Exhibit 10.30


 


EXECUTION COPY


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


AGREEMENT
dated as of August 10, 2005 between InSight Health Services Corp., a
Delaware corporation (“Company”), and Louis E. Hallman, III (“Executive”).  InSight Health Services Holdings Corp., a
Delaware corporation (“Parent”) is a party to this Agreement solely for the
purposes of Section 3.07.


 


Company
wishes to employ Executive, and Executive wishes to accept such employment, in
each case subject to the terms and conditions hereof.  Accordingly, Company and Executive hereby
agree as follows:


 


I.                                         TERM


 


Commencing
as of the first date of Executive’s employment with Company, Executive is to be
employed by Company for rolling twelve (12) month periods, whereby Executive’s
term of employment is twelve (12) months on a continuing basis, unless earlier
terminated in accordance with Article IV below.


 


II.                                     EMPLOYMENT


 


SECTION 2.01  Employment by Company.  Company, for itself and its subsidiaries and
affiliates, employs Executive for the term of this Agreement to render full
time services as Company’s Executive Vice President and Chief Strategy Officer
and in such other capacities as the Board of Directors of Company (“Board”) may
assign and, in connection therewith, to perform such duties as are reasonably
consistent with Executive’s position and as the Board shall direct.  Executive agrees to perform such duties as
are reasonably consistent with the duties normally pertaining to the office to
which Executive has been elected or appointed, subject always to the direction
of the Board.  Subject to Section 5.01
hereof, Executive’s expenditure of reasonable amounts of time for personal
business, charitable or professional activities will not be deemed a breach of
Executive’s undertaking to provide full time services hereunder, provided that
such activities do not interfere materially with Executive’s rendering of such
services.


 


SECTION 2.02  Acceptance of Employment
by Executive.  Executive
accepts such employment and shall render the services required by this
Agreement to be rendered by Executive. 
Executive shall also serve on request during all or any part of the term
of this Agreement as an officer of Company and of any of its subsidiaries or
affiliates without any compensation therefor other than as specified in this
Agreement.


 


SECTION 2.03  Place of Employment.  Executive’s principal place of employment
shall be located at 26250 Enterprise Court, Suite 100, Lake Forest,
California 92630.  In the event that the
principal place of employment of Executive is relocated to a site that is more
than 80 miles from Executive’s principal residence, subject to Section 4.05(a) hereof,
Company may require Executive to relocate Executive’s principal residence to
within 80 miles of such site. 
Notwithstanding the foregoing, Executive acknowledges that the duties to
be performed by 


 





















 


Executive
hereunder are such that Executive may be required to travel extensively,
principally within the United States, in connection with Company Business (as
defined below).


 


III.                                 COMPENSATION


 


SECTION 3.01  Salary, Bonuses, Life
Insurance.  As
compensation for the services to be rendered pursuant to this Agreement,
Company shall pay Executive, and Executive shall accept, a salary of  $275,000.00 per annum (“Annual Salary”),
payable in accordance with the payroll policies of Company for senior
executives as from time to time in effect, less such amounts as may be required
to be withheld by applicable federal, state and local law and regulations (the “Payroll
Policies”).


 


In addition to the Annual
Salary, Executive shall be eligible to receive and Company shall pay an annual
bonus based on a percentage of Executive’s Annual Salary agreed upon by the
Executive and the Company’s President and Chief Executive Officer (“Bonus”) (a)
75% of which Bonus shall be based upon Company achieving the goals set forth in
a budget prepared by Company management and adopted or approved by the Board;
and (b) 25% of which Bonus shall be based upon the achievement of other goals
mutually agreed upon by Executive and the President and Chief Executive Officer
of Company and approved by the Board. 
Such Bonuses are payable on the earlier to occur of the date Parent’s
(i) annual report on Form 10-K is filed with the Securities and Exchange
Commission (“SEC”) for such year and (ii) year-end audit has been completed for
such year.


 


For the fiscal year
ending June 30, 2006, Executive shall be eligible to receive a Bonus, which
shall equal 40% of Executive’s Annual Salary, prorated from the first date of
employment through June 30, 2006, 50% of which is guaranteed.


