Document:

exv10w15

Exhibit 10.15

FIRST AMENDMENT TO SECOND AMENDED AND

RESTATED LOAN AND SECURITY AGREEMENT

     THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is made and entered into on September 20, 2010, by and among INSIGHT HEALTH
CORP., a Delaware corporation (“IHC”); those affiliates of IHC listed on the signature
pages hereof (IHC, together with such affiliates, collectively, “Borrowers” and each
individually, a “Borrower”); the financial institutions party from time to time to the Loan
Agreement (as defined below) as lenders (collectively, “Lenders”); BANK OF AMERICA, N.A., a
national banking association, in its capacity as collateral and administrative agent (in such
capacity, together with its successors in such capacity, “Administrative Agent”) for the
Lenders.

Recitals:

     Borrowers, Lenders and Agent are parties to a certain Second Amended and Restated Loan and
Security Agreement dated August 1, 2007 (as at any time amended, restated, supplemented or
otherwise modified, the “Loan Agreement”), pursuant to which Agent and Lenders have made
loans and other extensions of credit to Borrowers, which loans and extensions of credit are secured
by security interests in and Liens upon all or substantially all of the assets of Borrowers.

     The parties desire to amend the Loan Agreement as hereinafter set forth.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby severally acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:

     1. Definitions. All capitalized terms used in this Amendment, unless otherwise
defined herein, shall have the meaning ascribed to such terms in the Loan Agreement.

     2. Amendments to Loan Agreement. The Loan Agreement is hereby amended as
follows:

     (a) By deleting the definitions of “Adjusted LIBOR Rate,” “Applicable Margin” and “Base Rate”
in Section 1.1 of the Loan Agreement and by substituting the following new definition in
lieu thereof:

     Adjusted LIBOR Rate — for any Interest Period with respect to a LIBOR
Loan, the per annum rate of interest (rounded up, if necessary, to the nearest 1/8th
of 1%), determined by Agent at approximately 11:00 a.m. (London time) two Business
Days prior to commencement of such Interest Period, for a term comparable to such
Interest Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source designated
by Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate at
which Dollar deposits in the approximate amount of the LIBOR Loan would be offered
by BofA’s London branch to major banks in the London interbank Eurodollar market.
If the Board of Governors imposes a Reserve Percentage with respect to LIBOR
deposits, then the Adjusted LIBOR Rate shall be the foregoing rate, divided by 1
minus the Reserve Percentage.

 

 

     Applicable Margin — a percentage equal to 2.75% with respect to
Revolver Loans that are Base Rate Loans and 3.75% with respect to Revolver Loans
that are LIBOR Loans; provided that, commencing on the Adjustment Date (as
defined below) relating to the financial statements for the fiscal month of
Borrowers ending September 30, 2010, and on each Adjustment Date thereafter, the
Applicable Margin shall be increased or decreased, based upon the Fixed Charge
Coverage Ratio for the Fixed Charge Coverage Ratio Test Period ending on the last
day of the then most recently ended Fiscal Quarter in which financial statements for
the last fiscal month of such Fiscal Quarter have been delivered to Administrative
Agent pursuant to Section 10.1.3(ii), as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Revolver Pricing
	 	 	 	 	Fixed Charge	 	LIBOR	 	 
	Level	 	Coverage Ratio	 	Loans	 	Base Rate Loans
	 	I	 	 	Equal to or greater than 1.50 to
1.0	 	 	3.25	%	 	 	2.25	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	II	 	Equal to or greater than 1.25 to
1.0 but less than 1.50 to 1.0	 	 	3.50	%	 	 	2.50	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	III	 	Less than 1.25 to 1.0	 	 	3.75	%	 	 	2.75	%

Except as otherwise provided in this definition, any such increase or reduction in
the Applicable Margin shall be effective on the date (the “Adjustment Date”) that is
the first day of the first month following the month in which Administrative Agent
receives the financial statements required to be delivered by Borrowers pursuant to
Section 10.1.3(ii) for the last month of the then most recently ended Fiscal Quarter
and the applicable Compliance Certificate. If, upon delivery of Borrowers’ annual
audited financial statements pursuant to Section 10.1.3(i) for Borrowers’ then most
recently ended Fiscal Year, Borrowers have not met the criteria for a reduction of
the Applicable Margin that was previously granted based upon Borrowers’ unaudited
financial statements for the last month of such Fiscal Year, then (a) such
Applicable Margin reduction shall be terminated and, effective on the first day of
the first month following receipt by Administrative Agent of such audited financial
statements, the Applicable Margin shall be the Applicable Margin that would have
been in effect if such reduction had been implemented based upon such audited
financial statements, and (b) Borrowers shall pay to Administrative Agent, for the
Pro Rata benefit of Lenders, on the first day of the month following receipt by
Administrative Agent of such audited financial statements, an amount equal to the
difference between the amount of interest that would have been paid using the
Applicable Margin determined based upon such audited financial statements and the
amount of interest actually paid during the period from the first day of the first
month following delivery of Borrowers’ unaudited financial statements for the last
month of such Fiscal Year

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through the first day of the month following receipt by Administrative Agent of such
audited financial statements.

     Base Rate — for any day, a per annum rate equal to the greater of (a)
the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus
0.50%; and (c) the Adjusted LIBOR Rate for a 30 day Interest Period as determined on
such day, plus 1.0%.

     (b) By deleting reference to “$15,000,000” in the definition of “LC Conditions” in
Section 1.1 of the Loan Agreement and by substituting “$5,000,000” in lieu thereof.

     (c) By deleting reference to “$30,000,000” in the definition of “Revolver Commitment” in
Section 1.1 of the Loan Agreement and by substituting “$20,000,000” in lieu thereof.

     (d) By adding the following new definitions of “First Amendment Date,” “Prime Rate,” “Reserve
Percentage” and “Unused Line Fee Percentage” in Section 1.1 of the Loan Agreement in the
proper alphabetical sequence:

     First Amendment Date — September 20, 2010.

     Prime Rate — the rate of interest announced by BofA from time to time
as its prime rate. Such rate is set by BofA on the basis of various factors,
including its costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such rate. Any change in such rate announced by BofA
shall take effect at the opening of business on the day specified in the public
announcement of such change.

     Reserve Percentage — the reserve percentage (expressed as a decimal,
rounded up to the nearest 1/8th of 1%) applicable to member banks under regulations
issued from time to time by the Board of Governors for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”).

     Unused Line Fee Percentage — a percentage equal to 0.75% through
September 30, 2010 and, thereafter, (a) for any month (or portion of such month that
the Commitments are in effect) that the Average Revolver Loan Balance is less than
50% of the total Revolver Commitment, 0.75%, and (b) for any month (or portion of
such month that the Commitments are in effect) that the Average Revolver Loan
Balance is greater than or equal to 50% of the total Revolver Commitment, 0.50%.

     (e) By deleting reference to “$30,000,000” in the preamble of Section 2 of the Loan
Agreement and by substituting “$20,000,000” in lieu thereof.

     (f) By deleting Section 3.2.2 of the Loan Agreement in its entirety and by
substituting the following new Section 3.2.2 in lieu thereof:

     3.2.2. Unused Line Fee. Borrowers shall be jointly and severally
obligated to pay to Administrative Agent, monthly in arrears on the first day of
each month, for

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the Pro Rata benefit of Lenders, an unused line fee (the “Unused Line Fee”)
equal to the Unused Line Fee Percentage then in effect, in each case divided by 360
days and multiplied by the number of days in the immediately preceding month and
then multiplied by the amount by which the Average Revolver Loan Balance for such
immediately preceding month (or portion of such month that the Commitments are in
effect) is less than the aggregate amount of the Revolver Commitments; but if the
Commitments are terminated on a day other than the last day of a month, then any
such Unused Line Fee payable for such month in which termination shall occur shall
be paid on the effective date of such termination. The Unused Line Fee shall be
deemed fully earned and non-refundable when due and payable.

     (g) By deleting Section 12.1.1 of the Loan Agreement in its entirety and by
substituting in lieu thereof the following:

          12.1.1. Payment of Obligations. A Borrower fails to pay any
Obligations when due (whether at stated maturity, on demand, upon acceleration or
otherwise).

     3. Ratification and Reaffirmation. Each Borrower hereby ratifies and reaffirms the
Obligations, each of the Loan Documents and all of such Borrower’s covenants, duties, indebtedness
and liabilities under the Loan Documents to which it is a party.

     4. Acknowledgments and Stipulations. Each Borrower acknowledges, stipulates and
agrees that: the Loan Agreement and the other Loan Documents executed by such Borrower are legal,
valid and binding obligations of such Borrower that are enforceable against such Borrower in
accordance with the terms thereof, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws of general application affecting the enforcement of
creditors’ rights; all of the Obligations are owing and payable without defense, offset or
counterclaim (and to the extent there exists any such defense, offset or counterclaim on the date
hereof, the same is hereby waived by such Borrower); the security interests and Liens granted by
such Borrower in favor of Agent pursuant to the Loan Documents are duly perfected, first priority
(subject to Permitted Liens) security interests and Liens, except to the extent permitted under the
Loan Agreement; prior to executing this Amendment, such Borrower consulted with and had the benefit
of advice of legal counsel of its own selection and has relied upon the advice of such counsel, and
in no part upon any representation of Agent or any Lender concerning the legal effects of this
Amendment or any provision hereof; and, as of the opening of business on September 13, 2010, the
unpaid principal amount of the Revolver Loans totaled $0.00 and the LC Obligations totaled
$1,610,000.00.

     5. Representations and Warranties. Each Borrower represents and warrants to Agent and
Lenders, to induce Agent and Lenders to enter into this Amendment, that, except for or as a result
of the Stipulated Defaults described in Section 9 hereof, (a) no Default or Event of
Default exists on the date hereof; (b) the execution, delivery and performance of this Amendment
and the consummation of the transactions contemplated hereby (i) are within the entity power of
such Borrower and have been duly authorized by all requisite entity action on the part of such
Borrower; (ii) do not require any consent or approval of any of the holders of the Equity Interests
of any Borrower or any of its Subsidiary other than those obtained on or prior to the date hereof;
(iii) do not contravene the Organic Documents of any Borrower or any of its Subsidiaries; (iv) do
not violate, or cause any Borrower or any of its Subsidiaries to be in default under, any provision
of any Applicable Law, order, writ, judgment, injunction, decree, determination or award in effect
having

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applicability to any Borrower or any of its Subsidiaries; (v) do not result in a breach of or
constitute a default under any indenture or loan or credit agreement or any other agreement, lease
or instrument to which any Borrower or any of its Subsidiaries is a party or by which it or its
Properties may be bound or affected; and (vi) do not result in, or require, the creation or
imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Properties
now owned or hereafter acquired by any Borrower or any of its Subsidiaries, except in the case of
clauses (iv) and (v) of this Section 5(b) as would not reasonably be expected to have a
Material Adverse Effect; (c) this Amendment has been duly executed and delivered by such Borrower;
(d) all of the representations and warranties made by such Borrower in the Loan Agreement are true
and correct in all material respects on and as of the date hereof (except for those representations
or warranties which expressly relate to an earlier date, in which case, such representations or
warranties are true and correct in all material respects as of such earlier date); (e) this
Amendment constitutes the legal, valid and binding obligation of such Borrower, enforceable against
such Borrower in accordance with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws of general application affecting the enforcement of
creditors’ rights; (f) such Borrower is entering into this Amendment freely and voluntarily with
the advice of legal counsel of his or its own choosing; and (g) such Borrower has freely and
voluntarily agreed to the releases, waivers and undertakings set forth in this Amendment.

     6. Reference to Loan Agreement. Upon the effectiveness of this Amendment, each
reference in the Loan Agreement to “this Agreement,” “hereunder,” or words of like import shall
mean and be a reference to the Loan Agreement, as amended by this Amendment.

     7. Breach of Amendment. This Amendment shall be part of the Loan Agreement and a
breach of any representation, warranty or covenant herein shall constitute an Event of Default.

     8. Conditions Precedent. The effectiveness of the amendments contained in
Section 2 hereof and the forbearance and agreement to continue to extend credit contained
in Section 9 hereof are subject to each of the following:

          (a) Agent’s receipt of this Amendment, duly executed and delivered by each party thereto;

          (b) Agent’s receipt of evidence of authority of Borrowers to execute, deliver and perform this
Amendment and such other documents as Agent may request in connection therewith, in each case
satisfactory in form and substance to Agent;

          (c) Agent’s receipt of payment by the Borrowers to Agent of a forbearance fee in the aggregate
amount of $50,000, which fee shall be fully earned upon execution of this Amendment by the parties,
shall be due and payable in immediately available funds and shall be non-refundable upon its
receipt by Agent;

          (d) all of the representations and warranties contained in this Amendment and that are made by
any Borrower are true, complete and accurate in all material respects on the date hereof; and

          (e) Agent’s receipt of such other documents and instruments as Agent may reasonably request,
in each case satisfactory in form and substance to Agent.

