Exhibit 10.21
FORM OF LOCKUP AGREEMENT
LOCKUP AGREEMENT, dated as
of , 2007, by
and among InSight Health Services Holdings Corp., a Delaware
corporation (the “Company”), and the undersigned
beneficial owners (or investment managers or advisors for the
beneficial owners) of the Notes (as defined below) (for the
avoidance of doubt, this does not include any Notes beneficially
owned by non-affiliated customers of the undersigned) identified on
Schedule A to this Agreement (defined hereinafter) on the date of
this Agreement and each other beneficial owner (or investment
managers or advisors for the beneficial owners) of Notes that
executes a counterpart signature page to this Agreement after the
date of this Agreement as provided in Section 23
(collectively, the “Concurring Noteholders,” and each,
individually, a “Concurring Noteholder”).
For purposes hereof, all references
in this Agreement to Concurring Noteholders or parties that are
“signatories to this Agreement” shall mean, as of any
date of determination, those Noteholders or parties, as the case
may be, who executed and delivered this Agreement as an
original signatory on or before the date of this Agreement,
together with those additional Noteholders or parties, as the case
may be, who after the date of this Agreement but, on or before
such date of determination, become party to this Agreement by
executing and delivering counterpart signature pages as provided in
Section 23. After the date of this Agreement, when Noteholders
become signatories to this Agreement, Schedule A shall be updated
to include the Notes held by such Noteholder.
WHEREAS, the Company and the
Concurring Noteholders have engaged in good faith negotiations with
the objective of restructuring the debt and equity capital
structures of the Company (the “Restructuring”),
substantially as reflected in the Term Sheet (as defined below)
which sets forth the terms and conditions of (i) the Exchange
Offer, (ii) the Consent Solicitation and (iii) the
Prepackaged Plan (each as defined below); and
WHEREAS, the Company and the
Concurring Noteholders desire that the Company conduct the Exchange
Offer and the Consent Solicitation as soon as practicable on the
terms described in the Term Sheet to accomplish the Restructuring,
or, if necessary under the terms of the Term Sheet, that the
Company commence a case under Chapter 11 of the Bankruptcy Code to
accomplish the Restructuring through the confirmation of the
Prepackaged Plan (the “Prepackaged
Proceeding”).
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth in this Agreement,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the parties
signatory to this Agreement hereby agrees as follows:
1.
Definitions
. The
following terms shall have the following meanings:
“Agreement” means this
Lockup Agreement, including the Schedules, Annexes and Exhibits
hereto (including any agreements incorporated herein or therein),
all of which are incorporated by reference herein.
“Board” means the Board
of Directors of the Company.
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“Common Stock” means the
common stock, par value $0.001 per share, of the
Company.
“Consent Solicitation”
means the solicitation by the Company of the consent of the
Noteholders to amend certain of the terms of the Indenture to
remove substantially all material affirmative and negative
covenants set forth therein other than the obligation to pay
principal and interest on the Notes.
“Exchange Offer” means
the offer by the Company to exchange 44,247,677 shares of Common
Stock in the event the Restructuring is consummated without
commencing the Prepackaged Proceeding and 49,219,326 shares of
Common Stock in the event the Restructuring is consummated through
the Prepackaged Proceeding, which may be adjusted pursuant to a
reverse stock split, for the outstanding Notes, such consideration
to be ratably adjusted in the event the Restructuring is
consummated without commencing the Prepackaged Proceeding and the
offer is not fully subscribed.
“HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations of the Federal Trade Commission
promulgated thereunder.
“Indenture” means the
Indenture (as amended, modified or supplemented from time to time),
dated as of October 30, 2001, among InSight, as issuer, the Company
and the subsidiaries listed in the preamble thereto, as guarantors,
and U.S. Bank Trust National Association, as trustee or any
successor trustee.