 


Company
shall purchase and maintain in full force and effect at all times during the
term of this Agreement a policy of term insurance on the life of Executive
payable to such beneficiary or beneficiaries as Executive may designate in an
amount equal to three (3) times the amount of the Annual Salary; provided
Executive shall comply with the issuing insurance company’s requirements for
issuance of the policy.


 


SECTION 3.02  Performance Review.
Executive’s performance shall be reviewed and evaluated by the Board annually
during the term of this Agreement.


 


SECTION 3.03  Participation in Employee
Benefit Plans.  Executive
shall be entitled during the term of this Agreement, if and to the extent
eligible, to participate in any life insurance, medical, health and accident
and disability plan or program, pension plan or similar benefit plan of
Company, which may be available to senior executives of Company generally, on
the same terms as such other executives.


 


SECTION 3.04  Expenses.  Subject to such policies as may from time to
time be established by Company for senior executives of Company generally,
Company shall pay or reimburse Executive for all reasonable business expenses
actually incurred or paid by Executive during the term of this Agreement in the
performance by Executive of services under this Agreement, upon 


 


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presentation
of expense statements or vouchers or such other supporting information as
Company may reasonably require.


 


SECTION 3.05  Automobile Allowance.  Company shall pay Executive $750 per month
and all reasonable expenses of operating an automobile subject to such policies
as may from time to time be established and amended by Company.


 


SECTION 3.06  Vacation.  Executive shall be entitled to three (3) weeks
of paid vacation each year during the term of this Agreement, which Executive
may accumulate up to six (6) weeks, to be taken at a time or times which
do not unreasonably interfere with Executive’s duties hereunder.


 


SECTION 3.07  Stock Options.  Parent shall grant stock options to
Executive, pursuant to the terms of the Stock Option Agreement substantially in
the form of Exhibit A, to purchase shares of Parent common stock in an
amount to be determined by the President and Chief Executive Officer of Company
and approved by the board of directors of Parent.


 


IV.                                TERMINATION


 


SECTION 4.01  Termination upon Death.  If Executive dies during the term of this
Agreement, this Agreement shall terminate as of the date of Executive’s death.


 


SECTION 4.02  Termination upon
Disability.  Executive’s
employment may be terminated by Company due to Executive’s permanent and total
disability (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended) (“Disability”), so that Executive is unable
substantially to perform Executive’s services required by this Agreement to be
rendered by Executive for (i) a period of three (3) consecutive
months or (ii) for shorter periods aggregating three (3) months
during any twelve (12) month period. 
Company may, at any time after the last day of the three (3) consecutive
months of Disability or the day on which the shorter periods of Disability
equal an aggregate of three (3) months, by 30 days’ written notice to
Executive, terminate this Agreement and Executive’s employment hereunder.  Any such determination of Disability shall be
made by a physician chosen by a majority of the members of the Board in its
sole and unfettered discretion.  Nothing in
this Section 4.02 shall be deemed to extend the term of this Agreement or
of Executive’s employment hereunder, beyond the term specified in Article I
hereof.


 


SECTION 4.03  Termination for Cause.  If the Board decides that Cause (as defined
below) exists, it may remove Executive for Cause and terminate this Agreement
and the term of Executive’s employment hereunder on the date specified in
written notice to Executive.  If
terminated for Cause, Executive shall have no right to receive any monetary
compensation or benefit hereunder with respect to any period after the date
specified in such notice.  Such notice
may also terminate Executive’s right to enter Company’s premises.  For purposes of this Agreement, the term “Cause”
means any of the following:


 


(a)                                  Executive
has been convicted or pled guilty or no contest to any crime or offense (other
than any crime or offense relating to the operation of a motor vehicle) which
is likely to 


 


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have
a material adverse impact on the business operations or financial or other
condition of Company, or any felony offense;


 


(b)                                 Executive
has committed fraud or embezzlement;


 


