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EXECUTION COPY
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement") dated as of June 29, 2001,
among INSIGHT HEALTH SERVICES HOLDINGS CORP., a Delaware corporation ("Parent"),
JWCH MERGER CORP., a Delaware corporation and wholly-owned subsidiary of Parent
("Acquisition"), CARLYLE PARTNERS II, L.P., a Delaware limited partnership,
CARLYLE PARTNERS III, L.P., a Delaware limited partnership, CARLYLE
INTERNATIONAL PARTNERS II, L.P., a Cayman Islands exempted limited partnership,
CARLYLE INTERNATIONAL PARTNERS III, L.P., a Cayman Islands exempted limited
partnership, C/S INTERNATIONAL PARTNERS, a Cayman Islands general partnership,
STATE BOARD OF ADMINISTRATION OF FLORIDA, CARLYLE INVESTMENT GROUP, L.P., a
Delaware limited partnership, CARLYLE-INSIGHT INTERNATIONAL PARTNERS, L.P., a
Cayman Islands exempted limited partnership, CARLYLE-INSIGHT PARTNERS, L.P., a
Delaware limited partnership and TC GROUP, L.L.C., a Delaware limited liability
company (each a "Stockholder", and collectively, the "Stockholders").
WHEREAS, Parent, Acquisition and InSight Health Services
Corp., a Delaware corporation (the "Company"), have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement";
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement), whereby Acquisition will merge with and into the
Company and the Company shall become the wholly-owned subsidiary of Parent (the
"Merger"), upon the terms and subject to the conditions set forth in the Merger
Agreement;
WHEREAS, the Stockholders beneficially own (i) 25,000 shares
of convertible preferred stock, Series B of the Company, par value $0.001 per
share (the "Series B Preferred Stock"), convertible in the aggregate into
298,507.46 shares of convertible preferred stock, Series D of the Company, par
value $0.001 per share (the "Series D Preferred Stock"), (ii) Warrants to
purchase up to 250,000 shares of Company Common Stock at an exercise price of
$10.00 per share, (iii) Warrants to purchase up to 30,000 shares of Company
Common Stock at an exercise price of $7.25 per share and (iv) Warrants to
purchase up to 10,000 shares of Company Common Stock at an exercise price of
$7.50 per share;
WHEREAS, pursuant to this Agreement the Stockholders agree to
(i) elect to convert all of the Series B Preferred Stock that they own into
298,507.46 shares of Series D Preferred Stock pursuant to the terms thereof
prior to the record date for the Approval Events (as defined below), (ii)
consent to the cancellation of the Warrants by virtue of the Merger in
consideration of the Warrant Consideration pursuant to the Merger Agreement,
(iii) vote in favor of the Merger and the adoption by the Company of the Merger
Agreement, and (iv) convert all of the aforementioned 298,507.46 shares of
Series D Preferred Stock into shares of Company Common Stock prior to the
Closing; and
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WHEREAS, as a condition to and in consideration of the
willingness of Parent and Acquisition to enter into the Merger Agreement, the
Stockholders have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Representations and Warranties of the Stockholders.
Each of the Stockholders hereby represents and warrants to Parent and
Acquisition as follows:
(a) Authority: No Conflicts. Each of the Stockholders is
an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of organization and has the requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by and on behalf of each of the
Stockholders and constitutes a legal, valid and binding obligation of each of
the Stockholders, enforceable in accordance with its terms (except to the extent
that enforcement may be affected by laws relating to bankruptcy, reorganization,
insolvency, and creditors' rights and by the availability of injunctive relief,
specific performance and other equitable remedies). No filing with, and no
permit, authorization, consent or approval of, any Governmental Entity or any
other person is necessary for the execution and delivery of this Agreement by
and on behalf of each of the Stockholders and the consummation by each of the
Stockholders of the transactions contemplated hereby. None of the execution and
delivery of this Agreement by and on behalf of each of the Stockholders, the
consummation of the transactions contemplated hereby and compliance with the
terms hereof by each of the Stockholders will conflict with, or result in any
violation of, or default (with or without notice or lapse of time or both) under
any provision of, each of the Stockholders' certificate of incorporation or
bylaws or organizational documents, any trust agreement, loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, notice,
decree, statute, law, ordinance, rule or regulation applicable to each of the
Stockholders or to each of the Stockholders' property or assets.
