Exhibit 10.24

June 29, 2006

PERSONAL AND CONFIDENTIAL

 

 

Michael A. Boylan

1005 Putters Place

Doylestown, PA 18901

 

Re:  Separation Agreement

Dear Mike:

This Letter Agreement (“Agreement”) sets forth the terms and conditions of your
separation from InSight Health Services Corp. (“InSight” or “Company”) effective
June 30, 2006.  InSight appreciates your service to the Company and wishes you
the best in your future endeavors. InSight will pay your earned wages and any
unused accrued vacation through June 30, 2006, regardless of whether you sign
this Agreement.

In consideration of the mutual covenants and promises made in this Agreement,
you and InSight agree as follows:

Termination.  Effective June 30, 2006, your employment, and any and all
positions you held with InSight and any of its  subsidiary or affiliated
entities (collectively the “InSight Companies”) is terminated, and as of that
date you relinquish any and all of your authorities with each of those
companies.

Separation Payments.  In addition to your final paycheck and payment for any
unused accrued vacation through and including June 30, 2006, in accordance with
the “Consideration Period” and “Revocation Period” (defined below), and in
consideration for your signing this Agreement, InSight agrees to pay you an
amount equal to your current regular monthly base salary, less applicable taxes
and withholdings required by law, on a regular payroll basis, for a period of
twelve (12) months (“Separation Payments”).  Payments will be made on the
subsequent pay periods following the “Consideration Period” and “Revocation
Period.”  The Separation Payments will be sent to your home address as set forth
above.

FY 2006 Incentive Compensation.   Also, in accordance with the “Consideration
Period” and Revocation Period,” the Company agrees to pay you, when it is
determined and approved by the Company’s Compensation Committee, any FY 2006
incentive compensation you may have earned pursuant to the InSight Executive
Management Incentive Compensation Plan.

Outplacement Counseling Services.   As further consideration for signing this
Agreement, the Company agrees to provide you with outplacement counseling
services through  a firm mutually agreed by you and the Company for the six (6)
month-period immediately following your resignation.  Your outplacement
counseling benefits and limitations will be explained in a separate agreement.

 

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Reference.   The Company agrees to provide you with a reference letter in the
form attached hereto as Exhibit A.

Compliance with Stock Option Agreements.  In accordance with the Stock Option
Agreement (i) entered into between you and InSight Health Services Holdings
Corp. (“IHSHC”), on June 29, 2001 (the “June 29th Stock Option Agreement”), and
(ii) entered into between you and IHSHC, dated October 17, 2001 (the “October
17th Stock Option Agreement” and together with the June 29th Stock Option
Agreement, the “Stock Option Agreements”), you agree to comply in full with
their terms.  Additionally, you agree to comply with the terms of the Fourth
Amended and Restated Stockholders Agreement, dated July 2, 2005, by and among
IHSHC and the stockholders of IHSHC signatory thereto (the “Stockholders
Agreement” and with the Stock Option Agreements are collectively referred to
herein as the “Stock Agreements”).

Benefits.  As additional consideration for this Agreement, the Company agrees to
continue the employee benefits specified in this provision until the first of
the following occurs: (a) expiration of the twelve (12) month period following
the date of your termination; or (b) until you are eligible for employment
benefits as the result of full-time employment with another employer.  The
benefits you will receive during the applicable period are life insurance,
medical, health and accident, and disability plans or programs covering you and
any dependents under the same terms and conditions as if you had not been
terminated, including any required co-payments.  The Company’s agreement to
provide these benefits during the applicable period is contingent upon your
participation being permissible under the general terms and provisions of such
plans and programs and contingent upon the Company’s right to amend or terminate
any employee benefit plans which are applicable generally to the Company’s
employees.  In the event of either of these contingencies, you will cease to
receive these benefits effective the date of the occurrence of the contingency. 
However, in such an event, the Company agrees to arrange to provide you with
benefits substantially similar to those you were receiving at the time of your
termination for the applicable period or its remainder.