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     9. Forbearance; Extensions of Credit During Forbearance Period.

     (a) Definitions. The following terms shall have the meanings ascribed to them:

     “Forbearance Conditions” shall mean the conditions to forbearance set
forth in Section 9(d) of this Amendment.

     “Forbearance Date” shall mean the later to occur of the date of this
Amendment or the date on which each of the Forbearance Conditions and the conditions
precedent set forth in Section 8 hereof is satisfied.

     “Forbearance Period” shall mean the period commencing on the
Forbearance Date and ending at 5:00 p.m. on December 1, 2010, unless extended in
writing by Agent and Lenders in their sole discretion.

     “Forbearance Termination Date” shall mean the sooner to occur of (a)
5:01 p.m. on the last day of the Forbearance Period or (b) the date on which Agent’s
and Lenders’ agreement to forbear terminates as provided in Section 9(e) of
this Amendment.

     “Interest Payment Default” shall mean a “Default” under (and as defined
in) the Senior Notes Indenture due to Borrowers’ failure to pay interest on the due
date therefor under Senior Notes Indenture, without giving effect to any grace
period for the payment of such interest under Section 6.01(i) of the Senior Notes
Indenture.

     “Stipulated Defaults” shall mean the Events of Default anticipated to
occur and referenced in Section 9(b) of this Amendment.

     (b) Stipulated Defaults. Each Borrower acknowledges, stipulates and agrees that it is
anticipated that an Event of Default will occur under (i) Section 10.1.3(i) of the Loan Agreement
because the audited balance sheets of Borrowers and the related statements of income, shareholders’
equity and cash flow for the Fiscal Year ended on or about June 30, 2010 will contain an
Impermissible Qualification, and (ii) Section 12.1.5 of the Loan Agreement as a consequence of the
Interest Payment Default, each of which Events of Default will be material.

     (c) Agreement to Forbear. If and for so long as each of the Forbearance Conditions is
timely satisfied and subject to the satisfaction of the conditions precedent set forth in
Section 8 hereof, Agent and Lenders agree that during the Forbearance Period, solely by
reason of the existence of the Stipulated Defaults, (i) they will not exercise any remedy available
to Agent or any Lender under the Loan Agreement, any of the other Loan Documents or Applicable Law
to enforce collection from any Borrower or any Guarantor of any of the Obligations or to foreclose
its security interest in any of the Collateral during the Forbearance Period, and (ii) they will
not implement the Default Rate; provided, however, that the foregoing forbearance
shall not restrict, impair or otherwise affect (A) Agent’s right to make demand for payment of any
of the Obligations that are payable on demand under the terms of any of the Loan Documents; (B) any
restriction or prohibition in any of the Loan Documents on the right of Borrowers to take or omit
to take, or otherwise acquiesce in, certain actions, including any limitations, restrictions, or
prohibitions with respect to Distributions, advancing monies to any Affiliate, consummating
acquisitions or making certain dispositions of assets (although during the Forbearance Period the
Stipulated Defaults shall not be

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asserted as the basis for enforcing any such restriction or prohibition); (C) Agent’s or any
Lender’s rights and remedies under any deposit account, blocked account, control account, bank
agency, lockbox, letter of credit or other agreement to which Agent or any Lender is a party
relating to any deposit or other account of any Borrower or any letter of credit issued for such
Borrower’s or any other Obligor’s account; (D) Agent’s or any Lender’s right to file, record,
publish or deliver a notice of default or document of similar effect relating to any Event of
Default that is not a Stipulated Default, or to take any lien enforcement action as a consequence
of any such Event of Default that is not a Stipulated Default; or (E) Agent’s or any Lender’s right
to administer the lending relationship with Borrowers under and in accordance with the Loan
Documents and this Amendment, including the imposition or release of Available Reserves. Neither
this Amendment nor Agent’s or any Lender’s forbearance hereunder shall be deemed to be a waiver of
or a consent to any Default or Event of Default.

     (d) Conditions to Forbearance. The following conditions shall constitute Forbearance
Conditions, the timely satisfaction of each and every one of which during the Forbearance Period
shall be a condition to the agreement of Agent and Lenders to forbear as set forth in Section
9(c) of this Amendment: (i) each Borrower duly and punctually observes, performs and
discharges each and every obligation and covenant on its part to be performed under this Amendment;
(ii) no Events of Default occur or exist other than the Stipulated Defaults; (iii) no Guarantor
revokes or attempts to revoke or terminate such Guarantor’s Guaranty; (iv) no representation or
warranty made by any Borrower in this Amendment proves to have been false or misleading in any
material respect; and (v) no “Event of Default” (as defined in the Senior Notes Indenture) shall
occur or exist under Section 6.01(i) of the Senior Notes Indenture.

     (e) Termination of Forbearance. If any one or more of the Forbearance Conditions is
not satisfied, Agent’s and Lenders’ agreement to forbear as set forth in Section 9(c) of
this Amendment shall, at Agent’s election but without further notice to or demand upon any
Borrower, terminate, and Agent and Lenders shall thereupon have and may exercise from time to time
all of the remedies available to it under the Loan Documents and Applicable Law as a consequence of
an Event of Default. On and after the Forbearance Termination Date, Agent and Lenders shall be
authorized, at any time and without further notice to or demand upon any Borrower or any other
Person, to enforce all of their remedies under the Loan Documents and Applicable Law.

     (f) Extensions of Credit. Notwithstanding the existence of the Stipulated Defaults
and subject to the satisfaction of each of the Forbearance Conditions, Agent and Lenders agree to
honor requests by Borrowers during the Forbearance Period for Revolver Loans and Letters of Credit
pursuant to the Loan Agreement, but in no event shall Agent’s and Lenders’ honoring of any such
requests be deemed a waiver of the Stipulated Defaults or any other Default or Event of Default
that may occur or exist.

     10. Expenses of Agent. Borrowers jointly and severally agree to pay, on demand, all
costs and expenses incurred by Agent in connection with the preparation, negotiation and execution
of this Amendment and any other Loan Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including, without limitation, the costs and fees of
Agent’s legal counsel and any taxes or expenses associated with or incurred in connection with any
instrument or agreement referred to herein or contemplated hereby.

     11. Effectiveness; Governing Law. This Amendment shall be effective upon acceptance
by Agent in Atlanta, Georgia (notice of which acceptance is hereby waived), whereupon

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the same shall be governed by and construed in accordance with the internal laws of the state
of New York.

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

     13. No Novation, etc. Except as otherwise expressly provided in this Amendment,
nothing herein shall be deemed to amend or modify any provision of the Loan Agreement or any of the
other Loan Documents, each of which shall remain in full force and effect. This Amendment is not
intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and the
Loan Agreement as herein modified shall continue in full force and effect.

     14. Counterparts; Electronic Signatures. This Amendment may be executed in any number
of counterparts and by different parties to this Amendment on separate counterparts, each of which,
when so executed, shall be deemed an original, but all such counterparts shall constitute one and
the same agreement. Any manually executed signature page delivered by a party hereto by facsimile
or other electronic transmission shall be deemed to be an original signature page hereto.

     15. Further Assurances. Each Borrower agrees to take such further actions as Agent
and Lenders shall reasonably request from time to time in connection herewith to evidence or give
effect to the amendments set forth herein or any of the transactions contemplated hereby.

     16. Section Titles. Section titles and references used in this Amendment shall be
without substantive meaning or content of any kind whatsoever and are not a part of the agreements
among the parties hereto.

     17. Relationship of Parties; No Third Party Beneficiaries. Nothing in this Amendment
shall be construed to alter the existing debtor-creditor relationship between any Borrower and
Agent or any Lender. This Amendment is not intended, nor shall it be construed, to create a
partnership or joint venture relationship between or among any of the parties hereto. No Person
other than a party hereto is intended to be a beneficiary hereof and no Person other than a party
hereto shall be authorized to rely upon or enforce the contents of this Amendment.

     18. Construction. This Amendment has been prepared through the joint efforts of all
of the parties hereto. Neither the provisions of this Amendment nor any alleged ambiguity therein
shall be interpreted or resolved against any party on the grounds that such party or its counsel
drafted this Amendment, or based on any other rule of strict construction. Each of the parties
represents that such party has carefully read this Amendment and all other instruments and
agreements executed in connection herewith and that such party knows the contents hereof and has
signed the same freely and voluntarily.

     19. Non-Waiver of Default. Neither this Amendment, Agent’s and Lenders’ forbearance
hereunder nor Agent’s and Lenders’ continued making of loans or other extensions of credit at any
time extended to any Borrower in accordance with this Amendment and the Loan Documents shall be
deemed a waiver of or consent the Stipulated Defaults or any other Event of Default. Each Borrower
agrees that such Events of Default shall not be deemed to have been waived, released or cured by
virtue of Loans or other extensions of credit at any time extended to such Borrower, Agent’s and
Lenders’ agreement to forbear pursuant to the terms of this Amendment or the execution of this
Amendment.

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     20. Release of Claims; Covenant Not to Sue. To induce Agent and Lenders to enter into
this Amendment, each Borrower, on behalf of itself and its agents, representatives, officers,
directors, subsidiaries, successors and assigns (collectively with
each Borrower, “Releasors” and individually a “Releasor”) hereby releases, acquits and forever
discharges each Releasee (as hereinafter defined) from any and all liabilities, claims, demands,
actions or causes of action of any kind (if there be any), whether absolute or contingent, due or
to become due, disputed or undisputed, liquidated or unliquidated, at law or in equity, or known or
unknown (collectively, “Claims”) that any Releasor now has, ever had or hereafter may have
against Agent or any Lender in any capacity or Agent’s or any Lender’s officers, directors,
employees, agents, attorneys, representatives, subsidiaries, affiliates and shareholders
(collectively with Agent and Lenders, the “Releasees”) based on acts, transactions, or
circumstances occurring on or before the date of this Amendment that relate to (i) any Loan
Document, (ii) any transaction, action or omission contemplated thereby or concluded thereunder or
(iii) any aspect of the dealings or relationships between or among any Borrower, on the one hand,
and Agent and Lenders, on the other hand, relating to any Loan Document or any transaction, action
or omission contemplated thereby or concluded thereunder. The provisions of this Section
20 shall survive the termination of this Amendment and any of the other Loan Documents and
payment in full of the Obligations. Each Borrower, on behalf of itself and its successors,
assigns and other legal representatives, hereby unconditionally and irrevocably agrees it will not
sue any Releasee on the basis of any Claim released, remised and discharged pursuant to the
foregoing provisions of this Section 20, and if such Borrower or any of its successors,
assigns or other legal representatives violate the foregoing covenant, such Borrower, for itself
and its successors, assigns and legal representatives, agrees to pay, in addition to such other
damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and cost
incurred by any Releasee as a result of such violation.

     21. Waiver of Jury Trial. To the fullest extent permitted by applicable law, the
parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or
proceeding arising out of or related to this Amendment.

[Remainder of page intentionally left blank signatures begin on following page.]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under
seal in and delivered by their respective duly authorized officers on the date first written above.

	 	 	 

	 

	 	BORROWERS:
	 
	 	 
	 

	 	INSIGHT HEALTH CORP.

MAXUM HEALTH SERVICES CORP. 

OPEN MRI, INC.

SIGNAL MEDICAL SERVICES, INC.

REVANA HEALTH CORP.

         (FKA COMPREHENSIVE MEDICAL
IMAGING, INC.)

COMPREHENSIVE MEDICAL IMAGING
CENTERS, INC.

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Keith S. Kelson, Executive Vice President 	 
	 	 	and Chief Financial Officer 	 
	 

	 	 	 

	 

	 	ORANGE COUNTY REGIONAL PET CENTER

       –
IRVINE, LLC 

PARKWAY IMAGING CENTER, LLC
	 
	 	 
	 

	 	By:      InSight Health Corp., as the sole member

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Keith S. Kelson, Executive Vice 	 
	 	 	President and Chief Financial Officer 	 
	 

First Amendment to Second Amended and Restated Loan and Security Agreement

  

 

CONSENT AND REAFFIRMATION

     Each of the undersigned guarantors of the Obligations of Borrowers at any time owing to Agent
and Lenders hereby (i) acknowledges receipt of a copy of the foregoing First Amendment to Second
Amended and Restated Loan and Security Agreement; (ii) consents to Borrowers’ execution and
delivery thereof; (iii) agrees to be bound thereby and subject to the terms and conditions thereof;
and (iv) affirms that nothing contained therein shall modify in any respect whatsoever its
respective guaranty of the Obligations and reaffirms that such guaranty is and shall remain in full
force and effect and is the legal, valid and binding obligation of such undersigned guarantor,
enforceable against such undersigned guarantor in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors’ rights.

     IN WITNESS WHEREOF, the undersigned has executed this Consent and Reaffirmation as of the date
of such First Amendment to Second Amended and Restated Loan and Security Agreement.

