S-4

Registration No. 333-[            ]

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

InSight Health Services Corp.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 8071
(Primary Standard Industrial
Classification Code Number) 33-0702770
(I.R.S. Employer
Identification No.)

For information regarding additional registrants, see the “Table of Additional Registrants”

26250 Enterprise Court

Suite 100

Lake Forest, California 92630

(949) 282-6000

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Marilyn U. MacNiven-Young, Esq.

Executive Vice President and General Counsel

26250 Enterprise Court

Suite 100

Lake Forest, California 92630

(949) 282-6000

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Stephen C. Koval, Esq.

Kaye Scholer LLP

425 Park Avenue

New York, New York 10022

(212) 836-8000

     Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the proposed exchange offer described herein have been satisfied or waived.

     If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

     If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o                            

     If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o                            

CALCULATION OF REGISTRATION FEE

		Proposed Maximum
Title of Each Class of	Amount to	Offering Price	Proposed Maximum	Amount of
Securities to be Registered	be Registered	Per Unit	Aggregate Offering Price	Registration Fee(2)
Senior Secured Floating Rate Notes due 2011	$300,000,000	100%	$300,000,000(1)	$35,310
Guarantees of Senior Secured Floating Rate Notes due 2011	—	—	—	(3)

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933, as amended.
(2)	Pursuant to Rule 457(p), the total dollar amount of the fee set forth below is offset against a fee previously paid to the Securities and Exchange Commission by InSight Health Services Holdings Corp. (“InSight Holdings”). InSight Holdings is the parent corporation of the registrant and owns 100% of the registrant’s outstanding voting securities. InSight Holdings previously paid $85,522.50 in connection with a registration statement on Form S-1 (Registration Number 333-116751), which was filed on June 23, 2004 and withdrawn on August 16, 2004. On November 3, 2004, the registrant filed a Form S-4 registration statement, which later became effective, and offset $3,167.50 of InSight Holdings’ balance. As a result of this filing, InSight Holdings will have a balance of $47,045 to offset against future filings.
(3)	Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

      Set forth below is certain information regarding each of the additional registrants. For each such registrant, its primary standard industrial classification code number is 8071, its principal executive office is c/o InSight Health Services Holdings Corp., 26250 Enterprise Court, Suite 100, Lake Forest, CA 92630 and its telephone number is (949) 282-6000.

			I.R.S. Employer
Exact Name of Registrant Guarantor	State or Other Jurisdiction of		Identification
as Specified in its Charter	Incorporation or Organization		Number
InSight Health Services Holdings Corp.		Delaware		04-3570028
InSight Health Corp.		Delaware		52-1278857
Signal Medical Services, Inc.		Delaware		33-0802413
Open MRI, Inc.		Delaware		94-3251529
Maxum Health Corp.		Delaware		75-2287276
Radiosurgery Centers, Inc.		Delaware		33-0522445
Maxum Health Services Corp.		Delaware		75-2135957
MRI Associates, L.P.		Indiana		35-1881106
Maxum Health Services of North Texas, Inc.		Texas		75-2435797
Maxum Health Services of Dallas, Inc.		Texas		75-2615132
NDDC, Inc.		Texas		75-2407830
Diagnostic Solutions Corp.		Delaware		75-2565249
Wilkes-Barre Imaging, L.L.C		Pennsylvania		52-2238781
Orange County Regional PET Center — Irvine, LLC		California		91-2070190
San Fernando Valley Regional PET Center, LLC		California		91-2070191
Valencia MRI, LLC		California		91-2070193
Parkway Imaging Center, LLC		Nevada		33-0872858
InSight Imaging Services Corp.		Delaware		81-0648120
Comprehensive Medical Imaging, Inc.		Delaware		95-4662473
Comprehensive Medical Imaging Centers, Inc.		Delaware		95-4666946
Comprehensive Medical Imaging — Biltmore, Inc.		Delaware		95-4800644
Comprehensive OPEN MRI — East Mesa, Inc.		Delaware		95-4803601
TME Arizona, Inc.		Texas		76-0539851
Comprehensive Medical Imaging — Fremont, Inc.		Delaware		95-4808736
Comprehensive Medical Imaging — San Francisco, Inc.		Delaware		95-4808722
Comprehensive OPEN MRI — Garland, Inc.		Delaware		77-0547383
IMI of Arlington, Inc.		Delaware		52-2081524
Comprehensive Medical Imaging — Fairfax, Inc.		Delaware		95-4666947
IMI of Kansas City, Inc.		Delaware		77-0477240
Comprehensive Medical Imaging — Bakersfield, Inc.		Delaware		77-0512185
Comprehensive OPEN MRI — Carmichael/ Folsom, LLC		California		77-0505765
Syncor Diagnostics Sacramento, LLC		California		91-1838444
Syncor Diagnostics Bakersfield, LLC		California		77-0469131
Phoenix Regional PET Center — Thunderbird, LLC		Arizona		77-0578521
Mesa MRI		Texas		76-0316425
Mountain View MRI		Texas		86-0651713
Los Gatos Imaging Center		Texas		94-3040209
Woodbridge MRI		Texas		54-1623177
Jefferson MRI — Bala		Texas		76-0300719
Jefferson MRI		Texas		23-2579343

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated October 28, 2005

PRELIMINARY PROSPECTUS

InSight Health Services Corp.

OFFER TO EXCHANGE

$300,000,000 SENIOR SECURED FLOATING RATE NOTES DUE 2011

FOR $300,000,000 SENIOR SECURED FLOATING RATE NOTES DUE 2011,

WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

      We are offering to exchange all of our $300,000,000 in outstanding senior secured floating rate notes due 2011 issued on September 22, 2005, which we refer to as the initial notes, for $300,000,000 in registered senior secured floating rate notes due 2011, which we refer to as the exchange notes. The initial notes and the exchange notes are collectively referred to as the notes. The terms of the exchange notes are identical to the terms of the initial notes except that the exchange notes are registered under the Securities Act of 1933 as amended, or Securities Act, and therefore are freely transferable, subject to certain conditions. The exchange notes evidence the same indebtedness as the initial notes.

      You should consider the following:

•  Our offer to exchange initial notes for exchange notes expires at 5:00 p.m., New York City time, on                     , 2005, unless we extend the offer.

•  If you fail to tender your initial notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected.

•  You may withdraw your tender of initial notes at any time prior to the expiration of the exchange offer.

•  No public market currently exists for the exchange notes. We do not intend to apply for listing of the exchange notes on any securities exchange or for inclusion of the exchange notes in any automated quotation system.

•  The exchange offer is subject to customary conditions, including that it does not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission, or SEC.

•  We will not receive any proceeds from the exchange offer.

•  If the holder of the notes is a broker-dealer that will receive exchange notes for its own account in exchange for initial notes that were acquired as a result of market-making activities or other trading activities, it will be required to acknowledge that it will deliver this prospectus, as it may be amended or supplemented, in connection with any resale of such exchange notes.

      Please refer to “Risk Factors” beginning on page 11 of this prospectus for a description of the risks you should consider before participating in the exchange offer.

      Neither the SEC nor any other securities commission or similar authority has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

      We have not authorized anyone to give any information or represent anything to you other than the information contained in this prospectus. You must not rely on any unauthorized information or representations.

The date of this prospectus is                     ,2005.

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY		1
RISK FACTORS		11
THE EXCHANGE OFFER		24
USE OF PROCEEDS		31
SELECTED CONSOLIDATED HISTORICAL FINANCIAL INFORMATION		32
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		35
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		51
BUSINESS		52
MANAGEMENT		62
PRINCIPAL STOCKHOLDERS		69
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		72
DESCRIPTION OF NOTES		73
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS		117
PLAN OF DISTRIBUTION		120
LEGAL MATTERS		121
EXPERTS		121
WHERE YOU CAN FIND MORE INFORMATION		121
INDEX TO FINANCIAL STATEMENTS		F-1
EX-3.77: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT
EX-3.78: SECOND AMENDMENT TO THE JOINT VENTURE AGREEMENT
EX-3.79: FIRST AMENDMENT TO THE BY-LAWS
EX-3.80: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT
EX-3.81: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT
EX-3.82: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT
EX-3.83: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT
EX-4.6: INDENTURE
EX-4.7: SECURITY AGREEMENT
EX-4.8: PLEDGE AGREEMENT
EX-4.9: COLLATERAL AGENCY AGREEMENT
EX-4.10: REGISTRATION RIGHTS AGREEMENT
EX-5.1: OPINION OF KAYE SCHOLER LLP
EX-10.1: AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
EX-12.1: RATIO OF EARNINGS TO FIXED CHARGES
EX-21.1: SUBSIDIARIES
EX-23.1: CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-25.1: STATEMENT OF ELIGIBILITY ON FORM T-1
EX-99.1: FORM OF LETTER OF TRANSMITTAL
EX-99.2: FORM OF NOTICE OF GUARANTEED DELIVERY

MARKET, RANKING AND OTHER DATA

      The data included in this prospectus regarding markets and ranking, including the size of certain markets and our position and the position of our competitors within these markets, are based on independent industry publications, reports of government agencies or other published industry sources and our estimates based on our management’s knowledge and experience in the markets in which we operate. Our estimates have been based on information obtained from our customers, suppliers, trade and business organizations and other contacts in the markets in which we operate. We believe these estimates to be accurate as of the date of this prospectus. However, this information may prove to be inaccurate because of the method by which we obtained some of the data for our estimates or because this information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in a survey of market size. As a result, you should be aware that market, ranking and other similar data included in this prospectus, and estimates and beliefs based on that data, may not be reliable.

PRESENTATION OF FINANCIAL INFORMATION

      We refer to “EBITDA” in various places in this prospectus. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA has been included because we believe that it is a useful tool for us and our investors to measure our ability to provide cash flows to meet debt service, capital expenditure and working capital requirements. EBITDA should not be considered an alternative to, or more meaningful than, income from company operations or other traditional indicators of operating performance and cash flow from operating activities determined in accordance with accounting principles generally accepted in the United States. We present the discussion of EBITDA because covenants in the indenture governing our existing unsecured senior subordinated notes, the indenture

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governing the notes and the credit agreement relating to our amended revolving credit facility contain ratios based on this measure. While EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Please see our reconciliation of net cash provided by operating activities to EBITDA as it appears under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which is in this prospectus.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus contains forward-looking statements which reflect our current views with respect to future events and financial performance. You should not rely on forward-looking statements in this prospectus. We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue” and similar expressions to identify these forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them, but we can give no assurance that our expectations, beliefs and projections will be realized. Accordingly, a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements we make in this prospectus are set forth in this prospectus, including the factors identified in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the following:

•  limitations and delays in reimbursement by third-party payors;

•  contract renewals and financial stability of customers;

•  conditions within the healthcare environment;

•  adverse utilization trends for certain diagnostic imaging procedures;

•  our ability to successfully integrate acquisitions;

•  competition in our markets;

•  the potential for rapid and significant changes in technology and their effect on our operations;

•  operating, legal, governmental and regulatory risks; and

•  economic, political and competitive forces affecting our business.

      If any of these risks or uncertainties materializes, or if any of our underlying assumptions is incorrect, our actual results may differ significantly from the results that we express in or imply by any of our forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether a change results from new information, future events or otherwise.

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PROSPECTUS SUMMARY

      This summary highlights information contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. For a more complete understanding of this offering, we encourage you to read this entire prospectus, including the section entitled “Risk Factors,” and the documents referred to under the heading “Where You Can Find More Information” prior to deciding whether to participate in the exchange offer. The section of this prospectus entitled “Description of Notes” contains more detailed information regarding the terms of the exchange notes.

      In this prospectus, the term “Holdings” refers to InSight Health Services Holdings Corp., a Delaware corporation, the term “InSight” refers to InSight Health Services Corp., a Delaware corporation and wholly-owned subsidiary of Holdings, and the terms “the Company,” “our company,” “we,” “us” and “our” refer to Holdings and its consolidated subsidiaries, including InSight, unless stated or the context otherwise requires.

General

      On September 22, 2005, we issued, through InSight, an aggregate principal amount of $300 million of senior secured floating rate notes due 2011 in an offering exempt from registration under the Securities Act. We refer to the notes issued in September 2005 as the “initial notes.” The term “exchange notes” refers to the senior secured floating notes due 2011 newly offered under this prospectus. The term “notes” refers to both the initial notes and exchange notes.

      In connection with the private offering of the initial notes, we entered into a registration rights agreement. Under the registration rights agreement, we are obligated, among other things, to deliver to you this prospectus and complete the exchange offer. This exchange offer allows you to exchange your initial notes for newly registered exchange notes with substantially similar terms. If the exchange offer is not completed as contemplated in the registration rights agreement, we will be required to pay liquidated damages to holders of the initial notes, and to holders of the exchange notes under limited circumstances. You should read the registration rights agreement in its entirety for more information. You should refer to the section in this prospectus entitled “Where You Can Find More Information” for information on how to obtain a copy of the registration rights agreement.

Our Business

Overview

      We are a nationwide provider of diagnostic imaging services through our integrated network of fixed-site centers and mobile facilities which are focused in targeted regions throughout the United States. Our services include magnetic resonance imaging, or MRI, positron emission tomography, or PET, computed tomography, or CT, and other technologies. These services are non-invasive techniques that generate representations of internal anatomy on film or digital media which are used by physicians for the diagnosis and assessment of diseases and disorders. Our historical revenues and EBITDA for fiscal 2005 were approximately $316.9 million and approximately $98.3 million, respectively.

      Our large integrated network of fixed-site centers and mobile facilities allows us to provide a full continuum of imaging services to better meet the needs of our customers, including healthcare providers, such as hospitals and physicians, and payors, such as managed care organizations, Medicare, Medicaid and insurance companies. Our fixed-site centers include freestanding centers and joint ventures with hospitals and radiology groups. Physicians refer patients to our fixed-site centers based on our service reputation, advanced equipment, breadth of managed care contracts and convenient locations. Our mobile facilities provide hospitals and physician groups access to imaging technologies when they lack either the resources or patient volume to provide their own full-time imaging services or require incremental capacity. We enter into agreements with radiologists to provide professional services, which include supervision and

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interpretation of radiological procedures and quality assurance. We do not engage in the practice of medicine.

      MRI, PET and PET/ CT services have experienced substantial procedure volume growth in recent years, which is anticipated to continue. We believe we are well positioned to capitalize on the growth in the diagnostic imaging industry which is being driven by an aging population, increasing acceptance of diagnostic imaging and expanding applications of diagnostic imaging technologies.

      Historically, we pursued a strategy that was largely focused on growth through the acquisition of imaging businesses in various parts of the country. We plan to refocus our strategic efforts away from acquisition growth to organic growth and will look to leverage our presence and advanced imaging systems in our targeted regions. We also plan to drive operational efficiencies, improve utilization of our imaging systems and enhance relationships with provider partners, including radiologists and hospitals, and with the payor community.

Our Strengths

      Large Integrated Network. Our network of imaging facilities and business model provide our customers with a full continuum of imaging services using multiple technologies. As of June 30, 2005, our network consisted of 120 fixed-site centers and 115 mobile facilities within our targeted regions.

      Targeted Regions with Significant Market Presence. We have developed a significant presence in California, Arizona, New England, the Carolinas, Florida and the Mid-Atlantic states. Our regionally focused network enhances our ability to serve our hospital customers, broadens our physician referral base and attracts additional managed care customers.

      Diverse Base of Revenues. We serve a diverse portfolio of customers in 34 states. We have more than 1,000 contracts with managed care organizations and more than 300 contracts with hospitals and physician groups. During fiscal 2005, no single customer or fixed-site center accounted for more than 5% of our total revenues.

      Technologically Advanced Diagnostic Imaging Equipment. As of June 30, 2005, we owned or leased 276 diagnostic imaging and treatment systems, of which 170 are conventional MRI systems, 41 are Open MRI systems, 33 are CT systems, 19 are PET systems, seven are PET/ CT systems, four are lithotripters, one is a catheterization lab and one is a Gamma Knife. Of our 170 conventional MRI systems, 90% have magnet strength of 1.5 Tesla or higher and 10% have magnet strength of 1.0 Tesla. Currently, the industry standard magnet strength for fixed and mobile MRI systems is 1.5 Tesla.

      Robust Information Technology System. We have developed a proprietary information system which we refer to as InSight Radiology Information System, or IRIS. IRIS provides real-time support for our front and back office operations, including scheduling and administration of imaging procedures and billing and collections across both our fixed-site centers and mobile facilities. By implementing IRIS, we have achieved logistical and cost efficiencies as well as expeditious integration of acquisitions.

      Experienced Management Team. Our senior management team has an average of 16 years of experience in the healthcare services industry. Our senior executives have extensive experience in managing the expansion of healthcare service companies through internal growth and acquisitions.

Our Equity Sponsors

      J.W. Childs Equity Partners II, L.P., The Halifax Group, L.L.C. and their affiliates, beneficially own approximately 99.8% of the common stock of Holdings as of September 30, 2005. Six of our seven directors are executives with these firms.

      J.W. Childs Equity Partners II, L.P. is an affiliate of J.W. Childs Associates, L.P. J.W. Childs Associates, L.P. is a leading private equity firm based in Boston, Massachusetts, specializing in leveraged buyouts and recapitalizations of middle-market growth companies in partnership with company management through J.W. Childs Equity Partners II, L.P. and other funds it sponsors. Since 1995, the

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firm has invested in 36 companies with a total transaction value of over $8.0 billion. J.W. Childs Associates, L.P. presently manages $3.4 billion of equity capital from leading financial institutions, pension funds, insurance companies and university endowments. Its principal executive offices are located at 111 Huntington Avenue, Suite 2900, Boston, Massachusetts 02199. Each of J.W. Childs Associates, L.P. and J.W. Childs Equity Partners II, L.P. is a Delaware limited partnership.

      The Halifax Group, L.L.C. is a private equity investment partnership with approximately $330 million of capital under management between two investment funds. With primary offices in Washington, D.C. and Dallas, Texas, Halifax focuses on management-led recapitalization and leveraged buyouts in middle-market growth companies across a variety of industries. The Halifax Group, L.L.C. is a Delaware limited liability company.

Recent Developments

Executive Leadership Changes

      On July 1, 2005, Bret W. Jorgensen, 46, was appointed our President and Chief Executive Officer and a director of InSight and Holdings. Michael N. Cannizzaro, our President and Chief Executive Officer since his appointment in August 2004, resigned from these positions as of July 1, 2005 but remains as our Chairman of the Board. Mr. Cannizzaro is an Operating Partner of J.W. Childs Associates, L.P.

      On August 10, 2005, Louis E. Hallman, III, 46, was appointed InSight’s Executive Vice President and Chief Strategy Officer. In this role, Mr. Hallman is responsible for our long-term strategic planning and development efforts.

      On September 25, 2005, Donald F. Hankus, 44, was appointed InSight’s Executive Vice President and Chief Information Officer. Mr. Hankus is responsible for our management information system maintenance and development.

Hurricanes Katrina and Rita

      Although we have no fixed-site centers in the areas directly affected by Hurricanes Katrina and Rita, the storms devastated many areas in parts of Louisiana, Mississippi and other areas of the Gulf Coast. We were able to relocate our mobile facilities prior to Katrina’s and Rita’s arrival. Some of our mobile customers in the region were directly hit by Katrina and continue the process of recovery. While it is not yet clear how long it will take for these customers to be fully operational, we expect that their situation will improve over the next six to twelve months and will not have a material adverse effect on our business. We are still assessing the long-term impact of Katrina, and currently estimate an initial storm related revenue loss of approximately $100,000. Additionally, we expect a decline of approximately $5,000 in revenues per week while the affected mobile customers recover. We intend to work with these customers as well as other customers in the surrounding areas to mitigate this decline in revenues.

Ratio of Earnings to Fixed Charges

      The following table sets forth our ratio of earnings to fixed charges for the periods indicated:

						Holdings
	InSight (Predecessor)
																	Pro forma
				Period from													for Year
	Year Ended			July 1 to		Years Ended June 30,											Ended
	June 30,			October 17,													June 30,
	2001			2001		2002			2003			2004			2005		2005
Ratio of earnings to fixed charges		1.6	x		—		1.0	x		1.2	x		1.1	x		—		—

      The ratio of earnings to fixed charges is unaudited for all periods presented. For purpose of calculating this ratio, earnings consist of net income (loss) plus income taxes and fixed charges. Fixed charges consist of interest expense and the estimated portion of rental expense deemed a reasonable approximation of this

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interest factor. For the year ended June 30, 2005 on an actual and pro forma basis to give pro forma affect to the offering of the initial notes as if it had been completed an July 1, 2004, we had a deficiency of earnings to fixed charges of approximately $12.1 million and $13.7 million, respectively. On October 17, 2001, Holdings acquired InSight pursuant to an agreement and plan of merger dated June 29, 2001, as amended. Holdings did not have any operating activities until October 17, 2001. The ratio of earnings to fixed charges for the year ended June 30, 2002 reflects the results for the entire fiscal year 2002 and does not include the results of operations of InSight from July 1, 2001 to October 17, 2001. For the period from July 1 to October 17, 2001, InSight had a deficiency of earnings to fixed charges of approximately $7.0 million.

Our Corporate Information

      Our principal executive office is located at 26250 Enterprise Court, Suite 100, Lake Forest, California 92630, and our telephone number is (949) 282-6000. Our internet address is www.insighthealth.com. www.insighthealth.com is a textual reference only, meaning that the information contained on the website is not part of this prospectus and is not incorporated in this prospectus by reference.

Summary of the Exchange Offer

The Initial Offering of Initial Notes	We issued the initial notes on September 22, 2005 to Banc of America Securities LLC and CIBC World Markets Corp., which are referred to in this prospectus as the “initial purchasers.” The initial purchasers subsequently resold the initial notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act or pursuant to offers and sales to non-U.S. persons that occurred outside the United States within the meaning of Regulation S under the Securities Act.
The Exchange Offer	We are offering to exchange your initial notes for exchange notes, which have been registered under the Securities Act. In order to be exchanged, an outstanding note must be properly tendered and accepted. You may tender outstanding notes only in denominations of $1,000 and multiples of $1,000. As of the date of this prospectus, $300.0 million in aggregate principal amount of initial notes is outstanding. All initial notes that are validly tendered and not validly withdrawn will be exchanged. We will issue exchange notes promptly after the expiration of the exchange offer.
Resales	We believe that the exchange notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act provided that:
	• the exchange notes are being acquired in the ordinary course of your business;
	• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes issued to you in the exchange offer; and
	• you are not an affiliate of ours.
	If any of these conditions is not satisfied and you transfer any exchange notes issued to you in the exchange offer without

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	delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your exchange notes from these requirements, you may incur liability under the Securities Act. We will not assume, nor will we indemnify you against, any such liability.
	Each broker-dealer that is issued exchange notes in the exchange offer for its own account in exchange for initial notes that were acquired by that broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the exchange notes. A broker-dealer may use this prospectus for an offer to resell, resale or other transfer of the exchange notes issued to it in the exchange offer.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time,                     , 2005, unless we decide to extend the expiration date.
Conditions to the Exchange Offer	The exchange offer is subject to customary conditions, including that it does not violate applicable law or any applicable interpretation of the staff of the SEC. The exchange offer is not conditioned upon any minimum principal amount of initial notes being tendered for exchange. For additional information, see the section of this prospectus entitled “The Exchange Offer — Conditions.”
Procedures for Tendering Initial Notes	If you wish to tender your initial notes for exchange in this exchange offer, you must transmit to the exchange agent on or before the expiration date either:
	• an original or a facsimile of a properly completed and duly executed letter of transmittal, which accompanies this prospectus, together with your initial notes and any other documentation required by the letter of transmittal, at the address provided on the cover page of the letter of transmittal; or
	• if the initial notes you own (i) are held of record by The Depositary Trust Company, or DTC, (ii) are in book-entry form and (iii) you are making delivery by book-entry transfer, a computer-generated message transmitted by means of the Automated Tender Offer Program System of DTC, or ATOP, in which you acknowledge and agree to be bound by the terms of the letter of transmittal and which, when received by the exchange agent, forms a part of a confirmation of book-entry transfer. As part of the book-entry transfer, DTC will facilitate the exchange of your initial notes and update your account to reflect the issuance of the exchange notes to you. ATOP allows you to electronically transmit your acceptance of the exchange offer to DTC instead of physically completing and delivering a letter of transmittal to the exchange agent. In addition, you must deliver to the exchange agent on or before the expiration date a timely confirmation of book-entry transfer of your initial notes into the account of the notes

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	exchange agent at DTC. If you cannot satisfy either of these procedures on a timely basis, then you should comply with the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures	If you wish to tender your initial notes and time will not permit the documents required by the letter of transmittal to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, you must tender your initial notes according to the guaranteed delivery procedures described in the section of this prospectus entitled “The Exchange Offer — Guaranteed Delivery Procedures.”
Special Procedures for Beneficial Owners	If you are the beneficial owner of book-entry interests and your name does not appear on a security position listing of DTC as the holder of the book-entry interests or if you are a beneficial owner of initial notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the book-entry interest or initial notes in the exchange offer, you should contact the person in whose name your book-entry interests or initial notes are registered promptly and instruct that person to tender on your behalf.
Acceptance of Initial Notes	Subject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all initial notes which are validly tendered in the exchange offer and not withdrawn before 5:00 p.m., New York City time, on                     , 2005.
Withdrawal Rights	You may withdraw the tender of your initial notes at any time prior to 5:00 p.m., New York City time on                     , 2005.
Consequences of Failure to Exchange Initial Notes	If you do not exchange your initial notes for exchange notes, your initial notes will continue to be subject to restrictions on transfer. In general, the initial notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.
Federal Income Tax Considerations	Based on the advice of counsel, the exchange of initial notes will not be a taxable event for U.S. federal income tax purposes.
Use of Proceeds	We will not receive any proceeds from the issuance of exchange notes. We will pay all of our expenses incident to the exchange offer.
Registration Rights Agreement	Simultaneously with the issuance of the initial notes, we entered into a registration rights agreement with the initial purchasers. The exchange offer is intended to satisfy our obligations under the registration rights agreement.
Exchange Agent	U.S. Bank National Association, the trustee under the indenture, is serving as the exchange agent in connection with the exchange offer.

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Description of Exchange Notes

      The form and terms of the exchange notes are the same as the form and terms of the initial notes, except that the exchange notes will be registered under the Securities Act. As a result, the exchange notes will not bear legends restricting their transfer and will not contain the registration rights and liquidated damage provisions contained in the initial notes. The exchange notes represent the same debt as the initial notes. Both the initial notes and the exchange notes are governed by the same indenture. The summary below describes the principal terms of the exchange notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The section of this prospectus entitled “Description of Notes” contains a more detailed description of the terms and conditions of the exchange notes.

Issuer	InSight Health Services Corp., a Delaware corporation.
Securities	$300.0 million aggregate principal amount of senior secured floating rate notes due 2011.
Maturity	November 1, 2011.
Interest	Interest on the notes will accrue at the rate per annum, reset quarterly, equal to LIBOR plus 5.25%.
Interest Payment Dates	Each February 1, May 1, August 1 and November 1, commencing on February 1, 2006.
Guarantees	The notes will be unconditionally guaranteed on a senior secured basis by Holdings and each of InSight’s existing and future domestic wholly owned subsidiaries, which are collectively referred to in this prospectus as the guarantors.
Ranking	The notes and the related guarantees are general senior secured obligations. Accordingly, they will rank:
	• equally in right of payment with all existing and any future senior indebtedness that we and the guarantors may incur;
	• effectively senior to our and the guarantors’ obligations under our amended revolving credit facility (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity”) and unsecured obligations to the extent of the value of the collateral securing the notes and the guarantees;
	• effectively subordinated to our obligations under our amended revolving credit facility, other indebtedness and guarantees of those obligations by the guarantors to the extent of the value of the collateral in which the holders of those obligations have a lien;
	• senior to our existing 97/8% unsecured senior subordinated notes due 2011 and any future subordinated indebtedness that we and the guarantors may incur; and
	• effectively subordinated to any obligations, including trade payables, of any of our subsidiaries that do not guarantee the notes.
Collateral	The notes and the guarantees will be secured by a first priority lien on substantially all of our and the guarantors’ existing and future tangible and intangible personal property including,

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	without limitation, equipment, certain contracts and intellectual property, but will not be secured by a lien on our real property, accounts receivable and related assets, cash accounts related to receivables and certain other assets. In addition, the notes and the guarantees will be secured by a portion of our stock and the stock or other equity interests of our subsidiaries. See “Description of Notes — Collateral.” The lenders under our amended revolving credit facility have a security interest in our accounts receivables and related assets and cash accounts related to receivables.
Optional Redemption	On or after November 1, 2006, we may redeem some or all of the notes at any time at the redemption prices described in the section entitled “Description of Notes — Optional Redemption.”
Mandatory Offer to Repurchase	If we or any of our restricted subsidiaries sell certain assets or if Holdings or we experience specific kinds of change of control, we must offer to purchase the notes at the prices set forth in the section of this prospectus entitled “Description of Notes — Repurchase at the Option of Holders.”
Basic Covenants of the Indenture	The indenture governing the notes restricts our ability and the ability of our restricted subsidiaries to:
	• borrow money;
	• pay dividends on or redeem or repurchase capital stock;
	• make investments;
	• create liens;
	• use assets as security in other transactions;
	• sell certain assets or merge with or into other companies;
	• enter into certain transactions with affiliates;
	• sell stock in our subsidiaries; and
	• restrict dividends or payments by us.
	For more details, see the section entitled “Description of Notes — Certain Covenants.”
Absence of a Public Market	There is no public market for the notes. We do not intend to apply for the notes to be listed on any securities exchange or to arrange for any quotation system to quote them. Accordingly, if an active public market does not develop, the market price and liquidity of the notes may be adversely affected.
Risk Factors	See the section entitled “Risk Factors” for a description of certain of the risks you should consider prior to participating in the exchange offer.

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Summary Consolidated Historical Financial Data

      The following table sets forth certain summary consolidated historical information of our company. Historical financial information (exclusive of Adjusted EBITDA) as of and for the fiscal years ended June 30, 2002, 2003, 2004 and 2005 is derived from our audited consolidated financial statements. Historical financial information (exclusive of Adjusted EBITDA) as of and for the fiscal year ended June 30, 2001 and for the period from July 1, 2001 to October 17, 2001 is derived from the audited consolidated financial statements of InSight. See footnote (1) below. The consolidated financial statements of InSight for the fiscal year ended June 30, 2001 were audited by Arthur Andersen LLP which has ceased operations.

      The information in the table below is only a summary and should be read together with our audited consolidated financial statements for the fiscal years ended June 30, 2003, 2004 and 2005 and the related notes, and the section of this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all as included elsewhere in this prospectus. The amounts in the table below reflect rounding adjustments (dollars in thousands).

	InSight (Predecessor)						Holdings
				Period from
	Year Ended			July 1 to			Years Ended June 30,
	June 30,			October 17,
	2001			2001(1)			2002(1)			2003			2004			2005
Income Statement Data:
Revenues	$	211,503		$	63,678		$	155,407		$	237,752		$	290,884		$	316,873
Gross profit		49,631			17,991			39,823			57,708			57,463			48,716
Income (loss) before income taxes		16,425			(6,748	)		9			8,188			4,874			(12,148	)
Net income (loss)		13,801			(4,648	)		9			4,922			2,924			(27,217	)
Balance Sheet Data:
Cash and cash equivalents	$	23,254		$	—		$	17,783		$	19,554		$	30,412		$	20,839
Total assets		321,056			—			499,401			577,317			675,631			624,523
Total debt		228,253			—			378,164			446,119			539,823			501,568
Cash Flow Data:
Net cash provided by operating activities	$	50,682		$	14,820		$	39,601		$	61,756		$	60,120		$	60,864
Net cash used in investing activities		(23,442	)		(21,592	)		(221,563	)		(102,705	)		(142,250	)		(32,578	)
Net cash provided by (used in) financing activities		(31,119	)		(8,053	)		199,475			42,720			92,988			(37,859	)
Other Data:
Capital expenditures	$	22,911		$	20,852		$	43,655		$	56,967		$	46,734		$	30,459
Adjusted EBITDA(2)		80,953			25,012			59,017			95,047			104,289			98,313
Depreciation and amortization		41,134			9,823			26,462			49,345			58,733			65,601
Number of fixed — site centers		70			—			73			88			118			120
Number of mobile facilities		87			—			97			100			118			115

(1)  On October 17, 2001, Holdings acquired InSight pursuant to an agreement and plan of merger dated June 29, 2001, as amended. Holdings did not have any operating activities until October 17, 2001. Our financial information for the year ended June 30, 2002 reflects results for the entire fiscal year 2002 and does not include the results of operations of InSight from July 1, 2001 to October 17, 2001. InSight’s results of operations through October 17, 2001 do not reflect any purchase accounting adjustments. The results of operations for the fiscal year ended June 30, 2002 can be derived by combining our results of operations for the fiscal year ended June 30, 2002 with the results of

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operations of InSight from July 1, 2001 to October 17, 2001. These combined results of operations should be used for comparative purposes only as they do not purport to be indicative of what our results of operations would have been if we owned InSight for the entire fiscal year ended June 30, 2002.

(2)

Adjusted EBITDA represents earnings before interest expenses, income taxes, depreciation and amortization excluding the acquisition related compensation charge for the period from July 1 to October 17, 2001. Adjusted EBITDA has been included because we believe that it is a useful tool for us and our investors to measure our ability to provide cash flows to meet debt service, capital expenditure and working capital requirements. EBITDA should not be considered an alternative to, or more meaningful than, income from company operations or other traditional indicators of operating performance and cash flow from operating activities determined in accordance with accounting principles generally accepted in the United States. We present this discussion of Adjusted EBITDA because covenants in the indenture governing our existing unsecured senior subordinated notes, the indenture governing the notes and the credit agreement relating to our amended revolving credit facility contain ratios based on this measure. While Adjusted EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Please see the reconciliation of net cash provided by operating activities to Adjusted EBITDA following these footnotes.

A reconciliation of net cash provided by operating activities to Adjusted EBITDA is as follows (amounts in thousands) (unaudited):

	InSight (Predecessor)					Holdings
			Period from
	Year Ended		July 1 to			Years Ended June 30,
	June 30,		October 17,
	2001		2001(1)			2002(1)			2003			2004			2005
Net cash provided by operating activities	$	50,682	$	14,820		$	39,601		$	61,756		$	60,120		$	60,864
Provision (benefit) for income taxes		2,624		(2,100	)		—			3,266			1,950			15,069
Interest expense, net		23,394		6,321			32,546			37,514			40,682			44,860
Write-off of debt issuance costs		—		—			(7,378	)		—			—			—
(Loss) gain on sales of centers		—		—			—			—			2,129			(170	)
Net change in operating assets and liabilities		4,253		5,971			(5,752	)		(7,489	)		(592	)		(7,086	)
Net change in deferred income taxes		—		—			—			—			—			(15,224	)
Adjusted EBITDA	$	80,953	$	25,012		$	59,017		$	95,047		$	104,289		$	98,313

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RISK FACTORS

      You should read and consider carefully each of the following factors, as well as the other information contained in this prospectus, before deciding whether to participate in the exchange offer.

RISKS RELATING TO THE NOTES

Our substantial debt could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.

      We have a substantial amount of debt, which requires significant interest and principal payments. As of June 30, 2005, after giving effect to the offering of the initial notes and application of the proceeds (See “Use of Proceeds”), we estimate that we and the guarantors would have had approximately $508.5 million of total debt outstanding. In addition, subject to the limits contained in the indenture governing the notes and our other debt instruments, we may be able to incur substantial additional indebtedness from time to time (which may rank pari passu in right of payment with the notes) to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences to the holders of the notes, including the following:

•  making it more difficult for us to satisfy our obligations with respect to the notes and our other debt;

•  limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;

•  requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes;

•  increasing our vulnerability to general adverse economic and industry conditions;

•  limiting our flexibility in planning for and reacting to changes in the industry in which we compete;

•  placing us at a disadvantage compared to other less leveraged competitors; and

•  increasing our cost of borrowing.

     You should not rely on Holdings’ guarantee in evaluating an investment in the notes.

      Holdings was formed as a holding company. Its sole source of operating income and cash flow is derived from us and its only material asset is our capital stock. As a result, Holdings’ guarantee provides little, if any, additional credit support for the notes. Furthermore, the indenture governing the notes does not impose significant restrictions on the business or operations of Holdings or on, among other things, the amount of indebtedness that Holdings may incur.

The capital stock and other securities securing the notes will automatically be released from the liens securing the notes and no longer be deemed to be collateral to the extent the pledge of such capital stock or other equity interests would require the filing of separate financial statements for InSight or any of our subsidiaries with the SEC. Therefore, a portion of InSight’s, and our other subsidiaries’, capital stock will not be part of the collateral.

      The indenture governing the notes and the security documents provide that, to the extent that a filing with the SEC (or any other governmental agency) of separate financial statements of InSight or any of our other subsidiaries is required due to the fact that InSight or such subsidiary’s capital stock or other securities secure the notes, then such portion of capital stock or other securities will automatically be deemed not to be part of the collateral securing the notes to the extent necessary to not be subject to such requirement. Pursuant to relevant SEC regulations, such separate financial statements of InSight or any of our other subsidiaries would be required if the aggregate principal amount, par value or book value as carried by us or the market value (whichever is the greatest), of the capital stock of InSight or any of our

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other subsidiaries, as the case may be, is equal to or greater than 20% of the aggregate principal amount of notes outstanding. As a result, a portion of InSight’s or our other subsidiaries’ capital stock will not be part of the collateral. To the extent we consolidate our subsidiaries into InSight or one of our other subsidiaries, an additional portion of InSight’s or our other subsidiaries’ capital stock will not be part of the collateral. See “Description of Notes — Collateral.” In addition, our equity interest in our joint ventures will not be part of the collateral to the extent the applicable joint venture agreement prohibits, or requires any consent for, the granting of a security interest in such equity interest. Substantially all of our joint venture agreements contain such a prohibition. It may be more difficult, costly and time consuming for holders of the notes to foreclose on our assets or the assets of a subsidiary than to foreclose on our or a subsidiary’s capital stock or other securities, so the proceeds realized upon any such foreclosure could be significantly less than those that would have been received upon any sale of the capital stock or other securities of us or a subsidiary.

Not all of our subsidiaries guarantee our obligations under the notes, and the assets of our non-guarantor subsidiaries may not be available to make payments on the notes.

      Our subsidiaries that are not wholly owned by us will not be guarantors of the notes. InSight’s present and future wholly owned domestic subsidiaries will guarantee the notes. Payments on the notes are only required to be made by InSight and the guarantors. As a result, no payments are required to be made from assets of subsidiaries that do not guarantee the notes, unless those assets are transferred by dividend or otherwise to us, Holdings or a subsidiary guarantor. You should be aware that the historical consolidated financial statements included in this prospectus are presented on a consolidated basis. The aggregate revenues, EBITDA and total assets for fiscal 2005 of our subsidiaries which are not guarantors were approximately $41.3 million, $9.6 million and $32.5 million, respectively, or approximately 13.0%, 9.8% and 5.2%, respectively, of our total revenues, EBITDA and total assets for fiscal 2005. We expect that as a result of our strategy of entering into joint ventures with hospitals and/or radiology groups, an increasing portion of our revenues, EBITDA and total assets will be attributable to the operations of our subsidiaries that are not guarantors.

      In the event of a bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries, holders of their liabilities, including their trade creditors, will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. As a result, the notes are effectively subordinated to the indebtedness of the non-guarantor subsidiaries. As of June 30, 2005, the total liabilities of our non-guarantor subsidiaries, excluding intercompany liabilities, were approximately $6.9 million.

We may be unable to service our debt, including the notes.

      Our ability to make scheduled payments on or to refinance our obligations with respect to our debt, including the notes, will depend on our financial and operating performance, which will be affected by general economic, financial, competitive, business and other factors beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, including the notes, or to fund our other liquidity needs.

      If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our debt on or before maturity, including the notes, or sell certain of our assets. We cannot assure you that we will be able to restructure or refinance any of our debt, including the notes, on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

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Our operations may be restricted by the terms of our debt, which could adversely affect us and increase our credit risk.

      The indenture relating to the notes and our amended revolving credit facility include a number of significant restrictive covenants. Our other debt instruments, including our unsecured senior subordinated notes due 2011, also include restrictive covenants. These covenants could adversely affect us, and adversely affect investors, by limiting our ability to plan for or react to market conditions or to meet our capital needs. These covenants will, among other things, restrict our ability to:

•  incur more debt;

•  create liens;

•  pay dividends and make distributions or repurchase stock;

•  make investments;

•  merge or consolidate or transfer or sell assets; and

•  engage in transactions with affiliates.

      A breach of a covenant or other provision in any debt instrument governing our current or future indebtedness could result in a default under that instrument and, due to cross-default and cross-acceleration provisions, could result in a default under our other debt instruments. Upon the occurrence of an event of default under our debt instruments, the lenders may be able to elect to declare all amounts outstanding to be immediately due and payable and terminate all commitments to extend further credit. If we are unable to repay those amounts, the lenders could proceed against the collateral granted to them, if any, to secure the indebtedness. If the lenders under our current or future indebtedness accelerate the payment of the indebtedness, we cannot assure you that our assets or cash flow would be sufficient to repay in full our outstanding indebtedness, including the notes. As a result of this transaction, substantially all of our and our guarantors’ assets, other than those assets consisting of accounts receivables and related assets or cash accounts related to receivables, which will secure our amended revolving credit facility, and a portion of our stock and the stock of our subsidiaries and our real estate, will be subject to the liens in favor of the holders of the notes. This may further limit our flexibility in obtaining secured or unsecured financing in the future. See “Description of Notes — Collateral — Overview” and “Description of Notes — Collateral — Excluded Assets.”

We will in most cases have control over the collateral, and the sale of particular assets by us could reduce the pool of assets securing the notes and the guarantees.

      The security documents allow us to remain in possession of, to retain exclusive control over, to freely operate and to collect, invest and dispose of any income from, the collateral securing the notes and the guarantees. In addition, we will not be required to comply with all or any portion of Section 314(d) of the Trust Indenture Act of 1939 if we determine, in good faith based on advice of counsel, that, under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or such portion of Section 314(d) of the Trust Indenture Act is inapplicable to the released collateral. We may, among other things, without any release or consent by the indenture trustee, conduct ordinary course activities with respect to collateral, such as selling, factoring, abandoning or otherwise disposing of collateral and making ordinary course cash payments (including repayments of indebtedness), subject to the requirements under our debt agreements.

      With respect to such releases, we must deliver to the collateral agent, from time to time, an officers’ certificate to the effect that all releases and withdrawals during the preceding six-month period in which no release or consent of the collateral agent was obtained in the ordinary course of our business were not prohibited by the indenture. See “Description of Notes — Possession, Use and Release of Collateral — Permitted Ordinary Course Activities with Respect to Collateral.”

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There are circumstances other than repayment or discharge of the notes under which the collateral securing the notes and guarantees will be released automatically, without your consent or the consent of the trustee.

      Under various circumstances, all or a portion of the collateral securing the notes and guarantees will be released automatically, including:

•  a taking by eminent domain, condemnation or other similar circumstances;

•  a sale, transfer or other disposal of such collateral in a transaction not prohibited under the indenture; or

•  with respect to collateral held by a guarantor, upon the release of such guarantor from its guarantee of any other indebtedness secured equally and ratably with the notes in accordance with the indenture.

See “Description of Notes — Possession, Use and Release of Collateral — Release of Collateral.”

If there is a default, the value of the collateral may not be sufficient to repay holders of the notes.

      The proceeds from the sale or sales of all of the collateral might not be sufficient to satisfy the amounts outstanding under the notes. The collateral does not include, among other things, any interest in our real estate, our equity interest in our joint venture arrangements, a portion of InSight’s and our other subsidiaries’ capital stock, assets securing capital lease obligations, accounts receivables and related assets, cash accounts related to receivables and our contracts, including physician contracts, to the extent such contracts, or applicable law, prohibits, or requires consent for, granting of a security interest therein. Many of our contracts, including most of such contracts with physicians, contain such prohibition.

      Subject to the restrictions contained in the indenture, we may issue additional notes that will be secured by the collateral on an equal and ratable basis with the notes offered hereby. Therefore, there may be additional notes that would share the same collateral base as the notes offered hereby. In addition, our amended revolving credit facility is secured by a first priority lien on assets consisting of accounts receivables and related assets and cash accounts related to receivables. Thus, such facility would effectively rank senior to the notes to the extent of the value of such assets. In addition, the indenture does allow certain permitted liens on our assets, including the collateral, which liens may rank ahead of the noteholders’ liens.

      No appraisal of the value of the collateral has been made in connection with this offering. Our property and equipment (other than land, building and leasehold improvements and assets securing our capital lease obligations), which make up a significant portion of the collateral that is tangible, had a net book value as of June 30, 2005 of approximately $162.9 million. The book value of the collateral should not be relied on as a measure of realizable value for such assets. The realizable value may be greater or lower than such net book value. The value of the collateral securing the notes in the event of a liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. A sale of the collateral in a bankruptcy or similar proceeding would likely be made under duress, which would reduce the amounts that could be recovered. Furthermore, such a sale could occur when other companies in our industry also are distressed, which might increase the supply of similar assets and therefore reduce the amounts that could be recovered. Our assets pledged as collateral to the notes also include our intangible assets, which had a book value as of June 30, 2005 of approximately $315.0 million. These assets primarily consist of the excess of the acquisition cost over the fair market value of the net assets acquired in purchase transactions. The value of these intangible assets will continue to depend significantly upon the success of our business as a going concern and the grown in future cash flows. As a result, in the event of a default under our indenture or any bankruptcy or dissolution of our company, the realizable value of these assets will likely be substantially lower and may be insufficient to satisfy the claims of our creditors, including the holders of the notes. In addition, some or all of the collateral may be released with the consent of a majority of the holders of the notes. The condition of the collateral will likely deteriorate during any period of financial distress preceding a sale of the collateral. In addition, much of the collateral

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will consist of illiquid assets that may have to be sold at a substantial discount in an insolvency situation. Accordingly, the proceeds of any sale of the collateral following an acceleration of maturity with respect to the notes may not be sufficient to satisfy, and may be substantially less than, amounts due on the notes. If such proceeds were not sufficient to repay amounts outstanding under the notes, then the holders of the notes (to the extent not repaid from the proceeds of the sale of the collateral) would only have an unsecured claim against our remaining assets.

Bankruptcy laws may limit your ability to realize value from the collateral.

      The right of the trustee or other agent to repossess and dispose of the collateral upon the occurrence of an event of default under the indenture or other indebtedness secured by the collateral is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against us before the collateral agent repossessed and disposed of the collateral. Under the bankruptcy code, a secured creditor is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the bankruptcy code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the collateral and may include cash payments or the granting of additional security, if and at such times as the court in its discretion determines that the value of the secured creditor’s interest in the collateral is declining during the pendency of the bankruptcy case. In view of the lack of a precise definition of the term “adequate protection” and the broad discretionary powers of a bankruptcy court, it is impossible to predict (1) how long payments under the notes could be delayed following commencement of a bankruptcy case, (2) whether or when the collateral agent could repossess or dispose of the collateral or (3) whether or to what extent holders of the notes would be compensated for any delay in payment or loss of value of the collateral through the requirement of “adequate protection.” In addition, the right of a secured creditor to receive interest on its claim that accrues after the bankruptcy case is subject to the court’s determination that the value of the collateral is at least equal to the amount of collateral that secures the claim.

The imposition of certain permitted liens will cause the assets on which such liens are imposed to be excluded from the collateral securing the notes and the guarantees. There are certain other categories of assets that are also excluded from the collateral.

      The indenture permits liens in favor of third parties to secure purchase money indebtedness and capital lease obligations, and any assets subject to such liens will be automatically excluded from the collateral securing the notes and the guarantees. Our ability to incur purchase money indebtedness and capital lease obligations is subject to the limitations, as described in “Description of Notes — Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock.” Other categories of excluded assets include real property, certain contracts, a portion of stock of foreign subsidiaries, a portion of stock of InSight and our other subsidiaries, accounts receivables and related assets, cash accounts related to receivables and the proceeds from any of the foregoing. See “Description of notes — Collateral — Excluded Assets.” If an event of default occurs and the notes are accelerated, the Notes and the guarantees will rank equally with the holders of other unsubordinated and unsecured indebtedness of the relevant entity with respect to such excluded property.

The collateral is subject to casualty risks.

      We will be obligated under the security documents to maintain adequate insurance or otherwise insure against hazards to the extent done by corporations operating assets of a similar nature in the same or similar localities. There are, however, certain losses that may be either uninsurable or not economically insurable, in whole or in part. As a result, we cannot assure you that the insurance proceeds will compensate us fully for our losses. If there is a total or partial loss of any of the pledged collateral, we

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cannot assure you that any insurance proceeds received by us will be sufficient to satisfy our obligations under the notes.

The collateral agent’s ability to exercise remedies is limited.

      The security agreement provides the collateral agent on behalf of the holders of the notes with significant remedies, including foreclosure and sale of all or parts of the collateral. However, the rights of the collateral agent to exercise significant remedies (such as foreclosure) will be, subject to certain exceptions, generally limited to a payment default, our bankruptcy or the acceleration of the indebtedness.

We may not have sufficient funds to purchase the notes and our other senior debt upon a change of control.

      Upon a change of control, we will be required to make an offer to purchase all outstanding notes at a price equal to 101% of their principal amount plus accrued and unpaid interest. Any future credit arrangements or other debt agreements to which we become party may contain similar agreements. However, we cannot assure you that we will have or will be able to borrow sufficient funds at the time of any change of control to make any required repurchases of notes or our other debt. Our inability to repay the notes or other debt, if accelerated, or to make a change of control offer and to purchase all of the tendered notes, would constitute an event of default under the indenture, and potentially, other debt.

Rights of holders of the notes in the collateral may be adversely affected by the failure to perfect security interests in certain collateral or the perfection of liens on the collateral by other creditors.

      Our obligations under the notes and the obligations of the guarantors under the guarantees will be secured by a first priority lien on the collateral, subject to certain permitted liens. See “Description of Notes — Collateral.” To the extent that a security interest in any item of collateral is unperfected, the notes in a bankruptcy will have no greater rights to such collateral than our general unsecured creditors. The security interests in some of the collateral, including the vehicles and imaging equipment used in connection with our mobile facilities, may not be perfected as of the closing of this exchange offer. Although we expect such security interests to be perfected sometime after the closing of this exchange offer, we cannot guarantee when, and if, such perfection will take place.

      In addition, applicable law requires that certain property acquired after the grant of a general security interest can only be perfected at the time such property is acquired and identified. There can be no assurance that the trustee or the collateral agent will monitor, or that we will inform the trustee or the collateral agent of, the future acquisition of property that constitutes collateral, and that the necessary action will be taken to properly perfect the security interest in such after acquired collateral. Neither the trustee nor the collateral agent will monitor the future acquisition of property that constitutes collateral, or take action to perfect the security interest in such acquired collateral. Although such failure may constitute an event of default in respect of the notes, it will not prevent such failure from resulting in the loss of the security interest in such newly acquired property or the priority of the security interest in such property in favor of the holders of the notes against third parties.

Federal and state statutes allow courts, under specific circumstances, to void the guarantees to be provided by the guarantors and require the holders of the notes to return payments received from the guarantors.

      Under federal bankruptcy law and comparable provisions of state fraudulent transfer laws, the guarantees could be voided, or claims in respect of the guarantees could be subordinated to all of the guarantor’s other debts if, among other things:

•  the guarantee was incurred with the intent to hinder, delay or defraud any of such guarantor’s present or future creditors; or

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•  the guarantor, at the time the debt evidenced by the guarantee was incurred, received less than reasonably equivalent value or fair consideration for the incurrence of such debt, and

•  was insolvent or rendered insolvent by reason of such incurrence,

•  was engaged in a business or transaction for which such guarantor’s remaining assets constituted unreasonably small capital, or

•  intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.

      In addition, any payment by a guarantor pursuant to its guarantee, or any future pledge of collateral in favor of the collateral agent, might be avoidable by the payor or pledgor (as debtor in possession) or by its collateral agent in bankruptcy or other third parties if certain events or circumstances exist or occur, including, among others, if such payment or pledge or granting of the security interest is deemed a fraudulent conveyance or the pledgor is insolvent at the time of such payment or pledge or granting of the security interest, such payment or pledge permits the holders of the notes to receive a greater recovery than if such payment or pledge had not been given and a bankruptcy proceeding in respect of the payor or pledgor is commenced within 90 days following the payment or pledge or, in certain circumstances, a longer period.

      The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a person would be considered insolvent if:

•  the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets;

•  the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

•  it could not pay its debts as they become due.

      On the basis of historical financial information, recent operating history and other factors, we believe that, after giving effect to this offering, each guarantor will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. There can be no assurance, however, as to what standard a court would apply in making such determinations or that a court would agree with our conclusions in this regard. To the extent that a guarantor’s guarantee is voided, it is likely that holders of the notes will not benefit from the collateral securing that guarantee.

Rises in interest rates could adversely affect our financial condition.

      An increase in prevailing interest rates would have an immediate effect on the interest rates charged on our variable rate debt, which rise and fall upon changes in interest rates. As of June 30, 2005, after giving effect to the offering of initial notes and application of the proceeds therefrom, we estimate that approximately 59% of our debt would have been variable rate debt. Increases in interest rates would also impact the refinancing of our fixed rate debt. If interest rates are higher when our fixed debt becomes due, we may be forced to borrow at the higher rates. If prevailing interest rates or other factors result in higher interest rates, the increased interest expense would adversely affect our cash flow and our ability to service our debt. As a protection against rising interest rates, we may enter into agreements such as interest rate swaps, caps, floors and other interest rate exchange contracts. These agreements, however, increase our risks as to the other parties to the agreements not performing or that the agreements could be unenforceable.

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There is no established trading market for the notes and it may be difficult for you to sell or pledge your notes.

      There is currently no public market for the notes. If markets for the notes do not develop, you will not be able to resell your notes for an extended period of time, if at all. Consequently, your lenders may be reluctant to accept the notes as collateral for loans. Moreover, if markets for the notes do develop in the future, we cannot assure you that these markets will continue indefinitely or that the notes can be sold at a price equal to or greater than their initial offering price. In addition, in response to prevailing interest rates and market conditions generally, the notes could trade at a price lower than their initial offering price.

      Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. We cannot assure you that the market for the notes, if any, will not be subject to similar disruptions. Any such disruptions may adversely affect you as a holder of the notes. As a result, you can not be sure that an active trading market will develop upon completion of the exchange offer.

RISKS RELATING TO OUR BUSINESS

Changes in the rates or methods of third-party reimbursements for diagnostic imaging and therapeutic services could result in reduced demand for our services or create downward pricing pressure, which would result in a decline in our revenues and harm our financial position.

      For fiscal 2005 we derived approximately 57% of our revenues from direct billings to patients and third-party payors such as Medicare, Medicaid, managed care and private health insurance companies. Changes in the rates or methods of reimbursement for the services we provide could have a significant negative impact on those revenues. Moreover, our healthcare provider customers on whom we depend for approximately 43% of our revenues generally rely on reimbursement from third-party payors. To the extent our provider customers’ reimbursement from third-party payors is reduced, it will likely have an adverse impact on our financial condition and results of operations since our provider customers will seek to offset decreased reimbursement rates. In addition, the Medicare Payment Advisory Commission, in its March 2005 report to Congress, recommended that the government adopt standards for physicians and providers who bill Medicare for interpreting diagnostic imaging studies and adopt utilization management techniques used by third-party private payors, such as the credentialing of physicians, in an attempt to control the rise of imaging costs.

      Certain third-party payors have proposed and implemented initiatives which have the effect of substantially decreasing reimbursement rates for diagnostic imaging services provided at non-hospital facilities, and third-party payors are continuing to monitor reimbursement for diagnostic imaging services. Recently, a third-party payor announced a requirement of participation, which has not yet been fully implemented, that would require freestanding imaging center providers to be multi-modality and not simply offer one type of diagnostic imaging service. Similar initiatives enacted in the future by numerous additional third-party payors would have a material adverse impact on our financial condition and our results of operations.

      Under Medicare’s prospective payment system for hospital outpatient services, or OPPS, a hospital is paid for outpatient services on a rate per service basis that varies according to the ambulatory payment classification group, or APC, to which the service is assigned rather than on a hospital’s costs. OPPS was implemented on August 1, 2000 and due to the anticipated adverse economic effect on hospitals, Congress provided for outlier payments for especially costly cases, as well as transitional payments for new technologies and innovative medical devices, drugs and biologics. While most of the transitional payments expired in 2003, the Centers for Medicare and Medicaid Services, or CMS, continues to make payments for new technology until sufficient data is collected to assign the new technology to an APC. Each year CMS publishes new APC rates that are determined in accordance with the promulgated methodology. The overall effect of OPPS has been to decrease reimbursement rates from those paid under the prior cost-based system.

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      In November 2004, CMS announced a 21% reduction in hospital reimbursement rates for PET, effective January 1, 2005. Although the immediate effect on us of this rate reduction has been minimal, on a long-term basis, this will have a negative impact on our PET and PET/ CT revenues as more hospital customers (both existing and future) negotiate lower rates with us. Because unfavorable reimbursement policies constrict the profit margins of the mobile customers we bill directly, we have lowered and may continue to lower, our fees to retain existing PET and PET/ CT customers and attract new ones. Any further modifications under OPPS further reducing reimbursement to hospitals may adversely impact our financial condition and our operations since hospitals will seek to offset such additional modifications.

      In August 2005, CMS published proposed regulations that apply to hospital outpatient services that significantly decrease the reimbursement for diagnostic procedures performed together on the same day. Under the new methodology, CMS has identified families of imaging procedures by imaging modality and contiguous body area. Medicare will pay 100% of the technical component of the higher priced procedure and 50% for the technical component of each additional procedure for procedures involving contiguous body parts within a family of codes when performed in the same session. Under the current methodology, Medicare pays 100% of the technical component of each procedure. The implementation of these regulations would adversely impact our financial condition and our results of operations since our hospital customers will seek to offset their reduced reimbursement through lower rates with us.

      Services provided in non-hospital based freestanding facilities, including independent diagnostic testing facilities, or IDTFs, are paid under the Medicare Part B fee schedule. CMS has also published proposed regulations, which would implement the same multi-procedure methodology rate reduction proposed for hospital outpatient services, for procedures reimbursed under the Part B fee schedule. In addition, CMS is proposing an overall decrease of 4.3% in the Part B fee schedule for CMS’s fiscal year 2006. Accordingly, if these changes become final and take effect, these reductions in Medicare payment for diagnostic imaging services under the Part B fee schedule may have a material adverse effect on our financial condition and results of operations.

      Implementation of any of the initiatives mentioned above and any further changes in the rates of or conditions for reimbursement could substantially reduce the amounts reimbursed to us or our customers for services provided by us. If third-party payors reduce the amount of their payments to our customers, our customers will likely seek to reduce their payments to us or seek an alternate supplier of diagnostic imaging services. Because unfavorable reimbursement policies have constricted and may continue to constrict the profit margins of the hospitals, physician groups and other healthcare providers that we bill directly, we have lowered and may continue to need to lower our fees to retain existing customers and attract new ones. These reductions would have a significant adverse effect on our revenues and financial results by decreasing demand for our services or creating downward pricing pressure.

If we are unable to renew our existing customer contracts on favorable terms or at all, our financial results would be adversely affected.

      Our financial results depend on our ability to sustain and grow our revenues from existing customers. Our revenues would decline if we are unable to renew our existing customer contracts or renew these contracts on favorable terms. For our mobile facilities, we generally enter into contracts with hospitals having one to five year terms. A significant number of our mobile contracts will expire each year. Our mobile facility contract renewal rate was 78% for the year ended June 30, 2005. We may not, however, achieve these renewal rates in the future. To the extent we do not renew a customer contract, it is not always possible to immediately obtain replacement customers. Historically, many replacement customers have been smaller, which have lower procedure volumes. In addition, attractive financing from equipment manufacturers, as well as attractive gross margins have caused, and may continue to cause, hospitals and physician groups who have utilized shared mobile services from our company and our competitors to purchase and operate their own equipment. We expect that some high volume customer accounts will continue to elect not to renew their agreements with us and instead purchase or lease their own diagnostic imaging equipment. This would adversely affect our business, financial operation and results of operations. Although the non-renewal of a single customer contract would have a material impact on our contract

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services revenues, non-renewal of several contracts on favorable terms or at all could have a significant negative impact on our business, financial condition and results of operations.

We have experienced, and will continue to experience, competition from hospitals, physician groups and other diagnostic imaging companies and this competition could adversely affect our revenues and our business.

      The healthcare industry in general, and the market for diagnostic imaging services in particular, is highly competitive and fragmented, with only a few national providers. We compete principally on the basis of our service reputation, equipment, breadth of managed care contracts and convenient locations. Our operations must compete with groups of radiologists, established hospitals and certain other independent organizations, including equipment manufacturers and leasing companies that own and operate imaging equipment. We have encountered and we will continue to encounter competition from hospitals and physician groups that purchase their own diagnostic imaging equipment from equipment manufacturers who provide low-cost financing. Some of our direct competitors may have access to greater financial resources than we do. If we are unable to successfully compete, our customer base would decline and our business, financial condition and results of operations would be adversely affected.

Managed care organizations may limit healthcare providers from using our services, causing us to lose procedure volume.

      Our fixed-site centers are principally dependent on our ability to attract referrals from physicians and other healthcare providers representing a variety of specialties. Our eligibility to provide service in response to a referral is often dependent on the existence of a contractual arrangement with the referred patient’s managed care organization. We currently have more than 1,000 contracts with managed care organizations for diagnostic imaging services provided at our fixed-site centers. Despite having a large number of contracts with managed care organizations, healthcare providers may be inhibited from referring patients to us in cases where the patient is not associated with one of the managed care organizations with which we have contracted. The loss of patient referrals causes us to lose procedure volume which adversely impacts our revenues. A significant decline in referrals would have a material adverse effect on our business, financial condition and results of operations.

Technological change in our industry could reduce the demand for our services and require us to incur significant costs to upgrade our equipment.

      We operate in a competitive, capital intensive, high fixed-cost industry. The development of new technologies or refinements of existing ones might (1) make our existing systems technologically or economically obsolete, or (2) reduce the need for our systems. MRI and other diagnostic imaging systems are currently manufactured by numerous companies. Competition among manufacturers for a greater share of the MRI and other diagnostic imaging systems market has resulted in and likely will continue to result in technological advances in the speed and imaging capacity of these new systems. Consequently, the obsolescence of our systems may be accelerated. Other than ultra-high field MRI systems and PET/ CT or “fusion” systems, we are aware of no imminent substantial technological changes; however, should such changes occur, we may not be able to acquire the new or improved systems. In the future, to the extent we are unable to generate sufficient cash from our operations or obtain additional funds through bank financing or the issuance of equity or debt securities, we may be unable to maintain a competitive equipment base. In addition, advancing technology may enable hospitals, physicians or other diagnostic service providers to perform procedures without the assistance of diagnostic service providers such as ourselves. As a result, we may not be able to maintain our competitive position in our targeted regions or expand our business.

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Our ability to maximize the utilization of our diagnostic imaging equipment may be adversely impacted by harsh weather conditions.

      Harsh weather conditions can adversely impact our operations and financial condition. To the extent severe weather patterns affect the regions in which we operate, potential patients may find it difficult to travel to our centers and we may have difficulty moving our mobile facilities along their scheduled routes. As a result, we would experience a decrease in procedure volume during that period. Our equipment utilization, procedure volume or revenues could be adversely affected by similar conditions in the future.

Because a high percentage of our operating expenses are fixed, a relatively small decrease in revenues could have a significant negative impact on our financial results.

      A high percentage of our expenses are fixed, meaning they do not vary significantly with the increase or decrease in revenues. Such expenses include, but are not limited to, debt service and capital lease payments, rent and operating lease payments, salaries, maintenance, insurance and vehicle operation costs. As a result, a relatively small reduction in the prices we charge for our services or procedure volume could have a disproportionate negative effect on our financial results.

We may be subject to professional liability risks which could be costly and negatively impact our business and financial results.

      We have not experienced any material losses due to claims for malpractice. However, claims for malpractice have been asserted against us in the past and any future claims, if successful, could entail significant defense costs and could result in substantial damage awards to the claimants, which may exceed the limits of any applicable insurance coverage. Successful malpractice claims asserted against us, to the extent not covered by our liability insurance, could have a material adverse affect on our business, financial condition and results of operations. In addition to claims for malpractice, there are other professional liability risks to which we are exposed through our operation of diagnostic imaging systems, including liabilities associated with the improper use or malfunction of our diagnostic imaging equipment.

      To protect against possible professional liability from malpractice claims, we maintain professional liability insurance in amounts that we believe are appropriate in light of the risks and industry practice. However, if we are unable to maintain insurance in the future at an acceptable cost or at all or if our insurance does not fully cover us in the event a successful claim was made against us, we could incur substantial losses. Any successful malpractice or other professional liability claim made against us not fully covered by insurance could be costly to defend against, result in a substantial damage award against us and divert the attention of our management from our operations, which could have a material adverse effect on our business, financial condition and results of operations.

Our failure to effectively integrate acquisitions and establish joint venture arrangements through partnerships with hospitals and other healthcare providers could impair our business.

      As part of our business strategy, we have pursued, and may continue to pursue, selective acquisitions and arrangements through partnerships and joint ventures with hospitals and other healthcare providers. Our acquisition and joint venture strategies require substantial capital which may exceed the funds available to us from internally generated funds and our available financing arrangements. We may not be able to raise any necessary additional funds through bank financing or through the issuance of equity or debt securities on terms acceptable to us, if at all.

      Additionally, acquisitions involve the integration of acquired operations with our operations. Integration involves a number of risks, including:

•  demands on management related to the increase in our size after an acquisition;

•  the diversion of our management’s attention from the management of daily operations to the integration of operations;

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•  integration of information systems;

•  risks associated with unanticipated events or liabilities;

•  difficulties in the assimilation and retention of employees;

•  potential adverse effects on operating results;

•  challenges in retaining customers and referral sources; and

•  amortization or write-offs of acquired intangible assets.

      Although we believe we have successfully integrated acquisitions in the past, we may not be able to successfully integrate the operations from any future acquisitions. If we do not successfully integrate our acquisitions, we may not realize anticipated operating advantages, economies of scale and cost savings. Also, we may not be able to maintain the levels of operating efficiency that the acquired companies would have achieved or might have achieved separately. Successful integration of each of their operations will depend upon our ability to manage those operations and to eliminate excess costs.

Loss of, and failure to attract, qualified employees, particularly technologists, could limit our growth and negatively impact our operations.

      Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees is intense. In particular, there is a very high demand for qualified technologists who are necessary to operate our systems, particularly PET technologists. We may not be able to hire and retain a sufficient number of technologists, and we expect that our costs for the salaries and benefits of technologists will continue to increase for the foreseeable future because of the industry’s competitive demand for their services. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees.

Our PET and PET/ CT service and some of our other imaging services require the use of radioactive materials, which could subject us to regulation, related costs and delays and potential liabilities for injuries or violations of environmental, health and safety laws.

      Our PET and PET/ CT service and some of our other imaging and therapeutic services require the use of radioactive materials to produce the images. While this radioactive material has a short half-life, meaning it quickly breaks down into non-radioactive substances, storage, use and disposal of these materials present the risk of accidental environmental contamination and physical injury. We are subject to federal, state and local regulations governing storage, handling and disposal of these materials and waste products. Although we believe that our safety procedures for storing, handling and disposing of these hazardous materials comply with the standards prescribed by law and regulation, we cannot completely eliminate the risk of accidental contamination or injury from those hazardous materials. In the event of an accident, we would be held liable for any resulting damages, and any liability could exceed the limits of or fall outside the coverage of our insurance. In addition, we may not be able to maintain insurance on acceptable terms, or at all. We could incur significant costs in order to comply with current or future environmental, health and safety laws and regulations.

An earthquake could adversely affect our business and operations.

      Our corporate headquarters and a material portion of our fixed-site centers are located in California, which has a high risk for earthquakes. Depending upon its magnitude, an earthquake could severely damage our facilities or prevent potential patients from traveling to our centers. Damage to our equipment or any interruption in our business would adversely affect our financial condition. While we presently carry earthquake insurance in amounts we believe are appropriate in light of the risks, the amount of our earthquake insurance coverage may not be sufficient to cover losses from earthquakes. In addition, we may discontinue earthquake insurance on some or all of our facilities in the future if the cost of premiums for

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earthquake insurance exceeds the value of the coverage discounted for the risk of loss. If we experience a loss which is uninsured or which exceeds policy limits, we could lose the capital invested in the damaged facilities as well as the anticipated future cash flows from those facilities.

Continued high fuel costs would harm our operations.

      Fuel costs constitute a significant portion of our mobile operating expenses. Historically, fuel costs have been subject to wide price fluctuations based on geopolitical issues and supply and demand. Fuel availability is also affected by demand for home heating oil, diesel, gasoline and other petroleum products. Because of the effect of these events on the price and availability of fuel, the cost and future availability of fuel cannot be predicted with any degree of certainty. In the event of a fuel supply shortage or further increases in fuel prices, a curtailment of scheduled mobile service could result. There have been significant increases in fuel costs and continued high fuel costs or further increases would harm our financial condition and results of operations.

RISKS RELATING TO GOVERNMENT REGULATION OF OUR BUSINESS

Complying with federal and state regulations pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties.

      We are directly or indirectly through our customers subject to extensive regulation by both the federal government and the states in which we conduct our business, including:

•  the federal False Claims Act;

•  the federal Medicare and Medicaid Anti-kickback Law, and state anti-kickback prohibitions;

•  the federal Civil Money Penalty Law;

•  the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA;

•  the federal physician self-referral prohibition commonly known as the Stark Law and the state law equivalents of the Stark Law;

•  state laws that prohibit the practice of medicine by non-physicians, and prohibit fee-splitting arrangements involving physicians;

•  United States Food and Drug Administration requirements;

•  state licensing and certification requirements, including certificates of need; and

•  federal and state laws governing the diagnostic imaging and therapeutic equipment used in our business concerning patient safety, equipment operating specifications and radiation exposure levels.

      If our operations are found to be in violation of any of the laws and regulations to which we or our customers are subject, we may be subject to the applicable penalty associated with the violation, including civil and criminal penalties, damages, fines and the curtailment of our operations. Any penalties, damages, fines or curtailment of our operations, individually or in the aggregate, could adversely affect our ability to operate our business and our financial results. The risks of our being found in violation of these laws and regulations is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action brought against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

The regulatory framework is uncertain and evolving.

      Healthcare laws and regulations may change significantly in the future. We continuously monitor these developments and modify our operations from time to time as the regulatory environment changes. However, we may not be able to adapt our operations to address new regulations, which could adversely

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affect our business. In addition, although we believe that we are operating in compliance with applicable federal and state laws, neither our current or anticipated business operations nor the operations of our contracted radiology groups have been the subject of judicial or regulatory interpretation. A review of our business by courts or regulatory authorities may result in a determination that could adversely affect our operations or the healthcare regulatory environment may change in a way that restricts our operations.

THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

      InSight, Holdings, the subsidiary guarantors and the initial purchasers entered into a registration rights agreement in connection with the issuance of the initial notes. The registration rights agreement provides that we will take the following actions, at our expense, for the benefit of the holders of the initial notes:

•  within 120 days after the date on which the initial notes were issued, file the exchange offer registration statement, of which this prospectus is a part;

•  cause the exchange offer registration statement to be declared effective under the Securities Act within 180 days after the date on which the initial notes were issued;

•  keep the exchange offer open for at least 30 business days, or longer if required by applicable law, after the date notice of the exchange offer is mailed to the holders of the initial notes; and

•  cause the exchange offer to be completed within 210 days after the date on which the initial notes were issued.

      For each of the initial notes surrendered in the exchange offer, the holder who surrendered the note will receive an exchange note having a principal amount equal to that of the surrendered note. Interest on each exchange note will accrue from the last interest payment date on which interest was paid on the outstanding note surrendered. If the note is surrendered for exchange on a date after the record date for the payment of interest to occur on or after the date of exchange, interest on the exchange note will accrue from that interest payment date.

      We will be required to file a shelf registration statement covering resales of the initial notes if:

•  because of any change in law or in currently prevailing interpretations of the staff of the SEC, we are not permitted to effect an exchange offer,

•  in some circumstances, the holders of initial notes so request, or

•  the exchange offer has not been completed by the 210th day after the date on which the initial notes were issued.

      Following the consummation of the exchange offer, holders of the initial notes who were eligible to participate in the exchange offer, but who did not tender their initial notes, will not have any further registration rights and the initial notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for the initial notes could be adversely affected. For additional information, see “— Consequences of Failure to Exchange.”