“Indenture Amendment”
means an amendment to the Indenture, which, among other things,
deletes substantially all material affirmative and negative
covenants other than the obligation to pay principal and interest
on the Notes contained in the Indenture.
“InSight” means InSight
Health Services Corp., a Delaware corporation and a wholly-owned
subsidiary of the Company.
“Material Adverse
Change” means any change, event or effect that is materially
adverse to the operations or financial condition of the Company and
its subsidiaries (taken as a whole); provided that the filing of
the Prepackaged Proceeding shall not constitute a Material Adverse
Change; and provided further that a change shall not be considered
to be a Material Adverse Change if (x) its effect is not
likely to last beyond the term of this Agreement; or (y) it
arises from actions required to be taken by the Company pursuant to
this Agreement.
“Minimum Tender
Condition” means the condition to the consummation of the
Exchange Offer that there be validly tendered and not withdrawn not
less than 97% in aggregate principal amount of the Notes; provided,
however, that the Minimum Tender Condition may be amended with the
mutual consent of the
Company,
and
.
“Noteholder” means any
beneficial owner of Notes.
“Notes” means the
9⅞% Senior Subordinated Notes due 2011 in the aggregate
principal amount at maturity of $194.5 million, issued by InSight
pursuant to the Indenture.
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“Person” means any
individual, partnership, corporation, limited liability company,
association, trust, joint venture, unincorporated organization,
governmental unit or other entity.
“Original Concurring
Noteholders” means those Noteholders who executed and
delivered an Original Lockup Agreement before the date of this
Agreement.
“Original Lockup
Agreement” means a lockup agreement with the Company,
substantially in the form included as Exhibit A to the
Company’s prospectus dated March 21, 2007 relating to the
Restructuring.
“Prepackaged Plan” means
a prepackaged plan of bankruptcy under Chapter 11 of the United
States Bankruptcy Code prepared by the Company to be implemented in
the event that insufficient tenders of Notes and consents have been
received from the Noteholders to satisfy or cause the Company to
waive the Minimum Tender Condition, but sufficient votes of an
accepting class under section 1126 of the United States Bankruptcy
Code have been received.
“Required Noteholders”
means Concurring Noteholders and Original Concurring Noteholders
holding a majority in aggregate principal amount of and accrued
interest on the Notes held by all Concurring Noteholders and
Original Concurring Noteholders.
“Securities Act” means
the Securities Act of 1933, as amended.
“Term Sheet” means that
certain Term Sheet attached hereto as Annex A which sets forth the
material terms and conditions of the Restructuring.
“Transfer” means to
directly or indirectly (i) sell, pledge, assign, encumber,
grant an option with respect to, transfer or dispose of any
participation or interest (voting or otherwise) in or
(ii) enter into an agreement, commitment or other arrangement
to sell, pledge, assign, encumber, grant an option with respect to,
transfer or dispose of any participation or interest (voting or
otherwise) in, or the act thereof.
2.
Agreement to
Complete the Restructuring . Subject to the terms
and conditions of this Agreement and so long as this Agreement
remains in effect as between the Company and a Concurring
Noteholder, the Company and such Concurring Noteholder agree to use
commercially reasonable best efforts to complete the Restructuring
through the Exchange Offer and the Consent Solicitation, as each is
described in the Term Sheet; or, alternatively, if the Minimum
Tender Condition is not satisfied or waived or the Company is
otherwise not able to consummate the Exchange Offer but the
required consents of holders of the Notes are received to confirm
the Prepackaged Plan, then through the Prepackaged Plan in
accordance with the terms of the Term Sheet. The obligations
of the parties hereunder are several and not joint and no party
hereto shall be responsible for the failure of any other party
hereto to perform its obligations hereunder.
3.
The
Company’s Obligations to Support the Restructuring
.