	 	 	 	 	 
	 	INSIGHT HEALTH SERVICES HOLDINGS CORP.

INSIGHT HEALTH SERVICES CORP.

 	 
	 	By:  	 	 
	 	 	Keith S. Kelson, Executive Vice President 	 
	 	 	and Chief Financial Officerexv4w1

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS, PREFERENCES

AND RIGHTS OF SERIES A CONVERTIBLE PREFERRED STOCK

OF

GEOEYE, INC.

          GeoEye, Inc. (the “Company”), a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that, pursuant to
authority conferred upon the Board of Directors of the Company (the “Board”) by Article IV of the
Certificate of Incorporation of the Company, and pursuant to Section 151 of the DGCL, the Board of
Directors of the Company adopted resolutions (i) designating a series of the Company’s previously
authorized preferred stock, par value $0.01 per share, and (ii) providing for the designations,
preferences and relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, of eighty thousand (80,000) shares of Series A Convertible
Preferred Stock of the Company, as follows:

          RESOLVED, that the Company is authorized to issue eighty thousand (80,000) shares of Series A
Convertible Preferred Stock, par value $0.01 per share (the “Preferred Shares”), which shall have
the following powers, designations, preferences and other special rights:

          (1) Preferred Dividends. The holders of the Preferred Shares (each, a “Holder” and
collectively, the “Holders”) shall be entitled to receive cumulative dividends (“Dividends”) at the
Dividend Rate payable on the Liquidation Preference of such Preferred Shares as of the applicable
Dividend Date (or, for the initial Dividend Period, as of the Initial Issuance Date). Dividends on
the Preferred Shares shall commence accruing on the Initial Issuance Date and shall be computed on
the basis of a 365-day year and actual days elapsed. Dividends shall be payable in arrears on
January 1, April 1, July 1, and October 1 (each, a “Dividend Date” and each such quarterly period
(or shorter period in the case of the first such period following the Initial Issuance Date) being
a “Dividend Period”) with the first Dividend Date being October 1, 2010. If a Dividend Date is not
a Business Day, then the Dividend shall be payable on the Business Day immediately following such
Dividend Date. At the Company’s option, dividends may be declared and paid in cash out of funds
legally available therefor, when, as and if declared by the Company; provided that if Dividends are
not declared and paid in cash on any Dividend Date for the immediately preceding Dividend Period,
then such Dividend shall automatically accrue and be added to the Liquidation Preference as of such
Dividend Date, whether or not declared by the Board and whether or not in any Dividend Period or
Periods there shall be funds of the Company legally available for the payment of such Dividends.
On each Dividend Date, if the Company does not have current or accumulated “earnings and profits”
within the meaning of Sections 301 and 312 of the Internal Revenue Code of 1986, as amended,
through such Dividend Date, the Company shall not withhold any amount of the applicable Dividend in
respect of U.S. federal income tax.

          (2) Participation in Common Dividends. In addition to the Dividends provided in
Section 1, in the event of any dividend or distribution declared on or paid on the Common Stock
(other than a dividend or distribution in Common Shares that results in an adjustment under Section
3(e)(ii)), the Holders shall, as holders of Preferred Stock, be entitled to such dividends paid and
distributions made to the holders of Common Stock to the same extent

 

 

as if such Holders had converted the Preferred Shares into Common Stock (without regard to any
limitations on conversion herein (including Section 14) or elsewhere) and had held such shares of
Common Stock on the record date for such dividends and distributions. Payments under the preceding
sentence shall be made concurrently with the dividend or distribution to the holders of Common
Stock.

          (3) Conversion of Preferred Shares. Preferred Shares shall be convertible into shares
of Common Stock on the terms and conditions set forth in this Section 3.

     (a) Holder’s Conversion Right. Subject to the provisions of Section
14, at any time or times on or after the Initial Issuance Date, any Holder shall be
entitled to convert any whole number of Preferred Shares, plus the amount of any
accrued but unpaid Dividends per Preferred Share, into fully paid and nonassessable
shares of Common Stock in accordance with Section 3(c) at the Conversion Rate.

     (b) Conversion. The number of shares of Common Stock issuable upon
conversion of each Preferred Share pursuant to Section 3(a) shall be determined
according to the following formula (the “Conversion Rate”):

Conversion Amount

Conversion Price

No fractional shares of Common Stock are to be issued upon the conversion of any
Preferred Share, but rather the number of shares of Common Stock to be issued shall
be rounded to the nearest whole number.

     (c) Mechanics of Conversion. The conversion of Preferred Shares shall
be conducted in the following manner:

     (i) Holder’s Delivery Requirements. To convert Preferred
Shares into shares of Common Stock on a date (a “Conversion Date”), the
Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt
on or prior to 11:59 p.m., New York City Time, on such date, a copy of a
properly completed notice of conversion executed by the registered Holder of
the Preferred Shares subject to such conversion in the form attached hereto
as Exhibit I (the “Conversion Notice”) to the Company and the
Company’s designated transfer agent (the “Transfer Agent”) and (B) surrender
to a common carrier for delivery to the Company as soon as practicable
following such date the original certificates representing the Preferred
Shares being converted (or compliance with the procedures set forth in
Section 17) (the “Preferred Stock Certificates”).

     (ii) Company’s Response. Upon receipt by the Company of a
Conversion Notice, the Company shall (A) as soon as practicable, but in any
event within one (1) Trading Day, send, via facsimile, a confirmation of
receipt of such Conversion Notice to such Holder and the Transfer Agent,
which confirmation shall constitute an instruction to the Transfer

 

 

Agent to process such Conversion Notice in accordance with the terms
herein and (B) on or before the third (3rd) Trading Day following
the date of receipt by the Company of such Conversion Notice (the “Share
Delivery Date”), (X) provided the Transfer Agent is participating in the The
Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
credit such aggregate number of shares of Common Stock to which the Holder
shall be entitled to the Holder’s or its designee’s balance account with DTC
through its Deposit Withdrawal Agent Commission system, or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the address as specified in the
Conversion Notice, a certificate, registered in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder
shall be entitled. If the number of Preferred Shares represented by the
Preferred Stock Certificate(s) submitted for conversion is greater than the
number of Preferred Shares being converted, then the Company shall, as soon
as practicable and in no event later than three (3) Business Days after
receipt of the Preferred Stock Certificate(s) (the “Preferred Stock Delivery
Date”) and at its own expense, issue and deliver to the Holder a new
Preferred Stock Certificate representing the number of Preferred Shares not
converted. The Person or Persons entitled to receive the shares of Common
Stock issuable upon a conversion of Preferred Shares shall be treated for
all purposes as the record holder or holders of such shares of Common Stock
on the Conversion Date.

     (iii) Record Holder. The Person or Persons entitled to receive
the shares of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date.

     (iv) Company’s Failure to Timely Convert.

     (A) Cash Damages. If (x) within three (3) Trading Days
after the Company’s receipt of the facsimile copy of a Conversion
Notice the Company shall fail to credit a Holder’s balance account
with DTC or issue and deliver a certificate to such Holder for the
number of shares of Common Stock to which such Holder is entitled
upon such Holder’s conversion of Preferred Shares or (y) within three
(3) Trading Days of the Company’s receipt of a Preferred Stock
Certificate the Company shall fail to issue and deliver a new
Preferred Stock Certificate representing the number of Preferred
Shares to which such Holder is entitled pursuant to Section 3(c)(ii),
then in addition to all other available remedies which such holder
may pursue hereunder and under the Securities Purchase Agreement, the
Company shall pay additional damages to such Holder for each day
after the Share Delivery Date that such conversion is not timely
effected and/or each day after the

 

 

Preferred Stock Delivery Date that such Preferred Stock
Certificate is not delivered in an amount equal to one (1.0%) of the
product of (I) the sum of the number of shares of Common Stock not
issued to the Holder on or prior to the Share Delivery Date and to
which such Holder is entitled as set forth in the applicable
Conversion Notice and, in the event the Company has failed to deliver
a new Preferred Stock Certificate to the Holder on or prior to the
Preferred Stock Delivery Date, the number of shares of Common Stock
issuable upon conversion of the Preferred Shares represented by such
Preferred Stock Certificate as of the Preferred Stock Delivery Date
and (II) the Closing Sale Price of the Common Stock on the Share
Delivery Date in the case of the failure to deliver Common Stock, or
the Preferred Stock Delivery Date, in the case of failure to deliver
a Preferred Stock Certificate. If any such cash damages described
above are not paid when due in cash, then the amount of such cash
damages shall (unless the Required Holders shall have given notice to
the Company otherwise) automatically accrue and be added to the
Liquidation Preference as of such due date. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect
to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the Preferred Shares as
required pursuant to the terms hereof.

     (B) Void Conversion Notice. If for any reason a Holder
has not received all of the shares of Common Stock to which such
Holder is entitled prior to the fifth (5th) Trading Day
after the Share Delivery Date with respect to a conversion of
Preferred Shares, then the Holder, upon written notice to the
Company, with a copy to the Transfer Agent, may void its Conversion
Notice with respect to, and retain or have returned, as the case may
be, any Preferred Shares that have not been converted pursuant to
such Holder’s Conversion Notice; provided that the voiding of a
Holder’s Conversion Notice shall not effect the Company’s obligations
to make any payments which have accrued prior to the date of such
notice pursuant to Section 3(c)(iv)(A) or otherwise.

     (v) Pro Rata Conversion; Disputes. In the event the Company
receives a Conversion Notice from more than one Holder for the same
Conversion Date and the Company can convert some, but not all, of such
Preferred Shares, the Company shall convert from each Holder electing to
have Preferred Shares converted at such time a pro rata amount of such
Holder’s Preferred Shares submitted for conversion based on the number of
Preferred Shares submitted for conversion on such date by such Holder
relative to the number of Preferred Shares submitted for conversion on

 

 

such date. In the event of a dispute as to the number of shares of
Common Stock issuable to a Holder in connection with a conversion of
Preferred Shares, the Company shall issue to such Holder the number of
shares of Common Stock not in dispute and resolve such dispute in accordance
with Section 19.

     (vi) Book-Entry. Upon conversion of Preferred Shares in
accordance with the terms hereof, the Holder thereof shall be required to
physically surrender the certificate representing the Preferred Shares to
the Company. In the event some, but not all of the Preferred Shares
represented by a certificate physically surrendered are converted, the
Company shall issue and deliver to the Holder a new Preferred Stock
Certificate representing the number of Preferred Shares not converted as
required by Section 3(c)(ii). The Holder and the Company shall maintain
records showing the number of Preferred Shares so converted and the dates of
such conversions. In the event of any dispute or discrepancy, such records
of the Company establishing the number of Preferred Shares to which the
record holder is entitled shall be controlling and determinative in the
absence of manifest error and subject, if applicable to the procedures set
forth in Section 19. Each certificate for Preferred Shares shall bear the
following legend:

ANY TRANSFEREE OF THIS CERTIFICATE SHOULD CAREFULLY
REVIEW THE TERMS OF THE COMPANY’S CERTIFICATE OF
DESIGNATIONS RELATING TO THE PREFERRED SHARES
REPRESENTED BY THIS CERTIFICATE.

     (d) Taxes.

     (i) Any and all payments made by the Company hereunder, including any
amounts received on a conversion or redemption of the Preferred Shares, must
be made by it without any Tax Deduction, unless required by law. If the
Company is required by applicable law to make a Tax Deduction (or in
connection therewith that there is a change in the applicable law with
respect to rate or the basis of such Tax Deduction), it must notify the
affected Holders promptly.

     (ii) If the Company is required by applicable law to make a Tax
Deduction, it must make the minimum Tax Deduction allowed by such applicable
law and must make any payment required in connection with that Tax Deduction
within the time allowed by such applicable law.

As soon as practicable after making a Tax Deduction or a payment required in
connection with a Tax Deduction, the Company must deliver

 

 

to the Holder any official receipt or form, if any, provided by or required
by the taxing authority to whom such Tax Deduction was paid.

     (iii) In addition, the Company agrees to pay in accordance with
applicable law any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise from any
payment made hereunder or in connection with the execution, delivery,
registration or performance of, or otherwise with respect to, the Preferred
Shares (“Other Taxes”). As soon as practicable after making a payment of
Other Taxes, the Company must deliver to such Holder any official receipt or
form, if any, provided by or required by the taxing authority to whom the
Tax Deduction was paid.

     (iv) The obligations of the Company under this Section 3(d) shall
survive any payment for the Preferred Shares and all other amounts payable
hereunder.

     (e) Adjustments to Conversion Price. The Conversion Price will be
subject to adjustment from time to time as provided in this Section 3(e).

