION COPY

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
February 22, 2005, is by and among INSIGHT HEALTH SERVICES CORP., a Delaware
corporation (the “Borrower”), the Guarantors parties hereto, the Lenders parties
hereto, BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such
capacity, the “Administrative Agent”), WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union National Bank), as Syndication Agent (in such
capacity, the “Syndication Agent”) and THE CIT GROUP/BUSINESS CREDIT, INC., as
Documentation Agent (in such capacity, the “Documentation Agent”).

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Parent, the Subsidiary Guarantors, the Lenders, the
Administrative Agent, the Syndication Agent and the Documentation Agent are
parties to that certain Credit Agreement dated as of October 17, 2001 (as
amended by that certain First Amendment to Credit Agreement, Waiver and Consent
dated as of January 24, 2003, that certain Second Amendment to Credit Agreement,
Waiver and Consent dated as of July 11, 2003, and that certain Third Amendment
to Credit Agreement, Waiver and Consent dated as of February 26, 2004, the
“Existing Credit Agreement”);

 

WHEREAS, the Borrower has requested that certain provisions of the Existing
Credit Agreement be amended; and

 

WHEREAS, the parties have agreed to amend the Existing Credit Agreement as set
forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

 

PART 1
DEFINITIONS

 

SUBPART 1.1       Certain Definitions.  Unless otherwise defined herein or the
context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:

 

“Amended Credit Agreement” means the Existing Credit Agreement as amended
hereby.

 

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“Fourth Amendment Effective Date” is defined in the first paragraph of Part 3
hereof.

 

SUBPART 1.2       Other Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided in the Amended Credit Agreement.

 

PART 2
AMENDMENTS TO EXISTING CREDIT AGREEMENT

 

Effective on (and subject to the occurrence of) the Fourth Amendment Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
Part 2.

 

SUBPART 2.1       Amendments to Section 1.1. Section 1.1 of the Existing Credit
Agreement is hereby amended in the following respects:

 

(a)           The definition of “Restricted Subsidiary” appearing in Section 1.1
of the Existing Credit Agreement is hereby amended in its entirety to read as
follows:

 

“Restricted Subsidiary” means any direct or indirect Subsidiary of the Borrower
which is not an Unrestricted Joint Venture.

 

(b)           The definition of “Subsidiary” appearing in Section 1.1 of the
Existing Credit Agreement is hereby amended in its entirety to read as follows:

 

“Subsidiary” means, as to any Person at any time, (a) any corporation (including
any Joint Venture) more than 50% of whose Capital Stock of any class or classes
having by the terms ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at such time owned by such Person directly
or indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity (including any Joint Venture) of which such Person
directly or indirectly through Subsidiaries owns at such time more than 50% of
the Capital Stock.

 

(c)           The following new definition is added to Section 1.1 of the
Existing Credit Agreement in proper alphabetical order:

 

“TRIA” means Toms River Imaging Associates, L.P., a New Jersey general
partnership.

 

(d)           The definition of “Unrestricted Joint Venture” appearing in
Section 1.1 of the Existing Credit Agreement is hereby amended in its entirety
to read as follows:

 

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“Unrestricted Joint Venture” means (i) each Person which is a Joint Venture as
of the Closing Date and is designated on Schedule 1.1B as an “Unrestricted Joint
Venture”, (ii) any Joint Venture acquired or created by the Credit Parties after
the Closing Date and which is not a direct or indirect Subsidiary of the
Borrower, (iii) any Joint Venture acquired or created by the Credit Parties
after the Closing Date and which is a direct or indirect Subsidiary of the
Borrower designated by the Credit Parties in writing to the Administrative Agent
concurrently with the acquisition or creation of such Joint Venture as an
“Unrestricted Joint Venture” for purposes of this Credit Agreement, (iv) any
Joint Venture with respect to which the Borrower shall not have, directly or
indirectly, control (whether through ownership of Voting Stock of such Joint
Venture, by contract or otherwise) over the making of dividends and other
payments or distributions on account of all of the Capital Stock of such Joint
Venture, and (v) from and after February 22, 2005, TRIA.  Any Unrestricted Joint
Venture which is a direct or indirect Subsidiary of the Borrower (other than any
Joint Venture described in clause (iv) of the immediately preceding sentence)
may be designated a Restricted Subsidiary so long as at the time of and
immediately after giving effect to such designation, no Default or Event of
Default shall exist hereunder; provided, however, that any Unrestricted Joint
Venture which has been designated a Restricted Subsidiary shall not at any time
thereafter be designated an Unrestricted Joint Venture.