(a) The Company agrees to use its commercially reasonable best
efforts to modify the Exchange Offer and the Consent Solicitation
as promptly as practicable, to do all things reasonably necessary
and appropriate in furtherance thereof, including filing any
related documents that it is required to
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file with the
Securities and Exchange Commission (the “Commission”),
and to use its commercially reasonable best efforts to complete the
same within 120 days of the date of modification of the Exchange
Offer.
(b)
If all of the
conditions to the Exchange Offer are not satisfied or waived by May
18, 2007, but the required consents of holders of the Notes are
received to confirm the Prepackaged Plan, then on such date (or
such earlier or later date as the Company may determine), the
Company shall file the Prepackaged Proceeding and seek confirmation
of the Prepackaged Plan.
(c)
Subject to the
terms and conditions of this Agreement, the Company shall use its
best efforts to take all necessary action to effect a restructuring
of its board of directors concurrently and in connection with and
conditioned upon the consummation of the Restructuring on the terms
set forth in the Term Sheet.
(d)
The Company
further agrees that it will not object to, or otherwise commence
any proceeding to oppose the Restructuring and shall not take any
action that is inconsistent with, or that would unreasonably delay
the consummation of, the Restructuring.
(e)
Nothing in this
Agreement shall be deemed to prevent the Company from taking, or
failing to take, any action that it is obligated to take (or fail
to take) in the performance of any fiduciary or similar duty which
the Company owes to any other Person; it being understood and
agreed that if any such action (or failure to act) results in
(i) an alteration of the terms of the Restructuring not
permitted by Section 6 or (ii) the Company giving written
notice of its intent to terminate this Agreement pursuant to
Section 7(a)(v), this Agreement and all of the obligations and
undertakings of the parties set forth in this Agreement, other than
the obligations of the Company contained in Section 9, shall
terminate and expire.
4.
Concurring
Noteholders’ Obligations to Support the
Restructuring . Subject to the terms
and conditions of this Agreement and so long as this Agreement
remains in effect as between the Company and a Concurring
Noteholder:
(a)
Concurring
Noteholder agrees, in connection with and conditioned upon
consummation of the Restructuring upon the terms set forth in the
Term Sheet, to: (i) tender its Notes pursuant to and in
accordance with the Exchange Offer and the other terms and
conditions of the Term Sheet within ten (10) days following the
date hereof; (ii) grant its consent pursuant to the Consent
Solicitation and agree to the Indenture Amendment;
(iii) withdraw its ballot rejecting the Prepackaged Plan and,
if necessary, file a pleading to evidence such withdrawal (in any
event, Concurring Noteholder’s signature to this agreement
shall be deemed to be conclusive evidence of Concurring
Noteholder’s withdrawal of such ballot); (iv) vote to
reject any plan of reorganization for the Company that does not
contain the terms of the Restructuring substantially as set forth
in the Term Sheet; and (v) subject to the terms of the Term
Sheet, not to withdraw or revoke any of the foregoing unless and
until this Agreement is terminated in accordance with its
terms. Each Concurring Noteholder acknowledges that by
tendering
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its Notes in the
Exchange Offer, it will be deemed to have (A) delivered the
consents required in the Consent Solicitation for the Indenture
Amendment and (B) accepted the Prepackaged Plan.
(b)
Each Concurring
Noteholder agrees, so long as this Agreement remains in effect, not
to Transfer any of the Notes held by it, in whole or in part,
unless the Transferee agrees in writing to be bound by the terms of
this Agreement. In the event that any Concurring Noteholder
Transfers any of the Notes, as a condition precedent to such
Transfer, such Concurring Noteholder agrees to cause the Transferee
to execute and deliver a joinder agreement in customary form
confirming the agreement of such Transferee to be bound by the
terms of this Agreement for so long as this Agreement shall remain
in effect. In the event that the Company’s consent is
required for any Transfer of the Notes, the Company hereby agrees
to grant such consent promptly in accordance with the requirements
of this Agreement. Any Transfer of the Notes in violation of
the foregoing shall be deemed ineffective to Transfer any right to
accept or reject the Exchange Offer, to consent to or reject the
Indenture Amendment, or to accept or reject the Prepackaged Plan,
which right shall remain with and be exercised only by the
purported transferor.