     (i) Adjustment of Conversion Price upon Issuance of Common
Stock. If and whenever on or after the Effective Date, the Company
issues or sells, or in accordance with this Section 3(e)(i) is deemed to
have issued or sold, any shares of Common Stock (including the issuance or
sale of shares of Common Stock owned or held by or for the account of the
Company, but excluding Excluded Securities) for a consideration per share
(the “New Issuance Price”) less than a price (the “Applicable Price”) equal
to the Closing Sale Price in effect immediately prior to such issuance
(other than such issuances or sales pursuant to an underwritten public
offering for which the Applicable Price is less than such Closing Sale Price
solely on account of customary selling concessions and discounts) (the
foregoing a “Dilutive Issuance”), then immediately after such Dilutive
Issuance, the Conversion Price then in effect shall be reduced to an amount
equal to the product of (x) the Conversion Price in effect immediately prior
to such Dilutive Issuance and (y) the quotient of (1) the sum of (I) the
product of the Conversion Price in effect immediately prior to such Dilutive
Issuance and the number of shares of Common Stock Deemed Outstanding
immediately prior to such Dilutive Issuance and (II) the consideration, if
any, received by the Company from such Dilutive Issuance, divided by (2) the
sum of (I) the product of (x) the Conversion Price in effect immediately
prior to such Dilutive Issuance multiplied by (y) the number of shares of
Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance
plus (II) the product of (x) the number of shares of Common Stock sold in
such Dilutive Issuance or deemed to be outstanding pursuant to Sections
3(e)(i)(A) and 3(e)(i)(B) with respect to such Dilutive Issuance, as
applicable, and (y) the Applicable Price. For purposes of determining the
adjusted Conversion Price under this Section 3(e)(i), the following
shall be applicable:

 

 

     (A) Issuance of Options. If the Company in any manner
grants or sells any Options and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion or exchange or exercise of any Convertible
Securities issuable upon exercise of such Option is less than the
Applicable Price, then each such share of Common Stock underlying
such Option shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting or sale of such
Option for such price per share. For purposes of this Section
3(e)(i)(A), the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of such Option” shall be equal to the sum of
the lowest amounts of consideration (if any) received or receivable
by the Company with respect to any one share of Common Stock upon
granting or sale of the Option, upon exercise of the Option and upon
conversion or exchange or exercise of any Convertible Security
issuable upon exercise of such Option. No further adjustment of the
Conversion Price shall be made upon the actual issuance of such share
of Common Stock or of such Convertible Securities upon the exercise
of such Options or upon the actual issuance of such Common Stock upon
conversion or exchange or exercise of such Convertible Securities.

     (B) Issuance of Convertible Securities. If the Company
in any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is
issuable upon such conversion or exchange or exercise thereof is less
than the Applicable Price, then each such share of Common Stock
underlying such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such
price per share. For the purposes of this Section 3(e)(i)(B), the
“lowest price per share for which one share of Common Stock is
issuable upon such conversion or exchange or exercise” shall be equal
to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common
Stock upon the issuance or sale of the Convertible Security and upon
the conversion or exchange or exercise of such Convertible Security.
No further adjustment of the Conversion Price shall be made upon the
actual issuance of such share of Common Stock upon conversion or
exchange or exercise of such Convertible Securities, and if any such
issue or sale of such Convertible Securities is made upon

 

 

exercise of any Options for which adjustment of the Conversion
Price had been or are to be made pursuant to other provisions of this
Section 3(e)(i), no further adjustment of the Conversion Price shall
be made by reason of such issue or sale.

     (C) Change in Option Price or Rate of Conversion. If
the purchase or exercise price provided for in any Options, the
additional consideration, if any, payable upon the issue, conversion,
exchange or exercise of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exchangeable
or exercisable for Common Stock changes at any time, the Conversion
Price in effect at the time of such change shall be adjusted to the
Conversion Price which would have been in effect at such time had
such Options or Convertible Securities provided for such changed
purchase price, additional consideration or changed conversion rate,
as the case may be, at the time initially granted, issued or sold.
For purposes of this Section 3(e)(i)(C), if the terms of any Option
or Convertible Security that was outstanding as of the Effective Date
are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such change.
No adjustment shall be made if such adjustment would result in an
increase of the Conversion Price then in effect.

     (D) Calculation of Consideration Received. In case any
Option is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated
transaction, (x) the Options will be deemed to have been issued for
the Black Scholes Value of such Options and (y) the other securities
issued or sold in such integrated transaction shall be deemed to have
been issued for the difference of (I) the aggregate consideration
received by the Company less (II) the Black Scholes Value of such
Options. If any Common Stock, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor will be deemed to be the net amount
received by the Company therefor. If any Common Stock, Options or
Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company
will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case
the amount of consideration received by the Company will be the
Closing Sale Price of such securities on the date of receipt of such
securities. If any Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection
with any

 

 

merger in which the Company is the surviving entity, the amount
of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as
is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration
other than cash or publicly traded securities will be determined
jointly by the Company and the Required Holders. If such parties are
unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair
value of such consideration will be determined in accordance with
Section 19.

     (E) Record Date. If the Company takes a record of the
holders of Common Stock for the purpose of entitling them (I) to
receive a dividend or other distribution payable in Common Stock,
Options or in Convertible Securities or (II) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such
record date will be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or
purchase, as the case may be.

     (ii) Pro Rata Distributions Prior to Initial Issuance Date. If
the Company shall distribute to holders of Common Stock any assets
(including cash dividends or other dividends or notes, rights or warrants to
subscribe for or purchase any security other than the Common Stock) with a
record date for determining the holders entitled to such distribution at any
time after the Effective Date and prior to the Initial Issuance Date, then
in each such case the Conversion Price then in effect shall be reduced to an
amount equal to the product of (x) the Conversion Price then in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution and (y) the quotient of (I) the
Closing Sale Price on such record date less the then per share fair value at
such record date of the assets so distributed applicable to one outstanding
share of the Common Stock, divided by (II) the Closing Sale Price on such
record date. For purposes of this Section 3(e)(ii), fair value shall be
determined in accordance with Section 3(e)(i)(D).

     (iii) Adjustment of Conversion Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the
Effective Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price and Conversion Floor Price in
effect immediately prior to such subdivision will be proportionately
reduced. If the Company at any time after the Effective Date combines (by
combination, reverse stock split or otherwise) its

 

 

outstanding shares of Common Stock into a smaller number of shares and
the Conversion Price and Conversion Floor Price in effect immediately prior
to such combination will be proportionately increased.

     (iv) Floor Price. Notwithstanding the foregoing, no adjustment
pursuant to Section 3(e)(i) or 3(e)(ii) shall cause the Conversion Price to
be less than $25.55, as such amount may be adjusted pursuant to Section
3(e)(iii) (the “Conversion Floor Price”). The limitations set forth in this
Section 3(e)(iv) shall no longer apply if the Company shall have sought and
obtained an affirmative vote of its stockholders in accordance with
applicable law and the rules and regulations of the Principal Market to
permit adjustments to the Conversion Price as set forth in this Certificate
of Designations without regard to the limitations set forth in this Section
3(e)(iv).

     (v) Events Prior to Initial Issuance Date; Other Events. With
respect to any events giving rise to an adjustment under the provision of
this Section 3(e) that occur after the Effective date and before the Initial
Issuance Date, the applicable adjustment shall be made effective on the
Initial Issuance Date. If any event occurs of the type contemplated by the
provisions of this Section 3(e) but not expressly provided for by such
provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Company’s Board of Directors will make an appropriate
adjustment in the Conversion Price so as to protect the rights of the
Holders; provided that no such adjustment will increase the Conversion Price
as otherwise determined pursuant to this Section 3(e).

     (f) Notices.

     (i) Immediately upon any adjustment of the Conversion Price pursuant to
Section 3(e), the Company will give written notice thereof to each Holder,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment. In the case of a dispute as to the determination of such
adjustment, then such dispute shall be resolved in accordance with the
procedures set forth in Section 19.

     (ii) The Company will give written notice to each Holder at least ten
(10) Business Days prior to the date on which the Company closes its books
or takes a record (I) with respect to any dividend or distribution upon the
Common Stock, (II) with respect to any pro rata subscription offer to
holders of Common Stock or (III) for determining rights to vote with respect
to any Fundamental Transaction or Liquidation Event, provided that such
information shall be made known to the public prior to or in conjunction
with such notice being provided to such Holder.

 

 

     (iii) The Company will also give written notice to each Holder at least
ten (10) Business Days prior to the date on which any Fundamental
Transaction or Liquidation Event will take place, provided that such
information shall be made known to the public prior to or in conjunction
with such notice being provided to such Holder.

          (4) Redemption at the Option of the Company.

     (a) Option. If at any time after the sixth (6th) anniversary of the
Initial Issuance Date, (i) the Weighted Average Price of the Common Stock listed on
the Principal Market exceeds 175% of the Conversion Price then in effect for a
period of thirty (30) consecutive Trading Days immediately preceding the Company
Optional Redemption Notice Date and (ii) no Equity Conditions Failure has occurred,
the Company shall have the right to redeem at its option all, but not less than all,
of the Preferred Shares; provided, that (i) the Company may redeem less than
all of the Preferred Shares only upon written consent of the Required Holders and
(ii) the Company may not redeem any Preferred Shares that the Holders (x) are not
permitted to convert pursuant to Section 14, except to the extent the Initial Holder
is not permitted to convert pursuant to Section 14 due to the Initial Holder
acquiring Voting Stock or Common Stock after March 19, 2010 other than through the
Preferred Shares or the Common Stock issued or issuable upon conversion thereof
(e.g., as a result of adjustments pursuant to Section 3(e) or stock dividends in
which the Initial Holder participates pursuant to Section 2 and similar actions with
respect to the Common Stock) without the consent of the Company or (y) would not be
able to convert due to a failure by the Company to have sufficient authorized and
unissued shares of Common Stock reserved for issuance upon conversion of Preferred
Shares equal to the number of shares of Common Stock necessary to effect the
conversion at the Conversion Rate with respect to each Preferred Share called for
redemption (a “Company Optional Redemption”). Subject to the consent of the
Required Holders in the preceding sentence, in the event the Company redeems
pursuant to clause (i) or (ii) above less than all of the Preferred Shares held by
the Holders the Company shall redeem such Preferred Shares on a pro
rata basis determined by the aggregate number of shares of Preferred Stock
held by each Holder.

     (b) Redemption Price and Payment. The Preferred Shares to be redeemed
on the Company Optional Redemption Date pursuant to this Section 4 shall be redeemed
by the Company by paying for each such Preferred Share, in cash, out of any assets
of the Company legally available therefor, an amount equal to the Liquidation
Preference plus Accrued Dividends as of the Company Optional Redemption Date (the
“Redemption Price”).

     (c) Mechanics of Redemption. The Company may exercise its right to
require redemption under this Section 4 by delivering an irrevocable written notice
thereof by facsimile and overnight courier to all, but not less than all, of the
Holders (the “Company Optional Redemption Notice” and the date all of the Holders
received such notice is referred to as the “Company Optional

 

 

Redemption Notice Date”). To the extent the Company, subject to consent of the
Required Holders, did not redeem all of the Preferred Shares held by the Holders on
its initial distribution of the Company Optional Redemption Notice, the Company may
deliver an additional Company Optional Redemption Notice hereunder (subject to the
conditions set forth herein) and such additional Company Optional Redemption Notice
shall also be irrevocable. The Company Optional Redemption Notice shall (i) state
the date on which the Company Optional Redemption shall occur (the “Company Optional
Redemption Date”) which date shall not be less than thirty (30) Trading Days nor
more than sixty (60) Trading Days following the Company Optional Redemption Notice
Date, (ii) the Redemption Price, (iii) certify that there has been no Equity
Conditions Failure, (iv) certify that the Company has sufficient authorized and
unissued shares of Common Stock equal to the number of shares of Common Stock
necessary to effect the conversion at the Conversion Rate with respect to each
Preferred Share called for redemption and (v) confirm that such redemption shall
only apply with respect to such Preferred Shares that the Holders are permitted to
convert pursuant to Section 14. Notwithstanding anything to the contrary in this
Section 4, at any time prior to the date the Company Optional Redemption Price is
paid, in full, the Preferred Shares subject to redemption pursuant to a Company
Optional Redemption Notice may be converted, in whole or in part, by the Holders
into shares of Common Stock pursuant to Section 3.

