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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") and GENERAL ELECTRIC COMPANY, a New York corporation (the
"Stockholder").
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 Stockholder beneficially owns (i) 17,005 shares
of convertible preferred stock, Series C of the Company, par value $0.001 per
share (the "Series C Preferred Stock"), convertible in the aggregate into
203,044.8 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 265,000 shares of Company Common Stock at an exercise price of
$10.00 per share and (iii) Warrants to purchase up to 5,000 shares of Company
Common Stock at an exercise price of $8.875 per share;
WHEREAS, pursuant to this Agreement the Stockholder agrees to
(i) elect to convert all of the Series C Preferred Stock that it owns into
203,044.8 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 203,044.8 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
Stockholder has 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:
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1. Representations and Warranties of the Stockholder.
The Stockholder hereby represents and warrants to Parent and Acquisition as
follows:
(a) Authority: No Conflicts. The Stockholder is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York 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 the Stockholder and
constitutes a legal, valid and binding obligation of the Stockholder,
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 the Stockholder and the consummation by the Stockholder of the
transactions contemplated hereby. None of the execution and delivery of this
Agreement by and on behalf of the Stockholder, the consummation of the
transactions contemplated hereby and compliance with the terms hereof by the
Stockholder 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, the
Stockholder's 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 the Stockholder or to the Stockholder's property or
assets.
(b) The Subject Shares. The Stockholder is the beneficial
owner of the Series C 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 C Preferred Stock, the Series D
Preferred Stock or the Warrants upon conversion or exercise thereof, as
applicable) and has, and throughout the term of this Agreement will have, good
and marketable title to the Subject Shares free and clear of all Liens. The
Stockholder does 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 Stockholder has
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 as of October
14, 1997, by and between the Company and the Stockholder, including, with
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
Stockholder that each is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has
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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 Stockholder. Until the termination
of this Agreement in accordance with Section 8 hereof, the Stockholder agrees 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 Stockholder 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.
(b) Irrevocable Proxy. The Stockholder hereby grants to
and appoints Parent (and each officer of Parent designated by Parent) its 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 Stockholder agrees 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.
Stockholder agrees to take such further action or execute such other instruments
as may be reasonably requested by Parent or Acquisition to effectuate the
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intent of this paragraph (b). The Stockholder hereby revokes any proxy
previously granted by the Stockholder with respect to the Subject Shares.
(c) Transfer Restrictions. The Stockholder agrees 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 Stockholder (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 its representations or warranties contained herein untrue or
incorrect or could have the effect of preventing or disabling the Stockholder
from performing any of its obligations hereunder. The Stockholder further agrees
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 Stockholder hereby irrevocably
waives any and all rights which it 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 Stockholder shall not, and shall
use its reasonable best efforts to cause its directors, officers, employees,
attorneys, accountants or financial advisors or other representatives
("Representatives") retained by it 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 Stockholder 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 Merger and the Merger Agreement, the Stockholder hereby (i)
agrees to deliver a Type B Conversion Notice (as defined in the Certificate of
Designation with respect to the Series C 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 C Preferred Stock that it owns into
203,044.8 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 Stockholder to vote all of such shares
held by such Stockholder after such conversion, irrespective of any voting
limitations, in favor of the Merger, the Merger Agreement and the transactions
contemplated
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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 Stockholder hereby agrees to convert all of the
shares of Series D Preferred Stock then owned by it 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
Stockholder becomes the record or beneficial owner 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 Stockholder immediately
following the effectiveness of the events described in clause (i) or the
Stockholder becoming the record or beneficial owner thereof, as described in
clause (ii), as though they were Subject Shares hereunder. The Stockholder
hereby agrees 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 Stockholder, 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.
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
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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 Stockholder 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 X.X. Childs Associates, L.P.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxx
Facsimile No.: (000) 000-0000
and
c/o The Halifax Group, L.L.C.
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
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If to the Stockholder:
General Electric Company
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Facsimile: 000-000-0000
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 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.
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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
Stockholder, 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/ Xxxxxx X. Xxx
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Name: Xxxxxx X. Xxx
Title: President
JWCH MERGER CORP.
By: /s/ Xxxxxx X. Xxx
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Name: Xxxxxx X. Xxx
Title: Presdient
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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.
GENERAL ELECTRIC COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Attorney-In-Fact