(c)                                  Executive
has breached any of Executive’s obligations under this Agreement and Executive
has failed to cure the breach within 30 business days following receipt of
written notice of such breach from Company;


 


(d)                                 Company,
after reasonable investigation, finds that Executive has violated material
written policies and procedures of Company, including but not necessarily
limited to, policies and procedures pertaining to harassment and
discrimination;


 


(e)                                  Executive
has failed to obey a specific written direction from the Board (unless such
specific written instruction represents an illegal act), provided that (i) such
failure continues for a period of 30 business days after receipt of such
specific written direction, and (ii) such specific written direction
includes a statement that the failure to comply therewith will be a basis for
termination hereunder; or


 


(f)            any willful act or omission on
Executive’s part which is materially injurious to the financial condition or
business reputation of Company or any of its subsidiaries.


 


SECTION 4.04  Termination in Discretion
of Company.  Company may,
at any time thereafter by 30 days’ written notice to Executive, terminate
this Agreement and the term of Executive’s employment hereunder, and Executive
thereafter shall have only such rights to receive monetary compensation or
benefits hereunder in respect of any period after the effective date of
termination as are provided in Section 4.07 hereof.  Such notice may also terminate Executive’s
right to enter Company’s premises.


 


SECTION 4.05  Voluntary Termination for
Good Reason.  During the
period commencing upon the occurrence of Good Reason (as defined below) and
continuing for 60 days thereafter, Executive shall have the right to terminate
Executive’s employment for Good Reason (as defined below), whereupon Executive
shall become entitled to receive compensation as provided in Section 4.07
hereof.  Termination by the Executive
pursuant to the preceding sentence shall be effective upon 60 days written
notice to Company.  For purposes of this
Agreement, “Good Reason” means any of the following:


 


(a)                                  the
movement by Company, without Executive’s consent, of Executive’s principal
place of employment to a site that is more than 80 miles from Executive’s
principal residence;


 


(b)                                 a
reduction by Company, without Executive’s consent, in Executive’s Annual
Salary, duties and responsibilities, and title, as they may exist from time to
time; or


 


(c)                                  a
failure by Company to comply with any material provisions of this Agreement
which has not been cured within 30 days after notice of such noncompliance has
been given by 


 


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Executive
to Company, or if such failure is not capable of being cured in such time, for
which a cure shall not have been diligently initiated by Company within the 30
day period.


 


SECTION 4.06  Voluntary Termination
Without Good Reason.  Executive
shall have the right to terminate this Agreement upon 60 days’ written notice
to Company and, upon such termination, Executive shall not have the right to
receive any monetary compensation or benefit hereunder with respect to any
period after the date specified in such notice.


 


SECTION 4.07  Compensation on
Termination.


 


(a)                                  If
the term of Executive’s employment hereunder is terminated pursuant to Section 4.01
hereof, Company shall pay to the executors or administrators of Executive’s
estate or Executive’s heirs or legatees (as the case may be) all compensation
accrued and unpaid up to the date of Executive’s death.


 


(b)                                 If
the term of Executive’s employment hereunder is terminated pursuant to Section 4.02,
4.04, 4.05, or 4.07(c) hereof, Company shall (i) pay to Executive all
compensation accrued and unpaid up to the effective date of termination; (ii) pay
to Executive additional compensation in an amount equal to twelve (12) months
of compensation at the Annual Salary rate then in effect, payable in accordance
with the Payroll Policies; and (iii) maintain, at Company’s expense, in
full force and effect, for Executive’s continued benefit until the earlier of
(x) twelve (12) months after the effective date of termination or (y) commencement
of Executive’s benefits pursuant to full time employment with a new employer
under such employer’s standard benefits program, all life insurance, medical,
health and accident, and disability plans or programs, in which Executive was
entitled to participate immediately prior to the effective date of termination;
provided, that Executive’s continued participation is permissible under the
general terms and provisions of such plans or programs and provided further,
that Company shall be entitled to amend or terminate any employee benefit plans
which are applicable generally to Company’s employees.  In the event that Executive’s participation
in any such plan or program is prohibited, Company shall arrange to provide
Executive with benefits substantially similar to those which Executive was
entitled to receive under such plans or programs.  Any amounts paid by Company to Executive
under (i) and (ii) above may be reduced, in the case of termination
pursuant to Section 4.02, by the amount which Executive is entitled to
receive under the terms of Company’s long-term disability insurance policy for
senior executives as and if in effect at the effective date of
termination.  Any payments made pursuant
to this Section 4.07 shall be reduced by such amounts as are required by
law to be withheld or deducted.