          (5) Protective Redemption. Prior to any redemption of Preferred Shares pursuant to
paragraph (c) of Article IV of the Certificate of Incorporation (the “Protective Redemption
Provisions”), the Holders shall first be given no less than 20 Trading Days written notice prior to
the exercise of the Protective Redemption Provisions, the Preferred Shares subject to redemption
under the Protective Redemption Provisions may be converted, in whole or in part, by the Holder
into shares of Common Stock. To the extent the Board may elect under paragraph (c)(5) of the
Protective Redemption Provisions which Redeemable Holders (as such term is defined in the
Certificate of Incorporation) shall be subject to a Protective Redemption (as such term is defined
in the Certificate of Incorporation), the Board shall, except to the extent as may be prohibited by
applicable Law, first elect to redeem the Voting Stock of Redeemable Holders other than the holders
of Preferred Shares and Common Stock issued upon conversion thereof and only in the event that
after giving effect to such redemptions additional redemptions are still necessary to prevent the
loss of or to reinstate the applicable Licenses (as such term is defined in the Certificate of
Incorporation) subject to License Qualifications (as such term is defined in the Certificate of
Incorporation) which give rise to the redemptions may the Board thereafter elect to redeem the
Preferred Shares or Common Stock issued upon conversion thereof. In the event of any redemption of
Preferred Shares pursuant to the Protective Redemption Provisions, the fair market value of the
Preferred Shares determined under paragraph (c)(6) of the Protective Redemption Provisions shall,
at the election of the Required Holders, be determined pursuant to Section 19; provided that such
fair market value of the Preferred Shares shall be determined assuming that the Company makes all
redemptions necessary to prevent the loss of or to reinstate the applicable Licenses subject to
License Qualifications which give rise to the redemptions. In the event of any redemption of
Preferred Shares pursuant to the Protective Redemption Provisions, the Company shall pay the
redemption price in full in cash, and shall not use any election under paragraph (c)(7) of the
Protective Redemption Provisions to pay any portion of

 

 

the redemption price in notes. The foregoing rights are in addition to and not in
substitution of the rights of holders of Voting Stock set forth in the Protective Redemption
Provisions.

          (6) Change of Control. No sooner than thirty (30) Trading Days nor later than fifteen
(15) Trading Days prior to the consummation of a Change of Control, but not prior to the public
announcement of such Change of Control, the Company shall deliver written notice thereof via
facsimile and overnight courier to the Holders (a “Change of Control Notice”). At any time during
the period beginning after a Holder’s receipt of a Change of Control Notice and ending on the date
that is the later of (x) twenty (20) Trading Days after delivery of the Change of Control Notice
and (y) five (5) Trading Days after the consummation of such Change of Control, such Holder may
require the Company to redeem all or any portion of such Holder’s Preferred Shares by delivering
written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of
Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to require
the Company to redeem. Any Preferred Shares subject to redemption pursuant to this Section 6 shall
be redeemed by the Company in cash at a price equal to the greater of (i) 115% of the Conversion
Amount being redeemed and (ii) (1) the product of (A) the Conversion Amount being redeemed
multiplied by (B) the quotient determined by dividing (I) the aggregate cash consideration and the
aggregate fair value of any non-cash consideration per share of Common Stock to be paid to the
holders of Common Stock upon consummation of the Change of Control (provided that (x) the fair
value of any such non-cash consideration consisting of publicly traded securities to be valued at
the greatest Closing Sale Price of such securities during the period commencing on the Trading Day
immediately prior to the public announcement of such Change of Control and ending as of the Trading
Day immediately prior to the consummation of such Change of Control and (y) fair value shall
otherwise be determined in accordance with Section 3(e)(i)(D)) by (II) the Conversion Price (the
“Change of Control Redemption Price”). The Company shall make payment of the Change of Control
Redemption Price concurrently with the consummation of such Change of Control if such a Change of
Control Redemption Notice is received prior to the consummation of such Change of Control and
within five (5) Trading Days after the Company’s receipt of such notice otherwise (the “Change of
Control Redemption Date”). Notwithstanding anything to the contrary in this Section 6, until the
Change of Control Redemption Price (together with any interest thereon) is paid in full, the
Conversion Amount submitted for redemption under this Section 6 may be converted, in whole or in
part, by the Holder into shares of Common Stock (or in the event the Conversion Date is after the
consummation of the Change of Control, such substitute securities as provided pursuant to Section
16). The parties hereto agree that in the event of the Company’s redemption of any of the
Preferred Shares under this Section 6, the Holder’s damages would be uncertain and difficult to
estimate because of the parties’ inability to predict future interest rates and the uncertainty of
the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any
redemption premium due under this Section 6 is intended by the parties to be, and shall be deemed,
a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a
penalty. In the event that the Company does not pay the Change of Control Redemption Price on the
Change of Control Redemption Date, then the Holder shall have the right to void the redemption. If
the Company fails to pay the Change of Control Redemption Price in full when due in accordance with
this Section 6, the Company will pay interest thereon at a rate equal to the lesser of 18% per
annum or the maximum rate permitted by applicable law, accruing daily from such date until the
Change of Control Redemption Price, plus all such interest thereon, is paid in full.
Notwithstanding the

 

 

foregoing, in the event a Change of Control Notice is delivered pursuant to this Section 6 at
a time when the Company is restricted or prohibited (contractually or otherwise) from redeeming the
Preferred Shares subject to redemption pursuant to this Section 6, the Company will use its best
efforts to obtain the requisite consents to remove or obtain an exception or waiver to such
restrictions or prohibition. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s failure to comply with
its obligations under this Section 6. In the event of a Private Cash Acquisition, the Required
Holders shall be deemed to have given a Change of Control Redemption Notice, provided that the
Company and acquiring entity, as applicable, have complied in all respects with the requirements of
the definition of “Private Cash Acquisition”.

     (7) Reservation of Shares.

     (a) The Company shall have sufficient authorized and unissued shares of Common Stock
for each of the Preferred Shares equal to 150% of the number of shares of Common Stock
necessary to effect the conversion at the Conversion Rate with respect to the Conversion
Amount of each such Preferred Share as of the Initial Issuance Date. The Company shall, so
long as any of the Preferred Shares are outstanding, take all action necessary to reserve
and keep available out of its authorized and unissued Common Stock, solely for the purpose
of effecting the conversions of the Preferred Shares, such number of shares of Common Stock
as shall from time to time be necessary to effect the conversion of all of the Preferred
Shares then outstanding; provided that at no time shall the number of shares of Common Stock
so reserved be less than 150% of the number of shares of Common Stock for which the
Preferred Shares are at any time convertible (without regard to any limitations on
conversion herein (including Section 14) or elsewhere) (the “Required Reserve Amount”). The
initial number of shares of Common Stock reserved for conversions of the Preferred Shares
and each increase in the number of shares so reserved shall be allocated pro rata among the
Holders based on the number of Preferred Shares held by each Holder at the time of issuance
of the Preferred Shares or increase in the number of reserved shares, as the case may be
(the “Authorized Share Allocation”). In the event a Holder shall sell or otherwise transfer
any of such Holder’s Preferred Shares, each transferee shall be allocated a pro rata portion
of the number of reserved shares of Common Stock reserved for such transferor. Any shares
of Common Stock reserved and allocated to any Person which ceases to hold any Preferred
Shares (other than pursuant to a transfer of Preferred Shares in accordance with the
immediately preceding sentence) shall be allocated to the remaining Holders of Preferred
Shares, pro rata based on the number of Preferred Shares then held by such Holders.

     (b) Insufficient Authorized Shares. If at any time while any of the Preferred
Shares remain outstanding the Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon
conversion of the Preferred Shares at least a number of shares of Common Stock equal to the
Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for the
Preferred Shares then outstanding. Without

 

 

limiting the generality of the foregoing sentence, as soon as practicable after the
date of the occurrence of an Authorized Share Failure, but in no event later than one
hundred-twenty (120) days after the occurrence of such Authorized Share Failure, the Company
shall hold a meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders’ approval of such increase in authorized shares of Common Stock and to
cause its board of directors to recommend to the stockholders that they approve such
proposal.

          (8) Voting Rights. Subject to Section 14, each Holder shall be entitled to the whole
number of votes equal to the number of shares of Common Stock into which such Holder’s Preferred
Shares would be convertible on the record date for the vote or consent of stockholders, and shall
otherwise have voting rights and powers equal to the voting rights and powers of the Common Stock.
Each Holder shall be entitled to receive the same prior notice of any stockholders’ meeting as is
provided to the holders of Common Stock in accordance with the bylaws of the Company, as well as
prior notice of all stockholder actions to be taken by legally available means in lieu of a
meeting, and shall vote as a class with the holders of Common Stock as if they were a single class
of securities upon any matter submitted to a vote of stockholders, except those matters required by
law or by the terms hereof to be submitted to a class vote of the Holders of Preferred Shares, in
which case the Holders of Preferred Shares only shall vote as a separate class.

          (9) Observer Rights. Until the date, if any (the “Board Observer Termination Date”),
that the Initial Holder and its Affiliates do not have either beneficial ownership of not less than
fifty percent (50%) of the Preferred Shares (or an equivalent amount of Common Stock issued upon
conversion thereof) or beneficial ownership of Common Stock (including on account of ownership of
Preferred Shares or other instruments directly or indirectly convertible into or exchangeable or
exercisable for Common Stock) representing in the aggregate not less than 5% of the number of
shares of Common Stock outstanding at such time immediately after giving effect to such conversion
of such Preferred Shares or other instruments beneficially owned by the Initial Holder and its
Affiliates, the Initial Holder shall have the right to designate a board observer to the Board of
Directors of the Company, which observer shall be a U.S. citizen (who may be an employee or
consultant of the Initial Holder and its Affiliates). The rights of the Initial Holder under this
Section 9 shall terminate upon the Board Observer Termination Date. The Company shall invite the
board observer to attend all meetings of the Board of Directors in a nonvoting observer capacity
and, in this respect, shall give such board observer copies of all notices, minutes, consents, and
other materials that it provides to its directors at the same time and in the same manner as
provided to such directors; provided, however, that (i) such board observer shall agree to hold all
information so provided in confidence and trust to the same extent members of the Board of
Directors are required to do so and (ii) such board observer may, upon request of the Board of
Directors that includes an explanation of the basis of such request, be excluded solely from the
portion of a meeting of the Board of Directors during which the Board of Directors discusses or
deliberates regarding any agreements or transactions between the Initial Holder or any of its
Affiliates, on the one hand, and the Company or any of its Subsidiaries, on the other hand, that
would constitute, or would

 

 

reasonably be expected to constitute, a “transaction with related persons, promoters and
certain control persons” under Item 404 of Regulation S-K.

          (10) Board Representation. Until the date, if any (the “Board Member Termination
Date”), that the Initial Holder and its Affiliates do not have either beneficial ownership of not
less than fifty percent (50%) of the Preferred Shares (or an equivalent amount of Common Stock
issued upon conversion thereof) or beneficial ownership of Common Stock (including on account of
ownership of Preferred Shares or other instruments directly or indirectly convertible into or
exchangeable or exercisable for Common Stock) representing in the aggregate not less than seven and
one-half (7.5%) of the number of shares of Common Stock outstanding at such time immediately after
giving effect to such conversion of such Preferred Shares or other instruments beneficially owned
by the Initial Holder and its Affiliates, the Initial Holder shall have the right to designate one
member for appointment to the Board of Directors of the Company, which designee shall be a U.S.
citizen (who may be an employee or consultant of the Initial Holder and its Affiliates) who has
experience in the defense industry, whether as a governmental official or as an executive, director
or consultant to private companies in the defense sector. The rights of the Initial Holder under
this Section 10 shall terminate upon the Board Member Termination Date. The Company agrees to take
all actions necessary to ensure the appointment of any such designee (and any replacement designee,
as applicable) to the Board of Directors.

          (11) Approval Rights. In addition to any other rights provided by law, except where
the vote or written consent of the holders of a greater number of shares is required by law or by
another provision of the Certificate of Incorporation, the affirmative vote at a meeting duly
called for such purpose or the written consent without a meeting of the Required Holders, voting
together as a single class, shall be required before the Company may:

     (a) amend or repeal any provision of, or add any provision to, the Certificate
of Incorporation, this Certificate of Designation or the Company’s bylaws, or file
any articles of amendment, certificate of designations, preferences, limitations and
relative rights of any series of preferred stock, if such action would adversely
alter or change the preferences, rights, privileges or powers of, or restrictions
provided for the benefit of the Preferred Shares, regardless of whether any such
action shall be by means of amendment to the Certificate of Incorporation or by
merger, consolidation or otherwise;

     (b) increase or decrease (other than by conversion) the authorized number of
shares of Preferred Shares;

     (c) create or authorize (by reclassification or otherwise) any new class or
series of shares that has a preference over or is on a parity with the Preferred
Shares with respect to dividends or the distribution of assets on the liquidation,
dissolution or winding up of the Company;

     (d) purchase, repurchase or redeem any shares of Common Stock (other than
pursuant to equity incentive agreements with employees) or any other Capital Stock
of the Company of any class junior in rank to the Preferred Shares

 

 

in respect of the preferences as to distributions and payments on the
liquidation, dissolution and winding up of the Company;

     (e) effect any Liquidation Event;

     (f) declare or pay any dividend or make any other payment or distribution on
account of the Company’s Capital Stock of any class junior in rank to the Preferred
Shares in respect of the preferences as to distributions and payments on the
liquidation, dissolution and winding up of the Company, other than dividends with
respect to which the holders of Preferred Shares are entitled to participate
pursuant to Section 2;

     (g) take any action that would reasonably result in the suspension from trading
or failure of the Common Stock to be listed on an Eligible Market other than as the
result of a Private Cash Acquisition, unless pursuant to Section 16 the Preferred
Shares are convertible into publicly traded common stock (or their equivalent) of
the applicable Successor Entity in a Fundamental Transaction in lieu of the shares
of Common Stock (in which case from and after such date this clause (g) shall apply
to such publicly traded common stock (or their equivalent) of the applicable
Successor Entity in lieu of the Common Stock;

     (h) effect any Affiliate Transactions other than Permitted Affiliate
Transactions;

     (i) whether or not prohibited by the terms of the Preferred Shares, circumvent
a right of the Preferred Shares; and

     (j) enter into any contract, agreement, or understanding with respect any of
the foregoing.