(b) The Subject Shares. The Stockholders are the
beneficial owners of the Series B Preferred Stock and the Warrants
(collectively, the "Subject Shares"; provided that the Subject Shares shall also
include any and all securities issuable in respect of the Series B Preferred
Stock, the Series D Preferred Stock or the Warrants upon conversion or exercise
thereof, as applicable) and have, and throughout the term of this Agreement will
have, good and marketable title to the Subject Shares free and clear of all
Liens. The Stockholders do not own, of record or beneficially, any shares of
capital stock of the Company or securities convertible into or exchangeable for
shares of capital stock of the Company, other than the Subject Shares. The
Stockholders have the sole right and power to vote (other than the Warrants) and
dispose of the Subject Shares, and none of the Subject Shares is subject to any
irrevocable proxy, power of
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attorney, voting trust or other agreement, arrangement or restriction with
respect to the voting or transfer (other than the provisions of the Securities
Act or state securities laws) of any of the Subject Shares, except as set forth
in the Securities Purchase Agreement dated October 14, 1997 between the Company
and the Stockholders, including, without limitation, the restrictions set forth
in Section 6.14 thereof, and as contemplated by this Agreement.
2. Representations and Warranties of Parent and
Acquisition. Parent and Acquisition hereby represent and warrant to the
Stockholders that each is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by and
on behalf of each of Parent and Acquisition and constitutes a legal, valid and
binding obligation of each of Parent and Acquisition enforceable in accordance
with its terms (except to the extent that enforcement may be affected by laws
relating to bankruptcy, reorganization, insolvency, and creditors' rights and by
the availability of injunctive relief, specific performance and other equitable
remedies). Except for the filings required under the HSR Act and the Exchange
Act, exemptive filings under federal and state securities laws in connection
with equity investments in Parent and the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware, (i) no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity or any
other Person is necessary for the execution of this Agreement by and on behalf
of each of Parent and Acquisition and the consummation by Parent and Acquisition
of the transactions contemplated hereby, and (ii) none of the execution and
delivery of this Agreement by Parent and Acquisition, the consummation of the
transactions contemplated hereby nor the compliance with the terms hereof by
Parent and Acquisition will conflict with, or result in any violation of, or
default (with or without notice or lapse of time or both) under any provision
of, their respective certificate of incorporation or bylaws, any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or regulation applicable to
Parent or Acquisition, as the case may be, or to Parent's or Acquisition's,
property or assets, as the case may be.
3. Covenants of the Stockholders. Until the termination
of this Agreement in accordance with Section 8 hereof, the Stockholders agree as
follows:
(a) Voting of Subject Shares. At any meeting of
stockholders of the Company called to vote upon the approval of the Merger, the
Merger Agreement and the transactions contemplated therein or at any adjournment
thereof or in any other circumstances upon which a vote or other approval with
respect to the Merger, the Merger Agreement and the transactions contemplated
therein is sought (the "Approval Events"), the Stockholders shall vote all of
the Subject Shares (other than the Warrants) at the time of such meeting or
adjournment in favor of the Merger, the adoption by the Company of the Merger
Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement.
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(b) Irrevocable Proxy. The Stockholders hereby grant to
and appoint Parent (and each officer of Parent designated by Parent) their proxy
and attorney-in-fact (with full power of substitution) to vote all of the
Subject Shares as indicated in Section 3(a) above. The Stockholders agree that
this proxy shall be irrevocable during the term of this Agreement and is coupled
with an interest sufficient at law to support an irrevocable power and given to
Parent as an inducement to enter into the Merger Agreement; provided that Parent
may at any time name any other Person as its substituted Proxy to act pursuant
hereto, either as to a specific matter or as to all matters covered herein.
Stockholders agree to take such further action or execute such other instruments
as may be reasonably requested by Parent or Acquisition to effectuate the intent
of this paragraph (b). The Stockholders hereby revoke any proxy previously
granted by the Stockholders with respect to the Subject Shares.