 


(c)           Notwithstanding
any provision herein to the contrary, if Executive is terminated by Company
without Cause, or Executive terminates Executive’s employment for Good Reason,
within twelve (12) months of a Change in Control (as defined herein) which
occurs after the Effective Time, Executive shall be entitled to the payments
and benefits set forth in Section 4.07(b). 
For purposes hereof, a “Change in Control” shall be deemed to have
occurred if (i) any person, or any two or more persons acting as a group, and
all affiliates of such person or persons (a “Group”), who prior to such time
beneficially owned less than 50% of the then outstanding capital stock of
Company or Parent, shall acquire shares of Company’s or Parent’s capital stock


 


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in
one or more transactions or series of transactions, including by merger, and
after such transaction or transactions such person or group and affiliates
beneficially own 50% or more of Company’s or Parent’s outstanding capital
stock, or (ii) Company or Parent shall sell all or substantially all of its
assets to any Group which, immediately prior to the time of such transaction,
beneficially owned less than 50% of the then outstanding capital stock of
Company or Parent.


 


(d)                                 The
compensation rights provided for Executive in this Section 4.07 shall be
Executive’s sole and exclusive remedies with respect to Section 4.01,
4.02, 4.04, 4.05, or 4.07(c) hereof, and Executive, the executors or
administrators of Executive’s estate or Executive’s heirs or legatees (as the
case may be) shall not be entitled to any other compensation, damages or relief
in connection therewith.


 


V.                                    CERTAIN COVENANTS OF EXECUTIVE


 


SECTION 5.01  Covenants Against Unfair
Competition.


 


(a)                                  Acknowledgments.  Executive acknowledges that, as of the date
hereof (i) the principal business of Company and its affiliates is the
provision of diagnostic imaging, treatment and related management services
through a network of mobile magnetic resonance imaging (“MRI”) and positron
emission tomography (“PET”) facilities, fixed-site MRI and PET facilities and
multi-modality centers, at times, together with other healthcare providers,
utilizing the related equipment and computer programs and “software” and
various corporate investment structures (“Company Business”); (ii) Company
Business is primarily national in scope; (iii) the industry is highly
competitive; and (iv) Executive’s duties hereunder will cause Executive to
have access to and be entrusted with various trade secrets not readily
available to the public or competitors, consisting of business accounts, lists
of customers and other business contacts, information concerning Company’s
relationships with actual or potential clients or customers and the needs or
requirements of such clients or customers, budgets, business and financial
plans, employee lists, financial information, artwork, designs, graphics,
marketing plans and techniques, business strategy and development, know-how or
other matters connected with Company Business, computer software programs and
specifications (some of which may be developed in part by Executive under this
Agreement), which items are owned exclusively by Company and used in the
operation of Company Business (“Trade Secrets”).  Notwithstanding the foregoing, the parties
agree that the term “Trade Secrets” shall not include information which (i) is
or becomes generally available to the public, without violation of any
obligation of confidentiality by Executive, (ii) is or becomes available
from a third party on a nonconfidential basis, provided that such third party
is not bound by a confidentiality agreement concerning the Trade Secrets and (iii) is
or has been independently acquired or developed by Executive without violating
the provisions of this Section.


 


Executive
further acknowledges that the Trade Secrets will be disclosed to Executive or
obtained by Executive and received in confidence and trust for the sole purpose
of using the same for the sole benefit of Company Business.  Executive also acknowledges that such Trade
Secrets are valuable to Company, of a unique and special nature, and important
to Company in competing in the marketplace.