          (12) Reports and Other Information.

     (a) Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, or otherwise report on an
annual and quarterly basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the SEC, the Company shall either
file with the SEC, without cost to each Holder, the following information or comply
with Section 12(b) with respect thereto:

     (i) within 90 days after the end of each fiscal year, annual financial
information that would be required to be contained in a filing with the SEC
on Form 10-K if the Company were required to file such a form, including (i)
a “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and (ii) a report on the annual financial statements by the
Company’s certified independent accountants; and

 

 

     (ii) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year commencing with the first fiscal quarter after
the Initial Issuance Date, all quarterly information that would be required
to be contained in a filing with the SEC on Form 10-Q if the Company were
required to file such a form, including “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”;

provided; however, that the Company shall not be so
obligated to file such reports with the SEC if the SEC does not permit such
filing, in which event the Company shall make available such information to
securities analysts and prospective investors upon request, in addition to
providing such information to the Holders.

The Company shall also furnish to Holders, securities analysts and
prospective investors upon request the information required to be delivered
pursuant Rule 144A(d)(4) under the Securities Act.

     (b) Notwithstanding the foregoing, the Company’s delivery obligations described
in Section 12(a) shall be deemed to be satisfied by posting of the information and
reports referred to in clauses (i) and (ii) of Section 12(a) above on the Company’s
website or one maintained on its behalf for such purpose; provided, that the
Company shall use reasonable efforts to inform Holders of the availability of such
information and reports, which may be satisfied by, among other things, a press
release on any national business press release wire.

          (13) Principal Market Restrictions.

     (a) The Company shall not, and shall cause each of its Subsidiaries and
controlled Affiliates not to, take any action if the effect of such action would be,
in the absence of Section 3(e)(iv), to cause the Conversion Price to be reduced
below the Conversion Floor Price.

     (b) The Company shall not, and shall cause each of its Subsidiaries and
controlled Affiliates not to, issue, purchase, repurchase or redeem any Common Stock
or other Voting Stock or securities convertible or exercisable for or exchangeable
into Common Stock or Voting Stock that in the absence of Section 14 would result in
the Initial Holder of Preferred Shares (or any Group that includes such Initial
Holder) having (x) upon conversion of all such Initial Holder’s (or any Group that
includes such Initial Holder) Preferred Shares, beneficial ownership of in excess of
the Maximum Percentage of the number of shares of Common Stock outstanding at such
time immediately after giving effect to such conversion or (y) the right to exercise
voting rights in the Company in excess of the Maximum Percentage of the voting
rights in the Company outstanding at such time, assuming such exercise as being
equivalent to conversion; provided, that the limitation in clause (x) shall not be
applicable to the extent the Initial Holder has acquired Voting Stock or Common
Stock after March 19, 2010 other than through the Preferred Shares or the Common
Stock issued or

 

 

issuable upon conversion thereof (e.g., as a result of adjustments pursuant to
Section 3(e) or stock dividends in which the Initial Holder participates pursuant to
Section 2 and similar actions with respect to the Common Stock) without the consent
of the Company.

          (14) Limitations Relating to Beneficial Ownership. The Company shall not effect any
conversion of Preferred Shares, and no Holder shall have the right to convert any Preferred Shares,
to the extent that at such time after giving effect to such conversion, the beneficial owner of
such shares (or any Group that includes such beneficial owner) would have acquired, after giving
effect to such conversion of Preferred Shares, beneficial ownership of a number of shares of Common
Stock that exceeds 19.99% (“Maximum Percentage”) of the number of shares of Common Stock
outstanding at such time immediately after giving effect to such conversion. The Company shall not
give effect to any voting rights of the Preferred Shares, and any Holder shall not have the right
to exercise voting rights with respect to any Preferred Shares pursuant hereto, to the extent that
at such time giving effect to such voting rights would result in such Holder (or any Group that
includes such beneficial owner) being deemed to beneficially own in excess of the Maximum
Percentage of the number of shares of Common Stock outstanding at such time immediately after
giving effect to such exercise, assuming such exercise as being equivalent to conversion. For
purposes of the foregoing, the number of shares of Common Stock beneficially owned by a Person (or
any Group that includes such Person) shall include the number of shares of Common Stock issuable
upon conversion of the Preferred Shares with respect to which the determination of such sentence is
being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A)
conversion of the remaining, nonconverted Preferred Shares beneficially owned by such Person (or
any Group that includes such Person) and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without limitation, any
notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section beneficially owned by such Person (or any Group that includes such
Person). Except as set forth in the preceding sentence, beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act. For any reason at any time, upon the written
request of any Holder, the Company shall within one (1) Business Day following the receipt of such
notice, confirm orally and in writing to any such Holder the number of shares of Common Stock then
outstanding. The limitations set forth in this Section 14 (x) shall no longer apply if the Company
shall have sought and obtained an affirmative vote of its stockholders in accordance with
applicable law and the rules and regulations of the Principal Market to permit the conversion and
voting of all of the Preferred Shares as set forth in this Certificate of Designations without
regard to the limitations set forth in this Section 14 and (y) shall not apply in the case of any
transaction in which immediately upon conversion the Preferred Shares a Holder transfers the Common
Stock into which such Preferred Shares are converted to a another Person (other than a member of a
Group that includes such Holder).

          (15) Liquidation. In the event of a Liquidation Event, the Holders shall be entitled
to receive in cash out of the assets of the Company, whether from capital or from earnings
available for distribution to its stockholders (the “Liquidation Funds”), before any amount shall
be paid to the holders of any of the Capital Stock of the Company of any class junior in rank to
the Preferred Shares in respect of the preferences as to distributions and payments on the
liquidation, dissolution and winding up of the Company, an amount per

 

 

Preferred Share equal to the Liquidation Preference plus Accrued Dividends; provided that, if
the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of
shares of other classes or series of preferred stock of the Company that are of equal rank with the
Preferred Shares as to payments of Liquidation Funds (the “Pari Passu Shares”), if any, then each
Holder and each holder of any such Pari Passu Shares shall receive a percentage of the Liquidation
Funds equal to the full amount of Liquidation Funds payable to such Holder as a liquidation
preference, in accordance with their respective Certificate of Designations, Preferences and
Rights, as a percentage of the full amount of Liquidation Funds payable to all holders of Preferred
Shares and Pari Passu Shares. After the foregoing distributions, the Holders shall be entitled, on
a pari passu basis with the holders of the Common Stock and treating for the purpose thereof all of
the Preferred Shares as having been converted into Common Stock pursuant to Section 3 (without
regard to any limitations on conversion herein (including Section 14) or elsewhere), to participate
in the distribution of any remaining assets of the Company to the holders of the outstanding Common
Stock. To the extent necessary, the Company shall cause such actions to be taken by any of its
Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation
Event to be distributed to the Holders in accordance with this Section. All the preferential
amounts to be paid to the Holders under this Section shall be paid or set apart for payment before
the payment or setting apart for payment of any amount for, or the distribution of any Liquidation
Funds of the Company to the holders of shares of other classes or series of preferred stock of the
Company junior in rank to the Preferred Shares in connection with a Liquidation Event as to which
this Section applies. The purchase or redemption by the Company of stock of any class, in any
manner permitted by law, shall not, for the purposes hereof, be regarded as a Liquidation Event.

          (16) Assumption. The Company shall not enter into or be party to a Fundamental
Transaction unless the Successor Entity assumes in writing (with the purchase of at least a
majority of the outstanding shares of the Company’s Common Stock automatically constituting an
assumption in writing) all of the obligations of the Company under this Certificate of Designations
and the other Transaction Documents in accordance with the provisions of this Section 16 pursuant
to written agreements in form and substance reasonably satisfactory to the Required Holders and
approved by the Required Holders prior to such Fundamental Transaction, including (other than in
the case of a Private Cash Acquisition) agreements to deliver to each Holder of Preferred Shares in
exchange for such Preferred Shares a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Certificate of Designations
including, without limitation, having a liquidation preference and dividend rate equal to the
liquidation preference and dividend rate of the Preferred Shares held by such Holder and having
similar ranking to the Preferred Shares, and satisfactory to the Required Holders. Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental Transaction, the provisions of
this Certificate of Designations referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Certificate of Designations with the same effect as if such
Successor Entity had been named as the Company herein. Other than in the case of a Private Cash
Acquisition, upon consummation of the Fundamental Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon conversion of the Preferred Shares at
any time after the consummation of the Fundamental Transaction, in lieu of the shares of Common
Stock (or other securities, cash,

 

 

assets or other property) issuable upon the conversion of the Preferred Shares prior to such
Fundamental Transaction, such shares of publicly traded common stock (or their equivalent) of the
Successor Entity, as adjusted in accordance with the provisions of this Certificate of
Designations. The provisions of this Section 16 shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations on conversion of
the Preferred Shares herein (including Section 14) or elsewhere. A “Private Cash Acquisition”
shall mean a Fundamental Transaction of the type described in clauses (A), (C) or (D) (for the
avoidance of doubt, so long as clause (y) below is satisfied) of the definition of “Fundamental
Transaction” in the event that (x) the Company has complied in all respects with its obligations
under Section 6 with respect to such transaction and shall have paid the Change of Control
Redemption Price in full on or prior to the date of consummation of such Fundamental Transaction,
(y) pursuant to such transaction 100% of the Common Stock of the Company is acquired in exchange
for all-cash consideration by a third party that is not an Affiliate of the Company and (z) the
applicable Successor Entity does not have any shares of publicly traded common stock (or their
equivalent) into which the Preferred Shares would be convertible in lieu of the shares of Common
Stock pursuant to this Section 16 after the consummation of such Fundamental Transaction.

          (17) Ranking. All shares of Common Stock and any other classes of Capital Stock or
series of preferred stock established by the Company prior to or after the Effective Date shall be
of junior rank to all Preferred Shares with respect to the preferences as to dividends,
distributions and payments upon Liquidation Event. The rights of the shares of Common Stock shall
be subject to the preferences and relative rights of the Preferred Shares. In the event of the
merger or consolidation of the Company with or into another corporation, the Preferred Shares shall
maintain their relative powers, designations and preferences provided for herein (except that the
Preferred Shares may not be pari passu with, or junior to, any Capital Stock of the successor
entity) and no merger shall result inconsistent therewith.

          (18) Lost or Stolen Certificates. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any Preferred Stock
Certificates representing the Preferred Shares, and, in the case of loss, theft or destruction, of
an indemnification undertaking by the Holder to the Company in customary form and, in the case of
mutilation, upon surrender and cancellation of the Preferred Stock Certificate(s), the Company
shall execute and deliver new preferred stock certificate(s); provided, however,
the Company shall not be obligated to re-issue preferred stock certificates if the Holder
contemporaneously requests the Company to convert such Preferred Shares into Common Stock.

          (19) Dispute Resolution. In the case of a dispute as to the Conversion Rate, the
Closing Sale Price or Weighted Average Price, or any adjustment pursuant to Section 3(e), the
Company shall instruct the Transfer Agent to issue to the Holder the number of shares of Common
Stock that is not disputed or take all such other required actions with respect to such matters to
the extent they are not disputed, and shall transmit an explanation of the disputed matters to the
Holder via facsimile within five (5) Business Days of receipt of such Holder’s Conversion Notice or
other applicable date of determination that a dispute exists. If such Holder and the Company are
unable to agree upon the disputed matter within five (5) Business Days of such explanation being
transmitted to the Holder, then the Company shall within two (2)

 

 

Business Days thereafter propose to the Holders via facsimile the investment bank or
appraiser, if applicable, referred to in clauses (B) and (C) below, and cooperate with the Holders
to promptly agree upon an investment bank or appraiser (or in each case if the Company’s proposal
is not approved by the Required Holders, within two (2) further Business Days propose an
alternative investment bank or appraiser). Within five (5) Business Days after (x) agreement with
the Required Holders on the investment bank or appraiser, if applicable, or (y) the explanation
referred to above being transmitted to the Holder the Company in the case of clause (A) below,
submit via facsimile (A) a disputed calculation of the Conversion Rate to the Company’s
independent, outside accountant or (B) a disputed Closing Sale Price or Weighted Average Price or
adjustment pursuant to Section 3(e) to an independent, reputable investment bank selected by the
Company and approved by the Required Holders or (C) a disputed valuation in connection with a
Valuation Event under Section 3(e)(i)(D) to an independent, reputable appraiser selected by the
Company and approved by the Required Holders. The Company shall cause, at the Company’s expense,
the accountant, investment bank or appraiser, as the case may be, to perform the determinations or
calculations and notify the Company and the Holders of the results as soon as practicable and in no
event later than five (5) Business Days from the time it receives the disputed determinations or
calculations (unless such accountant, investment bank or appraiser reasonably concludes that it
cannot make such determinations in that time period, in which case such time period shall be
extended to the extent mutually agreed between the Company and the Required Holders). Such
investment bank’s, accountant’s or appraiser’s determination or calculation, as the case may be,
shall be binding upon all parties absent error.