Consulting Services. You and the Company will enter into a Services Agreement, a
copy of which is attached hereto as Exhibit B, pursuant to which you will
provide services to the Company for an initial period of sixty (60) days
commencing July 1, 2006, which may be extended for additional thirty (30) day
periods as mutually agreed by you and the Company.  Both you and the Company may
terminate the Services Agreement upon thirty (30) days prior written notice. 
The monthly fee for such services will be $25,500 per month.

Release.  In consideration of this Agreement, you hereby irrevocably and
unconditionally release, waive and forever discharge the Company, its direct and
indirect parents (including IHSHC), subsidiaries and affiliates, affiliated
persons, partnerships and corporations, successors and assigns, and all of their
past and present directors, members, partners, contractors, distributors,
officers, shareholders, consultants, agents, representatives, attorneys,
employees, employee benefit plans and plan fiduciaries (collectively, the
“Company Releasees”), individually and collectively, from any and all actions,
causes of action, claims, demands, damages, rights, remedies and liabilities of
whatsoever kind or character, in law or equity, suspected or unsuspected, known
or unknown, past or present, that you have ever had, may now have, or may later
assert against any of the Company Releasees, concerning, arising out of or
related to your employment by or the performance of any services to or on behalf
of any of the

 

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InSight Companies or the termination of that employment, those services and your
positions with the InSight Companies, from the beginning of time to the
Effective Date (hereinafter referred to as “Executive’s Claims”), including
without limitation:  (i) any claims arising out of or related to any federal,
state and/or local labor or civil rights laws, as amended, including, without
limitation, the federal Civil Rights Acts of 1866, 1871, 1964 and 1991
(including but not limited to Title VII), the Age Discrimination in Employment
Act of 1967, the National Labor Relations Act, the Workers’ Adjustment and
Retraining Notification Act, the Employee Retirement Income Security Act of
1974, the Family and Medical Leave Act of 1993, the Americans with Disabilities
Act of 1990, the Fair Labor Standards Act of 1938, the Older Workers’ Benefit
Protection Act, the California Fair Employment and Housing Act,  the California
Industrial Welfare Commission Wage Orders, and the California Labor Code and/or
any similar state anti-discrimination and employment statutes; and (ii) any and
all other of Executive’s Claims arising out of or related to any contract, any
and all other federal, state or local constitutions, statutes, rules or
regulations, or under the laws of any country or political subdivision, or under
any common law right of any kind whatsoever.  Notwithstanding the foregoing,
this Agreement shall not affect any of your rights or obligations under (a) the
Stock Agreements, (b) the InSight Health Services Corp. 401(k) Savings Plan
(“InSight 401(k) Plan”), (c) the Amended and Restated Indemnification Agreement
executed by you and the Company effective October 17, 2001 (“Indemnification
Agreement”), (d) the Consolidated Omnibus Budget Reconciliation Act (“COBRA”),
(e) workers’ compensation or unemployment insurance benefits claims, or (f) the
terms of this Agreement.

You and the Company hereby waive and relinquish all rights and benefits afforded
by California Civil Code Section 1542.  You and the Company understand and
acknowledge the significance and consequences of this specific waiver of
Section 1542.  California Civil Code Section 1542 states as follows:

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

To the fullest extent permitted by law, you represent, warrant and agree not to
lodge or assist anyone else in lodging any formal or informal complaint in
court, with any federal, state or local agency or any other forum, in any
jurisdiction, arising out of or related to Executive’s Claims.  You hereby
represent and warrant that you have not brought any complaint, claim, charge,
action or proceeding against any of the Company Releasees in any jurisdiction or
forum, nor assisted or encouraged any other person or persons in doing so.  You
further represent and warrant that you have not in the past and will not in the
future assign any of Executive’s Claims to any person, corporation or other
entity.

Your execution of this Agreement operates as a complete bar and defense against
any and all of Executive’s Claims against the Company and each of the other
Company Releasees.  If you should hereafter make any of Executive’s Claims in
any charge, complaint, action, claim or proceeding against the Company or any of
the other Company Releasees, this Agreement may be raised as, and shall
constitute a complete bar to, any such charge, complaint, action, claim or
proceeding.