 


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During
and after the term of this Agreement (otherwise than in the performance of this
Agreement), without Company’s prior written consent, Executive shall not
divulge or use all or any of the Trade Secrets to or for any person or entity
except (i) for the benefit of Company and as necessary to perform
Executive’s services under this Agreement; and (ii) when required by law,
and then only after consultation with Company or unless such information is in
the public domain.  In the event that
Executive, becomes or is legally compelled (whether by deposition,
interrogatories, request for documents, subpoena, civil investigative demand or
similar process) to disclose any Trade Secrets, Executive shall provide Company
with prompt, prior written notice of such requirement so that Company may seek
a protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section.  Executive
agrees that Executive’s obligations under this Section 5.01 shall be
absolute and unconditional.


 


(b)                                 Breach.  Executive understands and agrees that
Executive’s employment with Company may be terminated if Executive breaches
this Agreement or in any way divulges such Trade Secrets.  Executive further understands and agrees that
Company may be irreparably harmed by any violation or threatened violation of
this Agreement and, therefore, Company may be entitled to injunctive relief to
enforce any of the provisions contained herein.


 


(c)                                  Non-Compete.  During the period of Executive’s employment,
Executive will not directly or indirectly either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any activity or business which Company shall determine in good
faith to be in competition in any substantial way with Company Business within
any metropolitan area in the United States or elsewhere in which Company is
then engaged in Company Business.  The
parties acknowledge that in California and some states post-employment
non-compete clauses may be generally unenforceable, but that other states and
jurisdictions permit such agreements. 
Executive hereby agrees that Executive will not directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any activity or business
which Company shall determine in good faith to be in competition in any
substantial way with Company Business as conducted at the effective date of
termination of Executive’s employment by Company for or a period of twelve (12)
months after the termination of Executive’s employment and that this Section will
be enforceable to the greatest extent of the law.


 


(d)                                 No Solicitation of Employees.  During Executive’s employment and for a
period of twelve (12) months after the termination of Executive’s employment,
Executive will not, either directly or indirectly, either alone or in concert
with others, solicit or entice or participate in the solicitation or attempt to
solicit or in any manner encourage employees of Company to leave Company or
work for anyone that is in competition in any substantial way with Company
Business (which in the case of the period following Executive’s termination,
shall mean Company Business as conducted as of the effective date of
termination of Executive’s employment with Company); provided, however, that
the public listing, advertising or posting of an available position shall not
constitute solicitation or an attempt to solicit hereunder and this subsection (d) shall
not preclude Executive from hiring an individual pursuant thereto.


 


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(e)                                  No Solicitation of Customers.  Executive will not during the course of
Executive’s employment, or for twelve (12) months thereafter, either directly
or indirectly call on, solicit, or take away, or attempt to call on, solicit or
take away any of Company’s customers on behalf of any business that is in
competition in any substantial way with Company.  Executive promises and agrees not to engage
in any unfair competition with Company. 
During Executive’s employment, Executive agrees not to plan or otherwise
take any preliminary steps, either alone or in concert with others, to set up
or engage in any business enterprise that would be in competition with Company
Business.  In the event of the
termination of Executive’s employment and for a period of twelve (12) months
thereafter, Executive will not accept any employment or engage in any
activities which Company shall determine in good faith to be competitive with
Company, if the fulfillment of the duties of the competitive employment or
activities would inherently require Executive to reveal Trade Secrets to which
Executive has access or learned during Executive’s employment on behalf of any
business that is in competition in any substantial way with Company.


 


(f)                                    Return of Company Property.  In the event of the termination of Executive’s
employment, Executive will deliver to Company all devices, records, sketches,
reports, proposals, files, customer lists, mailing or contact lists,
correspondence, computer tapes, discs and design and other document and data
storage and retrieval materials (and all copies, compilations and summaries
thereof), equipment, documents, duplicates, notes, drawings, specifications,
research tape or other electronic recordings, programs, data and other
materials or property of any nature belonging to Company or relating to Company
Business, and Executive will not take with Executive or allow a third party to
take, any of the foregoing or any reproduction of any of the foregoing.  Company property includes personal property,
made or compiled by Executive, in whole or in part and alone or with others, or
in any way coming into Executive’s possession concerning Company Business or
other affairs of Company or any of its affiliates.