Terms of the Exchange Offer

      Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all initial notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of initial notes accepted in the exchange offer. Any holder may tender some or all of its initial notes pursuant to the exchange offer. However,

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initial notes may be tendered only in integral multiples of $1,000. The exchange notes will evidence the same indebtedness as the initial notes and will be entitled to the benefits of the indenture.

      The form and terms of the exchange notes are the same as the form and terms of the initial notes except that:

      (1) the exchange notes bear a different CUSIP Number from the initial notes;

      (2) the exchange notes have been registered under the Securities Act and hence will not bear legends restricting their transfer; and

      (3) the holders of the exchange notes will not be entitled to certain rights under the registration rights agreement, including the provisions providing for an increase in the interest rate on the initial notes in certain circumstances relating to the timing of the exchange offer, all of which rights will terminate when the exchange offer is terminated.

      As of the date of this prospectus, $300.0 million aggregate principal amount of initial notes is outstanding. We have fixed the close of business on                     , 2005 as the record date for the exchange offer for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially.

      Holders of initial notes do not have any appraisal or dissenters’ rights under the Delaware General Corporation Law. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Act, Exchange Act and the rules and regulations of the SEC thereunder.

      We will be deemed to have accepted validly tendered initial notes when, as and if we have given oral or written notice thereof to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us.

      If any tendered initial notes are not accepted for exchange because of an invalid tender, the occurrence of specified other events set forth in this prospectus or otherwise, the certificates for any unaccepted initial notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the expiration date of the exchange offer.

      Holders who tender initial notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of initial notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See “— Fees and Expenses.”

Expiration Date; Extensions; Amendments

      The term “expiration date” will mean 5:00 p.m., New York City time, on                     , 2005, unless we, in our sole discretion, extend the exchange offer, in which case the term “expiration date” will mean the latest date and time to which the exchange offer is extended.

      To extend the exchange offer, we will:

•  notify the exchange agent of any extension orally or in writing; and

•  publicly announce the extension, including disclosure of the approximate number of initial notes deposited to date,

each before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

      We reserve the right, in our sole discretion:

•  to delay accepting any initial notes;

•  to extend or amend the terms of the exchange offer; or

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•  if any conditions listed below under “— Conditions” are not satisfied, to terminate the exchange offer by giving oral or written notice of the delay, extension or termination to the exchange agent.

      Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by public announcement thereof.

Interest on the Exchange Notes

      The exchange notes will bear interest at the same rate and on the same terms as the initial notes. Consequently, the exchange notes will bear interest at a rate per annum, reset quarterly, equal to LIBOR plus 5.25%. Interest will be payable each February 1, May 1, August 1 and November 1, commencing on February 1, 2006.

      Interest on the exchange notes will accrue from the last interest payment date on which interest was paid on the initial notes. If your initial notes are accepted for exchange, you will be deemed to have waived your right to receive any interest on the initial notes.

Procedures for Tendering Initial Notes

      Only a holder of initial notes may tender the initial notes in the exchange offer. Except as set forth under “— Book Entry Transfer,” to tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a copy thereof, have the signatures thereon guaranteed if required by the letter of transmittal, and mail or otherwise deliver the letter of transmittal or copy to the exchange agent prior to the expiration date. In addition, (1) certificates for the initial notes must be received by the exchange agent along with the letter of transmittal prior to the expiration date, (2) a timely confirmation of a book-entry transfer of such initial notes, if that procedure is available, into the exchange agent’s account at DTC pursuant to the procedure for book-entry transfer described below, must be received by the exchange agent prior to the expiration date or (3) the holder must comply with the guaranteed delivery procedures described below. To be tendered effectively, the letter of transmittal and other required documents must be received by the exchange agent at the address set forth under “Exchange Agent” prior to the expiration date.

      To participate in the exchange offer, each holder will be required to make the following representations to us:

•  Any exchange notes to be received by the holder will be acquired in the ordinary course of its business.

•  At the time of the commencement of the exchange offer, the holder has no arrangement or understanding with any person to participate in the distribution, within the meaning of Securities Act, of the exchange notes in violation of the Securities Act.

•  The holder is not our affiliate as defined in Rule 405 promulgated under the Securities Act.

•  If the holder is not a broker-dealer, it is not engaged in, and does not intend to engage in, the distribution of exchange notes.

•  If the holder is a broker-dealer that will receive exchange notes for its own account in exchange for initial notes that were acquired as a result of market-making or other trading activities, the holder will deliver a prospectus in connection with any resale of the exchange notes. We refer to these broker-dealers as participating broker-dealers.

•  The holder is not acting on behalf of any person or entity that could not truthfully make these representations.

      The tender by a holder that is not withdrawn before the expiration date will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal.

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      The method of delivery of initial notes and the letter of transmittal and all other required documents to the exchange agent is at the election and risk of the holder. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the exchange agent before the expiration date. No letter of transmittal or initial notes should be sent to us. Holders may request their respective brokers, dealers, commercial banks, trusts companies or nominees to effect these transactions for such holders.

      Any beneficial owner whose initial notes are registered in the name of a broker-dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on the beneficial owner’s behalf. If the beneficial owner wishes to tender on the owner’s own behalf, the owner must, prior to completing and executing the letter of transmittal and delivering the owner’s initial notes, either make appropriate arrangements to register ownership of the initial notes in the beneficial owner’s name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.

      Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, unless initial notes tendered pursuant thereto are tendered (1) by a registered holder who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” in the letter of transmittal or (2) for the account of such an eligible guarantor institution. If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by an eligible guarantor institution.

      If the letter of transmittal is signed by a person other than the registered holder of any initial notes listed therein, the initial notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as that registered holder’s name appears on the initial notes.

      If the letter of transmittal or any initial notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal unless waived by us.

      We will determine all questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered initial notes in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all initial notes not properly tendered or any initial notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular initial notes, but if we waive any condition of the exchange offer, we will waive that condition for all holders. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.

      Unless waived, any defects or irregularities in connection with tenders of initial notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of initial notes, neither we nor the exchange agent nor any other person shall incur any liability for failure to give such notification. Tenders of initial notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any initial notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, promptly following the expiration date.

      In all cases, issuance of exchange notes for initial notes that are accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of certificates for such initial notes or a timely confirmation of a book-entry transfer of such initial notes into the exchange agent’s account at DTC, a properly completed and duly executed letter of transmittal (or, with respect to

27

DTC and its participants, electronic instructions in which the tendering holder acknowledges its receipt of an agreement to be bound by the letter of transmittal), and all other required documents. If any tendered initial notes are not accepted for any reason set forth in the terms and conditions of the exchange offer or if initial notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged initial notes will be returned without expense to the tendering holder thereof, or, in the case of initial notes tendered by book-entry transfer into the exchange agent’s account at DTC pursuant to the book-entry transfer procedures described below, such nonexchanged initial notes will be credited to an account maintained with DTC, promptly after the expiration or termination of the exchange offer.

      Each broker-dealer that receives exchange notes for its own account in exchange for initial notes, where such initial notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”

Book Entry Transfer

      The exchange agent will make a request to establish an account with respect to the initial notes at DTC for purposes of the exchange offer within two business days after the date of this prospectus, and any financial institution that is a participant in DTC’s systems may make book-entry delivery of initial notes being tendered by causing DTC to transfer such initial notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. However, although delivery of initial notes may be effected through book-entry transfer at DTC, the letter of transmittal or copy thereof, with any required signature guarantees and any other required documents, must, in any case other than as set forth in the following paragraph, be transmitted to and received by the exchange agent at the address set forth under “— Exchange Agent” on or prior to the expiration date or the guaranteed delivery procedures described below must be complied with. Alternatively, participants may use DTC’s Automated Tender Offer Program, or ATOP, to process exchange offers through DTC. To accept the exchange offer through ATOP, participants in DTC must send electronic instructions to DTC through DTC’s communication system in lieu of sending a signed, hard copy letter of transmittal. DTC is obligated to communicate those electronic instructions to the exchange agent. To tender initial notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the exchange agent must reflect that the participant acknowledges its receipt of and agrees to be bound by the letter of transmittal.

Guaranteed Delivery Procedures

      Other than holders whose initial notes are held through DTC, holders who wish to tender their initial notes and whose initial notes are not immediately available, or who cannot deliver their initial notes or any other documents required by the letter of transmittal to the exchange agent prior to the expiration date, may tender their initial notes according to the guaranteed delivery procedures set forth in the letter of transmittal. Pursuant to such procedures:

•  the holder tenders through an eligible guarantor institution and signs a notice of guaranteed delivery;

•  on or prior to the expiration date, the exchange agent receives from the holder and the eligible guarantor institution a written or facsimile copy of a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us, setting forth the name and address of the holder, the certificate number or numbers of the tendered initial notes, and the principal amount of tendered initial notes, stating that the tender is being made thereby and guaranteeing that, within five business days after the date of delivery of the notice of guaranteed delivery, the tendered initial notes, a duly executed letter of transmittal and any other required documents will be deposited by the eligible guarantor institution with the exchange agent; and

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•  such properly completed and executed documents required by the letter of transmittal and the tendered initial notes in proper form for transfer are received by the exchange agent within five business days after the expiration date.

      Any holder who wishes to tender initial notes pursuant to the guaranteed delivery procedures described above must ensure that the exchange agent receives the notice of guaranteed delivery and letter of transmittal relating to such initial notes prior to 5:00 p.m., New York City time, on the expiration date.

Withdrawal of Tenders

      Except as otherwise provided in this prospectus, tenders of initial notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date.

      To withdraw a tender of initial notes in the exchange offer, a telegram, telex, letter or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in this prospectus prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. Any notice of withdrawal must:

•  specify the name of the person having deposited the initial notes to be withdrawn;

•  identify the initial notes to be withdrawn, including the certificate number(s) and principal amount of the initial notes, or, in the case of initial notes transferred by book-entry transfer, the name and number of the account at DTC to be credited;

•  be signed by the holder in the same manner as the initial signature on the letter of transmittal by which the initial notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the initial notes register the transfer of the initial notes into the name of the person withdrawing the tender; and

•  specify the name in which any initial notes are to be registered, if different from that of the person depositing the initial notes to be withdrawn.

      All questions as to the validity, form and eligibility, including time of receipt, of the notices will be determined by us. Our determination will be final and binding on all parties. Any initial notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no exchange notes will be issued with respect thereto unless the initial notes so withdrawn are validly retendered. Any initial notes which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to the holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn initial notes may be retendered by following one of the procedures described above under “— Procedures for Tendering” at any time prior to the expiration date.

Conditions

      Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange notes for, any initial notes, and may terminate or amend the exchange offer as provided in this prospectus before the acceptance of the initial notes, if:

•  any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or any material adverse development has occurred in any existing action or proceeding with respect to us or any of our subsidiaries; or

•  any law, statute, rule, regulation or interpretation by the staff of the SEC is proposed, adopted or enacted, which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us; or

•  any governmental approval has not been obtained, which approval we will, in our sole discretion, deem necessary for the consummation of the exchange offer as contemplated by this prospectus.

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      If we determine in our sole discretion that any of the conditions are not satisfied, we may (1) refuse to accept any initial notes and return all tendered initial notes to the tendering holders, (2) extend the exchange offer and retain all initial notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of holders to withdraw the initial notes (See “— Withdrawal of Tenders”) or (3) waive the unsatisfied conditions with respect to the exchange offer and accept all properly tendered initial notes which have not been withdrawn.

Exchange Agent

      U.S. Bank National Association has been appointed as exchange agent for the exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for Notice of Guaranteed Delivery should be directed to the exchange agent addressed as follows:

By Hand, Overnight Delivery or

Registered/Certified Mail

U.S. Bank National Association

Corporate Trust Services

EP-MN-WS-2N

60 Livingston Avenue

St. Paul, Minnesota 55107

Attention: Specialized Finance

Facsimile Transmissions:

(Eligible Institutions Only)

(651) 495-8158

To Confirm Facsimile by Telephone or for Information Call:

(800) 934-6802

      DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

Fees and Expenses

      We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by our and our affiliates’ officers and regular employees.

      We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses incurred in connection with these services.

      We will pay the cash expenses to be incurred in connection with the exchange offer. Such expenses include fees and expenses of the exchange agent and trustee, accounting and legal fees and printing costs, among others.

Accounting Treatment

      We will record the exchange notes at the same carrying value as the initial notes, which is face value, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes as a result of the exchange offer. The expenses of the exchange offer will be deferred and charged to expense over the term of the exchange notes.

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Consequences of Failure to Exchange

      The initial notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities. Accordingly, the initial notes may be resold only:

      (1) to us upon redemption thereof or otherwise;

      (2) so long as the initial notes are eligible for resale pursuant to Rule 144A, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act, which other exemption is based upon an opinion of counsel reasonably acceptable to us;

      (3) outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act; or

      (4) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States.

Resale of the Exchange Notes

      With respect to resales of exchange notes, based on interpretations by the staff of the SEC set forth in no-action letters issued to third parties, we believe that a holder or other person who receives exchange notes, whether or not the person is the holder, other than a person that is our affiliate within the meaning of Rule 405 under the Securities Act, in exchange for initial notes in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the exchange notes, will be allowed to resell the exchange notes to the public without further registration under the Securities Act and without delivering to the purchasers of the exchange notes a prospectus that satisfies the requirements of Section 10 of the Securities Act. However, if any holder acquires exchange notes in the exchange offer for the purpose of distributing or participating in a distribution of the exchange notes, the holder cannot rely on the position of the staff of the SEC expressed in the no-action letters or any similar interpretive letters, and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, unless an exemption from registration is otherwise available. Further, each broker-dealer that receives exchange notes for its own account in exchange for initial notes, where the initial notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes.

USE OF PROCEEDS

      This exchange offer is intended to satisfy some of our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the exchange notes. In consideration for issuing the exchange notes, we will receive initial notes in like principal amount, the form and terms of which are substantially identical to the form and terms of the exchange notes, except as otherwise described in this prospectus. We used the proceeds from the issuance of the initial notes, together with cash on hand, to (i) repay all outstanding indebtedness under our existing credit facility, including accrued interest thereon, (ii) purchase a portion of our outstanding 9⁷/8% unsecured senior subordinated notes due 2011, including accrued interest thereon, in one or more privately negotiated transactions and (iii) pay certain related fees and expenses.

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA

      The following table sets forth certain summary consolidated historical financial information of our company. Historical financial information (exclusive of Adjusted EBITDA) as of and for the fiscal years ended June 30, 2002, 2003, 2004 and 2005 is derived from our audited consolidated financial statements. Historical financial information (exclusive of Adjusted EBITDA) as of and for the fiscal year ended June 30, 2001 and for the period from July 1, 2001 to October 17, 2001 is derived from the audited consolidated financial statements of InSight. See footnote (1) below. The consolidated financial statements of InSight for the fiscal year ended June 30, 2001 were audited by Arthur Andersen LLP which has ceased operations.

      The information in the table below is only a summary and should be read together with our audited consolidated financial statements for the fiscal years ended June 30, 2003, 2004 and 2005 and the related notes, and the section of this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all as included elsewhere in this prospectus. The amounts in the table below reflect rounding adjustments (dollars in thousands).

	InSight (Predecessor)
							Holdings
				Period
				from
	Year Ended			July 1 to			Years Ended June 30,
	June 30,			October 17,
	2001			2001(1)			2002(1)			2003			2004			2005
Income Statement Data:
Revenues	$	211,503		$	63,678		$	155,407		$	237,752		$	290,884		$	316,873
Costs of operations		161,872			45,687			115,584			180,044			233,421			268,157
Gross profit		49,631			17,991			39,823			57,708			57,463			48,716
Corporate operating expenses		(10,783	)		(3,184	)		(7,705	)		(13,750	)		(16,217	)		(18,447	)
Acquisition related compensation charge		—			(15,616	)		—			—			—			—
(Loss) gain on sales of centers		—			—			—			—			2,129			(170	)
Equity in earnings of unconsolidated subsidiaries		971			382			437			1,744			2,181			2,613
Interest expense, net		(23,394	)		(6,321	)		(32,546	)		(37,514	)		(40,682	)		(44,860	)
Income (loss) before income taxes		16,425			(6,748	)		9			8,188			4,874			(12,148	)
Provision (benefit) for income taxes		2,624			(2,100	)		—			3,266			1,950			15,069
Net income (loss)	$	13,801		$	(4,648	)	$	9		$	4,922		$	2,924		$	(27,217	)
Balance Sheet Data:
Cash and cash equivalents	$	23,254		$	—		$	17,783		$	19,554		$	30,412		$	20,839
Working capital		16,791			—			35,907			32,580			48,116			36,068
Total assets		321,056			—			499,401			577,317			675,631			624,523
Total debt		228,253			—			378,164			446,119			539,823			501,568
Stockholders’ equity		65,471			—			87,376			91,614			94,941			67,724
Cash Flow Data:
Net cash provided by operating activities	$	50,682		$	14,820		$	39,601		$	61,756		$	60,120		$	60,864
Net cash used in investing activities		(23,442	)		(21,592	)		(221,563	)		(102,705	)		(142,250	)		(32,578	)
Net cash provided by (used in) financing activities		(31,119	)		(8,053	)		199,475			42,720			92,988			(37,859	)

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	InSight (Predecessor)
					Holdings
			Period
			from
	Year Ended		July 1 to		Years Ended June 30,
	June 30,		October 17,
	2001		2001(1)		2002(1)		2003		2004		2005
Other Data:
Capital expenditures	$	22,911	$	20,852	$	43,655	$	56,967	$	46,734	$	30,459
Adjusted EBITDA(2)		80,953		25,012		59,017		95,047		104,289		98,313
Depreciation and amortization		41,134		9,823		26,462		49,345		58,733		65,601
Number of fixed — site centers		70		—		73		88		118		120
Number of mobile facilities		87		—		97		100		118		115

(1)

On October 17, 2001, Holdings acquired InSight pursuant to an agreement and plan of merger dated June 29, 2001, as amended. Holdings did not have any operating activities until October 17, 2001. Our financial information for the year ended June 30, 2002 reflects results for the entire fiscal year 2002 and does not include the results of operations of InSight from July 1, 2001 to October 17, 2001. InSight’s results of operations through October 17, 2001 do not reflect any purchase accounting adjustments. The results of operations for the fiscal year ended June 30, 2002 can be derived by combining our results of operations for the fiscal year ended June 30, 2002 with the results of operations of InSight from July 1, 2001 to October 17, 2001. These combined results of operations should be used for comparative purposes only as they do not purport to be indicative of what our results of operations would have been if we owned InSight for the entire fiscal year ended June 30, 2002.

(2)

Adjusted EBITDA represents earnings before interest expenses, income taxes, depreciation and amortization excluding the acquisition related compensation charge for the period from July 1 to October 17, 2001. Adjusted EBITDA has been included because we believe that it is a useful tool for us and our investors to measure our ability to provide cash flows to meet debt service, capital expenditure and working capital requirements. EBITDA should not be considered an alternative to, or more meaningful than, income from company operations or other traditional indicators of operating performance and cash flow from operating activities determined in accordance with accounting principles generally accepted in the United States. We present this discussion of Adjusted EBITDA because covenants in the indenture governing our existing unsecured senior subordinated notes, the indenture governing the notes and the credit agreement relating to our amended revolving credit facility contain ratios based on this measure. While Adjusted EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Please see the reconciliation of net cash provided by operating activities to Adjusted EBITDA following these footnotes.

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      A reconciliation of net cash provided by operating activities to Adjusted EBITDA is as follows (amounts in thousands) (unaudited):

	InSight (Predecessor)					Holdings
			Period
			from
	Year Ended		July 1 to			Years Ended June 30,
	June 30,		October 17,
	2001		2001(1)			2002(1)			2003			2004			2005
Net cash provided by operating activities	$	50,682	$	14,820		$	39,601		$	61,756		$	60,120		$	60,864
Provision (benefit) for income taxes		2,624		(2,100	)		—			3,266			1,950			15,069
Interest expense, net		23,394		6,321			32,546			37,514			40,682			44,860
Write-off of debt issuance costs		—		—			(7,378	)		—			—			—
(Loss) gain on sales of centers		—		—			—			—			2,129			(170	)
Net change in operating assets and liabilities		4,253		5,971			(5,752	)		(7,489	)		(592	)		(7,086	)
Net change in deferred income taxes		—		—			—			—			—			(15,224	)
Adjusted EBITDA	$	80,953	$	25,012		$	59,017		$	95,047		$	104,289		$	98,313

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and accompanying notes which appear elsewhere in this prospectus. The forward-looking statements contained in the following discussion reflect our plans, estimates and beliefs, and involve risks, uncertainties and assumptions. Please see the section of this prospectus entitled “Cautionary Note Regarding Forward-Looking Statements” for more information. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly under the sections of this prospectus entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

Overview

      We are a nationwide provider of diagnostic imaging services through our integrated network of fixed-site centers and mobile facilities which are focused in targeted regions throughout the United States. Our services include magnetic resonance imaging, or MRI, positron emission tomography, or PET, computed tomography, or CT, and other technologies. These services are noninvasive techniques that generate representations of internal anatomy on film or digital media which are used by physicians for the diagnosis and assessment of diseases and disorders.

      We serve a diverse portfolio of customers, including healthcare providers, such as hospitals and physicians, and payors, such as managed care organizations, Medicare, Medicaid and insurance companies. We operate in 34 states and are primarily concentrated in California, Arizona, New England, the Carolinas, Florida and the Mid-Atlantic states. While we generated approximately 71% of our total revenues from MRI services during the year ended June 30, 2005, we provide a comprehensive offering of diagnostic imaging and treatment services, including PET, PET/ CT, CT, mammography, bone densitometry, diagnostic ultrasound, lithotripsy and x-ray. We have developed and continue to develop strong regional networks of diagnostic imaging centers and facilities, enabling us to effectively serve our customers and maximize utilization of our imaging equipment.

      As of June 30, 2005, our network consists of 120 fixed-site centers and 115 mobile facilities. This combination allows us to provide a full continuum of imaging services to better meet the needs of our customers, including healthcare providers, such as hospitals and physicians, and payors such as managed care organizations, Medicare, Medicaid and insurance companies. Our operations consist of two reportable segments, mobile operations and fixed operations. Our mobile operations include 33 parked mobile facilities, each of which serves a single customer. Our fixed operations include four mobile facilities as part of our fixed operations in Maine. Certain financial information regarding our reportable segments is included in Note 16 to our consolidated financial statements, which are a part of this prospectus.

      Given our size and expertise, we believe we are well positioned to capitalize on the ongoing growth in the diagnostic imaging industry. Growth in the diagnostic imaging industry has been and will continue to be driven by (1) an aging population, (2) the increasing acceptance of diagnostic imaging, particularly PET and PET/ CT, and the expansion of reimbursement coverage for PET and PET/ CT from Medicare and other third-party payors and (3) expanding applications of CT, MRI and PET technologies.

Acquisitions and Dispositions

      On April 1, 2004, we acquired the stock of Comprehensive Medical Imaging, Inc., or CMI, a subsidiary of Cardinal Health, Inc., which owned and operated 21 fixed-site centers located in California, Arizona, Texas, Kansas, Pennsylvania and Virginia. The aggregate purchase price for these centers was approximately $48.6 million. We refer to this acquisition as the CMI acquisition. On August 1, 2003, we acquired 22 mobile facilities primarily operating in the Mid-Atlantic states from CDL Medical Technologies, Inc. The aggregate purchase price for these facilities was approximately $49.9 million. We refer to this acquisition as the CDL acquisition. On April 2, 2003, we acquired 13 fixed-site centers

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located in Southern California from CMI. The aggregate purchase price for these centers was approximately $46.5 million. We refer to this acquisition as the Central Valley acquisition. These acquisitions significantly expanded our presence in the Los Angeles, Phoenix and Northern California markets and the Mid-Atlantic states. The aggregate cost of the CMI, CDL and Central Valley acquisitions totaled $145.0 million, none of which was assumed debt. We funded the consideration through (1) our credit facility and (2) $25 million in a private placement of 9⁷/8% senior subordinated notes due November 2011.

      In May 2005, we sold our joint venture interest in a fixed-site center in Valparaiso, Indiana, which resulted in a gain on sale of approximately $0.5 million. In April 2005, we sold a fixed-site center in Overland Park, Kansas, which resulted in a loss on sale of approximately $0.8 million. In March 2005, we sold our joint venture interest in a fixed-site center in Marina Del Rey, California, which resulted in a gain on sale of approximately $0.1 million. In December 2003, we sold a fixed-site center located in Hobart, Indiana, which resulted in a gain on sale of approximately $2.1 million. In August 2004, through a joint venture we opened a fixed-site center in Columbus, Ohio. In April 2004, we opened a fixed-site center in Simi Valley, California. In February 2004, we acquired the remaining joint venture interest in a fixed-site center in Henderson, Nevada. In August 2003, we acquired a joint venture interest in a fixed-site center located in Hammonton, New Jersey. All of these acquisitions and new centers were financed with internally generated funds.

Segments

      We have two reportable segments, fixed operations and mobile operations:

      Fixed Operations: Generally, our fixed operations consist of freestanding imaging centers which we refer to as fixed-site centers. However, our fixed operations also include four mobile facilities as part of our fixed operations in Maine. Revenues at our fixed-site centers are primarily generated from services billed, on a fee-for-service basis, directly to patients or third-party payors such as managed care organizations, Medicare, Medicaid, commercial insurance carriers and workers’ compensation funds, which we generally refer to as our patient services revenues and management fees. Revenues from our fixed operations are dependent on our ability to:

•  attract patient referrals from physician groups and hospitals;

•  increase procedure volume to maximize equipment utilization;

•  maintain our existing contracts and enter into new ones with managed care organizations and commercial insurance carriers; and

•  develop new fixed-site centers.

      Revenues from our fixed operations have been and will continue to be driven by the growth in the diagnostic imaging industry discussed above. These positive trends have been and will continue to be adversely affected by:

•  attractive financing arrangements by equipment manufacturers which have increased competition in our targeted regions, including by physician owned imaging facilities;

•  industry-wide increases in salaries and benefits for technologists;

•  increases in deductibles and co-payment charges to patients;

•  increases in the preauthorization requirements applicable to diagnostic imaging services by certain managed care organizations and state Medicaid programs;

•  reductions in reimbursement from certain third-party payors including proposed reductions from Medicare; and

•  reductions in reimbursement as a result of patient referrals from “third-party gatekeeper organizations.”

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      Mobile Operations: Our mobile operations consist of mobile facilities, which provide services to hospitals, physician groups and other healthcare providers. Our mobile operations include 33 parked mobile facilities, each of which serves a single customer. Revenues from our mobile operations are primarily generated from fee-for-service arrangements and fixed fee contracts billed directly to our hospital, physician group and other healthcare provider customers, which we generally refer to as contract services revenues. Our mobile operations revenues depend on our ability to:

•  establish new mobile customers within our targeted regions;

•  structure efficient mobile routes that maximize equipment utilization; and

•  renew existing mobile contracts with our hospital, physician group and other healthcare provider customers.

      Revenues from our mobile operations have been and will continue to be driven by the growth in the diagnostic imaging industry as discussed above. These positive trends have been and will continue to be adversely affected by:

•  increases in competition in our targeted regions from other mobile service providers;

•  industry-wide increases in salaries and benefits for technologists;

•  reductions in reimbursement from certain third-party payors including proposed reductions from Medicare;

•  attractive financing arrangements by equipment manufacturers which cause some of our customers and some of our customers’ referral sources to invest in their own diagnostic imaging equipment; and

•  a reduction in outpatient volumes at our fee-for-service customers due to increased deductibles and co-payment charges to patients.

      Revenues from both our fixed and mobile operations could also be affected by the timing of holidays, patient and referring physician vacation schedules and inclement weather.

Reimbursement

      Medicare. The Medicare program provides reimbursement for hospitalization, physician, diagnostic and certain other services to eligible persons 65 years of age and over and certain others. Providers are paid by the federal government in accordance with regulations promulgated by the United States Department of Health and Human Services and generally accept the payment with nominal deductible and co-insurance amounts required to be paid by the service recipient, as payment in full. Since 1983, hospital inpatient services have been reimbursed under a prospective payment system. Hospitals receive a specific prospective payment for inpatient treatment services based upon the diagnosis of the patient.

      Under Medicare’s OPPS a hospital is paid for outpatient services on a rate per service basis that varies according to the APC, to which the service is assigned rather than on a hospital’s costs. OPPS was implemented on August 1, 2000 and due to the anticipated adverse economic effect on hospitals, Congress provided for outlier payments for especially costly cases, as well as transitional payments for new technologies and innovative medical devices, drugs and biologics. While most of the transitional payments expired in 2003, CMS continues to make payments for new technology until sufficient data is collected to assign the new technology to an APC. Each year CMS publishes new APC rates that are determined in accordance with the promulgated methodology. The overall effect of OPPS has been to decrease reimbursement rates from those paid under the prior cost-based system. Multi-modality and certain fixed-site centers which are freestanding and not hospital-based facilities are not directly affected by OPPS.

      In November 2004, CMS announced a 21% reduction in hospital reimbursement rates for PET, effective January 1, 2005. Although the immediate effect on us of this rate reduction has been minimal, on a long-term basis this will have a negative impact on our PET and PET/ CT revenues as more hospital

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customers (both existing and future) negotiate lower rates with us. Because unfavorable reimbursement policies constrict the profit margins of the mobile customers we bill directly, we have and may continue to lower our fees to retain existing PET and PET/ CT customers and attract new ones; however, CMS recently announced that it will reimburse for additional PET procedures, including for Alzheimer’s disease and cervical cancer. Any further modifications under OPPS further reducing reimbursement to hospitals may adversely impact our financial condition and our operations since hospitals will seek to offset such additional modifications.

      Furthermore, in August 2005, CMS published proposed regulations that apply to hospital outpatient services that significantly decrease the reimbursement for diagnostic procedures performed together on the same day. Under the new methodology, CMS has identified families of imaging procedures by imaging modality and contiguous body area. Medicare will pay 100% of the technical component of the higher priced procedure and 50% for the technical component of each additional procedure for procedures involving contiguous body parts within a family of codes when performed in the same session. Under the current methodology, Medicare pays 100% of the technical component of each procedure. The implementation of these regulations would adversely impact our financial condition and our operations since our hospital customers will seek to offset their reduced reimbursement through lower rates.

      Services provided in non-hospital based freestanding facilities, such as IDTFs, are paid under the Medicare Part B fee schedule. CMS has also published proposed regulations, which would implement the same multi-procedure methodology rate reduction proposed for hospital outpatient services, for procedures reimbursed under the Part B fee schedule. Accordingly, Medicare payment for diagnostic imaging services under the Part B fee schedule may also be reduced. In addition, CMS is proposing an overall decrease of 4.3% in the Part B fee schedule for CMS’s fiscal year 2006. Accordingly, if these changes become final and take effect, these reductions in Medicare payment for diagnostic imaging services under the Part B fee schedule may have a material adverse effect on our financial condition and results of operations.

      All of the congressional and regulatory actions described above reflect industry-wide cost-containment pressures that we believe will continue to affect healthcare providers for the foreseeable future.

      Medicaid. The Medicaid program is a jointly-funded federal and state program providing coverage for low-income persons. In addition to federally-mandated basic services, the services offered and reimbursement methods vary from state to state. In many states, Medicaid reimbursement is patterned after the Medicare program; however, an increasing number of states have established or are establishing payment methodologies intended to provide healthcare services to Medicaid patients through managed care arrangements.

      Managed Care. Health Maintenance Organizations, or HMOs, Preferred Provider Organizations, or PPOs, and other managed care organizations attempt to control the cost of healthcare services by a variety of measures, including imposing lower payment rates, preauthorization requirements, limiting services and mandating less costly treatment alternatives. Managed care contracting has become very competitive and reimbursement schedules are at or below Medicare reimbursement levels. The development and expansion of HMOs, PPOs and other managed care organizations within our targeted regional networks could have a negative impact on utilization of our services in certain markets and/or affect the revenues per procedure which we can collect, since such organizations will exert greater control over patients’ access to diagnostic imaging services, the selection of the provider of such services and the reimbursement thereof.

      Some states have adopted or expanded laws or regulations restricting the assumption of financial risk by healthcare providers which contract with health plans. While we are not currently subject to such regulation, we or our customers may in the future be restricted in our ability to assume financial risk, or may be subjected to reporting requirements if we do so. Any such restrictions or reporting requirements could negatively affect our contracting relationships with health plans.

      Private Insurance. Private health insurance programs generally have authorized payment for our services on satisfactory terms. However, if Medicare reimbursement is reduced, we believe that private health insurance programs will also reduce reimbursement in response to reductions in government

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reimbursement, which could have an adverse impact on our business, financial condition and results of operations. Furthermore, certain third-party payors have proposed and implemented initiatives which have the effect of substantially decreasing reimbursement rates for diagnostic imaging services provided at non-hospital facilities, and payors are continuing to monitor reimbursement for diagnostic imaging services. Recently, a third-party payor announced a requirement of participation, which has not yet been fully implemented, that would require freestanding imaging center providers to be multi-modality and not simply offer one type of diagnostic imaging service. Similar initiatives enacted in the future by a significant number of additional third-party payors would have an adverse impact on our financial condition and our operations.

Revenues

      We earn revenues by providing services to patients, hospitals and other healthcare providers. Our patient services revenues are billed, on a fee-for-service basis, directly to patients or third-party payors such as managed care organizations, Medicare, Medicaid, commercial insurance carriers and worker’s compensation funds (collectively, “payors”). Patient services revenues also include balances due from patients, which are primarily collected at the time the procedure is performed. Our charge for a procedure is comprised of charges for both the technical and professional components of the service. Patient services revenues are presented net of (1) related contractual adjustments, which represent the difference between our charge for a procedure and what we will ultimately receive from payors and (2) payments due to radiologists for interpreting the results of the diagnostic imaging procedures. Our billing system does not generate contractual adjustments. Contractual adjustments are manual estimates based upon an analysis of (1) historical experience of contractual payments from payors and (2) the outstanding accounts receivables from payors. Contractual adjustments are written off against their corresponding asset account at the time payment is received from a payor, with a reduction to the allowance for contractual adjustments to the extent such an allowance was previously recorded. We report payments to radiologists on a net basis because (1) InSight is not the primary obligor for the provision of professional services, (2) the radiologists receive contractually agreed upon amounts from collections and (3) the radiologists bear the risk of non-collection. Our collection policy is to obtain all required insurance information at the time a procedure is scheduled, and to submit an invoice to the payor immediately after a procedure is completed. Most third-party payors require preauthorization before an MRI or PET procedure is performed on a patient.

      We refer to our revenues from hospitals, physician groups and other healthcare providers as contract services revenues. Contract services revenues are primarily generated from fee-for-service arrangements, fixed fee contracts and management fees billed to the hospital, physician group or other healthcare provider. Contract services revenues are generally billed to our customers on a monthly basis. Contract services revenues are recognized over the applicable contract period. Revenues collected in advance are recorded as unearned revenue.

      The provision for doubtful accounts related to revenues is reflected as an operating expense rather than a reduction of revenues and represents our estimate of amounts that will be uncollectible from patients, payors, hospitals and other healthcare providers. The provision for doubtful accounts includes amounts to be written off with respect to (1) specific accounts involving customers which are financially unstable or materially fail to comply with the payment terms of their contract and (2) other accounts based on our historical collection experience, including payor mix and the aging of patient accounts receivables balances. Estimates of uncollectible amounts are revised each period, and changes are recorded in the period they become known. Receivables deemed to be uncollectible, either through a customer default on payment terms or after reasonable collection efforts have been exhausted, are fully written off against their corresponding asset account, with a reduction to the allowance for doubtful accounts to the extent such an allowance was previously recorded. Our historical write-offs for uncollectible accounts are not concentrated in a specific payor class.

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      The following illustrates our payor mix based on revenues for the year ended June 30, 2005 (unaudited):

Percent of Total Revenues
Hospitals, physician groups, and other healthcare providers(1)	45	%
Managed care and insurance	38	%
Medicare/ Medicaid	13	%
Workers’ compensation	3	%
Other, including self-pay patients	1	%

(1)  No single hospital, physician group or other healthcare provider accounted for more than 5% of our total revenues.

      As of June 30, 2005, our days sales outstanding for trade accounts receivables on a net basis was 53 days. We calculate days sales outstanding by dividing accounts receivables, net of allowances, by the three-month average revenue per day.

      The aging of our gross and net trade accounts receivables as of June 30, 2005 is as follows (amounts in thousands):

														120 days
		Current			30 days			60 days			90 days			and older			Total
								(Unaudited)
Hospitals, physicians groups and other		$	11,799		$	5,724		$	1,559		$	480		$	867		$	20,429
healthcare providers
Managed care and insurance			22,362			10,392			5,271			3,055			11,839			52,919
Medicare/ Medicaid			7,439			1,835			1,213			1,160			3,812			15,459
Workers’ compensation			2,102			1,381			786			529			2,399			7,197
Other, including self-pay patients			229			169			134			92			18			642
Trade accounts receivables			43,931			19,501			8,963			5,316			18,935			96,646
Less:  Allowances for contractual adjustments			(14,943	)		(6,412	)		(3,307	)		(445	)		(4,305	)		(29,412	)
	Allowances for professional fees		(5,291	)		(2,213	)		(1,167	)		(731	)		(2,495	)		(11,897	)
	Allowances for doubtful accounts		(341	)		(163	)		(52	)		(1,843	)		(6,488	)		(8,887	)
Trade accounts receivables, net		$	23,356		$	10,713		$	4,437		$	2,297		$	5,647		$	46,450

Operating Expenses

      We operate in a capital intensive industry that requires significant amounts of capital to fund operations. As a result, a high percentage of our total operating expenses are fixed. Our fixed costs include debt service and capital lease payments, rent and operating lease payments, salaries and benefit obligations, equipment maintenance expenses, and insurance and vehicle operation costs. We expect that our costs for the salaries and benefits of technologists will continue to increase for the foreseeable future because of the industry’s competitive demand for their services. Due to the increase in our mobile PET and PET/ CT facilities, which are moved more frequently, our vehicle operation costs will continue to increase until we can maximize geographic operating efficiencies. Because a large portion of our operating expenses are fixed, any increase in our procedure volume disproportionately increases our operating cash flow. Conversely, any decrease in our procedure volume disproportionately decreases our operating cash flow. Our variable costs, which comprise only a small portion of our total operating expenses, include the cost of service supplies such as film, contrast media and radiopharmaceuticals used in PET and PET/ CT procedures.

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Results of Operations

      The following table sets forth certain condensed historical financial data expressed as a percentage of revenues for each of the periods indicated:

			Years Ended June 30,
			2005			2004			2003
REVENUES				100.0	%		100.0	%		100.0	%
COSTS OF OPERATIONS:
	Costs of services			61.4			58.0			52.9
	Provision for doubtful accounts			1.8			1.7			1.7
	Equipment leases			0.7			0.3			0.3
	Depreciation and amortization			20.7			20.2			20.7
		Total costs of operations		84.6			80.2			75.6
	Gross profit			15.4			19.8			24.4
CORPORATE OPERATING EXPENSES				(5.8	)		(5.6	)		(5.8	)
(LOSS) GAIN ON SALES OF CENTERS				—			0.7			—
EQUITY IN EARNINGS OF UNCONSOLIDATED PARTNERSHIPS				0.8			0.8			0.7
INTEREST EXPENSE, net				(14.2	)		(14.0	)		(15.8	)
	(Loss) income before income taxes			(3.8	)		1.7			3.5
PROVISION FOR INCOME TAXES				4.8			0.7			1.4
	Net (loss) income			(8.6	)%		1.0	%		2.1	%

      The following table sets forth historical revenues by segment for the periods indicated (amounts in thousands):

	Years Ended June 30,
	2005		2004		2003
Fixed operations	$	196,482	$	176,763	$	139,816
Mobile operations		120,391		114,121		97,936
Total	$	316,873	$	290,884	$	237,752

Years Ended June 30, 2005 and 2004

      Revenues: Revenues increased approximately 8.9% from approximately $290.9 million for the year ended June 30, 2004, to approximately $316.9 million for the year ended June 30, 2005. This increase was due to higher revenues from our fixed operations (approximately $19.7 million) and our mobile operations (approximately $6.3 million). Revenues from our fixed operations and mobile operations represented approximately 62% and 38%, respectively, of our total revenues for the year ended June 30, 2005.

      Revenues from our fixed operations increased approximately 11.1% from approximately $176.8 million for the year ended June 30, 2004, to approximately $196.5 million for the year ended June 30, 2005. The increase was due primarily to (1) the CMI acquisition (approximately $29.7 million); and (2) revenues from the fixed-site centers we opened in fiscal 2005 and 2004 (approximately $1.5 million), partially offset by a reduction in (1) revenues from our existing fixed-site centers; and (2) revenues from the fixed-site centers we sold in fiscal 2005 and 2004 (approximately $1.3 million). Revenues at our existing consolidated fixed-site centers decreased approximately 3.1% because of (1) a decrease in procedure volume at the fixed-site centers as a result of the adverse factors affecting our fixed operations discussed above; and (2) a decrease in our average reimbursement from payors.

      Revenues from our mobile operations increased approximately 5.5% from approximately $114.1 million for the year ended June 30, 2004, to approximately $120.4 million for the year ended June 30, 2005. The increase was due to (1) revenues from our existing mobile facilities (approximately $4.4 million); and

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(2) the CDL acquisition (approximately $1.9 million). The increase in revenues from our existing mobile facilities was the result of higher PET and PET/ CT revenues (approximately $5.8 million), partially offset by lower MRI and other revenues (approximately $1.4 million). The increase in PET and PET/ CT revenues was primarily due to an increase in the number of PET and PET/ CT facilities in service. The decrease in MRI revenues was due to fewer MRI facilities in service and the loss of some high volume customer contracts. The loss of high volume customers is primarily the result of customers reaching sufficient patient volumes to finance the cost of acquiring their own system. This has increased in recent years as equipment manufacturers have offered attractive financing to high volume customers. We experienced losses of high volume customers across our network and not just in any one region.

      Approximately 57% of our total revenues for the year ended June 30, 2005 were generated from patient services revenues. Patient services revenues from fixed operations and mobile operations represented approximately 99% and 1%, respectively, of total patient services revenues for the year ended June 30, 2005. Approximately 43% of our total revenues for the year ended June 30, 2005, were generated from contract services revenues. Contract services revenues from fixed operations and mobile operations represented approximately 13% and 87%, respectively, of total contract services revenues for the year ended June 30, 2005.

      Costs of Operations: Costs of operations increased approximately 14.9% from approximately $233.4 million for the year ended June 30, 2004, to approximately $268.2 million for the year ended June 30, 2005. This increase was due primarily to (1) the CDL and CMI acquisitions (approximately $1.2 million and $22.4 million, respectively); (2) increased costs at our mobile operations (approximately $9.8 million); (3) an increase in salaries and benefits at our billing operations, primarily related to the CMI acquisition (approximately $0.9 million); and (4) a charge related to the consolidation of certain billing offices (approximately $0.3 million).

      Costs of operations at our fixed operations increased approximately 16.5% from approximately $128.8 million for the year ended June 30, 2004, to approximately $150.1 million for the year ended June 30, 2005. The increase was due to (1) the CMI acquisition (approximately $22.4 million); (2) increased costs at the fixed-site centers we opened in fiscal 2005 and 2004 (approximately $1.4 million); (3) a charge for the closure of a fixed-site center (approximately $0.5 million); (4) a charge for severance payments for a terminated employee (approximately $0.3 million); and (5) an increase in costs at our existing fixed-site centers, partially offset by reduced costs from the fixed-site centers we sold in fiscal 2005 and 2004 (approximately $1.3 million).

      Costs of operations at our mobile operations increased approximately 12.6% from approximately $87.1 million for the year ended June 30, 2004, to approximately $98.1 million for the year ended June 30, 2005. The increase was due to (1) the CDL acquisition (approximately $1.2 million); and (2) increased costs at our existing mobile facilities (approximately $9.8 million). The increase in costs at our existing mobile facilities was due primarily to (1) higher salaries and benefits, particularly technologists (approximately $4.5 million); (2) an increase in equipment lease costs (approximately $2.1 million); (3) an increase in vehicle costs (approximately $0.2 million); and (4) an increase in medical supply costs (approximately $0.8 million). Our PET and PET/ CT facilities, which have higher (1) medical supply costs relating to the use of radiopharmaceuticals; (2) technologist salaries relating to the shortage of PET technologists and the number of technologists needed to operate PET/ CT facilities; and (3) vehicle operation costs because PET and PET/ CT facilities are moved more frequently, accounted for approximately $6.9 million of the increase in costs for our mobile operations. We believe that these higher costs will continue as we add additional PET/ CT facilities.

      Corporate Operating Expenses: Corporate operating expenses increased approximately 13.6% from approximately $16.2 million for the year ended June 30, 2004, to approximately $18.4 million for the year ended June 30, 2005. The increase was due primarily to (1) additional legal and accounting costs primarily related to Sarbanes-Oxley implementation (approximately $0.9 million); (2) consulting costs (approximately $0.5 million); (3) higher salaries and benefits (approximately $0.5 million); and (4) a charge for severance payments for a terminated employee (approximately $0.8 million). In 2005, we did

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not have any costs and expenses related to a withdrawn public offering, which totaled approximately $1.7 million in 2004.

      Interest Expense, net: Interest expense, net increased approximately 10.3% from approximately $40.7 million for the year ended June 30, 2004, to approximately $44.9 million for the year ended June 30, 2005. The increase was due primarily to additional indebtedness related to the CDL and CMI acquisitions and an increase in the interest rate on our variable rate indebtedness, partially offset by a reduction due to principal payments on notes payable and capital lease obligations.

      Provision for Income Taxes: Provision for income taxes increased from approximately $2.0 million for the year ended June 30, 2004, to approximately $15.1 million for the year ended June 30, 2005. As a result of our pre-tax loss for the year ended June 30, 2005 and anticipated future tax losses, we determined in the fourth quarter that a valuation allowance was necessary due to the uncertainty of future realization of net operating loss carryforwards and other assets. This decision was based on our anticipated future cumulative pre-tax losses, the main determination for recording such an allowance. In determining the net asset subject to a valuation allowance, we excluded a deferred tax liability related to an asset with an indefinite useful life that is not expected to reverse in the foreseeable future. This resulted in a net deferred tax liability of approximately $15.2 million after application of the valuation allowance. This valuation allowance does not affect our cash flows or the timing of income taxes payable in the future.

Years Ended June 30, 2004 and 2003

      Revenues: Revenues increased approximately 22.3% from approximately $237.8 million for the year ended June 30, 2003, to approximately $290.9 million for the year ended June 30, 2004. This increase was due to an increase in revenues from our fixed operations (approximately $36.9 million) and an increase in revenues from our mobile operations (approximately $16.2 million). Revenues for our fixed operations and mobile operations represented approximately 61% and 39%, respectively, of our total revenues for the year ended June 30, 2004.

      Revenues from our fixed operations increased approximately 26.4% from approximately $139.8 million for the year ended June 30, 2003, to approximately $176.8 million for the year ended June 30, 2004. The increase was due to (1) the Central Valley acquisition (approximately $20.0 million); (2) the CMI acquisition (approximately $10.3 million); (3) revenues from the fixed-site centers we opened in fiscal 2004 and 2003 (approximately $3.6 million); and (4) revenues from our existing fixed-site centers (approximately $4.3 million), partially offset by a decrease in revenues from the sale of a fixed-site center in Hobart, Indiana in fiscal 2004 (approximately $1.2 million). The increase in our revenues from our existing fixed-site centers was the result of a 4% increase in utilization, partially offset by a 1% decrease in reimbursement from third-party payors.

      Revenues from our mobile operations increased approximately 16.5% from approximately $97.9 million for the year ended June 30, 2003, to approximately $114.1 million for the year ended June 30, 2004. The increase was due to the CDL acquisition (approximately $21.0 million), partially offset by (1) reduced revenues associated with our short-term rental activities (approximately $1.1 million) and (2) reduced revenues from our existing mobile facilities (approximately $3.7 million). The decrease in revenues associated with our short-term rental activities is the result of fewer upgrades or installations of MRI equipment at hospitals which utilize our mobile facilities on a short-term or interim basis. The decrease in revenues from our existing mobile facilities was the result of lower MRI and other revenues (approximately $5.9 million), partially offset by higher PET revenues (approximately $2.2 million). The increase in PET revenues is primarily due to an increase in the number of PET facilities in service. The decrease in MRI revenues was due to a decrease in the number of MRI facilities in service and the loss of high volume customer contracts, partially offset by an increase in procedure volume at replacement accounts, which initially had lower procedure volumes. The loss of high volume customers is primarily the result of customers reaching sufficient patient volumes to finance the cost of acquiring their own system. This has increased in recent years as equipment manufacturers have offered attractive financing to high volume customers. We experienced losses of high volume customers across our network and not just in any one region.

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      Approximately 56% of our total revenues for the year ended June 30, 2004 were generated from patient services revenues. Patient services revenues for the fixed operations and mobile operations represented approximately 99% and 1%, respectively, of total patient services revenues for the year ended June 30, 2004. Approximately 44% of our total revenues for the year ended June 30, 2004, were generated from contract services revenues. Contract services revenues for the fixed operations and mobile operations represented approximately 13% and 87%, respectively, of total contract services revenues for the year ended June 30, 2004.

      Costs of Operations: Costs of operations increased approximately 29.6% from approximately $180.0 million for the year ended June 30, 2003, to approximately $233.4 million for the year ended June 30, 2004. This increase was due primarily to (1) the Central Valley, CDL and CMI acquisitions (approximately $15.2 million, $13.9 million and $7.7 million, respectively); (2) costs at the fixed-site centers we opened in fiscal 2004 and 2003 (approximately $3.3 million); and (3) increased costs at our existing fixed-site centers and mobile facilities (approximately $14.3 million), partially offset by reduced costs from the sale of a fixed-site center in Hobart, Indiana (approximately $1.0 million). The increase in costs of operations is due primarily to (1) higher salaries and benefits (approximately $7.8 million); (2) equipment maintenance costs (approximately $2.6 million); (3) insurance (approximately $1.0 million); and (4) depreciation expense (approximately $2.7 million), partially offset by reduced equipment lease costs (approximately $0.3 million) and provision for doubtful accounts (approximately $0.1 million).

      Costs of operations at our fixed operations increased approximately 29.1% from approximately $99.8 million for the year ended June 30, 2003, to approximately $128.8 million for the year ended June 30, 2004. The increase was due to (1) the Central Valley and CMI acquisitions (approximately $15.2 million and $7.7 million, respectively); (2) costs at the fixed-site centers we opened in fiscal 2004 and 2003 (approximately $3.3 million); and (3) increased costs at our existing fixed-site centers (approximately $3.8 million), partially offset by reduced costs from the sale of the fixed-site center discussed above (approximately $1.0 million). The increase in costs of operations at our existing fixed-site centers was due primarily to (1) higher salaries and benefits (approximately $3.8 million), particularly technologists and additional senior regional management; (2) equipment maintenance costs (approximately $0.9 million); (3) insurance (approximately $0.6 million); and (4) depreciation expense (approximately $0.3 million), partially offset by reduced provision for doubtful accounts (approximately $0.3 million).

      Costs of operations at our mobile operations increased approximately 30.4% from approximately $66.8 million for the year ended June 30, 2003, to approximately $87.1 million for the year ended June 30, 2004. The increase was due to (1) the CDL acquisition (approximately $13.9 million) and (2) increased costs at our existing mobile facilities (approximately $6.4 million). The increase in costs at our existing mobile facilities was due to (1) higher salaries and benefits (approximately $2.9 million), particularly technologists and additional mobile sales personnel; (2) equipment maintenance costs (approximately $1.0 million); (3) an increase in vehicle costs due to the reduction of our short-term rental activities (approximately $2.2 million); (4) insurance (approximately $0.3 million); and (5) depreciation expense (approximately $1.9 million), partially offset by reduced equipment lease costs (approximately $1.0 million) and other costs (approximately $0.9 million).

      Corporate Operating Expenses: Corporate operating expenses increased approximately 17.9% from approximately $13.8 million for the year ended June 30, 2003, to approximately $16.2 million for the year ended June 30, 2004. The increase was due primarily to (1) higher salaries and benefits (approximately $0.2 million); (2) additional costs to make IRIS conform with HIPAA requirements (approximately $0.1 million); (3) additional occupancy costs (approximately $0.1 million); and (4) costs and expenses incurred related to a withdrawn initial public offering (approximately $1.7 million), partially offset by reduced consulting costs related to our acquisition and development activities (approximately $0.3 million).

      Gain on Sale of Center: In December 2003, we sold a fixed-site center located in Hobart, Indiana for approximately $5.4 million. We realized a gain of approximately $2.1 million on the sale.

      Interest Expense, net: Interest expense, net increased approximately 8.5% from approximately $37.5 million for the year ended June 30, 2003, to approximately $40.7 million for the year ended June 30,

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2004. The increase was due primarily to additional debt related to the Central Valley, CDL and CMI acquisitions, partially offset by principal payments on notes payable and capital lease obligations.

      Provision for Income Taxes: Provision for income taxes decreased from $3.3 million for year ended June 30, 2003, to approximately $2.0 million for the year ended June 30, 2004. We have recorded a tax provision at an effective rate of 40% for the years ended June 30, 2004 and 2003, respectively.

Financial Condition, Liquidity and Capital Resources

      We have historically funded our operations and capital expenditure requirements from net cash provided by operating activities, capital and operating leases and our credit facility. We will fund future working capital and capital expenditure requirements from net cash provided by operating activities, capital and operating leases, and, to the extent necessary, our revolving credit facility.

      Liquidity: We believe, based on currently available information, that future cash flows provided by operating activities will be adequate to meet our anticipated interest expense, federal and state cash tax expense, capital expenditures, working capital, scheduled principal payments and other debt repayments for the next twelve months.

      Our short-term and long-term liquidity needs will arise primarily from:

•  principal and interest payments relating to our credit facility;

•  interest payments relating to the notes and our 9⁷/8% unsecured senior subordinated notes;

•  capital expenditures;

•  working capital requirements to support business growth; and

•  potential acquisitions.

      There are no scheduled principal repayments on our senior subordinated notes until 2011.

      Cash and cash equivalents as of June 30, 2005 were approximately $20.8 million. Our primary source of liquidity is cash provided by operating activities. Our ability to generate cash flows from operating activities is based upon several factors including the following:

•  the volume of patients at our fixed-site centers;

•  the demand for our mobile services;

•  our ability to control expenses; and

•  our ability to collect our trade accounts receivables from third-party payors, hospitals, physician groups, other healthcare providers and patients.

      A summary of cash flows is as follows (amounts in thousands):

	Years Ended June 30,
	2005			2004			2003
Net cash provided by operating activities	$	60,864		$	60,120		$	61,756
Net cash used in investing activities		(32,578	)		(142,250	)		(102,705	)
Net cash (used in) provided by financing activities		(37,859	)		92,988			42,720
Increase (decrease) in cash and cash equivalents	$	(9,573	)	$	10,858		$	1,771

      Net cash provided by operating activities was approximately $60.9 million for the year ended June 30, 2005 and resulted primarily from (1) net income before depreciation, amortization and deferred taxes (approximately $53.6 million); (2) a decrease in trade accounts receivables, net (approximately $8.1 million); and (3) an increase in accounts payable and accrued expenses (approximately $0.7 million), partially offset by an increase in other current assets (approximately $1.7 million). The decrease in trade

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accounts receivables, net is due to increased collections on patient services revenues. The increase in other current assets is due primarily to the payment of insurance premiums.

      Net cash used in investing activities was approximately $32.6 million for the year ended June 30, 2005. Cash used in investing activities resulted primarily from our purchase or upgrade of diagnostic imaging equipment at our existing fixed-site centers and mobile facilities (approximately $30.5 million) and net purchases of short-term investments (approximately $5.0 million), partially offset by proceeds from the sales of centers discussed above (approximately $2.8 million).

      Net cash used in financing activities was approximately $37.9 million for the year ended June 30, 2005. Cash used in financing activities resulted from principal payments of notes payable and capital lease obligations, including $30.0 million of voluntary prepayments on our credit facility.

      The following table sets forth our earnings before interest, taxes, depreciation and amortization, or EBITDA, for the years ended June 30, 2005, 2004 and 2003. EBITDA has been included because we believe that it is a useful tool for us and our investors to measure our ability to provide cash flows to meet debt service, capital expenditure and working capital requirements. EBITDA should not be considered an alternative to, or more meaningful than, income from company operations or other traditional indicators of operating performance and cash flow from operating activities determined in accordance with accounting principles generally accepted in the United States. We present the discussion of EBITDA because covenants in the indenture governing our senior subordinated notes and the credit agreement relating to our credit facility contain ratios based on this measure. While EBITDA is used as a measure of operations and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculations. Our reconciliation of net cash provided by operating activities to EBITDA is as follows (amounts in thousands):

		Years Ended June 30,
		2005			2004			2003
		(Unaudited)
Net cash provided by operating activities		$	60,864		$	60,120		$	61,756
	Provision for income taxes		15,069			1,950			3,266
	Interest expense, net		44,860			40,682			37,514
	(Loss) gain on sales of centers		(170	)		2,129			—
	Net change in operating assets and liabilities		(7,086	)		(592	)		(7,489	)
	Net change in deferred income taxes		(15,224	)		—			—
EBITDA		$	98,313		$	104,289		$	95,047

      EBITDA decreased approximately 5.8% from approximately $104.3 million for the year ended June 30, 2004, to approximately $98.3 million for the year ended June 30, 2005. This decrease was due primarily to (1) an increase in corporate operating expenses (approximately $2.2 million), (2) an increase in salaries and benefits at our billing operations primarily related to the CMI acquisition (approximately $0.9 million) and (3) a decrease in EBITDA from our mobile operations (approximately $2.9 million), partially offset by an increase in EBITDA from our fixed operations (approximately $0.7 million).

      EBITDA from our fixed operations increased 1.0% from approximately $73.4 million for the year ended June 30, 2004, to approximately $74.1 million for the year ended June 30, 2005. This increase was due primarily to (1) the CMI acquisition (approximately $11.1 million) and (2) the fixed-site centers we opened in fiscal 2005 (approximately $0.6 million), partially offset by (1) a decrease at our existing fixed-site centers (approximately $7.5 million), primarily related to decreased procedure volume and reimbursement discussed above, (2) the elimination of the gain on sale of the fixed-site center we sold in fiscal 2004 (approximately $2.1 million), (3) the elimination of EBITDA at the fixed-site centers we sold in fiscal 2005 and 2004 (approximately $0.4 million) and (4) a charge for severance payments for a terminated employee (approximately $0.3 million).

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      EBITDA from our mobile operations decreased approximately 5.2% from approximately $56.3 million for the year ended June 30, 2004, to approximately $53.4 million for the year ended June 30, 2005. This decrease was due to a reduction at our existing mobile facilities (approximately $4.0 million), primarily related to the increase in costs discussed above, partially offset by the CDL acquisition (approximately $1.1 million).

      EBITDA increased approximately 9.7% from approximately $95.0 million for the year ended June 30, 2003, to approximately $104.3 million for the year ended June 30, 2004. The increase was due primarily to increases in EBITDA from our fixed operations (approximately $14.3 million) and our mobile operations (approximately $0.8 million), partially offset by an increase in corporate operating expenses (approximately $2.4 million) and an increase in salaries and benefits of our billing operations primarily related to the Central Valley and CMI acquisitions.

      EBITDA from our fixed operations increased approximately 24.2% from approximately $59.1 million for the year ended June 30, 2003, to approximately $73.4 million for the year ended June 30, 2004. This increase was due primarily to (1) the Central Valley and CMI acquisitions (approximately $7.1 million and $3.8 million, respectively), (2) an increase at our existing fixed-site centers (approximately $3.3 million) and (3) the fixed-site centers we opened in fiscal 2004 and 2003 (approximately $0.7 million), partially offset by a reduction at the fixed-site center we sold in 2004 (approximately $0.5 million).

      EBITDA from our mobile operations increased approximately 1.5% from approximately $55.5 million for the year ended June 30, 2003, to approximately $56.3 million for the year ended June 30, 2004. This increase was due to the CDL acquisition (approximately $10.2 million), partially offset by a reduction at our existing mobile facilities (approximately $9.4 million).

      Capital Expenditures: In fiscal 2005, we purchased or leased 11 MRI systems, four PET/ CT facilities and eight CT systems. As of June 30, 2005, we have committed to purchase or lease at an approximate aggregate cost of $11.2 million, six diagnostic imaging systems through February 2006. We expect to use either internally generated funds or leases to finance the purchase of such equipment. We may purchase, lease or upgrade other diagnostic imaging systems as opportunities arise to place new equipment into service when new contract services agreements are signed, existing agreements are renewed, acquisitions are completed, or new fixed-site centers and mobile facilities are developed in accordance with our business strategy.

      Credit Facility and Outstanding Notes: As of June 30, 2005, through InSight, we had a credit facility with Bank of America, N.A. and a syndicate of other lenders consisting of: (1) a term loan with a principal balance of approximately $217.8 million, (2) an additional term loan with a principal balance of approximately $19.8 million and (3) a $50.0 million revolving credit facility. Borrowings under the credit facility bore interest at LIBOR plus 3.75% to 4.0%. As of June 30, 2005, there was a letter of credit of approximately $1.8 million outstanding under our credit facility. The credit facility required us to pay an unused facility fee up to 0.625% per annum, payable quarterly, on unborrowed amounts on the revolving credit facility. As of June 30, 2005 there were no borrowings under the revolving credit facility. The credit facility was secured by a first priority lien on substantially all of our assets.

      In addition to the indebtedness under our credit facility, through InSight, as of June 30, 2005, we had outstanding $250.0 million of 9⁷/8% unsecured senior subordinated notes. The notes mature in November 2011, with interest payable semi-annually and are redeemable at our option, in whole or in part, on or after November 1, 2006.

      The credit facility contains various restrictive covenants which prohibit us from prepaying other indebtedness, including the notes, and require us to maintain specified financial ratios and satisfy financial condition tests. As of June 30, 2005, we were in compliance with these covenants. In addition, the credit facility prohibits InSight from declaring or paying any dividends to us and prohibits us from making any payments with respect to the notes if we fail to perform our obligations under, or we fail to meet the conditions of, the credit facility or if payment creates a default under the credit facility.

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      Subsequent Event: On September 22, 2005, through InSight, we issued $300.0 million of initial notes. The proceeds from the issuance of the initial notes were used to repay all borrowings under our credit facility, to repurchase approximately $55.5 million aggregate principal amount of our unsecured senior subordinated notes in privately negotiated transactions, and pay certain related fees and expenses. The private offering was made within the United States only to qualified institutional buyers, and outside the United States only to non-U.S. investors under Regulation S of the Securities Act. The initial notes are unconditionally guaranteed on a senior secured basis by Holdings and InSight’s existing and future domestic wholly owned subsidiaries. The initial notes and the guarantees are secured by a first priority lien on substantially all of Holding’s, InSight’s and InSight’s wholly owned subsidiaries, future tangible and intangible personal property including, without limitation, equipment, certain contracts and intellectual property, but are not secured by a lien on their real property, accounts receivables and related assets, cash accounts related to receivables and certain other assets. In addition, the initial notes are secured by a portion of InSight’s stock and the stock or other equity interests of InSight’s subsidiaries.

      Concurrently with the issuance of the initial notes and repayment of all outstanding borrowings under the existing credit facility, we amended and restated the credit facility to reduce and modify the existing $50.0 million revolving credit facility to a $30.0 million asset-based revolving credit facility. Holdings and all of InSight’s existing and future, direct and indirect, wholly owned subsidiaries either are or will be co-borrowers, or do or will unconditionally guarantee all obligations of the borrowers under the amended revolving credit facility. Bank of America, N.A. is the administrative and collateral agent under the amended revolving credit facility. The amended revolving credit facility has a maturity of five years. Borrowings under the amended revolving credit facility bear interest at a rate equal to the sum of LIBOR plus 2.5% per annum or, at our option, the base rate (which is the Bank of America, N.A. prime rate). The default rate on the amended revolving credit facility is 2% above the otherwise applicable interest rate.

      All obligations under the amended revolving credit facility and the obligations of the guarantors under the guarantees are secured, subject to certain exceptions, by a first priority security interest in all of the following property and interests of Holdings, InSight and each of InSight’s subsidiaries that are co-borrowers or have provided guarantees: (i) all accounts; (ii) all instruments, chattel paper (including, without limitation, electronic chattel paper), documents, letter-of-credit rights and supporting obligations relating to any account; (iii) all general intangibles that relate to any account; (iv) all monies now or at any time or times hereafter in the possession or under the control of the lenders under the amended revolving credit facility; (v) all products and cash and non-cash proceeds of the foregoing; (vi) all of the deposit accounts identified as of the closing date and all future deposit accounts established for the collection of proceeds from the assets described above; and (vii) all books and records pertaining to any of the foregoing. The security interest purported to be created in respect of deposit accounts, as described above, is subject to any restrictions imposed by applicable law.

      Contractual Commitments: As defined by SEC reporting regulations, our contractual obligations as of June 30, 2005 are as follows (amounts in thousands):

			Payments Due by Period
			Less than		1-3		3-5		After
	Total		1 Year		Years		Years		5 Years
Long-term debt obligations	$	698,378	$	44,695	$	262,181	$	104,471	$	287,031
Capital lease obligations		14,711		5,802		8,583		326		—
Operating lease obligations		41,087		9,035		15,594		8,566		7,892
Purchase commitments		11,180		11,180		—		—		—
Total contractual obligations	$	765,356	$	70,712	$	286,358	$	113,363	$	294,923

      The long-term debt obligations and capital lease obligations include both principal and interest commitments for the periods presented. The interest commitment on our credit facility is based on our weighted average interest rate at June 30, 2005 (7.26%).

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Off-Balance Sheet Arrangements

      There are no off-balance sheet transactions, arrangements or obligations (including contingent obligations) that have, or are reasonably likely to have a current or future material effect on our financial condition, changes in the financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

      Management’s discussion and analysis of financial condition and results of operations, as well as disclosures included elsewhere in this prospectus are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingencies. We believe the critical accounting policies that most impact the consolidated financial statements are described below. A summary of our significant accounting policies can be found in the notes to our consolidated financial statements which are included elsewhere in this prospectus.

      Revenue Recognition: Revenues from patient services and from contract services are recognized when services are provided. Patient services revenues are presented net of (1) related contractual adjustments, which represent the difference between our charge for a procedure and what we will ultimately receive from private health insurance programs, Medicare, Medicaid and other federal healthcare programs, and (2) payments due to radiologists. We report payments made to radiologists on a net basis because (1) we are not the primary obligor for the provision of professional services, (2) the radiologists receive contractually agreed upon amounts from collections and (3) the radiologists bear the risk of non-collection. Contract services revenues are recognized over the applicable contract period. Revenues collected in advance are recorded as unearned revenue.

      Trade Accounts Receivables: We review our trade accounts receivables and our estimates of the allowance for doubtful accounts and contractual adjustments each period. Contractual adjustments are manual estimates based upon an analysis of (1) historical experience of contractual payments from payors and (2) the outstanding accounts receivables from payors. Contractual adjustments are written off against their corresponding asset account at the time a payment is received from a payor, with a reduction to the allowance for contractual adjustments to the extent such an allowance was previously recorded. Estimates of uncollectible amounts are revised each period, and changes are recorded in the period they become known. The provision for doubtful accounts includes amounts to be written off with respect to (1) specific accounts involving customers, which are financially unstable or materially fail to comply with the payment terms of their contract and (2) other accounts based on our historical collection experience, including payor mix and the aging of patient accounts receivables balances. Receivables deemed to be uncollectible, either through a customer default on payment terms or after reasonable collection efforts have been exhausted, are fully written off against their corresponding asset account, with a reduction to the allowance for doubtful accounts to the extent such an allowance was previously recorded. Our historical write-offs for uncollectible accounts receivables are not concentrated in a specific payor class. While we have not in the past experienced material differences between the amounts we have collected and our estimated allowances, the amounts we realize in the future could differ materially from the amounts assumed in arriving at the allowance for doubtful accounts and contractual adjustments.

      Goodwill and Other Intangible Assets: Goodwill represents the excess purchase price we paid over the fair value of the tangible and intangible assets and liabilities acquired in acquisitions. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” (SFAS 142), the goodwill and indefinite-lived intangible asset balances are not being amortized, but instead are subject to an annual assessment of impairment by applying a fair-value based test. Net other intangible assets are amortized on a straight-line basis over the estimated lives of the assets ranging from five to thirty years.

      We evaluate the carrying value of goodwill and acquisition-related intangible assets, including the related amortization period, in the second quarter of each fiscal year. Additionally, we review the carrying

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amount of goodwill whenever events and circumstances indicate that the carrying amount of goodwill may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit and adverse legal or regulatory developments. In evaluating goodwill and intangible assets not subject to amortization, we complete the two-step goodwill impairment test as required by SFAS 142. In a business combination, goodwill is allocated to our two reporting units (fixed and mobile), which are the same as our reportable operating segments, based on relative fair value of the assets acquired and liabilities assumed. In the first of a two-step impairment test, we determine the fair value of these reporting units using a discounted cash flow valuation model or market multiples, as appropriate. We compare the fair value for the reporting unit to its carrying value. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not impaired and no further testing is required. If the fair value does not exceed the carrying value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step compares the implied fair value of the reporting unit with the carrying amount of that goodwill. As of June 30, 2005, we do not believe any impairment of goodwill or other intangible assets has occurred.

      We assess the ongoing recoverability of our intangible assets subject to amortization by determining whether the intangible asset balance can be recovered over the remaining amortization period through projected undiscounted future cash flows. If projected future cash flows indicate that the unamortized intangible asset balances will not be recovered, an adjustment is made to reduce the net intangible asset to an amount consistent with projected future cash flows discounted at our incremental borrowing rate. Cash flow projections, although subject to a degree of uncertainty, are based on trends of historical performance and management’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions.

      Income Taxes: We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

New Pronouncements

      In May 2005, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards (SFAS) No. 154, “Accounting Changes and Error Corrections — a replacement of APB Opinion No. 20 and FASB Statement No. 3” (SFAS 154). SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle. These requirements apply to all voluntary changes and changes required by an accounting pronouncement in the unusual instance that a pronouncement does not include specific transition provisions. SFAS 154 is effective for fiscal years beginning after December 15, 2005. As such, we are required to adopt these provisions at the beginning of fiscal 2007. We do not expect the adoption of SFAS 154 to have a material impact on our financial condition and results of operations.

      In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” (SFAS 123R). SFAS 123R requires expensing of stock options and other share-based payments and supersedes FASB’s earlier rule (SFAS 123) that had allowed companies to choose between expensing stock options or showing pro-forma disclosure only. We will be required to implement SFAS 123R at the beginning of fiscal 2007. We do not believe that the impact of adopting SFAS 123R would be materially different than the pro-forma disclosures under SFAS 123 (Note 2) to the consolidated financial statements, which are a part of this prospectus.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      We provide our services in the United States and receive payment for our services exclusively in United States dollars. Accordingly, our business is unlikely to be affected by factors such as changes in foreign market conditions or foreign currency exchange rates.

      Our market risk exposure relates primarily to interest rates, where we will periodically use interest rate swaps to hedge variable interest rates on long-term debt under our credit facility. We do not engage in activities using complex or highly leveraged instruments.

Interest Rate Risk

      In order to modify and manage the interest characteristics of our outstanding indebtedness and limit the effects of interest rates on our operations, we may use a variety of financial instruments, including interest rate hedges, caps, floors and other interest rate exchange contracts. The use of these types of instruments to hedge our exposure to changes in interest rates carries additional risks such as counter-party credit risk and legal enforceability of hedging contracts. We do not enter into any transactions for speculative or trading purposes.

      Our future earnings and cash flows and some of our fair values relating to financial instruments are dependent upon prevailing market rates of interest, such as LIBOR. Based on interest rates and outstanding balances as of June 30, 2005, a 1% change in interest rates on our $238.3 million of floating rate indebtedness would affect annual future earnings and cash flows by approximately $2.4 million. The weighted average interest rate on our floating indebtedness as of June 30, 2005 was 7.26%.

      On September 22, 2005, InSight issued $300.0 million of initial notes and used the proceeds from this issuance to among other things pay off our floating rate indebtedness that was previously outstanding. Interest on the initial notes accrues at the rate per annum, reset quarterly, equal to LIBOR plus 5.25%. As a result of the issuance of these notes, a 1% change in interest rates on our $300.0 million of floating rate indebtedness would affect annual future earnings and cash flows by approximately $3.0 million. The weighted average interest rate on our floating indebtedness as of September 30, 2005 was 9.17%.

