EXHIBIT 10.1
EXECUTION COPY
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement") dated as of June 29, 2001, among
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INSIGHT HEALTH SERVICES HOLDINGS CORP., a Delaware corporation ("Parent"), JWCH
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MERGER CORP., a Delaware corporation and wholly-owned subsidiary of Parent
("Acquisition"), CARLYLE PARTNERS II, L.P., a Delaware limited partnership,
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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").
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WHEREAS, Parent, Acquisition and InSight Health Services Corp., a Delaware
corporation (the "Company"), have entered into an Agreement and Plan of Merger,
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dated as of the date hereof (the "Merger Agreement"; capitalized terms used but
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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
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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
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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
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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
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
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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";
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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
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
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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
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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
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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
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(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.
(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
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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
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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
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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
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
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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)
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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
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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
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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
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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.
8. Termination. Except as set forth in the next sentence, this Agreement
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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.
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9. Contents of Agreement; Parties in Interest, etc. This Agreement and
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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
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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
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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:
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c/o J.W. Childs Associates, L.P.
One Federal Street, 21st Floor
Boston, MA 02110
Attention: Edward D. Yun
Facsimile No.: (617) 753-1101
and
c/o The Halifax Group, L.L.C.
1133 Connecticut Avenue, N.W.
Suite 700
Washington, D.C. 20036
Attention: David W. Dupree
Facsimile No.: (202) 296-7133
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with a copy to:
Kaye Scholer LLP
425 Park Avenue
New York, New York 10022
Attention: Stephen C. Koval, Esq.
Facsimile No.: (212) 836-8689
If to the Stockholders:
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c/o The Carlyle Group
520 Madison Avenue, 41st Floor
New York, New York 10022
Attention: W. Robert Dahl
Facsimile No.: (212) 381-4900
with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Mark S. Wojciechowski
Facsimile No.: (212) 262-1910
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
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instrument in writing signed by all of the parties hereto.
13. Extensions; Waiver. Any party to this Agreement may (a) extend
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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 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.
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14. Governing Law. This Agreement shall be governed by and
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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
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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
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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
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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
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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/ Edward D. Yun
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Name: Edward D. Yun
Title: President
JWCH MERGER CORP.
By: /s/ Edward D. Yun
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Name: Edward D. Yun
Title: President
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/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
CARLYLE PARTNERS III, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
CARLYLE INTERNATIONAL PARTNERS II, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
CARLYLE INTERNATIONAL PARTNERS III, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
C/S INTERNATIONAL PARTNERS
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
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Name: W. Robert Dahl
Title: Managing Director
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/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
CARLYLE INVESTMENT GROUP, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
CARLYLE-INSIGHT INTERNATIONAL
PARTNERS, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
CARLYLE-INSIGHT PARTNERS, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director
TC GROUP, L.L.C.
By: TCG Holdings, L.L.C., as the Managing Member
By: /s/ W. Robert Dahl
________________________
Name: W. Robert Dahl
Title: Managing Director