          (20) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.
The remedies provided in this Certificate of Designations shall be cumulative and in addition to
all other remedies available under this Certificate of Designations, at law or in equity (including
a decree of specific performance and/or other injunctive relief). No remedy contained herein shall
be deemed a waiver of compliance with the provisions giving rise to such remedy. Nothing herein
shall limit a Holder’s right to pursue actual damages for any failure by the Company to comply with
the terms of this Certificate of Designations. The Company covenants to each Holder that there
shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the
computation thereof) shall be the amounts to be received by the Holder thereof and shall not,
except as expressly provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holders and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the Holders shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any
bond or other security being required.

          (21) Construction. This Certificate of Designations shall be deemed to be jointly
drafted by the Company and the Initial Holder and shall not be construed against any person as the
drafter hereof.

          (22) Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in
the exercise of any power, right or privilege hereunder shall operate as a waiver

 

 

thereof, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or privilege.

          (23) Notice. Whenever notice or other communication is required to be given under
this Certificate of Designations, unless otherwise provided herein, such notice shall be given in
accordance with Section 14 of the Securities Purchase Agreement (provided that if the Preferred
Shares are not held by a Purchaser then substituting the words “holder of Securities” for the word
“Purchaser”).

          (24) Preferred Share Register. The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by notice to the
Holders), a register for the Preferred Shares, in which the Company shall record the name and
address of the persons in whose name the Preferred Shares have been issued, as well as the name and
address of each transferee. The Company may treat the person in whose name any Preferred Share is
registered on the register as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, but in all events recognizing any properly made transfers.

          (25) Stockholder Matters. Any stockholder action, approval or consent required,
desired or otherwise sought by the Company pursuant to the rules and regulations of the applicable
Eligible Market, the DGCL, this Certificate of Designations or otherwise with respect to the
Preferred Shares may be effected by written consent of the Required Holders or at a duly called
meeting of the Company’s stockholders, all in accordance with the applicable rules and regulations
of the applicable Eligible Market and the DGCL. This provision is intended to comply with respect
to the Preferred Shares with the applicable sections of the DGCL permitting stockholder action,
approval and consent affected by written consent in lieu of a meeting.

          (26) Disclosure. Upon receipt or delivery by the Company of any notice in accordance
with the terms of this Certificate of Designations, unless the Company has in good faith determined
that the matters relating to such notice do not constitute material, nonpublic information relating
to the Company or its Subsidiaries, the Company shall within four (4) Business Days after any such
receipt or delivery publicly disclose such material, nonpublic information on a Current Report on
Form 8-K or otherwise, which disclosure shall be deemed to constitute notice to the Holders. In
the event that the Company believes that a notice contains material, nonpublic information relating
to the Company or its Subsidiaries, the Company shall so indicate to the Holders contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holders shall be
allowed to presume that all matters relating to such notice do not constitute material, nonpublic
information relating to the Company or its Subsidiaries.

          (27) Further Assurances. Upon request of the Holders, the Company shall execute and
deliver such further instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purposes of this Certificate of Designation.

          (28) Certain Defined Terms. For purposes of this Certificate of Designations, the
following terms shall have the following meanings:

 

 

     (a) “Accrued Dividends” means the product of (x) the result of the
following formula: (Dividend Rate)(N/365) and (y) the Liquidation Preference

     (b) “Affiliate” has the meaning set forth in the meaning set forth in Rule 405
under the Securities Act, provided that for purposes of this Certificate of
Designations the Initial Holder shall be deemed not to be an Affiliate of the
Company.

     (c) “Affiliate Transaction” means any of the following by the Company or any of
its Subsidiaries: any payment to, or sale, lease, transfer or other disposition of
any of its properties or assets to, or purchase of any property or assets from, or
entering into or making or amending any transaction, contract, agreement,
understanding, loan, advance or guarantee with or for the benefit of, any Affiliate.

     (d) “Applicable Price” has the meaning set forth in Section 3(e)(i).

     (e) “Approved Stock Plan” means any employee benefit plan which has been
approved by the Board of Directors of the Company, pursuant to which the Company’s
securities may be issued to any employee, consultant, officer or director for
services provided to the Company.

     (f) “Authorized Share Allocation” has the meaning set forth in Section 7(a).

     (g) “Authorized Share Failure” has the meaning set forth in Section 7(b).

     (h) “Black Scholes Value” means the value of an Option based on the Black
Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined
as of the day immediately following the public announcement of the applicable
Dilutive Issuance and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for term of such Option, (ii) an expected volatility equal to the
greater of one hundred percent (100%) and the 100 day volatility obtained from the
HVT function on Bloomberg as of the day immediately following the public
announcement of the applicable Dilutive Issuance, (iii) the underlying price per
share used in such calculation shall be the New Issuance Price, and (iv) a 365 day
annualization factor.

     (i) “Bloomberg” means Bloomberg Financial Markets.

     (j) “Board” has the meaning set forth in the Preamble.

     (k) “Business Day” means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law to
remain closed.

 

 

     (l) “Capital Stock” means: (A) in the case of a corporation, corporate stock;
(B) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;
(C) in the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and (D) any other interest or
participation that confers on a Person the right to receive a share of the profits
and losses of, or distributions of assets of, the issuing Person.

     (m) “Change of Control” means any Fundamental Transaction other than pursuant
to a migratory merger effected solely for the purpose of changing the jurisdiction
of incorporation of the Company.

     (n) “Change of Control Notice” has the meaning set forth in Section 6.

     (o) “Change of Control Redemption Date” has the meaning set forth in Section 6.

     (p) “Change of Control Redemption Notice” has the meaning set forth in Section
6.

     (q) “Change of Control Redemption Price” has the meaning set forth in Section
6.

     (r) “Closing Sale Price” means, for any security as of any date, the last
consolidated closing bid price, respectively, for such security on the Principal
Market, as confirmed by the Principal Market, or, if the Principal Market begins to
operate on an extended hours basis and does not designate the consolidated closing
bid price then the last bid price of such security prior to 4:00:00 p.m., New York
Time, as confirmed by the Principal Market, or, if the Principal Market is not the
principal securities exchange or trading market for such security the last bid price
of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last bid price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no last
bid price is reported for such security by Bloomberg, the average of the bid prices
of any market makers for such security as reported in the “pink sheets” by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Sale
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Sale Price, as the case may be, of such security on
such date shall be the fair market value as mutually determined by the Company and
the Required Holders. If the Company and the Required Holders are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 3(d)(iii). All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.

 

 

     (s) “Common Stock Deemed Outstanding” means, at any given time, the number of
shares of Common Stock actually outstanding at such time, plus the number of shares
of Common Stock deemed to be outstanding pursuant to Sections 3(e)(i)(A) and
3(e)(i)(B) hereof (regardless of whether the Options or Convertible Securities, as
applicable, are actually exercisable at such time) but excluding any shares of
Common Stock owned or held by or for the account of the Company or issuable upon
conversion of the Preferred Shares.

     (t) “Company” has the meaning set forth in the Preamble.

     (u) “Company Optional Redemption” has the meaning set forth in Section 4(a).

     (v) “Company Optional Redemption Date” has the meaning set forth in Section
4(c).

     (w) “Company Optional Redemption Notice” has the meaning set forth in Section
4(c).

     (x) “Company Optional Redemption Notice Date” has the meaning set forth in
Section 4(c).

     (y) “Common Stock” means any shares of any class of Capital Stock of the
Company that has no preference with respect to dividends or the distribution of
assets on the liquidation, dissolution or winding up of the Company and that is not
subject to redemption by the Company (other than pursuant to the Protective
Redemption Provisions). Subject to the provisions of Section 16, however, shares
issuable on conversion of the Preferred Shares shall include only shares of the
class designated as common stock, par value $0.01 per share, as of the Effective
Date or shares of any class or classes resulting from any reclassification or
reclassifications thereof and that have no preference with respect to dividends or
the distribution of assets on the liquidation, dissolution or winding up of the
Company and that is not subject to redemption by the Company (other than pursuant to
the Protective Redemption Provisions); provided that if at any time there shall be
more than one such resulting class, the shares of each such class then so issuable
on conversion shall be substantially in the proportion that the total number of
shares of such class resulting from all such reclassifications bears to the total
number of shares of all such classes resulting from all such reclassifications.

     (z) “Conversion Amount” means the sum of the Liquidation Preference plus the
amount of Accrued Dividends.

     (aa) “Conversion Date” has the meaning set forth in Section 3(c)(i).

     (bb) “Conversion Floor Price” has the meaning set forth in Section 3(e)(iv).

 

 

     (cc) “Conversion Notice” has the meaning set forth in Section 3(c)(i).

     (dd) “Conversion Price” means $29.76, subject to adjustment as provided herein.

     (ee) “Conversion Rate” has the meaning set forth in Section 3(b).

     (ff) “Convertible Securities” means any stock or securities (other than
Options) directly or indirectly convertible into or exchangeable or exercisable for
Common Stock.

     (gg) “DGCL” has the meaning set forth in the Preamble.

     (hh) “Dilutive Issuance” has the meaning set forth in Section 3(e)(i).

     (ii) “Dividends” has the meaning set forth in Section 1.

     (jj) “Dividend Date” has the meaning set forth in Section 1.

     (kk) “Dividend Period” has the meaning set forth in Section 1.

     (ll) “Dividend Rate” means five percent (5.0%) per annum; provided that from
and after the date that any Person or Group, directly or indirectly, in one or more
related transactions not constituting a Change of Control, is or shall become the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of 50% or more
in the aggregate ordinary voting power represented by the issued and outstanding
Common Stock, the Dividend Rate shall be fifteen percent (15.0%) per annum.

     (mm) “DTC” has the meaning set forth in Section 3(c)(ii).

     (nn) “Effective Date” means March 4, 2010.

     (oo) “Eligible Market” means The New York Stock Exchange, Inc, NYSE AMEX
Equities, The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ
Capital Market.

     (pp) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

     (qq) “Equity Conditions” means that each of the following conditions is
satisfied: (i) on each day during the period beginning thirty (30) Trading Days
prior to the applicable date of determination and ending on and including the
applicable date of determination (the “Equity Conditions Measuring Period”), either
(x) the Registration Statement (as defined in the Registration Rights Agreement, the
“Registration Statement”) filed pursuant to the Registration Rights Agreement shall
be effective and available for the resale of all of the Registrable Securities in
accordance with the terms of the Registration Rights

 

 

Agreement and no Suspension (as defined in the Registration Rights Agreement)
shall have occurred during the Equity Conditions Measuring Period or (y) all Common
Stock issuable upon conversion of the Preferred Shares shall be eligible for sale by
the holder thereof without restriction pursuant to Rule 144 and without the
requirement to be in compliance with Rule 144(c)(1) (or any successor thereto)
promulgated under the Securities Act and without the need for registration under any
applicable federal or state securities laws; (ii) on each day during the Equity
Conditions Measuring Period, the Common Stock is designated for quotation on the
Principal Market or any other Eligible Market and shall not have been suspended from
trading on such exchange or market nor shall delisting or suspension by such
exchange or market been threatened or pending either (A) in writing by such exchange
or market or (B) by falling below the then effective minimum listing maintenance
requirements of such exchange or market; (iii) during the Equity Conditions
Measuring Period, any applicable Preferred Shares to be redeemed shall be
convertible in full without regard to the restrictions set forth in Section 14
hereof and the rules or regulations of the Principal Market or any applicable
Eligible Market; (iv) during the Equity Conditions Measuring Period, there shall not
have occurred the public announcement of a pending, proposed or intended Fundamental
Transaction or any proposed or intended transaction pursuant to which an Person or
Group, directly or indirectly, shall become the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act) of 50% or more in the aggregate voting power
represented by the issued and outstanding Common Stock, in either case which has not
been abandoned, terminated or consummated and publicly announced as such no later
than 5 Trading Days prior to the expiration of the Equity Conditions Measuring
Period; and (v) approval of the Board or holders of Common Stock shall have
occurred, if necessary.