 

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Release by the Company.  In consideration of this Agreement, the Company on
behalf of itself, its parent and subsidiary corporations (“Company Releasors”)
hereby irrevocably and unconditionally releases, waives and forever discharges
you, your spouse, family members, and heirs, (collectively, the “Boylan
Releasees”) individually and collectively, from any and all actions, causes of
action, claims, demands, damages, rights, remedies and liabilities of whatsoever
kind or character, in law or equity, suspected or unsuspected, known or unknown,
past or present, that they have ever had, may now have, or may later assert
against the Boylan Releasees, whether or not arising out of or related to
Boylan’s employment by or the performance of any services to or on behalf of the
Company or the termination of that employment and those services, from the
beginning of time to the Effective Date (hereinafter referred to as “Company’s
Claims”), including without limitation, any and all other of Company’s Claims
arising out of or related to any contract, any and all federal, state or local
constitutions, statutes, rules or regulations, or under the laws of any country
or political subdivision, or under any common law right of any kind whatsoever,
including, without limitation, any of Company’s Claims for any kind of tortious
conduct, promissory or equitable estoppel, breach of the Company’s policies,
rules, regulations, handbooks or manuals, breach of express or implied contract
or covenants of good faith, breach of duty of loyalty or fiduciary duty. 
Notwithstanding the foregoing, this Agreement shall not affect any of the
Company’s rights or obligations under (a) the Stock Agreements, (b) the InSight
401(k) Plan, (c) the Indemnification Agreement, (d) COBRA, (e) workers’
compensation or unemployment insurance benefits claims, or (f) the terms of this
Agreement.

 

Further, notwithstanding the foregoing, the Company’s Claims which are being
released herein shall not include any claims or causes of action that the
Company Releasors may have against you as of the Effective Date, which may arise
from or be related to (i) any acts or omissions undertaken by you, or undertaken
at your express direction, which constitute fraud, theft or embezzlement against
the Company, or any act that constitutes a felony under the laws of the United
States or any state; or (ii) any voluntary act undertaken by you in knowing and
willful violation of a specific written Company directive or policy, which
causes the Company material harm or subjects it to material liability.

 

To the fullest extent permitted by law, the Company agrees not to lodge or
assist anyone else in lodging any formal or informal complaint in court, with
any federal, state or local agency or any other forum, in any jurisdiction,
against you or any of the other Boylan Releasees arising out of or related to
Company’s Claims.  The Company hereby represents and warrants that it has not
brought any complaint, claim, charge, action or proceeding against any of the
Boylan Releasees in any jurisdiction or forum, nor assisted or encouraged any
other person or persons in doing so.  The Company further represents and
warrants that it has not in the past and will not in the future assign any of
Company’s Claims to any person, corporation or other entity.

Execution of this Agreement by the Company operates as a complete bar and
defense against any and all of Company’s Claims against you or any of the other
Boylan Releasees.  If the Company should hereafter make any of Company’s Claims
in any charge, complaint, action, claim or proceeding against you or any of the
other Boylan Releasees, this Agreement may be raised as and shall constitute a
complete bar to any such charge, complaint, action, claim or proceeding and you
and/or the other Boylan Releasees shall be entitled to and

 

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shall recover from the Company all costs incurred, including reasonable
attorneys’ fees, in defending against any such charge, complaint, action, claim
or proceeding.

Continuing Obligations to Company.  You understand and agree that you have
continuing obligations to the Company under Section V of the Executive
Employment Agreement entered into among you, the Company and IHSHC effective on
June 29, 2001 (“Section V”).  You further understand and agree that should you
breach any provisions thereunder, the Company has the right to terminate any and
all of its obligations under this Agreement effective immediately.  This right
is in addition to any other rights or remedies to which the Company is entitled
for your breach of Section V.  A copy of Section V is attached hereto as Exhibit
C for your ease of reference.  Should you have a legitimate question as to
whether a particular prospective employment would be in breach of your
obligations under Section V, you may make an inquiry to the Company prior to
accepting such a position and if the Company determines that such potential
employment will not be a breach of Section V, it will so advise you and/or your
prospective employer in writing.