      Through InSight, as of June 30, 2005, we also have outstanding $250 million in senior subordinated notes which mature in November 2011 and bear interest at 9⁷/8%, payable semi-annually. The fair value of our senior subordinated notes as of June 30, 2005 was approximately $198 million.

      These amounts are determined by considering the impact of hypothetical interest rates on our borrowing cost. These analyses do not consider the effects of the reduced level of overall economic activity that could exist in that environment. Further, in the event of a change of this magnitude, we would consider taking actions to further mitigate our exposure to any such change. Due to the uncertainty of the specific actions that would be taken and their possible effects, however, this sensitivity analysis assumes no changes in our capital structure.

Inflation Risk

      We do not believe that inflation has had a material adverse impact on our business or operating results during the periods presented. We cannot assure you, however, that our business will not be affected by inflation in the future.

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BUSINESS

      We are a nationwide provider of diagnostic imaging services through our integrated network of fixed-site centers and mobile facilities which are focused in targeted regions throughout the United States. Our services include magnetic resonance imaging, or MRI, positron emission tomography, or PET, computed tomography, or CT, and other technologies. These services are noninvasive techniques that generate representations of internal anatomy on film or digital media which are used by physicians for the diagnosis and assessment of diseases and disorders.

      As of June 30, 2005, our network consists of 120 fixed-site centers and 115 mobile facilities. This combination allows us to provide a full continuum of imaging services to better meet the needs of our customers, including healthcare providers, such as hospitals and physicians, and payors such as managed care organizations, Medicare, Medicaid and insurance companies. Our fixed-site centers include freestanding centers and joint ventures with hospitals and radiology groups. Our mobile facilities provide hospitals, physician groups and other healthcare providers access to imaging technologies when they lack either the resources or patient volume to provide their own imaging services or require incremental capacity. We enter into agreements with radiologists to provide professional services, which include supervision and interpretation of imaging procedures and quality assurance. We do not engage in the practice of medicine. We have two reportable segments, fixed operations and mobile operations. Our mobile operations include 33 parked mobile facilities, each of which serves a single customer. Our fixed operations include four mobile facilities as part of our fixed operations in Maine. Certain financial information regarding our reportable segments is included in Note 16 to the consolidated financial statements, which are a part of this prospectus.

      Historically, we pursued a strategy that was largely focused on growth through the acquisition of imaging businesses in various parts of the country. We plan to refocus our strategic efforts away from acquisition growth to organic growth and will look to leverage our presence and advanced imaging systems in our targeted regions. We also plan to drive operational efficiencies, improve utilization of our imaging systems and enhance relationships with provider partners, including radiologists and hospitals, and with the payor community.

      Our principal executive offices are located at 26250 Enterprise Court, Suite 100, Lake Forest, California 92630, and our telephone number is (949) 282-6000. Our Internet address is www.insighthealth.com. www.insighthealth.com is a textual reference only, meaning that the information contained on the website is not part of this prospectus and is not incorporated by reference in this prospectus or in any other filings we make with the SEC.

Fixed-Site Business

      Our fixed-site centers provide a full spectrum of diagnostic imaging services to patients, physicians, insurance payors and managed care organizations. Of our 120 fixed-site centers, 77 offer MRI services exclusively and three offer either PET or another type of service exclusively. Our remaining 40 fixed-site centers are multi-modality sites typically offering MRI and one or more of PET, CT, x-ray, mammography, ultrasound, nuclear medicine, bone densitometry and nuclear cardiology. Diagnostic services are provided to a patient upon referral by a physician. Physicians refer patients to our fixed-site centers based on our service reputation, equipment, breadth of managed care contracts and convenient locations. Our fixed-site centers provide the equipment and technologists for the procedures, contract with radiologists to interpret the procedures, and bill payors directly. We have more than 1,000 managed care contracts with managed care organizations at our fixed-site centers. These managed care contracts often last for a period of multiple years because (1) they do not have specific terms or specific termination dates or (2) they contain annual “evergreen” provisions that provide for the contract to automatically renew unless either party terminates the contract.

      In addition to our independent facilities, we enter into joint ventures with hospitals and radiology groups. Under these arrangements, the hospital outsources its radiology function (primarily MRI) to us and we then install the appropriate imaging equipment on the hospital campus. Joint ventures are

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attractive to hospitals that lack the resources, management expertise or patient volume to provide their own imaging services or require incremental capacity. Joint ventures provide us with motivated partners capable of generating significant inpatient procedure volumes through fixed-site centers. Furthermore, our joint ventures allow us to charge a management and billing fee for supporting the day-to-day operations of the jointly owned centers.

Mobile Business

      Hospitals can access our diverse diagnostic imaging technology through our network of 115 mobile facilities. We currently have contracts with more than 300 hospitals, physician groups and other healthcare providers. We enable hospitals, physician groups and other healthcare providers to benefit from our advanced equipment without investing their own capital directly. We do not provide interpretation services for the diagnostic images produced. Interpretation services are provided by the hospital’s radiologists or physician groups.

      After reviewing the needs of our customers, route patterns, travel times, fuel costs and equipment utilization, our field managers implement planning and route management to maximize the utilization of our mobile equipment while controlling the costs to locate and relocate the mobile facilities. Our mobile facilities are scheduled for as little as one-half day and up to seven days per week at any particular site. We generally enter into one to five year-term contracts with our mobile customers under which they assume responsibility for billing and collections. We are paid directly by our mobile customers on a contracted amount for our services, regardless of whether they are reimbursed.

      Our mobile business provides a significant advantage for establishing joint venture arrangements with hospitals, physician groups and other healthcare providers and expanding our fixed-site business. We establish mobile routes in selected markets with the intent of growing with our customers. Our mobile facilities give us the flexibility to (1) supplement fixed-site centers operating at or near capacity until volume has grown sufficiently to warrant additional fixed-site centers, and (2) test new markets on a short-term basis prior to establishing new mobile routes or opening new fixed-site centers. Our goal is to enter into long-term joint venture relationships with our mobile customers once the local market matures and sufficient patient volume is attained to support a fixed-site center.

Diagnostic Imaging Technology

      Our diagnostic imaging systems consist of MRI systems, PET/ CT systems, PET systems, CT systems, digital ultrasound systems, computer-based nuclear medicine gamma cameras, x-ray, mammography, radiography/fluoroscopy systems and bone densitometry. Each of these types of imaging systems (other than x-ray) represents the marriage of computer technology and various medical imaging modalities. The following highlights our primary imaging systems:

Magnetic Resonance Imaging or MRI

      MRI is a technique that involves the use of high-strength magnetic fields to produce computer-processed, three-dimensional, cross-sectional images of the body. The resulting image reproduces soft tissue anatomy (as found in the brain, breast tissue, spinal cord and interior ligaments of body joints such as the knee) with superior clarity, not available by any other currently existing imaging modality, and without exposing patients to ionizing radiation. MRI systems are classified into two classes, conventional MRI systems and Open MRI systems. The structure of conventional MRI systems (including the narrow tubes into which a patient is inserted) allows for higher magnet field strengths, better image quality and faster scanning times than Open MRI systems. However, Open MRI systems are able to service patients who have access difficulties with the narrow tubes of conventional MRI systems, including pediatric patients and patients suffering from post-traumatic stress, claustrophobia or significant obesity. A typical conventional MRI examination takes from 20 to 45 minutes. A typical Open MRI examination takes from 30 to 60 minutes. MRI generally reduces the cost and amount of care needed and often eliminates the

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need for invasive diagnostic procedures. MRI systems are typically priced in the range of $0.9 million to $2.5 million each.

Positron Emission Tomography or PET

      PET is a nuclear medicine procedure that produces pictures of the body’s metabolic and biological functions. PET can provide earlier detection as well as monitoring of certain cancers, coronary diseases or neurological problems than other diagnostic imaging systems. The information provided by PET technology often obviates the need to perform further highly invasive or diagnostic surgical procedures. Interest in PET scanning has increased recently due to several factors including a growing recognition by clinicians that PET is a powerful diagnostic tool, increased third-party payor coverage and reimbursement and the availability of the isotopes used for PET scanning. PET/ CT is a “fusion” scanner, which makes it possible to collect both anatomical and biological information during a single procedure. A typical PET or PET/ CT examination takes from 20 to 60 minutes. PET systems are typically priced in the range of $0.8 million to $1.2 million each. PET/ CT systems are typically priced in the range of $1.8 million to $2.3 million each.

Computed Tomography or CT

      In CT imaging, a computer analyzes the information received from x-ray beams to produce multiple cross-sectional images of a particular organ or area of the body. CT imaging is used to detect tumors and other conditions affecting bones and internal organs. A typical CT examination takes from 15 to 30 minutes. CT systems are typically priced in the range of $0.3 million to $1.1 million each.

Other Imaging Technologies

•  Ultrasound systems use, detect and process high frequency sound waves to generate images of soft tissues and internal body organs.

•  X-ray is the most common energy source used in imaging the body and is now employed in conventional x-ray systems, CT scanners and digital x-ray systems.

•  Mammography is a low-level conventional examination of the breasts. Its primary purpose is to detect lesions in the breast that may be too small or deeply buried to be felt in a regular breast examination.

•  Bone densitometry uses an advanced technology called dual-energy x-ray absorptiometry, or DEXA, which safely, accurately and painlessly measures bone density and the mineral content of bone for the diagnosis of osteoporosis.

Business Development

      Our objective is to be the leading provider of diagnostic imaging services in our targeted regions. We plan to further develop and expand our targeted regions by continuing to emphasize quality of care, produce cost-effective diagnostic information and provide superior service and convenience to our customers. Our strategy is focused on two components.

      Firstly, we intend to maximize utilization of our existing facilities by:

•  broadening our physician referral base and generating new sources of revenues through selective marketing activities;

•  focusing our marketing efforts on attracting additional managed care customers;

•  expanding current imaging applications of existing modalities to increase overall procedure volume; and

•  maximizing cost efficiencies through increased purchasing power and continued reduction of expenses.

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      Secondly, we intend to pursue expansion opportunities within our existing regional markets by developing new fixed-site centers, developing mobile routes and making disciplined acquisitions where attractive returns on investment can be achieved and sustained. We also anticipate that some of these developments will be through joint ventures with hospitals because we believe that they have the potential to provide us with a steady source of procedure volume. Management believes that this will continue to be an area for growth because we expect hospitals and other healthcare providers to respond to federal healthcare regulatory requirements by outsourcing radiology services to imaging centers that are jointly owned and managed with third parties. We believe that the expansion of our business through such activities is a key factor in improving profitability. Generally, these activities are aimed at increasing revenues and gross profit, maximizing utilization of existing capacity and increasing economies of scale. Incremental gross profit resulting from such activities will vary depending on geographic location, whether facilities are mobile or fixed, the range of services provided and the strength of our joint venture partners. We cannot assure you, however, that we will be able to identify suitable opportunities or thereafter complete such opportunities on terms acceptable to us.

Government Regulation

      The healthcare industry is highly regulated and changes in laws and regulations can be significant. Changes in the law or new interpretation of existing laws can have a material effect on our permissible activities, the relative costs associated with doing business and the amount of reimbursement by government and other third-party payors. The federal government and all states in which we currently operate regulate various aspects of our business. Failure to comply with these laws could adversely affect our ability to receive reimbursement for our services and subject us and our officers and agents to civil and criminal penalties.

      Federal False Claims Act: There has been an increase in actions brought under the federal False Claims Act and in particular, under the False Claims Act’s “qui tam” or “whistleblower” provisions. Those provisions allow a private individual to bring actions in the name of the government alleging that the defendant has made false claims for payment from federal funds. After the individual has initiated the lawsuit, the government must decide whether to intervene in the lawsuit and to become the primary prosecutor. Until the government makes a decision, the lawsuit is kept secret. If the government declines to join the lawsuit, the individual may choose to pursue the case alone, in which case the individual’s counsel will have primary control over the prosecution, although the government must be kept apprised of the progress of the lawsuit, and may intervene later. Whether or not the federal government intervenes in the case, it will receive the majority of any recovery. If the litigation is successful, the individual is entitled to no less than 15%, but no more than 30%, of whatever amount the government recovers that is related to the whistleblower’s allegations. The percentage of the individual’s recovery varies, depending on whether the government intervened in the case and other factors. In recent years the number of suits brought against healthcare providers by government regulators and private individuals has increased dramatically. In addition, various states are considering or have enacted laws modeled after the federal False Claims Act, penalizing false claims against state funds. If a whistleblower action is brought against us, even if it is dismissed with no judgment or settlement, we may incur substantial legal fees and other costs relating to an investigation. Actions brought under the False Claims Act may result in significant fines and legal fees and distract our management’s attention, which would adversely affect our business, financial condition and results of operations.

      When an entity is determined to have violated the federal False Claims Act, it must pay three times the actual damages sustained by the government, plus mandatory civil penalties of between $5,500 to $11,000 for each separate false claim, as well as the government’s attorneys fees. Liability arises when an entity knowingly submits, or causes someone else to submit, a false claim for reimbursement to the federal government or submits a false claim with reckless disregard for, or in deliberate ignorance of, its truth or

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falsity. Simple negligence should not give rise to liability. Examples of the other actions which may lead to liability under the False Claims Act:

•  Failure to comply with the many technical billing requirements applicable to our Medicare and Medicaid business.

•  Failure to comply with Medicare requirements concerning the circumstances in which a hospital, rather than we, must bill Medicare for diagnostic imaging services we provide to outpatients treated by the hospital.

•  Failure of our hospital customers to accurately identify and report our reimbursable and allowable services to Medicare.

•  Failure to comply with the prohibition against billing for services ordered or supervised by a physician who is excluded from any federal healthcare programs, or the prohibition against employing or contracting with any person or entity excluded from any federal healthcare programs.

•  Failure to comply with the Medicare physician supervision requirements for the services we provide, or the Medicare documentation requirements concerning physician supervision.

•  The past conduct of the businesses we have acquired.

      We strive to ensure that we meet applicable billing requirements. However, the costs of defending claims under the False Claims Act, as well as sanctions imposed under the Act, could significantly affect our business, financial condition and results of operations.

      Anti-kickback Statutes: We are subject to federal and state laws which govern financial and other arrangements between healthcare providers. These include the federal anti-kickback statute which, among other things, prohibits the knowing and willful solicitation, offer, payment or receipt of any remuneration, direct or indirect, in cash or in kind, in return for or to induce the referral of patients for items or services covered by Medicare, Medicaid and certain other governmental health programs. Violation of the anti-kickback statute may result in civil or criminal penalties and exclusion from the Medicare, Medicaid and other federal healthcare programs. In addition, it is possible that private parties may file “qui tam” actions based on claims resulting from relationships that violate this statute, seeking significant financial rewards. Many states have enacted similar statutes, which are not limited to items and services paid for under Medicare or a federally funded healthcare program. In recent years, there has been increasing scrutiny by law enforcement authorities, the Department of Health and Human Services, or HHS, the courts and Congress of financial arrangements between healthcare providers and potential sources of referrals to ensure that such arrangements do not violate the anti-kickback provisions. HHS and the federal courts interpret “remuneration” broadly to apply to a wide range of financial incentives, including, under certain circumstances, distributions of partnership and corporate profits to investors who refer federal healthcare program patients to a corporation or partnership in which they have an ownership interest and payments for service contracts and equipment leases that are designed, even if only in part, to provide direct or indirect remuneration for patient referrals or similar opportunities to furnish reimbursable items or services. HHS has issued “safe harbor” regulations that set forth certain provisions which, if met, will assure that healthcare providers and other parties who refer patients or other business opportunities, or who provide reimbursable items or services, will be deemed not to violate the anti-kickback statutes. The safe harbors are narrowly drawn and some of our relationships may not qualify for any “safe harbor”; however, failure to comply with a “safe harbor” does not create a presumption of liability. We believe that our operations materially comply with the anti-kickback statutes; however, because these provisions are interpreted broadly by regulatory authorities, we cannot assure you that law enforcement officials or others will not challenge our operations under these statutes.

      Civil Money Penalty Law and Other Federal Statutes: The Civil Money Penalty, or CMP, law covers a variety of practices. It provides a means of administrative enforcement of the anti-kickback statute, and prohibits false claims, claims for medically unnecessary services, violations of Medicare participating provider or assignment agreements and other practices. The statute gives the Office of Inspector General

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of the HHS the power to seek substantial civil fines, exclusion and other sanctions against providers or others who violate the CMP prohibitions.

      In addition, in 1996, Congress created new federal crimes: healthcare fraud and false statements relating to healthcare matters. The healthcare fraud statute prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government sponsored programs such as the Medicare and Medicaid programs. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services, including those provided by private payors. A violation of this statute is a felony and may result in fines or imprisonment.

      We believe that our operations materially comply with the CMP law and the healthcare fraud and false statements statutes. These prohibitions, however, are broadly worded and there is limited authority interpreting their parameters. Therefore, we can give no assurance that the government will not pursue a claim against us based on these statutes. Such a claim would divert the attention of management and could result in substantial penalties which could adversely affect our business, financial condition and results of operations.

      Health Insurance Portability and Accountability Act: In 1996, Congress passed the Health Insurance Portability and Accountability Act, or HIPAA. Although the main focus of HIPAA was to make health insurance coverage portable, HIPAA has become a short-hand reference to new standards for electronic transactions and privacy and security obligations imposed on providers and others who handle personal health information. HIPAA requires healthcare providers to adopt standard formats for common electronic transactions with health plans, and to maintain the privacy and security of individual patients’ health information. The privacy standards went into effect on April 14, 2003, the electronic standards for transactions went into effect on October 16, 2003 and the security standards went into effect on April 20, 2005. A violation of HIPAA’s standard transactions, privacy and security provisions may result in criminal and civil penalties, which could adversely affect our business, financial condition and results of operations.

      Stark II, State Physician Self-referral Laws: The federal Physician Self-Referral or “Stark” Law prohibits a physician from referring Medicare patients for certain “designated health services” to an entity with which the physician (or an immediate family member of the physician) has a financial relationship unless an exception applies. In addition, the receiving entity is prohibited from billing for services provided pursuant to the prohibited referral. Designated health services under Stark include radiology services (MRI, CT, x-ray, ultrasound and others), radiation therapy, inpatient and outpatient hospital services and several other services. A violation of the Stark Law does not require a showing of intent. If a physician has a financial relationship with an entity that does not qualify for an exception, the referral of Medicare patients to that entity for designated health services is prohibited and, if the entity bills for such services, the Stark sanctions apply.

      Sanctions for violating Stark include denial of payment, mandatory refunds, civil money penalties and/or exclusion from the Medicare program. In addition, some courts have allowed federal False Claims Act lawsuits premised on Stark Law violations.

      The federal Stark Law prohibition is expansive, and its statutory language and implementing regulations are ambiguous. Consequently, the statute has been difficult to interpret. In 1995, the Centers for Medicare and Medicaid Services, or CMS, published final regulations interpreting the Stark prohibition as applied to clinical laboratory services. In 2001, CMS published Phase I of the final Stark regulations relating to all designated health services (including clinical laboratory services) which went into effect in January 2002. On March 26, 2004, CMS published Phase II of the final Stark regulations which became effective in July 2004. Phase II included some additional regulatory exceptions and definitions providing more flexibility in some areas and more specificity in others, but did not extend designated health services to PET or nuclear medicine. However, proposed regulations published in August 2005, include PET and nuclear medicine as designated health services under Stark. Until final regulations are published, it is

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unclear whether CMS will grandfather in existing PET and nuclear medicine arrangements as exceptions to the rule.

      With each set of regulations, CMS’ interpretation of the statute has evolved. This has resulted in considerable confusion concerning the scope of the referral prohibition and the requirements of the various exceptions. It is noteworthy, however, that CMS has taken the position that the Stark Law is self-effectuating and does not require implementing regulations. Thus, the government believes that physicians and others must comply with the Stark Law prohibitions regardless of the state of the regulatory guidance.

      The Stark Law does not directly prohibit referral of Medicaid patients, but rather denies federal financial participation to state Medicaid programs for services provided pursuant to a tainted referral. Thus, Medicaid referrals are subject to whatever sanctions the relevant state has adopted. Several states in which we operate have enacted or are considering legislation that prohibits “self-referral” arrangements or requires physicians or other healthcare providers to disclose to patients any financial interest they have in a healthcare provider to whom they refer patients. Possible sanctions for violating these state statutes include loss of licensure, civil fines and criminal penalties. The laws vary from state to state and seldom have been interpreted by the courts or regulatory agencies. Nonetheless, strict enforcement of these requirements is likely.

      We believe our operations materially comply with the federal and state physician self-referral laws. However, given the ambiguity of these statutes, the uncertainty of the regulations and the lack of judicial guidance on many key issues, we can give no assurance that the Stark Law or other physician self-referral regulations will not be interpreted in a manner that could adversely affect our business, financial condition and results of operations.

      FDA: The U.S. Food and Drug Administration, or FDA, has issued the requisite premarket approval for all of our MRI, PET, PET/ CT and CT systems. We do not believe that any further FDA approval is required in connection with equipment currently in operation or proposed to be operated; except under regulations issued by the FDA pursuant to the Mammography Quality Standards Act of 1992, all mammography facilities must have a certificate issued by the FDA. In order to obtain a certificate, a mammography facility is required to be accredited by an FDA approved accrediting body (a private, non-profit organization or state agency) or other entity designated by the FDA. Pursuant to the accreditation process, each facility providing mammography services must comply with certain standards including annual inspection.

      Compliance with these standards is required to obtain payment for Medicare services and to avoid various sanctions, including monetary penalties, or suspension of certification. Although all of our facilities which provide mammography services are currently accredited by the Mammography Accreditation Program of the American College of Radiology and we anticipate continuing to meet the requirements for accreditation, the withdrawal of such accreditation could result in the revocation or suspension of certification by the FDA, ineligibility for Medicare reimbursement and sanctions, including monetary penalties. Congress has extended Medicare benefits to include coverage of screening mammography subject to the prescribed quality standards described above. The regulations apply to diagnostic mammography as well as screening mammography.

      Radiologist and Facility Licensing: The radiologists with whom we contract to provide professional services are subject to licensing and related regulations by the states, including registrations to use radioactive materials. As a result, we require our radiologists to have and maintain appropriate licensure and registrations. In addition, some states also impose licensing or other requirements on us at our facilities and other states may impose similar requirements in the future. Some local authorities may also require us to obtain various licenses, permits and approvals. We believe that we have obtained all required licenses and permits; however, the criteria governing licensing or permitting may change or additional laws and licensing requirements governing our facilities may be enacted. These changes could adversely affect our business, financial condition and results of operations.

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      Liability Insurance: The hospitals, physician groups and other healthcare providers who use our diagnostic imaging systems are involved in the delivery of healthcare services to the public and, therefore, are exposed to the risk of liability claims. Our position is that we do not engage in the practice of medicine. We provide only the equipment and technical components of diagnostic imaging, including certain limited nursing services, and we have not experienced any material losses due to claims for malpractice. Nevertheless, claims for malpractice have been asserted against us in the past and any future claims, if successful, could entail significant defense costs and could result in substantial damage awards to the claimants, which may exceed the limits of any applicable insurance coverage. We maintain professional liability insurance in amounts we believe are adequate for our business of providing diagnostic imaging, treatment and management services. In addition, the radiologists or other healthcare professionals with whom we contract are required by such contracts to carry adequate medical malpractice insurance. Successful malpractice claims asserted against us, to the extent not covered by our liability insurance, could adversely affect our business, financial condition and results of operations.

      Independent Diagnostic Treatment Facilities: CMS has established a category of Medicare provider referred to as Independent Diagnostic Treatment Facilities, or IDTFs. Imaging centers have the option to participate in the Medicare program as either IDTFs or medical groups. Most of our fixed-site centers are IDTFs. IDTFs are being monitored by CMS, particularly with respect to physician supervision requirements; however, if CMS exercised increased oversight of IDTFs, our business, financial condition and results of operations could be adversely affected.

      Certificates of Need: Some states require hospitals and certain other healthcare facilities and providers to obtain a certificate of need, or CON, or similar regulatory approval prior to establishing certain healthcare operations or services, incurring certain capital expenditures and/or the acquisition of major medical equipment including MRI, PET and PET/ CT systems. We believe that we have complied or will comply with applicable CON requirements in those states where we operate. Nevertheless, this is an area of continuing legislative activity, and CON and licensing statutes may be modified in the future in a manner that may have a material adverse effect on our business, financial condition and results of operations.

      Environmental, Health and Safety Laws: Our PET and PET/ CT services and some of our other imaging services require the use of radioactive materials, which are subject to federal, state and local regulations governing the storage, use and disposal of materials and waste products. We could incur significant costs in order to comply with current or future environmental, health and safety laws and regulations. However, we believe that environmental, health and safety laws and regulations will not (1) cause us to incur any material capital expenditures in our current year or the succeeding year, including costs for environmental control facilities or (2) materially impact our revenues or our competitive position.

Sales and Marketing

      We engage in marketing activities to obtain new sources of revenues, expand business relationships, grow revenues at existing facilities, and maintain present business alliances and contractual relationships. Marketing activities for the fixed operations include educating physicians on new applications and uses of the technology and customer service programs. In addition, we leverage our targeted regional market concentration to develop contractual relationships with managed care payors to increase patient volume. Marketing activities for our mobile business include direct marketing to hospitals and developing leads through current customers, equipment manufacturers, and other vendors. In addition, marketing activities for our mobile operations include contacting referring physicians associated with hospital customers and educating physicians.

Competition

      The healthcare industry in general, and the market for diagnostic imaging services in particular, is highly competitive and fragmented, with only a few national providers. We compete principally on the

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basis of our service reputation, equipment, breadth of managed care contracts and convenient locations. Our operations must compete with groups of radiologists, established hospitals and certain other independent organizations, including equipment manufacturers and leasing companies that own and operate imaging equipment. We will continue to encounter substantial competition from hospitals and independent organizations, including Alliance Imaging, Inc., HEALTHSOUTH Corporation, MedQuest, Inc., Radiologix, Inc., Shared Imaging and Otter Tail Corporation. Some of our direct competitors may have access to greater financial resources than we do.

      Certain hospitals, particularly the larger or more financially stable hospitals, may be expected to directly acquire and operate imaging and treatment equipment on-site as part of their overall inpatient servicing capability, assume the associated financial risk, employ the necessary technologists and satisfy applicable CON and licensure requirements, if any. In addition, some physician practices that have refrained from establishing diagnostic imaging capability may decide to do so. Historically, smaller hospitals have been reluctant to purchase imaging and treatment equipment, but recently have chosen to do so with attractive financing offered by equipment manufacturers.

Customers and Contracts

      Our revenues are primarily generated from patient services and contract services. Patient services revenues are generally earned from services billed directly to patients or third-party payors (such as managed care organizations, Medicare, Medicaid, commercial insurance carriers and workers’ compensation funds) on a fee-for-service basis. Patient services revenues and management fees are primarily earned through fixed-site centers. Contract services revenues are generally earned from services billed to a hospital, physician group or other healthcare provider, which include fee-for-service arrangements in which revenues are based upon a contractual rate per procedure and fixed fee contracts. Contract services revenues are primarily earned through mobile facilities and are generally paid pursuant to contracts with a term from one to five years. A significant number of our mobile contracts will expire each year. Our mobile facility contract renewal rate was 78% for the year ended June 30, 2005. However, we expect that some high volume customer accounts will elect not to renew their contracts and instead will purchase or lease their own diagnostic imaging equipment and some customers may choose an alternative services provider.

      During the year ended June 30, 2005, approximately 57% of our revenues were generated from patient services and approximately 43% were generated from contract services.

Diagnostic Imaging and Other Equipment

      As of June 30, 2005, we owned or leased 276 diagnostic imaging and treatment systems, with the following classifications: 3.0 Tesla MRI, 1.5 Tesla MRI, 1.0 Tesla MRI, Open MRI, PET, PET/ CT, CT and other technology. Magnetic field strength is the measurement of the magnet used inside an MRI system. If the magnetic field strength is increased the image quality of the scan is improved and the time required to complete scans is decreased. Magnetic field strength on our MRI systems currently ranges from 0.2 to 3.0 Tesla. Of our 170 conventional MRI systems, 153 have a magnet field of 1.5 Tesla, which is the industry standard magnet strength for conventional fixed and mobile MRI systems.

      We continue to evaluate the mix of our diagnostic imaging equipment in response to changes in technology and to any surplus capacity in the marketplace. The overall technological competitiveness of our equipment continues to improve through upgrades, disposal and/or trade-in of older equipment and the purchase or execution of leases for new equipment.

      Several large companies presently manufacture MRI (including Open MRI), PET, PET/ CT, CT and other diagnostic imaging equipment, including General Electric Health Care, Hitachi Medical Systems, Siemens Medical Systems, Toshiba American Medical Systems and Phillips Medical Systems. We have acquired MRI and CT systems that were manufactured by each of the foregoing companies. We have acquired PET or PET/ CT systems that were manufactured by General Electric Health Care and Siemens Medical Systems. We enter into individual purchase orders for each system that we acquire, and we do not

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have long-term purchase arrangements with any equipment manufacturer. We maintain good working relationships with many of the major manufacturers to better ensure adequate supply as well as access to those types of diagnostic imaging systems which appear most appropriate for the specific imaging facility to be established.

Information Systems

      Our internal information technology systems allow us to manage our operations, accounting and finance, human resources, payroll, document imaging, and data warehousing. Our primary operating system is the InSight Radiology Information System, or IRIS, our proprietary information system. IRIS provides front-office support for scheduling and administration of imaging procedures and back office support for billing and collections. Additional functionality includes workflow, transcription, and image management.

Compliance Program

      We have voluntarily implemented a program to monitor compliance with federal and state laws and regulations applicable to healthcare entities. We have appointed a compliance officer who is charged with implementing and supervising our compliance program, which includes a code of ethical conduct for our employees and affiliates and a process for reporting regulatory or ethical concerns to our compliance officer, including a toll-free telephone hotline. We believe that our compliance program meets the relevant standards provided by the Office of Inspector General of the HHS. An important part of our compliance program consists of conducting periodic reviews of various aspects of our operations. Our compliance program also contemplates mandatory education programs designed to familiarize our employees with the regulatory requirements and specific elements of our compliance program.

Employees

      As of September 30, 2005 we had approximately 1,660 full-time, 110 part-time and 500 per diem employees. None of our employees is covered by a collective bargaining agreement. Management believes its employee relations to be satisfactory.

Properties

      We lease approximately 48,400 square feet of office space for our corporate headquarters and a billing office at 26250 Enterprise Court, Lake Forest, California 92630. The lease for this location expires in 2008.

Legal Proceedings

      We are engaged from time to time in the defense of lawsuits arising out of the ordinary course and conduct of our business and have insurance policies covering such potential insurable losses where such coverage is cost-effective. We believe that the outcome of any such lawsuits will not have a material adverse impact on our business, financial condition and results of operations.

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MANAGEMENT

      The following table sets forth the names, ages and positions of our directors and executive officers, including the executive officers of InSight who are deemed our executive officers (as defined under Rule 3b-7 of the Securities Exchange Act of 1934), as of September 30, 2005:

Michael N. Cannizzaro	56	Chairman of the Board and Director
Bret W. Jorgensen	46	President and Chief Executive Officer and Director
Patricia R. Blank	55	Executive Vice President — Enterprise Operations of InSight
Michael A. Boylan	49	Executive Vice President — Enterprise Development of InSight
Louis E. Hallman, III	46	Executive Vice President and Chief Strategy Officer of InSight
Donald F. Hankus	44	Executive Vice President and Chief Information Officer of InSight
Mitch C. Hill	46	Executive Vice President and Chief Financial Officer
Marilyn U. MacNiven-Young	54	Executive Vice President, General Counsel and Secretary
Kenneth M. Doyle	40	Director and Vice President
David W. Dupree	52	Director
Steven G. Segal	45	Director
Mark J. Tricolli	34	Director and Vice President
Edward D. Yun	38	Director and Vice President

      Michael N. Cannizzaro served as our President and Chief Executive Officer from August 9, 2004 until July 1, 2005. He became a member of our board of directors on October 17, 2001 and was elected chairman of the board on May 30, 2002. He has been an Operating Partner of J.W. Childs Associates, L.P. since October 29, 2001. Prior to that, he was President and Chief Executive Officer of Beltone Electronics Corporation from 1998 to 2000. Prior to that, he was President of Caremark International’s Prescription Service Division from 1994 to 1997; Vice President, Business Development of Caremark’s Nephrology Service Division from April 1994 to September 1994; and President of Leica North America from 1993 to 1994. He held numerous positions in general management at Baxter Healthcare Corporation from 1976 to 1993, including the position of President of four different divisions. He currently serves as a director of Universal Hospital Services, Inc. and previously served on National Nephrology Associates, Inc.’s board of directors from September 1999 to April 2004.

      Bret W. Jorgensen was appointed to our board of directors and our President and Chief Executive Officer on July 1, 2005. Prior to this appointment, Mr. Jorgensen was the Chief Executive Officer of AdvoLife, a provider of senior care services, from June 2004 until the sale of the company in October 2004. Prior to AdvoLife, he was Chairman and Chief Executive Officer of Directfit, a web-centric recruiting solutions provider (“Directfit”), from April 1999 to October 2003. In 1989, Jorgensen co-founded TheraTx, which became a diversified healthcare services company listed on NASDAQ. While at TheraTx, he served on the board of directors and held several executive leadership positions, including President of TheraTx Health Services, and was instrumental in TheraTx’s initial public offering in 1994 and sale in April 1997. He currently serves on the board of directors of AllianceCare, a provider of senior healthcare services, rehabilitation therapy and home health services.

      Patricia R. Blank has been InSight’s Executive Vice President-Enterprise Operations since October 22, 2004. She was InSight’s Executive Vice President and Chief Information Officer from September 1, 1999 to October 22, 2004. Prior to joining InSight, Ms. Blank was the principal of Blank &

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Company, a consulting firm specializing in healthcare consulting. From 1995 to 1998, Ms. Blank served as Executive Vice President and Chief Operating Officer of HealthHelp, Inc., a Houston, Texas-based radiology services organization managing radiology provider networks in multiple states. From 1988 to 1995, she was corporate director of radiology of FHP, a California insurance company.

      Michael A. Boylan has been InSight’s Executive Vice President-Enterprise Development since October 22, 2004. He was InSight’s Executive Vice President-Mobile Division and Business Development from April 8, 2004 to October 22, 2004. From February 7, 2002 to April 8, 2004, he was Executive Vice President and Chief Development Officer of InSight. He was Executive Vice President, Operations, Eastern Division of InSight from July 1, 2000 to February 7, 2002. From April 1998 to July 1, 2000, he was Executive Vice President and Chief Development Officer. From February 1996 to April 1998, he was Senior Vice President — Operations of InSight. Mr. Boylan was an Executive Vice President of Maxum Health Corp., or MHC, from March 1994 to February 1996. From 1992 to 1994, he served as a Regional Vice President of MHC’s principal operating subsidiary, Maxum Health Services Corp. From 1991 to 1992, he served as an Executive Director of certain of MHC’s operations. From 1986 to 1991, Mr. Boylan served in various capacities as an officer or employee, including President and Chief Operating Officer, with American Medical Imaging Corporation.

      Louis E. Hallman, III, was appointed InSight’s Executive Vice President and Chief Strategy Officer on August 10, 2005. Prior to this appointment, Mr. Hallman was the President of Right Manufacturing LLC, a specialty manufacturer, from January 2003 through January 2005. From January 2002 until January 2003, Mr. Hallman was a private investor and reviewed various business opportunities. From August 1999 through January 2002, he was President and CEO of Homesquared Inc., a supplier of web-based software applications to production homebuilders. In July 1989, Mr. Hallman co-founded TheraTx, Inc., which became a diversified healthcare services company listed on NASDAQ. While at TheraTx, he served as Vice President Corporate Development until its sale in April 1997.

      Donald F. Hankus was appointed InSight’s Executive Vice President and Chief Information Officer on September 26, 2005. Prior to this appointment, Mr. Hankus was the Director of Sales Operations of Quest Software, Inc., a provider of application, database and infrastructure software, from January 2004 through September 2005. From January 2000 through January 2004, he was Chief Information Officer of Directfit. From December 1996 to January 2000, he served as Director of Software Development for Cendant Corporation, a real estate brokerage and hotel franchisor.

      Mitch C. Hill was appointed our Executive Vice President and Chief Financial Officer on January 10, 2005. Prior to this appointment, Mr. Hill was the President and Chief Executive Officer of BMS Reimbursement Management, a provider of outsourced billing collection, accounts receivable and practice management service, from April 2001 to December 2004. Prior to that, he held the following positions with Buy.Com Inc., a multi-category Internet superstore, Chief Financial Officer from November 1999 to February 2001 and President from April 2000 to February 2001.

      Marilyn U. MacNiven-Young has been our Executive Vice President, General Counsel and Corporate Secretary since February 11, 2002 and Executive Vice President, General Counsel and Corporate Secretary of InSight since August 1998. From February 1996 through July 1998, she was an independent consultant to InSight. From September 1994 through June 1995, she was Senior Vice President and General Counsel of Abbey Healthcare Group, Inc., a home healthcare company. From 1991 through 1994, Ms. MacNiven-Young served as General Counsel of American Health Services Corp.

      Kenneth M. Doyle has been a member of our board of directors and Vice President since June 13, 2001. Mr. Doyle is a Managing Director of The Halifax Group, L.L.C. Mr. Doyle joined The Halifax Group, L.L.C. in January 2000. Prior to joining The Halifax Group, L.L.C., Mr. Doyle was an Industry Leader and Vice President at GE Equity, the private equity subsidiary of GE Capital. Prior to joining GE Equity, Mr. Doyle spent four years in investment banking as a Senior Associate for the Telecommunications Corporate Finance Group at Merrill Lynch and as an Associate with Chase Manhattan Bank in the Media and Telecommunications Group. Mr. Doyle also spent three years with Ernst & Young in the

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Entrepreneurial Services Group. Mr. Doyle currently serves on the board of directors of National Packaging Solutions Group, Inc., Soil Safe, Inc. and Maverick Healthcare Group, LLC.

      David W. Dupree became a member of our board of directors on October 17, 2001. Mr. Dupree is a Managing Director of The Halifax Group, L.L.C. which he founded in January 1999. Prior to joining The Halifax Group, L.L.C., Mr. Dupree was a Managing Director and Partner with The Carlyle Group, a global investment firm located in Washington, D.C., where he was primarily responsible for investments in healthcare and related sectors. Prior to joining The Carlyle Group in 1992, Mr. Dupree was a Principal in Corporate Finance with Montgomery Securities and prior to that, he was Co-Head of Equity Private Placements at Alex, Brown & Sons Incorporated. Mr. Dupree currently serves on the board of directors of Whole Foods Markets, Inc., Universal Hospital Services, Inc., and PolyPipe Holdings, Inc. and previously served on InSight’s board of directors, as a designee of The Carlyle Group, from October 1997 to December 1999.

      Steven G. Segal became a member of our board of directors on October 17, 2001. He is a Partner of J.W. Childs Associates, L.P. and has been at J.W. Childs Associates, L.P. since 1995. Prior to that time, he was an executive at Thomas H. Lee Company from 1987, most recently holding the position of Managing Director. He is also a director of Quality Stores Inc., Jillian’s Entertainment Corp., Big V Supermarkets, Inc., The NutraSweet Company, Universal Hospital Services, Inc. and is Co-Chairman of the Board of Empire Kosher Poultry, Inc. Mr. Segal also served on the board of directors of National Nephrology Associates, Inc. from December 1998 to April 2004.

      Mark J. Tricolli has been a member of our board of directors and Vice President since June 13, 2001. Mr. Tricolli is a Vice President of J.W. Childs Associates, L.P. and has been at J.W. Childs Associates, L.P. since July 2000. Prior to that, Mr. Tricolli was an Associate in the Merchant Banking Division of Goldman, Sachs & Co. from August 1999 to June 2000. Prior to that, Mr. Tricolli was pursuing a degree in business school from 1997 to 1999. During the summer of 1998, he worked at Donaldson, Lufkin & Jenrette. He is also a director of Equinox Holdings, Inc. and Universal Hospital Services, Inc.

      Edward D. Yun became a member of our board of directors on June 13, 2001 and became a Vice President on February 11, 2002. He is a Partner of J.W. Childs Associates, L.P. and has been at J.W. Childs Associates, L.P. since 1996. From 1994 until 1996, he was an Associate at DLJ Merchant Banking, Inc. He is also a director of Jillian’s Entertainment Corp., Pan Am International Flight Academy, Inc., Equinox Holdings, Inc., Chevys, Inc. and Universal Hospital Services, Inc. Mr. Yun served on the board of directors of National Nephrology Associates, Inc. from December 1998 to April 2004 and on the board of directors of The Hartz Mountain Corporation from December 2000 to June 2004.

      Audit Committee. Our board of directors has not established committees. Instead, the InSight board of directors, which is identical to our board of directors, established an audit committee, which oversees our (1) accounting and financial reporting processes and audits of our annual financial statements, (2) internal control over financial reporting, and (3) the independent registered public accounting firm’s qualifications and independence. The audit committee’s responsibilities are limited to oversight. Our management is responsible for the preparation, presentation and integrity of our financial statements as well as our financial reporting process, accounting policies and internal control over financial reporting.

      InSight’s board of directors has determined that it presently has no “audit committee financial expert” (as that term is defined in the rules promulgated by the SEC pursuant to the Sarbanes-Oxley Act of 2002) serving on the audit committee. InSight’s board of directors has determined that each of the members of the audit committee is financially literate and has accounting or related financial management expertise, as such terms are interpreted by InSight’s board of directors.

      Code of Ethical Conduct. We have adopted a code of ethical conduct that applies to all of our and our subsidiaries’ employees, including, our principal executive officer, principal financial officer and principal accounting officer. A copy of the code of ethical conduct is posted on our website, www.insighthealth.com, under “About Us.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to amendments to or waivers from any provision of the code of ethical

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conduct applicable to our principal executive officer, principal financial officer, principal accounting officer or controller (or persons performing similar functions) by posting such information on our internet website, www.insighthealth.com, under “About Us”.

Executive Compensation

      The following table sets forth information concerning the annual, long-term and all other compensation for services rendered in all capacities to us and our subsidiaries for the years ended June 30, 2005, 2004 and 2003 of the persons who served as (1) our chief executive officer during the year ended June 30, 2005 and (2) the other four most highly compensated executive officers for the year ended June 30, 2005. We refer to the persons described in clause (2) above as the Other Executive Officers and we refer to persons discussed in clauses (1) and (2) above as the Named Executive Officers.

Summary Compensation Table

		Annual Compensation								Long Term
										Compensation
		Fiscal								Awards Stock
		Year								Options		All Other
Name and Principal Position		Ended		Salary		Bonus(1)		Other(2)		(Shares)		Comp(2)
Michael N. Cannizzaro(3)			2005	$	—	$	—	$	—		40,000	$	—
	Chairman of the Board of		2004		—		—		—		—		—
	Directors		2003		—		—		—		—		—
Steven T. Plochocki(4)			2005	$	45,200	$	—	$	1,500		—	$	13,536
	President and Chief Executive		2004		420,000		105,000		9,000		—		30,344
	Officer		2003		350,000		—		9,000		—		6,418
Michael A. Boylan(5)			2005	$	275,000	$	97,000	$	9,000		—	$	29,872
	Executive Vice President —		2004		249,700		82,950		9,000		—		25,692
	Enterprise Development		2003		237,000		—		9,000		—		7,150
Patricia R. Blank(6)			2005	$	275,000	$	97,000	$	9,000		30,000	$	31,873
	Executive Vice President —		2004		224,700		42,000		9,000		—		30,367
	Enterprise Operations		2003		210,000		—		9,000		—		7,682
Marilyn U. MacNiven-Young			2005	$	275,000	$	85,000	$	9,000		10,000	$	14,087
	Executive Vice President,		2004		267,500		52,400		9,000		—		12,644
	General Counsel and Secretary		2003		262,000		—		9,000		—		4,333
Mitch C. Hill(7)			2005	$	121,600	$	55,000	$	4,500		40,000	$	10,199
	Executive Vice President and		2004		—		—		—		—		—
	Chief Financial Officer		2003		—		—		—		—		—

(1)	Bonuses which are based on our performance are earned and accrued during the year and paid subsequent to the end of each year. Discretionary bonuses are earned and paid in the year in which they are awarded by InSight’s compensation committee.
(2)	Amounts of Other Annual Compensation include perquisites (auto allowances and commissions for contract awards and renewals) and amounts of All Other Compensation include (i) amounts contributed to InSight’s 401(k) profit sharing plan, (ii) specified premiums on executive life insurance arrangements and (iii) specified premiums on executive health insurance arrangements.
(3)	Mr. Cannizarro served as President and Chief Executive Officer from August 9, 2004 until July 1, 2005.
(4)	Mr. Plochocki served as President and Chief Executive Officer until August 9, 2004.
(5)	Effective October 22, 2004, Mr. Boylan’s title changed from Executive Vice President — Mobile Division and Business Development to Executive Vice President — Enterprise Development.
(6)	Effective October 22, 2004, Ms. Blank’s title changed from Executive Vice President and Chief Information Officer to Executive Vice President — Enterprise Operations.

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(7)  Mr. Hill also received a right to purchase 2,525 shares of our common stock at a price of $19.82 per share. This right expired on October 22, 2005.

      Compensation of Directors. We reimburse our non-employee directors for all out-of-pocket expenses incurred in the performance of their duties as directors. We do not pay fees to directors for attendance at meetings or for their services as members of the board of directors or committees thereof.

      OPTION GRANTS. During the year ended June 30, 2005, stock options were granted by us pursuant to stock option agreements to certain of the Named Executive Officers, as follows:

	Individual Grants
												Potential Realizable Value
	Number of		Percent of									at Assumed Annual Rates of
	Securities		Total Options									Stock Price Appreciation for
	Underlying		Granted to					Market Price				Option Term(2)
	Options		Employees in			Exercise Price		on Grant		Expiration
Name	Granted		Fiscal Year			Per Share(1)		Date		Date(3)		5%		10%
Michael N. Cannizzaro		20,000		9.5	%	$	19.82	$	19.82		8/12/2014	$	249,294	$	631,760
		20,000		9.5	%		19.82		19.82		4/8/2015		249,294		631,760
Steven T. Plochocki		—		—			—		—		—		—		—
Michael A. Boylan		—		—			—		—		—		—		—
Patricia R. Blank		30,000		14.3	%		19.82		19.82		1/10/2015		373,941		947,640
Marilyn U. MacNiven-Young		10,000		4.8	%		19.82		19.82		1/10/2015		124,648		315,877
Mitch C. Hill(4)		40,000		19.1	%		19.82		19.82		1/10/2015		498,587		1,263,519

(1)	The options were granted at an exercise price of $19.82 per share, the estimated price per share determined by the board of directors.
(2)	Potential realizable value is determined by taking the exercise price per share and applying the stated annual appreciation rate compounded annually for the remaining term of the option (ten years), subtracting the exercise price per share at the end of the period and multiplying the remaining number by the number of options granted. Actual gains, if any, on stock option exercises and the Company’s common stock holdings are dependent on the future performance of the common stock.
(3)	Except for Mr. Cannizzaro’s options, which were fully exercisable on the date of grant, the other options are exercisable starting twelve months after the date of grant with 50% of the shares vesting annually on the following schedule: (i) 10% of the shares becoming exercisable upon the anniversary of the grant date in each of the fiscal years ending on June 30 in the years 2006-2010 and (ii) 50% of the shares becoming exercisable upon the attainment of certain performance targets on an exit event. The options were granted for a term of ten years, subject to earlier termination in certain events related to termination of employment.
(4)	Mr. Hill also received a right to purchase 2,525 shares of our common stock at a price of $19.82 per share. This right expired on October 22, 2005.

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      Option Exercises and Year-End Values. During the year ended June 30, 2005, none of the Named Executive Officers exercised any stock options. The following table sets forth information with respect to the unexercised options to purchase common stock granted under our 2001 Stock Option Plan and pursuant to stock option agreements, for the Named Executive Officers at June 30, 2005:

	Number of								Value of Unexercised
	Shares				Number of Unexercised				In-the-Money Options at
	Acquired				Options at June 30, 2005				June 30, 2005(1)
	on		Value
Name	Exercise		Realized		Exercisable		Unexercisable		Exercisable		Unexercisable
Michael N. Cannizzaro		—	$	—		40,000		—	$	—	$	—
Steven T. Plochocki		—		—		52,500		—		601,125		—
Michael A. Boylan		—		—		57,490		59,500		557,146		108,290
Patricia R. Blank		—		—		4,500		55,500		8,190		46,410
Marilyn U. MacNiven-Young		—		—		4,500		35,500		8,190		46,410
Mitch C. Hill		—		—		—		40,000		—		—

(1)  Based on the price at which the common stock was valued on that date of $19.82 per share.

      Cancellation of Options in our Acquisition of InSight. On the consummation of our acquisition of InSight on October 17, 2001, each holder of an option to purchase shares of common stock of InSight outstanding under any of InSight’s stock option plans, whether or not vested, received the difference between $18.00 and the exercise price of each share of common stock the holder could have acquired pursuant to the terms of the stock option agreements (less applicable tax withholding), and the options were terminated; except that Messrs. Plochocki, Boylan and two former officers rolled over certain of their InSight stock options into fully vested options to purchase our common stock under our 2001 Stock Option Plan.

      Indemnification Agreements. InSight has entered into separate indemnification agreements with each of its directors and executive officers that could require InSight, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors and executive officers of InSight and its affiliates and to advance expenses incurred by them as a result of any proceedings against them as to which they could be indemnified.

      Employment Agreements. In connection with our acquisition of InSight, Messrs. Plochocki and Boylan and Ms. Blank entered into employment agreements with us. Ms. MacNiven-Young entered into an employment agreement with us in December 2001. In January 2005, we entered into a new employment agreement with Ms. Blank as a result of her appointment as InSight’s Executive Vice President — Enterprise Operations on October 22, 2004. We entered into employment agreements with Messrs. Hill, Jorgensen, Hallman and Hankus in January, July, August and September of 2005, respectively. Effective as August 9, 2004, Mr. Plochocki was no longer employed by us. We entered into a resignation agreement with him that was consistent with the terms of his employment agreement. The material terms of the resignation agreement are set forth in “Certain Relationships and Related Transactions — Severance Agreement.”

      The employment agreement with Mr. Plochocki was for an initial term of three years, and thereafter a term of twelve months on a continuing basis subject to certain termination rights. The employment agreement provided that Mr. Plochocki would receive an annual base salary as well as a discretionary bonus of up to 75% of his annual base salary if InSight achieved its budgetary goals and a discretionary bonus of an additional 25% of his annual base salary upon the achievement of other goals mutually agreed upon by Mr. Plochocki and InSight’s board of directors. Mr. Plochocki’s employment agreement also provided for a life insurance policy of three times the amount of his annual base salary and entitled him to participate during the term of his employment in InSight’s life insurance, medical, health and accident and disability plan or program, pension plan or other similar benefit plan and our stock option plans. Mr. Plochocki also was subject to a noncompetition covenant and nonsolicitation provisions (relating to

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InSight’s employees and customers) during the term of his employment agreement and continuing for a period of 24 months after the termination of his employment. In addition, InSight was required to maintain at its expense until the earlier of 24 months after the date of termination or commencement of Mr. Plochocki’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 Mr. Plochocki was entitled to participate immediately prior to the date of termination.

      Each of the employment agreements with the Other Executive Officers and Messrs. Jorgensen, Hallman and Hankus provides for a term of 12 months on a continuing basis, subject to certain termination rights. These employment agreements provide for an annual salary as well as a discretionary bonus of up to 75% of the executive’s annual base salary if InSight achieves its budgetary goals and a discretionary bonus of an additional 25% of the executive’s annual base salary upon the achievement of other goals mutually agreed upon by each executive and InSight’s President and Chief Executive Officer and approved by InSight’s board of directors (except in the case of Mr. Jorgensen’s whose goals shall be agreed upon by InSight’s board of directors and himself). Each executive is provided with a life insurance policy of three times the amount of his or her annual base salary and is entitled to participate in InSight’s life insurance, medical, health and accident and disability plan or program, pension plan or other similar benefit plan and our stock option plans. Each executive is subject to a noncompetition covenant and nonsolicitation provisions (relating to InSight’s employees and customers) during the term of his or her respective employment agreement and continuing for a period of 12 months after the termination of his or her respective employment. Each executive’s employment agreement will terminate and each of them will be entitled to all accrued and unpaid compensation, as well as 12 months of compensation at the annual salary rate then in effect (1) upon the executive’s permanent and total disability (as defined in the respective employment agreement); (2) upon InSight’s 30 days’ written notice to the executive of the termination of the executive’s employment without cause (as defined in the respective employment agreement); (3) if the executive terminates his or her employment with InSight for good reason (as defined in the respective employment agreement); and (4) if the executive’s employment is terminated by InSight without cause or he or she terminates his or her employment for good reason within 12 months of a change in control (as defined in the respective employment agreement). In addition, InSight will maintain at its expense until the earlier of 12 months after the date of termination or commencement of the 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 the executive was entitled to participate immediately prior to the date of termination. Each executive’s employment will immediately terminate upon his or her death and the executors or administrators of his or her estate or his or her heirs or legatees (as the case may be) will be entitled to all accrued and unpaid compensation up to the date of his or her death. The executive’s employment will terminate and the executive will not be entitled to receive any monetary compensation or benefit upon (1) the termination of his or her respective employment by InSight for cause, or (2) his or her voluntary termination of his or her respective employment with InSight without good reason.

      Under his employment agreement, Mr. Hill was entitled to a bonus equal to 40% of his annual salary prorated for the fiscal year ended June 30, 2005. Mr. Hill may purchase 2,525 shares of our common stock at a price equal to $19.82 per share, on or before October 22, 2005. Under his employment agreement, Mr. Jorgensen is entitled to a bonus equal to 50% of his annual salary for the fiscal year ending June 30, 2006. Under his employment agreement, Mr. Hallman is eligible to receive a bonus of 40% of his annual salary for the fiscal year ending June 30, 2006 (50% of this bonus is guaranteed). Under his employment agreement, Mr. Hankus is eligible to receive a bonus of 40% of his prorated annual salary for the fiscal year ending June 30, 2006.

      Compensation Committee Interlocks and Insider Participation. The InSight board of directors, which is identical to our board of directors, established a compensation committee to act with regard to compensation and other matters for us. During the year ended June 30, 2005, InSight’s compensation committee consisted of Messrs. Cannizzaro (chairman), Dupree, Segal and Plochocki. Mr. Plochocki served on the committee until he ceased to be InSight’s President and Chief Executive Officer on

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August 9, 2004. Neither Mr. Plochocki nor Mr. Cannizzaro participated in decisions relating to his own compensation or award of stock options.

PRINCIPAL STOCKHOLDERS

      The following table sets forth certain information regarding beneficial ownership of our common stock as of September 30, 2005, by: (i) each person or entity known to us owning beneficially 5% or more of our common stock; (ii) each member of our board of directors; (iii) each of the Named Executive Officers; and (iv) all directors and executive officers (as defined by Rule 3b-7), as a group. At September 30, 2005, our outstanding securities consisted of approximately 5,468,814 shares of common stock and options to purchase 204,690 shares of common stock which are immediately exercisable. Beneficial ownership of the securities listed in the table has been determined in accordance with the applicable rules and regulations promulgated under the Securities Exchange Act of 1934.

		Amount and Nature		Percent of
		of Beneficial		Common Stock
		Ownership of		Beneficially
Names and Addresses of Beneficial Owners		Common Stock(1)		Owned(1)
J.W. Childs Equity Partners II, L.P.(2)			4,350,290		79.5	%
	111 Huntington Avenue, Suite 2900
	Boston, Massachusetts 02199
JWC-InSight Co-invest LLC(3)			338,532		6.2	%
	111 Huntington Avenue, Suite 2900
	Boston, Massachusetts 02199
Halifax Capital Partners, L.P.(4)			1,111,112		20.3	%
	1133 Connecticut Avenue, N.W.
	Washington, D.C. 20036
Steven G. Segal(5)			—		—
	111 Huntington Avenue, Suite 2900
	Boston, Massachusetts 02199
Edward D. Yun(6)			—		—
	111 Huntington Avenue, Suite 2900
	Boston, Massachusetts 02199
Michael N. Cannizzaro(7)			40,000		*
	111 Huntington Avenue, Suite 2900
	Boston, Massachusetts 02199
Mark J. Tricolli(8)			—		—
	111 Huntington Avenue, Suite 2900
	Boston, Massachusetts 02199
David W. Dupree(9)			4,092		*
	1133 Connecticut Avenue, N.W.
	Washington, D.C. 20036
Kenneth M. Doyle(10)			—		—
	1133 Connecticut Avenue, N.W.
	Washington, D.C. 20036
Steven T. Plochocki(11)(12)			52,500		1.0	%
	26250 Enterprise Court, Suite 100
	Lake Forest, CA 92630
Bret W. Jorgensen(13)			—		—
	26250 Enterprise Court, Suite 100
	Lake Forest, CA 92630
Michael A. Boylan(14)			64,490		1.2	%
	110 Gibraltar Road
	Horsham, PA 18901

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		Amount and Nature		Percent of
		of Beneficial		Common Stock
		Ownership of		Beneficially
Names and Addresses of Beneficial Owners		Common Stock(1)		Owned(1)
Mitch C. Hill(15)			2,525		*
	26250 Enterprise Court, Suite 100
	Lake Forest, CA 92630
Marilyn U. MacNiven-Young(16)			7,500		*
	26250 Enterprise Court, Suite 100
	Lake Forest, CA 92630
Patricia R. Blank(17)			7,500		*
	26250 Enterprise Court, Suite 100
	Lake Forest, CA 92630
All directors and executive officers, as a group (13 persons)(18)			126,107		2.3	%

(1)	For purposes of this table, a person is deemed to have “beneficial ownership” of any security that such person has the right to acquire within 60 days after September 30, 2005.
(2)	Includes 4,011,758 shares of our common stock owned directly by J.W. Childs Equity Partners II, L.P. and 338,532 shares of our common stock owned directly by JWC-InSight Co-invest LLC, an affiliate of J.W. Childs Equity Partners II, L.P. The general partner of J.W. Childs Equity Partners II, L.P. is J.W. Childs Advisors II, L.P., a Delaware limited partnership. The general partner of J.W. Childs Advisors II, L.P. is J.W. Childs Associates, L.P., a Delaware limited partnership. The general partner of J.W. Childs Associates, L.P. is J.W. Childs Associates, Inc., a Delaware corporation. J.W. Childs Advisors II, L.P., J.W. Childs Associates, L.P. and J.W. Childs Associates, Inc. may be deemed to beneficially own the 4,350,290 shares of our common stock held by J.W. Childs Equity Partners II, L.P. and JWC-InSight Co-invest LLC. John W. Childs, Glenn A. Hopkins, Dana L. Schmaltz, Adam L. Suttin, William E. Watts, James Rhee and Jeffrey Teschke, as well as Steven G. Segal, Edward D. Yun, Michael N. Cannizzaro and Mark J. Tricolli (as indicated in footnotes 5, 6, 7, and 8, respectively) share voting and investment control over, and therefore may be deemed to beneficially own, the shares of common stock held by these entities.
(3)	JWC-InSight Co-invest LLC is a Delaware limited liability company and affiliate of J.W. Childs Equity Partners II, L.P. J.W. Childs Associates, Inc. is the managing member of JWC-InSight Co-invest LLC. As the managing member, J.W. Childs Associates, Inc. owns the 338,532 shares of our common stock to be held directly by JWC-InSight Co-invest LLC. John W. Childs, Glenn A. Hopkins, Dana L. Schmaltz, Adam L. Suttin, William E. Watts, James Rhee and Jeffrey Teschke, as well as Steven G. Segal, Edward D. Yun, Michael N. Cannizzaro and Mark J. Tricolli (as indicated in footnotes 5, 6, 7, and 8, respectively) share voting and investment control over, and therefore may be deemed to beneficially own, the shares of common stock held by these entities.
(4)	Includes 1,107,020 shares of our common stock owned directly by Halifax Capital Partners, L.P. and 4,092 shares of our common stock owned directly by Mr. Dupree, a Managing Director of The Halifax Group, L.L.C. The general partner of Halifax Capital Partners, L.P. is Halifax Genpar, L.P., a Delaware limited partnership. The general partner of Halifax Genpar, L.P. is The Halifax Group, L.L.C. a Delaware limited liability company. Halifax Genpar, L.P. and The Halifax Group, L.L.C. may be deemed to beneficially own the 1,111,112 shares of our common stock held by Halifax Capital Partners, L.P. and its affiliate, Mr. Dupree. Halifax Capital Partners, L.P., Halifax Genpar, L.P. and The Halifax Group, L.L.C. disclaim beneficial ownership of the 4,092 shares of our common stock owned directly by Mr. Dupree. William L. Rogers, A. Judson Hill, Michael T. Marshall and Brent D. Williams, as well as Mr. Dupree and Kenneth M. Doyle (as indicated in footnotes 9 and 10, respectively) share voting and investment control over, and therefore may be deemed to beneficially own, the shares of common stock held by these entities.
(5)	As a Partner of J.W. Childs Associates, L.P., which manages J.W. Childs Equity Partners II, L.P., and a member of JWC-InSight Co-invest LLC, Mr. Segal may be deemed to beneficially own the

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	4,011,758 shares of our common stock owned by J.W. Childs Equity Partners II, L.P. and the 338,532 shares of our common stock held directly by JWC-InSight Co-invest LLC. Mr. Segal disclaims beneficial ownership of such shares.
(6)	As a Partner of J.W. Childs Associates, L.P., which manages J.W. Childs Equity Partners II, L.P. and a member of JWC-InSight Co-invest LLC, Mr. Yun may be deemed to beneficially own the 4,011,758 shares of our common stock owned by J.W. Childs Equity Partners II, L.P., and the 338,532 shares of our common stock held directly by JWC-InSight Co-invest LLC. Mr. Yun disclaims beneficial ownership of such shares.
(7)	As an Operating Partner of J.W. Childs Associates, L.P., which manages J.W. Childs Equity Partners II, L.P. and a member of JWC-InSight Co-invest LLC, Mr. Cannizzaro may be deemed to beneficially own the 4,011,758 shares of our common stock owned by J.W. Childs Equity Partners II, L.P. and the 338,532 shares of our common stock held directly by JWC-InSight Co-invest LLC. Mr. Cannizzaro disclaims beneficial ownership of such shares. Includes options to purchase 40,000 shares of our common stock at an exercise price of $19.82 per share, which are fully vested and immediately exercisable.
(8)	As a Vice President at J.W. Childs Associates, L.P., which manages J.W. Childs Equity Partners II, L.P. and a member of JWC-InSight Co-invest LLC, Mr. Tricolli may be deemed to beneficially own the 4,011,758 shares of our common stock owned by J.W. Childs Equity Partners II, L.P. and the 338,532 shares of our common stock held directly by JWC-InSight Co-invest LLC. Mr. Tricolli disclaims beneficial ownership of such shares.
(9)	As a Managing Director of The Halifax Group, L.L.C., which manages Halifax Capital Partners, L.P., Mr. Dupree may be deemed to beneficially own the 1,107,020 shares of our common stock owned by Halifax Capital Partners, L.P. and its affiliates. Mr. Dupree disclaims beneficial ownership of such shares.

(10)	As a Managing Director of The Halifax Group, L.L.C., which manages Halifax Capital Partners, L.P., Mr. Doyle may be deemed to beneficially own the 1,111,112 shares of our common stock owned by Halifax Capital Partners, L.P. and its affiliates. Mr. Doyle disclaims beneficial ownership of such shares.
(11)	Includes an option to purchase 52,500 shares of our common stock at an exercise price of $8.37 per share which option was granted upon the consummation of the Acquisition and is fully vested and immediately exercisable.
(12)	Effective August 9, 2004, Mr. Plochocki was no longer employed by us. See “Certain Relationships and Related Transactions — Severance Arrangement.”
(13)	Does not include an option to purchase 248,236 shares of our common stock at an exercise price of $19.82 per share, which is not currently exercisable.
(14)	Includes (i) an option to purchase 46,990 shares of our common stock at an exercise price of $8.37 per share which option was granted upon the consummation of the Acquisition and is fully vested and immediately exercisable and (ii) an option to purchase 17,500 shares of our common stock at an exercise price of $18.00 per share. Does not include an option to purchase 52,500 shares of our common stock at an exercise price of $18.00 per share, which is not currently exercisable.
(15)	Includes a right to purchase 2,525 shares of our common stock at a price of $19.82 per share, which expired on October 22, 2005. Does not include an option to purchase 40,000 shares of our common stock at an exercise price of $19.82 per share, which is not currently exercisable.
(16)	Includes an option to purchase 7,500 shares of our common stock at an exercise price of $18.00 per share. Does not include (i) an option to purchase 22,500 shares of our common stock at an exercise price of $18.00 per share and (ii) an option to purchase 10,000 shares of our common stock at an exercise price of $19.82 per share, which are not currently exercisable.
(17)	Includes an option to purchase 7,500 shares of our common stock at an exercise price of $18.00 per share. Does not include (i) an option to purchase 22,500 shares of our common stock at an exercise

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price of $18.00 per share and (ii) an option to purchase 30,000 shares of our common stock at an exercise price of $19.82 per share, which are not currently exercisable.

(18)  Mr. Plochocki is not included in the group because he was not an executive officer as of September 30, 2005.

      Except as otherwise noted, we believe that each of the stockholders listed in the table above has sole voting and dispositive power over all shares beneficially owned. Each of our stockholders in the table above is party to a stockholders agreement which governs the transferability and voting of shares of our common stock held by them. See “Certain Relationships and Related Transactions — Stockholders Agreement.”

Equity Compensation Plan Information

      The following table provides information as of June 30, 2005, with respect to compensation plans under which our common stock is authorized for issuance. These compensation plans include: (i) the 2001 Stock Option Plan; and (ii) stock options granted pursuant to stock option agreements. Our stockholders approved the 2001 Stock Option Plan and the issuance of options to purchase up to 626,000 shares of our common stock, pursuant to individual stock option agreements.

					Number of Shares
					Remaining Available for
					Future Issuance Under
	Number of Shares to be		Weighted Average		Equity Compensation
	Issued Upon Exercise of		Exercise Price of		Plans (Excluding Shares
Plan Category	Outstanding Options		Outstanding Options		Reflected in Column (a))
	(a)		(b)		(c)
Equity compensation plans approved by stockholders		616,990	$	16.74		128,950

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Management Agreement

      Upon the completion of the Acquisition, we entered into a management agreement with J.W. Childs Advisors II, L.P., the general partner of J.W. Childs Equity Partners II, L.P. and Halifax Genpar, L.P., the general partner of Halifax Capital Partners, L.P. J.W. Childs Advisors II, L.P. and Halifax Genpar, L.P. will provide business, management and financial advisory services to us in consideration of (i) an annual fee of $240,000 to be paid to J.W. Childs Advisors II, L.P. and (ii) an annual fee of $60,000 to be paid to Halifax Genpar, L.P. From August 2004 through December 2005, we have paid and will continue to pay J.W. Childs Advisors II, L.P. a monthly fee of $10,000 for the services of Michael N. Cannizzaro, our Chairman of the Board. We will also reimburse such entities for all travel and other out-of-pocket expenses incurred by such entities in connection with their performance of the advisory services under the agreement. The management agreement has an initial term of five years, which term will automatically renew for one year periods thereafter and is subject to earlier termination by our board of directors. Furthermore, we and InSight have agreed to indemnify and hold harmless J.W. Childs Advisors II, L.P. and Halifax Genpar, L.P. and their affiliates, from and against any and all claims, losses, damages and expenses arising out of the Acquisition or the performance by J.W. Childs Advisors II, L.P. and Halifax Genpar, L.P. of their obligations under the management agreement.

Stockholders Agreement

      We, J.W. Childs Equity Partners II, L.P., JWC-InSight Co-invest LLC, Halifax Capital Partners, L.P., Mr. Dupree, management of InSight and all other holders of our capital stock or stock options have entered into a stockholders agreement. Under the stockholders agreement, we and each of our stockholders have a right of first refusal to purchase any stock proposed to be sold by all other stockholders, except J.W. Childs Equity Partners II, L.P. and JWC-InSight Co-invest LLC. Additionally, the stockholders agreement affords: (1) stockholders, other than J.W. Childs Equity Partners II, L.P. and JWC-InSight

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Co-invest LLC, so-called “tag-along rights”, which give these stockholders the right to participate with respect to proposed sales of our capital stock by J.W. Childs Equity Partners II, L.P. and JWC — InSight Co-invest LLC; (2) J.W. Childs Equity Partners II, L.P. and JWC-InSight Co-invest LLC “drag-along rights”, which gives these stockholders the right to require other stockholders to participate in proposed sales of a majority of our capital stock; and (3) all stockholders certain registration rights with respect to our capital stock. Furthermore, the stockholders agreement contains put and call features on capital stock and stock options held by InSight management which are triggered upon termination of such individual’s employment with InSight; however, these put and call features are inapplicable to Mr. Jorgensen’s capital stock and stock options. The stockholders agreement also obligates us and our stockholders to take all necessary action to appoint, as our directors, up to eight nominees designated by J.W. Childs Equity Partners II, L.P. (as would constitute a majority of our entire board of directors) and two nominees designated by Halifax Capital Partners, L.P.

Severance Agreement

      Pursuant to the terms of a resignation agreement with us, Steven T. Plochocki, our former President and Chief Executive Officer, will receive severance equal to 24 months salary at his level of compensation as of August 9, 2004, which was $420,000 per year and benefits in accordance with the terms of his employment agreement. All of Mr. Plochocki’s unvested stock options were cancelled. Mr. Plochocki’s vested stock options under the 2001 Stock Option Plan remain outstanding in accordance with their terms.

DESCRIPTION OF NOTES

      You can find the definitions of certain terms used in this description under the caption “Certain Definitions.” In this description, references to the “Company” refer only to InSight Health Services Corp. (“InSight”) and not to any of the subsidiaries of InSight.

General

      On September 22, 2005, the Company issued $300 million aggregate principal amount of senior secured floating rate notes due 2011 under an indenture dated as of September 22, 2005 (the “Indenture”), among itself, InSight’s Wholly Owned Restricted Subsidiaries, InSight Health Services Holdings Corp. (the “Parent”) and U.S. Bank National Association, as trustee (the “Trustee”) in a private transaction that was not subject to the registration requirements of the Securities Act. We refer to these notes as the initial notes. The exchange notes offered hereby in exchange for the initial notes are identical to, and represent the same indebtedness as, the initial notes, except that the exchange notes are registered under the Securities Act and therefore are freely transferable. The Company will issue the exchange notes offered hereby under the Indenture. The exchange notes offered hereby, along with the initial notes will be treated as a single class of securities under the Indenture, including, without limitation, with respect to waivers, amendments, redemptions and offers to purchase. Accordingly, unless the context otherwise requires, all references in this section to “Notes” shall include the initial notes and the exchange notes. The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). We herein sometimes refer to the Subsidiary Guarantors and the Parent collectively as the “Guarantors.”

      The following description is a summary of the material provisions of the Indenture and the Security Documents. It does not restate those agreements in their entirety. We urge you to read the Indenture and the Security Documents in their entirety because they, and not this description, define your rights as a Holder. Certain defined terms used in this description but not defined below under “Certain Definitions” have the meanings assigned to them in the Indenture.

      The registered Holder of a Note will be treated as its owner for all purposes. Only registered Holders will have rights under the Indenture.

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Brief Description of the Notes and the Guarantees

      The Notes:

•  are general senior secured obligations of the Company;

•  are secured by security interests in the Collateral on a first priority basis;

•  rank equally in right of payment with all existing and future Pari Passu Indebtedness of the Company; and

•  will rank senior in right of payment to all existing and future Subordinated Indebtedness of the Company.

      The Guarantees:

      The Notes are unconditionally guaranteed on a senior secured basis by the Parent and by all of the Wholly Owned Restricted Subsidiaries of the Company.

      Each Guarantee of the Notes:

•  is a senior secured obligation of the Guarantor;

•  is secured, on a first priority basis, by security interests in the Collateral owned by the Guarantor;

•  is senior in right of payment to all existing and future Subordinated Indebtedness of the Guarantor; and

•  ranks equally in right of payment with all existing and future Pari Passu Indebtedness of the Guarantor.

      The Notes will be effectively subordinated to any debt and other liabilities, including trade payables, of any Subsidiaries of the Company that do not guarantee the Notes. As of June 30, 2005, such Subsidiaries had approximately $6.9 million of debt and other balance sheet liabilities, excluding intercompany liabilities.

