Exhibit 10.20

 

May 1, 2007

InSight Health Services Corp. and
its Subsidiaries listed on the
signature pages hereto

26250 Enterprise Court

Suite 100

Lake Forest, California 92630

Attention: Chief Financial Officer

Re:  Payment of Exchange Consent Fee in Connection with Conversion of Senior
Subordinated Notes to Equity

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Loan and Security
Agreement  dated September 22, 2005 (as at any time amended, restated, modified
or supplemented, the “Loan Agreement”), among InSight Health Services Corp.
(individually and, in its capacity as the representative of the other Borrowers
(as defined below) pursuant to Section 4.4 of the Loan Agreement, “InSight
Health”), a Delaware corporation, and those subsidiaries of InSight Health
listed on the signature pages hereto (InSight Health and each of its
subsidiaries listed on the signature pages hereto being referred to collectively
as “Borrowers,” and individually as a “Borrower”), the financial institution
listed on the signature pages hereto as “Lender” (together with its successors
and permitted assigns, “Lenders”), and Bank of America, N.A. (“Bank of
America”), a national bank, in its capacity as collateral and administrative
agent for the Lenders (together with its successors in such capacity,
“Administrative Agent”).  Capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed to such terms in the Loan
Agreement.

Parent filed that certain Registration Statement on Form S-4 under the
Securities Act of 1933, as amended (the “Securities Act”), on February 16, 2007
(as at any time amended, supplemented or modified, the “S-4”). As described in
the S-4, Parent has offered to exchange shares of the common stock of Parent for
the valid tender of Senior Subordinated Notes by the holders thereof (the
“Exchange Offer”).  The exchange of shares of  the common stock of Parent for
Senior Subordinated Notes and the cancellation of Senior Subordinated Notes so
exchanged as described in the S-4 is hereinafter referred to collectively as the
“Exchange Transaction.”

Pursuant to a letter agreement dated March 15, 2007 (the “March 15 Letter
Agreement”), among the parties hereto, Administrative Agent and Lenders (i)
consented to the Exchange Offer and the amendments to the Senior Subordinated
Notes Indenture as described in the S-4 (the “Indenture Amendments”), the
Exchange Transaction and the change of ownership of Parent that would result
therefrom, and (ii) amended the Loan Agreement in certain respects in connection
therewith.

Borrowers have informed Administrative Agent and Lenders that Parent intends to
file a prospectus under Rule 424 of the Securities Act modifying the terms of
the Exchange Offer and related consent solicitation (the “Prospectus”).  The
Prospectus will, among other things, provide for the payment of a consent fee
(the “Consent Fee”) to the holders of the Senior Subordinated Notes that consent
to the Indenture Amendments.  Borrowers would pay such Consent Fee with (i) the
proceeds of new Senior Notes to be issued pursuant to the Senior Note Indenture
(the “New Senior Notes”) and (ii) cash on hand and/or the proceeds of Revolver
Loans.

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Administrative Agent and Lenders are willing to (i) consent to (a) the Consent
Fee and the payment by Borrowers of the Consent Fee, (b) the issuance of the New
Senior Notes to derive funds necessary to pay a portion of the Consent Fee and
the incurrence by the Borrowers of the Liens and Debt relating to the New Senior
Notes on the same terms and with respect to the same collateral as currently
exists with respect to the Senior Notes, and (c) the issuance of the New Senior
Notes to, and the payment of a Consent Fee to, any Affiliates of the Borrowers
that are equityholders of Parent at the time of such issuance or payment, (ii)
waive the application of any of the provisions in the Loan Agreement that would
prohibit (x) the Consent Fee or payment of the Consent Fee, (y) the issuance of
the New Senior Notes and the incurrence of the Liens and Debt relating to the
New Senior Notes on the same terms and with respect to the same collateral as
currently exists with respect to the Senior Notes, or (z) the issuance of the
New Senior Notes to, and the payment of a Consent Fee to, any Affiliates of the
Borrowers that are equityholders of Parent at the time of such issuance or
payment and (iii) waive the Event of Default resulting from the failure of
InSight Health to make the interest payment on the Senior Subordinated Notes due
May 1, 2007 (the “May SSN Interest Payment”), in each case on the terms and
subject to the conditions set forth herein.