In addition, the twelve (12) month periods referred to in Section 5.01(d) and
(e) of Section V will be extended until the later of (i) August 31, 2007 and
(ii) the termination of  the Services Agreement.

Cooperation.  After your termination, you may be asked questions by the Company,
its accountants, financial advisors or attorneys relating to your former duties,
to which you agree to  respond in a reasonably timely and responsible manner by
providing such information as may be within your knowledge.

Return of InSight Property; Expenses.  As set forth in Section V, you agree to
immediately return all Company property and equipment in your possession or
under your control, including, but not limited to, credit cards, keys, building
access cards, manuals, notebooks, financial statements, reports and any other
property of InSight; however, you may retain the cell phone, TREO and computer
hardware and software you currently use until (i) you acquire your own cell
phone, TREO and personal computer and service or (ii) the termination of the
Services Agreement, whichever occurs earlier.  You should immediately submit to
InSight all outstanding business expenses incurred on or before June 30, 2006,
for reconciliation and payment in accordance with the Company’s policies.

Legal Representation.  You and InSight each acknowledge that you have had the
opportunity to receive the advice of independent legal counsel prior to the
execution of this Agreement and the opportunity to receive an explanation from
legal counsel of the legal nature and effect of this Agreement, and you have
fully exercised that opportunity to the extent desired and you understand the
terms and provisions of this Agreement and its nature and effect.  You further
represent that you are entering into this Agreement freely and voluntarily.

No Admission of Liability.  Nothing contained in this Agreement or the fact that
InSight has signed this Agreement shall be considered as admission of any
liability whatsoever by InSight.  This Agreement may not be introduced in any
action or proceeding by anyone for any purpose except to evidence or to enforce
its terms.

 

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Confidentiality.  As a material inducement to InSight to enter into this
Agreement and as an indivisible part of the consideration to be received for
entering into this Agreement and for the performance of obligations under this
Agreement by each party to this Agreement, you agree that you will not disclose,
disseminate, and/or publicize or cause or permit to be disclosed, disseminated,
and/or publicized, any of the specific terms of this Agreement, any claims or
allegations or the basis for any claims or allegations, which were or could have
been made against InSight and its divisions, affiliates, parents (including
IHSHC), subsidiaries, predecessor and successor corporations, and the past and
present directors, officers, management committees, shareholders, agents,
servants, employees, representatives, administrators, partners, general
partners, managing partners, limited partners, benefit plan fiduciaries and
administrators, assigns, heirs, successors or predecessors in interest,
adjustors, insurers, and attorneys, which concern and are within the scope of
this Agreement, directly or indirectly, specifically or generally, to any
person, corporation, association, governmental agency, or other entity except:
(a) to the extent necessary to report income to appropriate taxing authorities;
(b) in response to an order of a court of competent jurisdiction or a subpoena
issued under authority thereof; (c) in response to any subpoena issued by a
state or federal governmental agency; or (d) as otherwise required by law. 
Notwithstanding the foregoing, InSight may file this Agreement with the
Securities and Exchange Commission in accordance with the Securities Exchange
Act of 1934.

Assistance/Cooperation Regarding Current or Future Litigation.  In connection
with InSight’s participation in current or future litigation relating to events
which occurred during your employment with the Company and/or about which you
have information, you agree to cooperate to the fullest extent possible in the
preparation, prosecution, or defense of the Company’s case, including, but not
limited to, meeting with the Company’s counsel, the execution of truthful
declarations, being a deponent and/or witness as required, or providing
information and/or documents requested by the Company.  You acknowledge that the
Company is actively engaged in litigation with Southwest Outpatient Radiology,
P.C. and William B. Kessler Memorial Hospital and that you have been or may be
identified as a witness and will cooperate with InSight and its counsel, as
required. You further agree not to voluntarily assist any party, any current or
former employee of the Company, and/or attorney in any claim, dispute, charge,
or litigation adverse to the Company.  This section does not prohibit you from
testifying truthfully pursuant to a subpoena or lawful court order.