      The assets of any Subsidiary that does not guarantee the Notes will not constitute Collateral and will be subject to the prior claims of all creditors of that Subsidiary, including trade creditors. Foreign Subsidiaries of the Company will not be Guarantors and Domestic Subsidiaries of the Company that are not Wholly Owned Restricted Subsidiaries will not be Guarantors. As of the Issue Date, there will be no Foreign Subsidiaries of the Company. Under the Indenture, the Company will be permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries.” The Company’s Unrestricted Subsidiaries will not be subject to the restrictive covenants in the Indenture and will not guarantee the Notes. In the event of a bankruptcy, administrative receivership, composition, insolvency, liquidation or reorganization of any of the non-guarantor Subsidiaries, such Subsidiaries will pay the holders of their liabilities, including trade payables, before any of their assets would become available to pay creditors of the Company and its Subsidiaries that are Guarantors (including Holders of the Notes). See “Risk Factors — Not all of our subsidiaries guarantee our obligations under the notes, and the assets of our non-guarantor subsidiaries may not be available to make payments on the notes.”

Principal, Maturity and Interest

      The Notes will mature on November 1, 2011 and are senior secured obligations of the Company.

      After the Notes offered hereby have been issued, the Indenture provides for the issuance of additional Notes from time to time having identical terms and conditions to the Notes offered hereby (the “Additional Notes”) (in all respects other than the payment of interest accruing prior to the issue date of such additional Notes), subject to compliance with the covenants contained in the Indenture, including, without limitation, the covenant described under “— Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock” and “— Certain Covenants — Liens”. Such Additional Notes will form a single series with the Notes offered hereby and have the same terms as to status, redemption or otherwise

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as the Notes offered hereby. Any Additional Notes will be guaranteed by the Guarantors and will be secured by the Collateral on an equal and ratable basis with the Notes offered hereby. See “— Collateral.” In addition, there can be no assurance as to when or whether the Company will issue any such Additional Notes or as to the aggregate principal amount of such Additional Notes.

      Interest on the Notes accrues at the rate per annum, reset quarterly, equal to LIBOR plus 5.25%, as determined by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee, and will be payable quarterly in cash on each February 1, May 1, August 1 and November 1, commencing on February 1, 2006 with respect to the Notes offered hereby, to the Holders of record on the immediately preceding January 15, April 15, July 15 and October 15. Interest on such Note will accrue from the most recent date to which interest has been paid on such Note or, with respect to the Notes offered hereby, if no interest has been paid, from the Issue Date.

      The amount of interest for each day that the Notes are outstanding (the “Daily Interest Amount”) will be calculated by dividing the interest rate in effect for such day by 365 (or 366, in the case of a calculation made with respect to a leap year) and multiplying the result by the principal amount of the Notes. The amount of interest to be paid on the Notes for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period.

      All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

      The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law.

      The Calculation Agent will, upon the request of the Holder of any Note, provide the interest rate then in effect with respect to the Notes. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Guarantors and the Holders of the Notes.

      The principal of and premium, if any, and interest on the Notes are payable and the Notes are exchangeable and transferable, at the office or agency of the Company in the City of New York maintained for such purposes (which initially will be the office of the Trustee located at 100 Wall Street, Suite 1600, New York, New York 10005) or, at the option of the Company, payment of interest may be paid by check mailed to the address of the person entitled thereto as such address appears in the security register. The Notes are issued only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof. No service charge will be made for any registration of transfer or exchange or redemption of Notes, but the Company may require payment in certain circumstances of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

      The Notes, together with any Additional Notes, will be treated as a single class of securities under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

      The Notes will not be entitled to the benefit of any sinking fund.

Guarantees

      Each of the Company’s Wholly Owned Restricted Subsidiaries is a Subsidiary Guarantor and payment of the principal of, premium, if any, and interest on the Notes, when and as the same become due and payable, are guaranteed, jointly and severally, on a senior secured basis (the “Guarantees”) by the Subsidiary Guarantors and by the Parent. In addition, if the Company or any of its Wholly Owned Restricted Subsidiaries shall acquire or create another Wholly Owned Subsidiary (other than any Foreign Subsidiary), then such Subsidiary shall be required to execute a Guarantee, in accordance with the terms

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of the Indenture. The obligations of the Guarantors under the Guarantees is limited so as not to constitute a fraudulent conveyance under applicable statutes. See “Risk Factors — Risks Relating to the Notes — Federal and state statutes allow courts, under specific circumstances, to void guarantees and require noteholders to return payments received from guarantors.”

      The Indenture provides that upon a sale or other disposition to a Person not an Affiliate of the Company of all or substantially all of the assets of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition to a Person not an Affiliate of the Company of all of the Capital Stock of any Subsidiary Guarantor, by way of merger, consolidation or otherwise, which transaction is carried out in accordance with the covenants described below under the captions “— Repurchase at the Option of Holders — Asset Sales,” such Subsidiary Guarantor will be deemed automatically and unconditionally released and discharged from all of its obligations under its Guarantee without any further action on the part of the Trustee or any holder of the Notes; provided that any such termination shall occur only to the extent that all obligations of such Subsidiary Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure any, Indebtedness of the Company shall also terminate upon such sale, disposition or release.

Collateral

Overview

      Under the Security Documents, except as otherwise stated below, each of the Company and the Guarantors, as applicable, have granted in favor of U.S. Bank National Association, as Collateral Agent (and any successor thereto under the Collateral Agency Agreement) (the “Collateral Agent”) for the benefit of the Trustee and the Holders, a first priority security interest in substantially all of its tangible and intangible personal property, including, without limitation, equipment, contracts and intellectual property held by it and any Capital Stock (including, without limitation, any Capital Stock of its subsidiary) owned, directly or indirectly, by it, and the proceeds thereof, whether now owned or hereafter acquired, other than Excluded Assets (as defined below), (collectively, the “Collateral”). The Note Obligations will be secured on a first priority perfected basis by the Collateral. To the extent the provisions in the Indenture or the Security Documents conflict with the provisions of the Trust Indenture Act, the provisions of the Trust Indenture Act will control.

Excluded Assets

      The Collateral securing the Notes does not and will not include, the following, (collectively, the “Excluded Assets”):

      1. any interest in real property;

      2. assets securing Capitalized Lease Obligations or Indebtedness under purchase money mortgages incurred pursuant to clause (8) of the third paragraph under the caption, “— Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock,” provided that such assets that are released from such security in connection with the incurrence of Indebtedness pursuant to clause (16) of the third paragraph under the caption, “— Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stocks” shall not be Excluded Assets;

      3. Excluded Contracts;

      4. any Voting Stock that is issued by a Foreign Subsidiary (that is a corporation for United States federal income tax purposes) and owned by the Company or any Guarantor, if and to the extent that the inclusion of such Voting Stock in the Collateral would cause the Collateral pledged by the Company or such Guarantor, as the case may be, to include in the aggregate more than 65% of the total combined voting power of all classes of Voting Stock of such Foreign Subsidiary;

      5. any Capital Stock owned by the Company or a Guarantor and issued by an entity that is not a Wholly Owned Subsidiary of the Company or a Guarantor to the extent (and only with respect to

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such portion of such Capital Stock that would be prohibited as referred to below) that any joint venture agreement, between or among the Company and/or any Guarantor and one or more third parties with respect to a Permitted Joint Venture, by the express terms of a valid and enforceable restriction in favor of such third parties prohibits, or requires any consent for, the granting of a security interest in such Capital Stock by the Company or such Guarantor;

      6. Receivables and Related Assets;

      7. any Capital Stock and other securities of the Company, any of its Subsidiaries or any of the Parent’s subsidiaries to the extent that the pledge of such Capital Stock or other securities to secure the Notes or the Guarantees would cause the Company, such Subsidiary or such subsidiary of the Parent, as the case may be, to be required to file separate financial statements with the Commission pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time); and

      8. proceeds and products from any and all of the foregoing excluded collateral described in clauses (1) through (7), unless such proceeds or products would otherwise constitute Collateral securing the Notes.

After-Acquired Property

      The Indenture and the relevant Security Documents require that the Company and the Guarantors pledge all After-Acquired Property, except as otherwise indicated below, as Collateral on a first priority perfected Lien basis. In addition, any future Restricted Subsidiaries of the Company that guarantee the Notes will have to similarly provide security on behalf of the Holders of the Notes.

Permitted Liens

      The Company and the Subsidiary Guarantors are permitted by the Indenture to create or incur Permitted Liens. The Notes may be effectively subordinated to existing and future secured Indebtedness and other liabilities to the extent the Collateral serves as collateral for such Permitted Liens. For example, the Notes will be effectively subordinated to security interests on acquired property or assets of acquired companies which are secured prior to (and not in connection with) such acquisition; such security interests generally constitute Permitted Liens. The Indenture also permits the Company and the Subsidiary Guarantors to create other Permitted Liens. See “Risk Factors — The imposition of certain permitted liens will cause the asset on which such liens are imposed to be excluded from the collateral securing the Notes and the guarantees. There are also certain other categories of assets that are also excluded from the collateral.”

Foreclosure

      The Collateral Agency Agreement provides that the Trustee, after receipt of instructions from a majority in aggregate principal amount of the outstanding Notes may, after the obligations outstanding under the Notes have been accelerated, instruct the Collateral Agent generally to realize upon the Collateral. The Collateral Agent will only exercise remedies under the Security Documents, including, without limitation, the institution of foreclosure proceedings in accordance with the Security Documents and applicable law, after the Holders of the Notes have accelerated their Indebtedness.

      The Collateral Agent will apply the proceeds received by it from any foreclosure of the Collateral:

      1. first, to the payment of advances made and liabilities incurred by the Collateral Agent in order to protect the Liens granted by the Security Documents or the Collateral, with interest thereon at the rate specified in the Security Documents, and the payment of all reasonable out-of-pocket costs and expenses incurred by the Collateral Agent or the Trustee in connection with the preservation, collection, foreclosure or enforcement of the Liens granted by the Security Documents or any interest, right, power or remedy of the Collateral Agent or in connection with the collection or enforcement of any of the Notes or the Security Documents in any insolvency proceeding, including all reasonable out-of-pocket fees and disbursements of attorneys, accountants, consultants, appraisers and other

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professionals engaged by the Collateral Agent or the Trustee and reasonable compensation of the Collateral Agent or the Trustee for services in connection therewith;

      2. second, to the payment of accrued and unpaid interest on the Notes;

      3. third, to the payment of any due and unpaid premium, if any, in respect of the prepayment or payment of the Notes;

      4. fourth, to the payment of any due and unpaid principal of the Notes;

      5. fifth, to any remaining unpaid amounts of the Note Obligations; and

      6. sixth, to any other persons as their interests may appear or as instructed by a court of competent jurisdiction.

      The Collateral Agent will have limited, if any, rights with respect to assets included as Collateral but which are subject to a Permitted Lien. With respect to any of the Collateral, the Collateral Agent’s rights with respect to the Collateral are likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against the Company or any of the Guarantors prior to the Collateral Agent having repossessed and disposed of the Collateral.

      The Indenture permits the release of Collateral without the substitution of additional Collateral under certain circumstances, such as those described under “Repurchase at the Option of Holders — Asset Sales” and “— Possession, Use and Release of Collateral.”

      The fact that other obligors may benefit from Permitted Liens could have a material adverse effect on the amount that would be realized upon a liquidation of the Collateral. There can be no assurance that proceeds of any sale of the Collateral pursuant to the Indenture and the Security Documents following an Event of Default would be sufficient to satisfy, or would not be substantially less than, amounts due under the Notes. In addition, the Collateral Agent will not have any Liens on Excluded Assets. See “Risk Factors — If there is a default, the value of the collateral may not be sufficient to repay the holders of the notes.” If the proceeds on any of the Collateral are not sufficient to repay all amounts due on the Notes, the holders of the Notes (to the extent not repaid from the proceeds of the sale of the Collateral) would have only an unsecured claim against the remaining assets, if any, of the Company.

Perfection and Non-Perfection of Security in Collateral

      To the extent that the security interests created by the Security Documents with respect to any Collateral are not perfected, the Collateral Agent will be treated as a general unsecured creditor of the Company and the Guarantors in the event of a bankruptcy. The security interests of certain lien holders, such as judgment creditors and any creditors who obtain a perfected security interest in any items of Collateral in which the Collateral Agent’s security interest is unperfected, would take priority over the Collateral Agent’s interests in the Collateral. Accordingly, there can be no assurance that the assets in which the Collateral Agent’s security interest is unperfected will be available upon the occurrence of an event of default or a default under the other secured obligations to satisfy the obligations under the Notes. In addition, certain assets may be subject to Permitted Liens that would take priority over any liens granted in such assets under the Security Documents. The security interests in some of the Collateral, including the vehicles and imaging equipment used in connection with the Company’s and Guarantors’ mobile facilities, may not be perfected as of the closing of this exchange offer. Although the Company expects such assets to be perfected sometime after the closing of this exchange offer, the Company cannot guarantee when, and if, such perfection would take place.

Possession, Use and Release of Collateral

Possession and Use of the Collateral

      Subject to and in accordance with the provisions of the Security Documents and the Indenture, so long as the Collateral Agent has not exercised its rights with respect to the Collateral upon the occurrence

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and during the continuance of an Event of Default, the Company and the Guarantors will have the right to remain in possession and retain exclusive control of the Collateral, to operate the Collateral, to alter or repair the Collateral and to collect, invest and dispose of any income therefrom.

Release of Collateral

      The Indenture and the Security Documents provide that the Liens securing the Notes will, upon compliance with the condition that the Company delivers to the Trustee all documents required by the Trust Indenture Act, automatically and without the need for any further action by any Person be released so long as such release is in compliance with the Trust Indenture Act:

      1. in whole, as to all property subject to such Liens which has been taken by eminent domain, condemnation or other similar circumstances;

      2. in whole, as to all property subject to such Liens, upon:

      (a) payment in full of the principal of, accrued and unpaid interest and premium on the Notes;

      or

      (b) defeasance of the Notes or discharge of the Indenture as set forth under the caption, “— Legal Defeasance and Covenant Defeasance;” or

      3. in part, as to any property that (a) is sold, transferred or otherwise disposed of by the Parent, the Company or any of their Subsidiaries in a transaction not prohibited by the Indenture, at the time of such sale, transfer or disposition, to the extent of the interest sold, transferred or disposed of or (b) is owned or at any time acquired by a Guarantor that has been released from its Guarantee, concurrently with the release of such Guarantee.

      Notwithstanding anything to the contrary herein, the Company will not be required to comply with all or any portion of Section 314(d) of the Trust Indenture Act if it determines, in good faith based on advice of counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the Commission and its staff, including “no action” letters or exemptive orders, all or any portion of Section 314(d) of the Trust Indenture Act is inapplicable to the released Collateral. Without limiting the generality of the foregoing, certain no-action letters issued by the Commission have permitted an indenture qualified under the Trust Indenture Act to contain provisions permitting the release of collateral from liens under such indenture in the ordinary course of the issuer’s business without requiring the issuer to provide certificates and other documents under Section 314(d) of the Trust Indenture Act, as described below under the caption, “— Permitted Ordinary Course Activities with Respect to Collateral.”

      If any Collateral is released in accordance with any of the Security Documents and if the Company has delivered the certificates and documents required by the Security Documents, the Trustee will determine whether it has received all documentation required by Section 314(d) of the Trust Indenture Act in connection with such release and, based on such determination and the opinion of counsel delivered pursuant to the Indenture, will deliver a certificate to the Collateral Agent setting forth such determination.

Permitted Ordinary Course Activities with Respect to Collateral

      Notwithstanding the foregoing, so long as the Collateral Agent has not exercised its rights with respect to the Collateral upon the occurrence and during the continuance of an Event of Default and such transaction would not violate the Trust Indenture Act or be prohibited by the Indenture or the Security Documents, the Company and the Guarantors may, among other things, without any release or consent by the Trustee or the Collateral Agent, conduct ordinary course activities with respect to Collateral, including, without limitation, (i) selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien of the Security Documents which has become worn out, defective or obsolete or not used or useful in the business; (ii) abandoning, terminating, canceling, releasing or making

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alterations in or substitutions of any leases or contracts subject to the Lien of the Indenture or any of the Security Documents; (iii) surrendering or modifying any franchise, license or permit subject to Lien pursuant to the Indenture or any of the Security Documents which it may own or under which it may be operating; altering, repairing, replacing, changing the location or position of and adding to its structures, machinery, systems, equipment, fixtures and appurtenances; (iv) granting a license of any intellectual property; (v) selling, transferring or otherwise disposing of inventory in the ordinary course of business; (vi) making cash payments (including for the scheduled repayment of Indebtedness) from cash that is at any time part of the Collateral in the ordinary course of business that are not otherwise prohibited by the Indenture and the Security Documents; and (vii) abandoning any intellectual property which is no longer used or useful in the Company’s business. The Company must deliver to the Collateral Agent, within 30 calendar days following the end of each six-month period beginning on January 1 and July 1 of any year, an officers’ certificate to the effect that all releases and withdrawals during the preceding six-month period (or since the Issue Date, in the case of the first such certificate) in which no release or consent of the Collateral Agent was obtained in the ordinary course of the Company’s and the Guarantors’ business were not prohibited by the Indenture or any of the Security Documents.

Sufficiency of Collateral

      In the event of foreclosure on the Collateral, the proceeds from the sale of the Collateral may not be sufficient to satisfy in full the Note Obligations. The amount to be received upon such a sale would be dependent on numerous factors, including but not limited to the timing and the manner of the sale. In addition, the book value of the Collateral should not be relied on as a measure of realizable value for such assets. By its nature, portions of the Collateral, such as equipment, contracts and intellectual property, may be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the Collateral can be sold in a short period of time in an orderly manner. A significant portion of the Collateral includes assets that may only be usable, and thus retain value, as part of the existing operating business of the Company and its Subsidiaries. Accordingly, any such sale of the Collateral separate from the sale of certain of the operating businesses of the Company and its Subsidiaries may not be feasible or of significant value. See Risk Factors — “If there is a default, the value of the collateral may not be sufficient to repay holders of the notes.”

Certain Bankruptcy Limitations

      The right of the Collateral Agent to repossess and dispose of the Collateral upon the occurrence of an Event of Default would be significantly impaired by applicable bankruptcy law in the event that a bankruptcy case were to be commenced by or against the Company or any of the Guarantors prior to the Collateral Agent having repossessed and disposed of the Collateral. Upon the commencement of a case for relief under Title 11 of the United States Code, as amended (the “Bankruptcy Code”), a secured creditor such as the Collateral Agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from the debtor, without bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and use collateral even though the debtor is in default under the applicable debt instruments provided that the secured creditor is given adequate protection. The meaning of the term “adequate protection” may vary according to the circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the collateral and may include cash payments or the granting of additional security, if and at such times as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay or repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. A bankruptcy court may determine that a secured creditor may not require compensation for a diminution in the value of the collateral if the value of the collateral exceeds the debt it secures.

      In view of the broad equitable powers of a bankruptcy court, it is impossible to predict how long payments under the Notes could be delayed following commencement of a bankruptcy case, whether or when the Collateral Agent could repossess or dispose of the Collateral, the value of the Collateral at the time of the bankruptcy petition or whether or to what extent Holders of the Notes would be compensated

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for any delay in payment or loss of value of the Collateral through the requirement of “adequate protection.” Any disposition of the Collateral during a bankruptcy case would also require permission from the bankruptcy court. Furthermore, in the event a bankruptcy court determines the value of the Collateral is not sufficient to repay all amounts due on the Notes, the Holders of the Notes would hold secured claims to the extent of the value of the Collateral to which the Holders of the Notes are entitled, and unsecured claims with respect to such shortfall. The Bankruptcy Code only permits the payment and/or accrual of post-petition interest, costs and attorney’s fees to a secured creditor during a debtor’s bankruptcy case to the extent the value of the Collateral is determined by the bankruptcy court to exceed the aggregate outstanding principal amount of the obligations secured by the Collateral.

      In addition, the Collateral Agent may need to evaluate the impact of the potential liabilities before determining to foreclose on the Collateral. In this regard, the Collateral Agent may decline to foreclose on the Collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the Holders of Notes. Finally, the Collateral Agent’s ability to foreclose on the Collateral on behalf of the Holders of Notes may be subject to lack of perfection, the consent of third parties, prior liens and practical problems associated with the realization of the Collateral Agent’s security interest in the Collateral.

Optional Redemption

      The Notes are not redeemable at the Company’s option prior to November 1, 2006. Thereafter, the Notes will be redeemable, at the option of the Company, as a whole or from time to time in part, on not less than 30 nor more than 60 days’ prior notice to the Holders at the following redemption prices (expressed as percentages of principal amount), together with accrued interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date), if redeemed during the 12-month period beginning on November 1 of the years indicated below.

Year	Redemption Price
2006		103.00	%
2007		101.50	%
2008 and thereafter		100.00	%

      If less than all the Notes are to be redeemed, the particular Notes to be redeemed will be selected not more than 60 days prior to the redemption date by the Trustee by such method as the Trustee deems fair and appropriate, provided that no Note of $1,000 in principal amount at maturity or less shall be redeemed in part.

Mandatory Redemption

      Except as set forth below under “Repurchase at the Option of Holders,” the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

Repurchase at the Option of Holders

Change of Control

      If a Change of Control occurs at any time, then each Holder will have the right to require that the Company purchase such Holder’s Notes in whole or in part in integral multiples of $1,000, at a purchase price in cash equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to the date of purchase, pursuant to the offer described below (the “Change of Control Offer”) and the other procedures set forth in the Indenture.

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      Within 30 days following any Change of Control, the Company will notify the Trustee thereof and give written notice of such Change of Control to each Holder of Notes by first class mail, postage prepaid, at its address appearing in the security register, stating, among other things:

      1. the purchase price and the purchase date, which will be a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed or such later date as is necessary to comply with the requirements under the Exchange Act;

      2. that any Note not tendered will continue to accrue interest;

      3. that, unless the Company defaults in the payment of the purchase price, any Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control purchase date; and

      4. certain other procedures that a Holder must follow to accept a Change of Control Offer or to withdraw such acceptance.

      If a Change of Control Offer is made, there can be no assurance that the Company will have available funds sufficient to pay the purchase price for all of the Notes that might be tendered by Holders seeking to accept the Change of Control Offer. The failure of the Company to make or consummate the Change of Control Offer or pay the applicable Change of Control purchase price when due would result in an Event of Default and would give the Trustee and the Holders the rights described under “Events of Default and Remedies.”

      The Revolving Credit Agreement provides that certain change of control events with respect to the Company and the Subsidiary Guarantors would constitute a default thereunder. Any future credit agreements or other agreements to which the Company becomes a party may contain similar restrictions and provisions. If a Change of Control occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or refinance such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture, which would, in turn, constitute a default under the Revolving Credit Agreement.

      One of the events that constitutes a Change of Control under the Indenture is the disposition of “all or substantially all” of the Company’s assets. This term has not been interpreted under New York law (which is the governing law of the Indenture) to represent a specific quantitative test. As a consequence, if Holders elect to require the Company to purchase the Notes and the Company elects to contest such election, there can be no assurance as to how a court interpreting New York law would interpret the phrase in many circumstances.

      The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all the Notes validly tendered and not withdrawn under such Change of Control Offer.

      The existence of a Holder’s right to require the Company to purchase such Holder’s Notes upon a Change of Control may deter a third party from acquiring the Company in a transaction that constitutes a Change of Control.

      The definition of “Change of Control” in the Indenture is limited in scope. The provisions of the Indenture may not afford Holders the right to require the Company to repurchase such Notes in the event of a highly leveraged transaction or certain transactions with the Company’s management or its Affiliates, including a reorganization, restructuring, merger or similar transaction involving the Parent or the Company (including, in certain circumstances, an acquisition of the Parent or the Company by management or its Affiliates) that may adversely affect Holders, if such transaction is not a transaction defined as a Change of Control. See “Certain Definitions” below for the definition of “Change of

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Control.” A transaction involving the Company’s management or its Affiliates, or a transaction involving a recapitalization of the Parent or the Company, would result in a Change of Control if it is the type of transaction specified in such definition.

      The Company will comply with the applicable tender offer rules including Rule 14e-1 under the Exchange Act, and any other applicable securities laws and regulations in connection with a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the “Change of Control” provisions of the Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the “Change of Control” provisions of the Indenture by virtue thereof.

      Restrictions in the Indenture described herein on the ability of the Company and its Restricted Subsidiaries to incur additional Indebtedness, to grant Liens on its or their property, to make Restricted Payments and to make Asset Sales may also make more difficult or discourage a takeover of the Company, whether favored or opposed by the management of the Company. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the Notes, and there can be no assurance that the Company or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. In certain circumstances, such restrictions and the restrictions on transactions with Affiliates may make more difficult or discourage any leveraged buyout of the Company or any of its Restricted Subsidiaries. While such restrictions cover a variety of arrangements which have traditionally been used to effect highly leveraged transactions, the Indenture may not afford the Holders protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction.

Asset Sales

      The Company will not, and will not permit any Restricted Subsidiary to, engage in any Asset Sale unless:

      1. the consideration received by the Company or such Restricted Subsidiary for such Asset Sale is not less than the fair market value of the assets sold as evidenced by a resolution of the board of directors of such entity set forth in an officers’ certificate delivered to the Trustee;

      2. the consideration received by the Company or the relevant Restricted Subsidiary in respect of such Asset Sale consists of at least 75% cash or cash equivalents. For purposes of this provision, cash and cash equivalents includes:

      (a) if such Asset Sale does not involve Collateral, any liabilities (as reflected in the Company’s consolidated balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Guarantee) that are assumed by any transferee of any such assets or other property in such Asset Sale, and where the Company or the relevant Restricted Subsidiary is released from any further liability in connection therewith with respect to such liabilities;

      (b) any securities, notes or other similar obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted within 180 days of the related Asset Sale by the Company or such Restricted Subsidiary into cash or cash equivalents (to the extent of the net cash proceeds or the cash equivalents (net of related costs) received upon such conversion);

      (c) any Designated Noncash Consideration received by the Company or any such Restricted Subsidiary in the Asset Sale having an aggregate fair market value, as determined by

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the Board of the Company, taken together with all other Designated Noncash Consideration received pursuant to this clause that is at that time outstanding, not to exceed the greater of:

      (A) $10 million; and

      (B) 15% of Consolidated Tangible Assets at the time of the receipt of such Designated Noncash Consideration (with the fair market value of each item of such Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value); and

      3. if such Asset Sale involves the transfer of Collateral,

      (a) all consideration received in such Asset Sale shall consist of assets that are not Excluded Assets; and

      (b) all consideration (including cash and cash equivalents) received in such Asset Sale shall be expressly made subject to a first priority perfected Lien (subject to Permitted Liens) in favor of the Collateral Agent.

      If the Company or any Restricted Subsidiary engages in an Asset Sale, the Company may, at its option, within 12 months after such Asset Sale (i) apply all or a portion of the Net Cash Proceeds to repay or purchase Applicable Indebtedness (and, in the case of revolving loans and other similar obligations, permanently reduce the commitment thereunder), or (ii) invest (or enter into a legally binding agreement to invest) all or a portion of such Net Cash Proceeds in properties and assets to replace the properties and assets that were the subject of the Asset Sale or in properties and assets that will be used in businesses of the Company or its Restricted Subsidiaries, as the case may be, existing on the Issue Date or in businesses the same, similar or reasonably related thereto; provided, that, to the extent that such Net Cash Proceeds represent proceeds of Collateral, (A) none of such properties and assets obtained shall consist of Excluded Assets and (B) such properties and assets obtained shall be expressly made subject to a first priority Lien (subject to Permitted Liens) with respect to the Notes. If any such legally binding agreement to invest such Net Cash Proceeds is terminated, the Company may, within 90 days of such termination or within 12 months of such Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in clause (i) or (ii) (without regard to the parenthetical contained in such clause (ii)) above. Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Cash Proceeds in a manner that is not prohibited by the Indenture. The amount of such Net Cash Proceeds not so used as set forth above in this paragraph constitutes “Excess Proceeds.”

      When the aggregate amount of Excess Proceeds exceeds $10 million, the Company will, within 30 days thereafter, make an offer to purchase (an “Excess Proceeds Offer”) from all Holders on a pro rata basis, in accordance with the procedures set forth in the Indenture, the maximum principal amount (expressed as a multiple of $1,000) of Notes that may be purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued interest, if any, to the date such offer to purchase is consummated. To the extent that the aggregate principal amount of Notes tendered pursuant to such offer to purchase is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes validly tendered and not withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to be purchased will be selected on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds will be reset to zero.

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Certain Covenants

Restricted Payments

      The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, take any of the following actions:

      (a) declare or pay any dividend on, or make any distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary, other than (i) dividends or distributions payable solely in Qualified Equity Interests or (ii) dividends or distributions by a Restricted Subsidiary payable to the Company or a Wholly Owned Restricted Subsidiary or to all holders of Capital Stock of such Restricted Subsidiary on a pro rata basis;

      (b) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any shares of Capital Stock, or any options, warrants or other rights to acquire such shares of Capital Stock, of the Company, any direct or indirect parent of the Company or any Subsidiary of the Company (other than a Wholly Owned Restricted Subsidiary);

      (c) make any principal payment on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Subordinated Indebtedness; and

      (d) make any Investment (other than a Permitted Investment) in any Person (such payments or other actions described in (but not excluded from) clauses (a) through (d) being referred to as “Restricted Payments”),

unless at the time of, and immediately after giving effect to, the proposed Restricted Payment:

      (i) no Default or Event of Default has occurred and is continuing,

      (ii) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Disqualified Stock,” and

      (iii) the aggregate amount of all Restricted Payments made after the Reference Date does not exceed the sum of:

      (A) 50% of the aggregate Consolidated Net Income of the Company during the period (taken as one accounting period) from the first day of the Company’s first fiscal quarter commencing after October 30, 2001 to the last day of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Net Income is a loss, 100% of such amount); plus

      (B) 100% of the aggregate net cash proceeds received by the Company after the Reference Date as a capital contribution or from the issuance or sale (other than to a Subsidiary) of either (1) Qualified Equity Interests of the Company or (2) debt securities or Disqualified Stock that have been converted into or exchanged for Qualified Stock of the Company, together with the aggregate net cash proceeds received by the Company at the time of such conversion or exchange.

      Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may take the following actions, so long as no Default or Event of Default has occurred and is continuing or would occur:

      (a) the payment of any dividend within 60 days after the date of declaration thereof, if at the declaration date such payment would not have been prohibited by the foregoing provisions;

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      (b) the repurchase, redemption or other acquisition or retirement for value of any shares of Capital Stock of the Company, in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, Qualified Equity Interests of the Company or of the Parent, the proceeds of which are contributed to the Company as a capital contribution on a substantially concurrent basis;

      (c) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, shares of Qualified Equity Interests of the Company or of the Parent, the proceeds of which are contributed to the Company as a capital contribution on a substantially concurrent basis;

      (d) the purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness in exchange for, or out of the net cash proceeds of a substantially concurrent issuance or sale (other than to a Subsidiary) of, Subordinated Indebtedness, so long as the Company or a Restricted Subsidiary would be permitted to refinance such original Subordinated Indebtedness with such new Subordinated Indebtedness pursuant to clause (4) of the definition of Permitted Indebtedness set forth in the covenant entitled “Incurrence of Indebtedness and Issuance of Disqualified Stock;”

      (e) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness in the event of a Change of Control in accordance with provisions similar to the “Change of Control” covenant; provided that, prior to or simultaneously with such repurchase, the Company has made the Change of Control Offer as provided in such covenant with respect to the Notes and has repurchased all Notes validly tendered for payment in connection with such Change of Control Offer;

      (f) within 90 days after the completion of an Excess Proceeds Offer pursuant to the covenant described under the caption “— Repurchase at the Option of Holders — Asset Sales” (including the purchase of all Notes tendered), any purchase or redemption of Indebtedness of the Company that is subordinated in right of payment to the Notes and that is required to be repurchased or redeemed pursuant to the terms thereof as a result of the related Asset Sale, at a purchase price not greater than 100% of the outstanding principal amount thereof (plus accrued and unpaid interest);

      (g) the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of the Company, options on any such shares or related stock appreciation rights or similar securities, or any dividend, distribution or advance to the Parent for the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of the Parent, options on any such shares or related stock appreciation rights or similar securities, in each case held by officers, directors or employees or former officers, directors or employees (or their estates or beneficiaries under their estates) of the Company, the Parent or any Subsidiary of the Company, as applicable, or by any employee benefit plan of the Company, the Parent or any Subsidiary of the Company, as applicable, upon death, disability, retirement or termination of employment or pursuant to the terms of any employee benefit plan or any other agreement under which such shares of stock or related rights were issued; provided that the aggregate amount of cash applied by the Company for such purchase, redemption, acquisition, cancellation or other retirement of such shares of Capital Stock of the Company or the Parent after the Reference Date does not exceed $7.5 million in the aggregate (excluding for purposes of calculating such amount the aggregate amount received by any Person in connection with such purchase, redemption, acquisition, cancellation or other retirement of such shares that is concurrently used to repay loans made to such Person by the Company pursuant to clause (f) of the definition of “Permitted Investment”);

      (h) the payment of dividends or other distributions or the making of loans or advances to the Parent in amounts required for the Parent to pay franchise taxes and other fees required to maintain its existence and provide for all other customary operating costs of the Parent to the extent attributable to the ownership and operation of the Company and its Restricted Subsidiaries, including,

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without limitation, in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other customary costs and expenses including all costs and expenses with respect to filings with the Commission;

      (i) the payment of dividends or other distributions by the Company to the Parent in amounts required to pay the tax obligations of the Parent attributable to the Company and its Subsidiaries, determined as if the Company and its Subsidiaries had filed a separate consolidated, combined or unitary return for the relevant taxing jurisdiction; provided that (x) the amount of dividends paid pursuant to this clause (i) to enable the Parent to pay Federal and state income taxes (and franchise taxes based on income) at any time shall not exceed the amount of such Federal and state income taxes (and franchise taxes based on income) actually owing by the Parent at such time to the respective tax authorities for the respective period and (y) any refunds received by the Parent attributable to the Company or any of its Subsidiaries shall promptly be returned by the Parent to the Company through a contribution or purchase of common stock (other than Disqualified Stock) of the Company;

      (j) the payment of dividends or other distributions or the making of loans or advances to the Parent in amounts required for the Parent to pay to the Equity Sponsors an annual amount not to exceed $500,000 for payment of management consulting or financial advisory services provided to the Company or any of the Subsidiaries;

      (k) other Restricted Payments not to exceed $10 million at any one time outstanding;

      (l) repurchase or repurchases of Existing Notes; provided that (1) at the time of such repurchase or repurchases, no amount is outstanding under the Revolving Credit Agreement or any Indebtedness incurred to refinance or replace the Revolving Credit Agreement, (2) the aggregate amount of cash (or fair market value of any other assets) applied to such repurchase or repurchases under this clause (l) does not exceed $25 million and (3) the amount of cash and cash equivalents held by the Company and the Restricted Subsidiaries immediately after giving effect to such repurchase or repurchases shall not be less than $29 million; and

      (m) repurchase or repurchases of Existing Notes; provided that (1) such repurchase or repurchases occur on the Issue Date or within two Business Days from the Issue Date and (2) the aggregate amount of cash (or fair market value of any other assets) applied to such repurchase or repurchases under this clause (m) does not exceed $50 million.

      The actions described in clauses (e), (f), (g), (h), (i), (j) and (k) of this paragraph will be Restricted Payments that will be permitted to be taken in accordance with this paragraph but will reduce the amount that would otherwise be available for Restricted Payments under clause (iii) of the first paragraph of this covenant and the actions described in clauses (a), (b), (c), (d), (l) and (m) of the preceding paragraph will be Restricted Payments that will be permitted to be taken in accordance with this paragraph and will not reduce the amount that would otherwise be available for Restricted Payments under clause (iii) of the first paragraph of this covenant.

      For the purpose of making any calculations under the Indenture (i) if a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company will be deemed to have made an Investment in an amount equal to the greater of the fair market value or net book value of the net assets of such Restricted Subsidiary at the time of such designation as determined by the Board of the Company, and (ii) any property transferred to or from an Unrestricted Subsidiary will be valued at fair market value at the time of such transfer, as determined by the Board of the Company. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined by the Board of the Company whose resolution with respect thereto shall be delivered to the Trustee, such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $10 million.

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Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an officer’s certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required under “Certain Covenants — Restricted Payments” were computed, together with a copy of any fairness opinion or appraisal required by the Indenture.

      If the aggregate amount of all Restricted Payments calculated under the foregoing provision includes an Investment in an Unrestricted Subsidiary or other Person that thereafter becomes a Restricted Subsidiary, the aggregate amount of all Restricted Payments calculated under the foregoing provision will be reduced by the lesser of (x) the net asset value of such Subsidiary at the time it becomes a Restricted Subsidiary and (y) the initial amount of such Investment.

      If an Investment resulted in the making of a Restricted Payment, the aggregate amount of all Restricted Payments calculated under the foregoing provision will be reduced by the amount of any net reduction in such Investment (resulting from the payment of interest or dividends, loan repayment, transfer of assets or otherwise, other than the redesignation of an Unrestricted Subsidiary or other Person as a Restricted Subsidiary), to the extent such net reduction is not included in the Company’s Consolidated Net Income; provided that the total amount by which the aggregate amount of all Restricted Payments may be reduced may not exceed the lesser of (x) the cash proceeds received by the Company and its Restricted Subsidiaries in connection with such net reduction and (y) the initial amount of such Investment.

      In computing the Consolidated Net Income of the Company for purposes of the foregoing clause (iii)(A) of the first paragraph of this covenant, (i) the Company may use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (ii) the Company will be permitted to rely in good faith on the financial statements and other financial data derived from its books and records that are available on the date of determination. If the Company makes a Restricted Payment that, at the time of the making of such Restricted Payment, would in the good faith determination of the Company be permitted under the requirements of the Indenture, such Restricted Payment will be deemed to have been made in compliance with the Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Incurrence of Indebtedness and Issuance of Disqualified Stock

      The Company will not, and will not permit any Restricted Subsidiary to, create, issue, assume, guarantee or in any manner become directly or indirectly liable for the payment of, or otherwise incur (collectively, “incur”), any Indebtedness (including Acquired Indebtedness and the issuance of Disqualified Stock), except that the Company and any Subsidiary Guarantors may incur Indebtedness if, at the time of such event, the Fixed Charge Coverage Ratio for the immediately preceding four full fiscal quarters for which internal financial statements are available, taken as one accounting period, would have been equal to at least 2.0 to 1.0.

      In making the foregoing calculation, pro forma effect will be given to: (i) the incurrence of such Indebtedness and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred and the application of such proceeds occurred at the beginning of such four-quarter period; (ii) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and (iii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period. In making a computation under the foregoing clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit facility will be

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computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Company, either the fixed or floating rate, and (C) the amount of any indebtedness that bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months).

      Notwithstanding the foregoing, the Company may, and may permit its Restricted Subsidiaries to, incur the following Indebtedness (“Permitted Indebtedness”):

      (1) Indebtedness of the Company or any Subsidiary Guarantor under the Credit Agreement (and the incurrence by any Subsidiary Guarantor of guarantees thereof) in an aggregate principal amount at any one time outstanding not to exceed $125 million, less (A) any amounts applied to the permanent reduction of such credit facilities pursuant to the provisions of the covenant described under the caption “— Repurchase at the Option of Holders — Asset Sales” and (B) up to $50 million of cash (or the fair market value of any other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date.

      (2) Indebtedness represented by the Notes (other than the Additional Notes) and the related Guarantees;

      (3) Existing Indebtedness;

      (4) the incurrence by the Company of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace, any Indebtedness that is permitted to be incurred under clause (2) or (3) above;

      (5) Indebtedness owed by the Company to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary (provided that such Indebtedness is held by the Company or such Restricted Subsidiary); provided, however, that:

      (a) any Indebtedness of the Company or any Subsidiary Guarantor owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, acceleration, or otherwise) to the payment and performance of the Company’s obligations under the Notes or the Subsidiary Guarantor’s obligations under its Guarantee, as the case may be; and

      (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (5);

      (6) Indebtedness of the Company or any Restricted Subsidiary under Hedging Obligations incurred in the ordinary course of business;

      (7) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;

      (8) either (A) Capitalized Lease Obligations of the Company or any Restricted Subsidiary or (B) Indebtedness under purchase money mortgages or secured by purchase money security interests so long as (x) such Indebtedness is not secured by any property or assets of the Company or any Restricted Subsidiary other than the property and assets so acquired and (y) such Indebtedness is created within 90 days of the acquisition of the related property; provided that the aggregate amount

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of Indebtedness under clauses (A) and (B) does not exceed 15% of Consolidated Tangible Assets less the amount of any Indebtedness incurred under clause (16) below at any one time outstanding;

      (9) Guarantees by any Restricted Subsidiary made in accordance with the provisions of the covenant described under the caption “— Guarantees of Indebtedness by Restricted Subsidiaries;”

      (10) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within two business days of incurrence;

      (11) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;

      (12) the incurrence of Non-Recourse Indebtedness by Permitted Joint Ventures that are Restricted Subsidiaries;

      (13) Indebtedness incurred by a Receivables Subsidiary pursuant to a Receivables Program; provided that, after giving effect to any such incurrence of Indebtedness, the aggregate principal amount of all Indebtedness incurred under this clause (13) and then outstanding does not exceed $30 million;

      (14) Indebtedness of the Company, any Restricted Subsidiary or any Permitted Joint Venture not permitted by any other clause of this definition, in an aggregate principal amount not to exceed $30 million at any one time outstanding;

      (15) Indebtedness represented by Attributable Debt related to a Sale and Leaseback transaction involving tractors existing on the Issue Date; provided that (i) the aggregate amount of such Indebtedness does not exceed $7 million and (ii) such Indebtedness is incurred within 12 months from the Issue Date; and

      (16) the incurrence of Indebtedness represented by Additional Notes and the related Guarantees, the net cash proceeds of which are used to satisfy, extinguish and retire the Company and/or any of the Restricted Subsidiaries’ obligations under any Indebtedness incurred under clause (8) above; provided that (A) any property or assets of the Company or any Restricted Subsidiary securing such Indebtedness, the obligations of which are being so satisfied, extinguished and retired, are fully released from such security and (B) such property or assets are expressly made subject to a first priority perfected Lien in favor of the Collateral Agent.

      For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Disqualified Stock” covenant, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (16) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under the Credit Agreement incurred on the Issue Date shall be deemed to have been incurred on the Issue Date in reliance on the exception provided by clause (1) above.

      The Company will not incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of the Company unless it is subordinate in right of payment to the Notes to the same extent. The Company will not permit any Subsidiary Guarantor to incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of such Subsidiary Guarantor unless it is subordinate in right of payment to such Subsidiary Guarantor’s Guarantee to the same extent. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Subsidiary Guarantor, as applicable, solely by reason of any Liens or Guarantees arising or created in respect thereof or by virtue of the fact that the holders of any secured Indebtedness have

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entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.

Liens

      Parent will not, and will not permit any of its subsidiaries (other than Unrestricted Subsidiaries) to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind upon any of their property or assets, whether now owned or hereafter acquired, or any income or profits therefrom or any right to receive income therefrom, except Permitted Liens. The Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind upon any of their property or assets, whether now owned or hereafter acquired, or any income or profits therefrom or any right to receive income therefrom, except Permitted Liens.

Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries

      The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to:

      (1) pay dividends, in cash or otherwise, or make any other distributions on or in respect of its Capital Stock;

      (2) pay any Indebtedness owed to the Company or any other Restricted Subsidiary;

      (3) make loans or advances to the Company or any other Restricted Subsidiary; or

      (4) transfer any of its properties or assets to the Company or any other Restricted Subsidiary.

      However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

      (1) any agreement (including the Revolving Credit Agreement) in effect on the Issue Date;

      (2) customary non-assignment provisions of any lease, license or other contract entered into in the ordinary course of business by the Company or any Restricted Subsidiary;

      (3) the refinancing or successive refinancing of Indebtedness incurred under the agreements in effect on the Issue Date (including the Revolving Credit Agreement), so long as such encumbrances or restrictions are no more restrictive, taken as a whole, than those contained in such original agreement;

      (4) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

      (5) purchase money obligations for acquired property permitted under the covenant entitled “— Incurrence of Indebtedness and Issuance of Disqualified Stock” that impose restrictions of the nature described in clause (4) of the preceding paragraph on the property so acquired;

      (6) any agreement for the sale of a Restricted Subsidiary or an asset that restricts distributions by that Restricted Subsidiary or transfers of such asset pending its sale;

      (7) secured Indebtedness otherwise permitted to be incurred pursuant to the provisions of the covenant described above under the caption “— Liens” that limits the right of the debtor to dispose of the assets securing such Indebtedness;

      (8) restrictions on cash or other deposits or net worth imposed by leases entered into in the ordinary course of business;

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      (9) Non-Recourse Indebtedness of any Permitted Joint Venture permitted to be incurred under the Indenture;

      (10) applicable law or regulation;

      (11) a Receivables Program with respect to a Receivables Subsidiary; and

      (12) customary provisions in joint venture, limited liability company operating, partnership, shareholder and other similar agreements entered into in the ordinary course of business reasonably consistent with past practice by the Company or any Restricted Subsidiary.

Merger, Consolidation or Sale of Assets

      Neither the Company nor the Parent will, in a single transaction or series of related transactions, consolidate or merge with or into (whether or not the Company or the Parent, as the case may be, is the surviving corporation), or directly and/or indirectly through its Subsidiaries, sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (determined on a consolidated basis for the Company or the Parent, as the case may be, and its Subsidiaries, taken as a whole) in one or more related transactions to, another corporation, Person or entity unless:

      (a) either (i) the Company or the Parent, as the case may be, is the surviving corporation or (ii) the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (the “Surviving Entity”) is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia and assumes all the obligations of the Company or the Parent, as the case may be, under the Notes, the Indenture, the Security Documents and the Registration Rights Agreement pursuant to agreements in form and substance reasonably satisfactory to the Trustee;

      (b) immediately after giving effect to such transaction and treating any obligation of the Company in connection with or as a result of such transaction as having been incurred as of the time of such transaction, no Default or Event of Default has occurred and is continuing;

      (c) if such transaction involves the Company, the Company (or the Surviving Entity if the Company is not the continuing obligor under the Indenture) could, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four quarter period, incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the first paragraph of “— Incurrence of Indebtedness and Issuance of Disqualified Stock;”

      (d) each Guarantor, unless it is the other party to the transaction described above, has by supplemental indenture confirmed that its Guarantee applies to the Surviving Entity’s obligations under the Indenture and the Notes;

      (e) if any of the property or assets of the Company or any of its Restricted Subsidiaries would thereupon become subject to any Lien, the provisions of the covenant described above under the caption “— Liens” are complied with; and

      (f) the Company or the Parent, as the case may be, delivers, or causes to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an officers’ certificate and an opinion of counsel, each stating that such transaction complies with the requirements of the Indenture.

      The Indenture provides that no Subsidiary Guarantor may consolidate with or merge with or into any other Person or convey, sell, assign, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any other Person (other than the Company or another Subsidiary Guarantor) unless: (a) subject to the provisions of the following paragraph, the Person formed by or surviving such consolidation or merger (if other than such Subsidiary Guarantor) or to which such

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properties and assets are transferred assumes all of the obligations of such Subsidiary Guarantor under the Indenture, its Guarantee, the Security Documents and the Registration Rights Agreement, pursuant to agreements in form and substance reasonably satisfactory to the Trustee, (b) immediately after giving effect to such transaction, no Default or Event of Default has occurred and is continuing and (c) the Subsidiary Guarantor delivers, or causes to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an officers’ certificate and an opinion of counsel, each stating that such transaction complies with the requirements of the Indenture.

      For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

      In the event of any transaction described in and complying with the conditions listed in the first paragraph of this covenant in which the Company is not the continuing obligor under the Indenture, the Surviving Entity will succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture, and thereafter the Company will, except in the case of a lease, be discharged from all of its obligations and covenants under the Indenture and Notes.

Transactions with Affiliates

      The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or suffer to exist any transaction with, or for the benefit of, any Affiliate of the Company (“Interested Persons”), unless (a) such transaction is on terms that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could have been obtained in an arm’s-length transaction with third parties who are not Interested Persons and (b) the Company delivers to the Trustee (i) with respect to any transaction or series of related transactions entered into after the Issue Date involving aggregate payments in excess of $5 million, a resolution of the Company’s Board set forth in an officers’ certificate certifying that such transaction or transactions complies with clause (a) above and that such transaction or transactions have been approved by the Board (including a majority of the Disinterested Directors) of the Company and (ii) with respect to a transaction or series of related transactions involving aggregate payments equal to or greater than $10 million, a written opinion as to the fairness to the Company or such Restricted Subsidiary of such transaction or series of transactions from a financial point of view issued by an accounting, appraisal or investment banking firm, in each case of national standing.

      The foregoing covenant will not restrict:

      (A) transactions among the Company and/or its Restricted Subsidiaries;

      (B) the Company from paying reasonable and customary regular compensation, indemnification, reimbursement and fees to officers of the Company or any Restricted Subsidiary and to directors of the Company or any Restricted Subsidiary who are not employees of the Company or any Restricted Subsidiary;

      (C) transactions permitted by the provisions of the covenant described under the caption “Certain Covenants — Restricted Payments;”

      (D) advances to employees for moving, entertainment and travel expenses and similar expenditures in the ordinary course of business and consistent with past practice;

      (E) any Receivables Program of the Company or a Restricted Subsidiary;

      (F) the agreements described herein under the caption “Certain Relationships and Related Transactions” and certain other agreements listed on a schedule to the Indenture, in each case as in effect as of the Issue Date or any amendment thereto (so long as the amended agreement is not more

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disadvantageous to the Holders in any material respect than such agreement immediately prior to such amendment) or any transaction contemplated thereby; and

      (G) issuances of Equity Interests (other than Disqualified Stock) of the Parent or the Company to Affiliates.

Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries

      The Company (a) will not permit any Restricted Subsidiary to issue any Capital Stock unless after giving effect thereto the Company’s percentage interest (direct and indirect) in the Capital Stock of such Restricted Subsidiary is at least equal to its percentage interest prior thereto, and (b) will not, and will not permit any Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any Restricted Subsidiary to any Person (other than the Company or a Wholly Owned Restricted Subsidiary); provided, however, that this covenant will not prohibit (i) the sale or other disposition of all, but not less than all, of the issued and outstanding Capital Stock of a Restricted Subsidiary owned by the Company and its Restricted Subsidiaries in compliance with the other provisions of the Indenture, (ii) the sale or other disposition of a portion of the issued and outstanding Capital Stock of a Restricted Subsidiary (other than a Subsidiary Guarantor), whether or not as a result of such sale or disposition such Restricted Subsidiary continues or ceases to be a Restricted Subsidiary, if (A) at the time of such sale or disposition, the Company could make an Investment in the remaining Capital Stock held by it or one of its Restricted Subsidiaries in an amount equal to the amount of its remaining Investment in such Person pursuant to the covenant entitled “Restricted Payments” and (B) such sale or disposition is permitted under, and the Company or such Restricted Subsidiary applies the Net Cash Proceeds of any such sale in accordance with, the “Asset Sales” covenant, or (iii) the ownership by directors of director’s qualifying shares or the ownership by foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent mandated by applicable law.

      The Company will not permit any Restricted Subsidiary to issue any Preferred Stock other than to the Company or any Subsidiary Guarantor.

Payments for Consent

      The Indenture provides that neither the Company nor any of its Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Guarantees of Indebtedness by Restricted Subsidiaries

      The Company will not permit any Restricted Subsidiary that is not a Subsidiary Guarantor, directly or indirectly, to guarantee, assume or in any other manner become liable for the payment of any Indebtedness of the Company or any Indebtedness of any other Restricted Subsidiary, unless (a) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for a guarantee of payment of the Notes by such Restricted Subsidiary on a senior secured basis on the same terms as set forth in the Indenture and (b) with respect to any guarantee of Subordinated Indebtedness by a Restricted Subsidiary, any such guarantee is subordinated to such Restricted Subsidiary’s guarantee with respect to the Notes at least to the same extent as such Subordinated Indebtedness is subordinated to the Notes, provided that the foregoing provision will not be applicable to any guarantee by any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

      Any guarantee by a Restricted Subsidiary of the Notes pursuant to the preceding paragraph may provide by its terms that it will be automatically and unconditionally released and discharged upon (i) any sale, exchange or transfer to any Person not an Affiliate of the Company of all of the Company’s and the

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Restricted Subsidiaries’ Capital Stock in, or all or substantially all the assets of, such Restricted Subsidiary (which sale, exchange or transfer is not prohibited by the Indenture) or (ii) the release or discharge of the guarantee that resulted in the creation of such guarantee of the Notes, except a discharge or release by or as a result of payment under such guarantee.

Issuances of Guarantees by New Restricted Subsidiaries

      The Company will provide to the Trustee, on the date that any Person (other than a Foreign Subsidiary) becomes a Wholly Owned Restricted Subsidiary, a supplemental indenture to the Indenture, executed by such new Wholly Owned Restricted Subsidiary, providing for a full and unconditional guarantee on a senior secured basis by such new Wholly Owned Restricted Subsidiary of the Company’s obligations under the Notes and the Indenture to the same extent as that set forth in the Indenture.

Unrestricted Subsidiaries

      The Board of the Company may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as (i) such Subsidiary has no Indebtedness other than Non-Recourse Indebtedness, (ii) no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity, (iii) any Investment in such Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary will not violate the provisions of the covenant described under the caption “— Restricted Payments,” (iv) neither the Company nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from Persons who are not Affiliates of the Company, (v) neither the Company nor any Restricted Subsidiary has any obligation to subscribe for additional shares of Capital Stock or other equity interests in such Subsidiary, or to maintain or preserve such Subsidiary’s financial condition or to cause such Subsidiary to achieve certain levels of operating results, and (vi) such Unrestricted Subsidiary has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the Company or any of its Restricted Subsidiaries. Notwithstanding the foregoing, the Company may not designate any Subsidiary Guarantor (whether or not existing as of the Issue Date) as an Unrestricted Subsidiary.

      The Board of the Company may designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) no Default or Event of Default has occurred and is continuing following such designation and (ii) the Company would, at the time of making such designation and giving such pro forma effect as if such designation had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption “Incurrence of Indebtedness and Issuance of Disqualified Stock” (treating any Indebtedness of such Unrestricted Subsidiary as the incurrence of Indebtedness by a Restricted Subsidiary).

Sale and Leaseback Transactions

      The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

      (1) Company or such Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such Sale and Leaseback Transaction pursuant to the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Disqualified Stock” and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described under the caption “— Liens;”

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      (2) the gross cash proceeds of that Sale and Leaseback Transaction are at least equal to the fair market value of the property that is the subject of that Sale and Leaseback Transaction; and

      (3) the transfer of assets in that Sale and Leaseback Transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales.”

Reports

      Whether or not the Company is required to file reports with the Commission, the Company will file with the Commission all such annual reports, quarterly reports and other documents that the Company would be required to file if it were subject to Section 13(a) or 15(d) under the Exchange Act. The Company will also be required (a) to supply to the Trustee and each Holder, or supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other documents within 15 days after the date on which the Company files such reports and documents with the Commission or the date on which the Company would be required to file such reports and documents if the Company were so required and (b) if filing such reports and documents with the Commission is not accepted by the Commission or is prohibited under the Exchange Act, to supply at the Company’s cost copies of such reports and documents to any prospective Holder promptly upon written request.

      Notwithstanding the foregoing, so long as the Parent guarantees the Notes, the reports, information and other documents required to be filed and provided as described above may be those of the Parent, rather than the Company, so long as such filings (i) would satisfy the requirements of the Exchange Act and regulations promulgated thereunder and (ii) disclose the Company’s results of operations and financial condition in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in at least such detail as would be required if the Company were filing such report.

Events of Default and Remedies

      The following will be “Events of Default” under the Indenture:

      (a) default in the payment of any interest on any Note when it becomes due and payable, and continuance of such default for a period of 30 days;

      (b) default in the payment of the principal of (or premium, if any, on) any Note when due;

      (c) failure to perform or comply with the Indenture provisions described under the captions “— Repurchase at the Option of Holders — Change of Control,” “— Repurchase at the Option of Holders — Asset Sales,” “— Certain Covenants — Restricted Payments,” “Incurrence of Indebtedness and Issuance of Disqualified Stock” or “— Merger, Consolidation or Sale of Assets;”

      (d) default in the performance, or breach, of any covenant or agreement of the Company or any Guarantor contained in the Indenture or in any Guarantee (other than a default in the performance, or breach, of a covenant or agreement that is specifically dealt with elsewhere herein), and continuance of such default or breach for a period of 60 days after written notice has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding;

      (e) (i) an event of default has occurred under any mortgage, bond, indenture, loan agreement or other document evidencing an issue of Indebtedness of the Company, the Parent or any Restricted Subsidiary, which issue individually or in the aggregate has an aggregate outstanding principal amount of not less than $10 million, and such default has resulted in such Indebtedness becoming, whether by declaration or otherwise, due and payable prior to the date on which it would otherwise become due and payable or (ii) a default in any payment when due at final maturity of any such Indebtedness;

      (f) failure by the Company, the Parent or any of its Restricted Subsidiaries to pay one or more final judgments the uninsured portion of which exceeds in the aggregate $10 million, which judgment or judgments are not paid, discharged or stayed for a period of 60 days;

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      (g) any Guarantee ceases to be in full force and effect or is declared null and void or any such Guarantor denies that it has any further liability under any Guarantee, or gives notice to such effect (other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture);

      (h) the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to the Company, the Parent or any Significant Subsidiary; or

      (i) default by the Company or any Restricted Subsidiary in the performance of the Security Documents which adversely affects the enforceability, validity, perfection or priority of such Liens, the repudiation or disaffirmation by the Company or any Restricted Subsidiary of its material obligations under the Security Documents or the determination in a judicial proceeding that the Security Documents are unenforceable or invalid against the Company or any Restricted Subsidiary party thereto for any reason with respect to the Collateral (which default, repudiation, disaffirmation or determination is not rescinded, stayed, or waived by the Persons having such authority pursuant to the Security Documents or otherwise cured within 60 days after the Company receives written notice thereof specifying such occurrence from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes and demanding that such default be remedied).

      If an Event of Default (other than as specified in clause (h) above) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Notes then outstanding may, and the Trustee at the request of such Holders will, declare the principal of, and accrued interest on, all of the outstanding Notes immediately due and payable and, upon any such declaration, such principal and such interest will become due and payable immediately.

      If an Event of Default specified in clause (h) above occurs and is continuing, then the principal of and accrued interest on all of the outstanding Notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

      At any time after a declaration of acceleration under the Indenture, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of a majority in aggregate principal amount of the outstanding Notes, by written notice to the Company and the Trustee, may rescind such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all Notes, (B) all unpaid principal of (and premium, if any, on) any outstanding Notes that has become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Notes, (C) to the extent that payment of such interest is lawful, interest upon overdue interest and overdue principal at the rate borne by the Notes and (D) all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (ii) all Events of Default, other than the non-payment of amounts of principal of (or premium, if any, on) or interest on the Notes that have become due solely by such declaration of acceleration, have been cured or waived. No such rescission will affect any subsequent default or impair any right consequent thereon.

      No Holder has any right to institute any proceeding with respect to the Indenture or any remedy hereunder, unless the Holders of at least 25% in aggregate principal amount of the outstanding Notes have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding, the Trustee has failed to institute any such proceeding within 60 days after receipt of such notice, request and offer of indemnity and the Trustee, within such 60-day period, has not received directions inconsistent with such written request by Holders of a majority in aggregate principal amount of the outstanding Notes. Such imitations do not apply, however, to a suit instituted by a Holder for the enforcement of the payment of the principal of, premium, if any, or interest on such Note on or after the respective due dates expressed in such Note.

      The Holders of not less than a majority in aggregate principal amount of the outstanding Notes may, on behalf of the Holders of all of the Notes waive any past defaults under the Indenture, except a default in the payment of the principal of (and premium, if any) or interest on any Note, or in respect of a

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covenant or provision that under the Indenture cannot be modified or amended without the consent of the holder of each Note outstanding.

      If a Default or an Event of Default occurs and is continuing and is known to the Trustee, the Trustee ill mail to each Holder notice of the Default or Event of Default within 90 days after the occurrence hereof. Except in the case of a Default or an Event of Default in payment of principal of (and premium, if any, on) or interest on any Notes, the Trustee may withhold the notice to the Holders if a committee of its rust officers in good faith determines that withholding such notice is in the interests of the Holders.

      The Company is required to furnish to the Trustee annual statements as to the performance by the Company and the Guarantors of their obligations under the Indenture and as to any default in such performance. The Company is also required to notify the Trustee within five days of any Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

      No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture or the Guarantees, as applicable, or any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

      The Company may, at its option and at any time, terminate the obligations of the Company and the Guarantors with respect to the outstanding Notes (“legal defeasance”). Such legal defeasance means that the Company will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, except for (i) the rights of Holders of outstanding Notes to receive payments in respect of the principal of (and premium, if any, on) and interest on such Notes when such payments are due, (ii) the Company’s obligations to issue temporary Notes, register the transfer or exchange of any Notes, replace mutilated, destroyed, lost or stolen Notes, maintain an office or agency for payments in respect of the Notes and segregate and hold such payments in trust, (iii) the rights, powers, trusts, duties and immunities of the Trustee and (iv) the legal defeasance provisions of the Indenture. In addition, the Company may, at its option and at any time, elect to terminate the obligations of the Company and any Guarantor with respect to certain covenants set forth in the Indenture and described under “Certain Covenants” above, and any omission to comply with such obligations would not constitute a Default or an Event of Default with respect to the Notes (“covenant defeasance”).

      In order to exercise either legal defeasance or covenant defeasance: (a) the Company must irrevocably deposit or cause to be deposited with the Trustee, as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders, money in an amount, or U.S. Government Obligations (as defined in the Indenture) that through the scheduled payment of principal and interest thereon will provide money in an amount, or a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay and discharge the principal of (and premium, if any, on) and interest on the outstanding Notes at maturity (or upon redemption, if applicable) of such principal or installment of interest; (b) no Default or Event of Default has occurred and is continuing on the date of such deposit or, insofar as an event of bankruptcy under clause (h) of “Events of Default” above is concerned, at any time during the period ending on the 91st day after the date of such deposit; (c) such legal defeasance or covenant defeasance may not result in a breach or violation of, or constitute a default under, the Indenture, the Security Documents, the Credit Agreement or any other material agreement or instrument to which the Company or any Guarantor is a party or by which it is bound; (d) in the case of legal defeasance, the Company must deliver to the Trustee an opinion of counsel stating that the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or since the date hereof, there has been a change in applicable federal

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income tax law, to the effect, and based thereon such opinion must confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as, would have been the case if such legal defeasance had not occurred; (e) in the case of covenant defeasance, the Company must have delivered to the Trustee an opinion of counsel to the effect that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (f) the Company must have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to either the legal defeasance or the covenant defeasance, as the case may be, have been complied with.

Transfer and Exchange

      A Holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer document and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.

      The registered Holder of a Note will be treated as the owner of it for all purposes.

Amendment, Supplement and Waiver

      Modifications and amendments of the Indenture and any Guarantee may be made by the Company, any affected Guarantor and the Trustee with the consent of the Holders of a majority in aggregate outstanding principal amount of the Notes; provided, however, that no such modification or amendment may, without the consent of the Holder of each outstanding Note affected thereby:

      (a) change the Stated Maturity of the principal of, or any installment of interest on, any Note, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the coin or currency in which any Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the redemption date);

      (b) amend, change or modify the obligation of the Company to make and consummate an Excess Proceeds Offer with respect to any Asset Sale in accordance with the covenant described under the covenant entitled “Repurchase at the Option of Holders — Asset Sales” or the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with the covenant entitled “Repurchase at the Option of Holders — Change of Control,” including, in each case, amending, changing or modifying any definition relating thereto;

      (c) reduce the percentage in principal amount of outstanding Notes, the consent of whose Holders is required for any waiver of compliance with certain provisions of, or certain defaults and their consequences provided for under, the Indenture;

      (d) waive a default in the payment of principal of, or premium, if any, or interest on the Notes or reduce the percentage or aggregate principal amount of outstanding Notes the consent of whose Holders is necessary for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults;

      (e) modify the ranking or priority of the Notes or the Guarantee of any Guarantor; or

      (f) release any Guarantor from any of its obligations under its Guarantee or the Indenture other than in accordance with the terms of the Indenture.

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      The Holders of a majority in aggregate principal amount of the Notes outstanding may waive compliance with certain restrictive covenants and provisions of the Indenture.

      Without the consent of any Holders, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Indenture for any of the following purposes: (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company in the Indenture and in the Notes; (2) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; (3) to add additional Events of Default; (4) to provide for uncertificated Notes in addition to or in place of the certificated Notes; (5) to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee; (6) to secure the Notes; (7) to cure any ambiguity, to correct or supplement any provision in the Indenture that may be defective or inconsistent with any other provision in the Indenture, or to make any other provisions with respect to matters or questions arising under the Indenture, provided that such actions pursuant to this clause do not adversely affect the interests of the Holders in any material respect; (8) to comply with any requirements of the Commission in order to effect and maintain the qualification of the Indenture under the Trust Indenture Act; (9) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture; (10) to allow any Guarantor to execute a supplemental indenture and a Guarantee with respect to the Notes; or (11) to release Collateral from the Liens created by the Indenture or the Security Documents when permitted by the Indenture and the Security Documents.

Concerning the Trustee

      U.S. Bank National Association, the Trustee under the Indenture, will be the initial paying agent and registrar for the Notes.

      The Indenture provides that, except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. Under the Indenture, the Holders of a majority in outstanding principal amount of the Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. If an Event of Default has occurred and is continuing, the Trustee will exercise such rights and powers vested in it under the Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.

      The Indenture and provisions of the Trust Indenture Act, incorporated by reference therein, contain limitations on the rights of the Trustee thereunder, should it become a creditor of the Company, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in other transactions; provided, however, that, if it acquires any conflicting interest (as defined in the Trust Indenture Act), it must eliminate such conflict upon the occurrence of an Event of Default or else resign.

Book-Entry, Delivery and Form

      The exchange notes will be represented by one or more global Notes in registered, global form without interest coupons (the “Global Notes”). The Global Notes will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee of DTC (such nominee being referred to herein as the “Global Note Holder”) for credit to an account of a direct or indirect participant in DTC, including the Euroclear System (“Euroclear”) and Clearstream Banking, S.A. (“Clearstream”), unless transferred to a person that takes delivery through a Global Note in accordance with the certification requirements described below.

      Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below. See “— Exchange of Global Notes for Certificated Notes.” Except in the limited circumstances described

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below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Notes in certificated form.

Depositary Procedures

      The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. The Company takes no responsibility for these operations and procedures and urges investors to contact the system or its participants directly to discuss these matters.

      DTC has advised the Company that DTC is a limited-purpose trust company that was created to hold securities for its participating organizations (collectively, the “Participants”) and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in 57 accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks and trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the “Indirect Participants”) that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of the Depositary only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants or Indirect Participants.

      DTC has also advised the Company that pursuant to procedures established by it (i) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the initial purchasers with portions of the principal amount of the Global Notes and (ii) ownership of the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants), or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).

      Investors in the Global Notes who are Participants in DTC’s system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants in such system. Clearstream and Euroclear will hold such interests in the Global Note on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositories, which in turn will hold such interests in the Global Note in customers’ securities accounts in the depositories’ names on the books of DTC. All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interest in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

      Except as described below, owners of Interest in Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or “Holders” thereof under the Indenture for any purpose.

      Payments in respect of the principal of, and premium and Liquidated Damages, if any, and interest on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving payments and for all other purposes. Consequently, neither the

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Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for (i) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes, or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

      DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

      Transfers between Participants in DTC will be effected in accordance with DTC’s procedures and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.

      Subject to compliance with the transfer restrictions applicable to the Notes described herein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.

      DTC has advised the Company that it will take any action permitted to be taken by a Holder of Notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its Participants.

      Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

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     Exchange of Global Notes for Certificated Notes

      A Global Note is exchangeable for definitive Notes in registered certificated form (“Certificated Notes”) if:

      (1) DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes and the Company fails to appoint a successor depositary within 90 days or (b) has ceased to be a clearing agency registered under the Exchange Act;

      (2) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or

      (3) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes.

      In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures.

Exchange of Certificated Notes for Global Notes

      Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes.

Same-Day Settlement and Payment

      The Indenture requires that payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, and interest ) be made by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. With respect to Certificated Notes, the Company will make all payments of principal, premium, if any, and interest by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder’s registered address.

      Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream) immediately following the settlement date of DTC. DTC has advised the Company that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

Additional Information

      Anyone who receives this prospectus may obtain a copy of the Indenture without charge by writing to InSight Health Services Corp., 26250 Enterprise Court, Suite 100, Lake Forest, CA 92630, Attention: General Counsel.

Certain Definitions

      “Acquired Indebtedness” means Indebtedness of a Person (a) existing at the time such Person is merged with or into the Company or a Subsidiary or becomes a Subsidiary or (b) assumed in connection with the acquisition of assets from such Person.

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      “Affiliate” means, with respect to any specified person, (a) any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person or (b) any other person that owns, directly or indirectly, 10% or more of such specified person’s Capital Stock or any executive officer or director of any such specified person or other person. For the purposes of this definition, “control,” when used with respect to any specified person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

      “After-Acquired Property” means any and all assets or property (other than Excluded Assets) acquired after the Issue Date, including, without limitation, any property or assets acquired by the Company or any Guarantor from a transfer from the Company or a Guarantor, which in each case constitutes Collateral as defined in the Indenture.

      “Applicable Indebtedness” means:

      (1) in respect of Asset Sales involving Collateral, Indebtedness secured on a first priority basis by the Collateral; or

      (2) in respect of Asset Sales not involving Collateral, Pari Passu Indebtedness.

      “Asset Sale” means (i) the sale, lease, conveyance or other disposition of any assets (including, without limitation, by way of merger, consolidation or similar arrangement) (collectively, a “transfer”) by the Company or any Restricted Subsidiary other than in the ordinary course of business and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries of Shares of Capital Stock of any of the Company’s Restricted Subsidiaries (which shall be deemed to include the sale, grant or conveyance of any interest in the income, profits or proceeds therefrom). For the purposes of this definition, the term “Asset Sale” does not include (a) any transfer of properties or assets (i) that is governed by the provisions of the Indenture described under the captions “— Certain Covenants — Merger, Consolidation or Sale of Assets,” “— Limitation on Issuances and sales of Capital Stock of Restricted Subsidiaries” (to the extent of clause (a) thereof) or “— Restricted Payments,” (ii) between or among the Company and its Subsidiaries that are Guarantors pursuant to transactions that do not violate any other provision of the Indenture or (iii) representing obsolete or permanently retired equipment and facilities, (b) the sale or exchange of equipment in connection with the purchase or other acquisition of other equipment, in each case used in the business of the Company or its Restricted Subsidiaries as it was in existence on the Issue Date or any business determined by the Board of the Company in its good faith judgment to be reasonably related thereto; provided, that, to the extent such equipment sold or exchanged represents Collateral, such other equipment purchased or acquired (A) shall consist of assets that are not Excluded Assets and (B) shall be expressly made subject to a first priority perfected Lien with respect to the Notes or (c) any (1) single transaction or (2) series of related transactions, that involves assets having a fair market value of less than $2.0 million, provided that the aggregate fair market value of assets involved in all transactions consummated from and after the Issue Date under clause (1) or (2) does not exceed $10 million. Notwithstanding anything to the contrary set forth above, a disposition of Receivables and Related Assets other than pursuant to a Receivables Program contemplated under the provisions described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock” shall be deemed to be an Asset Sale.

      “Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value will be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided, however, that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligation.”

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      “Board” means the Company’s Board of Directors or the Parent’s Board of Directors, as applicable.

      “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are authorized or obligated by law or executive order to close.

      “Capital Stock” of any Person means any and all shares, interests, partnership interests, participations, rights in or other equivalents (however designated) of such Person’s equity interest (however designated), whether now outstanding or issued after the Issue Date.

      “Capitalized Lease Obligation” means, with respect to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person.

      “Change of Control” means the occurrence of any of the following:

      (a) the consummation of any transaction (including, without limitation, any merger or consolidation) (a) prior to a Public Equity Offering by the Company or the Parent, the result of which is that the Principals and their Related Parties become the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of less than 50% of the Voting Stock of the Company or the Parent, as the case may be (measured by voting power rather than the number of shares), or (b) after a Public Equity Offering of the Company or the Parent, any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the Principals and their Related Parties, become the beneficial owner (as defined above), directly or indirectly, of 35% or more of the Voting Stock of the Company or the Parent, as the case may be, and such person is or becomes, directly or indirectly, the beneficial owner of a greater percentage of the voting power of the Voting Stock of the Company or the Parent, as the case may be, calculated on a fully diluted basis, than the percentage beneficially owned by the Principals and their Related Parties;

      (b) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries or the Parent and its Subsidiaries, in each case, taken as a whole, to any “person” (as the term is defined in Section 13(d)(3) of the Exchange Act) other than the Principals or Related Parties of the Principals;

      (c) the first day on which a majority of the members of the Board of the Company or the Parent are not Continuing Directors; or

      (d) the Company or the Parent is liquidated or dissolved or adopts a plan of liquidation or dissolution, other than in a transaction that complies with the provisions described under “Certain Covenants — Consolidation, Merger or Sale of Assets.”

