EXHIBIT 2
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 GE FUND, 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 10,948 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 130,722.4 shares
of convertible preferred stock, Series D of the Company, par value $0.001 per
share (the "SERIES D PREFERRED STOCK")
WHEREAS, pursuant to this Agreement the Stockholder agrees to (i) elect
to convert all of the Series C Preferred Stock that it owns into 130,722.4
shares of Series D Preferred Stock pursuant to the terms thereof prior to the
record date for the Approval Events (as defined below), (ii) vote in favor of
the Merger and the adoption by the Company of the Merger Agreement, and (iii)
convert all of the aforementioned 130,722.4 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:
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 (the "SUBJECT SHARES" provided that the Subject
Shares shall also include any and all securities issuable in respect of the
Series C Preferred Stock or Series D Preferred Stock upon conversion 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 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 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 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,
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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 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 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.
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(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 OF SUBJECT SHARES. In connection with the Merger
and the Merger Agreement, the Stockholder hereby 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 130,722.4 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 therein.
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
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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 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
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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
If to the Stockholder:
GE Fund
c/o General Electric Company
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to:
GE Fund
c/o General Electric Company
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Facsimile: 000-000-0000
and
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.
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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.
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
--------------------------------
Name: Xxxxxx X. Xxx
Title: President
JWCH MERGER CORP.
By: /s/ XXXXXX X. XXX
--------------------------------
Name: Xxxxxx X. Xxx
Title: President
GE FUND
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Attorney in Fact
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