NOW, THEREFORE, the parties hereto, intending to be bound hereby, agree as
follows:

1.             Consent to Incurrence and Payment of Consent Fee and Issuance of
New Senior Notes.  In reliance upon the representations, warranties, agreements
and covenants of Borrowers set forth herein, Administrative Agent and Lenders
hereby consent to (i) the Consent Fee and the payment by Borrowers of the
Consent Fee, (ii) the issuance of the New Senior Notes in connection therewith,
and the incurrence of the Liens and Debt relating to the New Senior Notes,
provided that such Liens and Debt shall be on the same terms and with respect to
the same collateral as currently exists with respect to the Senior Notes, and
(iii) the issuance of the New Senior Notes to, and the payment of a Consent Fee
to, any Affiliates of the Borrowers that are equityholders of Parent at the time
of such issuance or payment; provided that each of the following conditions is
satisfied at the time of payment of the Consent Fee or issuance of the New
Senior Notes and immediately after giving effect thereto:

(a)           all of the conditions set forth in clauses (a) and (b) of Section
1 of the March 15 Letter Agreement are timely satisfied;

(b)           after giving effect to the provisions of this letter agreement, no
Default or Event of Default exists, including, without limitation, any Event of
Default arising from the commencement of any Insolvency Proceeding by or against
Parent or any Borrower;

(c)           irrespective of any original issue discount in connection with the
issuance of the New Senior Notes, the aggregate stated principal amount of the
New Senior Notes shall not exceed $10,000,000;

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(d)           if New Senior Notes are issued in connection with payment of the
Consent Fee, the New Senior Notes are issued on or before August 31, 2007;

(e)           the Exchange Transaction is consummated prior to or concurrently
with the issuance of the New Senior Notes and payment of the Consent Fee; and

(f)            the portion of the Consent Fee that is derived from cash on hand
and/or the proceeds of Revolver Loans does not exceed $2,500,000 in the
aggregate.

To the extent that any provisions of the Loan Agreement or any of the other Loan
Documents (other than this letter agreement and the terms and conditions set
forth herein) would otherwise restrict (A) Borrowers’ ability to agree to pay or
to pay the Consent Fee, (B) the issuance of the New Senior Notes and the
incurrence of the Liens and Debt relating to the New Senior Notes on the same
terms and with respect to the same collateral as currently exists with respect
to the Senior Notes, or (C) the issuance of the New Senior Notes to, or the
payment of a Consent Fee to, any Affiliates of Borrowers that are equityholders
of Parent at the time of such issuance or payment, Administrative Agent and
Lenders hereby waive the application of such provisions subject to the
conditions set forth above.  The foregoing waiver shall not extend to, or be
deemed a waiver with respect to, any matter other than the matters specified in
clauses (A), (B), and (C) of the prior sentence.

2.             Additional Agreements.  (a)  The Administrative Agent and Lenders
hereby waive the Event of Default existing under Section 12.1.5 of the Loan
Agreement as a result of the failure of InSight Health to make the May SSN
Interest Payment on May 1, 2007, provided that if such payment is not made on or
before May 31, 2007 with respect to the Senior Subordinated Notes that are not
tendered as part of the Exchange Transaction, such failure shall constitute an
Event of Default under the Loan Agreement that is not waived hereby.

(b)   The Administrative Agent and the Lenders hereby agree that the last
sentence of Section 9.1.9 of the Loan Agreement is hereby amended in its
entirety to read as follows:

“Since March 31, 2005, there has been no material adverse change in the
consolidated financial condition of the Borrowers and such other Persons shown
on the Consolidated balance sheet as of such date, except as set forth in any
filings made by Parent or Borrowers with the SEC that have been provided to
Administrative Agent and Lenders prior to May 1, 2007.”