 


(g)                                 Disclosure and Assignment of Rights.  (i)  Executive shall promptly disclose
and assign to Company and its affiliates or its nominee(s), to the maximum
extent permitted by Section 2870 of the California Labor Code, as it may
be hereafter amended from time to time, all right, title and interest of
Executive in and to any and all ideas, inventions, discoveries, secret
processes and methods and improvements, together with any and all patents that
may be issued thereon in the United States and in all foreign countries, which
Executive may invent, develop or improve, or cause to be invented, developed or
improved, during the term of this Agreement or which are (1) conceived and
developed during normal working hours, and (2) related to the scope of
Company Business.  As used in this
Agreement, the term “invent” includes “make”, “discover”, “develop”, “manufacture”
or “produce”, or any of them; “invention” includes the phrase “any new or
useful original art, machine, methods of manufacture, process, composition of
matter, design, or configuration of any kind”; “improvement” includes “discovery”
or “production”; and “patent” includes “Letters Patent” and “all the
extensions, renewals, modifications, improvements and reissues of such patents”.


 


(ii)                                  Executive
shall disclose immediately to duly authorized representatives of Company any
ideas, inventions, discoveries, secret processes and methods and improvements
covered by the provisions of paragraph (i) above, and execute all
documents reasonably required 


 


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in
connection with the application for an issuance of Letters Patent in the United
States and in any foreign country and the assignment thereof to Company and its
affiliates or its nominee(s).


 


SECTION 5.02 
Rights and Remedies Upon Breach.  If Executive breaches, or threatens to
breach, in any material respect any of the provisions of Section 5.01 hereof
(“Restrictive Covenants”), Company shall, in addition to all its other rights
hereunder and under applicable law and in equity, have the right to seek
specific enforcement of the Restrictive Covenants by any court having
jurisdiction, including, without limitation, the granting of a preliminary
injunction which may be granted without the necessity of proving damages or the
posting of a bond or other security, it being acknowledged that any such breach
or threatened breach may cause irreparable injury to Company and that money
damages may not provide an adequate remedy to Company.  In addition to and not in lieu of any other
remedy that Company may have pursuant to this Agreement or otherwise, in the
event of any breach of any provision of Section 5.01 during the period which
Executive is entitled to receive payments and benefits pursuant to Section
4.07, such period shall terminate as of the date of such breach and Executive
shall not thereafter be entitled to receive any salary or other payments or
benefits under this Agreement, including, but not limited to, any stock options
granted to Executive.


 


SECTION 5.03 
Severability and Modification of Covenants.  Company and Executive agree and acknowledge
that the duration, scope and geographic area of the Restrictive Covenants
described in this Section 5.01 are fair, reasonable and necessary in order to
protect the good will and other legitimate interests of Company, that adequate
consideration has been received by Executive for such obligations, and that
these obligations do not prevent Executive from earning a livelihood.  If any court of competent jurisdiction
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions.  If any court of
competent jurisdiction construes any of the Restrictive Covenants, or any part thereof,
to be unenforceable because of the duration or geographic scope of such
provision or otherwise, such provision shall be deemed amended to the minimum
extent required to make it enforceable and, in its reduced form, such provision
shall then be enforceable and enforced.


 


VI.                                CERTAIN AGREEMENTS


 


SECTION 6.01    (a)   Customers, Suppliers.  Executive does not have, and at any time
during the term of this Agreement shall not have, any employment with or any
direct or indirect interest in (as owner, partner, shareholder, employee,
director, officer, agent, consultant or otherwise) any customer of or supplier
to Company.