     (rr) “Equity Conditions Failure” means that on any day during the period
commencing ten (10) Trading Days prior to the applicable Company Optional Redemption
Notice Date through the applicable Company Optional Redemption Date the Equity
Conditions have not been satisfied (or waived in writing by the Holder).

     (ss) “Equity Conditions Measuring Period” has the meaning set forth in the
definition of “Equity Conditions.”

     (tt) “Excluded Securities” means any Common Stock issued or issuable or deemed
to be issued in accordance with Section 3(e) hereof by the Company: (A) in
connection with any Approved Stock Plan; (B) upon conversion of the Preferred
Shares; (C) upon conversion, exercise or exchange of any Options or Convertible
Securities which are outstanding on the day immediately preceding the Effective
Date, provided that such issuance of Common Stock upon exercise of such Options or
Convertible Securities is made pursuant to the terms of such Options or Convertible
Securities in effect on the date immediately preceding the Effective Date and such
Options or Convertible Securities are not amended, modified or changed on or after
the Effective Date; and (D) in

 

 

connection with any subdivision, stock split, stock dividend, recapitalization
or similar transaction by the Company for which adjustment is made pursuant to
Section 3(e)(iii).

     (uu) “Fundamental Transaction” means that the Company shall (A) consolidate or
merge with or into (whether or not the Company is the surviving corporation) another
Person, or (B) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company to another Person, or
(C) recommend (or shall not publicly recommend against) that holders of the
Company’s outstanding Voting Stock tender their shares in any tender or exchange
offer by another Person or Persons seeking to purchase by such offer more than 50%
of the outstanding shares of Voting Stock of the Company (not including any shares
of the Voting Stock of the Company held by the Person or Persons making or party to,
or associated or Affiliated with the Person or Persons making or party to, such
purchase, tender or exchange offer) and such Person or Person acquires by such offer
more than 50% of the outstanding shares of the Voting Stock of the Company, or (D)
consummate a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person whereby such other Person acquires more than 50% of
the outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock of the Company held by the other Person or other Persons making or
party to, or associated or Affiliated with the other Persons making or party to,
such stock purchase agreement or other business combination), or (E) reorganize,
recapitalize or reclassify its Common Stock.

     (vv) “Group” has the meaning set forth in Section 13(d) of the Exchange Act.

     (ww) “Holder” has the meaning set forth in Section 1.

     (xx) “Initial Holder” means Cerberus Satellite LLC.

     (yy) “Initial Issuance Date” means the date of this Certificate of
Designations, which is September 22, 2010.

     (zz) “Liquidation Event” means the voluntary or involuntary liquidation,
dissolution or winding up of the Company or such Subsidiaries the assets of which
constitute all or substantially all of the assets of the business of the Company and
its Subsidiaries taken as a whole, in a single transaction or series of
transactions.

     (aaa) “Liquidation Funds” has the meaning set forth in Section 15.

     (bbb) “Liquidation Preference” means an amount equal to the Stated Value of a
Preferred Share plus all Dividends accrued and added to the Liquidation Preference
of such Preferred Share pursuant to Section 1.

 

 

     (ccc) “Maximum Percentage” has the meaning set forth in Section 14.

     (ddd) “N” means the number of days from, but excluding (i) the last Dividend
Date with respect to which dividends have been either paid in full by the Company in
cash or added to the Liquidation Preference on the applicable Preferred Share, or
(ii) the Initial Issuance Date if no Dividend Date has occurred.

     (eee) “New Issuance Price” has the meaning set forth in Section 3(e)(i).

     (fff) “Options” means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

     (ggg) “Other Taxes” has the meaning set forth in Section 3(d)(iii).

     (hhh) “Parent Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity security
is quoted or listed on an Eligible Market, or, if there is more than one such Person
or Parent Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental Transaction.

     (iii) “Pari Passu Shares” has the meaning set forth in Section 15.

     (jjj) “Permitted Affiliate Transaction” means any of the following Affiliate
Transactions:

     (i) an Affiliate Transaction on terms that are not materially less
favorable, taken as a whole, to the Company or the relevant Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Subsidiary with an unrelated Person on an arm’s-length
basis;

     (ii) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration equal to or less
than $5.0 million, an Affiliate Transaction approved by a responsible
officer of the Company;

     (iii) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million but less than $25.0 million, an Affiliate Transaction for which the
Company’s Board of Directors adopts a resolution that such Affiliate
Transaction complies with this covenant and which has been approved by a
majority of the disinterested members, if any, of the Company’s Board of
Directors;

     (iv) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration equal to or in
excess of $25.0 million, an Affiliate Transaction in which the Company

 

 

receives a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company or the relevant Subsidiary, as
the case may be, from a financial point of view from an independent
financial advisor to the Company and delivers the same to each Holder;

     (v) transactions between or among the Company and/or any of its
Subsidiaries or any entity that becomes a Subsidiary as a result of such
transaction, so long as such transactions are not otherwise prohibited by
this Certificate of Designations;

     (vi) the payment of reasonable and customary fees paid to, and
indemnities provided on behalf of, officers, directors, employees or
consultants of the Company or any Subsidiary;

     (vii) payments made in respect of, or performance under, any agreement
as in effect on the Effective Date or any amendment thereto (so long as any
such amendment is not less advantageous to the Holders in any material
respect than the original agreement as in effect on the Effective Date);

     (viii) transactions with a Person that is an Affiliate of the Company
solely because the Company owns, directly or through a Subsidiary, Capital
Stock in, or controls, such Person;

     (ix) any employment agreements, stock option plans and other
compensatory agreements entered into by the Company or any of its
Subsidiaries and which, in each case, are either in the ordinary course of
business or are approved by the Board of Directors of the Company in good
faith; and

     (x) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board
of Directors of the Company.

     (kkk) “Person” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

     (lll)“Preferred Shares” has the meaning set forth in the Preamble.

     (mmm) “Principal Market” means The NASDAQ Global Market.

     (nnn) “Preferred Stock Certificates” has the meaning set forth in Section
3(c)(i).

     (ooo) “Preferred Stock Delivery Date” has the meaning set forth in Section
3(c)(ii).

 

 

     (ppp) “Private Cash Acquisition ” has the meaning set forth in Section 16.

     (qqq) “Protective Redemption Provisions” has the meaning set forth in Section
5.

     (rrr) “Redemption Price” has the meaning set forth in Section 4(b).

     (sss) “Registration Rights Agreement” means that certain registration rights
agreement with respect to the Preferred Shares by and among the Company and the
initial Holders of the Preferred Shares dated as of the Initial Issuance Date, as
such agreement may be amended from time to time as provided in such agreement.

     (ttt) “Registration Statement” has the meaning set forth in the definition of
“Equity Conditions”.

     (uuu) “Required Holders” means the Holders of Preferred Shares representing at
least a majority of the aggregate Preferred Shares then outstanding.

     (vvv) “Required Reserve Amount” has the meaning set forth in Section (7)(a).

     (www) “SEC” means the Securities and Exchange Commission.

     (xxx) “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

     (yyy) “Securities Purchase Agreement” means that certain securities purchase
agreement with respect to the Preferred Shares by and among the Company and the
initial Holders, dated as of March 19, 2010, as such agreement further may be
amended from time to time as provided in such agreement.

     (zzz) “Share Delivery Date” has the meaning set forth in Section 3(c)(ii).

     (aaaa) “Stated Value” means $1,000.

     (bbbb) “Subsidiary” means, with respect to any specified Person:

     (i) any corporation, association or other business entity, of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and

 

 

     (ii) any partnership, joint venture, limited liability company or
similar entity of which (x) more than 50% of the capital accounts,
distribution rights, total equity and voting interests or general or limited
partnership interests, as applicable, are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof whether in the form of membership, general,
special or limited partnership interests or otherwise and (y) such Person or
any Subsidiary of such Person is a controlling general partner or otherwise
controls such entity.

     (cccc) “Successor Entity” means the Person, which may be the Company, formed
by, resulting from or surviving any Fundamental Transaction or the Person with which
such Fundamental Transaction shall have been made, provided that if such Person is
not a publicly traded entity whose common stock or equivalent equity security is
quoted or listed for trading on an Eligible Market, Successor Entity shall mean such
Person’s Parent Entity.

     (dddd) “Tax” means any tax, levy, impost, duty or other charge or withholding
of a similar nature (including any related penalty or interest).

     (eeee) “Tax Deduction” means a deduction or withholding for or on account of
Tax from a payment under this Certificate of Designations.

     (ffff) “Trading Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading market
for the Common Stock, then on the principal securities exchange or securities market
on which the shares of Common Stock are then traded; provided that “Trading Day”
shall not include any day on which the shares of Common Stock are scheduled to trade
on such exchange or market for less than 4.5 hours or any day that the shares of
Common Stock are suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance the
closing time of trading on such exchange or market, then during the hour ending at
4:00:00 p.m., New York Time).

     (gggg) “Transfer Agent” has the meaning set forth in Section 3(c)(i).

     (hhhh) “Valuation Event” has the meaning set forth in Section 3(e)(i)(D).

     (iiii) “Voting Stock” of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting power
to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not at
the time Capital Stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).

 

 

     (jjjj) “Weighted Average Price” means, for any security as of any date, the
dollar volume-weighted average price for such security on the applicable Eligible
Market during the period beginning at 9:30:01 a.m., New York City Time, and ending
at 4:00:00 p.m., New York City Time, as reported by Bloomberg through its “Volume at
Price” function or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New
York City Time, and ending at 4:00:00 p.m., New York City Time, as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid price
and the lowest closing ask price of any of the market makers for such security as
reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation
Bureau, Inc.). If the Weighted Average Price cannot be calculated for such security
on such date on any of the foregoing bases, the Weighted Average Price of such
security on such date shall be the fair market value as mutually determined by the
Company and the Required Holders. If the Company and the Required Holders are
unable to agree upon the fair market value of the Common Stock, then such dispute
shall be resolved pursuant to Section 3(d)(iii) below with the term “Weighted
Average Price” being substituted for the term “Closing Sale Price.” All such
determinations shall be appropriately adjusted for any stock dividend, stock split
or other similar transaction during such period.

*   *   *   *   *

 

 

          IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to be signed by
William L. Warren, its Senior Vice President, General Counsel and Secretary, as of the
22nd day of September, 2010.

	 	 	 	 	 	 	 

	 	 	GEOEYE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William L. Warren
 

	 	 
	 

	 	Name:
	 	William L. Warren	 	 
	 

	 	Title:
	 	Senior Vice President, General Counsel and Secretary	 	 

 

 

EXHIBIT I

GEOEYE, INC.

CONVERSION NOTICE

          Reference is made to the Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of GeoEye, Inc. (the “Certificate of Designations”). In accordance
with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the
number of shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “Preferred
Shares”), of GeoEye, Inc., a Delaware corporation (the “Company”), indicated below into shares of
Common Stock, par value $0.01 per share (the “Common Stock”), of the Company, as of the date
specified below.

	 	 	 

	     Date of Conversion:

	 	 
	 

	 	 

	 	 	 

	     Number of Preferred Shares to be converted:

	 	 
	 

	 	 

	 	 	 

	     Stock certificate no(s). of Preferred Shares to be converted:

	 	 
	 

	 	 

	 	 	 

	     Tax ID Number (If applicable):

	 	 
	 

	 	 

          Please confirm the following information:

	 	 	 

	     Conversion Price:

	 	 
	 

	 	 

	 	 	 

	     Number of shares of Common Stock to be issued:

	 	 
	 

	 	 

          Please issue the Common Stock into which the Preferred Shares are being converted in the
following name and to the following address:

	 	 	 	 	 

	     Issue to:

	 	 
 

 

	 	 
	 
	 	 	 	 
	     Address:

	 	 
 

	 	 

	 	 	 	 	 

	     Telephone Number:

	 	 
 

	 	 
	 
	 	 	 	 
	     Facsimile Number:

	 	 
 

	 	 

	 	 	 	 	 

	     Authorization:

	 	 
 

	 	 

	 	 	 	 	 

	     By:

	 	 
 

	 	 
	     Title:

	 	 
 

	 	 
	 
	 	 	 	 
	     Dated:
	 	 	 	 

	 	 	 

	     Account Number (if electronic book entry transfer):

	 	 
	 

	 	 

	 	 	 

	     Transaction Code Number (if electronic book entry transfer):

	 	 
	 

	 	 

[NOTE TO HOLDER — THIS FORM MUST BE SENT CONCURRENTLY TO TRANSFER AGENT]

 

 

ACKNOWLEDGMENT

     The Company hereby acknowledges this Conversion Notice and hereby directs American Stock
Transfer and Trust Company to issue the above indicated number of shares of Common Stock in
accordance with the Irrevocable Transfer Agent Instructions dated ____, 2010 from the Company and
acknowledged and agreed to by American Stock Transfer and Trust Company.

	 	 	 	 	 
	 	GEOEYE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]