EXHIBIT 1
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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
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 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.
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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.
(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
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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
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
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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.
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.
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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:
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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
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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
If to the Stockholders:
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c/o The Carlyle Group
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxxxxx
Facsimile No.: (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.
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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/ 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: 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. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
CARLYLE PARTNERS III, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
CARLYLE INTERNATIONAL PARTNERS II, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
CARLYLE INTERNATIONAL PARTNERS III, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
C/S INTERNATIONAL PARTNERS
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
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. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
CARLYLE INVESTMENT GROUP, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
CARLYLE-INSIGHT INTERNATIONAL PARTNERS, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
CARLYLE-INSIGHT PARTNERS, L.P.
By: TC Group, L.L.C., as the General Partner
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
TC GROUP, L.L.C.
By: TCG Holdings, L.L.C., as the Managing Member
By: /s/ W. Xxxxxx Xxxx
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Name: W. Xxxxxx Xxxx
Title: Managing Director