 


(b)                                 Certain Activities.  Executive during the term of this Agreement
shall not (i) give or agree to give, any gift or similar benefit of more
than nominal value to any customer, supplier, or governmental employee or
official or any other person who is or may be in a position to assist or hinder
Company in connection with any proposed transaction, which gift or similar
benefit, if not given or continued in the future, might adversely affect the
business or prospects of Company, (ii) use any corporate or other funds
for unlawful contributions, payments, gifts or entertainment, (iii) make
any unlawful expenditures relating to political activity to government 


 


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officials
or others, (iv) establish or maintain any unlawful or unrecorded funds in
violation of Section 30A of the Securities Exchange Act of 1934, as
amended, and (v) accept or receive any unlawful contributions, payments,
gifts, or expenditures.


 


VII.                            MISCELLANEOUS


 


SECTION 7.01  Notices.  Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed or faxed, or sent by certified, registered or
express mail, postage prepaid, and shall be deemed given when so delivered
personally, telegraphed, telexed or faxed, or if mailed, two (2) days
after the date of mailing, as follows:


 


	
   

  	
  (i)

  	
  If
  to Company, addressed to it at:

  	
  InSight
  Health Services Corp.

  
	
   

  	
   

  	
   

  	
  26250
  Enterprise Court, Suite 100

  
	
   

  	
   

  	
   

  	
  Lake
  Forest, CA 92630

  
	
   

  	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (949) 462-3703

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  If
  to Parent, addressed to it at:

  	
  InSight
  Health Services Holdings Corp.

  
	
   

  	
   

  	
   

  	
  c/o
  J.W. Childs Associates, L.P.

  
	
   

  	
   

  	
   

  	
  111
  Huntington Avenue, Suite 2900

  
	
   

  	
   

  	
   

  	
  Boston,
  MA 02199

  
	
   

  	
   

  	
   

  	
  Attention:
  Edward D. Yun

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (617) 753-1101

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  copies to:

  	
  The
  Halifax Group, L.L.C.

  
	
   

  	
   

  	
   

  	
  1133
  Connecticut Avenue, N.W., Suite 700

  
	
   

  	
   

  	
   

  	
  Washington,
  D.C. 20036

  
	
   

  	
   

  	
   

  	
  Attention:
  David Dupree

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (202) 296-7133

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Kaye
  Scholer LLP

  
	
   

  	
   

  	
   

  	
  425
  Park Avenue

  
	
   

  	
   

  	
   

  	
  New
  York, NY 10022

  
	
   

  	
   

  	
   

  	
  Attention:
  Stephen C. Koval, Esq.

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (212) 836-8689

  



 


(iii)                               If
to Executive, to the address or facsimile set forth below Executive’s signature
hereto.  Any party hereto may, by notice
to the other, change its address for receipt of notices hereunder.


 


SECTION 7.02  Entire Agreement.  This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.


 


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SECTION 7.03  Waivers and Amendments.  This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, amended, modified, superseded, canceled, renewed or extended,
only by a written instrument signed by Executive, Company and Parent.  No waiver of any provision of this Agreement
shall be deemed to be a waiver of any other provision, whether or not
similar.  No such waiver shall constitute
a continuing waiver.  No delay on the
part of either party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of either party
of any right, power or privilege hereunder, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.


 


SECTION 7.04  Assignment.  This Agreement is personal to Executive, and
Executive’s rights and obligations hereunder may not be assigned by
Executive.  Company may assign this
Agreement and its rights, together with its obligations, hereunder (i) in
connection with any sale, transfer or other disposition of all or substantially
all of its assets or business(s), whether by merger, consolidation or
otherwise; or (ii) to any wholly owned subsidiary of Company, provided
that Company shall remain liable for all of its obligations under this
Agreement.


 


SECTION 7.05  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.


 


SECTION 7.06  Headings.  The article and section headings in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.


 


SECTION 7.07  Number.  Unless the context of this Agreement
otherwise requires, words using the singular or plural number will also include
the plural or singular number.


 


SECTION 7.08  Governing Law.  This Agreement shall be governed by the laws
of the State of California, without regard to any conflicts of law principles
thereof that would call for the application of the laws of any other
jurisdiction.  Subject to Section 7.11
below, any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against either of
the parties in the courts of the State of California, or if it has or can
acquire jurisdiction, in the United States District Court for the Southern
District of California, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.  Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world,
whether within or without the State of California.