(c) Transfer Restrictions. The Stockholders agree not to
(i) sell, transfer, pledge, encumber, assign or otherwise dispose of or
hypothecate (including by gift or by contribution or distribution to any trust
or similar instrument or to any beneficiaries of the Stockholders (collectively,
"Transfer")), or enter into any contract, option or other arrangement or
understanding (including any profit sharing arrangement) with respect to the
Transfer of, any of the Subject Shares other than pursuant to the terms of this
Agreement and the Merger Agreement, (ii) enter into any voting arrangement or
understanding other than this Agreement with respect to the Subject Shares,
whether by proxy, voting agreement or otherwise, or (iii) take any action that
could make any of their representations or warranties contained herein untrue or
incorrect or could have the effect of preventing or disabling the Stockholders
from performing any of their obligations hereunder. The Stockholders further
agree to take in a timely manner any and all actions (including, without
limitation, delivering the certificates evidencing the Subject Shares to the
Company) reasonably necessary for the Company to affix a legend on the
certificates evidencing the Subject Shares stating that the Subject Shares are
subject to this Agreement.
(d) Appraisal Rights. The Stockholders hereby irrevocably
waives any and all rights which they may have as to appraisal, dissent or any
similar or related matter with respect to the Merger under Section 262 of the
General Corporation Law of the State of Delaware or otherwise.
(e) No Solicitation. The Stockholders shall not, and
shall use their reasonable best efforts to cause their directors, officers,
employees, attorneys, accountants or financial advisors or other representatives
("Representatives") retained by them not to, directly or indirectly through
another Person, (i) solicit, initiate or encourage (including by way of
furnishing information), or take any other action to facilitate, any inquiries
or the making of any proposal that constitutes, or may reasonably be expected to
lead to, any Takeover Proposal, or (ii) participate in any discussions or
negotiations regarding any Takeover Proposal; provided that the foregoing shall
not limit or prohibit any Representative of the Stockholders who is a director
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of the Company from exercising his or her fiduciary duty solely as a director of
the Company in a manner consistent with the terms and conditions set forth in
the Merger Agreement.
4. Conversion or Exercise of Subject Shares. In
connection with the Merger and the Merger Agreement, the Stockholders hereby (i)
agree to deliver a Type B Conversion Notice (as defined in the Certificate of
Designation with respect to the Series B Preferred Stock) electing to (subject
to the delivery of a Type B Conversion Notice with respect to the Series B
Preferred Stock) convert all of the Series B Preferred Stock that they own into
298,507.46 shares of the Series D Preferred Stock pursuant to the terms thereof
prior to the record date established by the Company in connection with the
Approval Event which would permit such Stockholders to vote all of such shares
held by such Stockholders after such conversion, irrespective of any voting
limitations, in favor of the Merger, the Merger Agreement and the transactions
contemplated therein and (ii) subject to the consummation of the Merger,
consents to the cancellation of the Warrants in exchange for the Warrant
Consideration.
5. Conversion of Series D Preferred Stock. Immediately
prior to the Effective Time, the Stockholders hereby agree to convert all of the
shares of Series D Preferred Stock then owned by them into shares of Company
Common Stock.
6. Additional Shares. Without limiting the provisions of
the Merger Agreement, in the event (i) of any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of capital
stock of the Company on, of or affecting the Subject Shares or (ii) the
Stockholders become the record or beneficial owners of any additional shares of
the capital stock of the Company or other securities entitling the holder
thereof to vote or give consent with respect to the matters set forth in Section
3(a), then the terms of this Agreement shall apply to the shares of capital
stock or other securities of the Company held by the Stockholders immediately
following the effectiveness of the events described in clause (i) or the
Stockholders becoming the record or beneficial owners thereof, as described in
clause (ii), as though they were Subject Shares hereunder. The Stockholders
hereby agree to promptly notify Parent of the number of any additional shares of
capital stock or other voting securities of the Company acquired, of record or
beneficially, by the Stockholders, if any, after the date hereof and prior to
the termination of this Agreement pursuant to Section 8 hereof.
7. Officers and Directors. Notwithstanding anything
contained to the contrary in this Agreement, in the event a Representative is a
director or officer of the Company, nothing in this Agreement is intended or
shall be construed to require such Representative, solely in his or her capacity
as a director or officer of the Company, to act or fail to act in any manner
inconsistent with (i) his or her fiduciary duties in such capacity and (ii) the
Merger Agreement. Furthermore, no Representative who is or becomes (during the
term hereof) a director or officer of the Company makes any agreement or
understanding herein solely in his or her capacity as a director or officer, and
nothing herein will limit or affect, or give rise to any liability of any
Representative solely in such Person's capacity as a director or officer of the
Company.