3.             No Novation, Etc.  The parties hereto acknowledge and agree that,
except as set forth herein, nothing in this letter agreement shall be deemed to
amend, modify or waive any provision of the Loan Agreement, the March 15 Letter
Agreement or any of the other Loan Documents, each of which shall remain in full
force and effect.  This letter agreement is not intended to be, nor shall it be
construed to create, a novation or accord and satisfaction, and the Loan
Agreement as herein modified shall continue in full force and effect. Nothing in
this letter agreement is intended to abrogate, amend or alter section 8.2.5 of
the Loan Agreement or to require Lenders to make any Revolver Loan at a time at
which Borrowers do not have availability to obtain such Revolver Loan.

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4.             Ratification and Reaffirmation.  Borrowers hereby ratify and
reaffirm the Obligations, each of the Loan Documents and all of Borrowers’
covenants, duties, indebtedness and liabilities under the Loan Documents.

5.             Acknowledgements and Stipulations; Representation and Warranties.
By its signature below, each Borrower (a) acknowledges and stipulates that (i)
the Loan Agreement and the other Loan Documents executed by such Borrower are
legal, valid and binding obligations of such Borrower that are enforceable
against such Borrower in accordance with the terms thereof, except as the
enforceability thereof maybe limited by bankruptcy, insolvency or other similar
laws of general application affecting the enforcement of creditors’ rights, (ii)
all of the Obligations of such Borrower are owing and payable without defense,
offset or counterclaim (and to the extent there exists any such defense, offset
or counterclaim on the date hereof, the same is hereby waived by each Borrower),
(iii) the security interests and liens granted by such Borrower in favor of
Administrative Agent are duly perfected, first priority security interests and
Liens (subject only to those Permitted Liens that are expressly permitted by the
terms of the Loan Agreement to have priority over the Liens of Administrative
Agent), and (iv) the Loan Agreement and any actions taken under the Loan
Agreement are hereby ratified and approved by such Borrower; and (b) represents
and warrants to Administrative Agent and Lenders, to induce Administrative Agent
and Lenders to enter into this letter agreement, that (i) the execution,
delivery and performance of this letter agreement has been duly authorized by
all requisite corporate or limited liability company action on the part of such
Borrower, (ii) all of the representations and warranties made by such Borrower
in the Loan Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof, except to the extent that any
such representation or warranty is stated to relate to an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects on and as of such earlier date, and (iii) to the best of such
Borrower’s knowledge, there exists no claim or cause of action of any kind or
nature, whether absolute or contingent, disputed or undisputed, at law or in
equity, that such Borrower has or has ever had against Administrative Agent or
any Lender arising under or in connection with any of the Loan Documents (and to
the extent there exists any such claim or cause of action on the date hereof,
the same is hereby waived by such Borrower).

6.             Expenses.   Borrowers agree to pay, on demand, all reasonable
out-of-pocket costs and expenses incurred by Administrative Agent and Lenders in
connection with the preparation, negotiation and execution of this letter
agreement, any other Loan Documents executed pursuant hereto and any and all
amendments, modifications and supplements thereto, including the reasonable
costs and fees of Administrative Agent’s outside legal counsel.

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7.             Miscellaneous.  This letter agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.  This
letter agreement shall be binding upon an inure to the benefit of the parties
and their respective successors and assigns.  This letter agreement may be
executed in any number of counterparts and by different parties to this letter
agreement on separate counterparts, each of which when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement.  Any signature delivered by a party by facsimile transmission or
portable document format by electronic mail shall be deemed to be an original
signature hereto.  To the fullest extent permitted by Applicable Law, the
parties hereto each hereby waives the right to trial by jury in any action,
suit, counterclaim or proceeding arising out of or related to this letter
agreement.

[Signatures appear on following page]

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This letter agreement shall be effective upon Administrative Agent’s receipt of
counterparts hereof duly executed by Lenders and Borrowers.

 

Very truly yours

 

 

 

 

 

ADMINISTRATIVE AGENT:

 

 

 

 

 

BANK OF AMERICA, N.A.,

 

 

as Administrative Agent

 

 

 

 

 

 

 

 

By:

/s/ Seth Benefield

 

 

 

Name:

  /s/ Seth Benefield

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

LENDER:

 

 

 

 

 

BANK OF AMERICA, N.A., as Lender

 

 

 

 

 

By:

/s/ Seth Benefield

 

 

 

Name:

  /s/ Seth Benefield

 

 

 

Title:

Vice President

 

 

 

[Signatures continued on following page]

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  BORROWERS:

 

 

 

 

 

INSIGHT HEALTH SERVICES CORP.