      “Collateral Agency Agreement” means the Collateral Agency Agreement dated as of the Issue Date among the Company, the Guarantors, the Trustee and the Collateral Agent, as the same may be amended, restated, supplemented, replaced or modified from time to time.

      “Commission” means the United States Securities and Exchange Commission.

      “Consolidated EBITDA” means, for any period, the sum of, without duplication, Consolidated Net Income for such period, plus (or, in the case of clause (d) below, plus or minus) the following items to the extent included in computing Consolidated Net Income for such period (a) Fixed Charges for such period, plus (b) the provision for federal, state, local and foreign income taxes of the Company and its Restricted Subsidiaries for such period, plus (c) the aggregate depreciation and amortization expense of the Company and its Restricted Subsidiaries for such period, plus (d) any other non-cash charges for such period, and minus non-cash items increasing Consolidated Net Income for such period, other than non-cash charges or items increasing Consolidated Net Income resulting from changes in prepaid assets or accrued liabilities in the ordinary course of business, plus (e) Minority Interest; provided that fixed charges, income tax expense, depreciation and amortization expense and non-cash charges of a Restricted

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Subsidiary will be included in Consolidated EBITDA only to the extent (and in the same proportion) that the net income of such Subsidiary was included in calculating Consolidated Net Income for such period.

      “Consolidated Net Income” means, for any period, the net income (or net loss) of the Company and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, adjusted to the extent included in calculating such net income or loss by excluding (a) any net after-tax extraordinary or nonrecurring gains or losses (less all fees and expenses relating thereto), (b) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to Asset Sales or discontinued operations, (c) the portion of net income (or loss) of any Person (other than the Company or a Restricted Subsidiary), including Unrestricted Subsidiaries, in which the Company or any Restricted Subsidiary has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid to the Company or any Restricted Subsidiary in cash during such period, (d) the net income (or loss) of any Person combined with the Company or any Restricted Subsidiary on a “pooling of interests” basis attributable to any period prior to the date of combination, (e) the net income (but not the net loss) of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is at the date of determination restricted, directly or indirectly, except to the extent that such net income is actually paid to the Company or a Restricted Subsidiary thereof by loans, advances, intercompany transfers, principal repayments or otherwise and (f) the cumulative effect of a change in accounting principles.

      “Consolidated Tangible Assets” means, as of the date of determination, the total assets, less goodwill and other intangibles, shown on the balance sheet of the Company and its Restricted Subsidiaries as of the most recent date for which such a balance sheet is available, determined on a consolidated basis in accordance with GAAP.

      “Continuing Directors” means, as of any date of determination, any member of the Board of the Company or the Parent, as the case may be, who:

      (1) was a member of such Board on the Reference Date;

      (2) was nominated for election or elected to such Board with the approval of the majority of the Continuing Directors who were members of such Board at the time of such nomination or election; or (3) was nominated by one or more of the Principals and the Related Parties.

      “Credit Agreement” means one or more debt facilities or commercial paper facilities (including the Revolving Credit Agreement) with banks or other institutional lenders providing for revolving credit loans, term loans, senior secured, senior unsecured or subordinated note financings, receivables financing or letters of credit, in each case together with agreements relating to the provision of cash and treasury management services and other bank products or services provided by a lender thereunder or an affiliate thereof and all other agreements, instruments, and documents (including, without limitation, any Guarantees and Security Documents) executed or delivered pursuant thereto or in connection therewith, in each case as such agreement, other agreements, instruments or documents may be amended, restated, supplemented, extended, renewed, replaced, refinanced or otherwise modified from time to time, including, without limitation, any agreement increasing or decreasing the amount of, extending the maturity of, refinancing or otherwise restructuring all or a portion of the Indebtedness under such agreements or any successor agreements.

      “Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

      “Deposit Accounts Collateral” means each Deposit Account maintained by the Company or any Guarantor on the Issue Date and identified on a schedule to the Security Documents and each Deposit Account established by the Company or any Guarantor after the Issue Date into which collections on Accounts and proceeds of other Receivables and Related Assets are to be deposited. For purposes of this definition, “Deposit Account” and “Accounts” shall have the meanings provided for by the UCC.

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      “Designated Noncash Consideration” means the fair market value of noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an officer’s certificate, setting forth the basis of such valuation, executed by the principal executive officer and the principal financial officer of the Company, less the amount of cash or cash equivalents received in connection with a sale of such Designated Noncash Consideration.

      “Determination Date” means, with respect to an Interest Period, the second London Banking Day preceding the first day of such Interest Period.

      “Disinterested Director” means, with respect to any transaction or series of transactions in respect of which the Board is required to deliver a resolution of the Board, to make a finding or otherwise take action under the Indenture, a member of the Board who does not have any material direct or indirect financial interest in or with respect to such transaction or series of transactions.

      “Disqualified Stock” means any class or series of Capital Stock that, either by its terms, by the terms of any security into which it is convertible or exchangeable or by contract or otherwise (i) is or upon the happening of an event or passage of time would be, required to be redeemed prior to the final Stated Maturity of the Notes, (ii) is redeemable at the option of the Holder thereof, at any time prior to such final Stated Maturity or (iii) at the option of the Holder thereof is convertible into or exchangeable for debt securities at any time prior to such final Stated Maturity; provided that any Capital Stock that would constitute Disqualified Stock solely as a result of the provisions therein giving holders thereof the right to cause the issuer thereof to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the Stated Maturity of the Notes will not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions contained in the covenants described under the captions “Repurchase at the Option of Holders — Change of Control” and “— Asset Sales” described herein and such Capital Stock specifically provides that the issuer will not repurchase or redeem any such stock pursuant to such provision prior to the Company’s repurchase of such Notes as are required to be repurchased pursuant to the provisions contained in the covenants described under the captions “Repurchase at the Option of Holders — Change of Control” and “— Asset Sales.”

      “Equity Interests” means Capital Stock and all warrants, options and other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

      “Equity Sponsors” means J.W. Childs Associates, L.P., J.W. Childs Equity Partners II, L.P., The Halifax Group, L.L.C. and Halifax Capital Partners L.P.

      “Exchange Act” means the Securities Exchange Act of 1934, as amended.

      “Excluded Contract” means at any date any rights or interest of the Company or any Guarantor in, to or under any agreement, contract, license, instrument, document or other general intangible (referred to solely for purposes of this definition as a “Contract”) to the extent that such Contract by the express terms of a valid and enforceable restriction in favor of a Person who is not the Company or any Guarantor, or any requirement of law, prohibits, or requires any consent or establishes any other condition for, an assignment thereof or a grant of a security interest therein by the Company or a Guarantor; provided that: (1) rights to payment under any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent permitted thereby or by Section 9-406 or Section 9-408 of the UCC, (2) all proceeds paid or payable to any of the Company or any Guarantor from any sale, transfer or assignment of such Contract and all rights to receive such proceeds shall be included in the Collateral and (3) any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent the Company or any Guarantor obtains such consent, or removes such condition specified above.

      “Existing Indebtedness” means the Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) outstanding on the Issue Date and listed on a schedule to the Indenture, until such amounts are repaid.

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      “Existing Notes” means the 97/8% Senior Subordinated Notes due 2011 of the Company.

      “Fixed Charges” means, for any period, without duplication, the sum of (a) the amount that, in conformity with GAAP, would be set forth opposite the caption “interest expense” (or any like caption) on a consolidated statement of operations of the Company and its Restricted Subsidiaries for such period, including, without limitation, (i) amortization of original issue discount, (ii) the net cost of interest rate contracts (including, amortization of discounts), (iii) the interest portion of any deferred payment obligation, (iv) amortization of debt issuance costs, (v) the interest component of Capitalized Lease Obligations, and (vi) imputed interest with respect to Attributable Debt plus (b) all dividends and distributions paid (whether or not in cash) on Preferred Stock and Disqualified Stock by the Company or any Restricted Subsidiary (to any Person other than the Company or any of its Restricted Subsidiaries), other than dividends on Equity Interests payable solely in Qualified Equity Interests of the Company, computed on a tax effected basis, plus (c) all interest on any Indebtedness of any Person guaranteed by the Company or any of its Restricted Subsidiaries or secured by a lien on the assets of the Company or any of its Restricted Subsidiaries; provided, however, that Fixed Charges will not include (i) any gain or loss from extinguishment of debt, including the write-off of debt issuance costs, and (ii) the fixed charges of a Restricted Subsidiary to the extent (and in the same proportion) that the net income of such Subsidiary was excluded in calculating Consolidated Net Income pursuant to clause (e) of the definition thereof for such period.

      “Fixed Charge Coverage Ratio” means, for any period, the ratio of Consolidated EBITDA for such period to Fixed Charges for such period.

      “Foreign Subsidiary” means a Restricted Subsidiary that is incorporated in a jurisdiction other than the United States or a state thereof or the District of Columbia and that has no material operations or assets in the United States.

      “GAAP” means generally accepted accounting principles in the United States, consistently applied, that are in effect on the Issue Date.

      “Guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness.

      “Hedging Obligations” means, with respect to any Person, the obligations of such Person entered into in the ordinary course of business under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and other similar financial agreements or arrangements designed to protect such Person against, or manage the exposure of such Person to, fluctuations in interest rates, and (ii) forward exchange agreements, currency swap, currency option and other similar financial agreements or arrangements designed to protect such Person against, or manage the exposure of such Person to, fluctuations in foreign currency exchange rates.

      “Holder” means the Person in whose name a Note is, at the time of determination, registered on the registrar’s books.

      “Indebtedness” means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent, (a) every obligation of such Person for money borrowed, (b) every obligation of such Person evidenced by bonds, debentures, Notes or other similar instruments, (c) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person, (d) every obligation of such Person issued or assumed as the deferred purchase price of property or services, (e) the attributable value of every Capitalized Lease Obligation of such Person, (f) all Disqualified Stock of such Person valued at its maximum fixed repurchase price, plus accrued and unpaid dividends thereon, (g) all obligations of such Person under or in respect of Hedging Obligations, (h) all Attributable Debt, and (i) every obligation of the type referred to in clauses (a) through (h) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed. For purposes of this definition, the “maximum fixed repurchase price” of any Disqualified Stock that does not have a fixed

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repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which Indebtedness is required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value will be determined in good faith by the board of directors of the issuer of such Disqualified Stock. Notwithstanding the foregoing, trade accounts payable and accrued liabilities arising in the ordinary course of business and any liability for federal, state or local taxes or other taxes owed by such Person will not be considered Indebtedness for purposes of this definition.

      “Interest Period” means the period commencing on and including an interest payment date and ending on and including the day immediately preceding the next succeeding interest payment date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include February 1, 2006.

      “Investment” in any Person means, (i) directly or indirectly, any advance, loan or other extension of credit (including, without limitation, by way of guarantee or similar arrangement) or capital contribution to such Person, the purchase or other acquisition of any stock, bonds, notes, debentures or other securities issued by such Person, the acquisition (by purchase or otherwise) of all or substantially all of the business or assets of such Person, or the making of any investment in such Person, (ii) the designation of any Restricted Subsidiary as an Unrestricted Subsidiary and (iii) the fair market value of the Capital Stock (or any other Investment), held by the Company or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to be a Restricted Subsidiary. Investments exclude endorsements for deposit or collection in the ordinary course of business and extensions of trade credit on commercially reasonable terms in accordance with normal trade practices.

      “Issue Date” means the date on which the Notes are first issued.

      “LIBOR” means, with respect to an Interest Period, the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in United States dollars to leading European banks for a three-month period beginning on the second London Banking Day after the Determination Date. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

      “Lien” means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest, hypothecation, assignment for security, claim, or preference or priority or other encumbrance upon, or with respect to, any property of any kind, real or personal, movable or immovable, now owned or hereafter acquired. A Person will be deemed to own subject to a Lien any property that such Person has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement.

      “London Banking Day” is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

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      “Minority Interest” means, with respect to any Person, interests in income of such Person’s Subsidiaries held by Persons other than such Person or another Subsidiary of such Person, as reflected on such Person’s consolidated financial statements.

      “Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or cash equivalents, including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed for, cash or cash equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary), net of (a) brokerage commissions and other fees and expenses (including fees and expenses of legal counsel and investment banks) related to such Asset Sale, (b) provisions for all taxes payable as a result of such Asset Sale, (c) payments made to retire Indebtedness where such Indebtedness is secured by the assets that are the subject of such Asset Sale, (d) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets that are subject to the Asset Sale and (e) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the seller after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.

      “Non-Recourse Indebtedness” means Indebtedness of a Person (i) as to which neither the Company nor any of its Restricted Subsidiaries (other than such Person) (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise), and (ii) the obligees of which will have recourse for repayment of the principal of and interest on such Indebtedness and any fees, indemnities, expense reimbursements or other amount of whatsoever nature accrued or payable in connection with such Indebtedness solely against the assets of such Person and not against any of the assets of the Company or its Restricted Subsidiaries (other than such Person).

      “Note Obligations” means the Notes, the Guarantees and all other Obligations of any obligor under the Indenture, the Notes, the Guarantees and the Security Documents.

      “Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

      “Pari Passu Indebtedness” means (a) with respect to the Notes, Indebtedness that ranks pari passu in right of payment to the Notes and (b) with respect to any Guarantee, Indebtedness that ranks pari passu in right of payment to such Guarantee.

      “Patient Receivables” means the patient accounts of the Company or any Guarantor existing or hereinafter created, any and all rights to receive payments due on such accounts from any obligor or other third-party payor under or in respect of such accounts (including, without limitation, all insurance companies, Blue Cross/ Blue Shield, Medicare, Medicaid and health maintenance organizations), and all proceeds of, or in any way derived, whether directly or indirectly, from any of the foregoing (including, without limitation, all interest, finance charges and other amounts payable by an obligor in respect thereof).

      “Permitted Business” means the business conducted by the Company, its Restricted Subsidiaries and Permitted Joint Ventures as of the Issue Date and any and all diagnostic imaging and information businesses that in the good faith judgment of the Board of the Company are reasonably related thereto.

      “Permitted Investments” means any of the following:

      (a) Investments in (i) United States dollars (including such dollars as are held as overnight bank deposits and demand deposits with banks), (ii) securities with a maturity of one year or less issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof); (iii) certificates of deposit, Euro-dollar time deposits or acceptances with a maturity

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of one year or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus of not less than $500,000,000; (iv) any shares of money market mutual or similar funds having assets in excess of $500,000,000; (v) repurchase obligations with a term not exceeding seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above; and (vi) commercial paper with a maturity of one year or less issued by a corporation that is not an Affiliate of the Company and is organized under the laws of any state of the United States or the District of Columbia and having a rating (A) from Moody’s Investors Service, Inc. of at least P-1 or (B) from Standard & Poor’s Ratings Group of at least A-1;

      (b) Investments by the Company or any Restricted Subsidiary in another Person, if as a result of such Investment (i) such other Person becomes a Restricted Subsidiary or (ii) such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, the Company or a Restricted Subsidiary;

      (c) Investments by the Company or a Restricted Subsidiary in the Company or a Restricted Subsidiary;

      (d) Investments in existence on the Reference Date;

      (e) promissory notes or other evidence of Indebtedness received as a result of Asset Sales permitted under the covenant entitled “Repurchase at the Option of Holders — Asset Sales;”

      (f) loans or advances to officers, directors and employees of the Company or any of its Restricted Subsidiaries made (i) in the ordinary course of business in an amount not to exceed $5 million in the aggregate at any one time outstanding or (ii) in connection with the purchase by such Persons of Equity Interests of the Parent so long as the cash proceeds of such purchase received by the Parent are contemporaneously remitted by the Parent to the Company as a capital contribution;

      (g) any Investment by the Company or any Restricted Subsidiary of the Company in Permitted Joint Ventures made after the Reference Date having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (g) that are at the time outstanding, not exceeding the greater of (i) $30 million and (ii) 10% of the Consolidated Tangible Assets of the Company as of the last day of the most recent full fiscal quarter ending immediately prior to the date of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

      (h) any Investment by the Company or any Restricted Subsidiary in a trust, limited liability company, special purpose entity or other similar entity in connection with a Receivables Program; provided that (A) such Investment is made by a Receivables Subsidiary and (B) the only assets transferred to such trust, limited liability company, special purpose entity or other similar entity consists of Receivables and Related Assets of such Receivables Subsidiary; and

      (i) other Investments that do not exceed $20 million in the aggregate at any one time outstanding.

      “Permitted Joint Venture” means any joint venture, partnership or other Person designated by the Board of the Company, (i) at least 20% of whose Capital Stock with voting power under ordinary circumstances to elect directors (or Persons having similar or corresponding powers and responsibilities) is at the time owned (beneficially or directly) by the Company and/or by one or more Restricted Subsidiaries of the Company and if the Company owns more than 50% of the Capital Stock of the Permitted Joint Venture, such Permitted Joint Venture is either a Restricted Subsidiary of the Company or has been designated as an Unrestricted Subsidiary of the Company in accordance with the provisions described under the caption “— Unrestricted Subsidiaries,” (ii) (x) if it is an Unrestricted Subsidiary, all Indebtedness of such Person is Non-Recourse Indebtedness or (y) if it is a Person other than an Unrestricted Subsidiary, either all Indebtedness of such Person is Non-Recourse Indebtedness or the only

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Indebtedness of such Person that is not Non-Recourse Indebtedness is Indebtedness as to which any guarantee provided by the Company or a Restricted Subsidiary complies with the covenants described under the captions “Certain Covenants — Restricted Payments” and “— Incurrence of Indebtedness and Issuance of Disqualified Stock” and (iii) which is engaged in a Permitted Business; provided that each of Berwyn Magnetic Resonance Center, LLC, Garfield Imaging Center, Ltd., Tom’s River Imaging Associates, L.P., St. John’s Regional Imaging Center, LLC, Dublin Diagnostic Imaging, LLC, Connecticut Lithotripsy, LLC, Northern Indiana Oncology Center of Porter Memorial Hospital, LLC, Lockport MRI, LLC, Wilkes-Barre Imaging, LLC, Sun Coast Imaging Center, LLC, Granada Hills Open MRI, LLC, Daniel Freeman MRI, LLC, InSight-Premier Health, LLC, Southern Connecticut Imaging Centers, LLC, Parkway Imaging Center, LLC, Metabolic Imaging of Kentucky, LLC, Maine Molecular Imaging, LLC, Greater Waterbury Imaging Center, L.P. and Central Maine Magnetic Imaging Associates, shall be deemed to be a Permitted Joint Venture. Any such designation (other than with respect to the Persons identified in the preceding sentence) shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution giving effect to such designation and an officer’s certificate certifying that such designation complied with the foregoing provisions.

      “Permitted Liens” means:

      (1) Liens on Receivables and Related Assets securing Indebtedness incurred under clause (1) of the covenant described under the caption “Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock” in an aggregate principal amount not to exceed $125 million less (A) up to $50 million of cash (or the fair market value of any other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date and (B) the aggregate principal amount of any Additional Notes issued by the Company.

      (2) Liens in favor of the Company or any Restricted Subsidiary that is a Guarantor;

      (3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary;

      (4) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition and do not extend to any property other than the property so acquired by the Company or the Restricted Subsidiary;

      (5) Liens securing the Notes (other than Additional Notes) and the related Guarantees;

      (6) Liens existing on the Issue Date;

      (7) Liens securing Permitted Refinancing Indebtedness; provided that such Liens do not extend to any property or assets other than the property or assets that secure the Indebtedness being refinanced;

      (8) Liens to secure Indebtedness (including Capitalized Lease Obligations) permitted by clause (8) of the third paragraph of the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock;” provided that any such Lien (i) covers only the assets acquired, constructed or improved with such Indebtedness and (ii) is created within 90 days of such acquisition, construction or improvement;

      (9) Liens on cash or cash equivalents securing Hedging Obligations of the Company or any of its Restricted Subsidiaries (a) that are incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, or (b) securing letters of credit that support such Hedging Obligations;

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      (10) Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other social security obligations;

      (11) Lien, deposits or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of Indebtedness), leases, or other similar obligations arising in the ordinary course of business;

      (12) Carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business in respect of obligations not overdue for a period in excess of 60 days or which are being contested in good faith by appropriate proceedings promptly instituted and diligently prosecuted; provided, however, that any reserve or other appropriate provision as will be required to conform with GAAP will have been made for that reserve or provision;

      (13) survey exceptions, encumbrances, easements or reservations of, or rights of other for, rights of way, zoning or other restrictions as to the use of properties, and defects in title which, in the case of any of the foregoing, were not incurred or created to secure the payment of Indebtedness, and which in the aggregate do not materially adversely affect the value of such properties or materially impair the use for the purposes of which such properties are held by the Company or any of its Restricted Subsidiaries;

      (14) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

      (15) Liens, deposits or pledges to secure public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds or obligations; any encumbrance on rights of the Company or any Guarantor to pledge interest in, or grant control over, Patient Receivables to third parties pursuant to applicable statutes; Liens, deposits or pledges in lieu of such bonds or obligations, or to secure such bonds or obligations, or to secure letters of credit in lieu of or supporting the payment of such bonds or obligations; and Liens of sellers of goods to the Company and any of its Restricted Subsidiaries arising under Article 2 of the UCC in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses;

      (16) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Company or any Subsidiary thereof on deposit with or in possession of such bank;

      (17) any interest or title of a lessor, licensor or sublicensor in the property subject to any lease, license or sublicense (other than any property that is the subject of a Sale Leaseback Transaction);

      (18) Liens for taxes, assessments and governmental charges not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by GAAP; (19) Liens arising from precautionary UCC financing statements regarding operating leases or consignments;

      (19) Liens or assets directly related to a Sale and Leaseback Transaction to secure related Attributable Debt;

      (20) any interest of title of a buyer in connection with, and Liens arising from UCC financing statements relating to, a sale of Receivables and Related Assets pursuant to a Receivables Program; provided that such Liens do not extend to any assets other than Receivables and Related Assets;

      (21) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto; provided that such insurance policies are purchased in the ordinary course of business;

      (22) Liens securing Additional Notes and the related Guarantees incurred pursuant to clauses (1), (14) or (16) of the covenant described under the caption “Certain Covenants —

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Incurrence of Indebtedness and Issuance of Disqualified Stock” in an aggregate principal amount not to exceed $125 million less up to $50 million of cash (or the fair market value of any other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date; and

      (23) Liens not otherwise permitted by the Indenture so long as the aggregate outstanding principal amount of the obligations secured thereby does not exceed $3 million at any one time outstanding.

      “Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that: (i) the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded plus accrued interest plus the lesser of the amount of any premium required to be paid in connection with such refinancings pursuant to the terms of such indebtedness or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing (in each case plus the amount of reasonable expenses incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date not earlier than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such Permitted Refinancing Indebtedness shall not include Indebtedness of a Restricted Subsidiary that refinances Indebtedness of the Company, or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of a Subsidiary Guarantor.

      “Person” means any individual, corporation, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

      “Preferred Stock” means, with respect to any Person, any and all shares, interests, partnership interests, participation, rights in or other equivalents (however designated) of such Person’s preferred or preference stock, whether now outstanding or issued after the Issue Date, and including, without limitation, all classes and series of preferred or preference stock of such Person.

      “Principals” means the Equity Sponsors and their respective Affiliates.

      “Public Equity Offering” means an offer and sale of Capital Stock (other than Disqualified Stock) of the Company or the Parent pursuant to a registration statement that has been declared effective by the Commission pursuant to the Securities Act (other than a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the Company).

      “Qualified Equity Interest” means any Qualified Stock and all warrants, options or other rights to acquire Qualified Stock (but excluding any debt security that is convertible into or exchangeable for Capital Stock).

      “Qualified Stock” of any Person means any and all Capital Stock of such Person, other than Disqualified Stock.

      “Receivables and Related Assets” means all of the following property and interests in property of the Company and each Guarantor, whether now owned or existing or hereafter created, acquired or arising and wheresoever located: (i) all Accounts; (ii) all Instruments, Chattel Paper (including, without limitation, Electronic Chattel Paper), Documents, Letter-of-Credit Rights and Supporting Obligations, in each case to the extent arising out of or relating to, or given in exchange or settlement for or to evidence the

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obligation to pay, any Account; (iii) all General Intangibles that arise out of or relate to any Account or from which any Account arises; (iv) all of the Deposit Accounts Collateral; (v) all monies now or at any time or times hereafter in the possession or under the control of the lenders under the Revolving Credit Agreement or a bailee of the lenders under the Revolving Credit Agreement, including, without limitation, any cash collateral in any cash collateral account, other than any proceeds from the sale or other disposition of any of the Collateral; (vi) all products and cash and non-cash proceeds of the foregoing, including, without limitation, proceeds of insurance in respect of any of the foregoing; and (vii) all books and records (including, without limitation, customer lists, files, correspondence, tapes, computer programs, print-outs and other computer materials and records) of the Company or any Guarantor pertaining to any of the foregoing. For purposes of this definition, “Accounts,” “Instruments,” “Chattel Paper,” “Electronic Chattel Paper,” “Documents,” “Letter-of-Credit Rights,” “Supporting Obligations” and “General Intangibles” shall have the meanings provided for by the UCC.

      “Receivables Program” means with respect to any Person, any securitization program pursuant to which such Person pledges, sells or otherwise transfers or encumbers its Receivables and Related Assets, including a trust, limited liability company, special purpose entity or other similar entity.

      “Receivables Subsidiary” means a Wholly Owned Subsidiary (i) created for the purpose of financing Receivables and Related Assets created in the ordinary course of business of the Company and its Subsidiaries and (ii) the sole assets of which consist of Receivables and Related Assets of the Company and its Subsidiaries and Permitted Investments.

      “Reference Date” means October 17, 2001.

      “Related Party” means:

      (1) any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Principal; or

      (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause.

      “Representative Amount” means as at any date an amount equal to, or approximately equal to, the aggregate principal amount of the Notes then outstanding.

      “Restricted Subsidiary” means any Subsidiary other than an Unrestricted Subsidiary. Notwithstanding anything to the contrary herein or in the Notes, Toms River Imaging Associates, L.P. will be deemed a Restricted Subsidiary of the Company so long as the Company, directly or indirectly, owns at least 50% of the Voting Stock thereof.

      “Revolving Credit Agreement” means the Amended and Restated Loan and Security Agreement, dated as of the Issue Date, among the Company, the Guarantors, the lenders party thereto and Bank of America, N.A., as collateral and administrative agent, providing for up to $30 million of revolving credit borrowings and/or letters of credit, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith.

      “Sale and Leaseback Transaction” means any transaction or series of related transactions pursuant to which the Company or a Restricted Subsidiary sells or transfers any property or asset in connection with the leasing, or the resale against installment payments, of such property or asset to the seller or transferor.

      “Securities Act” means the Securities Act of 1933, as amended.

      “Security Documents” means, collectively, the Collateral Agency Agreement, the Security Agreement (as defined in the Collateral Agency Agreement), the Pledge Agreement (as defined in the Collateral Agency Agreement), the Account Control Agreements (as defined in the Collateral Agency Agreement), and all other pledges, agreements, financing statements, filings or other documents that grant or evidence the Lien in the Collateral in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes, as they may be amended, restated, supplemented, replaced or modified from time to time.

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      “Significant Subsidiary” means any Restricted Subsidiary of the Company that, together with its Subsidiaries, (a) for the most recent fiscal year of the Company, accounted for more than 10% of the consolidated net revenues of the Company and its Subsidiaries, (b) as of the end of such fiscal year, was the owner of more than 10% of the consolidated assets of the Company and its Restricted Subsidiaries, in the case of either (a) or (b), as set forth on the most recently available consolidated financial statements of the Company for such fiscal year or (c) was organized or acquired after the beginning of such fiscal year and would have been a Significant Subsidiary if it had been owned during such entire fiscal year.

      “Stated Maturity” means, when used with respect to any Note or any installment of interest thereon, the date specified in such Note as the fixed date on which the principal of such Note or such installment of interest is due and payable and, when used with respect to any other Indebtedness, means the date specified in the instrument governing such Indebtedness as the fixed date on which the principal of such Indebtedness or any installment of interest thereon is due and payable.

      “Subordinated Indebtedness” means Indebtedness of the Company or a Guarantor that is subordinated in right of payment to the Notes or the Guarantee issued by such Guarantor, as the case may be.

      “Subsidiary” means any Person a majority of the equity ownership or Voting Stock of which is at the time owned, directly or indirectly, by the Company and/or one or more other Subsidiaries of the Company. Notwithstanding anything to the contrary herein or in the Notes, Toms River Imaging Associates, L.P. will be deemed a Subsidiary of the Company so long as the Company, directly or indirectly, owns at least 50% of the Voting Stock thereof.

      “Subsidiary Guarantors” means, collectively, all Wholly Owned Restricted Subsidiaries (including any Person that becomes a Wholly Owned Restricted Subsidiary after the Issue Date) that are incorporated in the United States or a state thereof or the District of Columbia.

      “Telerate Page 3750” means the display designated as “Page 3750” on the Moneyline Telerate service (or such other page as may replace Page 3750 on that service).

      “UCC” means the Uniform Commercial Code (or any successor statute) as adopted and in force in the State of New York or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any asset, the Uniform Commercial Code (or any successor statute) of such state.

      “Unrestricted Subsidiary” means (a) any Subsidiary that is designated by the Board of the Company as an Unrestricted Subsidiary in accordance with the “Unrestricted Subsidiaries” covenant and (b) any Subsidiary of an Unrestricted Subsidiary.

      “Voting Stock” means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of any Person (irrespective of whether or not, at the time, stock of any other class or classes has, or might have, voting power by reason of the happening of any contingency).

      “Weighted Average Life to Maturity” means, as of the date of determination with respect to any Indebtedness or Disqualified Stock, the quotient obtained by dividing (a) the sum of the products of (i) the number of years from the date of determination to the date or dates of each successive scheduled principal or liquidation value payment of such Indebtedness or Disqualified Stock, respectively, multiplied by (ii) the amount of each such principal or liquidation value payment by (b) the sum of all such principal or liquidation value payments.

      “Wholly Owned Restricted Subsidiary” means any Restricted Subsidiary, all of the outstanding Voting Stock (other than directors’ qualifying shares or shares of foreign Restricted Subsidiaries required to be owned by foreign nationals pursuant to applicable law) of which is owned, directly or indirectly, by the Company.

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      “Wholly Owned Subsidiary” means any Subsidiary, all of the outstanding Voting Stock (other than directors’ qualifying shares or shares of foreign Subsidiaries required to be owned by foreign nationals pursuant to applicable law) of which is owned, directly or indirectly, by the Company.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

General

      The following discussion summarizes certain material U.S. federal income tax considerations generally applicable to purchasers of the notes. The U.S. federal income tax considerations set forth below are based upon currently existing provisions of the Internal Revenue Code of 1986, as amended, referred to as the “Code,” applicable final, temporary and proposed Treasury regulations, judicial authority, and current administrative rulings and pronouncements of the Internal Revenue Service (the “IRS”). There can be no assurance that the IRS will not take a contrary view, and no ruling from the IRS has been, or will be, sought on the issues discussed herein. Legislative, judicial, or administrative changes or interpretations may be forthcoming that could alter or modify the statements and conclusions set forth herein. Any such changes or interpretations may or may not be retroactive and could affect the tax consequences discussed below.

      The summary is not a complete analysis or description of all potential U.S. federal income tax considerations that may be relevant to, or of the actual tax effect that any of the matters described herein will have on, particular purchasers, and does not address foreign, state, local or other tax consequences. This summary does not purport to address special classes of taxpayers (such as S corporations, mutual funds, insurance companies, financial institutions, small business investment companies, regulated investment companies, broker-dealers and tax-exempt organizations) who are subject to special treatment under the U.S. federal income tax laws, or persons that hold notes that are a hedge against, or that are hedged against, currency risk or that are part of a straddle or conversion transaction, or an expatriate of the United States, or persons whose functional currency within the meaning of section 985 of the Code is not the U.S. dollar. Furthermore, estate and gift tax consequences are not discussed herein. No opinion of counsel will be requested with respect to any of the matters discussed herein. The following discussion is additionally limited to initial purchasers of the notes who acquire the notes at their original issue price within the meaning of section 1273 of the Code, and who will hold the notes as capital assets within the meaning of section 1221 of the Code.

      As used herein, the term “U.S. Holder” means a beneficial owner of the notes that is (1) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes, (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof (including the District of Columbia), (3) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (4) a trust if a U.S. court can exercise primary supervision over the administration of such trust, and one or more U.S. fiduciaries has the authority to control all of the substantial decisions of such trust (or otherwise if the trust has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person). As used herein the term “Non-U.S. Holder” means a beneficial owner of notes that is not a U.S. Holder and is not an entity classified as a partnership for U.S. federal income tax purposes. If a partnership holds the notes, the tax treatment of a partner therein will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner of a partnership acquiring the notes, you should consult your tax advisor about the U.S. tax consequences of holding and disposing of the notes.

      Because individual circumstances may differ, each prospective purchaser of the notes is strongly urged to consult its own tax advisor with respect to its particular tax situation and as to any U.S. federal, foreign, state, local or other tax considerations (including any possible changes in tax law) affecting the purchase, holding and disposition of the notes.

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Federal Income Tax Consequences to U.S. Holders

      This section describes certain U.S. federal income tax considerations applicable to U.S. Holders. Non-U.S. Holders should see the discussion below under the heading “Federal Income Tax Consequences to Non-U.S. Holders” for a discussion of certain tax considerations applicable to them.

      Interest and OID on the Notes. Interest on the notes generally will be taxable to a U.S. Holder as ordinary interest income at the time such amounts are accrued or received, in accordance with the U.S. Holder’s method of accounting for U.S. federal income tax purposes.

      In the event that the issue price of the notes is less than the “stated redemption price at maturity” of the notes by more than a de minimis amount, the notes will be considered to have original issue discount (“OID”). The “stated redemption price at maturity” of a debt instrument is equal to the sum of all payments to be received other than payments of stated interest. The “issue price” of a debt instrument issued for cash is equal to the first price at which a substantial amount of such debt instruments are sold. If the notes are treated as having OID, a U.S. Holder (including a cash basis holder) generally would be required to include the OID on the notes in income for U.S. federal income tax purposes under the accrual method on a constant yield basis resulting in the inclusion of interest in income in advance of the receipt of cash attributable to that income.

      Amortizable Bond Premium. A U.S. Holder that purchases a note for an amount in excess of the stated redemption price at maturity will be considered to have purchased the Note with “amortizable bond premium.” Such holder may elect to amortize such premium (as an offset to interest income), using a constant-yield method, over the remaining term of the note. Such election, once made, generally applies to all debt instruments held or subsequently acquired by the U.S. Holder on or after the first day of the first taxable year to which the election applies and may be revoked only with the consent of the IRS. A U.S. Holder that elects to amortize such premium must reduce its tax basis in the note by the amount of the premium amortized during its holding period. With respect to a U.S. Holder that does not elect to amortize bond premium, the amount of such premium will be included in the U.S. Holder’s tax basis for purposes of computing gain or loss in connection with taxable disposition of the note.

      Disposition of the Notes. Unless a nonrecognition provision applies, the sale, exchange, redemption (including pursuant to an offer by InSight) or other disposition of a note will be a taxable event for U.S. federal income tax purposes. In such event, in general, a U.S. Holder will recognize gain or loss equal to the difference between (1) the amount of cash plus the fair market value of property received (except to the extent attributable to any accrued interest on the notes which will be taxable as such to the extent not previously included in income) and (2) the U.S. Holder’s adjusted tax basis in the notes (as increased by any OID previously included in income or decreased by any amortizable bond premium deducted). Certain U.S. Holders (including individuals) are eligible for preferential rates of U.S. federal income taxation in respect of long-term capital gains. The deductibility of capital losses is subject to limitations.

      Exchange Offer. The exchange of initial notes for the exchange notes will not constitute a taxable exchange. As a result, (1) a U.S. Holder will not recognize a taxable gain or loss as a result of exchanging such holder’s notes; (2) the holding period of the exchange notes received will include the holding period of the initial notes exchanged therefor; and (3) the adjusted tax basis of the exchange notes received will be the same as the adjusted tax basis of the initial notes exchanged therefor immediately before such exchange.

      Backup Withholding. Under section 3406 of the Code and applicable Treasury regulations, a noncorporate U.S. Holder may be subject to backup withholding at the rate of 28% (subject to change in future years) with respect to “reportable payments,” which include interest paid on, or, in certain cases, the proceeds of a sale, exchange or redemption of, the notes. The payor will be required to deduct and withhold the prescribed amounts if (1) the payee fails to furnish a taxpayer identification number (TIN) to the payor in the manner required, (2) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (3) there has been a “notified payee underreporting” described in section 3406(c) of

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the Code or (4) there has been a failure of the payee to certify under penalty of perjury that the payee is not subject to withholding under section 3406(a)(1)(C) of the Code. Amounts paid as backup withholding do not constitute an additional tax and may be refunded (or credited against the holder’s U.S. federal income tax liability, if any) so long as the required information is provided to the IRS. We will report to the holders of the notes and to the IRS the amount of any “reportable payments” for each calendar year and the amount of tax withheld, if any, with respect to payment on those securities.

Federal Income Tax Consequences to Non-U.S. Holders

      The following information describes the U.S. federal income tax treatment of “Non-U.S. Holders.”

      U.S. Trade or Business Income. If the interest or gain on the notes is “effectively connected with the conduct of a trade or business within the United States” by a Non-U.S. Holder and, if a tax treaty applies, the income or gain generally is attributable to a U.S. permanent establishment maintained by the Non-U.S. Holder (“U.S. trade or business income”), such interest or gain will be subject to U.S. federal income tax essentially in the same manner as if the notes were held by a U.S. Holder, as described above, and in the case of a Non-U.S. Holder that is a corporation, may also be subject to U.S. branch profits tax. Such Non- U.S. Holder will not be subject to withholding taxes, if it provides a properly executed IRS Form W-8ECI.

      Interest on the Notes. Interest on the notes held by other Non-U.S. Holders will be subject to withholding of up to 30% of each payment made to the holders or other payee unless the “portfolio interest exemption” applies or an applicable income tax treaty reduces the withholding rate. The interest paid on the notes generally will qualify for the portfolio interest exemption and, accordingly, interest paid on the notes to a Non-U.S. Holder will not be subject to withholding, if (1) the U.S. person who would otherwise be required to deduct and withhold the tax receives from the Non-U.S. Holder who is the beneficial owner of the notes a statement signed by such person under penalties of perjury, certifying that such owner is not a U.S. person on IRS Form W-8BEN (or successor form); (2) such Non-U.S. Holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock; (3) such Non-U.S. Holder is not a “controlled foreign corporation” (within the meaning of section 957 of the Code) related to us (within the meaning of section 864(d)(4) of the Code); and (4) the Non-U.S. Holder is not a bank receiving the interest on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business.

      If a Non-U.S. Holder does not claim, or does not qualify for, the benefit of the portfolio interest exemption, the Non-U.S. Holder may be subject to a 30% withholding tax on interest payments on the notes. However, the Non-U.S. Holder may be able to claim the benefit of a reduced withholding tax rate under an applicable income tax treaty. The required information for claiming treaty benefits is generally submitted, under current Treasury regulations, on IRS Form W-8BEN.

      Sale or Other Disposition of the Notes. A Non-U.S. Holder will generally not be subject to U.S. federal income tax or withholding tax on gain recognized on a sale, exchange, redemption, retirement, or other disposition of the notes. A Non-U.S. Holder may, however, be subject to tax on such gain if: (1) the Non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met; or (2) the gain is U.S. trade or business income.

      Backup Withholding and Information Reporting. Payments of interest or principal may be subject to both backup withholding at a rate of 28% (subject to change in future years) and information reporting. Backup withholding and information reporting generally will not apply to payments on the notes if the Non- U.S. Holder certifies, on a Form W-8BEN, or successor form, that it is not a U.S. person, provided that the payor does not have actual knowledge that the Non-U.S. Holder is, in fact, a U.S. person. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the Non-U.S. Holder’s U.S. federal income tax liability, if any, provided that the required information is furnished to the IRS.

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      The foregoing summary is included herein for general information only and does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular holder of the notes in light of his or her particular circumstances and income tax situation. Prospective investors are urged to consult their own tax advisors as to any tax consequences to them from the purchase, ownership, and disposition of the notes, including the application and effect of state, local, foreign, and other tax laws.

PLAN OF DISTRIBUTION

      Based on existing interpretations of the Securities Act by the staff of the SEC set forth in several no-action letters to third parties, and subject to the immediately following sentence, we believe that the exchange notes that will be issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by the holders thereof without further compliance with the registration and prospectus delivery provisions of the Securities Act. However, any purchaser of the notes who is an “affiliate” (within the meaning of the Securities Act) of ours or who intends to participate in the exchange offer for the purpose of distributing the exchange notes or a broker-dealer (within the meaning of the Securities Act) that acquired initial notes in a transaction other than as part of its market-making or other trading activities and who has arranged or has an understanding with any person to participate in the distribution of the exchange notes: (1) will not be able to rely on the interpretations by the staff of the SEC set forth in the above-mentioned no-action letters; (2) will not be able to tender its initial notes in the exchange offer; and (3) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the notes unless such sale or transfer is made pursuant to an exemption from such requirements.

      Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for initial notes where such initial notes were acquired as a result of market-marketing activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.

      We will not receive any proceeds from any such sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account, pursuant to the exchange offer, may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letters of transmittal state that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      For a period of 180 days after the expiration date we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

120

      By its acceptance of the exchange offer, any broker-dealer that receives exchange notes pursuant to the exchange offer agrees to notify us before using this prospectus in connection with the sales or transfer of the new notes. The broker-dealer further acknowledges and agrees that, upon receipt of notice from us of the happening of any event which:

•  makes any statement in this prospectus untrue in any material respect;

•  requires the making of any changes in this prospectus to make the statements in this prospectus not misleading; or

•  may impose upon us disclosure obligations that may have a material adverse effect on us, which notice we agree to deliver promptly to the broker-dealer, the broker-dealer will suspend use of this prospectus until we have notified the broker-dealer that delivery of the prospectus may resume and have furnished copies of any amendment or supplement to this prospectus to the broker-dealer.

LEGAL MATTERS

      The validity of the exchange notes offered hereby and certain other legal matters will be passed upon on our behalf by Kaye Scholer LLP, New York, New York.

EXPERTS

      The consolidated financial statements of Holdings as of June 30, 2005 and 2004 and for each of the three years in the period ended June 30, 2005, included in this prospectus, have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

      InSight and the guarantors have filed with the SEC a registration statement on Form S-4 to register the exchange notes to be issued in exchange for the initial notes. In this prospectus, we refer to that registration statement, together with all amendments, exhibits, annexes and schedules thereto as the “registration statement.” This prospectus, which is part of the registration statement, does not contain all the information in the registration statement. For further information with respect to InSight, the guarantors and the exchange offer, reference is made to the registration statement. Statements made in this prospectus as to the contents of any contract, agreement or other documents referred to are not necessarily complete. For a more complete understanding and description of each contract, agreement or other document filed as an exhibit to the registration statement, we encourage you to read the documents contained in the exhibits.

      Holdings files annual, quarterly and special reports and other information with the SEC. You may read and copy any document Holdings files at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.

      Please call the SEC at 1-888-SEC-0330 for further information on the public reference rooms. Holdings’ SEC filings are also available to the public from the SEC’s web site at www.sec.gov or from our web site at www.insighthealth.com. However, the information on our web site does not constitute a part of this prospectus.

      You should rely only upon the information provided in this prospectus. We have not authorized anyone to provide you with different information. You should not assume that the information in this prospectus is accurate as of any date other than the date of this prospectus.

121

INDEX TO FINANCIAL STATEMENTS

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

for the Years Ended June 30, 2005, 2004 and 2003

	Page Number
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2
CONSOLIDATED BALANCE SHEETS		F-3
CONSOLIDATED STATEMENTS OF OPERATIONS		F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY		F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS		F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		F-7 — F-30
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS		F-31

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of InSight Health Services Holdings Corp.:

      In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of InSight Health Services Holdings Corp. and its subsidiaries (the “Company”) at June 30, 2005 and 2004 and the results of their operations and their cash flows for each of the three years in the period then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

Orange County, California

September 22, 2005

F-2

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2005 AND 2004

			2005			2004
			(Amounts in thousands,
			except share data)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	20,839		$	30,412
	Trade accounts receivables, net			46,450			55,010
	Short-term investments			5,000			—
	Other current assets			7,970			6,207
		Total current assets		80,259			91,629
PROPERTY AND EQUIPMENT, net				209,461			242,336
INVESTMENTS IN PARTNERSHIPS				3,513			2,901
OTHER ASSETS				16,301			19,302
OTHER INTANGIBLE ASSETS, net				36,459			38,518
GOODWILL				278,530			280,945
			$	624,523		$	675,631
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Current portion of notes payable		$	2,795		$	2,716
	Current portion of capital lease obligations			4,927			5,060
	Accounts payable and other accrued expenses			36,469			35,737
		Total current liabilities		44,191			43,513
LONG-TERM LIABILITIES:
	Notes payable, less current portion			485,531			518,245
	Capital lease obligations, less current portion			8,315			13,802
	Other long-term liabilities			3,538			5,130
	Deferred income taxes			15,224			—
		Total long-term liabilities		512,608			537,177
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY:
	Common stock, $.001 par value, 10,000,000 shares authorized, 5,468,814 shares issued and outstanding at June 30, 2005 and 2004			5			5
	Additional paid-in capital			87,081			87,081
	Retained (deficit) earnings			(19,362	)		7,855
		Total stockholders’ equity		67,724			94,941
			$	624,523		$	675,631

The accompanying notes are an integral part of these consolidated financial statements.

F-3

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

			Years Ended June 30,
			2005			2004			2003
			(Amounts in thousands)
REVENUES:
	Contract services		$	136,537		$	129,193		$	111,921
	Patient services			180,336			161,691			125,831
		Total revenues		316,873			290,884			237,752
COSTS OF OPERATIONS:
	Costs of services			194,507			168,700			125,685
	Provision for doubtful accounts			5,723			4,998			4,154
	Equipment leases			2,326			990			860
	Depreciation and amortization			65,601			58,733			49,345
		Total costs of operations		268,157			233,421			180,044
		Gross profit		48,716			57,463			57,708
CORPORATE OPERATING EXPENSES				(18,447	)		(16,217	)		(13,750	)
(LOSS) GAIN ON SALES OF CENTERS				(170	)		2,129			—
EQUITY IN EARNINGS OF UNCONSOLIDATED PARTNERSHIPS				2,613			2,181			1,744
INTEREST EXPENSE, net				(44,860	)		(40,682	)		(37,514	)
		(Loss) income before income taxes		(12,148	)		4,874			8,188
PROVISION FOR INCOME TAXES				15,069			1,950			3,266
		Net (loss) income	$	(27,217	)	$	2,924		$	4,922

The accompanying notes are an integral part of these consolidated financial statements.

F-4

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

									Accumulated
		Common Stock				Additional			Other			Retained
						Paid-In			Comprehensive			Earnings
		Shares		Amount		Capital			Gain (Loss)			(Deficit)			Total
		(Amounts in thousands, except share data)
BALANCE AT JUNE 30, 2002			5,468,764	$	5	$	87,586		$	(224	)	$	9		$	87,376
Stock options exercised			50		—		1			—			—			1
Repurchase of stock options			—		—		(506	)		—			—			(506	)
Net income			—		—		—			—			4,922			4,922
Other comprehensive loss:
	Unrealized loss attributable to change in fair value of derivative		—		—		—			(179	)		—			(179	)
Comprehensive income																4,743
BALANCE AT JUNE 30, 2003			5,468,814		5		87,081			(403	)		4,931			91,614
Net income			—		—		—			—			2,924			2,924
Other comprehensive gain:
	Unrealized gain attributable to change in fair value of derivative		—		—		—			403			—			403
Comprehensive income																3,327
BALANCE AT JUNE 30, 2004			5,468,814		5		87,081			—			7,855			94,941
Net loss			—		—		—			—			(27,217	)		(27,217	)
BALANCE AT JUNE 30, 2005			5,468,814	$	5	$	87,081		$	—		$	(19,362	)	$	67,724

The accompanying notes are an integral part of these consolidated financial statements.

F-5

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

				Years Ended June 30,
				2005			2004			2003
				(Amounts in thousands)
OPERATING ACTIVITIES:
	Net (loss) income			$	(27,217	)	$	2,924		$	4,922
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
		Loss (gain) on sales of centers			170			(2,129	)		—
		Depreciation and amortization			65,601			58,733			49,345
		Deferred income taxes			15,224			—			—
	Changes in operating assets and liabilities:
		Trade accounts receivables, net			8,096			(8,455	)		(2,237	)
		Other current assets			(1,736	)		3,084			4,907
		Accounts payable and other accrued expenses			726			5,963			4,819
			Net cash provided by operating activities		60,864			60,120			61,756
INVESTING ACTIVITIES:
	Acquisition of fixed-site centers and mobile facilities				—			(101,334	)		(46,292	)
	Proceeds from sales of centers				2,810			5,413			—
	Additions to property and equipment				(30,459	)		(46,734	)		(56,967	)
	Net purchases of short-term investments				(5,000	)		—			—
	Other				71			405			554
			Net cash used in investing activities		(32,578	)		(142,250	)		(102,705	)
FINANCING ACTIVITIES:
	Proceeds from stock options and warrants exercised				—			—			1
	Purchase of stock options				—			—			(506	)
	Principal payments of notes payable and capital lease obligations				(37,781	)		(8,209	)		(7,500	)
	Proceeds from issuance of debt				—			101,125			50,000
	Other				(78	)		72			725
			Net cash (used in) provided by financing activities		(37,859	)		92,988			42,720
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:					(9,573	)		10,858			1,771
	Cash, beginning of period				30,412			19,554			17,783
	Cash, end of period			$	20,839		$	30,412		$	19,554
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Interest paid			$	42,461		$	38,939		$	36,286
	Income taxes paid (refund received)				202			377			(224	)
	Equipment additions under capital leases				—			—			25,455

The accompanying notes are an integral part of these consolidated financial statements.

F-6

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2005

1. NATURE OF BUSINESS

      All references to “we,” “us,” “our,” “our company,” “the Company” or “InSight Holdings” mean InSight Health Services Holdings Corp., a Delaware corporation and all entities and subsidiaries owned or controlled by InSight Health Services Holdings Corp. All references to “InSight” mean InSight Health Services Corp., a Delaware corporation and wholly owned subsidiary of InSight Health Services Holdings Corp. and all entities and subsidiaries controlled by InSight Through InSight and its subsidiaries, we provide diagnostic imaging, treatment and related management services in 34 states throughout the United States. Our operations are primarily concentrated in California, Arizona, New England, the Carolinas, Florida and the Mid-Atlantic states. We have two reportable segments: fixed operations and mobile operations. Our services are provided through a network of 84 mobile magnetic resonance imaging, or MRI, facilities, 15 mobile positron emission tomography, or PET, facilities, seven mobile PET/ CT facilities, four mobile lithotripsy facilities, four mobile computed tomography, or CT, facilities, one mobile catheterization lab (collectively, mobile facilities), 77 MRI fixed-site centers, 40 multi-modality fixed-site centers, two PET fixed-site centers and one Leksell Stereotactic Gamma Knife fixed-site treatment center (collectively, fixed-site centers).

      At our multi-modality fixed-site centers, we typically offer other services in addition to MRI, including PET, CT, x-ray, mammography, ultrasound, nuclear medicine and bone densitometry services.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a. CONSOLIDATED FINANCIAL STATEMENTS

      Our consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Our investment interests in partnerships or limited liability companies, or Partnerships, are accounted for under the equity method of accounting when our ownership is 50% or less (Note 14). Our investment interests in Partnerships are consolidated when we own more than 50%.

      Significant intercompany balances have been eliminated in consolidation.

     b. USE OF ESTIMATES

      The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

     c. REVENUE RECOGNITION

      Revenues from contract services and from patient services are recognized when services are provided. Patient services revenues are presented net of (1) related contractual adjustments, which represent the difference between our charge for a procedure and what we will ultimately receive from private health insurance programs, Medicare, Medicaid and other federal healthcare programs, and (2) payments due to radiologists. We report payments made to radiologists on a net basis because (i) we are not the primary obligor for the provision of professional services, (ii) the radiologists receive contractually agreed upon amounts from collections and (iii) the radiologists bear the risk of non-collection. Contract services revenues are recognized over the applicable contract period. Revenues collected in advance are recorded as unearned revenue.

F-7

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

     d. CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

      Cash equivalents are generally composed of liquid investments with original maturities of three months or less, such as certificates of deposit and commercial paper.

     e. TRADE ACCOUNTS RECEIVABLES

      We review our trade accounts receivables and our estimates of the allowance for doubtful accounts and contractual adjustments each period. Contractual adjustments are manual estimates based upon an analysis of (i) historical experience of contractual payments from payors and (ii) the outstanding accounts receivables from payors. Contractual adjustments are written off against their corresponding asset account at the time a payment is received from a payor, with a reduction to the allowance for contractual adjustments to the extent such an allowance was previously recorded. Estimates of uncollectible amounts are revised each period, and changes are recorded in the period they become known. The provision for doubtful accounts includes amounts to be written off with respect to (1) specific accounts involving customers, which are financially unstable or materially fail to comply with the payment terms of their contract and (2) other accounts based on our historical collection experience, including payor mix and the aging of patient accounts receivables balances. Receivables deemed to be uncollectible, either through a customer default on payment terms or after reasonable collection efforts have been exhausted, are fully written off against their corresponding asset account, with a reduction to the allowance for doubtful accounts to the extent such an allowance was previously recorded.

     f. LONG-LIVED ASSETS

      Property and Equipment. Property and equipment are depreciated and amortized on the straight-line method using the following estimated useful lives:

Vehicles	3 to 8 years
Buildings	7 to 20 years
Leasehold improvements	Lesser of the useful life or term of lease
Computer and office equipment	3 to 5 years
Diagnostic and related equipment	5 to 8 years
Equipment and vehicles under capital leases	Lesser of the useful life or term of lease

      We capitalize expenditures for improvements and major equipment upgrades. Maintenance, repairs and minor replacements are charged to operations as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations.

      Long-lived Asset Impairment. We review long-lived assets, including identified intangible assets, for impairment when events or changes in business conditions indicate that their full carrying value may not be recovered. We consider assets to be impaired and write them down to fair value if expected associated undiscounted cash flows are less than the carrying amounts. Fair value is determined based on the present value of the expected associated cash flows.

     g. DEFERRED FINANCING COSTS

      Costs incurred in connection with financing activities are deferred and amortized using the effective interest method over the terms of the related debt agreements ranging from seven to ten years. Amortization of these costs is charged to interest expense in the accompanying consolidated statements of operations. Total costs deferred and included in other assets in the accompanying consolidated balance sheets at June 30, 2005 and 2004 were approximately $16.0 million and $19.0 million, respectively.

F-8

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

     h. STOCK-BASED COMPENSATION

      As permitted under Statement of Financial Accounting Standards, or SFAS, No. 123, “Accounting for Stock Based Compensation” (SFAS 123), we account for the options and warrants issued to employees in accordance with APB Opinion No. 25. SFAS 123 requires that we present pro-forma disclosures of net income as if we had recognized compensation expense equal to the fair value of options granted, as determined at the date of grant. Our net (loss) income would have reflected the following pro-forma amounts (amounts in thousands):

		Years Ended June 30,
		2005			2004			2003
Net (loss) income:	As reported	$	(27,217	)	$	2,924		$	4,922
	Expense		(245	)		(377	)		(652	)
	Pro-forma	$	(27,462	)	$	2,547		$	4,270

      The fair value of each option grant and warrant issued is estimated on the date of grant or issuance using the Black-Scholes pricing model with the following assumptions used for the grants and issuances in the years ended June 30, 2005, 2004 and 2003, respectively.

	Years Ended June 30,
Assumptions	2005		2004		2003
Weighted average estimated fair value per option granted		6.80		6.22		6.39
Risk-free interest rate		4.13-4.50%		3.58-4.18%		4.07-4.58%
Volatility		0.00%		0.00%		0.00%
Expected dividend yield		0.00%		0.00%		0.00%
Estimated contractual life		10.00  years		10.00  years		10.00  years

     i. GOODWILL AND OTHER INTANGIBLE ASSETS

      Goodwill and Other Intangible Assets. Goodwill represents the excess purchase price we paid over the fair value of the tangible and intangible assets and liabilities acquired in acquisitions. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” (SFAS 142), the goodwill and indefinite-lived intangible asset balances are not being amortized, but instead are subject to an annual assessment of impairment by applying a fair-value based test. Net other intangible assets are amortized on a straight-line basis over the estimated lives of the assets ranging from five to thirty years.

      We evaluate the carrying value of goodwill and acquisition-related intangible assets, including the related amortization period, in the second quarter of each fiscal year. Additionally, we review the carrying amount of goodwill whenever events and circumstances indicate that the carrying amount of goodwill may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit and adverse legal or regulatory developments. In evaluating goodwill and intangible assets not subject to amortization, we complete the two-step goodwill impairment test as required by SFAS 142. In a business combination, goodwill is allocated to our two reporting units (fixed and mobile), which are the same as our reportable operating segments, based on relative fair value of the assets acquired and liabilities assumed. In the first of a two-step impairment test, we determine the fair value of these reporting units using a discounted cash flow valuation model or market multiples, as appropriate. We compare the fair value for the reporting unit to its carrying value. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not impaired and no further testing is required. If the fair value does not exceed the carrying value, the second

F-9

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step compares the implied fair value of the reporting unit with the carrying amount of that goodwill.

      We assess the ongoing recoverability of our intangible assets subject to amortization by determining whether the intangible asset balance can be recovered over the remaining amortization period through projected undiscounted future cash flows. If projected future cash flows indicate that the unamortized intangible asset balances will not be recovered, an adjustment is made to reduce the net intangible asset to an amount consistent with projected future cash flows discounted at our incremental borrowing rate. Cash flow projections, although subject to a degree of uncertainty, are based on trends of historical performance and management’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions.

      As of June 30, 2005, we do not believe any impairment of goodwill or other intangible assets has occurred.

     j. INCOME TAXES

      We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

     k. COMPREHENSIVE INCOME

      Components of comprehensive income are changes in equity other than those resulting from investments by owners and distributions to owners. Net income (loss) is the primary component of comprehensive income. Our only component of comprehensive income other than net income (loss) is the change in unrealized gain or loss on derivatives qualifying for hedge accounting, net of tax. The aggregate amount of such changes to equity that have not yet been recognized in net income are reported in the equity portion of the accompanying consolidated balance sheets as accumulated other comprehensive income (loss).

     l. FAIR VALUE OF FINANCIAL INSTRUMENTS

      The fair value of financial instruments is estimated using available market information and other valuation methodologies. The fair value of our financial instruments is estimated to approximate the related book value, unless otherwise indicated.

     m. NEW PRONOUNCEMENTS

      In May 2005, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards (SFAS) No. 154, “Accounting Changes and Error Corrections — a replacement of APB Opinion No. 20 and FASB Statement No. 3” (SFAS 154). SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle. These requirements apply to all voluntary changes and changes required by an accounting pronouncement in the unusual instance that a pronouncement does not include specific transition provisions. SFAS 154 is effective for fiscal years beginning after December 15, 2005. As such, we are required to adopt these provisions at the beginning of

F-10

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

fiscal 2007. We do not expect the adoption of SFAS 154 to have a material impact on our financial condition and results of operations.

      In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” (SFAS 123). SFAS 123R requires expensing of stock options and other share-based payments and supersedes FASB’s earlier rule (SFAS 123) that had allowed companies to choose between expensing stock options or showing pro-forma disclosure only. We will be required to implement SFAS 123R at the beginning of fiscal 2007. We do not believe that the impact of adopting SFAS 123R would be materially different than the pro-forma disclosures under SFAS 123.

3. ACQUISITIONS

      In August 2003, we acquired twenty-two (22) mobile facilities operating primarily in the Mid-Atlantic states. The acquisition consisted of certain tangible and intangible assets, including diagnostic imaging equipment, customer contracts and other agreements. The aggregate purchase price was approximately $49.9 million, which included approximately $28.1 million paid to the seller and approximately $21.8 million for the payment of debt and transaction costs. The excess purchase price paid by us over our estimate of the fair value of the tangible and other intangible assets as of the date of the acquisition was approximately $29.1 million and is reflected as goodwill in the accompanying consolidated balance sheets as of June 30, 2005 and 2004.

      In April 2004, we acquired twenty-one (21) fixed-site centers located in California, Arizona, Kansas, Texas, Pennsylvania and Virginia. The acquisition consisted of certain tangible and intangible assets, including diagnostic imaging equipment, real property, customer contracts and other agreements. The aggregate purchase price was approximately $48.6 million, which included approximately $35.9 million paid to the seller, approximately $10.6 million for the payment of debt and approximately $2.1 million of transaction costs. The excess purchase price paid by us over our estimate of the fair value of the tangible and other intangible assets as of the date of the acquisition was approximately $30.2 million and is reflected as goodwill in the accompanying consolidated balance sheets as of June 30, 2005 and 2004.

F-11

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Our unaudited pro-forma combined results of operations, assuming our two acquisitions had occurred as of July 1, 2003, are presented below. The pro-forma combined results of operations for the year ended June 30, 2004 include adjustments to interest expense (approximately $1.8 million) and amortization of identified intangible assets (approximately $0.1 million). These combined results have been prepared for comparison purposes only and do not purport to be indicative of what operating results would have been, and may not be indicative of future operating results (amounts in thousands):

	Year Ended
	June 30,
	2004
	(Unaudited)
Revenues	$	333,864
Costs of operations		257,665
Gross profit		76,199
Corporate operating expenses		(32,436	)
Gain on sale of center		2,129
Equity in earnings of unconsolidated partnerships		2,181
Impairment and restructuring charges		(1,142	)
Interest expense, net		(43,429	)
Income before income taxes		3,502
Provision for income taxes		1,400
Net income	$	2,102

4. TRADE ACCOUNTS RECEIVABLES

      Trade accounts receivables, net are comprised of the following (amounts in thousands):

	June 30,
	2005		2004
Trade accounts receivables	$	96,646	$	115,645
Less: Allowances for contractual adjustments		29,412		37,209
Allowances for professional fees		11,897		15,329
Allowances for doubtful accounts		8,887		8,097
Trade accounts receivables, net	$	46,450	$	55,010

      The allowances for doubtful accounts and contractual adjustments includes management’s estimate of the amounts expected to be written off on specific accounts and for write-offs on other unidentified accounts included in accounts receivables. In estimating the write-offs and adjustments on specific accounts, management relies on a combination of in-house analysis and a review of contractual payment rates from private health insurance programs or under the federal Medicare program. In estimating the allowance for unidentified write-offs and adjustments, management relies on historical experience. The amounts we will ultimately realize could differ materially in the near term from the amounts assumed in arriving at the allowances for doubtful accounts and contractual adjustments in the accompanying consolidated financial statements at June 30, 2005.

      We reserve a contractually agreed upon percentage at several of our fixed-site centers, averaging 20 percent of the accounts receivables balance from patients and third-party payors for payments to radiologists representing professional fees for interpreting the results of the diagnostic imaging procedures.

F-12

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Payments to radiologists are only due when amounts are received. At that time, the balance is transferred from the allowance account to a professional fees payable account.

5. OTHER CURRENT ASSETS

      Other current assets are comprised of the following (amounts in thousands):

	June 30,
	2005		2004
Prepaid expenses	$	6,965	$	5,249
Amounts due from our unconsolidated partnerships		1,005		958
	$	7,970	$	6,207

6. PROPERTY AND EQUIPMENT

      Property and equipment, net are stated at cost and are comprised of the following (amounts in thousands):

	June 30,
	2005		2004
Vehicles	$	5,701	$	4,570
Land, building and leasehold improvements		29,335		27,201
Computer and office equipment		44,996		44,373
Diagnostic and related equipment		231,351		207,856
Equipment and vehicles under capital leases		74,862		77,460
		386,245		361,460
Less: Accumulated depreciation and amortization		176,784		119,124
Property and equipment, net	$	209,461	$	242,336

      Depreciation expense was approximately $61.6 million, $55.0 million and $45.9 million for the years ended June 30, 2005, 2004 and 2003, respectively.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

      A reconciliation of goodwill for the year ended June 30, 2005 is as follows (amounts in thousands):

		Mobile			Fixed			Consolidated
Goodwill, June 30, 2004		$	106,064		$	174,881		$	280,945
	Acquired in acquisitions		—			747			747
	Sales of centers		—			(1,362	)		(1,362	)
	Adjustments to goodwill		(1,800	)		—			(1,800	)
Goodwill, June 30, 2005		$	104,264		$	174,266		$	278,530

      Adjustments to goodwill result from the allocation of amounts to other intangible assets and were based on completed goodwill result from the allocation of amounts to other intangible assets and were based on completed valuations of our August 2003 and April 2004 acquisitions.

F-13

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following reconciliation of other intangible assets is as follows (amounts in thousands):

		June 30, 2005				June 30, 2004
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Value		Amortization		Value		Amortization
Amortized intangible assets:
	Managed care contracts	$	24,410	$	2,656	$	24,410	$	1,798
	Wholesale contracts		15,380		9,355		13,580		6,354
			39,790		12,011		37,990		8,152
Unamortized intangible assets:
	Trademark		8,680		—		8,680		—
Other intangible assets		$	48,470	$	12,011	$	46,670	$	8,152

      Other intangible assets are amortized on a straight-line method using the following estimated useful lives:

Managed care contracts	30 years
Wholesale contracts	5 to 7  years

      Amortization of intangible assets was approximately $3.8 million, $3.6 million and $3.0 million for the years ended June 30, 2005, 2004 and 2003, respectively.

      Estimated amortization expense for the years ending June 30, are as follows (amounts in thousands):

2006	$	3,827
2007		2,336
2008		1,591
2009		1,591
2010		1,568

8. ACCOUNTS PAYABLE AND OTHER ACCRUED EXPENSES

      Accounts payable and other accrued expenses are comprised of the following (amounts in thousands):

	June 30,
	2005		2004
Accounts payable	$	2,193	$	2,968
Accrued equipment related costs		5,355		8,144
Accrued payroll and related costs		11,677		8,905
Accrued interest expense		4,214		4,266
Accrued professional fees		2,365		2,539
Accrued income taxes		223		468
Other accrued expenses		10,442		8,447
	$	36,469	$	35,737

F-14

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

9. NOTES PAYABLE

      Notes payable are comprised of the following (amounts in thousands):

	June 30,
	2005		2004
Notes payable to bank (Credit Facility), bearing interest at LIBOR plus 3.75% to 4.0% (7.26% at June 30, 2005), principal and interest payable quarterly, maturing in October 2008. The notes are collateralized by substantially all of our assets.	$	237,608	$	270,047
Unsecured senior subordinated notes payable (Notes), bearing interest at 9.875%, interest payable semi-annually, principal due in November 2011. At June 30, 2005, the fair value of the notes was approximately $198 million.		250,000		250,000
Other notes payable		718		914
Total notes payable		488,326		520,961
Less: Current portion		2,795		2,716
Long-term notes payable	$	485,531	$	518,245

      Through InSight, we have a credit facility, or Credit Facility, with Bank of America, N.A. and a syndicate of other lenders consisting of (1) a term loan with a principal balance of approximately $217.8 million, (2) an additional term loan with a principal balance of approximately $19.8 million, and (3) a $50.0 million revolving credit facility. As of June 30, 2005, there were no borrowings under the revolving credit facility. Borrowings under the Credit Facility bear interest at LIBOR plus 3.75% to 4.0%. As of June 30, 2005, there was a letter of credit of approximately $1.8 million outstanding under our Credit Facility. We are required to pay an unused facility fee of up to 0.625% per annum, payable quarterly, on unborrowed amounts on the revolving credit facility. We may use the revolving credit facility to fund our future working capital needs. See Note 18.

      Through InSight, we also have outstanding $250 million in unsecured senior subordinated notes, or Notes. The Notes mature in November 2011 and bear interest at 9.875% payable semi-annually. The Notes are redeemable at our option, in whole or in part, on or after November 1, 2006.

      Scheduled maturities of equipment and other notes payable at June 30, 2005, are as follows (amounts in thousands):

2006	$	2,795
2007		2,802
2008		179,557
2009		53,172
2010		—
Thereafter		250,000
	$	488,326

      The credit agreement related to the Credit Facility and the indenture related to the Notes contain limitations on additional borrowings, capital expenditures, dividend payments and certain financial covenants. As of June 30, 2005, we were in compliance with these covenants.

F-15

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      During 1998, InSight entered into an interest rate swap agreement with a bank to hedge against the effects of increases in the interest rates associated with floating rate debt on its bank financing. The initial amount of the swap agreement was $40.0 million. The swap agreement expired in September 2004.

10. LEASE OBLIGATIONS, COMMITMENTS AND CONTINGENCIES

      We lease diagnostic equipment, certain other equipment and our office, imaging and treatment facilities under various capital and operating leases. Future minimum scheduled rental payments required under these noncancelable leases at June 30, 2005 are as follows (amounts in thousands):

		Capital		Operating
	2006	$	5,802	$	9,035
	2007		5,653		8,443
	2008		2,930		7,151
	2009		301		5,145
	2010		25		3,421
	Thereafter		—		7,892
Total minimum lease payments			14,711	$	41,087
Less: Amounts representing interest			1,469
Present value of capital lease obligations			13,242
Less: Current portion			4,927
Long-term capital lease obligations		$	8,315

      Accumulated depreciation on assets under capital leases was $10.6 and $8.4 million at June 30, 2005 and 2004, respectively.

      Rental expense for diagnostic equipment and other equipment for the years ended June 30, 2005, 2004 and 2003 was $2.3 million, $1.0 million and $0.9 million, respectively.

      We occupy facilities under lease agreements expiring through October 2017. Some of these lease agreements may include provisions for an increase in lease payments based on the Consumer Price Index or scheduled increases based on a guaranteed minimum percentage or dollar amount. Rental expense for these facilities for the years ended June 30, 2005, 2004 and 2003 was $9.2 million, $7.9 million and $6.5 million, respectively.

      We are engaged from time to time in the defense of lawsuits arising out of the ordinary course and conduct of our business, including claims for malpractice, and have insurance policies covering such potential insurable losses where such coverage is cost-effective. Management believes that the outcome of any such lawsuits will not have a material adverse impact on our business, financial condition and results of operations.

11. CAPITAL STOCK

      STOCK OPTIONS: We originally reserved 626,000 shares for the granting of nonstatutory stock options to key employees. Options are issued with an exercise price of at least the fair market value, as determined by the board of directors, of our common stock on the grant date. Subsequent to June 30, 2005, we increased the number of shares reserved for such grants by 219,286 shares. Generally speaking, 50% of the options vest cumulatively over various periods up to five years from the grant date, and 50%

F-16

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

vest cumulatively upon the achievement of certain performance targets on an exit event. The options are exercisable in whole or in installments, and expire ten years from the grant date.

      We have one stock option plan, which provided for the granting of nonstatutory stock options to four key employees (three of which employees are no longer with the Company), all of which are fully vested. Holders of options for 175,990 shares of InSight common stock rolled over their options and received options for our common stock with the same terms under our stock option plan. In 2003, we purchased vested stock options covering 56,000 shares of our common stock at a price equal to the difference between $19.07 and the exercise price per share.