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8. Termination. Except as set forth in the next
sentence, this Agreement shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect immediately following the earliest to occur of (x) the Effective
Time or (y) the termination of the Merger Agreement. Nothing in this Section 8
shall relieve any party of liability for breach of this Agreement.
9. Contents of Agreement; Parties in Interest, etc. This
Agreement and the agreements referred to or contemplated herein set forth the
entire understanding of the parties hereto with respect to the transactions
contemplated hereby and thereby, and, except as set forth in this Agreement and
such other agreements, there are no representations or warranties, express or
implied, made by any party to this Agreement with respect to the subject matter
of this Agreement. Any and all previous agreements and understandings between or
among the parties regarding the subject matter hereof, whether written or oral,
are superseded by this Agreement and the agreements referred to or contemplated
herein.
10. Assignment and Binding Effect. Neither this Agreement
nor the rights and obligations hereunder may be assigned by any of the parties
hereto without the prior written consent of the other parties hereto; provided,
that Parent and/or Acquisition may assign its rights and obligations under this
Agreement to any directly or indirectly wholly-owned Subsidiary of Parent, upon
written notice to the Stockholders if the assignee shall assume the obligations
of Parent and/or Acquisition hereunder. Subject to the foregoing, all the terms
and provisions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of the parties
hereto.
11. Notices. Any notice, request, demand, waiver,
consent, approval, or other communication which is required or permitted to be
given to any party hereunder shall be in writing and shall be deemed given only
if delivered to the party personally or sent to the party by facsimile
transmission (promptly followed by a hard copy delivered in accordance with this
Section 11 or by registered or certified mail (return receipt requested), with
postage and registration or certification fees thereon prepaid, addressed to the
party at its address set forth below:
If to Parent or Acquisition:
c/o ▇.▇. Childs Associates, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
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c/o The Halifax Group, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholders:
c/o The Carlyle Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or Person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request, demand,
waiver, consent, approval or other communication will be deemed to have been
given as of the date so delivered, telegraphed or mailed.
12. Amendment. This Agreement may not be amended except
by an instrument in writing signed by all of the parties hereto.
13. Extensions; Waiver. Any party to this Agreement may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance by
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the other party with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
14. Governing Law. This Agreement shall be governed by
and interpreted and enforced in accordance with the laws of the State of
Delaware, without regard to the conflicts of law principles thereof.
15. No Benefit to Others. The representations,
warranties, covenants and agreements contained in this Agreement are for the
sole benefit of the parties hereto, and their respective successors and assigns,
and they shall not be construed as conferring, and are not intended to confer,
any rights on any other Person.
16. Severability. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other terms and provisions of the
Agreement shall remain in full force and effect. Upon such determination, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
give effect to the original intent of the parties to the fullest extent
permitted by applicable law.
17. Section Headings. All section headings are for
convenience only and shall in no way modify or restrict any of the terms or
provisions hereof.
18. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and the
Stockholders, Acquisition and Parent may become a party hereto by executing a
counterpart hereof. This Agreement and any counterpart so executed shall be
deemed to be one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
INSIGHT HEALTH SERVICES HOLDINGS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: President
JWCH MERGER CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: President
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
CARLYLE PARTNERS II, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
CARLYLE PARTNERS III, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
CARLYLE INTERNATIONAL PARTNERS II, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
CARLYLE INTERNATIONAL PARTNERS III, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
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C/S INTERNATIONAL PARTNERS
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
STATE BOARD OF ADMINISTRATION OF FLORIDA
separate account maintained pursuant to an
Investment Management Agreement dated as of
September 6, 1996 between the State Board of
Administration of Florida, Carlyle Investment
Group, L.P. and Carlyle Investment Management,
L.L.C.
By: Carlyle Investment Management, L.L.C., as
Investment Manager
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
CARLYLE INVESTMENT GROUP, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
CARLYLE-INSIGHT INTERNATIONAL
PARTNERS, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
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CARLYLE-INSIGHT PARTNERS, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD
TC GROUP, L.L.C.
By: TCG Holdings, L.L.C., as the Managing
Member
By: /s/ ▇▇ ▇▇▇▇
----------------------------
Name: ▇▇ ▇▇▇▇
Title: MD