Non Disparagement.  As a material inducement to InSight to enter into this
Agreement, you agree that you will not make any negative or disparaging comments
about InSight or IHSHC.  InSight agrees that its senior management and Board of
Directors will not make any negative or disparaging comments about you.

Other Agreements.  Except for (i) Section V as modified by the terms of this
Agreement, (ii) the Stock Agreements, (iii) the InSight 401(k) Plan, and (iv)
the Indemnification Agreement, the terms of this Agreement supercede any and all
other agreements, understandings, negotiations, or discussions, either oral or
in writing, express or implied, among you and the Company and IHSHC.  For
avoidance of doubt, this Agreement shall have no affect on the ten (10) year
term of the  46,990 “Rollover Options” granted to you pursuant to the June 29th
Stock  Option Agreement, which unless terminated earlier pursuant to the terms
of that agreement or the IHSHC 2001 Stock Option Plan, shall expire on October
17, 2011.

 

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Successors.  This Agreement is binding upon the Company and you and upon the
Company’s and your respective successors, assigns, heirs, executors,
administrators and legal representatives.

Entire Agreement.  This Agreement constitutes the full, complete, and exclusive
agreement between you and InSight with respect to the subject matter discussed
herein.  This Agreement cannot be changed unless in writing, signed by you,
InSight, and IHSHC.

Waiver.  No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar. 
No waiver shall constitute a continuing waiver.  No waiver shall be binding
unless executed in writing by the party charged with the waiver.

Severability.  In the event any provision of this Agreement shall be determined
to be unlawful, such provision shall be deemed to be severed from this Agreement
and every other provision of this Agreement shall remain in full force and
effect.

Governing Law.  This Agreement is made and entered into in the Commonwealth of
Pennsylvania, and shall in all respects be interpreted, enforced, and governed
under the laws of said state.

Resolution of Disputes.  Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, will be submitted to final and binding
arbitration in Orange County, California, before a mutually agreed upon
arbitrator from Judicial Arbitration and Mediation Services (JAMS), as the
exclusive remedy for such controversy or dispute.  Judgment upon any award
rendered by the arbitrator may be entered in the Superior Court of the County of
Orange, State of California, which will have exclusive jurisdiction thereof. 
The prevailing party in any proceeding brought to enforce the terms of this
Agreement will be entitled to recover from the other party all damages, costs
and expenses, including without limitation, attorneys’ and arbitrators’ fees,
incurred as a result of such action.  In agreeing to this arbitration, you
understand and agree that you are waiving the right to a jury trial as to any
issue(s) subject to this Agreement.  The decision of the arbitrator will be
bound by generally accepted legal principles, including but not limited to all
rules of law and legal principles concerning potential liability, burdens of
proof, and measure of damages found in all applicable California statutes and
administrative rules and codes, and all California case law.  The parties agree
that this provision does not limit their right to seek injunctive relief in the
threat of imminent and irreparable harm as a result of breach of this Agreement.

Consideration Period.  You have until 5:00 p.m. on August 14, 2006, or
forty-five (45) days from receipt of this Agreement to consider it.  InSight
hereby advises you to consult with an attorney before signing this Agreement.

Revocation Period.  For a period of seven (7) days following the signing of this
Agreement, you may revoke this Agreement.  This Agreement does not become
effective or enforceable until the revocation period has expired without you
exercising your option to revoke (“Effective Date”).

 

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Please acknowledge your understanding and acceptance of this Agreement by
signing this Agreement below and returning it to me no later than 5:00 p.m. on
August 14, 2006, or on the forty-fifth (45th) day from the day you receive this
Agreement.  An extra copy of this Agreement has been signed by me and is
enclosed for your records.

 

 

Sincerely,

 

 

 

/s/ Mitch C. Hill

 

 

Mitch C. Hill

 

Executive Vice President and Chief Financial Officer

 

InSight Health Services Corp. and

 

InSight Health Services Holdings Corp.

 

 

Enclosures

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

Dated: June 29, 2006.

/s/ Michael A. Boylan

 

 

                Michael A. Boylan

 

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