      As of June 30, 2005, we had 128,950 shares available for issuance. A summary of the status of our stock option plans at June 30, 2005, 2004 and 2003 and changes during the periods is presented below:

					Weighted
					Average
		Shares			Exercise Price
Outstanding, June 30, 2002			772,990		$	15.81
	Granted		25,500			19.01
	Exercised		(50	)		18.00
	Repurchased		(56,000	)		8.97
	Forfeited		(109,625	)		18.00
Outstanding, June 30, 2003			632,815			16.16
	Granted		30,000			19.07
	Forfeited		(59,825	)		18.27
Outstanding, June 30, 2004			602,990			16.10
	Granted		209,500			19.82
	Forfeited		(195,500	)		18.07
Outstanding, June 30, 2005			616,990		$	16.74
Exercisable at:
	June 30, 2003		148,465		$	9.99
	June 30, 2004		168,790		$	10.96
	June 30, 2005		204,565		$	12.56

      Of the options outstanding at June 30, 2005, the characteristics are as follows:

	Weighted Average		Options		Total Options		Remaining Contractual
Exercise Price Range	Exercise Price		Exercisable		Outstanding		Life
$8.37	$	8.37		123,490		123,490		6.33 years
18.00 - 19.82		18.83		81,075		493,500		8.49 years
				204,565		616,990

F-17

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12. INCOME TAXES

      The provision for income taxes includes income taxes currently payable and those deferred because of temporary differences between the financial statements and tax bases of assets and liabilities. The provision for income taxes for the years ended June 30, 2005, 2004 and 2003 is as follows (amounts in thousands):

			Years Ended June 30,
			2005			2004			2003
Current provision:
	Federal		$	—		$	1,640		$	2,491
	State			(155	)		310			775
				(155	)		1,950			3,266
Deferred taxes arising from temporary differences:
	State income taxes			(9	)		173			(176	)
	Accrued expenses			(741	)		(46	)		163
	Reserves			(1,376	)		4,660			1,127
	Depreciation and amortization			8,971			9,694			7,718
	Creation/utilization of net operating losses			(11,758	)		(8,167	)		(9,491	)
	Section 481 adjustment			1,161			1,161			(2,343	)
	Changes in valuation allowance reducing goodwill			—			(6,800	)		—
	Changes in valuation allowance			20,694			—			1,728
	Non-goodwill intangible amortization			(1,001	)		(1,399	)		1,200
	Other			(717	)		724			74
		Total deferred taxes arising from temporary differences		15,224			—			—
Total provision for income taxes			$	15,069		$	1,950		$	3,266

      A reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:

	Years Ended June 30,
	2005			2004			2003
Federal statutory tax rate		34.0	%		34.0	%		34.0	%
State income taxes, net of federal benefit		(11.8	)		4.0			4.0
Permanent items, including goodwill and non-deductible merger costs		(1.5	)		2.0			1.0
Changes in valuation allowance		(138.9	)		—			1.0
Other, net		(5.8	)		—			—
Net effective tax rate		(124.0	)%		40.0	%		40.0	%

F-18

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The components of our net deferred tax asset (including current and non-current portions) as of June 30, 2005 and 2004, respectively, which arise due to timing differences between financial and tax reporting and net operating loss (NOL) carryforwards are as follows (amounts in thousands):

		June 30,
		2005			2004
Accrued expenses		$	2,092		$	1,351
Depreciation and amortization			(43,273	)		(34,302	)
Reserves			2,191			816
Section 481 adjustment			—			1,161
State income taxes			12			3
Non-goodwill intangible amortization			(7,436	)		(8,437	)
NOL carryforwards			56,076			44,318
Other			73			(645	)
	Net deferred asset		9,735			4,265
Valuation allowance			(24,959	)		(4,265	)
		$	(15,224	)	$	—

      As of June 30, 2005, we had federal NOL carryforwards of approximately $142.9 million and state NOL carryforwards of approximately $125.0 million, expiring on various dates between 2006 and 2025. The charitable contribution carryforwards of approximately $0.1 million will begin to expire in 2006 if not utilized.

      A valuation allowance is provided against the net deferred tax asset when it is more likely than not that the net deferred tax asset will not be realized. Based upon our losses during 2005 and the available evidence, management determined that is more likely than not that the deferred tax assets related to certain net operating loss carryforwards and other assets as of June 30, 2005 will not be realized. Consequently, we recorded a valuation allowance in the amount of $25.0 million as of June 30, 2005. This decision was based on our anticipated future cumulative pre-tax losses, the main determination for recording such a reserve. Also, in determining the net asset subject to a valuation allowance, we excluded a deferred tax liability related to an asset with an indefinite useful life that is not expected to reverse in the foreseeable future resulting in a net deferred tax liability of approximately $15.2 million after application of the valuation allowance. The valuation allowance may be reduced in the future if we forecast and realize future taxable income or other tax planning strategies are implemented. Ultimate realization of the benefit of the NOLs is dependent upon our generating sufficient taxable income prior to their expiration.

13. RETIREMENT SAVINGS PLANS

      InSight has a 401(k) profit sharing plan (Plan), which is available to all eligible employees, pursuant to which InSight matches a percentage of employee contributions to the Plan. InSight contributions of approximately $1.3 million, $1.0 million and $0.8 million were made for the years ended June 30, 2005, 2004 and 2003.

14. INVESTMENTS IN AND TRANSACTIONS WITH PARTNERSHIPS

      We have direct ownership in four Partnerships at June 30, 2005, three of which operate fixed-site centers and one of which operates a mobile PET facility. We own between 33% and 50% of these

F-19

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Partnerships, serve as the managing general partner and provide certain management services. These Partnerships are accounted for under the equity method.

      Set forth below is certain financial data of these Partnerships (amounts in thousands):

		June 30,
		2005			2004
Combined Financial Position:
Current assets:
	Cash	$	3,534		$	3,144
	Trade accounts receivables, net		3,038			2,606
	Other		75			460
Property and equipment, net			3,846			4,116
Intangible assets, net			117			557
Total assets			10,610			10,883
Current liabilities			(2,286	)		(2,465	)
Due to the Company			(912	)		(805	)
Long-term liabilities			(674	)		(1,117	)
Net assets		$	6,738		$	6,496

      Set forth below are the combined operating results of the Partnerships and our equity in earnings of the Partnerships (amounts in thousands):

	Years Ended June 30,
	2005		2004		2003
Operating Results:
Revenues	$	25,935	$	19,455	$	19,291
Expenses		19,558		14,314		15,646
Net income	$	6,377	$	5,141	$	3,645
Equity in earnings of unconsolidated partnerships	$	2,613	$	2,181	$	1,744

15. RELATED PARTY TRANSACTIONS

      We have a management agreement with J.W. Childs Advisors II, L.P., the general partner of J.W. Childs Equity Partners II, L.P., and Halifax Genpar, L.P., the general partner of Halifax Capital Partners, L.P. J.W. Childs Advisors II, L.P. and Halifax Genpar, L.P. provide business, management and financial advisory services to InSight and the Company in consideration of (i) an annual fee of $240,000 to be paid to J.W. Childs Advisors II, L.P. and (ii) an annual fee of $60,000 to be paid to Halifax Genpar, L.P. In addition, from August 2004 through December 2005, we have paid and will continue to pay J.W. Childs Advisors II, L.P. a monthly fee of $10,000 for the services of Michael N. Cannizzaro, our Chairman of the Board.

16. SEGMENT INFORMATION

      We have two reportable segments: mobile operations and fixed operations, which are business units defined primarily by the type of service provided. Mobile operations consist primarily of mobile facilities while fixed operations consist primarily of fixed-site centers, although both operations generate both contract services and patient services revenues. We do not allocate corporate and billing related costs,

F-20

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

depreciation related to our billing system, amortization related to other intangible assets and income taxes to the two segments. We manage cash flows on a consolidated basis, and not by segment.

      The following tables summarize our operating results by segment (amounts in thousands):

		Mobile			Fixed			Other			Consolidated
Year ended June 30, 2005:
	Contract services revenues	$	118,891		$	17,646		$	—		$	136,537
	Patient services revenues		1,500			178,836			—			180,336
	Total revenues		120,391			196,482			—			316,873
	Depreciation and amortization		31,176			25,301			9,124			65,601
	Total costs of operations		98,147			150,105			19,905			268,157
	Corporate operating expenses		—			—			(18,447	)		(18,447	)
	Loss on sales of centers		—			(170	)		—			(170	)
	Equity in earnings of unconsolidated partnerships		—			2,613			—			2,613
	Interest expense, net		(8,572	)		(7,058	)		(29,230	)		(44,860	)
	Income (loss) before income taxes		13,672			41,762			(67,582	)		(12,148	)
	Additions to property and equipment		14,361			14,974			1,124			30,459
Year ended June 30, 2004:
	Contract services revenues	$	112,219		$	16,974		$	—		$	129,193
	Patient services revenues		1,902			159,789			—			161,691
	Total revenues		114,121			176,763			—			290,884
	Depreciation and amortization		29,340			21,157			8,236			58,733
	Total costs of operations		87,128			128,814			17,479			233,421
	Corporate operating expenses		—			—			(16,217	)		(16,217	)
	Gain on sale of center		—			2,129			—			2,129
	Equity in earnings of unconsolidated partnerships		—			2,181			—			2,181
	Interest expense, net		(11,562	)		(6,841	)		(22,279	)		(40,682	)
	Income (loss) before income taxes		15,431			45,418			(55,975	)		4,874
	Additions to property and equipment		20,577			21,707			4,450			46,734
Year ended June 30, 2003:
	Contract services revenues	$	95,912		$	16,009		$	—		$	111,921
	Patient services revenues		2,024			123,807			—			125,831
	Total revenues		97,936			139,816			—			237,752
	Depreciation and amortization		24,322			17,408			7,615			49,345
	Total costs of operations		66,823			99,795			13,426			180,044
	Corporate operating expenses		—			—			(13,750	)		(13,750	)
	Equity in earnings of unconsolidated partnerships		84			1,660			—			1,744
	Interest expense, net		(11,190	)		(8,259	)		(18,065	)		(37,514	)
	Income (loss) before income taxes		20,007			33,422			(45,241	)		8,188
	Additions to property and equipment		29,598			22,581			4,788			56,967

F-21

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

17. RESULTS OF QUARTERLY OPERATIONS (unaudited)

		First			Second			Third			Fourth
		Quarter			Quarter			Quarter			Quarter			Total
		(Amounts in thousands)
2005:
	Revenues	$	80,854		$	78,115		$	78,212		$	79,692		$	316,873
	Gross profit		14,109			12,659			11,502			10,446			48,716
	Net loss		(786	)		(1,134	)		(2,011	)		(23,286	)		(27,217	)
2004:
	Revenues	$	68,772		$	69,946		$	70,736		$	81,430		$	290,884
	Gross profit		15,550			13,178			13,556			15,179			57,463
	Net income (loss)		1,610			1,344			281			(311	)		2,924

18. SUBSEQUENT EVENT

      On September 16, 2005, we agreed to sell $300 million of senior secured floating rate notes due 2011 (New Notes). The proceeds from this sale will be used to repay all borrowings under our credit facility, to repurchase a portion of our unsecured senior subordinated notes, and for general corporate purposes. The private offering was made within the United States only to qualified institutional buyers, and outside the United States only to non-U.S. investors under Regulation S of the Securities Act of 1933. These New Notes have not been registered under the Securities Act of 1933 or applicable state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state laws. This statement shall not constitute an offer to sell or a solicitation of an offer to buy the New Notes.

19. SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION

      InSight Health Services Holdings Corp. and all of InSight Health Services Corp.’s wholly owned subsidiaries, or guarantor subsidiaries, guarantee InSight Health Services Corp.’s payment obligations under the notes (Note 9). These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10 “Financial statements of guarantors and issuers of guaranteed securities registered or being registered.” InSight Health Services Holdings Corp. accounts for its investment in InSight Health Services Corp. and its subsidiaries under the equity method of accounting. Dividends from InSight Health Services Corp. to InSight Health Services Holdings Corp. are restricted under the Credit Facility. This information is not intended to present the financial position, results of operations and cash flows of the individual companies or groups of companies in accordance with accounting principles generally accepted in the United States.

F-22

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2005

			Parent
			Company						Guarantor			Non-Guarantor
			Only			InSight			Subsidiaries			Subsidiaries		Eliminations			Consolidated
			(Amounts in thousands)
ASSETS
Current assets:
	Cash and cash equivalents		$	—		$	—		$	17,971		$	2,868	$	—		$	20,839
	Trade accounts receivables, net			—			—			40,271			6,179		—			46,450
	Short-term investments			—			—			5,000			—		—			5,000
	Other current assets			—			—			7,487			483		—			7,970
	Intercompany accounts receivable			87,086			487,828			17,294			—		(592,208	)		—
		Total current assets		87,086			487,828			88,023			9,530		(592,208	)		80,259
Property and equipment, net				—			—			191,044			18,417		—			209,461
Investments in partnerships				—			—			3,513			—		—			3,513
Investments in consolidated subsidiaries				(19,362	)		(19,362	)		8,289			—		30,435			—
Other assets				—			—			16,272			29		—			16,301
Goodwill and other intangible assets, net				—			—			310,486			4,503		—			314,989
			$	67,724		$	468,466		$	617,627		$	32,479	$	(561,773	)	$	624,523
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of notes payable and capital lease obligations		$	—		$	2,564		$	4,708		$	450	$	—		$	7,722
	Accounts payable and other accrued expenses			—			—			34,915			1,554		—			36,469
	Intercompany accounts payable			—			—			574,915			17,293		(592,208	)		—
		Total current liabilities		—			2,564			614,538			19,297		(592,208	)		44,191
Notes payable and capital lease obligations, less current portion				—			485,044			7,504			1,298		—			493,846
Other long-term liabilities				—			220			14,947			3,595		—			18,762
Stockholders’ equity				67,724			(19,362	)		(19,362	)		8,289		30,435			67,724
			$	67,724		$	468,466		$	617,627		$	32,479	$	(561,773	)	$	624,523

F-23

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2004

			Parent
			Company				Guarantor			Non-Guarantor
			Only		InSight		Subsidiaries			Subsidiaries		Eliminations			Consolidated
			(Amounts in thousands)
ASSETS
Current assets:
	Cash and cash equivalents		$	—	$	—	$	25,820		$	4,592	$	—		$	30,412
	Trade accounts receivables, net			—		—		47,048			7,962		—			55,010
	Other current assets			—		—		6,058			149		—			6,207
	Intercompany accounts receivable			87,086		520,047		19,865			—		(626,998	)		—
		Total current assets		87,086		520,047		98,791			12,703		(626,998	)		91,629
Property and equipment, net				—		—		219,584			22,752		—			242,336
Investments in partnerships				—		—		2,901			—		—			2,901
Investments in consolidated subsidiaries				7,855		7,855		10,864			—		(26,574	)		—
Other assets				—		—		19,218			84		—			19,302
Goodwill and other intangible assets, net				—		—		314,960			4,503		—			319,463
			$	94,941	$	527,902	$	666,318		$	40,042	$	(653,572	)	$	675,631
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of notes payable and capital lease obligations		$	—	$	2,514	$	4,540		$	722	$	—		$	7,776
	Accounts payable and other accrued expenses			—		—		34,304			1,433		—			35,737
	Intercompany accounts payable			—		—		607,133			19,865		(626,998	)		—
		Total current liabilities		—		2,514		645,977			22,020		(626,998	)		43,513
Notes payable and capital lease obligations, less current portion				—		517,289		12,622			2,136		—			532,047
Other long-term liabilities				—		244		(136	)		5,022		—			5,130
Stockholders’ equity				94,941		7,855		7,855			10,864		(26,574	)		94,941
			$	94,941	$	527,902	$	666,318		$	40,042	$	(653,572	)	$	675,631

F-24

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2005

				Parent
				Company						Guarantor			Non-Guarantor
				Only			InSight			Subsidiaries			Subsidiaries			Elimination		Consolidated
				(Amounts in thousands)
Revenues:
	Contract services			$	—		$	—		$	128,619		$	7,918		$	—	$	136,537
	Patient services				—			—			146,953			33,383			—		180,336
			Total revenues		—			—			275,572			41,301			—		316,873
Costs of operations					—			—			231,144			37,013			—		268,157
		Gross profit			—			—			44,428			4,288			—		48,716
Corporate operating expenses					—			—			(18,447	)		—			—		(18,447	)
Loss on sales of centers					—			—			(170	)		—			—		(170	)
Equity in earnings of unconsolidated partnerships					—			—			2,613			—			—		2,613
Interest expense, net					—			—			(43,615	)		(1,245	)		—		(44,860	)
		(Loss) income before income taxes			—			—			(15,191	)		3,043			—		(12,148	)
Provision for income taxes					—			—			15,069			—			—		15,069
		(Loss) income before equity in income (loss) of consolidated subsidiaries			—			—			(30,260	)		3,043			—		(27,217	)
Equity in income (loss) of consolidated subsidiaries					(27,217	)		(27,217	)		3,043			—			51,391		—
		Net (loss) income		$	(27,217	)	$	(27,217	)	$	(27,217	)	$	3,043		$	51,391	$	(27,217	)

F-25

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2004

				Parent
				Company				Guarantor			Non-Guarantor
				Only		InSight		Subsidiaries			Subsidiaries			Elimination			Consolidated
				(Amounts in thousands)
Revenues:
	Contract services			$	—	$	—	$	120,508		$	8,685		$	—		$	129,193
	Patient services				—		—		121,919			39,772			—			161,691
			Total revenues		—		—		242,427			48,457			—			290,884
Costs of operations					—		—		191,303			42,118			—			233,421
		Gross profit			—		—		51,124			6,339			—			57,463
Corporate operating expenses					—		—		(16,217	)		—			—			(16,217	)
Gain on sale of center					—		—		2,129			—			—			2,129
Equity in earnings of unconsolidated partnerships					—		—		2,181			—			—			2,181
Interest expense, net					—		—		(39,235	)		(1,447	)		—			(40,682	)
		(Loss) income before income taxes			—		—		(18	)		4,892			—			4,874
Provision for income taxes					—		—		1,950			—			—			1,950
		(Loss) income before equity in income of consolidated subsidiaries			—		—		(1,968	)		4,892			—			2,924
Equity in income of consolidated subsidiaries					2,924		2,924		4,892			—			(10,740	)		—
		Net income		$	2,924	$	2,924	$	2,924		$	4,892		$	(10,740	)	$	2,924

F-26

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 2003

				Parent
				Company				Guarantor			Non-Guarantor
				Only		InSight		Subsidiaries			Subsidiaries			Elimination			Consolidated
				(Amounts in thousands)
Revenues:
	Contract services			$	—	$	—	$	103,446		$	8,475		$	—		$	111,921
	Patient services				—		—		90,509			35,322			—			125,831
			Total revenues		—		—		193,955			43,797			—			237,752
Costs of operations					—		—		142,668			37,376			—			180,044
		Gross profit			—		—		51,287			6,421			—			57,708
Corporate operating expenses					—		—		(13,750	)		—			—			(13,750	)
Equity in earnings of unconsolidated partnerships					—		—		1,744			—			—			1,744
Interest expense, net					—		—		(35,601	)		(1,913	)		—			(37,514	)
		Income before income taxes			—		—		3,680			4,508			—			8,188
Provision for income taxes					—		—		3,266			—			—			3,266
		Income before equity in income of consolidated subsidiaries			—		—		414			4,508			—			4,922
Equity in income of consolidated subsidiaries					4,922		4,922		4,508			—			(14,352	)		—
		Net income		$	4,922	$	4,922	$	4,922		$	4,508		$	(14,352	)	$	4,922

F-27

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2005

			Parent
			Company						Guarantor			Non-Guarantor
			Only			InSight			Subsidiaries			Subsidiaries			Eliminations			Consolidated
			(Amounts in thousands)
OPERATING ACTIVITIES:
	Net (loss) income		$	(27,217	)	$	(27,217	)	$	(27,217	)	$	3,043		$	51,391		$	(27,217	)
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Loss on sales of centers		—			—			170			—			—			170
		Depreciation and amortization		—			—			60,261			5,340			—			65,601
		Deferred income taxes		—			—			15,224			—			—			15,224
		Equity in (loss) income of consolidated subsidiaries		27,217			27,217			(3,043	)		—			(51,391	)		—
Changes in operating assets and liabilities:
	Trade accounts receivables, net			—			—			6,634			1,462			—			8,096
	Intercompany receivables, net			—			32,219			(24,931	)		(7,288	)		—			—
	Other current assets			—			—			(1,397	)		(339	)		—			(1,736	)
	Accounts payable and other accrued expenses			—			—			539			187			—			726
		Net cash provided by operating activities		—			32,219			26,240			2,405			—			60,864
INVESTING ACTIVITIES:
	Proceeds from sales of centers			—			—			2,810			—			—			2,810
	Additions to property and equipment			—			—			(28,449	)		(2,010	)		—			(30,459	)
	Net purchases of short-term investments			—			—			(5,000	)		—			—			(5,000	)
	Other			—			—			1,554			(1,483	)		—			71
		Net cash used in investing activities		—			—			(29,085	)		(3,493	)		—			(32,578	)
FINANCING ACTIVITIES:
	Principal payments of notes payable and capital lease obligations			—			(32,195	)		(4,950	)		(636	)		—			(37,781	)
	Other			—			(24	)		(54	)		—			—			(78	)
		Net cash used in financing activities		—			(32,219	)		(5,004	)		(636	)		—			(37,859	)
DECREASE IN CASH AND CASH EQUIVALENTS				—			—			(7,849	)		(1,724	)		—			(9,573	)
	Cash, beginning of year			—			—			25,820			4,592			—			30,412
	Cash, end of year		$	—		$	—		$	17,971		$	2,868		$	—		$	20,839

F-28

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2004

			Parent
			Company						Guarantor			Non-Guarantor
			Only			InSight			Subsidiaries			Subsidiaries			Eliminations			Consolidated
			(Amounts in thousands)
OPERATING ACTIVITIES:
	Net income		$	2,924		$	2,924		$	2,924		$	4,892		$	(10,740	)	$	2,924
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Gain on sale of center		—			—			(2,129	)		—			—			(2,129	)
		Depreciation and amortization		—			—			53,266			5,467			—			58,733
		Equity in income of consolidated subsidiaries		(2,924	)		(2,924	)		(4,892	)		—			10,740			—
Changes in operating assets and liabilities:
	Trade accounts receivables, net			—			—			(9,158	)		703			—			(8,455	)
	Intercompany receivables, net			—			(97,056	)		103,500			(6,444	)		—			—
	Other current assets			—			—			2,781			303			—			3,084
	Accounts payable and other accrued expenses			—			—			5,596			367			—			5,963
		Net cash (used in) provided by operating activities		—			(97,056	)		151,888			5,288			—			60,120
INVESTING ACTIVITIES:
	Acquisitions of fixed-site centers and mobile facilities			—			—			(101,334	)		—			—			(101,334	)
	Proceeds from sale of center			—			—			5,413			—			—			5,413
	Additions to property and equipment			—			—			(40,979	)		(5,755	)		—			(46,734	)
	Other			—			—			405			—			—			405
		Net cash (used in) provided by operating activities		—			—			(136,495	)		(5,755	)		—			(142,250	)
FINANCING ACTIVITIES:
	Principal payments of notes payable and capital lease obligations			—			(2,201	)		(5,319	)		(689	)		—			(8,209	)
	Proceeds from issuance of notes payable			—			100,000			—			1,125			—			101,125
	Other			—			(743	)		(219	)		1,034			—			72
		Net cash provided by (used in) financing activities		—			97,056			(5,538	)		1,470			—			92,988
INCREASE IN CASH AND CASH EQUIVALENTS				—			—			9,855			1,003			—			10,858
	Cash, beginning of year			—			—			15,965			3,589			—			19,554
	Cash, end of year		$	—		$	—		$	25,820		$	4,592		$	—		$	30,412

F-29

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2003

			Parent
			Company						Guarantor			Non-Guarantor
			Only			InSight			Subsidiaries			Subsidiaries			Eliminations			Consolidated
			(Amounts in thousands)
OPERATING ACTIVITIES:
	Net income		$	4,922		$	4,922		$	4,922		$	4,507		$	(14,351	)	$	4,922
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Depreciation and amortization		—			—			43,681			5,664			—			49,345
		Equity in income of consolidated subsidiaries		(4,922	)		(4,922	)		(4,507	)		—			14,351			—
Changes in operating assets and liabilities:
	Trade accounts receivables, net			—			—			(2,241	)		4			—			(2,237	)
	Intercompany receivables, net			505			(48,373	)		52,838			(4,970	)		—			—
	Other current assets			—			—			5,131			(224	)		—			4,907
	Accounts payable and other accrued expenses			—			—			4,862			(43	)		—			4,819
	Net cash provided by (used in) operating activities			505			(48,373	)		104,686			4,938			—			61,756
INVESTING ACTIVITIES:
	Acquisitions of fixed-site centers			—			—			(46,292	)		—			—			(46,292	)
	Additions to property and equipment			—			—			(51,827	)		(5,140	)		—			(56,967	)
	Other			—			—			554			—			—			554
		Net cash used in investing activities		—			—			(97,565	)		(5,140	)		—			(102,705	)
FINANCING ACTIVITIES:
	Proceeds from stock options exercised			1			—			—			—			—			1
	Purchase of stock options			(506	)		—			—			—			—			(506	)
	Principal payments of notes payable and capital lease obligations			—			(1,627	)		(5,453	)		(420	)		—			(7,500	)
	Proceeds from issuance of notes payable			—			50,000			—			—			—			50,000
	Other			—			—			(154	)		879			—			725
		Net cash (used in) provided by financing activities		(505	)		48,373			(5,607	)		459			—			42,720
INCREASE IN CASH AND CASH EQUIVALENTS				—			—			1,514			257			—			1,771
	Cash, beginning of year			—			—			14,451			3,332			—			17,783
	Cash, end of year		$	—		$	—		$	15,965		$	3,589		$	—		$	19,554

F-30

SCHEDULE II

INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED JUNE 30, 2005, 2004 AND 2003

		Balance at									Balance at
		Beginning of		Charges to		Charges to					End of
		Year		Expenses		Revenues		Other			Year
		(Amounts in thousands)
June 30, 2003:
	Allowance for doubtful accounts	$	7,980	$	4,154	$	—	$	(4,230	)(A)	$	7,904
	Allowance for contractual adjustments		18,510		—		122,101		(112,242	)(B)		28,369
		$	26,490	$	4,154	$	122,101	$	(116,472	)	$	36,273
June 30, 2004:
	Allowance for doubtful accounts	$	7,904	$	4,998	$	—	$	(4,805	)(A)	$	8,097
	Allowance for contractual adjustments		28,369		—		176,172		(167,332	)(B)		37,209
		$	36,273	$	4,998	$	176,172	$	(172,137	)	$	45,306
June 30, 2005:
	Allowance for doubtful accounts	$	8,097	$	5,723	$	—	$	(4,933	)(A)	$	8,887
	Allowance for contractual adjustments		37,209		—		194,928		(202,725	)(B)		29,412
		$	45,306	$	5,723	$	194,928	$	(207,658	)	$	38,299

(A)	Write-off of uncollectible accounts.
(B)	Write-off of contractual adjustments, representing the difference between our charge for a procedure and what we receive from payors.

F-31

      All tendered initial notes, executed letters of transmittal, and other related documents should be directed to the exchange agent. Requests for assistance and for additional copies of this prospectus, the letter of transmittal and other related documents should be directed to the exchange agent.

EXCHANGE AGENT:

U.S. BANK NATIONAL ASSOCIATION

By Hand, Overnight Delivery or

Registered/Certified Mail

U.S. Bank National Association

Corporate Trust Services

EP-MN-WS-2N

60 Livingston Avenue

St. Paul, Minnesota 55107

Attention: Specialized Finance

Facsimile Transmissions:

(Eligible Institutions Only)

(651) 495-8158

To Confirm Facsimile by Telephone or for Information Call:

(800) 934-6802

Until                     , 2006, all dealers that effect transactions in these securities, whether or not participating in this exchange offer, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

InSight Health

Services Corp.

Offer to Exchange All Outstanding

$300,000,000 Principal Amount of

Senior Secured Floating

Rate Notes due 2011

for

$300,000,000 Principal Amount of

Senior Secured Floating

Rate Notes due 2011

Which Have Been

Registered Under

the Securities Act of 1933

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.     Indemnification of Directors and Officers.

      The following is a summary of the statutes, charter and bylaw provisions, contracts or other arrangements under which our directors and officers are insured or indemnified against liability in their capacities as such. All of our directors and officers are covered by insurance policies maintained and held in effect by Holdings against certain liabilities for actions taken in their capacities as such, including liabilities under the Securities Act.

      Holdings is incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law (“DGCL”) provides that a corporation may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or complete action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Section 145 further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or the right of the corporation to procure a judgment in its favor, against expenses actually and reasonably incurred in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court or Chancery or such other court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

      Holdings’ amended and restated certificate of incorporation limits the liability of its directors and officers to the fullest extent permitted under the DGCL. The amended and restated certificate of incorporation specifies that the directors and officers will not be personally liable for monetary damages for breach of fiduciary duty as a director or officer. This limitation does not apply to actions by a director or officer that do not meet the standards of conduct which make it permissible under the DGCL for us to indemnify such director or officer.

      InSight has entered into separate indemnification agreements with each of its directors and executive officers that could require InSight, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors and executive officers of InSight and its affiliates and to advance expenses incurred by them as a result of any proceedings against them as to which they could be indemnified.

II-2

Item 21. Exhibits

*2	.1	Agreement and Plan of Merger, dated as of June 29, 2001, by and among InSight Health Services Holdings Corp. (“Holdings”), JWCH Merger Corp. and InSight Health Services Corp. (“InSight”), previously filed and incorporated herein by reference from InSight’s Current Report on Form 8-K, filed on July 2, 2001.
*2	.2	Amendment No. 1 to Agreement and Plan of Merger, dated as of June 29, 2001, by and among Holdings, JWCH Merger Corp. and InSight, previously filed and incorporated by reference from InSight’s Annual Report on Form 10-K, filed on September 14, 2001.
*2	.3	Amendment No. 2 to Agreement and Plan of Merger, dated as of October 9, 2001, by and among Holdings, InSight Health Services Acquisition Corp. and InSight, previously filed and incorporated herein by reference from InSight’s Current Report on Form 8-K, filed on October 9, 2001.
*2	.4	Asset Purchase Agreement, dated January 6, 2003, by and among InSight Health Corp., Comprehensive Medical Imaging Centers, Inc., Comprehensive Medical Imaging, Inc. and Cardinal Health 414, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 16, 2003.
*2	.5	Amendment No. 1 to Asset Purchase Agreement, dated February 21, 2003, by and among InSight Health Corp., Comprehensive Medical Imaging Centers, Inc., Comprehensive Medical Imaging, Inc. and Cardinal Health 414, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 16, 2003.
*2	.6	Amendment No. 2 to Asset Purchase Agreement, dated March 31, 2003, by and among InSight Health Corp., Comprehensive Medical Imaging Centers, Inc., Comprehensive Medical Imaging, Inc. and Cardinal Health 414, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 16, 2003.
*2	.7	Asset Purchase Agreement, dated June 19, 2003, by and among InSight Health Corp., CDL Medical Technologies, Inc., Keith E. Loiselle and David J. Simile, previously filed and incorporated by reference from Holdings’ Current Report on Form 8-K, filed on August 11, 2003.
*2	.8	Stock Purchase Agreement dated February 13, 2004, by and among InSight Health Corp., Comprehensive Medical Imaging, Inc., Cardinal Health 414, Inc. and Cardinal Health, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 8, 2004.
*2	.9	Amendment No. 1 to Stock Purchase Agreement dated April 1, 2004, by and among InSight Health Corp., Comprehensive Medical Imaging, Inc., Cardinal Health 414, Inc. and Cardinal Health, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 8, 2004.
*3	.1	Certificate of Incorporation of Holdings, as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.2	Bylaws of Holdings, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.3	Certificate of Incorporation of InSight, as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.4	Bylaws of InSight, as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.5	Certificate of Incorporation of InSight Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.6	Bylaws of InSight Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.7	Certificate of Incorporation of Signal Medical Services, Inc., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.8	Bylaws of Signal Medical Services, Inc., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.

II-3

*3	.9	Certificate of Incorporation of Open MRI, Inc., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.10	Bylaws of Open MRI, Inc., previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.11	Certificate of Incorporation of Maxum Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.12	Bylaws of Maxum Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.13	Certificate of Incorporation of Radiosurgery Centers, Inc., previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.14	Bylaws of Radiosurgery Centers, Inc., previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.15	Certificate of Incorporation of Maxum Health Services Corp., as amended, previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.16	Bylaws of Maxum Health Services Corp., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.17	Certificate of Limited Partnership of MRI Associates, L.P., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.18	Agreement of Limited Partnership of MRI Associates, L.P., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.19	Certificate of Incorporation of Maxum Health Services of North Texas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.20	Bylaws of Maxum Health Services of North Texas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.21	Certificate of Incorporation of Maxum Health Services of Dallas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.22	Bylaws of Maxum Health Services of Dallas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.23	Certificate of Incorporation of NDDC, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.24	Bylaws of NDDC, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.25	Certificate of Incorporation of Diagnostic Solutions Corp., as amended, previously filed and incorporated herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.26	Bylaws of Diagnostic Solutions Corp., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.27	Certificate of Organization of Wilkes-Barre Imaging, L.L.C., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4/A, filed on March 25, 2002.
*3	.28	Operating Agreement of Wilkes-Barre Imaging, L.L.C., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4/A, filed on March 25, 2002.
*3	.29	Certificate of Organization of Orange County Regional PET Center-Irvine, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.30	Operating Agreement of Orange County Regional PET Center-Irvine, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.31	Certificate of Organization of San Fernando Valley Regional PET Center, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.

II-4

*3	.32	Operating Agreement of San Fernando Valley Regional PET Center, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.33	Certificate of Organization of Valencia MRI, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.34	Operating Agreement of Valencia MRI, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.35	Certificate of Organization of Parkway Imaging Center, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.36	Operating Agreement of Parkway Imaging Center, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.37	Certificate of Incorporation of InSight Imaging Services Corp., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.38	Bylaws of InSight Imaging Services Corp., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.39	Certificate of Incorporation of Comprehensive Medical Imaging, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.40	Bylaws of Comprehensive Medical Imaging, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.41	Certificate of Incorporation of Comprehensive Medical Imaging Centers, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.42	Bylaws of Comprehensive Medical Imaging Centers, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.43	Certificate of Incorporation of Comprehensive Medical Imaging-Biltmore, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.44	Bylaws of Comprehensive Medical Imaging-Biltmore, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.45	Certificate of Incorporation of Comprehensive OPEN MRI-East Mesa, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.46	Bylaws of Comprehensive OPEN MRI-East Mesa, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.47	Articles of Incorporation of TME Arizona, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.48	Bylaws of TME. Arizona, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.49	Certificate of Incorporation of Comprehensive Medical Imaging-Fremont, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.50	Bylaws of Comprehensive Medical Imaging-Fremont, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.51	Certificate of Incorporation of Comprehensive Medical Imaging-San Francisco, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.52	Bylaws of Comprehensive Medical Imaging-San Francisco, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.53	Certificate of Incorporation of Comprehensive OPEN MRI-Garland, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.54	Bylaws of Comprehensive OPEN MRI-Garland, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.

II-5

*3	.55	Certificate of Incorporation of IMI of Arlington, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.56	Bylaws of IMI of Arlington, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.57	Certificate of Incorporation of Comprehensive Medical Imaging-Fairfax, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.58	Bylaws of Comprehensive Medical Imaging-Fairfax, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.59	Certificate of Incorporation of IMI of Kansas City, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.60	Bylaws of IMI of Kansas City, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.61	Certificate of Incorporation of Comprehensive Medical Imaging-Bakersfield, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.62	Bylaws of Comprehensive Medical Imaging-Bakersfield, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.63	Articles of Organization of Comprehensive OPEN MRI-Carmichael/Folsom, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.64	Operating Agreement of Comprehensive OPEN MRI-Carmichael/Folsom, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.65	Articles of Organization of Syncor Diagnostics Sacramento, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.66	Operating Agreement of Syncor Diagnostics Sacramento, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.67	Articles of Organization of Syncor Diagnostics Bakersfield, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.68	Operating Agreement of Syncor Diagnostics Bakersfield, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.69	Articles of Organization of Phoenix Regional PET Center-Thunderbird, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.70	Operating Agreement of Phoenix Regional PET Center-Thunderbird, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.71	Joint Venture Agreement of Mesa MRI, dated as of December 20, 1991, by and between TME Partners III, Ltd. and TME, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.72	Joint Venture Agreement of Mountain View MRI, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.73	Joint Venture Agreement of Los Gatos Imaging Center, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.74	Joint Venture Agreement of Woodbridge MRI, as amended by First Amendment thereto, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.75	Joint Venture Agreement of Jefferson MRI-Bala, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.76	Joint Venture Agreement of Jefferson MRI, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.

II-6

3	.77	Amendment Number One to Joint Venture Agreement of Los Gatos Imaging Center, filed herewith.
3	.78	Second Amendment to Joint Venture Agreement of Woodbridge MRI, filed herewith.
3	.79	First Amendment to Bylaws of Maxum Health Services Corp., filed herewith.
3	.80	Amendment Number One to Joint Venture Agreement of Mountain View MRI, filed herewith.
3	.81	Amendment Number One to Joint Venture Agreement of Mesa MRI, filed herewith.
3	.82	Amendment Number One to Joint Venture Agreement of Jefferson MRI, filed herewith.
3	.83	Amendment Number One to Joint Venture Agreement of Jefferson MRI-Bala, filed herewith.
*4	.1	Indenture, dated October 30, 2001, with State Street Bank and Trust Company, N.A., as Trustee, with respect to 97/8% Senior Subordinated Notes due 2011, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*4	.2	Supplemental Indenture, dated February 25, 2002, with respect to adding an additional Subsidiary Guarantor (named therein), previously filed and incorporated herein by reference from InSight’s Amendment No. 1 to Registration Statement on Form S-4, filed on March 25, 2002.
*4	.3	Supplemental Indenture, dated April 2, 2003, with respect to adding additional Subsidiary Guarantors (named therein), previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 26, 2003.
*4	.4	Third Supplemental Indenture, dated as of March 8, 2004, with respect to adding additional Subsidiary Guarantors (named therein), previously filed and incorporated herein by reference from Holdings’ Quarterly Report on Form 10-Q, filed on May 13, 2004.
*4	.5	Fourth Supplemental Indenture, dated as of June 8, 2004, with respect to adding additional Subsidiary Guarantors (named therein), previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 24, 2004.
4	.6	Indenture, dated September 22, 2005, with U.S. Bank National Association, as Trustee, with respect to Senior Secured Floating Rate Notes due 2011, filed herewith.
4	.7	Security Agreement, dated September 22, 2005, by and among the Loan Parties (as defined therein) and U.S. Bank National Association, as Collateral Agent, filed herewith.
4	.8	Pledge Agreement, dated September 22, 2005, by and among the Loan Parties (as defined therein) and U.S. Bank National Association, as Collateral Agent, filed herewith.
4	.9	Collateral Agency Agreement, dated September 22, 2005, among the Loan Parties (as defined therein) and U.S. Bank National Association, as Trustee and Collateral Agent, filed herewith.
4	.10	Registration Rights Agreement, dated September 22, 2005, by and among InSight, Holdings, the Subsidiary Guarantors (named therein) and Banc of America Securities LLC and CIBC World Market Corp. with respect to $300 million of Senior Secured Floating Rate Notes due 2011, filed herewith.
5	.1	Opinion of Kaye Scholer LLP, filed herewith.
10	.1	Amended and Restated Loan and Security Agreement, dated September 22, 2005, by and among InSight, and its subsidiaries listed therein and Bank of America, N.A. as Lender, filed herewith.
*10	.2	Holdings 2001 Stock Option Plan, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.3	Holdings 2001 Stock Option Plan Stock Option Agreement, dated June 29, 2001, by and between Holdings and Steven T. Plochocki, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.4	Holdings 2001 Stock Option Plan Stock Option Agreement, dated June 29, 2001, by and between Holdings and Michael A. Boylan, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.5	Executive Employment Agreement, dated July 1, 2005, among InSight, Holdings and Bret W. Jorgensen, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on July 8, 2005.
*10	.6	Executive Employment Agreement, dated June 29, 2001, between InSight and Steven T. Plochocki, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.

II-7

*10	.7	First Amendment to Executive Employment Agreement, dated September 4, 2003, by and between InSight and Steven T. Plochocki, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*10	.8	Executive Employment Agreement, dated October 22, 2004, among InSight, Holdings and Patricia R. Blank, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on January 26, 2005.
*10	.9	Executive Employment Agreement, dated June 29, 2001, between InSight and Michael A. Boylan, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.10	Executive Employment Agreement, dated January 10, 2005, among InSight, Holdings and Mitch C. Hill, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on January 14, 2005.
*10	.11	Executive Employment Agreement, dated August 10, 2005, among InSight, Holdings and Louis E. Hallman, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on August 15, 2005.
*10	.12	Executive Employment Agreement, dated August 10, 2005, among InSight, Holdings and Donald F. Hankus, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on September 30, 2005.
*10	.13	Executive Employment Agreement, dated December 27, 2001, between InSight and Marilyn U. MacNiven-Young, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.14	Form of Holdings Performance Based Option Agreement, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.15	Form of Amended and Restated Indemnification Agreement, previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 22, 2005.
*10	.16	Fourth Amended and Restated Stockholders Agreement, dated as of July 1, 2005, among the Company, the JWC Holders (as defined therein), the Halifax Holders (as defined therein), the Management Holders (as defined therein) and the Additional Holders (as defined therein), previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on July 8, 2005.
*10	.17	Management Agreement, dated as of October 17, 2001, by and among J.W. Childs Advisors II, L.P., Halifax Genpar, L.P., Holdings and InSight, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.18	Resignation Agreement dated August 9, 2004, by and among InSight, Holdings and Steven T. Plochocki, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-4, filed on November 3, 2004.
*10	.19	Stock Option Agreement, dated August 12, 2004, by and between Holdings and Michael N. Cannizzaro, previously filed and incorporated by reference from Holdings Quarterly Report on Form 10-Q, filed on November 10, 2004.
*10	.20	Stock Option Agreement, dated April 8, 2005, by and between Holdings Company and Michael N. Cannizzaro, previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 22, 2005.
12	.1	Ratio of Earnings to Fixed Charges, filed herewith.
21	.1	Subsidiaries of Holdings, filed herewith.
23	.1	Consent of PricewaterhouseCoopers LLP, filed herewith.
23	.4	Consent of Kaye Scholer LLP, included with Exhibit 5.1.
25	.1	Statement of Eligibility on Form T-1 of the Trustee under the Indenture dated September 22, 2005, between InSight and U.S. Bank National Association, filed herewith.
99	.1	Form of Letter of Transmittal, filed herewith.
99	.2	Form of Notice of Guaranteed Delivery, filed herewith.

*  Previously filed

II-8

Item 22. Undertakings.

      (a) The undersigned registrant hereby undertakes:

      (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

      (a) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

      (b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

      (c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

      (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

      (e) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

      (f) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

      (2) That, for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-9

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrants have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

INSIGHT HEALTH SERVICES CORP.

INSIGHT HEALTH SERVICES HOLDINGS CORP.

By:  /s/ Bret W. Jorgensen

Name:        Bret W. Jorgensen

Title: President and Chief Executive Officer of each of the foregoing entities

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and Director (principal executive officer) of each of the foregoing entities
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer (principal financial and accounting officer) of each of the foregoing entities
/s/ Michael N. Cannizzaro Michael N. Cannizzaro	Chairman of the Board and Director of each of the foregoing entities
/s/ Kenneth M. Doyle Kenneth M. Doyle	Director of each of the foregoing entities
/s/ David W. Dupree David W. Dupree	Director of each of the foregoing entities
/s/ Steven G. Segal Steven G. Segal	Director of each of the foregoing entities
/s/ Mark J. Tricolli Mark J. Tricolli	Director of each of the foregoing entities
/s/ Edward D. Yun Edward D. Yun	Director of each of the foregoing entities

II-10

SIGNATURES

      Pursuant to the requirements of the Securities Act, the registrants have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

INSIGHT HEALTH CORP.

SIGNAL MEDICAL SERVICES, INC.

OPEN MRI, INC.

MAXUM HEALTH CORP.

RADIOSURGERY CENTERS, INC.

MAXUM HEALTH SERVICES CORP.

MAXUM HEALTH SERVICES OF NORTH TEXAS, INC.

MAXUM HEALTH SERVICES OF DALLAS, INC.

NDDC, INC.

DIAGNOSTIC SOLUTIONS CORP.

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/ Bret W. Jorgensen

Name:        Bret W. Jorgensen

Title: President and Chief Executive Officer of each of the foregoing entities

II-11

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and sole Director (principal executive officer) of each the foregoing entities
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer (principal financial and accounting officer) of each the foregoing entities

II-12

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

MRI ASSOCIATES, L.P.

By: InSight Health Corp., its general partner

By:  /s/ Bret W. Jorgensen

Name:        Bret W. Jorgensen

Title: President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and sole Director of InSight Health Corp., its general partner (principal executive officer)
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer of InSight Health Corp., its general partner (principal financial and accounting officer)

II-13

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

WILKES-BARRE IMAGING, L.L.C.

By:	InSight Health Corp., its sole member and manager
By:	/s/ Bret W. Jorgensen

Name:        Bret W. Jorgensen

Title: President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and sole Director of InSight Health Corp., its sole member and sole manager (principal executive officer)
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer of InSight Health Corp., its sole member and sole manager (principal financial and accounting officer)

II-14

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrants have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

ORANGE COUNTY REGIONAL PET CENTER — IRVINE, LLC

SAN FERNANDO VALLEY REGIONAL PET CENTER, LLC

VALENCIA MRI, LLC

By: InSight Health Corp., its sole member

By:  /s/ Bret W. Jorgensen

Name: Bret W. Jorgensen

Title: President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and sole Director of InSight Health Corp., its sole member (principal executive officer)
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer of InSight Health Corp., its sole member (principal financial and accounting officer)

II-15

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

PARKWAY IMAGING CENTER, LLC

By:  /s/ Bret W. Jorgensen

Name: Bret W. Jorgensen

Title: Manager

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	Manager (principal executive officer)
/s/ Mitch C. Hill Mitch C. Hill	Manager (principal financial and accounting officer)

II-16

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrants have duly caused this registration statement to be signed on their behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

COMPREHENSIVE OPEN MRI-
     CARMICHAEL/ FOLSOM, LLC

SYNCOR DIAGNOSTICS SACRAMENTO, LLC

SYNCOR DIAGNOSTICS BAKERSFIELD, LLC

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., its members
By:	/s/ Bret W. Jorgensen

Name:        Bret W. Jorgensen

Title: President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and sole Director of Comprehensive Medical Imaging, Inc. and Comprehensive Medical Imaging Centers, Inc., its members (principal executive officer)
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer of Comprehensive Medical Imaging, Inc. and Comprehensive Medical Imaging Centers, Inc., its members (principal financial and accounting officer)

II-17

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Lake Forest, State of California, on October 28, 2005.

PHOENIX REGIONAL PET CENTER-THUNDERBIRD, LLC

By:	Comprehensive Medical Imaging Centers, Inc., its sole member
By:	/s/ Bret W. Jorgensen

Name: Bret W. Jorgensen

Title: President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 28, 2005.

SIGNATURE
/s/ Bret W. Jorgensen Bret W. Jorgensen	President and Chief Executive Officer and sole Director of Comprehensive Medical Imaging Centers, Inc., its sole member (principal executive officer)
/s/ Mitch C. Hill Mitch C. Hill	Executive Vice President and Chief Financial Officer of Comprehensive Medical Imaging Centers, Inc., its sole member (principal financial and accounting officer)

II-18

Exhibit Index

*2	.1	Agreement and Plan of Merger, dated as of June 29, 2001, by and among InSight Health Services Holdings Corp. (“Holdings”), JWCH Merger Corp. and InSight Health Services Corp. (“InSight”), previously filed and incorporated herein by reference from InSight’s Current Report on Form 8-K, filed on July 2, 2001.
*2	.2	Amendment No. 1 to Agreement and Plan of Merger, dated as of June 29, 2001, by and among Holdings, JWCH Merger Corp. and InSight, previously filed and incorporated by reference from InSight’s Annual Report on Form 10-K, filed on September 14, 2001.
*2	.3	Amendment No. 2 to Agreement and Plan of Merger, dated as of October 9, 2001, by and among Holdings, InSight Health Services Acquisition Corp. and InSight, previously filed and incorporated herein by reference from InSight’s Current Report on Form 8-K, filed on October 9, 2001.
*2	.4	Asset Purchase Agreement, dated January 6, 2003, by and among InSight Health Corp., Comprehensive Medical Imaging Centers, Inc., Comprehensive Medical Imaging, Inc. and Cardinal Health 414, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 16, 2003.
*2	.5	Amendment No. 1 to Asset Purchase Agreement, dated February 21, 2003, by and among InSight Health Corp., Comprehensive Medical Imaging Centers, Inc., Comprehensive Medical Imaging, Inc. and Cardinal Health 414, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 16, 2003.
*2	.6	Amendment No. 2 to Asset Purchase Agreement, dated March 31, 2003, by and among InSight Health Corp., Comprehensive Medical Imaging Centers, Inc., Comprehensive Medical Imaging, Inc. and Cardinal Health 414, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 16, 2003.
*2	.7	Asset Purchase Agreement, dated June 19, 2003, by and among InSight Health Corp., CDL Medical Technologies, Inc., Keith E. Loiselle and David J. Simile, previously filed and incorporated by reference from Holdings’ Current Report on Form 8-K, filed on August 11, 2003.
*2	.8	Stock Purchase Agreement dated February 13, 2004, by and among InSight Health Corp., Comprehensive Medical Imaging, Inc., Cardinal Health 414, Inc. and Cardinal Health, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 8, 2004.
*2	.9	Amendment No. 1 to Stock Purchase Agreement dated April 1, 2004, by and among InSight Health Corp., Comprehensive Medical Imaging, Inc., Cardinal Health 414, Inc. and Cardinal Health, Inc., previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on April 8, 2004.
*3	.1	Certificate of Incorporation of Holdings, as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.2	Bylaws of Holdings, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.3	Certificate of Incorporation of InSight, as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.4	Bylaws of InSight, as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.5	Certificate of Incorporation of InSight Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.6	Bylaws of InSight Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.7	Certificate of Incorporation of Signal Medical Services, Inc., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.8	Bylaws of Signal Medical Services, Inc., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.

II-19

*3	.9	Certificate of Incorporation of Open MRI, Inc., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.10	Bylaws of Open MRI, Inc., previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.11	Certificate of Incorporation of Maxum Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.12	Bylaws of Maxum Health Corp., as amended, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.13	Certificate of Incorporation of Radiosurgery Centers, Inc., previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.14	Bylaws of Radiosurgery Centers, Inc., previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.15	Certificate of Incorporation of Maxum Health Services Corp., as amended, previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.16	Bylaws of Maxum Health Services Corp., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.17	Certificate of Limited Partnership of MRI Associates, L.P., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.18	Agreement of Limited Partnership of MRI Associates, L.P., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.19	Certificate of Incorporation of Maxum Health Services of North Texas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.20	Bylaws of Maxum Health Services of North Texas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.21	Certificate of Incorporation of Maxum Health Services of Dallas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.22	Bylaws of Maxum Health Services of Dallas, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.23	Certificate of Incorporation of NDDC, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.24	Bylaws of NDDC, Inc., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.25	Certificate of Incorporation of Diagnostic Solutions Corp., as amended, previously filed and incorporated herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.26	Bylaws of Diagnostic Solutions Corp., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*3	.27	Certificate of Organization of Wilkes-Barre Imaging, L.L.C., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4/A, filed on March 25, 2002.
*3	.28	Operating Agreement of Wilkes-Barre Imaging, L.L.C., previously filed and incorporated by reference herein from InSight’s Registration Statement on Form S-4/A, filed on March 25, 2002.
*3	.29	Certificate of Organization of Orange County Regional PET Center-Irvine, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.30	Operating Agreement of Orange County Regional PET Center-Irvine, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.31	Certificate of Organization of San Fernando Valley Regional PET Center, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.

II-20

*3	.32	Operating Agreement of San Fernando Valley Regional PET Center, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.33	Certificate of Organization of Valencia MRI, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.34	Operating Agreement of Valencia MRI, LLC, as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.35	Certificate of Organization of Parkway Imaging Center, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.36	Operating Agreement of Parkway Imaging Center, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.37	Certificate of Incorporation of InSight Imaging Services Corp., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.38	Bylaws of InSight Imaging Services Corp., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.39	Certificate of Incorporation of Comprehensive Medical Imaging, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.40	Bylaws of Comprehensive Medical Imaging, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.41	Certificate of Incorporation of Comprehensive Medical Imaging Centers, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.42	Bylaws of Comprehensive Medical Imaging Centers, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.43	Certificate of Incorporation of Comprehensive Medical Imaging-Biltmore, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.44	Bylaws of Comprehensive Medical Imaging-Biltmore, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.45	Certificate of Incorporation of Comprehensive OPEN MRI-East Mesa, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.46	Bylaws of Comprehensive OPEN MRI-East Mesa, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.47	Articles of Incorporation of TME Arizona, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.48	Bylaws of TME. Arizona, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.49	Certificate of Incorporation of Comprehensive Medical Imaging-Fremont, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.50	Bylaws of Comprehensive Medical Imaging-Fremont, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.51	Certificate of Incorporation of Comprehensive Medical Imaging-San Francisco, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.52	Bylaws of Comprehensive Medical Imaging-San Francisco, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.53	Certificate of Incorporation of Comprehensive OPEN MRI-Garland, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.54	Bylaws of Comprehensive OPEN MRI-Garland, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.

II-21

*3	.55	Certificate of Incorporation of IMI of Arlington, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.56	Bylaws of IMI of Arlington, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.57	Certificate of Incorporation of Comprehensive Medical Imaging-Fairfax, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.58	Bylaws of Comprehensive Medical Imaging-Fairfax, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.59	Certificate of Incorporation of IMI of Kansas City, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.60	Bylaws of IMI of Kansas City, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.61	Certificate of Incorporation of Comprehensive Medical Imaging-Bakersfield, Inc., as amended, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.62	Bylaws of Comprehensive Medical Imaging-Bakersfield, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.63	Articles of Organization of Comprehensive OPEN MRI-Carmichael/Folsom, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.64	Operating Agreement of Comprehensive OPEN MRI-Carmichael/Folsom, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.65	Articles of Organization of Syncor Diagnostics Sacramento, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.66	Operating Agreement of Syncor Diagnostics Sacramento, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.67	Articles of Organization of Syncor Diagnostics Bakersfield, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.68	Operating Agreement of Syncor Diagnostics Bakersfield, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.69	Articles of Organization of Phoenix Regional PET Center-Thunderbird, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.70	Operating Agreement of Phoenix Regional PET Center-Thunderbird, LLC, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.71	Joint Venture Agreement of Mesa MRI, dated as of December 20, 1991, by and between TME Partners III, Ltd. and TME, Inc., previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.72	Joint Venture Agreement of Mountain View MRI, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.73	Joint Venture Agreement of Los Gatos Imaging Center, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.74	Joint Venture Agreement of Woodbridge MRI, as amended by First Amendment thereto, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.75	Joint Venture Agreement of Jefferson MRI-Bala, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*3	.76	Joint Venture Agreement of Jefferson MRI, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.

II-22

3	.77	Amendment Number One to Joint Venture Agreement of Los Gatos Imaging Center, filed herewith.
3	.78	Second Amendment to Joint Venture Agreement of Woodbridge MRI, filed herewith.
3	.79	First Amendment to Bylaws of Maxum Health Services Corp., filed herewith.
3	.80	Amendment Number One to Joint Venture Agreement of Mountain View MRI, filed herewith.
3	.81	Amendment Number One to Joint Venture Agreement of Mesa MRI, filed herewith.
3	.82	Amendment Number One to Joint Venture Agreement of Jefferson MRI, filed herewith.
3	.83	Amendment Number One to Joint Venture Agreement of Jefferson MRI-Bala, filed herewith.
*4	.1	Indenture, dated October 30, 2001, with State Street Bank and Trust Company, N.A., as Trustee, with respect to 97/8% Senior Subordinated Notes due 2011, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*4	.2	Supplemental Indenture, dated February 25, 2002, with respect to adding an additional Subsidiary Guarantor (named therein), previously filed and incorporated herein by reference from InSight’s Amendment No. 1 to Registration Statement on Form S-4, filed on March 25, 2002.
*4	.3	Supplemental Indenture, dated April 2, 2003, with respect to adding additional Subsidiary Guarantors (named therein), previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 26, 2003.
*4	.4	Third Supplemental Indenture, dated as of March 8, 2004, with respect to adding additional Subsidiary Guarantors (named therein), previously filed and incorporated herein by reference from Holdings’ Quarterly Report on Form 10-Q, filed on May 13, 2004.
*4	.5	Fourth Supplemental Indenture, dated as of June 8, 2004, with respect to adding additional Subsidiary Guarantors (named therein), previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 24, 2004.
4	.6	Indenture, dated September 22, 2005, with U.S. Bank National Association, as Trustee, with respect to Senior Secured Floating Rate Notes due 2011, filed herewith.
4	.7	Security Agreement, dated September 22, 2005, by and among the Loan Parties (as defined therein) and U.S. Bank National Association, as Collateral Agent, filed herewith.
4	.8	Pledge Agreement, dated September 22, 2005, by and among the Loan Parties (as defined therein) and U.S. Bank National Association, as Collateral Agent, filed herewith.
4	.9	Collateral Agency Agreement, dated September 22, 2005, among the Loan Parties (as defined therein) and U.S. Bank National Association, as Trustee and Collateral Agent, filed herewith.
4	.10	Registration Rights Agreement, dated September 22, 2005, by and among InSight, Holdings, the Subsidiary Guarantors (named therein) and Banc of America Securities LLC and CIBC World Market Corp. with respect to $300 million of Senior Secured Floating Rate Notes due 2011, filed herewith.
5	.1	Opinion of Kaye Scholer LLP, filed herewith.
10	.1	Amended and Restated Loan and Security Agreement, dated September 22, 2005, by and among InSight, and its subsidiaries listed therein and Bank of America, N.A. as Lender, filed herewith.
*10	.2	Holdings 2001 Stock Option Plan, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.3	Holdings 2001 Stock Option Plan Stock Option Agreement, dated June 29, 2001, by and between Holdings and Steven T. Plochocki, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.4	Holdings 2001 Stock Option Plan Stock Option Agreement, dated June 29, 2001, by and between Holdings and Michael A. Boylan, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.5	Executive Employment Agreement, dated July 1, 2005, among InSight, Holdings and Bret W. Jorgensen, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on July 8, 2005.
*10	.6	Executive Employment Agreement, dated June 29, 2001, between InSight and Steven T. Plochocki, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.

II-23

*10	.7	First Amendment to Executive Employment Agreement, dated September 4, 2003, by and between InSight and Steven T. Plochocki, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-1, filed on June 23, 2004.
*10	.8	Executive Employment Agreement, dated October 22, 2004, among InSight, Holdings and Patricia R. Blank, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on January 26, 2005.
*10	.9	Executive Employment Agreement, dated June 29, 2001, between InSight and Michael A. Boylan, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.10	Executive Employment Agreement, dated January 10, 2005, among InSight, Holdings and Mitch C. Hill, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on January 14, 2005.
*10	.11	Executive Employment Agreement, dated August 10, 2005, among InSight, Holdings and Louis E. Hallman, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on August 15, 2005.
*10	.12	Executive Employment Agreement, dated August 10, 2005, among InSight, Holdings and Donald F. Hankus, previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on September 30, 2005.
*10	.13	Executive Employment Agreement, dated December 27, 2001, between InSight and Marilyn U. MacNiven-Young, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.14	Form of Holdings Performance Based Option Agreement, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.15	Form of Amended and Restated Indemnification Agreement, previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 22, 2005.
*10	.16	Fourth Amended and Restated Stockholders Agreement, dated as of July 1, 2005, among the Company, the JWC Holders (as defined therein), the Halifax Holders (as defined therein), the Management Holders (as defined therein) and the Additional Holders (as defined therein), previously filed and incorporated herein by reference from Holdings’ Current Report on Form 8-K, filed on July 8, 2005.
*10	.17	Management Agreement, dated as of October 17, 2001, by and among J.W. Childs Advisors II, L.P., Halifax Genpar, L.P., Holdings and InSight, previously filed and incorporated herein by reference from InSight’s Registration Statement on Form S-4, filed on December 27, 2001.
*10	.18	Resignation Agreement dated August 9, 2004, by and among InSight, Holdings and Steven T. Plochocki, previously filed and incorporated by reference from Holdings’ Registration Statement on Form S-4, filed on November 3, 2004.
*10	.19	Stock Option Agreement, dated August 12, 2004, by and between Holdings and Michael N. Cannizzaro, previously filed and incorporated by reference from Holdings Quarterly Report on Form 10-Q, filed on November 10, 2004.
*10	.20	Stock Option Agreement, dated April 8, 2005, by and between Holdings Company and Michael N. Cannizzaro, previously filed and incorporated herein by reference from Holdings’ Annual Report on Form 10-K, filed on September 22, 2005.
12	.1	Ratio of Earnings to Fixed Charges, filed herewith.
21	.1	Subsidiaries of Holdings, filed herewith.
23	.1	Consent of PricewaterhouseCoopers LLP, filed herewith.
23	.4	Consent of Kaye Scholer LLP, included with Exhibit 5.1.
25	.1	Statement of Eligibility on Form T-1 of the Trustee under the Indenture dated September 22, 2005, between InSight and U.S. Bank National Association, filed herewith.
99	.1	Form of Letter of Transmittal, filed herewith.
99	.2	Form of Notice of Guaranteed Delivery, filed herewith.

*  Previously filed

II-24 EX-3.77 2 y13913exv3w77.txt EX-3.77: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT Exhibit 3.77 AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT This Amendment Number One to Joint Venture Agreement (this "Amendment") is made effective as of June 8, 2004, and is entered into by Comprehensive Medical Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the "Members"), in their capacity as the members or venturers of Los Gatos Imaging Center, a Texas general partnership (the "Company"). This Amendment amends the Company's Joint Venture Agreement dated as December 31, 1987 (the "Agreement"). Capitalized terms used in the Amendment and not otherwise defined have the meanings ascribed in the Agreement. Accordingly, the Members hereby agree as follows: 1. AMENDMENT TO SECTION 7. The second to last paragraph of Section 7 "MANAGEMENT OF THE JOINT VENTURE", beginning "Notwithstanding the foregoing," is hereby deleted in its entirety. 2. AMENDMENT TO SECTION 14. Section 14 of the Agreement "ASSIGNMENT OF INTEREST IN THE JOINT VENTURE" is hereby deleted in its entirety. 3. EFFECTIVE DATE. This Amendment shall be effective as of the date written above. 4. FULL FORCE AND EFFECT. Except as amended by this Amendment, the Agreement shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the Agreement conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the Agreement. IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed as of the date first written above. COMPREHENSIVE MEDICAL IMAGING, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer COMPREHENSIVE MEDICAL IMAGING CENTERS, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer EX-3.78 3 y13913exv3w78.txt EX-3.78: SECOND AMENDMENT TO THE JOINT VENTURE AGREEMENT Exhibit 3.78 SECOND AMENDMENT TO JOINT VENTURE AGREEMENT This Second Amendment to Joint Venture Agreement (this "Agreement") is made effective as of June 8, 2004, and is entered into by Comprehensive Medical Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the "Members"), in their capacity as the members or venturers of MRI of Woodbridge, a Texas general partnership (the "Company"). This Amendment amends the Company's Joint Venture Agreement dated as of May 5, 1992, as amended by that certain First Amendment dated as of May 15, 1992 (collectively, the "Agreement"). Capitalized terms used in the Amendment and not otherwise defined have the meanings ascribed in the Agreement. Accordingly, the Members hereby agree as follows: 1. AMENDMENT TO SECTION 1.2. Section 1.2 is hereby amended to read in its entirety as follows: "1.2. NAME. The name of the Venture shall be, and the business of the Venture shall be conducted under the name of "Woodbridge MRI." The Venture's business may be conducted under any other name or names deemed advisable by the Managing Venturer." 2. AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is hereby deleted in its entirety. 3. EFFECTIVE DATE. This Amendment shall be effective as of the date written above. 4. FULL FORCE AND EFFECT. Except as amended by this Amendment, the Agreement shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the Agreement conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the Agreement. IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed as of the date first written above. COMPREHENSIVE MEDICAL IMAGING, INC. By: /s/ Steven T. Plochocki ------------------------------------ Name: Steven T. Plochocki Title: President and Chief Executive Officer EX-3.79 4 y13913exv3w79.txt EX-3.79: FIRST AMENDMENT TO THE BY-LAWS Exhibit 3.79 FIRST AMENDMENT TO BY LAWS OF MAXUM HEALTH SERVICES CORP. This First Amendment to By Laws (this "Amendment") of Maxum Health Services Corp. is effective as of October 26, 2005. 1. Article 6 "OFFICERS" of the By Laws is hereby deleted in its entirety and replaced with the following: "ARTICLE 6. ----------- OFFICERS Section 6.1 Number; Security. The executive officers of the corporation shall be the president, one or more vice presidents (including an executive vice president, if the board of directors so determines), a chief financial officer, a secretary and a treasurer. Any two or more offices may be held by the same person, except the offices of president and secretary. Section 6.2 Election; Term of Office. The executive officers of the corporation shall be elected annually by the board of directors, and each such officer shall hold office until the next annual meeting of the board of directors and until the election of his or her successor, subject to the provisions of Section 6.4. Section 6.3 Subordinate Officers. The board of directors may appoint subordinate officers (including assistant secretaries and assistant treasurers), agents or employees, each of whom shall hold office for such period and have such powers and duties as the board of directors determines. The board of directors may delegate to any executive officer or to any committee the power to appoint and define the powers and duties of any subordinate officers, agents or employees. Section 6.4 Resignation and Removal of Officers. Any officer may resign at any time by delivering his or her resignation in writing to the president or secretary of the corporation, to take effect at the time specified in the resignation; the acceptance of a resignation, unless required by its terms, shall not be necessary to make it effective. Any officer appointed by the board of directors or appointed by an executive officer or by a committee may be removed by the board of directors either with or without cause, and in the case of an officer appointed by an executive officer or by a committee, by the officer or committee who appointed him or her or by the president. Section 6.5 Vacancies. A vacancy in any office may be filled for the unexpired term in the manner prescribed in Sections 6.2 and 6.3 of these by laws for election or appointment to the office. Section 6.6 The President. The president shall be the chief executive officer of the corporation and shall preside at all meetings of the board of directors and of the stockholders. Subject to the control of the board of directors and the chairman of the board, he or she shall have general supervision over the business of the corporation and shall have such other powers and duties as presidents of corporations usually have or as the board of directors assigns to him or her. Section 6.7 Vice President. Each vice president shall have such powers and duties as the board of directors or the president assigns to him or her. Section 6.8 Chief Financial Officer. The chief financial officer of the corporation shall have general supervision over all financial matters of the corporation and shall have such other powers and duties as chief financial officers usually have or as the board of directors or the president assigns to him or her. Section 6.9 Treasurer. The treasurer shall be in charge of the corporation's books and accounts. Subject to the control of the board of directors, he or she shall have such other powers and duties as the board of directors or the president assigns to him or her. Section 6.10 Secretary. The secretary shall be the secretary of, and keep the minutes of, all meetings of the board of directors and of the stockholders, shall be responsible for giving notice of all meetings of stockholders and of the board of directors, and shall keep the seal and, when authorized by the board of directors, apply it to any instrument requiring it. Subject to the control of the board of directors, he or she shall have such powers and duties as the board of directors or the president assigns to him or her. In the absence of the secretary from any meeting, the minutes shall be kept by the person appointed for that purpose by the presiding officer. Section 6.11 Salaries. The board of directors may fix the officers' salaries, if any, or it may authorize the president to fix the salary of any other officer." 2. Except as amended by this Amendment, the By Laws shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the By Laws conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the By Laws. EX-3.80 5 y13913exv3w80.txt EX-3.80: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT Exhibit 3.80 AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT This Amendment Number One to Joint Venture Agreement (this "Amendment") is made effective as of June 8, 2004, and is entered into by Comprehensive Medical Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the "Members"), in their capacity as the members or venturers of Mountain View MRI, a Texas general partnership (the "Company"). This Amendment amends the Company's Joint Venture Agreement dated as April 27, 1990 (the "Agreement"). Capitalized terms used in the Amendment and not otherwise defined have the meanings ascribed in the Agreement. Accordingly, the Members hereby agree as follows: 1. AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is hereby deleted in its entirety. 2. EFFECTIVE DATE. This Amendment shall be effective as of the date written above. 3. FULL FORCE AND EFFECT. Except as amended by this Amendment, the Agreement shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the Agreement conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the Agreement. IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed as of the date first written above. COMPREHENSIVE MEDICAL IMAGING, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer COMPREHENSIVE MEDICAL IMAGING CENTERS, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer EX-3.81 6 y13913exv3w81.txt EX-3.81: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT Exhibit 3.81 AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT This Amendment Number One to Joint Venture Agreement (this "Amendment") is made effective as of June 8, 2004, and is entered into by Comprehensive Medical Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the "Members"), in their capacity as the members or venturers of Mesa MRI, a Texas general partnership (the "Company"). This Amendment amends the Company's Joint Venture Agreement dated as December 20, 1991 (the "Agreement"). Capitalized terms used in the Amendment and not otherwise defined have the meanings ascribed in the Agreement. Accordingly, the Members hereby agree as follows: 1. AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is hereby deleted in its entirety. 2. EFFECTIVE DATE. This Amendment shall be effective as of the date written above. 3. FULL FORCE AND EFFECT. Except as amended by this Amendment, the Agreement shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the Agreement conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the Agreement. IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed as of the date first written above. COMPREHENSIVE MEDICAL IMAGING, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer COMPREHENSIVE MEDICAL IMAGING CENTERS, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer EX-3.82 7 y13913exv3w82.txt EX-3.82: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT Exhibit 3.82 AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT This Amendment Number One to Joint Venture Agreement (this "Amendment") is made effective as of June 8, 2004, and is entered into by Comprehensive Medical Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the "Members"), in their capacity as the members or venturers of Jefferson MRI, a Texas general partnership (the "Company"). This Amendment amends the Company's Joint Venture Agreement dated as December 29, 1989 (the "Agreement"). Capitalized terms used in the Amendment and not otherwise defined have the meanings ascribed in the Agreement. Accordingly, the Members hereby agree as follows: 1. AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is hereby deleted in its entirety. 2. EFFECTIVE DATE. This Amendment shall be effective as of the date written above. 3. FULL FORCE AND EFFECT. Except as amended by this Amendment, the Agreement shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the Agreement conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the Agreement. IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed as of the date first written above. COMPREHENSIVE MEDICAL IMAGING, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer COMPREHENSIVE MEDICAL IMAGING CENTERS, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer EX-3.83 8 y13913exv3w83.txt EX-3.83: AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT Exhibit 3.83 AMENDMENT NUMBER ONE TO JOINT VENTURE AGREEMENT This Amendment Number One to Joint Venture Agreement (this "Amendment") is made effective as of June 8, 2004, and is entered into by Comprehensive Medical Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the "Members"), in their capacity as the members or venturers of Jefferson MRI-Bala, a Texas general partnership (the "Company"). This Amendment amends the Company's Joint Venture Agreement dated as December 30, 1992 (the "Agreement"). Capitalized terms used in the Amendment and not otherwise defined have the meanings ascribed in the Agreement. Accordingly, the Members hereby agree as follows: 1. AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is hereby deleted in its entirety. 2. EFFECTIVE DATE. This Amendment shall be effective as of the date written above. 3. FULL FORCE AND EFFECT. Except as amended by this Amendment, the Agreement shall remain in full force and effect; provided, however that wherever the terms and conditions of this Amendment and the terms and conditions of the Agreement conflict, the terms and conditions of this Amendment shall be deemed to supersede the conflicting terms of the Agreement. IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed as of the date first written above. COMPREHENSIVE MEDICAL IMAGING, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer COMPREHENSIVE MEDICAL IMAGING CENTERS, INC. By: /s/ Steven T. Plochocki -------------------------------------- Name: Steven T. Plochocki Title: President and Chief Executive Officer EX-4.6 9 y13913exv4w6.txt EX-4.6: INDENTURE Exhibit 4.6 ================================================================================ INSIGHT HEALTH SERVICES CORP. SENIOR SECURED FLOATING RATE NOTES DUE 2011 ---------- INDENTURE Dated as of September 22, 2005 ---------- U.S. BANK NATIONAL ASSOCIATION TRUSTEE ---------- ================================================================================ CROSS-REFERENCE TABLE*