 

SUBPART 2.2       Amendment to Section 7.1. Section 7.1 of the Existing Credit
Agreement is hereby amended to include a new subsection Section 7.1(l):

 

(l)            Acknowledgment Regarding TRIA.  The parties hereto hereby agree
and acknowledge that (i) with respect to the fiscal year of the Borrower ending
June 30, 2005, the financial statements of the Consolidated Parties for such
fiscal year required to be delivered to the Administrative Agent under
Section 7.1(a) of the Credit Agreement shall include TRIA as a Consolidated
Party with respect to the three month portion of such fiscal year ended
September 30, 2004, (ii) any comparative financial information for prior fiscal
periods required to be included with financial statements of the Consolidated
Parties delivered to the Administrative Agent under Section 7.1(a) or (b) of the
Credit Agreement shall include TRIA as a Consolidated Party to the extent such
comparative financial information relates to any fiscal period of the Borrower
which (A) ended on or prior to September 30, 2004 or (B) includes the three
months ended September 30, 2004 and (iii) for purposes of calculating the
financial covenants set forth in Section 7.9 of the Credit Agreement for each
fiscal quarter of the Borrower ending on and after December 31, 2004, TRIA shall
not be included as a Consolidated Party.

 

PART 3
CONDITIONS TO EFFECTIVENESS

 

This Amendment shall be and become effective as of the date hereof (the “Fourth
Amendment Effective Date”) when all of the conditions set forth in this Part 3
shall have

 

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been satisfied, and thereafter this Amendment shall be known, and may be
referred to, as the “Fourth Amendment.”

 

SUBPART 3.1       Counterparts of Amendment. The Administrative Agent shall have
received counterparts (or other evidence of execution, including telephonic
message, satisfactory to the Administrative Agent) of this Amendment, which
collectively shall have been duly executed on behalf of each of the Borrower,
the Guarantors and the Required Lenders.

 

SUBPART 3.2       Other Fees and Out of Pocket Costs.  The Borrower shall have
paid any and all reasonable out-of-pocket costs (to the extent invoiced)
incurred by the Administrative Agent (including the reasonable fees and expenses
of the Administrative Agent’s legal counsel), and all other fees and other
amounts payable to the Administrative Agent, in each case in connection with the
arrangement, negotiation, preparation, execution and delivery of this Amendment.

 

PART 4
MISCELLANEOUS

 

SUBPART 4.1       Representations and Warranties.  The Credit Parties hereby
represent and warrant to the Administrative Agent and the Lenders that (a) after
giving effect to this Amendment, (i) no Default or Event of Default exists under
the Amended Credit Agreement or any of the other Credit Documents and (ii) the
representations and warranties set forth in Section 6 of the Existing Credit
Agreement are, subject to the limitations set forth therein, true and correct in
all material respects as of the date hereof (except for those which expressly
relate to an earlier date) and (b) the transactions contemplated in this
Amendment are not prohibited by the Subordinated Note Indenture (as in effect
immediately prior to the Fourth Amendment Effective Date).

 

SUBPART 4.2       Reaffirmation of Credit Party Obligations.  Each Credit Party
hereby ratifies the Amended Credit Agreement and acknowledges and reaffirms (i)
that it is bound by all terms of the Amended Credit Agreement and (ii) that it
is responsible for the observance and full performance of the Credit Party
Obligations.  Without limiting the generality of the proceeding sentence,
(i) each of the Guarantors restates that it jointly and severally guarantees the
prompt payment when due of all Credit Party Obligations, in accordance with, and
pursuant to the terms of, Section 4 of the Existing Credit Agreement and
(ii) each of the Credit Parties agrees that all references in the Collateral
Documents to the term “Credit Party Obligations” shall be deemed to include all
of the obligations of the Credit Parties to the Lenders and the Administrative
Agent, whenever arising, under the Amended Credit Agreement, the Collateral
Documents or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a Bankruptcy Event with respect to
any Credit Party, regardless of whether such interest is an allowed claim under
the Bankruptcy Code).

 

SUBPART 4.3       Cross-References.  References in this Amendment to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.

 

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SUBPART 4.4       Instrument Pursuant to Existing Credit Agreement.  This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.

 

SUBPART 4.5       References in Other Credit Documents.  At such time as this
Amendment shall become effective pursuant to the terms of Part 3 all references
in the Existing Credit Agreement and the other Credit Documents to the “Credit
Agreement” shall be deemed to refer to the Credit Agreement as amended by this
Amendment.

 

SUBPART 4.6       Counterparts.  This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

 

SUBPART 4.7       Governing Law.  THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

SUBPART 4.8       Successors and Assigns.  This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

SUBPART4.9        Costs, Expenses.  The Borrower agrees to pay on demand all
reasonable costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery and administration of this Amendment
(including, without limitation, the fees and expenses of counsel to the
Administrative Agent) in accordance with the terms of Section 11.5 of the
Existing Credit Agreement.

 

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