(c)
Each Concurring
Noteholder agrees that it will (i) not vote for, consent to,
provide any support for, participate in the formulation of, or
solicit or encourage others to formulate any other tender offer,
settlement offer, or exchange offer for the Notes other than the
Exchange Offer; and (ii) permit public disclosure, including
in a press release, of the contents of this Agreement, including,
but not limited to, the commitments contained in this
Section 4 and the Term Sheet, but not including information
with respect to such Concurring Noteholder’s specific
ownership of Notes.
(d)
Each Concurring
Noteholder further agrees that it will not object to, or otherwise
commence any proceeding to oppose, the Restructuring and shall not
take any action that is materially inconsistent with, or that would
unreasonably delay the consummation of, the Restructuring in
accordance with the terms of the Term Sheet. Accordingly, so
long as this Agreement is in effect, each Concurring Noteholder
agrees that it shall not (i) object to confirmation of the
Prepackaged Plan or otherwise commence any action or proceeding to
alter, oppose or add any other provision to the Prepackaged Plan or
any other documents or agreements consistent with the Prepackaged
Plan; (ii) object to the approval of any disclosure statement
that describes the Prepackaged Plan; (iii) vote for, consent
to, support, intentionally induce or participate directly or
indirectly in the formation of any other plan of reorganization or
liquidation proposed or filed, or to be proposed or filed, in any
Chapter 11 case for the Company; (iv) commence or support any
action or proceeding to shorten or terminate the period during
which only the Company may propose and/or seek confirmation of
a plan of reorganization for the Company; (v) directly or
indirectly seek, solicit, support or encourage any other plan,
sale, proposal or offer of winding up, liquidation, reorganization,
merger, consolidation, dissolution or restructuring of the Company;
or (vi) commence or support any action filed by the Company or
any other party in interest to appoint a trustee, conservator,
receiver or examiner for the Company, or to dismiss any Chapter 11
case, or to convert such Chapter 11 case to one under Chapter
7.
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(e)
Nothing in this
Agreement shall be deemed to prevent any Concurring Noteholder from
taking, or failing to take, any action that it is obligated to take
(or fail to take) in the performance of any fiduciary or similar
duty which the Concurring Noteholder owes to any other Person,
including any duties that may arise as a result of any
Concurring Noteholder’s appointment to any committee in the
Prepackaged Proceeding or any other bankruptcy or insolvency
proceeding.
(f)
Each Concurring
Noteholder further agrees that any Notes acquired by such
Concurring Noteholder following the date of this Agreement shall be
subject to the terms and conditions of this Agreement and shall be
subject to the same treatment in the Restructuring as the Notes
held by such Concurring Noteholder as of the date hereof. For
the avoidance of doubt, this shall not include any acquired Notes
beneficially owned by non-affiliated customers of the undersigned
Concurring Noteholder.
(g)
Subject to
Section 2 of this Agreement, each Concurring Noteholder agrees
that so long as it is the legal owner or beneficial owner of all or
any portion of either a referenced “claim” or
referenced “interest” within the meaning of
11 U.S.C. §§ 101, et seq. (each a
“Claim”), it will: (i) take all reasonable
steps to support the Prepackaged Plan, use its commercially
reasonable best efforts to defend the adequacy of pre-petition
disclosure and solicitation procedures in connection with the
Prepackaged Plan and the Exchange Offer and, to the extent
necessary, support the adequacy of any post-petition disclosure
statement that may be required by the bankruptcy court and
circulated in connection herewith or therewith; (ii) from and
after the date hereof, not agree to, consent to, provide any
support to, participate in the formulation of, or vote for any plan
of reorganization or liquidation of the Company, other than the
Prepackaged Plan; and (iii) agree to permit disclosure in
the