TRUST INDENTURE ACT SECTION INDENTURE SECTION - --------------- ----------------- 310(a)(1) .................................................. 7.10 (a)(2) .................................................. 7.10 (a)(3) .................................................. N.A. (a)(4) .................................................. N.A. (a)(5) .................................................. 7.10 (b) ..................................................... 7.10 (c) ..................................................... N.A. 311(a) ..................................................... 7.11 (b) ..................................................... 7.11 (c) ..................................................... N.A. 312(a) ..................................................... 2.06 (b) ..................................................... 13.03 (c) ..................................................... 13.03 313(a) ..................................................... 7.06, 13.03 (b)(1) .................................................. N.A. (b)(2) .................................................. 7.06 (c) ..................................................... 7.06, 13.02 (d) ..................................................... 7.06 314(a) ..................................................... 7.06, 13.05 (b) ..................................................... N.A. (c)(1) .................................................. N.A. (c)(2) .................................................. N.A. (c)(3) .................................................. N.A. (d) ..................................................... 10.05 (e) ..................................................... 13.05 (f) ..................................................... N.A. 315(a) ..................................................... N.A. (b) ..................................................... N.A. (c) ..................................................... N.A. (d) ..................................................... N.A. (e) ..................................................... N.A. 316(a) (last sentence) ..................................... N.A. (a)(1)(A) ............................................... N.A. (a)(1)(B) ............................................... N.A. (a)(2) .................................................. N.A. (b) ..................................................... N.A. (c) ..................................................... 13.14

- ---------- N.A. means not applicable. * This Cross-Reference Table is not part of the Indenture. 317(a)(1) .................................................. N.A. (a)(2) .................................................. N.A. (b) ..................................................... N.A. 318(a) ..................................................... N.A. (b) ..................................................... N.A. (c) ..................................................... 13.01 TABLE OF CONTENTS

Page ---- CROSS-REFERENCE TABLE.................................................... i ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01 Definitions.............................................. 1 Section 1.02 Other Definitions........................................ 25 Section 1.03 Incorporation by Reference of Trust Indenture Act........ 26 Section 1.04 Rules of Construction.................................... 26 ARTICLE TWO THE NOTES Section 2.01 Form and Dating.......................................... 27 Section 2.02 Execution and Authentication............................. 28 Section 2.03 Methods of Receiving Payments on the Notes............... 29 Section 2.04 Registrar and Paying Agent............................... 29 Section 2.05 Paying Agent to Hold Money in Trust...................... 29 Section 2.06 Holder Lists............................................. 30 Section 2.07 Transfer and Exchange.................................... 30 Section 2.08 Replacement Notes........................................ 43 Section 2.09 Outstanding Notes........................................ 43 Section 2.10 Treasury Notes........................................... 44 Section 2.11 Temporary Notes.......................................... 44 Section 2.12 Cancellation............................................. 44 Section 2.13 Defaulted Interest....................................... 44 Section 2.14 CUSIP Numbers............................................ 45 ARTICLE THREE REDEMPTION AND PREPAYMENT; SATISFACTION AND DISCHARGE Section 3.01 Notices to Trustee....................................... 45 Section 3.02 Selection of Notes to Be Redeemed........................ 45 Section 3.03 Notice of Redemption..................................... 45 Section 3.04 Effect of Notice of Redemption........................... 46 Section 3.05 Deposit of Redemption Price.............................. 46 Section 3.06 Notes Redeemed in Part................................... 47 Section 3.07 Optional Redemption...................................... 47 Section 3.08 Mandatory Redemption..................................... 48 Section 3.09 Repurchase Offers........................................ 48 Section 3.10 Application of Trust Money............................... 50

i ARTICLE FOUR COVENANTS Section 4.01 Payment of Notes......................................... 50 Section 4.02 Maintenance of Office or Agency.......................... 50 Section 4.03 Reports.................................................. 51 Section 4.04 Compliance Certificate................................... 51 Section 4.05 Taxes.................................................... 52 Section 4.06 Stay, Extension and Usury Laws........................... 52 Section 4.07 Restricted Payments...................................... 52 Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries............................... 57 Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Stock................................................. 58 Section 4.10 Asset Sales.............................................. 62 Section 4.11 Transactions with Affiliates............................. 63 Section 4.12 Liens.................................................... 64 Section 4.13 Corporate Existence...................................... 65 Section 4.14 Offer to Repurchase upon a Change of Control............. 65 Section 4.15 Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries............................... 66 Section 4.16 Designation of Restricted and Unrestricted Subsidiaries.. 66 Section 4.17 Payments for Consent..................................... 67 Section 4.18 Limitations on Issuances of Guarantees of Indebtedness... 67 Section 4.19 Additional Guarantees.................................... 68 Section 4.20 Sale and Leaseback Transactions.......................... 68 ARTICLE FIVE SUCCESSORS Section 5.01 Merger, Consolidation or Sale of Assets.................. 69 ARTICLE SIX DEFAULTS AND REMEDIES Section 6.01 Events of Default........................................ 70 Section 6.02 Acceleration............................................. 72 Section 6.03 Other Remedies........................................... 73 Section 6.04 Waiver of Past Defaults.................................. 73 Section 6.05 Control by Majority...................................... 74 Section 6.06 Limitation on Suits...................................... 74 Section 6.07 Rights of Holders of Notes to Receive Payment............ 74 Section 6.08 Collection Suit by Trustee............................... 75 Section 6.09 Trustee May File Proofs of Claim......................... 75 Section 6.10 Priorities............................................... 75 Section 6.11 Undertaking for Costs.................................... 76 ii ARTICLE SEVEN TRUSTEE Section 7.01 Duties of Trustee........................................ 76 Section 7.02 Certain Rights of Trustee................................ 77 Section 7.03 Individual Rights of Trustee............................. 78 Section 7.04 Trustee's Disclaimer..................................... 78 Section 7.05 Notice of Defaults....................................... 78 Section 7.06 Reports by Trustee to Holders of the Notes............... 78 Section 7.07 Compensation and Indemnity............................... 79 Section 7.08 Replacement of Trustee................................... 80 Section 7.09 Successor Trustee by Merger, Etc......................... 81 Section 7.10 Eligibility; Disqualification............................ 81 Section 7.11 Preferential Collection of Claims Against Company........ 81 ARTICLE EIGHT DEFEASANCE AND COVENANT DEFEASANCE Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance............................................ 81 Section 8.02 Legal Defeasance and Discharge........................... 81 Section 8.03 Covenant Defeasance...................................... 82 Section 8.04 Conditions to Legal or Covenant Defeasance............... 82 Section 8.05 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions......... 83 Section 8.06 Repayment to the Company................................. 84 Section 8.07 Reinstatement............................................ 84 ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01 Without Consent of Holders of Notes...................... 85 Section 9.02 With Consent of Holders of Notes......................... 86 Section 9.03 Compliance with Trust Indenture Act...................... 87 Section 9.04 Revocation and Effect of Consents........................ 87 Section 9.05 Notation on or Exchange of Notes......................... 88 Section 9.06 Trustee to Sign Amendments, Etc.......................... 88 ARTICLE TEN COLLATERAL Section 10.01 Security Documents....................................... 88 Section 10.02 Opinions of Counsel...................................... 89 Section 10.03 Possession and Use of the Collateral..................... 89 Section 10.04 Suits to Protect the Collateral.......................... 89 Section 10.05 Release of Collateral.................................... 89 Section 10.06 Permitted Ordinary Course Activities with respect to Collateral............................................ 91 Section 10.07 Actions by the Trustee................................... 92 iii Section 10.08 Purchaser Protected...................................... 92 ARTICLE ELEVEN GUARANTEES Section 11.01 Guarantee................................................ 92 Section 11.02 Limitation on Guarantor Liability........................ 93 Section 11.03 Execution and Delivery of Guarantee...................... 94 Section 11.04 Releases of Guarantors................................... 94 ARTICLE TWELVE SATISFACTION AND DISCHARGE Section 12.01 Satisfaction and Discharge............................... 95 Section 12.02 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions......... 96 Section 12.03 Repayment to the Company................................. 96 ARTICLE THIRTEEN MISCELLANEOUS Section 13.01 Trust Indenture Act Controls............................. 96 Section 13.02 Notices.................................................. 96 Section 13.03 Communication by Holders of Notes with Other Holders of Notes................................................. 98 Section 13.04 Certificate and Opinion as to Conditions Precedent....... 98 Section 13.05 Statements Required in Certificate or Opinion............ 98 Section 13.06 Rules by Trustee and Agents.............................. 99 Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders...................................... 99 Section 13.08 Governing Law............................................ 99 Section 13.09 Consent to Jurisdiction.................................. 99 Section 13.10 No Adverse Interpretation of Other Agreements............ 100 Section 13.11 Successors............................................... 100 Section 13.12 Severability............................................. 100 Section 13.13 Counterpart Originals.................................... 100 Section 13.14 Acts of Holders.......................................... 100 Section 13.15 Benefit of Indenture..................................... 101 Section 13.16 Table of Contents, Headings, Etc......................... 102 Section 13.17 Trustee Not Fiduciary for Holders of Senior Indebtedness.......................................... 102 iv EXHIBITS Exhibit A1 FORM OF NOTE Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Exhibit E FORM OF NOTATION OF GUARANTEE Exhibit F FORM OF SUPPLEMENTAL INDENTURE SCHEDULE I EXISTING INDEBTEDNESS SCHEDULE II AGREEMENTS EXCLUDED FROM TRANSACTIONS WITH AFFILIATES COVENANT v INDENTURE dated as of September 22, 2005 among InSight Health Services Corp., a Delaware corporation (the "COMPANY"), InSight Health Services Holdings Corp., a Delaware corporation, (the "PARENT"), the Subsidiary Guarantors (as defined below) and U.S. Bank National Association, a national banking association, as trustee. The Company, the Parent, the Subsidiary Guarantors and the Trustee (as defined below) agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined below) of the Senior Secured Floating Rate Notes due 2011: ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01 Definitions. "144A GLOBAL NOTE" means a global note substantially in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that shall be issued in a denomination equal to the outstanding principal amount at maturity of the Notes sold in reliance on Rule 144A. "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (a) existing at the time such Person is merged with or into the Company or a Subsidiary or becomes a Subsidiary or (b) assumed in connection with the acquisition of assets from such Person. "ADDITIONAL NOTES" means Notes (other than the Notes issued on the date hereof) issued under this Indenture in accordance with the provisions of this Indenture. "AFFILIATE" means, with respect to any specified person, (a) any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person or (b) any other person that owns, directly or indirectly, 10% or more of such specified person's Capital Stock or any executive officer or director of any such specified person or other person. For the purposes of this definition, "control," when used with respect to any specified person, means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AFTER-ACQUIRED PROPERTY" means any and all assets or property (other than Excluded Assets) acquired after the Issue Date, including, without limitation, any property or assets acquired by the Company or any Guarantor from a transfer from the Company or a Guarantor, which in each case constitutes Collateral. "AGENT" means any Registrar, Paying Agent or co-registrar. "APPLICABLE INDEBTEDNESS" means: (1) in respect of Asset Sales involving Collateral, Indebtedness secured on a first priority basis by the Collateral; or (2) in respect of Asset Sales not involving Collateral, Pari Passu Indebtedness. "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. "ASSET SALE" means (i) the sale, lease, conveyance or other disposition of any assets (including, without limitation, by way of merger, consolidation or similar arrangement) (collectively, a "transfer") by the Company or any Restricted Subsidiary other than in the ordinary course of business and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries of Shares of Capital Stock of any of the Company's Restricted Subsidiaries (which shall be deemed to include the sale, grant or conveyance of any interest in the income, profits or proceeds therefrom). For the purposes of this definition, the term "Asset Sale" does not include (a) any transfer of properties or assets (i) that is governed by Section 5.01 hereof, Section 4.15 hereof (to the extent of clause (a) thereof) or Section 4.07 hereof (ii) between or among the Company and its Subsidiaries that are Guarantors pursuant to transactions that do not violate any other provision of this Indenture or (iii) representing obsolete or permanently retired equipment and facilities, (b) the sale or exchange of equipment in connection with the purchase or other acquisition of other equipment, in each case used in the business of the Company or its Restricted Subsidiaries as it was in existence on the Issue Date or any business determined by the Board of the Company in its good faith judgment to be reasonably related thereto; provided, that, to the extent such equipment sold or exchanged represents Collateral, such other equipment purchased or acquired (A) shall consist of assets that are not Excluded Assets and (B) shall be expressly made subject to a first priority perfected Lien with respect to the Notes or (c) any (1) single transaction or (2) series of related transactions, that involves assets having a fair market value of less than $2.0 million, provided that the aggregate fair market value of assets involved in all transactions consummated from and after the Issue Date under clause (1) or (2) does not exceed $10 million. Notwithstanding anything to the contrary set forth above, a disposition of Receivables and Related Assets other than pursuant to a Receivables Program contemplated under Section 4.09 hereof shall be deemed to be an Asset Sale. "ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value will be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided, however, that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of "Capitalized Lease Obligation." "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. 2 "BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have a corresponding meaning. "BOARD" means the Company's Board of Directors or the Parent's Board of Directors, as applicable. "BOARD RESOLUTION" means, with respect to a Board, a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or the Parent, as the case may be, to have been duly adopted by such Board and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BROKER-DEALER" has the meaning set forth in the Registration Rights Agreement. "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are authorized or obligated by law or executive order to close. If a payment date is not a Business Day, payment may be made on the next succeeding day that is a Business Day, and no interest shall accrue on such payment for the intervening period. "CAPITALIZED LEASE OBLIGATION" means, with respect to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person. "CAPITAL STOCK" of any Person means any and all shares, interests, partnership interests, participations, rights in or other equivalents (however designated) of such Person's equity interest (however designated), whether now outstanding or issued after the Issue Date. "CASH EQUIVALENTS" means, at any date, (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any lender under the Credit Agreement, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof (any such bank being an "Approved Lender"), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing within twelve months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the lenders under the Credit Agreement) or recognized securities 3 dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations and (e) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d). "CHANGE OF CONTROL" means the occurrence of any of the following: (a) the consummation of any transaction (including, without limitation, any merger or consolidation) (i) prior to a Public Equity Offering by the Company or the Parent, the result of which is that the Principals and their Related Parties become the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of less than 50% of the Voting Stock of the Company or the Parent, as the case may be (measured by voting power rather than the number of shares), or (ii) after a Public Equity Offering of the Company or the Parent, any "person" or "group" (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the Principals and their Related Parties, become the beneficial owner (as defined above), directly or indirectly, of 35% or more of the Voting Stock of the Company or the Parent, as the case may be, and such person is or becomes, directly or indirectly, the beneficial owner of a greater percentage of the voting power of the Voting Stock of the Company or the Parent, as the case may be, calculated on a fully diluted basis, than the percentage beneficially owned by the Principals and their Related Parties; (b) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries or the Parent and its Subsidiaries, in each case, taken as a whole, to any "person" (as the term is defined in Section 13(d)(3) of the Exchange Act) other than the Principals or Related Parties of the Principals; (c) the first day on which a majority of the members of the Board of the Company or the Parent are not Continuing Directors; or (d) the Company or the Parent is liquidated or dissolved or adopts a plan of liquidation or dissolution, other than in a transaction that complies with the provisions described under Section 5.01 hereof. "CLEARSTREAM" means Clearstream Banking, societe anonyme, Luxembourg. "COLLATERAL" means collectively all of the property and assets that are from time to time subject to the Lien of the Security Documents, including the Liens, if any, required to be granted pursuant to this Indenture or the Security Documents. 4 "COLLATERAL AGENCY AGREEMENT" means the Collateral Agency Agreement dated as of the Issue Date among the Company, the Guarantors, the Trustee and the Collateral Agent, as the same may be amended, restated, supplemented, replaced or modified from time to time. "COMMON STOCK" means, with respect to any Person, any and all shares, interests, participations and other equivalents (however designated, whether voting or non-voting) of such Person's Common Stock, whether now outstanding or issued after the date of this Indenture, and includes, without limitation, all series and classes of such Common Stock. "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order signed in the name of the Company by its Chairman, its President, any Vice President, its Treasurer or an Assistant Treasurer, and delivered to the Trustee. "CONSOLIDATED EBITDA" means, for any period, the sum of, without duplication, Consolidated Net Income for such period, plus (or, in the case of clause (d) below, plus or minus) the following items to the extent included in computing Consolidated Net Income for such period: (a) Fixed Charges for such period, plus (b) the provision for federal, state, local and foreign income taxes of the Company and its Restricted Subsidiaries for such period, plus (c) the aggregate depreciation and amortization expense of the Company and its Restricted Subsidiaries for such period, plus (d) any other non-cash charges for such period, and minus non-cash items increasing Consolidated Net Income for such period, other than non-cash charges or items increasing Consolidated Net Income resulting from changes in prepaid assets or accrued liabilities in the ordinary course of business; plus (e) Minority Interest, provided that fixed charges, income tax expense, depreciation and amortization expense and non-cash charges of a Restricted Subsidiary will be included in Consolidated EBITDA only to the extent (and in the same proportion) that the net income of such Subsidiary was included in calculating Consolidated Net Income for such period. "CONSOLIDATED NET INCOME" means, for any period, the net income (or net loss) of the Company and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, adjusted to the extent included in calculating such net income or loss by excluding (a) any net after-tax extraordinary or nonrecurring gains or losses (less all fees and expenses relating thereto), (b) any net after-tax gains or losses (less all fees and expenses relating thereto) attributable to Asset Sales or discontinued operations, (c) the portion of net income (or loss) of any Person (other than the Company or a Restricted Subsidiary), including Unrestricted Subsidiaries, in which the Company or any Restricted Subsidiary has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid to the Company or any Restricted Subsidiary in cash during such period, (d) the net income (or loss) of any Person combined with the Company or any Restricted Subsidiary on a "pooling of interests" basis attributable to any period prior to the date of combination, (e) the net income (but not the net loss) of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is at the date of determination restricted, directly or indirectly, except to the extent that such net income is actually paid to the Company or a Restricted Subsidiary thereof by loans, advances, intercompany transfers, principal repayments or otherwise and (f) the cumulative effect of a change in accounting principles. 5 "CONSOLIDATED TANGIBLE ASSETS" means, as of the date of determination, the total assets, less goodwill and other intangibles, shown on the balance sheet of the Company and its Restricted Subsidiaries as of the most recent date for which such a balance sheet is available, determined on a consolidated basis in accordance with GAAP. "CONTINUING DIRECTORS" means, as of the date of determination, any member of the Board of the Company or the Parent, as the case may be, who: (a) was a member of such Board on the Reference Date; (b) was nominated for election or elected to such Board with the approval of the majority of the Continuing Directors who were members of such Board at the time of such nomination or election; or (c) was nominated by one or more of the Principals and the Related Parties. "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the Trustee specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company. "CREDIT AGREEMENT" means one or more debt facilities or commercial paper facilities (including the Revolving Credit Agreement) with banks or other institutional lenders providing for revolving credit loans, term loans, senior secured, senior unsecured or subordinated note financings, receivables financing or letters of credit, in each case together with agreements relating to the provision of cash and treasury management services and other bank products or services provided by a lender thereunder or an affiliate thereof and all other agreements, instruments, and documents (including, without limitation, any Guarantees and Security Documents) executed or delivered pursuant thereto or in connection therewith, in each case as such agreement, other agreements, instruments or documents may be amended, restated, supplemented, extended, renewed, replaced, refinanced or otherwise modified from time to time, including, without limitation, any agreement increasing or decreasing the amount of, extending the maturity of, refinancing or otherwise restructuring all or a portion of the Indebtedness under such agreements or any successor agreements. "CUSTODIAN" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "DEFAULT" means any event that is, or after notice or passage of time or both would be, an Event of Default. "DEFINITIVE NOTE" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.07 hereof, substantially in the form of Exhibit A1 hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "DEPOSIT ACCOUNTS COLLATERAL" means each Deposit Account maintained by the Company or any Guarantor on the Issue Date and identified on a schedule to the Security Documents and each Deposit Account established by the Company or any Guarantor after the 6 Issue Date into which collections on Accounts and proceeds of other Receivables and Related Assets are to be deposited. For purposes of this definition, "Deposit Account" and "Accounts" shall have the meanings provided for by the UCC. "DEPOSITARY" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.04 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "DESIGNATED NONCASH CONSIDERATION" means the fair market value of noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an officer's certificate, setting forth the basis of such valuation, executed by the principal executive officer and the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a sale of such Designated Noncash Consideration. "DETERMINATION DATE" means, with respect to an Interest Period, the second London Banking Day preceding the first day of such Interest Period. "DISINTERESTED DIRECTOR" means, with respect to any transaction or series of transactions in respect of which the Board is required to deliver a resolution of the Board, to make a finding or otherwise take action under this Indenture, a member of the Board who does not have any material direct or indirect financial interest in or with respect to such transaction or series of transactions. "DISQUALIFIED STOCK" means any class or series of Capital Stock that, either by its terms, by the terms of any security into which it is convertible or exchangeable or by contract or otherwise (i) is or upon the happening of an event or passage of time would be, required to be redeemed prior to the final Stated Maturity of the Notes, (ii) is redeemable at the option of the holder thereof, at any time prior to such final Stated Maturity or (iii) at the option of the holder thereof is convertible into or exchangeable for debt securities at any time prior to such final Stated Maturity; provided that any Capital Stock that would constitute Disqualified Stock solely as a result of the provisions therein giving holders thereof the right to cause the issuer thereof to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the Stated Maturity of the Notes will not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions contained in Sections 4.10 and 4.14 hereof, and such Capital Stock specifically provides that the issuer will not repurchase or redeem any such stock pursuant to such provisions prior to the Company's repurchase of such Notes as are required to be repurchased pursuant to the provisions contained in Sections 4.10 and 4.14 hereof. "EQUITY INTERESTS" means Capital Stock and all warrants, options and other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). 7 "EQUITY SPONSORS" means J.W. Childs Associates, L.P., J.W. Childs Equity Partners II, L.P., The Halifax Group, L.L.C. and Halifax Capital Partners, L.P. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, including the rules and regulations of the SEC promulgated thereunder. "EXCHANGE NOTES" means the Notes issued in the Exchange Offer in accordance with Section 2.07(f) hereof. "EXCHANGE OFFER" has the meaning set forth in the Registration Rights Agreement. "EXCLUDED ASSETS" means: (1) any interest in real property; (2) assets securing Capitalized Lease Obligations or Indebtedness under purchase money mortgages incurred pursuant to clause (c)(viii) under Section 4.09 hereof provided that such assets that are released from such security in connection with the incurrence of Indebtedness pursuant to clause (c)(xvi) under Section 4.09 hereof shall not be Excluded Assets; (3) Excluded Contracts; (4) any Voting Stock that is issued by a Foreign Subsidiary (that is a corporation for United States federal income tax purposes) and owned by the Company or any Guarantor, if and to the extent that the inclusion of such Voting Stock in the Collateral would cause the Collateral pledged by the Company or such Guarantor, as the case may be, to include in the aggregate more than 65% of the total combined voting power of all classes of Voting Stock of such Foreign Subsidiary; (5) any Capital Stock owned by the Company or a Guarantor and issued by an entity that is not a Wholly Owned Subsidiary of the Company or a Guarantor to the extent (and only with respect to such portion of such Capital Stock that would be prohibited as referred to below) that any joint venture agreement, between or among the Company and/or any Guarantor and one or more third parties with respect to a Permitted Joint Venture, by the express terms of a valid and enforceable restriction in favor of such third parties prohibits, or requires any consent for, the granting of a security interest in such Capital Stock by the Company or such Guarantor; (6) Receivables and Related Assets; (7) any Capital Stock and other securities of the Company, any of its Subsidiaries or any of the Parent's subsidiaries to the extent that the pledge of such Capital Stock or other securities to secure the Notes or the Guarantees would cause the Company, such Subsidiary or such subsidiary of the Parent, as the case may be, to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time); and 8 (8) proceeds and products from any and all of the foregoing excluded collateral described in clauses (1) through (7), unless such proceeds or products would otherwise constitute Collateral securing the Notes. "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the Registration Rights Agreement. "EXCLUDED CONTRACT" means at any date any rights or interest of the Company or any Guarantor in, to or under any agreement, contract, license, instrument, document or other general intangible (referred to solely for purposes of this definition as a "Contract") to the extent that such Contract by the express terms of a valid and enforceable restriction in favor of a Person who is not the Company or any Guarantor, or any requirement of law, prohibits, or requires any consent or establishes any other condition for, an assignment thereof or a grant of a security interest therein by the Company or a Guarantor; provided that: (1) rights to payment under any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent permitted thereby or by Section 9-406 or Section 9-408 of the UCC, (2) all proceeds paid or payable to any of the Company or any Guarantor from any sale, transfer or assignment of such Contract and all rights to receive such proceeds shall be included in the Collateral and (3) any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent the Company or any Guarantor obtains such consent, or removes such condition specified above. "EXISTING INDEBTEDNESS" means the Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) outstanding on the Issue Date and listed on Schedule I to this Indenture, until such amounts are repaid. "EXISTING NOTES" means the 9 7/8% Senior Subordinated Notes Due 2011 of the Company. "FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of Consolidated EBITDA for such period to Fixed Charges for such period. "FIXED CHARGES" means, for any period, without duplication, the sum of (a) the amount that, in conformity with GAAP, would be set forth opposite the caption "interest expense" (or any like caption) on a consolidated statement of operations of the Company and its Restricted Subsidiaries for such period, including, without limitation, (i) amortization of original issue discount, (ii) the net cost of interest rate contracts (including, amortization of discounts), (iii) the interest portion of any deferred payment obligation, (iv) amortization of debt issuance costs, (v) the interest component of Capitalized Lease Obligations, and (vi) imputed interest with respect to Attributable Debt plus (b) all dividends and distributions paid (whether or not in cash) on Preferred Stock and Disqualified Stock by the Company or any Restricted Subsidiary (to any Person other than the Company or any of its Restricted Subsidiaries), other than dividends on Equity Interests payable solely in Qualified Equity Interests of the Company, computed on a tax effected basis, plus (c) all interest on any Indebtedness of any Person guaranteed by the Company or any of its Restricted Subsidiaries or secured by a lien on the assets of the Company or any of its Restricted Subsidiaries; provided that Fixed Charges will not include (i) any gain or loss from extinguishment of debt, including the write-off of debt issuance costs, and (ii) the fixed 9 charges of a Restricted Subsidiary to the extent (and in the same proportion) that the net income of such Subsidiary was excluded in calculating Consolidated Net Income pursuant to clause (e) of the definition thereof for such period. "FOREIGN SUBSIDIARY" means a Restricted Subsidiary that is incorporated in a jurisdiction other than the United States or a state thereof or the District of Columbia and that has no material operations or assets in the United States. "GAAP" means generally accepted accounting principles in the United States, consistently applied, that are in effect on the Issue Date. "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.07(g)(ii), which is required to be placed on all Global Notes issued under this Indenture. "GLOBAL NOTES" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A1 or A2 hereto, as appropriate, issued in accordance with Section 2.01, 2.07(b)(iv), 2.07(d)(ii) or 2.07(f) of this Indenture. "GUARANTEE" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "GUARANTEE" means a Guarantee of the Notes pursuant to this Indenture. "GUARANTORS" means: (1) the Parent; (2) the Subsidiary Guarantors; and (3) any other Subsidiary that executes a Guarantee in accordance with the provisions hereof; and their respective successors and assigns. "HEDGING OBLIGATIONS" means, with respect to any Person, the obligations of such Person entered into in the ordinary course of business under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and other similar financial agreements or arrangements designed to protect such Person against, or manage the exposure of such Person to, fluctuations in interest rates, and (ii) forward exchange agreements, currency swap, currency option and other similar financial agreements or arrangements designed to protect such Person against, or manage the exposure of such Person to, fluctuations in foreign currency exchange rates. "HOLDER" means a Person in whose name a Note is, at the time of determination, registered on the registrar's books. "IAI GLOBAL NOTE" means the global Note substantially in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors. 10 "INDEBTEDNESS" means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent, (a) every obligation of such Person for money borrowed, (b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person, (d) every obligation of such Person issued or assumed as the deferred purchase price of property or services, (e) the attributable value of every Capitalized Lease Obligation of such Person, (f) all Disqualified Stock of such Person valued at its maximum fixed repurchase price, plus accrued and unpaid dividends thereon, (g) all obligations of such Person under or in respect of Hedging Obligations, (h) all Attributable Debt, and (i) every obligation of the type referred to in clauses (a) through (h) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed. For purposes of this definition, the "maximum fixed repurchase price" of any Disqualified Stock that does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were purchased on any date on which Indebtedness is required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock, such fair market value will be determined in good faith by the board of directors of the issuer of such Disqualified Stock. Notwithstanding the foregoing, trade accounts payable and accrued liabilities arising in the ordinary course of business and any liability for federal, state or local taxes or other taxes owed by such Person will not be considered Indebtedness for purposes of this definition. "INDENTURE" means this Indenture, as amended or supplemented from time to time. "INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a Global Note through a Participant. "INITIAL PURCHASERS" means each of Banc of America Securities LLC and CIBC World Markets Corp. as initial purchasers under the Purchase Agreement dated September 16, 2005, among the Company, the Guarantors, Banc of America Securities LLC and CIBC World Markets Corp. "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs. "INTEREST PERIOD" means the period commencing on and including an interest payment date and ending on and including the day immediately preceding the next succeeding interest payment date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include February 1, 2006. "INVESTMENT" in any Person means, (i) directly or indirectly, any advance, loan or other extension of credit (including, without limitation, by way of guarantee or similar arrangement) or capital contribution to such Person, the purchase or other acquisition of any stock, bonds, notes, debentures or other securities issued by such Person, the acquisition (by purchase or otherwise) of all or substantially all of the business or assets of such Person, or the 11 making of any investment in such Person, (ii) the designation of any Restricted Subsidiary as an Unrestricted Subsidiary and (iii) the fair market value of the Capital Stock (or any other Investment), held by the Company or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to be a Restricted Subsidiary. Investments exclude endorsements for deposit or collection in the ordinary course of business and extensions of trade credit on commercially reasonable terms in accordance with normal trade practices. "ISSUE DATE" means the date on which the Notes are first issued. "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. "LIBOR" means, with respect to an Interest Period, the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank's offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank's rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in United States dollars to leading European banks for a three-month period beginning on the second London Banking Day after the Determination Date. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period. "LIEN" means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest, hypothecation, assignment for security, claim, or preference or priority or other encumbrance upon, or with respect to, any property of any kind, real or personal, movable or immovable, now owned or hereafter acquired. A Person will be deemed to own subject to a Lien any property that such Person has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement. "LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to Section 5 of the Registration Rights Agreement. 12 "LONDON BANKING DAY" is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market. "MINORITY INTEREST" means, with respect to any Person, interests in income of such Person's Subsidiaries held by Persons other than such Person or another Subsidiary of such Person, as reflected on such Person's consolidated financial statements. "MOODY'S" means Moody's Investors Service and any successor thereof. "NET CASH PROCEEDS" means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed for, cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary), net of (a) brokerage commissions and other fees and expenses (including fees and expenses of legal counsel and investment banks) related to such Asset Sale, (b) provisions for all taxes payable as a result of such Asset Sale, (c) payments made to retire Indebtedness where such Indebtedness is secured by the assets that are the subject of such Asset Sale, (d) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets that are subject to the Asset Sale and (e) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the seller after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale. "NON-RECOURSE INDEBTEDNESS" means Indebtedness of a Person (i) as to which neither the Company nor any of its Restricted Subsidiaries (other than such Person), (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise), and (ii) the obligees of which will have recourse for repayment of the principal of and interest on such Indebtedness and any fees, indemnities, expense reimbursements or other amount of whatsoever nature accrued or payable in connection with such Indebtedness solely against the assets of such Person and not against any of the assets of the Company or its Restricted Subsidiaries (other than such Person). "NON-U.S. PERSON" means a Person who is not a U.S. Person. "NOTES" means the Senior Secured Floating Rate Notes due 2011 of the Company issued on the date hereof and the Exchange Notes. The Notes and the Additional Notes, if any, shall be treated as a single class for all purposes under this Indenture. "NOTE OBLIGATIONS" means the Notes, the Guarantees and all other Obligations of any obligor under this Indenture, the Notes, the Exchange Notes, the Guarantees and the Security Documents. 13 "OBLIGATIONS" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "OFFICER" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company by at least two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 13.05 hereof. "OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.05 hereof. "PARI PASSU INDEBTEDNESS" means (a) with respect to the Notes, Indebtedness that ranks pari passu in right of payment to the Notes and (b) with respect to any Guarantee, Indebtedness that ranks pari passu in right of payment to such Guarantee. "PARTICIPANT" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and with respect to DTC, shall include Euroclear and Clearstream). "PATIENT RECEIVABLES" means the patient accounts of the Company or any Guarantor existing or hereinafter created, any and all rights to receive payments due on such accounts from any obligor or other third-party payor under or in respect of such accounts (including, without limitation, all insurance companies, Blue Cross/Blue Shield, Medicare, Medicaid and health maintenance organizations), and all proceeds of, or in any way derived, whether directly or indirectly, from any of the foregoing (including, without limitation, all interest, finance charges and other amounts payable by an obligor in respect thereof). "PERMITTED BUSINESS" means the business conducted by the Company, its Restricted Subsidiaries and Permitted Joint Ventures as of the Issue Date and any and all diagnostic imaging and information businesses that in the good faith judgment of the Board of the Company are reasonably related thereto. "PERMITTED INDEBTEDNESS" has the meaning set forth in Section 4.09(c) hereof. "PERMITTED INVESTMENTS" means any of the following: (a) Investments in (i) United States dollars (including such dollars as are held as overnight bank deposits and demand deposits with banks), (ii) securities with a maturity of one year or less issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof); (iii) certificates of deposit, Euro-dollar time deposits or acceptances with a maturity of one year or less of any financial institution that is a member of the Federal 14 Reserve System having combined capital and surplus of not less than $500,000,000; (iv) any shares of money market mutual or similar funds having assets in excess of $500,000,000; (v) repurchase obligations with a term not exceeding seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above; and (vi) commercial paper with a maturity of one year or less issued by a corporation that is not an Affiliate of the Company and is organized under the laws of any state of the United States or the District of Columbia and having a rating (A) from Moody's of at least P-1 or (B) from S&P of at least A-1; (b) Investments by the Company or any Restricted Subsidiary in another Person, if as a result of such Investment (i) such other Person becomes a Restricted Subsidiary or (ii) such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, the Company or a Restricted Subsidiary; (c) Investments by the Company or a Restricted Subsidiary in the Company or a Restricted Subsidiary; (d) Investments in existence on the Reference Date; (e) promissory notes or other evidence of Indebtedness received as a result of Asset Sales permitted under Section 4.10 hereof; (f) loans or advances to officers, directors and employees of the Company or any of its Restricted Subsidiaries made (i) in the ordinary course of business in an amount not to exceed $5 million in the aggregate at any one time outstanding or (ii) in connection with the purchase by such Persons of Equity Interests of the Parent so long as the cash proceeds of such purchase received by the Parent are contemporaneously remitted by the Parent to the Company as a capital contribution; (g) any Investment by the Company or any Restricted Subsidiary of the Company in Permitted Joint Ventures made after the Reference Date having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (g) that are at the time outstanding, not exceeding the greater of (i) $30 million and (ii) 10% of the Consolidated Tangible Assets of the Company as of the last day of the most recent full fiscal quarter ending immediately prior to the date of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (h) any Investment by the Company or any Restricted Subsidiary in a trust, limited liability company, special purpose entity or other similar entity in connection with a Receivables Program; provided that (A) such Investment is made by a Receivables Subsidiary and (B) the only assets transferred to such trust, limited liability company, special purpose entity or other similar entity consist of Receivables and Related Assets of such Receivables Subsidiary; and (i) other Investments that do not exceed $20 million in the aggregate at any one time outstanding. 15 "PERMITTED JOINT VENTURE" means any joint venture, partnership or other Person designated by the Board of the Company, (i) at least 20% of whose Capital Stock with voting power under ordinary circumstances to elect directors (or Persons having similar or corresponding powers and responsibilities) is at the time owned (beneficially or directly) by the Company and/or by one or more Restricted Subsidiaries of the Company and if the Company owns more than 50% of the Capital Stock of the Permitted Joint Venture, such Permitted Joint Venture is either a Restricted Subsidiary of the Company or has been designated as an Unrestricted Subsidiary of the Company in accordance with the provisions of Section 4.16 hereof, (ii) (x) if it is an Unrestricted Subsidiary, all Indebtedness of such Person is Non-Recourse Indebtedness or (y) if it is a Person other than an Unrestricted Subsidiary, either all Indebtedness of such Person is Non-Recourse Indebtedness or the only Indebtedness of such Person that is not Non-Recourse Indebtedness is Indebtedness as to which any guarantee provided by the Company or a Restricted Subsidiary complies with the provisions of Sections 4.07 and 4.09 hereof, and (iii) which is engaged in a Permitted Business; provided, that each of Berwyn Magnetic Resonance Center, LLC, Garfield Imaging Center, Ltd., Tom's River Imaging Associates, L.P., St. John's Regional Imaging Center, LLC, Dublin Diagnostic Imaging, LLC, Connecticut Lithotripsy, LLC, Northern Indiana Oncology Center of Porter Memorial Hospital, LLC, Lockport MRI, LLC, Wilkes-Barre Imaging, LLC, Sun Coast Imaging Center, LLC, Granada Hills Open MRI, LLC, Daniel Freeman MRI, LLC, InSight-Premier Health, LLC, Southern Connecticut Imaging Centers, LLC, Parkway Imaging Center, LLC, Metabolic Imaging of Kentucky, LLC, Maine Molecular Imaging, LLC, Greater Waterbury Imaging Center, L.P. and Central Maine Magnetic Imaging Associates, shall be deemed to be a Permitted Joint Venture. Any such designation (other than with respect to the Persons identified in the preceding sentence) shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution giving effect to such designation and an officer's certificate certifying that such designation complied with the foregoing provisions. "PERMITTED LIENS" means: (1) Liens on Receivables and Related Assets securing Indebtedness incurred under paragraph (c)(i) under Section 4.09 hereof in an aggregate principal amount not to exceed $125 million less (A) up to $50 million of cash (or the fair market value of any other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date and (B) the aggregate principal amount of any Additional Notes issued by the Company. (2) Liens in favor of the Company or any Restricted Subsidiary that is a Guarantor; (3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary; (4) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in 16 existence prior to the contemplation of such acquisition and do not extend to any property other than the property so acquired by the Company or the Restricted Subsidiary; (5) Liens securing the Notes (other than Additional Notes) and the related Guarantees; (6) Liens existing on the Issue Date; (7) Liens securing Permitted Refinancing Indebtedness; provided that such Liens do not extend to any property or assets other than the property or assets that secure the Indebtedness being refinanced; (8) Liens to secure Indebtedness (including Capitalized Lease Obligations) permitted by paragraph 4.09(c)(viii) hereof provided that any such Lien (i) covers only the assets acquired, constructed or improved with such Indebtedness and (ii) is created within 90 days of such acquisition, construction or improvement; (9) Liens on cash or cash equivalents securing Hedging Obligations of the Company or any of its Restricted Subsidiaries (a) that are incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, or (b) securing letters of credit that support such Hedging Obligations; (10) Liens incurred or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance or other social security obligations; (11) Lien, deposits or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of Indebtedness), leases, or other similar obligations arising in the ordinary course of business; (12) Carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other like Liens arising in the ordinary course of business in respect of obligations not overdue for a period in excess of 60 days or which are being contested in good faith by appropriate proceedings promptly instituted and diligently prosecuted; provided, however, that any reserve or other appropriate provision as will be required to conform with GAAP will have been made for that reserve or provision; (13) survey exceptions, encumbrances, easements or reservations of, or rights of other for, rights of way, zoning or other restrictions as to the use of properties, and defects in title which, in the case of any of the foregoing, were not incurred or created to secure the payment of Indebtedness, and which in the aggregate do not materially adversely affect the value of such properties or materially impair the use for the purposes of which such properties are held by the Company or any of its Restricted Subsidiaries; 17 (14) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made; (15) Liens, deposits or pledges to secure public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds or obligations; any encumbrance on rights of the Company or any Guarantor to pledge interest in, or grant control over, Patient Receivables to third parties pursuant to applicable statutes; Liens, deposits or pledges in lieu of such bonds or obligations, or to secure such bonds or obligations, or to secure letters of credit in lieu of or supporting the payment of such bonds or obligations; and Liens of sellers of goods to the Company and any of its Restricted Subsidiaries arising under Article 2 of the UCC in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses; (16) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Company or any Subsidiary thereof on deposit with or in possession of such bank; (17) any interest or title of a lessor, licensor or sublicensor in the property subject to any lease, license or sublicense (other than any property that is the subject of a Sale Leaseback Transaction); (18) Liens for taxes, assessments and governmental charges not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by GAAP; (19) Liens arising from precautionary UCC financing statements regarding operating leases or consignments; (20) Liens or assets directly related to a Sale and Leaseback Transaction to secure related Attributable Debt; (21) any interest of title of a buyer in connection with, and Liens arising from UCC financing statements relating to, a sale of Receivables and Related Assets pursuant to a Receivables Program; provided that such Liens do not extend to any assets other than Receivables and Related Assets; (22) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto; provided that such insurance policies are purchased in the ordinary course of business; (23) Liens securing Additional Notes and the related Guarantees incurred pursuant to clauses 4.09(c)(i), (xiv) or (xvi) hereof in an aggregate principal amount not to exceed $125 million less up to $50 million of cash (or the fair market value of any other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date; and 18 (24) Liens not otherwise permitted by this Indenture so long as the aggregate outstanding principal amount of the obligations secured thereby does not exceed $3 million at any one time outstanding. "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that: (i) the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded plus accrued interest plus the lesser of the amount of any premium required to be paid in connection with such refinancings pursuant to the terms of such indebtedness or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing (in each case plus the amount of reasonable expenses incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date not earlier than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such Permitted Refinancing Indebtedness shall not include Indebtedness of a Restricted Subsidiary that refinances Indebtedness of the Company, or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of a Subsidiary Guarantor. "PERSON" means any individual, corporation, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or any agency or political subdivision thereof. "PREFERRED STOCK" means, with respect to any Person, any and all shares, interests, partnership interests, participation, rights in or other equivalents (however designated) of such Person's preferred or preference stock, whether now outstanding or issued after the Issue Date, and including, without limitation, all classes and series of preferred or preference stock of such Person. "PRINCIPALS" means the Equity Sponsors and their respective Affiliates. "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.07(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. "PUBLIC EQUITY OFFERING" means an offer and sale of Capital Stock (other than Disqualified Stock) of the Company or the Parent pursuant to a registration statement that has been declared effective by the SEC pursuant to the Securities Act (other than a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the Company). 19 "PURCHASE MONEY OBLIGATIONS" of any Person means any obligations of such Person to any seller or any other Person incurred or assumed to finance the construction and/or acquisition of real or personal property to be used in the business of such Person or any of its Subsidiaries in an amount that is not more than 100% of the cost of such property, and incurred within 90 days after the date of such construction or acquisition (excluding accounts payable to trade creditors incurred in the ordinary course of business); provided that any Lien on such Indebtedness shall not extend to any property other than the property so acquired or constructed. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "QUALIFIED EQUITY INTEREST" means any Qualified Stock and all warrants, options or other rights to acquire Qualified Stock (but excluding any debt security that is convertible into or exchangeable for Capital Stock). "QUALIFIED STOCK" of any Person means any and all Capital Stock of such Person, other than Disqualified Stock. "RECEIVABLES AND RELATED ASSETS" means all of the following property and interests in property of the Company and each Guarantor, whether now owned or existing or hereafter created, acquired or arising and wheresoever located: (i) all Accounts; (ii) all Instruments, Chattel Paper (including, without limitation, Electronic Chattel Paper), Documents, Letter-of-Credit Rights and Supporting Obligations, in each case to the extent arising out of or relating to, or given in exchange or settlement for or to evidence the obligation to pay, any Account; (iii) all General Intangibles that arise out of or relate to any Account or from which any Account arises; (iv) all of the Deposit Accounts Collateral; (v) all monies now or at any time or times hereafter in the possession or under the control of the lenders under the Revolving Credit Agreement or a bailee of the lenders under the Revolving Credit Agreement, including, without limitation, any cash collateral in any cash collateral account, other than any proceeds from the sale or other disposition of any of the Collateral; (vi) all products and cash and non-cash proceeds of the foregoing, including, without limitation, proceeds of insurance in respect of any of the foregoing; and (vii) all books and records (including, without limitation, customer lists, files, correspondence, tapes, computer programs, print-outs and other computer materials and records) of the Company or any Guarantor pertaining to any of the foregoing. For purposes of this definition, "Accounts," "Instruments," "Chattel Paper," "Electronic Chattel Paper," "Documents," "Letter-of-Credit Rights," "Supporting Obligations" and "General Intangibles" shall have the meanings provided for by the UCC. "RECEIVABLES PROGRAM" means, with respect to any Person, any securitization program pursuant to which such Person pledges, sells or otherwise transfers or encumbers its Receivables and Related Assets, including a trust, limited liability company, special purpose entity or other similar entity. "RECEIVABLES SUBSIDIARY" means a Wholly Owned Subsidiary (i) created for the purpose of financing Receivables and Related Assets created in the ordinary course of business of the Company and its Subsidiaries and (ii) the sole assets of which consist of Receivables and Related Assets of the Company and its Subsidiaries and Permitted Investments. 20 "REFERENCE DATE" means October 17, 2001. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of the Issue Date, by and among the Company, the Guarantors and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time. "REGULATION S" means Regulation S promulgated under the Securities Act. "REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global Note or a Regulation S Permanent Global Note, as appropriate. "REGULATION S PERMANENT GLOBAL NOTE" means a permanent global Note in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount at maturity of the Regulation S Temporary Global Note upon expiration of the Restricted Period. "REGULATION S TEMPORARY GLOBAL NOTE" means a temporary global Note in the form of Exhibit A2 hereto bearing the Global Note Legend, the Private Placement Legend and the Temporary Regulation S Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount at maturity of the Notes initially sold in reliance on Rule 903 of Regulation S. "RELATED PARTY" means: (a) any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Principal; or (b) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause. "REPRESENTATIVE" means the trustee, agent or representative for any Senior Indebtedness. "REPRESENTATIVE AMOUNT" means as at any date an amount equal to, or approximately equal to, the aggregate principal amount of the Notes then outstanding. "RESPONSIBLE OFFICER," when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject. 21 "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the Private Placement Legend. "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private Placement Legend. "RESTRICTED PERIOD" means the 40-day restricted period as defined in Regulation S. "RESTRICTED SUBSIDIARY" means any Subsidiary other than an Unrestricted Subsidiary. Notwithstanding anything to the contrary herein or in the Notes, Toms River Imaging Associates, L.P. will be deemed a Restricted Subsidiary of the Company so long as the Company, directly or indirectly, own at least 50% of the Voting Stock thereof. "REVOLVING CREDIT AGREEMENT" means the Amended and Restated Loan and Security Agreement, to be dated as of the Issue Date, among the Company, the Guarantors, the Lenders party thereto and Bank of America, N.A., as collateral agent and administrative agent, providing for up to $30 million of revolving credit borrowings and/or letters of credit, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith. "RULE 144" means Rule 144 promulgated under the Securities Act. "RULE 144A" means Rule 144A promulgated under the Securities Act. "RULE 903" means Rule 903 promulgated under the Securities Act. "RULE 904" means Rule 904 promulgated the Securities Act. "SALE AND LEASEBACK TRANSACTION" means any transaction or series of related transactions pursuant to which the Company or a Restricted Subsidiary sells or transfers any property or asset in connection with the leasing, or the resale against installment payments, of such property or asset to the seller or transferor. "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended from time to time, and the rules and regulations thereunder. "SECURITY DOCUMENTS" means, collectively, the Collateral Agency Agreement, the Security Agreement (as defined in the Collateral Agency Agreement), the Pledge Agreement (as defined in the Collateral Agency Agreement), the Account Control Agreements (as defined in the Collateral Agency Agreement), and all other pledges, agreements, financing statements, filings or other documents that grant or evidence the Lien in the Collateral in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes, as they may be amended, restated, supplemented, replaced or modified from time to time. 22 "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of the Company that, together with its Subsidiaries, (a) for the most recent fiscal year of the Company, accounted for more than 10% of the consolidated net revenues of the Company and its Subsidiaries, (b) as of the end of such fiscal year, was the owner of more than 10% of the consolidated assets of the Company and its Restricted Subsidiaries, in the case of either (a) or (b), as set forth on the most recently available consolidated financial statements of the Company for such fiscal year or (c) was organized or acquired after the beginning of such fiscal year and would have been a Significant Subsidiary if it had been owned during such entire fiscal year. "S&P" means Standard & Poor's Ratings Group and any successor thereof. "STATED MATURITY" means, when used with respect to any Note or any installment of interest thereon, the date specified in such Note as the fixed date on which the principal of such Note or such installment of interest is due and payable and, when used with respect to any other Indebtedness, means the date specified in the instrument governing such Indebtedness as the fixed date on which the principal of such Indebtedness or any installment of interest thereon is due and payable. "SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a Guarantor that is subordinated in right of payment to the Notes or the Guarantee issued by such Guarantor, as the case may be. "SUBSIDIARY" means any Person a majority of the equity ownership or Voting Stock of which is at the time owned, directly or indirectly, by the Company and/or one or more other Subsidiaries of the Company. Notwithstanding anything to the contrary herein or in the Notes, Toms River Imaging Associates, L.P. will be deemed a Subsidiary of the Company so long as the Company, directly or indirectly, own at least 50% of the Voting Stock thereof. "SUBSIDIARY GUARANTORS" means, collectively, all Wholly Owned Restricted Subsidiaries (including any Person that becomes a Wholly Owned Restricted Subsidiary after the Issue Date) that are incorporated in the United States or a state thereof or the District of Columbia. "TELERATE PAGE 3750" means the display designated as "Page 3750" on the Moneyline Telerate service (or such other page as may replace Page 3750 on that service). "TEMPORARY REGULATION S LEGEND" means the legend set forth in Section 2.07(h) hereof, which is required to be placed on the Regulation S Temporary Global Note. "TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa - 77bbbb), as in effect on the date on which this Indenture is qualified under the TIA. 23 "TRUSTEE" means U.S. Bank National Association, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "UCC" means the Uniform Commercial Code (or any successor statute) as adopted and in force in the State of New York or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any asset, the Uniform Commercial Code (or any successor statute) of such state. "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "UNRESTRICTED GLOBAL NOTE" means a permanent Global Note substantially in the form of Exhibit A1 attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend. "UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary that is designated by the Board of the Company as an Unrestricted Subsidiary in accordance with Section 4.16 hereof and (b) any Subsidiary of an Unrestricted Subsidiary. "U.S. GOVERNMENT OBLIGATIONS" means (i) securities that are (a) direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof; and (ii) depositary receipts issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause (i) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest of the U.S. Government Obligation evidenced by such depositary receipt. "U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the Securities Act. "VOTING STOCK" means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of any Person (irrespective of whether or not, at the time, stock of any other class or classes has, or might have, voting power by reason of the happening of any contingency). 24 "WEIGHTED AVERAGE LIFE TO MATURITY" means, as of the date of determination with respect to any Indebtedness or Disqualified Stock, the quotient obtained by dividing (a) the sum of the products of (i) the number of years from the date of determination to the date or dates of each successive scheduled principal or liquidation value payment of such Indebtedness or Disqualified Stock, respectively, multiplied by (ii) the amount of each such principal or liquidation value payment by (b) the sum of all such principal or liquidation value payments. "WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary, all of the outstanding Voting Stock (other than directors' qualifying shares or shares of foreign Restricted Subsidiaries required to be owned by foreign nationals pursuant to applicable law) of which is owned, directly or indirectly, by the Company. "WHOLLY OWNED SUBSIDIARY" means any Subsidiary, all of the outstanding Voting Stock (other than directors' qualifying shares or shares of foreign Subsidiaries required to be owned by foreign nationals pursuant to applicable law) of which is owned, directly or indirectly, by the Company. Section 1.02 Other Definitions.

DEFINED IN TERM SECTION - ---- ---------- "AUTHENTICATION ORDER"............................................. 2.02 "CALCULATION AGENT"................................................ Exhibit A1 "CHANGE OF CONTROL OFFER".......................................... 4.14 "CHANGE OF CONTROL PAYMENT"........................................ 4.14 "CHANGE OF CONTROL PAYMENT DATE"................................... 4.14 "COMPANY".......................................................... Preamble "COVENANT DEFEASANCE".............................................. 8.03 "DTC".............................................................. 2.01 "EVENT OF DEFAULT"................................................. 6.01 "EXCESS PROCEEDS".................................................. 4.10 "EXCESS PROCEEDS OFFER"............................................ 4.10 "INCUR"............................................................ 4.09 "LEGAL DEFEASANCE"................................................. 8.02 "OFFER AMOUNT"..................................................... 3.09 "OFFER PERIOD"..................................................... 3.09 "PARENT"........................................................... Preamble "PAYING AGENT"..................................................... 2.04 "PAYMENT DEFAULT".................................................. 6.01 "PURCHASE DATE".................................................... 3.09 "REGISTRAR"........................................................ 2.04 "RELATED JUDGMENT"................................................. 13.09 "RELATED PROCEEDINGS".............................................. 13.09 "REPURCHASE OFFER"................................................. 3.09 "RESTRICTED PAYMENTS".............................................. 4.07 "SPECIFIED COURTS"................................................. 13.09

25 Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "INDENTURE SECURITIES" means the Notes; "INDENTURE SECURITY HOLDER" means a Holder of a Note; "INDENTURE TO BE QUALIFIED" means this Indenture; "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and "OBLIGOR" on the Notes means the Company and any successor obligor upon the Notes. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. Section 1.04 Rules of Construction. (a) Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) "or" is not exclusive; (iv) words in the singular include the plural, and in the plural include the singular; (v) provisions apply to successive events and transactions; and (vi) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. 26 ARTICLE TWO THE NOTES Section 2.01 Form and Dating. (1) General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A1 or A2 hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be issued in registered, global form without interest coupons and only shall be in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. (2) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A1 or A2 attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A1 attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee in accordance with instructions given by the Holder thereof as required by Section 2.07 hereof. (3) Temporary Global Notes. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for The Depository Trust Company ("DTC") in New York, New York, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of (i) a written certificate from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount at maturity of the Regulation S Temporary Global Note (except to the extent of any Beneficial Owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by Section 2.07(a)(ii) hereof), and (ii) an Officers' Certificate from the Company. Following the termination of the Restricted 27 Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. (4) Euroclear and Clearstream Procedures Applicable. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank" and "Customer Handbook" of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream. Section 2.02 Execution and Authentication. Two Officers of the Company shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture is unlimited. The Trustee shall, upon a written order of the Company signed by two Officers of the Company (an "AUTHENTICATION ORDER") delivered to the Trustee, authenticate Notes for original issue on the Issue Date in an aggregate principal amount of $300 million. The Trustee shall authenticate Notes thereafter in unlimited amount, so long as permitted by the terms of this Indenture, including without limitation Section 4.09 and Section 4.12, for original issuance pursuant to an Authentication Order, in aggregate principal amount as specified in such order (other than as provided in Section 2.08). The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. 28 Section 2.03 Methods of Receiving Payments on the Notes. If a Holder of Notes has given wire transfer instructions to the Company at least 10 Business Days before payment is due, the Company shall pay all principal, interest and premium and Liquidated Damages, if any, on that Holder's Notes in accordance with those instructions. All other payments on Notes shall be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the Company elects to make interest payments by check mailed to the Holders at their addresses set forth in the register of Holders. Payments of interest to the Trustee as Paying Agent, if the Trustee then acts as Paying Agent, with respect to any Interest Payment Date (as defined in the Notes) shall be made by the Company in immediately available funds for receipt by the Trustee one Business Day prior to the such Interest Payment Date (or in no event later than 12:30 p.m. Eastern Time on such Interest Payment Date). Section 2.04 Registrar and Paying Agent. (a) The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("REGISTRAR") and an office or agency where Notes may be presented for payment ("PAYING AGENT"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without prior notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. (b) The Company initially appoints DTC to act as Depositary with respect to the Global Notes. (c) The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. Section 2.05 Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and shall notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or one of its Subsidiaries) shall have no further liability for the money. If the Company or any of its Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying 29 Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. Section 2.06 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA Section 312(a). Section 2.07 Transfer and Exchange. (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes shall be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary; (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or (iii) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes. Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.11 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.07 or Section 2.08 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.07(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.07(b), (c) or (f) hereof. (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: 30 (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.07(b)(i). (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.07(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.07(f) hereof, the requirements of this Section 2.07(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount at maturity of the relevant Global Notes pursuant to Section 2.07(i) hereof. (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.07(b)(ii) above and the Registrar receives the following: 31 (A) if the transferee shall take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and (B) if the transferee shall take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof. (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any Holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.07(b)(ii) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or (2) if the Holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or 32 transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any Holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; 33 (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(i) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c) shall be registered in such name or names and in such authorized denomination or denominations as the Holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.07(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. (iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A Holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 34 (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or (2) if the Holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any Holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.07(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(i) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.07(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the Holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.07(c)(iv) shall not bear the Private Placement Legend. (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. (i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive 35 Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, and in the case of clause (C) above, the Regulation S Global Note and in all other cases the IAI Global Note. (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a 36 Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.07(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. 37 If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.07(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.07(e). (i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: (A) if the transfer shall be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transfer shall be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transfer shall be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 38 (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. Any Notes 39 that remain outstanding after the consummation of the Exchange Offer, and Exchange Notes issued in connection with the Exchange Offer, shall be treated as a single class of securities under this Indenture. (g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) Private Placement Legend. Except as permitted below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE, THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY, THE PARENT OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES AND THE GUARANTEES ENDORSED THEREON ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) PRIOR TO 40 THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.07 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form: THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. (h) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall bear a legend in substantially the following form: THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. (i) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a 41 particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.12 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. (j) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid and legally binding obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving 42 payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.07 to effect a registration of transfer or exchange may be submitted by facsimile with the original to follow by first class mail. Section 2.08 Replacement Notes. (a) If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. (b) Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. Section 2.09 Outstanding Notes. (a) The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.10 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof. (b) If a Note is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser. (c) If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. (d) If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any of the foregoing) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. 43 Section 2.10 Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned shall be so disregarded. Section 2.11 Temporary Notes. (a) Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes. (b) Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. Section 2.12 Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of canceled Notes in accordance with its procedures for the disposition of canceled securities in effect as of the date of such disposition (subject to the record retention requirement of the Exchange Act). Certification of the disposition of all canceled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. Section 2.13 Defaulted Interest. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 44 Section 2.14 CUSIP Numbers. The Company in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee of any change in the "CUSIP" numbers. ARTICLE THREE REDEMPTION AND PREPAYMENT; SATISFACTION AND DISCHARGE Section 3.01 Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. Section 3.02 Selection of Notes to Be Redeemed. (a) If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. (b) The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount at maturity thereof to be redeemed. No Notes in amounts of $1,000 or less shall be redeemed in part. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. Section 3.03 Notice of Redemption. (a) Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by 45 first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. The notice shall identify the Notes to be redeemed and shall state: (i) the redemption date; (ii) the redemption price; (iii) if any Note is being redeemed in part, the portion of the principal amount at maturity of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note shall be issued in the name of the Holder thereof upon cancellation of the original Note; (iv) the name and address of the Paying Agent; (v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price and become due on the date fixed for redemption; (vi) that, unless the Company defaults in making such redemption payment, interest, if any, on Notes called for redemption ceases to accrue on and after the redemption date; (vii) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (viii) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. (b) At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. The notice, if mailed in the manner provided herein shall be presumed to have been given, whether or not the Holder receives such notice. Section 3.04 Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. Section 3.05 Deposit of Redemption Price. (a) One Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed on that date. The 46 Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. (b) If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Holder in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. Section 3.06 Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. No Notes in denominations of $1,000 or less shall be redeemed in part. Section 3.07 Optional Redemption. (a) The Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to November 1, 2006. Thereafter, the Company may redeem all or a part of the Notes from time to time, upon not less than 30 days' (or, if all of the Notes are then held by an Initial Purchaser and/or any of its affiliates, 15 days) nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on November 1 of the years indicated below (subject to the right of Holders on the relevant record date to receive interest due on the related interest payment date):

YEAR PERCENTAGE - ---- ---------- 2006.................. 103.00% 2007.................. 101.50% 2008 and thereafter... 100.00%