 


SECTION 7.09  Expenses.  Should either party institute an action to
enforce this Agreement or any provision hereof, or for damages by reason of any
alleged breach of this Agreement or any provisions hereof, Executive shall be
entitled to receive from Company Executive’s reasonable travel and living
expenses, incurred by Executive in connection with preparation for and
participation in any proceeding relating to the action if Executive is the
prevailing party or such portion thereof as the court may award.


 


SECTION 7.10  Effective Date.  This Agreement shall be effective as of the
date hereof.


 


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SECTION 7.11  
(a)   Resolution of Disputes.   Executive and Company mutually
agree and understand that as an inducement for Company to enter into this
Agreement, Executive and Company agree and consent to the resolution by
arbitration of all claims or controversies, past, present or future, whether
arising out of the employment relationship (or its termination) or relating to
this Agreement that Company may have against Executive or that Executive may
have against Company or against its officers, directors, employees or agents in
their capacity as such or otherwise. The only claims that are arbitrable are those
that, in the absence of this arbitration provision, would have been justiciable
under applicable state or federal law. The claims covered by this arbitration
provision, include, but are not limited to, claims for wages or other
compensation due; claims for breach of any contract or covenant (express or
implied); tort claims; claims for discrimination, retaliation or harassment
(including, but not limited to, race, sex, sexual orientation, religion,
national origin, age, marital status, or medical condition, handicap or
disability); claims for benefits (except claims under an employee benefit or
pension plan that either (i) specifies that its claims procedure shall
culminate in an arbitration procedure different from this one, or (ii) is
underwritten by a commercial insurer which decides the claims); and claims for
violation of any federal, state, or other governmental law, statute, regulation
or ordinance, except claims excluded in Section 7.10 (b) below.


 


Except
as otherwise provided in this arbitration provision, both Company and Executive
agree that neither of them shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination)
in any way related to any claim covered by this arbitration provision.


 


(b)                                 Claims Excluded From Arbitration.
Claims Executive may have for workers’ compensation or unemployment
compensation benefits are not covered by this arbitration provision. Also not
covered are claims by Company for injunctive and/or other equitable relief,
including but not limited to those for unfair competition and/or the use and/or
unauthorized disclosure of Trade Secrets or confidential information, as to
which Executive understands and agrees that Company may seek and obtain relief
from a court of competent jurisdiction.


 


(c)                                  Arbitration Procedures.
Executive and Company understand and agree that the arbitration will take place
in Orange County, California, in accordance with the California Employment
Dispute Resolution Rules of the American Arbitration Association then in
effect in the State of California, and judgment upon such award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The
decision of the arbitrator(s) shall 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.


 


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IN
WITNESS WHEREOF, the parties have executed this Executive Employment Agreement
as of the date first above written.


 


	
   

  	
  COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSIGHT
  HEALTH SERVICES CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bret W. Jorgensen

  	
   

  	
   

  	 

	
   

  	
   

  	
  Name: 
  Bret W. Jorgensen

  	
   

  	 

	
   

  	
   

  	
  Title: 
  President and Chief Executive

  	
   

  	 

	
   

  	
   

  	
  Officer

  	
   

  	 

	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Louis E. Hallman, III

  	
   

  
	
   

  	
  Name:
  Louis E. Hallman, III

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  and Facsimile Number:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  118
  Brookdale Place

  	
   

  
	
   

  	
  Solana
  Beach, CA 92075

  	
   

  
	
   

  	
  Fax:
  (858) 755-6485

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSIGHT
  HEALTH SERVICES 

  HOLDINGS CORP.

  
	
   

  	
  (solely
  for the purpose of Section 3.07)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bret W. Jorgensen

  	
   

  
	
   

  	
   

  	
  Name: 
  Bret W. Jorgensen

  	
   

  
	
   

  	
   

  	
  Title: 
  President and Chief Executive

  	
   

  
	
   

  	
   

  	
  Officer

  	
   

  
									



 


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EXHIBIT A


 


STOCK OPTION AGREEMENT


 


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