 

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President and Chief
Financial Officer

 

 

 

 

 

 

 

 

 

 

WILKES-BARRE IMAGING, L.L.C.

 

 

 

 

 

By:

InSight Health Corp., as the sole member and
sole manager

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President
and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

MRI ASSOCIATES, L.P.

 

 

 

 

 

By:

InSight Health Corp., as the general partner

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President
and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

VALENCIA MRI, LLC

 

 

ORANGE COUNTY REGIONAL PET CENTER-
IRVINE, LLC

 

 

SAN FERNANDO VALLEY REGIONAL PET
CENTER, LLC

 

 

 

 

 

 

 

 

By:

InSight Health Corp., as the sole member

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President
and Chief Financial Officer

 

 

[Signatures continued on following page]

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PARKWAY IMAGING CENTER, LLC

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

Name:

Mitch C. Hill

 

 

Title:

Manager

 

 

 

 

 

 

 

 

INSIGHT HEALTH CORP.

 

 

OPEN MRI, INC.

 

 

MAXUM HEALTH CORP.

 

 

RADIOSURGERY CENTERS, INC.

 

 

DIAGNOSTIC SOLUTIONS CORP.

 

 

MAXUM HEALTH SERVICES CORP.

 

 

MAXUM HEALTH SERVICES OF NORTH
TEXAS, INC.

 

 

MAXUM HEALTH SERVICES OF DALLAS,
INC.

 

 

NDDC, INC.

 

 

SIGNAL MEDICAL SERVICES, INC.

 

 

INSIGHT IMAGING SERVICES CORP.

 

 

COMPREHENSIVE MEDICAL IMAGING,
INC.

 

 

COMPREHENSIVE MEDICAL IMAGING
CENTERS, INC.

 

 

COMPREHENSIVE MEDICAL IMAGING-
BILTMORE, INC.

 

 

COMPREHENSIVE OPEN MRI-EAST MESA,
INC.

 

 

TME ARIZONA, INC.

 

 

COMPREHENSIVE MEDICAL IMAGING-
FREMONT, INC.

 

 

COMPREHENSIVE MEDICAL IMAGING-
SAN FRANCISCO, INC.

 

 

COMPREHENSIVE OPEN MRI- GARLAND,
INC.

 

 

IMI OF ARLINGTON, INC.

 

 

COMPREHENSIVE MEDICAL IMAGING-
FAIRFAX, INC.

 

 

IMI OF KANSAS CITY, INC.

 

 

COMPREHENSIVE MEDICAL IMAGING-
BAKERSFIELD, INC.

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President and
Chief Financial Officer

 

 

[Signatures continued on following page]

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COMPREHENSIVE OPEN MRI-
CARMICHAEL/FOLSOM, LLC

 

 

SYNCOR DIAGNOSTICS SACRAMENTO, LLC

 

 

SYNCOR DIAGNOSTICS BAKERSFIELD, LLC

 

 

 

 

 

By:

Comprehensive Medical Imaging, Inc. and
Comprehensive Medical Imaging Centers,
Inc., as the members

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President
and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

PHOENIX REGIONAL PET CENTER-
THUNDERBIRD, LLC

 

 

 

 

 

By:

Comprehensive Medical Imaging Centers,
Inc., as the sole member

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President
and Chief Financial Officer

 

 

[Signatures continued on following page]

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MESA MRI
MOUNTAIN VIEW MRI
LOS GATOS IMAGING CENTER
WOODBRIDGE MRI
JEFFERSON MRI-BALA
JEFFERSON MRI

 

 

 

 

 

By:

Comprehensive Medical Imaging, Inc.
and Comprehensive Medical Imaging
Centers, Inc., as the members

 

 

 

 

 

 

 

By:

/s/ Mitch C. Hill

 

 

 

 

Mitch C. Hill, Executive Vice President
and Chief Financial Officer

 

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