(b) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 47 Section 3.08 Mandatory Redemption. Except as set forth in Section 4.10 and 4.14 hereof, the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes. Section 3.09 Repurchase Offers. In the event that, pursuant to Sections 4.10 and 4.14 hereof, the Company shall be required to commence an offer to all Holders to purchase their respective Notes (a "REPURCHASE OFFER"), it shall follow the procedures specified below. The Repurchase Offer shall remain open for a period of not less than 30 and not more than 60 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "OFFER PERIOD"). No later than five Business Days after the termination of the Offer Period (the "PURCHASE DATE"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Sections 4.10 and 4.14 hereof (the "OFFER AMOUNT") or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Repurchase Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Repurchase Offer. Upon the commencement of a Repurchase Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Repurchase Offer. The Repurchase Offer shall be made to all Holders. The notice, which shall govern the terms of the Repurchase Offer, shall state: (i) that the Repurchase Offer is being made pursuant to Section 4.10 or Section 4.14 hereof, and the length of time the Repurchase Offer shall remain open; (ii) the Offer Amount, the purchase price and the Purchase Date; (iii) that any Note not tendered or accepted for payment shall continue to accrete or accrue interest and Liquidated Damages, if any; (iv) that, unless the Company defaults in making such payment, any Note (or portion thereof) accepted for payment pursuant to the Repurchase Offer shall cease to accrete or accrue interest and Liquidated Damages, if any, after the Purchase Date; (v) that Holders electing to have a Note purchased pursuant to a Repurchase Offer may elect to have Notes purchased in integral multiples of $1,000 only; (vi) that Holders electing to have a Note purchased pursuant to any Repurchase Offer shall be required to surrender the Note, with the form entitled "Option 48 of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (vii) that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased; (viii) that, if the aggregate amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee shall select the Notes to be purchased pursuant to the terms of Section 3.02 hereof (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (ix) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). On the Purchase Date, the Company shall, to the extent lawful, accept for payment on a pro rata basis to the extent necessary, the Offer Amount of Notes (or portions thereof) tendered pursuant to the Repurchase Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes (or portions thereof) were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of Notes tendered by such Holder, as the case may be, and accepted by the Company for purchase, and the Company shall promptly issue a new Note. The Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount at maturity equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the respective Holder thereof. The Company shall publicly announce the results of the Repurchase Offer on the Purchase Date. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Excess Proceeds Offer. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 49 Section 3.10 Application of Trust Money. All money deposited with the Trustee pursuant to Section 12.02 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law. ARTICLE FOUR COVENANTS Section 4.01 Payment of Notes. (a) The Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or one of its Subsidiaries, holds as of 1:00 p.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. (b) The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. Section 4.02 Maintenance of Office or Agency. (a) The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an agent of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. (b) The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain 50 an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. (c) The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.04 of this Indenture. Section 4.03 Reports. (a) Whether or not the Company is required to file reports with the SEC, so long as any Notes are outstanding, the Company will file with the SEC, within the time periods specified in the SEC's rules and regulations, all such annual reports, quarterly reports and other documents that the Company would be required to file if it were subject to Section 13(a) or 15(d) under the Exchange Act. The Company will also be required (i) to supply to the Trustee and each Holder, or supply to the Trustee for forwarding to each such Holder, without cost to such Holder, copies of such reports and other documents within 15 days after the date on which the Company files such reports and documents with the SEC or the date on which the Company would be required to file such reports and documents if the Company were so required and (ii) if filing such reports and documents with the SEC is not accepted by the SEC or is prohibited under the Exchange Act, to supply at the Company's cost copies of such reports and documents to any prospective Holder promptly upon written request. In addition, the Company has agreed that, for so long as any Notes remain outstanding, it will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information specified in Rule 144A(d)(4) under the Securities Act. (b) Notwithstanding subsection (a) above, so long as the Parent guarantees the Notes, the reports, information and other documents required to be filed and provided as described above may be those of the Parent, rather than the Company, so long as such filings (i) would satisfy the requirements of the Exchange Act and the regulations promulgated thereunder and (ii) disclose the Company's results of operations and financial condition in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section in at least such detail as would be required if the Company were filing such report. Section 4.04 Compliance Certificate. (a) The Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, the Company has kept, observed, performed and fulfilled its obligations under this Indenture and is not in default in the performance or observance of any of the material terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred and be continuing, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her 51 knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. (b) If required under Section 314(a) of the Trust Indenture Act, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (which shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article Four or Article Five hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. Section 4.05 Taxes. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, any material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. Section 4.06 Stay, Extension and Usury Laws. The Company and each of the Guarantors covenant (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. Section 4.07 Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take any of the following actions: (i) declare or pay any dividend on, or make any distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary, other than (i) dividends or distributions payable solely in Qualified Equity Interests or (ii) dividends or distributions by a Restricted Subsidiary payable to the Company or a Wholly Owned 52 Restricted Subsidiary or to all holders of Capital Stock of such Restricted Subsidiary on a pro rata basis; (ii) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any shares of Capital Stock, or any options, warrants or other rights to acquire such shares of Capital Stock, of the Company, any direct or indirect parent of the Company or any Subsidiary of the Company (other than a Wholly Owned Restricted Subsidiary); (iii) make any principal payment on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Subordinated Indebtedness; and (iv) make any Investment (other than a Permitted Investment) in any Person (such payments or other actions described in (but not excluded from) clauses (a) through (d) being referred to as "RESTRICTED PAYMENTS"); unless at the time of, and immediately after giving effect to, the proposed Restricted Payment: (i) no Default or Event of Default has occurred and is continuing; (ii) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); and (iii) the aggregate amount of all Restricted Payments made after the Reference Date does not exceed the sum of: (A) 50% of the aggregate Consolidated Net Income of the Company during the period (taken as one accounting period) from the first day of the Company's first fiscal quarter commencing after October 30, 2001 to the last day of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Net Income is a loss, 100% of such amount); plus (B) 100% of the aggregate net cash proceeds received by the Company after the Reference Date as a capital contribution or from the issuance or sale (other than to a Subsidiary) of either (1) Qualified Equity Interests of the Company or (2) debt securities or Disqualified Stock that have been converted into or exchanged for Qualified Stock of the Company, together with the aggregate net cash proceeds received by the Company at the time of such conversion or exchange. 53 (b) Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may take the following actions, so long as no Default or Event of Default has occurred and is continuing or would occur: (i) the payment of any dividend within 60 days after the date of declaration thereof, if at the declaration date such payment would not have been prohibited by the foregoing provisions; (ii) the repurchase, redemption or other acquisition or retirement for value of any shares of Capital Stock of the Company, in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, Qualified Equity Interests of the Company or of the Parent, the proceeds of which are contributed to the Company as a capital contribution on a substantially concurrent basis; (iii) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, shares of Qualified Equity Interests of the Company or of the Parent, the proceeds of which are contributed to the Company as a capital contribution on a substantially concurrent basis; (iv) the purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness in exchange for, or out of the net cash proceeds of a substantially concurrent issuance or sale (other than to a Subsidiary) of, Subordinated Indebtedness, so long as the Company or a Restricted Subsidiary would be permitted to refinance such original Subordinated Indebtedness with such new Subordinated Indebtedness pursuant to clause (iv) of the definition of Permitted Indebtedness; (v) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness in the event of a Change of Control in accordance with provisions similar to Section 4.14 hereof; provided that prior to or simultaneously with such repurchase, the Company has made the Change of Control Offer as provided in Section 4.14 hereof with respect to the Notes and has repurchased all Notes validly tendered for payment in connection with such Change of Control Offer; (vi) within 90 days after the completion of an Excess Proceeds Offer pursuant to Section 4.10 hereof (including the purchase of all Notes tendered), any purchase or redemption of Indebtedness of the Company that is subordinated in right of payment to the Notes and that is required to be repurchased or redeemed pursuant to the terms thereof as a result of the related Asset Sale, at a purchase price not greater than 100% of the outstanding principal amount thereof (plus accrued and unpaid interest); (vii) the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of the Company, options on any such shares or related stock appreciation rights or similar securities, or any dividend, distribution or advance to the Parent for the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of the Parent, options on any such shares or related stock 54 appreciation rights or similar securities, in each case held by officers, directors or employees or former officers, directors or employees (or their estates or beneficiaries under their estates) of the Company, the Parent or any Subsidiary of the Company, as applicable, or by any employee benefit plan of the Company, the Parent or any Subsidiary of the Company, as applicable, upon death, disability, retirement or termination of employment or pursuant to the terms of any employee benefit plan or any other agreement under which such shares of stock or related rights were issued; provided that the aggregate amount of cash applied by the Company for such purchase, redemption, acquisition, cancellation or other retirement of such shares of Capital Stock of the Company or the Parent after the Reference Date does not exceed $7.5 million in the aggregate (excluding for purposes of calculating such amount the aggregate amount received by any Person in connection with such purchase, redemption, acquisition, cancellation or other retirement of such shares that is concurrently used to repay loans made to such Person by the Company pursuant to clause (f) of the definition of "Permitted Investment"); (viii) the payment of dividends or other distributions or the making of loans or advances to the Parent in amounts required for the Parent to pay franchise taxes and other fees required to maintain its existence and provide for all other customary operating costs of the Parent to the extent attributable to the ownership and operation of the Company and its Restricted Subsidiaries, including, without limitation, in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other customary costs and expenses including all costs and expenses with respect to filings with the SEC; (ix) the payment of dividends or other distributions by the Company to the Parent in amounts required to pay the tax obligations of the Parent attributable to the Company and its Subsidiaries, determined as if the Company and its Subsidiaries had filed a separate consolidated, combined or unitary return for the relevant taxing jurisdiction; provided that (x) the amount of dividends paid pursuant to this clause (viii) to enable the Parent to pay Federal and state income taxes (and franchise taxes based on income) at any time shall not exceed the amount of such Federal and state income taxes (and franchise taxes based on income) actually owing by the Parent at such time to the respective tax authorities for the respective period and (y) any refunds received by the Parent attributable to the Company or any of its Restricted Subsidiaries shall promptly be remitted by the Parent to the Company through a contribution or purchase of common stock (other than Disqualified Stock) of the Company; (x) the payment of dividends or other distributions or the making of loans or advances to the Parent in amounts required for the Parent to pay to the Equity Sponsors an annual amount not to exceed $500,000 for payment of management consulting or financial advisory services provided to the Company or any of the Subsidiaries; (xi) other Restricted Payments not to exceed $10 million at any one time outstanding; 55 (xii) repurchase or repurchases of Existing Notes; provided that (1) at the time of such repurchase or repurchases, no amount is outstanding under the Revolving Credit Agreement or any Indebtedness incurred to refinance or replace the Revolving Credit Agreement, (2) the aggregate amount of cash (or fair market value of any other assets) applied to such repurchase or repurchases under this clause (xii) does not exceed $25 million and (3) the amount of cash and Cash Equivalents held by the Company and the Restricted Subsidiaries immediately after giving effect to such repurchase or repurchases shall not be less than $29 million; and (xiii) repurchase or repurchases of Existing Notes; provided that (1) such repurchase or repurchases occur on the Issue Date or within two Business Days from the Issue Date, (2) the aggregate amount of cash (or fair market value of any other assets) applied to such repurchase or repurchases under this clause (xiii) does not exceed $50 million and (3) the amount of cash and cash equivalent held by the Company and the Restricted Subsidiaries immediately after giving effect to such repurchase or repurchases shall not be less than $29 million. (c) The actions described in clauses (v), (vi), (vii), (viii), (ix), (x) and (xi) of Section 4.07(b) will be Restricted Payments that will be permitted to be taken in accordance with this Section 4.07 but will reduce the amount that would otherwise be available for Restricted Payments under clause (iv)(iii) of Section 4.07(a) hereof and the actions described in clauses (i), (ii), (iii), (iv), (xii) and (xiii) of Section 4.07(b) will be Restricted Payments that will be permitted to be taken in accordance with this Section 4.07 and will not reduce the amount that would otherwise be available for Restricted Payments under clause (iv)(iii) of Section 4.07(a) hereof. For the purpose of making any calculations under this Indenture (i) if a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company will be deemed to have made an Investment in an amount equal to the greater of the fair market value or net book value of the net assets of such Restricted Subsidiary at the time of such designation as determined by the Board of the Company, and (ii) any property transferred to or from an Unrestricted Subsidiary will be valued at fair market value at the time of such transfer, as determined by the Board of the Company. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined by the Board of the Company whose resolution with respect thereto shall be delivered to the Trustee, such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $10 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required under this Section 4.07 were computed, together with a copy of any fairness opinion or appraisal required by this Indenture. If the aggregate amount of all Restricted Payments calculated under the foregoing provision includes an Investment in an Unrestricted Subsidiary or other Person that thereafter 56 becomes a Restricted Subsidiary, the aggregate amount of all Restricted Payments calculated under the foregoing provision will be reduced by the lesser of (x) the net asset value of such Subsidiary at the time it becomes a Restricted Subsidiary and (y) the initial amount of such Investment. If an Investment resulted in the making of a Restricted Payment, the aggregate amount of all Restricted Payments calculated under the foregoing provision will be reduced by the amount of any net reduction in such Investment (resulting from the payment of interest or dividends, loan repayment, transfer of assets or otherwise, other than the redesignation of an Unrestricted Subsidiary or other Person as a Restricted Subsidiary), to the extent such net reduction is not included in the Company's Consolidated Net Income; provided that the total amount by which the aggregate amount of all Restricted Payments may be reduced may not exceed the lesser of (x) the cash proceeds received by the Company and its Restricted Subsidiaries in connection with such net reduction and (y) the initial amount of such Investment. In computing the Consolidated Net Income of the Company for purposes of Section 4.07(a)(iv)(iii)(A) hereof, (i) the Company may use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (ii) the Company will be permitted to rely in good faith on the financial statements and other financial data derived from its books and records that are available on the date of determination. If the Company makes a Restricted Payment that, at the time of the making of such Restricted Payment, would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment will be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company's financial statements affecting Consolidated Net Income of the Company for any period. Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to (i) pay dividends, in cash or otherwise, or make any other distributions on or in respect of its Capital Stock, (ii) pay any Indebtedness owed to the Company or any other Restricted Subsidiary, (iii) make loans or advances to the Company or any other Restricted Subsidiary or (iv) transfer any of its properties or assets to the Company or any other Restricted Subsidiary. (b) However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of: (i) any agreement (including the Credit Agreement) in effect on the Issue Date; 57 (ii) customary non-assignment provisions of any lease, license or other contract entered into in the ordinary course of business by the Company or any Restricted Subsidiary; (iii) the refinancing or successive refinancing of Indebtedness incurred under the agreements (including the Credit Agreement) in effect on the Issue Date, so long as such encumbrances or restrictions are no more restrictive, taken as a whole, than those contained in such original agreement; (iv) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; (v) purchase money obligations for acquired property permitted under Section 4.09 hereof that impose restrictions of the nature described in clause (iv) of Section 4.08(a) hereof on the property so acquired; (vi) any agreement for the sale of a Restricted Subsidiary or an asset that restricts distributions by that Restricted Subsidiary or transfers of such asset pending its sale; (vii) secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.12 hereof that limits the right of the debtor to dispose of the assets securing such Indebtedness; (viii) restrictions on cash or other deposits or net worth imposed by leases entered into in the ordinary course of business; (ix) Non-Recourse Indebtedness of any Permitted Joint Venture permitted to be incurred under this Indenture; (x) applicable law or regulation; (xi) a Receivables Program with respect to a Receivables Subsidiary; and (xii) customary provisions in joint venture, limited liability company operating, partnership, shareholder and other similar agreements entered into in the ordinary course of business reasonably consistent with past practice by the Company or any Restricted Subsidiary. Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, create, issue, assume, guarantee or in any manner become directly or indirectly liable for the payment of, or otherwise incur (collectively, "INCUR"), any Indebtedness (including Acquired Indebtedness and the issuance of Disqualified Stock), except that the Company and any 58 Subsidiary Guarantors may incur Indebtedness if, at the time of such event, the Fixed Charge Coverage Ratio for the immediately preceding four full fiscal quarters for which internal financial statements are available, taken as one accounting period, would have been equal to at least 2.0 to 1.0. (b) In making the foregoing calculation, pro forma effect will be given to: (i) the incurrence of such Indebtedness and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred and the application of such proceeds occurred at the beginning of such four-quarter period; (ii) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and (iii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period. In making a computation under the foregoing clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit facility will be computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Company, either the fixed or floating rate, and (C) the amount of any Indebtedness that bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months). (c) Notwithstanding the foregoing, the Company may, and may permit its Restricted Subsidiaries to, incur the following Indebtedness ("PERMITTED INDEBTEDNESS"): (i) Indebtedness of the Company or any Subsidiary Guarantor under the Credit Agreement (and the incurrence by any Subsidiary Guarantor of guarantees thereof) in an aggregate principal amount at any one time outstanding not to exceed $125 million, less (A) any amounts applied to the permanent reduction of such credit facilities pursuant to the provisions of Section 4.10 hereof and (B) up to $50 million of cash (or the fair market value of any other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date; (ii) Indebtedness represented by the Notes (other than the Additional Notes) and the related Guarantees; (iii) Existing Indebtedness; 59 (iv) the incurrence by the Company of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace, any Indebtedness that is permitted to be incurred under clause (ii) or (iii) above; (v) Indebtedness owed by the Company to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary (provided that such Indebtedness is held by the Company or such Restricted Subsidiary); provided that: (A) any Indebtedness of the Company or any Subsidiary Guarantor owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, acceleration, or otherwise) to the payment and performance of the Company's obligations under the Notes or the Subsidiary Guarantor's obligations under its Guarantee, as the case may be; and (B) (x) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (v); (vi) Indebtedness of the Company or any Restricted Subsidiary under Hedging Obligations incurred in the ordinary course of business; (vii) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock; (viii) either (A) Capitalized Lease Obligations of the Company or any Restricted Subsidiary or (B) Indebtedness under purchase money mortgages or secured by purchase money security interests so long as (x) such Indebtedness is not secured by any property or assets of the Company or any Restricted Subsidiary other than the property and assets so acquired and (y) such Indebtedness is created within 90 days of the acquisition of the related property; provided that the aggregate amount of Indebtedness under clauses (A) and (B) does not exceed 15% of Consolidated Tangible Assets less the amount of any Indebtedness incurred under clause (xvi) below at any one time outstanding; (ix) Guarantees by any Restricted Subsidiary made in accordance with the provisions of Section 4.18 hereof; (x) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within two business days of incurrence; 60 (xi) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business; (xii) the incurrence of Non-Recourse Indebtedness by Permitted Joint Ventures that are Restricted Subsidiaries; (xiii) Indebtedness incurred by a Receivables Subsidiary pursuant to a Receivables Program; provided that, after giving effect to any such incurrence of Indebtedness, the aggregate principal amount of all Indebtedness incurred under this clause (xiii) and then outstanding does not exceed $30 million; (xiv) Indebtedness of the Company, any Restricted Subsidiary or any Permitted Joint Venture not permitted by any other clause of this definition, in an aggregate principal amount not to exceed $30 million at any one time outstanding; (xv) Indebtedness represented by Attributable Debt related to a Sale and Leaseback transaction involving tractors existing on the Issue Date; provided that (i) the aggregate amount of such Indebtedness does not exceed $7 million and (ii) such Indebtedness is incurred within 12 months from the Issue Date; and (xvi) the incurrence of Indebtedness represented by Additional Notes and the related Guarantees, the net cash proceeds of which are used to satisfy, extinguish and retire the Company and/or any of the Restricted Subsidiaries' obligations under any Indebtedness incurred under clause (viii) above; provided that (A) any property or assets of the Company or any Restricted Subsidiary securing such Indebtedness, the obligations of which are being so satisfied, extinguished and retired, are fully released from such security and (B) such property or assets are expressly made subject to a first priority perfected Lien in favor of the Collateral Agent. (d) The Company will not incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of the Company unless it is subordinate in right of payment to the Notes to the same extent. The Company will not permit any Subsidiary Guarantor to incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of such Subsidiary Guarantor unless it is subordinate in right of payment to such Subsidiary Guarantor's Guarantee to the same extent. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Subsidiary Guarantor, as applicable, solely by reason of any Liens or Guarantees arising or created in respect thereof or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them. (e) For purposes of determining compliance with this Section 4.09, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xvi) above, or is entitled to be incurred 61 pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement incurred on the Issue Date shall be deemed to have been incurred on the Issue Date in reliance on the exception provided by clause (i) of the definition of Permitted Indebtedness. Section 4.10 Asset Sales. (a) The Company will not, and will not permit any Restricted Subsidiary to, engage in any Asset Sale unless: (i) the consideration received by the Company or such Restricted Subsidiary for such Asset Sale is not less than the fair market value of the assets sold evidenced by a resolution of the board of directors of such entity set forth in an Officers' Certificate delivered to the Trustee; (ii) the consideration received by the Company or the relevant Restricted Subsidiary in respect of such Asset Sale consists of at least 75% cash or Cash Equivalents (for purposes of this clause (ii), cash and Cash Equivalents includes (1) if such Asset Sale does not involve Collateral, any liabilities (as reflected in the Company's consolidated balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Guarantee) that are assumed by any transferee of any such assets or other property in such Asset Sale, and where the Company or the relevant Restricted Subsidiary is released from any further liability in connection therewith with respect to such liabilities, (2) any securities, notes or other similar obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted within 180 days of the consummation of the related Asset Sale by the Company or such Restricted Subsidiary into cash and Cash Equivalents (to the extent of the net cash proceeds or the Cash Equivalents (net of related costs) received upon such conversion), (3) any Designated Noncash Consideration received by the Company or any such Restricted Subsidiary in the Asset Sale having an aggregate fair market value, as determined by the Board of the Company, taken together with all other Designated Noncash Consideration received pursuant to this clause that is at that time outstanding, not to exceed the greater of: (A) $10 million; and (B) 15% of Consolidated Tangible Assets at the time of the receipt of such Designated Noncash Consideration (with the fair market value of each item of such Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value); and (iii) if such Asset Sale involves the transfer of Collateral, (1) all consideration received in such Asset Sale shall consist of assets that are not Excluded Assets; and 62 (2) all consideration (including cash and cash equivalents) received in such Asset Sale shall be expressly made subject to a first priority perfected Lien (subject to Permitted Liens) in favor of the Collateral Agent. (b) If the Company or any Restricted Subsidiary engages in an Asset Sale, the Company may, at its option, within 12 months after such Asset Sale (i) apply all or a portion of the Net Cash Proceeds to repay or purchase Applicable Indebtedness (and, in the case of revolving loans and other similar obligations, permanently reduce the commitment thereunder), or (ii) invest (or enter into a legally binding agreement to invest) all or a portion of such Net Cash Proceeds in properties and assets to replace the properties and assets that were the subject of the Asset Sale or in properties and assets that will be used in businesses of the Company or its Restricted Subsidiaries, as the case may be, existing on the Issue Date or in businesses the same, similar or reasonably related thereto; provided, that, to the extent that such Net Cash Proceeds represent proceeds of Collateral, (A) none of such properties and assets obtained shall consist of Excluded Assets and (B) such properties and assets obtained shall be expressly made subject to a first priority Lien (subject to Permitted Liens) with respect to the Notes. If any such legally binding agreement to invest such Net Cash Proceeds is terminated, the Company may, within 90 days of such termination or within 12 months of such Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in clause (i) or (ii) (without regard to the parenthetical contained in such clause (ii)) above. Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Cash Proceeds in a manner that is not prohibited by this Indenture. The amount of such Net Cash Proceeds not so used as set forth above in this paragraph shall constitute "EXCESS PROCEEDS". (c) When the aggregate amount of Excess Proceeds exceeds $10 million, the Company will, within 30 days thereafter, make an offer to purchase (an "EXCESS PROCEEDS OFFER") from all Holders of Notes on a pro rata basis, in accordance with the procedures set forth in this Indenture, the maximum principal amount (expressed as a multiple of $1,000) of Notes that may be purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued interest and Liquidated Damages, if any, to the date such offer to purchase is consummated. To the extent that the aggregate principal amount of Notes tendered pursuant to such offer to purchase is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes validly tendered and not withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to be purchased will be selected on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds will be reset to zero. Section 4.11 Transactions with Affiliates. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or suffer to exist any transaction with, or for the benefit of, any Affiliate of the Company ("Interested Persons"), unless (i) such transaction is on terms that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could have been obtained in an arm's-length transaction with third parties who are not Interested Persons and (ii) the Company delivers to the Trustee (x) with respect to any transaction or series of related transactions entered into after the Issue Date involving aggregate payments in excess of $5 million, a resolution of the Company's Board set forth in an officers' 63 certificate certifying that such transaction or transactions complies with clause (i) above and that such transaction or transactions have been approved by the Board (including a majority of the Disinterested Directors) of the Company and (y) with respect to a transaction or series of related transactions involving aggregate payments equal to or greater than $10 million, a written opinion as to the fairness to the Company or such Restricted Subsidiary of such transaction or series of transactions from a financial point of view issued by an accounting, appraisal or investment banking firm, in each case of national standing. (b) The foregoing Section 4.11(a) will not restrict: (i) transactions among the Company and/or its Restricted Subsidiaries; (ii) the Company from paying reasonable and customary regular compensation, indemnification, reimbursement and fees to officers of the Company or any Restricted Subsidiary and to directors of the Company or any Restricted Subsidiary who are not employees of the Company or any Restricted Subsidiary; (iii) transactions permitted by Section 4.07; (iv) advances to employees for moving, entertainment and travel expenses and similar expenditures in the ordinary course of business and consistent with past practice; (v) any Receivables Program of the Company or a Restricted Subsidiary; (vi) the agreements listed on Schedule II to this Indenture, in each case as in effect as of the Issue Date or any amendment thereto (so long as the amended agreement is not more disadvantageous to the Holders of the Notes in any material respect than such agreement immediately prior to such amendment) or any transaction contemplated thereby; and (vii) issuance of Equity Interests (other than Disqualified Stock) of the Parent or the Company to Affiliates. Section 4.12 Liens. The Parent shall not, and shall not permit any of its subsidiaries (other than Unrestricted Subsidiaries) to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind upon any of their property or assets, whether now owned or hereafter acquired, or any income or profits therefrom or any right to receive income therefrom, except Permitted Liens. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind upon any of their property or assets, whether now owned or hereafter acquired, or any income or profits therefrom or any right to receive income therefrom, except Permitted Liens. 64 Section 4.13 Corporate Existence. Subject to Article Five, the Parent and the Company will do or cause to be done all things necessary to preserve and keep in full force and effect the corporate existence, rights (charter and statutory) and franchises of the Parent, the Company and each Subsidiary; provided that the Company shall not be required to preserve any such right or franchise if the Board shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries as a whole and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 4.14 Offer to Repurchase upon a Change of Control. (a) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 days following any Change of Control, the Company shall notify the Trustee thereof and mail a notice, by first-class mail, postage prepaid, to each Holder, describing the transaction or transactions that constitute the Change of Control and stating (1) that the Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes tendered will be accepted for payment; (2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or such later date as is necessary to comply with the requirements under the Exchange Act (the "CHANGE OF CONTROL PAYMENT DATE"); (3) that any Note not tendered will continue to accrue interest; (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing its election to have the Notes purchased; and (7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relating to such Change of Control Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof. 65 (b) By 2:00 p.m. Eastern Time on the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal amount of $1,000 or an integral multiple thereof. (c) Notwithstanding anything to the contrary in this Section 4.14, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 and Section 3.09 hereof and all other provisions of this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Section 4.15 Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries. The Company (a) will not permit any Restricted Subsidiary to issue any Capital Stock unless after giving effect thereto the Company's percentage interest (direct and indirect) in the Capital Stock of such Restricted Subsidiary is at least equal to its percentage interest prior thereto, and (b) will not, and will not permit any Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any Restricted Subsidiary to any Person (other than the Company or a Wholly Owned Restricted Subsidiary); provided, however, that this Section 4.15 will not prohibit (i) the sale or other disposition of all, but not less than all, of the issued and outstanding Capital Stock of a Restricted Subsidiary owned by the Company and its Restricted Subsidiaries in compliance with the other provisions of this Indenture, (ii) the sale or other disposition of a portion of the issued and outstanding Capital Stock of a Restricted Subsidiary (other than a Subsidiary Guarantor) whether or not as a result of such sale or disposition such Restricted Subsidiary continues or ceases to be a Restricted Subsidiary if (A) at the time of such sale or disposition, the Company could make an Investment in the remaining Capital Stock held by it or one of its Restricted Subsidiaries in an amount equal to the amount of its remaining Investment in such Person pursuant to Section 4.07 hereof and (B) such sale or disposition is permitted under, and the Company or such Restricted Subsidiary applies the Net Cash Proceeds of any such sale in accordance with, Section 4.10 hereof, or (iii) the ownership by directors of director's qualifying shares or the ownership by foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent mandated by applicable law. The Company will not permit any Restricted Subsidiary to issue any Preferred Stock other than to the Company or any Subsidiary Guarantor. Section 4.16 Designation of Restricted and Unrestricted Subsidiaries. (a) The Board of the Company may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as (i) such 66 Subsidiary has no Indebtedness other than Non-Recourse Indebtedness, (ii) no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity, (iii) any Investment in such Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary will not violate the provisions of Section 4.07 hereof, (iv) neither the Company nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from Persons who are not Affiliates of the Company, (v) neither the Company nor any Restricted Subsidiary has any obligation to subscribe for additional shares of Capital Stock or other equity interests in such Subsidiary, or to maintain or preserve such Subsidiary's financial condition or to cause such Subsidiary to achieve certain levels of operating results, and (vi) such Unrestricted Subsidiary has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the Company or any of its Restricted Subsidiaries. Notwithstanding the foregoing, the Company may not designate any Subsidiary Guarantor (whether or not existing as of the Issue Date) as an Unrestricted Subsidiary. (b) The Board of the Company may designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) no Default or Event of Default has occurred and is continuing following such designation and (ii) the Company could, at the time of making such designation and giving such pro forma effect as if such designation had been made at the beginning of the applicable four quarter period, incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) (treating any Indebtedness of such Unrestricted Subsidiary as the incurrence of Indebtedness by a Restricted Subsidiary). Section 4.17 Payments for Consent. Neither the Company nor any of its Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Section 4.18 Limitations on Issuances of Guarantees of Indebtedness. (a) The Company will not permit any Restricted Subsidiary that is not a Subsidiary Guarantor, directly or indirectly, to guarantee, assume or in any other manner become liable for the payment of any Indebtedness of the Company or any Indebtedness of any other Restricted Subsidiary, unless (i) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for a guarantee of payment of the Notes by such Restricted Subsidiary on a senior secured basis on the same terms as set forth in this Indenture and (ii) with respect to any guarantee of Subordinated Indebtedness by a Restricted Subsidiary, any such guarantee is subordinated to such Restricted Subsidiary's guarantee with respect to the Notes at 67 least to the same extent as such Subordinated Indebtedness is subordinated to the Notes, provided that the foregoing provision will not be applicable to any guarantee by any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. (b) Any guarantee by a Restricted Subsidiary of the Notes pursuant to Section 4.18(a) may provide by its terms that it will be automatically and unconditionally released and discharged upon (i) any sale, exchange or transfer to any Person not an Affiliate of the Company of all of the Company's and the Restricted Subsidiaries' Capital Stock in, or all or substantially all the assets of, such Restricted Subsidiary (which sale, exchange or transfer is not prohibited by this Indenture) or (ii) the release or discharge of the guarantee that resulted in the creation of such guarantee of the Notes, except a discharge or release by or as a result of payment under such guarantee. Section 4.19 Additional Guarantees. The Company shall provide to the Trustee, on the date that any Person (other than a Foreign Subsidiary) becomes a Wholly Owned Restricted Subsidiary, a supplemental indenture to this Indenture, executed by such new Wholly Owned Restricted Subsidiary, providing for a full and unconditional guarantee on a senior secured basis by such new Wholly Owned Restricted Subsidiary of the Company's obligations under the Notes and this Indenture to the same extent as that set forth in this Indenture. Section 4.20 Sale and Leaseback Transactions The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if: (a) the Company or such Restricted Subsidiary, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such Sale and Leaseback Transaction pursuant to Section 4.09 hereof and (b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof; (b) the gross cash proceeds of that Sale and Leaseback Transaction are at least equal to the fair market value of the property that is the subject of that Sale and Leaseback Transaction; and (c) the transfer of assets in that Sale and Leaseback Transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, Section 4.10 hereof. 68 ARTICLE FIVE SUCCESSORS Section 5.01 Merger, Consolidation or Sale of Assets. (a) Neither the Parent nor the Company will, in a single transaction or series of related transactions, consolidate or merge with or into (whether or not the Parent or the Company, as the case may be, is the surviving corporation), or directly and/or indirectly through its Subsidiaries, sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (determined on a consolidated basis for the Parent or the Company, as the case may be, and its Subsidiaries taken as a whole) in one or more related transactions to, another corporation, Person or entity unless: (i) either (i) the Company or the Parent, as the case may be, is the surviving corporation or (ii) the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (the "SURVIVING ENTITY") is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia and assumes all the obligations of the Company or the Parent, as the case may be, under the Notes, this Indenture, the Security Documents and the Registration Rights Agreement pursuant to agreements in form and substance reasonably satisfactory to the Trustee; (ii) immediately after giving effect to such transaction and treating any obligation of the Company in connection with or as a result of such transaction as having been incurred as of the time of such transaction, no Default or Event of Default has occurred and is continuing; (iii) if such transaction involves the Company, the Company (or the Surviving Entity if the Company is not the continuing obligor under this Indenture) could, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant Section 4.09(a); (iv) each Guarantor, unless it is the other party to the transaction described above, has by supplemental indenture confirmed that its Guarantee applies to the Surviving Entity's obligations under this Indenture and the Notes; (v) if any of the property or assets of the Company or any of its Restricted Subsidiaries would thereupon become subject to any Lien, the provisions of Section 4.12 hereof are complied with; and (vi) the Company or the Parent, as the case may be, delivers or causes to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such transaction complies with the requirements of this Indenture. 69 (b) No Subsidiary Guarantor shall consolidate with or merge with or into any other Person or convey, sell, assign, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any other Person (other than the Company or another Subsidiary Guarantor) unless: (i) subject to the provisions of the last paragraph of this Section 5.01(b), the Person formed by or surviving such consolidation or merger (if other than such Subsidiary Guarantor) or to which such properties and assets are transferred assumes all of the obligations of such Subsidiary Guarantor under this Indenture, its Guarantee, the Security Documents and the Registration Rights Agreement, pursuant to agreements in form and substance reasonably satisfactory to the Trustee; (ii) immediately after giving effect to such transaction, no Default or Event of Default has occurred and is continuing; and (iii) the Subsidiary Guarantor delivers, or causes to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such transaction complies with the requirements of this Indenture. For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. (c) In the event of any transaction described in and complying with the provisions of Section 5.01(a) in which the Company is not the continuing obligor under this Indenture, the Surviving Entity will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, and thereafter the Company will, except in the case of a lease, be discharged from all of its obligations under this Indenture and the Notes. ARTICLE SIX DEFAULTS AND REMEDIES Section 6.01 Events of Default. "EVENT OF DEFAULT", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) default in the payment of any interest on any Note when it becomes due and payable, and continuance of such default for a period of 30 days; (ii) default in the payment of the principal of (or premium, if any, on) any Note when due; 70 (iii) failure to perform or comply with the provisions of Sections 4.07, 4.09, 4.10, 4.14 or 5.01; (iv) default in the performance, or breach, of any covenant or agreement of the Company or any Guarantor contained in this Indenture or in any Guarantee (other than a default in the performance, or breach, of a covenant or agreement that is specifically dealt with elsewhere herein), and continuance of such default or breach for a period of 60 days after written notice has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding; (v) (x) an event of default has occurred under any mortgage, bond, indenture, loan agreement or other document evidencing an issue of Indebtedness of the Company, the Parent or any Restricted Subsidiary, which issue individually or in the aggregate has an aggregate outstanding principal amount of not less than $10 million, and such default has resulted in such Indebtedness becoming, whether by declaration or otherwise, due and payable prior to the date on which it would otherwise become due and payable or (y) a default (a "PAYMENT DEFAULT") in any payment when due at final maturity of any such Indebtedness; (vi) failure by the Company, the Parent or any of its Restricted Subsidiaries to pay one or more final judgments the uninsured portion of which exceeds in the aggregate $10 million, which judgment or judgments are not paid, discharged or stayed for a period of 60 days; (vii) any Guarantee ceases to be in full force and effect or is declared null and void or any such Guarantor denies that it has any further liability under any Guarantee, or gives notice to such effect (other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture); (viii) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company, the Parent or any Significant Subsidiary a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustments or composition of or in respect of the Company, the Parent or any Significant Subsidiary under any Bankruptcy Law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company, the Parent or any Significant Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; (ix) the institution by the Company, the Parent or any Significant Subsidiary of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any Bankruptcy Law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company, the Parent or any Significant Subsidiary or of any substantial part of its property, or the 71 making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due; or (x) default by the Company or any Restricted Subsidiary in the performance of the Security Documents which adversely affects the enforceability, validity, perfection or priority of such Liens, the repudiation or disaffirmation by the Company or any Restricted Subsidiary of its material obligations under the Security Documents or the determination in a judicial proceeding that the Security Documents are unenforceable or invalid against the Company or any Restricted Subsidiary party thereto for any reason with respect to the Collateral (which default, repudiation, disaffirmation or determination is not rescinded, stayed, or waived by the Persons having such authority pursuant to the Security Documents or otherwise cured within 60 days after the Company receives written notice thereof specifying such occurrence from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes and demanding that such default be remedied). Section 6.02 Acceleration. (a) If an Event of Default (other than as specified in Section 6.01(viii) or (ix) hereof) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Note then outstanding may, and the Trustee at the request of such Holders will, declare the principal of, and accrued interest on, all of the outstanding Notes immediately due and payable and, upon any such declaration, such principal and such interest will become due and payable immediately. The Trustee shall promptly notify the Company of any such acceleration of the Notes pursuant to this Section 6.02(a). If an Event of Default specified in Section 6.01(viii) or (ix) hereof occurs and is continuing, then the principal of and accrued interest on all of the outstanding Notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. (b) At any time after a declaration of acceleration under this Indenture, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of a majority in aggregate principal amount of the outstanding Notes, by written notice to the Company and the Trustee, may rescind such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on, and Liquidated Damages with respect to, all Notes, (B) all unpaid principal of (and premium, if any, on) any outstanding Notes that has become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Notes, (C) to the extent that payment of such interest is lawful, interest upon overdue interest and overdue principal at the rate borne by the Notes and (D) all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (ii) all Events of Default, other than the non-payment of amounts of principal of (or premium, if any, on), or interest on or Liquidated Damages with respect to, the Notes that have become due solely by such declaration of acceleration, have been cured or waived. No such rescission will affect any subsequent default or impair any right consequent thereon. 72 (c) Notwithstanding the preceding paragraph, in the event of a declaration of acceleration in respect of the Notes because an Event of Default specified in Section 6.01(v) shall have occurred and be continuing and provided no judgment or decree for payment of the money due has been obtained by the Trustee, such declaration of acceleration shall be automatically annulled if the Indebtedness that is the subject of such Event of Default has been discharged or the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and written notice of such discharge or rescission, as the case may be, shall have been given to the Trustee by the Company and countersigned by the holders of such Indebtedness or a trustee, fiduciary or agent for such holders, within 30 days after such declaration of acceleration in respect of the Notes, and no other Event of Default has occurred during such 30-day period which has not been cured or waived during such period. Section 6.03 Other Remedies. (a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, interest, and Liquidated Damages, if any, with respect to, the Notes or to enforce the performance of any provision of the Notes or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon and during the continuance of an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. Section 6.04 Waiver of Past Defaults. Holders of a majority in principal amount of the then outstanding Notes by notice to the Trustee, may on behalf of the Holders of all of the Notes, waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of interest or Liquidated Damages, if any, on, or the principal of, the Notes (including in connection with an offer to purchase) (provided, however, that the Holders of a majority in principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). The Company shall deliver to the Trustee an Officers' Certificate stating that the requisite percentage of Holders have consented to such waiver and attaching copies of such consents. In case of any such waiver, the Company, the Trustee and the Holders shall be restored to their former positions and rights hereunder and under the Notes, respectively. This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 73 Section 6.05 Control by Majority. Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages, if any) if it determines that withholding notice is in their interest. Section 6.06 Limitation on Suits. (a) A Holder may pursue a remedy with respect to this Indenture, or the Notes or the Guarantees only if: (i) the Holder gives to the Trustee written notice of a continuing Event of Default; (ii) the Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (iii) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee security and indemnity satisfactory to the Trustee against any loss, liability or expense that might be incurred by it in connection with the request or direction; (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (v) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. (b) A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. Section 6.07 Rights of Holders of Notes to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, interest on, and Liquidated Damages, if any, with respect to, the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. 74 Section 6.08 Collection Suit by Trustee. If an Event of Default specified in Section 6.01(i) or (ii) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, interest, and Liquidated Damages, if any, remaining unpaid on the Notes and interest on overdue principal and premium, if any, and, to the extent lawful, interest and Liquidated Damages, if any, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company or any Guarantor (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other securities or property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.10 Priorities. (a) If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, interest and Liquidated Damages, if any, ratably, without 75 preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, interest, and Liquidated Damages, if any, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. (b) The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. Section 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than ten percent in principal amount of the then outstanding Notes. ARTICLE SEVEN TRUSTEE Section 7.01 Duties of Trustee. (a) If an Event of Default has occurred and is continuing, and is actually known to the Trustee, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform on their face to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 76 (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. (f) Money held in trust by the Trustee need not be segregated from other funds and need not be held in an interest-bearing account, in each case except to the extent required by law or by any other provision of this Indenture. Section 7.02 Certain Rights of Trustee. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. 77 (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. (g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of such event is sent to the Trustee in accordance with Section 13.02 hereof, and such notice references the Notes. Section 7.03 Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may become a creditor of, or otherwise deal with, the Company or any of its Affiliates with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest as described in the Trust Indenture Act, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. Section 7.04 Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. Section 7.05 Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium and Liquidated Damages, if any, or interest on any Note, the Trustee may withhold the notice to the Holders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. Section 7.06 Reports by Trustee to Holders of the Notes. (a) Within 60 days after each May 15 beginning with the May 15 following the date hereof, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). 78 (b) A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange or any delisting thereof. Section 7.07 Compensation and Indemnity. (a) The Company shall pay to the Trustee (in its capacity as Trustee, and, to the extent it has been appointed as such, as Paying Agent and Registrar) from time to time reasonable compensation for its acceptance of this Indenture and services hereunder in accordance with a written schedule provided by the Trustee to the Company. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable and customary disbursements, advances and reasonable out-of-pocket expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable and customary compensation, disbursements and expenses of the Trustee's agents and counsel. (b) The Company shall indemnify the Trustee against any and all losses, liabilities or reasonable out-of-pocket expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by either of the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable and customary fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. (c) The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. (d) To secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. (e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(viii) or (ix) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. 79 Section 7.08 Replacement of Trustee. (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. (b) The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (i) the Trustee fails to comply with Section 7.10 hereof; (ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (iii) a custodian or public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. (d) If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. 80 Section 7.09 Successor Trustee by Merger, Etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another Person, the successor Person without any further act shall be the successor Trustee. Section 7.10 Eligibility; Disqualification. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has (or its corporate parent shall have) a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b). Section 7.11 Preferential Collection of Claims Against Company. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. The Trustee hereby waives any right to set-off any claim that it may have against the Company in any capacity (other than as Trustee and Paying Agent) against any of the assets of the Company held by the Trustee; provided, however, that if the Trustee is or becomes a lender of any other Indebtedness permitted hereunder to be pari passu with the Notes, then such waiver shall not apply to the extent of such Indebtedness. ARTICLE EIGHT DEFEASANCE AND COVENANT DEFEASANCE Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at the option of the Board evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article Eight. Section 8.02 Legal Defeasance and Discharge. Upon the Company's exercise under Section 8.02 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes and all obligations of the Guarantors shall be deemed to have been discharged with respect to their obligations under the Subsidiary Guarantees on the date the conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that the Company and the Guarantors shall be deemed to have paid and discharged the 81 entire Indebtedness represented by the outstanding Notes and Subsidiary Guarantees, respectively, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.05 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, interest and Liquidated Damages, if any, on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes under Article Two and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. Section 8.03 Covenant Defeasance. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.18, 4.19, 4.20, 4.21 and 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(iii) through (vii) and Section 6.01(x) shall not constitute Events of Default. Section 8.04 Conditions to Legal or Covenant Defeasance. (a) The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: (i) the Company must irrevocably deposit or cause to be deposited with the Trustee, as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders, money in an amount, or U.S. Government Obligations that through the scheduled payment of principal and interest thereon will provide money in an 82 amount, or a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay and discharge the principal of (and premium, if any, on) and interest and Liquidated Damages, if any, on the outstanding Notes at maturity (or upon redemption, if applicable) of such principal or installment of interest or Liquidated Damages; (ii) no Default or Event of Default has occurred and is continuing on the date of such deposit or, insofar as an event of bankruptcy under Section 6.01(viii) is concerned, at any time during the period ending on the 91st day after the date of such deposit; (iii) such Legal Defeasance or Covenant Defeasance may not result in a breach or violation of, or constitute a default under, this Indenture, the Security Documents, the Credit Agreement or any material agreement or instrument to which the Company or any Guarantor is a party or by which it is bound; (iv) in the case of Legal Defeasance, the Company must deliver to the Trustee an Opinion of Counsel stating that the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or, since the Issue Date, there has been a change in applicable federal income tax law, to the effect, and based thereon such opinion must confirm, that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (v) in the case of Covenant Defeasance, the Company must have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; and (vi) the Company must have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to either the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with. Section 8.05 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions. (a) Subject to Section 8.06 hereof, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "TRUSTEE") pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due 83 thereon in respect of principal, premium and Liquidated Damages, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. (b) The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. (c) Anything in this Article Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable U.S. Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Section 8.06 Repayment to the Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company. Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable U.S. Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. 84 ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01 Without Consent of Holders of Notes. (a) Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors, and the Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note: (i) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company in this Indenture and in the Notes; or (ii) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (iii) to add additional Events of Defaults; or (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes; or (v) to evidence and provide for the acceptance of appointment under this Indenture by a successor Trustee; or (vi) to secure the Notes; or (vii) to cure any ambiguity, to correct or supplement any provision in this Indenture that may be defective or inconsistent with any other provision in this Indenture, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such actions pursuant to this clause do not adversely affect the interests of the Holders in any material respect; or (viii) to comply with any requirements of the SEC in order to effect and maintain the qualification of this Indenture under the Trust Indenture Act; or (ix) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture; or (x) to allow any Guarantor to execute a supplemental Indenture and a Guarantee with respect to the Notes; or (xi) to release Collateral from the Liens created by this Indenture or the Security Documents when permitted by this Indenture and the Security Documents. (b) Upon the request of the Company accompanied by a resolution of its Board authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company in the execution of any amended or supplemental Indenture authorized or 85 permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Section 9.02 With Consent of Holders of Notes. (a) Except as provided below in this Section 9.02, the Company the Guarantors and the Trustee may amend or supplement this Indenture or the Notes with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes). (b) The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or its duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect. (c) Upon the request of the Company accompanied by a resolution of its Board authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence reasonably satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. (d) It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. (e) After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the then outstanding Notes (including 86 Additional Notes, if any) may waive compliance in a particular instance by the Company with any provision of this Indenture, or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): (i) change the Stated Maturity of the principal of, or any installment of interest on, any Note, or reduce the principal amount thereof or the rate of interest or Liquidated Damages, if any, thereon or any premium payable upon the redemption thereof, or change the coin or currency in which any Note or any premium or the interest or any Liquidated Damages thereon are payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the redemption date); (ii) amend, change or modify the obligation of the Company to make and consummate an Excess Proceeds Offer with respect to any Asset Sale in accordance with Section 4.10 or the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with Section 4.14, including, in each case, amending, changing or modifying any definition relating thereto; (iii) reduce the percentage in principal amount of outstanding Notes, the consent of whose Holders is required for any waiver of compliance with certain provisions of, or certain defaults and their consequences provided for under, this Indenture; (iv) waive a Default or Event of Default in the payment of principal of, or premium, if any, or interest or Liquidated Damages, if any, on the Notes or reduce the percentage or aggregate principal amount of outstanding Notes the consent of whose Holders is necessary for waiver of compliance with certain provisions of this Indenture or for waiver of certain Defaults or Events of Default; (v) modify the ranking or priority of the Notes or the Guarantee of any Guarantor; (vi) release any Guarantor from any of its obligations under its Guarantee or this Indenture other than in accordance with the terms of this Indenture; or (vii) make any change in the preceding amendment and waiver provisions. Section 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in a amended or supplemental Indenture that complies with the TIA as then in effect. Section 9.04 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if 87 notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. Section 9.05 Notation on or Exchange of Notes. (a) The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. (b) Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.06 Trustee to Sign Amendments, Etc. The Trustee shall sign any amended or supplemental indenture or Note authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture or Note until its Board approves it. In executing any amended or supplemental indenture or Note, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. ARTICLE TEN COLLATERAL Section 10.01 Security Documents. (a) The payment of all Note Obligations under this Indenture, the Notes and the Guarantees, when due (whether on an interest payment date, at Stated Maturity, upon repurchase, upon acceleration, redemption or otherwise) shall be secured as provided in the Security Documents which the Company and the Guarantors have entered into simultaneously with the execution of this Indenture and shall be secured as provided in by all Security Documents hereafter delivered as required by this Indenture. (b) Each Holder of Notes, by its acceptance of a Note, consents and agrees to the terms of each Security Document, authorizes and directs the Trustee to appoint U.S. Bank National Association as Collateral Agent on the Issue Date and directs the Collateral Agent to enter into the Security Documents, and authorizes and empowers each of the Trustee and the Collateral Agent as set forth in the Security Documents and to perform its respective obligations and exercise its respective rights and powers thereunder. 88 Section 10.02 Opinions of Counsel. (a) The Company and the Guarantors acknowledge that all After-Acquired Property shall be subject to the terms and conditions of the Security Documents. The Company and the Guarantors shall comply with the provisions of the Security Documents with respect to Liens on After-Acquired Property. Section 10.03 Possession and Use of the Collateral. Subject to and in accordance with the provisions of the Security Documents and this Indenture, so long as the Collateral Agent has not exercised its rights with respect to the Collateral upon the occurrence and during the continuance of an Event of Default, the Company and the Guarantors shall have the right to remain in possession and retain exclusive control of the Collateral, to operate the Collateral, to alter or repair the Collateral and to collect, invest and dispose of any income therefrom. Section 10.04 Suits to Protect the Collateral. Subject to the terms of the Security Documents, the Trustee shall have power, but without the obligation to exercise such power, to institute in its name and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of this Indenture or any of the Security Documents, and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interests and the interests of the Holders of the Notes in the Collateral and in the principal, interest, issues, profits, rents, revenues and other income arising therefrom, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of, or compliance with, such enactment, rule or order would impair the security under any of the Security Documents, or be prejudicial to the interests of the Holders of the Notes or the Trustee. Section 10.05 Release of Collateral. (a) The release of any Collateral from the Lien granted under the Security Documents or the release of, in whole or in part, the Liens granted by any of the Security Documents, shall not be deemed to impair the security interests in contravention of the provisions of this Indenture if and to the extent the Collateral or Liens are released in accordance with the terms of this Indenture or of the Security Documents. To the extent applicable and subject to Section 10.06 and paragraph (c) of this Section 10.05, the Company and the Guarantors shall comply with Section 314(d) of the TIA, relating to the release of property or securities from the Lien and security interest of the Security Documents and relating to the substitution therefor of any property or securities to be subjected to the Lien and security interest of the Security Documents. Any certificate or opinion required by Section 314(d) of the TIA may be made by an Officer of the Company or the relevant Guarantor except in cases where Section 314(d) of the TIA requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected or approved by the Trustee in the exercise of reasonable care. 89 Liens securing the Note Obligations under this Indenture, the Notes and the Guarantees shall, upon compliance with the condition that the Company or the Parent delivers to the Trustee all documents required by the Trust Indenture Act, automatically and without the need for any further action by any Person be released (so long as such release is in compliance with the Trust Indenture Act): (1) in whole, as to all property subject to such Liens which has been taken by eminent domain, condemnation or other similar circumstances; (2) in whole, as to all property subject to such Liens, upon: (i) payment in full of the principal of, accrued and unpaid interest and premium on the Notes; or (ii) satisfaction and discharge of this Indenture as set forth under Article Twelve hereof; (iii) Defeasance or Covenant Defeasance of this Indenture as set forth under Article Eight hereof; or (3) in part, as to any property that (a) is sold, transferred or otherwise disposed of by the Parent, the Company, or one of their Subsidiaries in a transaction not prohibited by this Indenture, at the time of such sale, transfer or disposition, to the extent of the interest sold, transferred or disposed of or (b) is owned or at any time acquired by a Guarantor that has been released from its Guarantee, concurrently with the release of such Guarantee. (b) The Trustee shall cause the Collateral Agent to execute and deliver to the Company and the Guarantors, at the Company's and Guarantors' expense, all documents that such parties shall reasonably request to evidence such release. Such documents shall be without recourse to or warranty by the Trustee and the Collateral Agent. (c) Notwithstanding anything to the contrary herein, the Company will not be required to comply with all or any portion of Section 314(d) of the Trust Indenture Act if it determines, in good faith based on advice of counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including "no action" letters or exemptive orders, all or any portion of Section 314(d) of the Trust Indenture Act is inapplicable to the released Collateral. Without limiting the generality of the foregoing, certain no-action letters issued by the SEC have permitted an indenture qualified under the Trust Indenture Act to contain provisions permitting the release of collateral from liens under such indenture in the ordinary course of the issuer's business without requiring the issuer to provide certificates and other documents under Section 314(d) of the Trust Indenture Act, as described below under Section 10.06 hereof. (d) If any Collateral is released in accordance with any of the Security Documents and if the Company has delivered the certificates and documents required by the Security Documents, the Trustee will determine whether it has received all documentation required by Section 314(d) of the Trust Indenture Act in connection with such release and, based 90 on such determination and the opinion of counsel delivered pursuant to this Indenture, will deliver a certificate to the Collateral Agent setting forth such determination. Section 10.06 Permitted Ordinary Course Activities with respect to Collateral. (a) So long as the Collateral Agent has not exercised its rights with respect to the Collateral upon the occurrence and during the continuance of an Event of Default and such transaction would not violate the Trust Indenture Act or be prohibited by the Security Documents, the Company and the Guarantors may, without any release or consent by the Trustee or the Collateral Agent, conduct ordinary course activities with respect to Collateral, including, without limitation, (i) selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien of the Security Documents which has become worn out, defective or obsolete or not used or useful in the business; (ii) abandoning, terminating, canceling, releasing or making alterations in or substitutions of any leases or contracts subject to the Lien of this Indenture or any of the Security Documents; (iii) surrendering or modifying any franchise, license or permit subject to the Lien of this Indenture or any of the Security Documents which it may own or under which it may be operating; (iv) altering, repairing, replacing, changing the location or position of and adding to its structures, machinery, systems, equipment, fixtures and appurtenances; (v) granting a license of any intellectual property; (vi) selling, transferring or otherwise disposing of inventory in the ordinary course of business; (vii) making cash payments (including for the scheduled repayment of Indebtedness) from cash that is at any time part of the Collateral in the ordinary course of business that are not otherwise prohibited by this Indenture and this Security Documents; and (viii) abandoning any intellectual property which is no longer used or useful in the Company's business. (b) The Company and the Guarantors shall not be required to comply with the requirement to deliver certificates pursuant to Section 10.05(a) in respect of the release of Collateral or Liens as described in paragraph (a) of this Section 10.06, provided that the Company and the Parent shall deliver to the Collateral Agent, within 30 calendar days following the end of each six-month period beginning on January 1 and July 1 of any year, an Officers' Certificate to the effect that all releases and withdrawals during the preceding six-month period (or since the Issue Date, in the case of the first such certificate) in which no release or consent of the Collateral Agent was obtained were in the ordinary course of the Company's and the 91 Guarantors' business and were not prohibited by this Indenture or any of the Security Documents. Section 10.07 Actions by the Trustee. Subject to the provisions of the Security Documents and Article Six, the Trustee may, but without any obligation to do so, in its sole discretion and without the consent of the Holders take all actions it deems necessary or appropriate in order to (i) enforce any of the terms of the Security Documents and (ii) to collect and receive all amounts payable in respect of the Obligations of the Company and any Guarantors under the Security Documents and this Indenture. The Trustee shall have the power to institute and maintain such suits and proceedings as it may deem expedient in order to prevent any impairment of the Collateral by any act that may be unlawful or in violation of this Indenture or the Security Documents, and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interests and those of the Holders in the Collateral. No duty beyond that set forth in Section 7.01 is imposed on the Trustee pursuant to this Section 10.07. All items to be delivered to the Trustee pursuant to this Article Ten shall also be delivered to the Collateral Agent. Section 10.08 Purchaser Protected. In no event shall any purchaser in good faith or other transferee of any Collateral purported to be released hereunder be bound to ascertain the authority (if any) of the Trustee to direct the Collateral Agent to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any Collateral permitted to be sold, disposed of or transferred by this Article Ten, be under obligation to ascertain or inquire into the authority of the Company or any Guarantor, as applicable, to make any such sale or other transfer. ARTICLE ELEVEN GUARANTEES Section 11.01 Guarantee. (a) Subject to this Article Eleven, each of the Guarantors hereby, jointly and severally, unconditionally guarantees on a senior secured basis to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (i) the principal of, premium, if any, interest and Liquidated Damages, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful (subject in all cases to any applicable grace period provided herein), and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, 92 by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. (b) The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Subject to Section 6.06 hereof, each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. (c) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. (d) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Six hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. Section 11.02 Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in 93 respect of the obligations of such other Guarantor under this Article Eleven, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent transfer or conveyance. Section 11.03 Execution and Delivery of Guarantee. (a) To evidence its Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Guarantee substantially in the form included in Exhibit E shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by any of its executive officers. (b) Each Guarantor hereby agrees that its Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. (c) If an Officer whose signature is on this Indenture or on the Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Guarantee is endorsed, the Guarantee shall be valid nevertheless. (d) The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors. (e) In the event that the Company creates or acquires any new Wholly Owned Restricted Subsidiaries subsequent to the date of this Indenture, if required by Section 4.19 hereof, the Company shall cause such Subsidiaries to execute supplemental indentures to this Indenture and Guarantees in accordance with Section 4.19 hereof and this Article Eleven, to the extent applicable. Section 11.04 Releases of Guarantors. (a) A Subsidiary Guarantor will be deemed automatically and unconditionally released and discharged from all of its obligations under its Guarantee without any further action on the part of the Trustee or any Holder of the Notes upon a sale or other disposition to a Person not an Affiliate of the Company of all of the Capital Stock of, or all or substantially all of the assets of, such Subsidiary Guarantor, by way of merger, consolidation or otherwise, which transaction is carried out in accordance with Section 4.10 hereof; provided that any such termination shall occur (x) only to the extent that all obligations of such Subsidiary Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure any Indebtedness of the Company shall also terminate upon such sale, disposition or release and (y) only if the Trustee is furnished with written notice of such release together with an Officers' Certificate from such Subsidiary Guarantor to the effect that all of the conditions to release in this Section 11.04(a) have been satisfied. (b) Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article Eleven. 94 ARTICLE TWELVE SATISFACTION AND DISCHARGE Section 12.01 Satisfaction and Discharge. (a) This Indenture shall be discharged and shall cease to be of further effect as to all Notes issued thereunder, when: (i) either: (A) all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or (B) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption; (ii) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound; (iii) the Company or any Guarantor has paid or caused to be paid all sums payable by it hereunder; and (iv) the Company has delivered irrevocable instructions to the Trustee hereunder to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be. (b) In addition, the Company must deliver an Officers' Certificate and an Opinion of Counsel (which opinion may be subject to customary assumptions and exclusions) to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. (c) Notwithstanding the above, the Trustee shall pay to the Company from time to time upon its request any cash or U.S. Government Obligations held by it as provided in this section which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification delivered to the Trustee, are in excess of the 95 amount thereof that would then be required to be deposited to effect a satisfaction and discharge under this Article Twelve. Section 12.02 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions. Subject to Section 12.03 hereof, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 12.02, the "TRUSTEE") pursuant to Section 12.01 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Liquidated Damages, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. Section 12.03 Repayment to the Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium and Liquidated Damages, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times or The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company. ARTICLE THIRTEEN MISCELLANEOUS Section 13.01 Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control. Section 13.02 Notices. (a) Any notice or communication by the Company or any Guarantor, on the one hand, or the Trustee on the other hand, to the other is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), facsimile or overnight air courier guaranteeing next day delivery, to the others' address: 96 If to the Company or any Guarantor: InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, CA 92630 Facsimile: 949-462-3703 Attention: General Counsel with copies to: J.W. Childs Associates, L.P. 111 Huntington Avenue Suite 2900 Boston, MA 02199 Facsimile: 617-753-1101 Attention: Edward D. Yun and to: Halifax Capital Partners, L.P. 1133 Connecticut Avenue N.W. Suite 700 Washington, D.C. 20036 Facsimile: 202-296-7133 Attention: David W. Dupree and to: Kaye Scholer LLP 245 Park Avenue New York, NY 10022 Facsimile: 212-836-8689 Attention: Stephen C. Koval, Esq. If to the Trustee: U.S. Bank National Association Corporate Trust Services 100 Wall Street - Suite 1600 New York, NY 10005 Attention: Cheryl Clarke (b) The Company, the Guarantors or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. 97 (c) All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. (d) Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. (e) If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. (f) If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. Section 13.03 Communication by Holders of Notes with Other Holders of Notes. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to its rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). Section 13.04 Certificate and Opinion as to Conditions Precedent. (a) Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (i) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (ii) to the extent required under Section 314 of the Trust Indenture Act, an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. Section 13.05 Statements Required in Certificate or Opinion. (a) Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (i) a statement that the Person making such certificate or opinion has read such covenant or condition; 98 (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. Section 13.06 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or shareholder of the Parent, the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Parent, the Company or the Subsidiary Guarantors under the Notes, this Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. Section 13.08 Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Section 13.09 Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Indenture or the transactions contemplated hereby ("RELATED PROCEEDINGS") may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case located in the City of New York (collectively, the "SPECIFIED COURTS"), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party's address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts 99 and irrevocably and unconditionally waive and agree not to plead or claim in any such court that a Related Proceeding has been brought in an inconvenient forum. Section 13.10 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or any of its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 13.11 Successors. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 5.01. Section 13.12 Severability. In case any provision in this Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 13.13 Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 13.14 Acts of Holders. (1) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by the Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company if made in the manner provided in this Section 13.14. (2) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to such witness, notary or officer the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of authority. The fact and date of the execution of any such instrument or writing, or the authority 100 of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (3) Notwithstanding anything to the contrary contained in this Section 13.14, the principal amount and serial numbers of Notes held by any Holder, and the date of holding the same, shall be proved by the register of the Notes maintained by the Registrar as provided in Section 2.04 hereof. (4) If the Company shall solicit from the Holders of the Notes any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a resolution of its Board, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be the record date specified in or pursuant to such resolution, which shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith or the date of the most recent list of Holders forwarded to the Trustee prior to such solicitation pursuant to Section 2.06 hereof and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the then outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the then outstanding Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. (5) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration or transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note. (6) Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Note may do so itself with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Section 13.15 Benefit of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Registrar and its successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. 101 Section 13.16 Table of Contents, Headings, Etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. Section 13.17 Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders or the Company or to any other Person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Agreement or otherwise. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 102 SIGNATURES INSIGHT HEALTH SERVICES HOLDINGS CORP. By: Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer INSIGHT HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 103 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer PARKWAY IMAGING CENTER, LLC By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Manager 104 INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. DIAGNOSTIC SOLUTIONS 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 105 MAXUM HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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 ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 106 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 107 U.S. Bank National Association, as Trustee By: /s/ Jean Clarke ------------------------------------ Name: Jean Clarke Title: Assistant Vice President 108 EXHIBIT A1 [Face of Note] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE, THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY, THE PARENT OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED A1-1 INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. A1-2 CUSIP [________] No. ______________ **$_______** INSIGHT HEALTH SERVICES CORP. Senior Secured Floating Rate Notes due 2011 Issue Date: September 22, 2005 InSight Health Services Corp., a Delaware corporation (the "Company", which term includes any successor under this Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of [Amount of Note] ($[________]) on November 1, 2011. Interest Payment Dates: February 1, May 1, August 1 and November 1, commencing February 1, 2006. Record Dates: January 15, April 15, July 15 and October 15. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. A1-3 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers. INSIGHT HEALTH SERVICES CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- This is one of the Senior Secured Floating Rate Notes due 2011 described in the within-mentioned Indenture. Dated: September 22, 2005 U.S. Bank National Association, as Trustee By: --------------------------------- Authorized Signatory A1-4 [Reverse Side of Note] INSIGHT HEALTH SERVICES CORP. Senior Secured Floating Rate Notes due 2011 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. Interest. (a) The Company promises to pay interest on the principal amount of this Note at the rate per annum, reset quarterly, equal to LIBOR plus 5.25%, as determined by the calculation agent (the "Calculation Agent"), which shall initially be the Trustee, from the date hereof until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company shall pay interest and Liquidated Damages, if any, quarterly in arrears on February 1, May 1, August 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be February 1, 2006. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. (b) The amount of interest for each day that the Notes are outstanding (the "Daily Interest Amount") will be calculated by dividing the interest rate in effect for such day by 365 (or 366, in the case of a calculation made with respect to a leap year) and multiplying the result by the principal amount of the Notes. The amount of interest to be paid on the Notes for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period. All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards). The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law. The Calculation Agent will, upon the request of the Holder of any Note, provide the interest rate then in effect with respect to the Notes. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Guarantors and the Holders of the Notes. A1-5 2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the 15th day of the month next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose in The City of New York, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. Indenture. The Company issued the Notes under an Indenture dated as of September 22, 2005 (the "Indenture") among the Company, the Parent, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. 5. Optional Redemption. The Company shall not have the option to redeem the Notes prior to November 1, 2006. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on November 1 of the years indicated below:

Year Percentage - ---- ---------- 2006.................. 103.0% 2007.................. 101.5% 2008 and thereafter... 100.0%

6. Mandatory Redemption. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. A1-6 7. Repurchase at Option of Holder. (a) Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (the "Change of Control Payment"). Within 30 days following any Change of Control, the Company will notify the Trustee thereof and mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. (b) Within 365 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Company may, at its option, within 12 months after such Asset Sale, (i) apply all or a portion of the Net Cash Proceeds to repay or purchase Applicable Indebtedness (and, in the case of revolving loans and other similar obligations, permanently reduce the commitment thereunder), or (ii) invest (or enter into a legally binding agreement to invest) all or a portion of such Net Cash Proceeds in properties and assets to replace the properties and assets that were the subject of the Asset Sale or in properties and assets that will be used in businesses of the Company or its Restricted Subsidiaries, as the case may be, existing on the Issue Date or in businesses the same, similar or reasonably related thereto; provided, that, to the extent that such Net Cash Proceeds represent proceeds of Collateral, (A) none of such properties and assets obtained shall consist of Excluded Assets and (B) such properties and assets obtained shall be expressly made subject to a first priority Lien (subject to Permitted Liens) with respect to the Notes. If any such legally binding agreement to invest such Net Cash Proceeds is terminated, the Company may, within 90 days of such termination or within 12 months of such Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in clause (i) or (ii) (without regard to the parenthetical contained in such clause (ii)) above. Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Cash Proceeds in a manner that is not prohibited by the Indenture. The amount of such Net Cash Proceeds not so used as set forth above in this paragraph shall constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds exceeds $10 million, the Company will, within 30 days thereafter, make an offer to purchase (an "Excess Proceeds Offer") from all Holders of Notes on a pro rata basis, in accordance with the procedures set forth in the Indenture, the maximum principal amount (expressed as a multiple of $1,000) of Notes that may be purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued interest and Liquidated Damages, if any, to the date such offer to purchase is consummated. To the extent that the aggregate principal amount of Notes tendered pursuant to such offer is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes validly tendered and not withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to be purchased will be selected on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds will be reset to zero. 8. Selection and Notice of Redemption If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements A1-7 of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest and Liquidated Damages, if any, cease to accrue on Notes or portions of them called for redemption. 9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. 10. Persons Deemed Owners. The registered Holder of a Note will be treated as its owner for all purposes. 11. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes and Additional Notes, if any, voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal of the then outstanding Notes and Additional Notes, if any, voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes). Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency; to provide for uncertificated Notes in addition to or in place of certificated Notes; to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company; to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; to add additional Events of Default; to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee; to secure the Notes; to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of its date; to allow any Guarantor to execute a supplemental Indenture and a Guarantee with respect to the Notes; or to release Collateral from the Liens created by the Indenture or the Security Documents when permitted by the Indenture and the Security Documents. A1-8 12. Defaults and Remedies. In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Parent, the Company or any Restricted Subsidiary that is a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately by notice in writing to the Company specifying the respective Event of Default. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages, if any) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or Liquidated Damages, if any, on, or the principal of, the Notes. 13. Security Interest. The Notes will be secured, to the extent and in the manner provided in the Security Documents, by a first priority Lien on the Collateral. Each Noteholder, by its acceptance of a Note, (i) consents and agrees to the terms of each Security Document, (ii) authorizes and directs the Trustee to appoint U.S. Bank National Association as Collateral Agent on the Issue Date, (iii) directs the Collateral Agent to enter into the Security Documents and (iv) authorizes and empowers each of the Trustee and the Collateral Agent to bind the Holders of Notes as set forth in the Security Documents and to perform its respective obligations and exercise its respective rights and powers thereunder. In the event of any conflict between (a) the Indenture and (b) the Security Documents, the provisions of the Security Documents shall control unless such compliance would violate the TIA. 14. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 15. No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Parent, the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Parent, the Company or the Subsidiary Guarantors under the Notes, the Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. 16. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes. In addition to the rights provided to Holders under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of September 22, 2005, between the Company, the A1-9 Guarantors and the parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes shall have the rights set forth in one or more registration rights agreements, if any, between the Company, the Guarantors and the other parties thereto, relating to rights given by the Company and the Guarantors to the purchasers of Additional Notes (the "Registration Rights Agreement"). 18. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, CA 92630 Facsimile: 949-462-3703 Attention: General Counsel A1-10 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to: __________________________________ (Insert assignee's legal name) ________________________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. no.) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint ________________________________________________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. Date: ------------------- Your Signature: ------------------------------------- (Sign exactly as your name appears on the face of this Note) Signature Guarantee*: ------------------ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A1-11 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below: - Section 4.10 - Section 4.14 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $____________ Date: ------------------- Your Signature: ------------------------------------- (Sign exactly as your name appears on the face of this Note) Tax Identification No.: ------------- Signature Guarantee*: ------------------ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A1-12 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

Principal Amount at Amount of Decrease in Amount of Increase in Maturity Signature of Principal Amount at Principal Amount at of this Global Note Authorized Officer Maturity Maturity Following such of Trustee or Date of Exchange of this Global Note of this Global Note Decrease (or Increase) Note Custodian - ---------------- --------------------- --------------------- ---------------------- ------------------

A1-13 EXHIBIT A2 [Face of Note] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE, THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE A2-1 GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY, THE PARENT OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. A2-2 CUSIP [___________] No.___________ **$_____________** INSIGHT HEALTH SERVICES CORP. Senior Secured Floating Rate Notes due 2011 Issue Date: September 22, 2005 InSight Health Services Corp., a Delaware corporation (the "Company", which term includes any successor under this Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of [Amount of Note] ($[_______]) on November 1, 2011. Interest Payment Dates: February 1, May 1, August 1 and November 1, commencing on February 1, 2006. Record Dates: January 15, April 15, July 15 and October 15. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. A2-3 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers. INSIGHT HEALTH SERVICES CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- This is one of the Senior Secured Floating Rate Notes due 2011 described in the within-mentioned Indenture. Dated: September 22, 2005 U.S. Bank National Association, as Trustee By: --------------------------------- Authorized Signatory A2-4 [Reverse Side of Note] INSIGHT HEALTH SERVICES CORP. Senior Secured Floating Rate Notes due 2011 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. Interest. (a) The Company promises to pay interest on the principal amount of this Note at the rate per annum, reset quarterly, equal to LIBOR plus 5.25%, as determined by the calculation agent (the "Calculation Agent"), which shall initially be the Trustee, from the date hereof until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company shall pay interest and Liquidated Damages, if any, quarterly in arrears on February 1, May 1, August 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be February 1, 2006. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. (b) The amount of interest for each day that the Notes are outstanding (the "Daily Interest Amount") will be calculated by dividing the interest rate in effect for such day by 365 (or 366, in the case of a calculation made with respect to a leap year) and multiplying the result by the principal amount of the Notes. The amount of interest to be paid on the Notes for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period. All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards). The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law. The Calculation Agent will, upon the request of the Holder of any Note, provide the interest rate then in effect with respect to the Notes. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Guarantors and the Holders of the Notes. 2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of A2-5 Notes at the close of business on the 15th day of the month next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose in The City of New York, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. Indenture. The Company issued the Notes under an Indenture dated as of September 22, 2005 (the "Indenture") among the Company, the Parent, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. 5. Optional Redemption. The Company shall not have the option to redeem the Notes prior to November 1, 2006. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' prior notice to the Holders, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on November 1 of the years indicated below:

Year Percentage - ---- ---------- 2006.................. 103.0% 2007.................. 101.5% 2008 and thereafter... 100.0%

6. Mandatory Redemption. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 7. Repurchase at Option of Holder. (a) Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer A2-6 described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase (the "Change of Control Payment"). Within 30 days following any Change of Control, the Company will notify the Trustee thereof and mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. (b) Within 365 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Company may, at its option, within 12 months after such Asset Sale, (i) apply all or a portion of the Net Cash Proceeds to repay or purchase Applicable Indebtedness (and, in the case of revolving loans and other similar obligations, permanently reduce the commitment thereunder), or (ii) invest (or enter into a legally binding agreement to invest) all or a portion of such Net Cash Proceeds in properties and assets to replace the properties and assets that were the subject of the Asset Sale or in properties and assets that will be used in businesses of the Company or its Restricted Subsidiaries, as the case may be, existing on the Issue Date or in businesses the same, similar or reasonably related thereto; provided, that, to the extent that such Net Cash Proceeds represent proceeds of Collateral, (A) none of such properties and assets obtained shall consist of Excluded Assets and (B) such properties and assets obtained shall be expressly made subject to a first priority Lien (subject to Permitted Liens) with respect to the Notes. If any such legally binding agreement to invest such Net Cash Proceeds is terminated, the Company may, within 90 days of such termination or within 12 months of such Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in clause (i) or (ii) (without regard to the parenthetical contained in such clause (ii)) above. Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Cash Proceeds in a manner that is not prohibited by the Indenture. The amount of such Net Cash Proceeds not so used as set forth above in this paragraph shall constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds exceeds $10 million, the Company will, within 30 days thereafter, make an offer to purchase (an "Excess Proceeds Offer") from all Holders of Notes on a pro rata basis, in accordance with the procedures set forth in the Indenture, the maximum principal amount (expressed as a multiple of $1,000) of Notes that may be purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued interest and Liquidated Damages, if any, to the date such offer to purchase is consummated. To the extent that the aggregate principal amount of Notes tendered pursuant to such offer is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes validly tendered and not withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to be purchased will be selected on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds will be reset to zero. 8. Selection and Notice of Redemption If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee A2-7 considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest and Liquidated Damages, if any, cease to accrue on Notes or portions of them called for redemption. 9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. 10. Persons Deemed Owners. The registered Holder of a Note will be treated as its owner for all purposes. 11. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes and Additional Notes, if any, voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal of the then outstanding Notes and Additional Notes, if any, voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes). Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency; to provide for uncertificated Notes in addition to or in place of certificated Notes; to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company; to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; to add additional Events of Default; to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee; to secure the Notes; to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of its date; to allow any Guarantor to execute a supplemental Indenture and a Guarantee with respect to the Notes; or to release Collateral from the Liens created by the Indenture or the Security Documents when permitted by the Indenture and the Security Documents. A2-8 12. Defaults and Remedies. In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Parent, the Company or any Restricted Subsidiary that is a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately by notice in writing to the Company specifying the respective Event of Default. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages, if any) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or Liquidated Damages, if any, on, or the principal of, the Notes. 13. Security Interest. The Notes will be secured, to the extent and in the manner provided in the Security Documents, by a first priority Lien on the Collateral. Each Noteholder, by its acceptance of a Note, (i) consents and agrees to the terms of each Security Document, (ii) authorizes and directs the Trustee to appoint U.S. Bank National Association as Collateral Agent on the Issue Date, (iii) directs the Collateral Agent to enter into the Security Documents and (iv) authorizes and empowers each of the Trustee and the Collateral Agent to bind the Holders of Notes as set forth in the Security Documents and to perform its respective obligations and exercise its respective rights and powers thereunder. In the event of any conflict between (a) the Indenture and (b) the Security Documents, the provisions of the Security Documents shall control unless such compliance would violate the TIA. 14. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 15. No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Parent, the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Parent, the Company or the Subsidiary Guarantors under the Notes, the Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. 16. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes. In addition to the rights provided to Holders under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of September 22, 2005, between the Company, the A2-9 Guarantors and the parties named on the signature pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and Restricted Definitive Notes shall have the rights set forth in one or more registration rights agreements, if any, between the Company, the Guarantors and the other parties thereto, relating to rights given by the Company and the Guarantors to the purchasers of Additional Notes (the "Registration Rights Agreement"). 18. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, CA 92630 Facsimile: 949-462-3703 Attention: General Counsel A2-10 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to: ---------------------------------- (Insert assignee's legal name) - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint -------------------------------------------------------- to transfer this Note on the books of the Company. The agent may substitute another to act for him. Date: ------------------------------- Your Signature: ----------------------------------------- (Sign exactly as your name appears on the face of this Note) Signature Guarantee*: --------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A2-11 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below: - Section 4.10 - Section 4.14 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $ ---------- Date: ------------------------------- Your Signature: ------------------------ (Sign exactly as your name appears on the face of this Note) Tax Identification No.: ---------------- Signature Guarantee*: --------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A2-12 SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE The following exchanges of a part of this Regulation S Temporary Global Note for an interest in another Global Note or of other Restricted Global Notes for an interest in this Regulation S Temporary Global Note, have been made:

Principal Amount at Amount of Decrease in Amount of Increase in Maturity Signature of Principal Amount at Principal Amount at of this Global Note Authorized Officer Maturity Maturity Following such of Trustee or Date of Exchange of this Global Note of this Global Note Decrease (or Increase) Note Custodian - ---------------- --------------------- --------------------- ---------------------- ------------------

A2-13 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, CA 92630 Facsimile: 949-462-3703 Attention: General Counsel U.S. Bank National Association Corporate Trust Services 100 Wall Street - Suite 1600 New York, NY 10005 Attention: Cheryl Clarke Re: Senior Secured Floating Rate Notes due 2011 Reference is hereby made to the Indenture, dated as of September 22, 2005 (the "Indenture"), among InSight Health Services Corp., a Delaware corporation (the "Company"), InSight Health Services Holdings Corp., a Delaware corporation (the "Parent"), the Subsidiary Guarantors, and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ___________________ (the "Transferor") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount at maturity of $___________ in such Note[s] or interests (the "Transfer"), to ___________________________ (the "Transferee"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act. B-1 2. Check if Transferee will take delivery of a beneficial interest in the Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Permanent Global Note, the Regulation S Temporary Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 3. Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) such Transfer is being effected to the Company or a subsidiary thereof; or (c) such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or (d) such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby B-2 further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Definitive Notes and in the Indenture and the Securities Act. 4. Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note. (a) Check if Transfer is Pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (b) Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (c) Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. B-3 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. ---------------------------------------- [Insert Name of Transferor] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Dated: ------------------------------ B-4 ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (A) OR (B)] (A) a beneficial interest in the: (i) 144A Global Note (CUSIP __________); or (ii) Regulation S Global Note (CUSIP __________); or (iii) IAI Global Note (CUSIP __________); or (B) a Restricted Definitive Note. 2. After the Transfer the Transferee will hold: [CHECK ONE] (A) a beneficial interest in the: (i) 144A Global Note (CUSIP __________); or (ii) Regulation S Global Note (CUSIP __________); or (iii) IAI Global Note (CUSIP __________); or (iv) Unrestricted Global Note (CUSIP __________); or (B) a Restricted Definitive Note; or (C) an Unrestricted Definitive Note, in accordance with the terms of the Indenture. B-5 EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, CA 92630 Facsimile: 949-462-3703 Attention: General Counsel U.S. Bank National Association Corporate Trust Services 100 Wall Street - Suite 1600 New York, NY 10005 Attention: Cheryl Clarke Re: Senior Secured Floating Rate Notes due 2011 Reference is hereby made to the Indenture, dated as of September 22, 2005 (the "Indenture"), among InSight Health Services Corp., a Delaware corporation (the "Company"), InSight Health Services Holdings Corp., a Delaware corporation (the "Parent"), the Subsidiary Guarantors, and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. __________________________ (the "Owner") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount at maturity of $____________ in such Note[s] or interests (the "Exchange"). In connection with the Exchange, the Owner hereby certifies that: 1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note (1) Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. C-1 (2) Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (3) Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (4) Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes (a) Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount at maturity, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. C-2 (b) Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. ---------------------------------------- [Insert Name of Transferor] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Dated: ----------------------------- C-3 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR [________] Re: Senior Secured Floating Rate Notes due 2011 Reference is hereby made to the Indenture, dated as of September 22, 2005 (the "Indenture"), among InSight Health Services Corp., a Delaware corporation (the "Company") InSight Health Services Holdings Corp., a Delaware corporation (the "Parent"), the Subsidiary Guarantors, and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $____________ aggregate principal amount at maturity of: (a) [ ] beneficial interest in a Global Note, or (b) [ ] a Definitive Note, we confirm that: 1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act"). 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. D-1 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. ---------------------------------------- [Insert Name of Accredited Investor] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Dated: ------------------------------ D-2 EXHIBIT E FORM OF NOTATION OF GUARANTEE For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed on a senior secured basis, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of September 22, 2005 (the "Indenture") among InSight Health Services Corp. (the "Company"), InSight Health Services Holdings Corp., the Subsidiary Guarantors (as defined in the Indenture), and U.S. Bank National Association, as trustee (the "Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture are (i) expressly set forth in Article Eleven of the Indenture and (ii) are secured to the extent set forth in Article Ten of the Indenture, and reference is hereby made to the Indenture for the precise terms of the Guarantee. This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. [Name of Guarantor] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- E-1 EXHIBIT F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS Supplemental Indenture (this "Supplemental Indenture"), dated as of _____________, among __________________ (the "Guaranteeing Subsidiary"), a subsidiary of InSight Health Services Corp. (or its permitted successor), a Delaware corporation (the "Company"), InSight Health Services Holdings Corp., the Subsidiary Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under the Indenture referred to below (the "Trustee"). WITNESSETH WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as of September 22, 2005 providing for the issuance of an aggregate principal amount of $300.0 million of Senior Secured Floating Rate Notes due 2011 (the "Notes"); WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's obligations under the Notes and the Indenture on the terms and conditions set forth herein (the "Guarantee"); and WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as follows: (a) Along with all other Guarantors, to jointly and severally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (i) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. (b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance that might otherwise constitute a legal or equitable discharge or defense of a guarantor. (c) The following are hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever. (d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture. (e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. (f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. (g) As between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Six of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. 3. Execution and Delivery. Each Guaranteeing Subsidiary agrees that the Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. 4. Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms. Except as otherwise provided in Section 5.01(b) of the Indenture, a Subsidiary Guarantor may not consolidate with or merge with or into any other Person or convey, sell, assign, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any other Person (other than the Company or another Subsidiary Guarantor) unless: (i) subject to the provisions of the second to the last paragraph of this Section 4, the Person formed by or surviving such consolidation or merger (if other than such Subsidiary Guarantor) or to which such properties and assets are transferred assumes all of the obligations of such Subsidiary Guarantor under the Indenture, its Guarantee to Security Documents and the Registration Rights Agreement, pursuant to agreements in form and substance reasonably satisfactory to the Trustee; (ii) immediately after giving effect to such transaction, no Default or Event of Default has occurred and is continuing; and (iii) the Subsidiary Guarantor delivers, or causes to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such transaction complies with the requirements of this Indenture. For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be performed by a Guarantor, such successor Person shall succeed to and be substituted for a Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as though all of such Guarantees had been issued at the date of the execution hereof. 5. Releases. (a) A Subsidiary Guarantor will be deemed automatically and unconditionally released and discharged from all of its obligations under its Guarantee without any further action on the part of the Trustee or any Holder of the Notes upon a sale or other disposition to a Person not an Affiliate of the Company of all of the Capital Stock of, or all or substantially all of the assets of, such Subsidiary Guarantor, by way of merger, consolidation or otherwise, which transaction is carried out in accordance with Section 4.10 hereof; provided that any such termination shall occur (x) only to the extent that all obligations of such Subsidiary Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure any Indebtedness of the Company shall also terminate upon such sale, disposition or release and (y) only if the Trustee is furnished with written notice of such release together with an Officers' Certificate from such Subsidiary Guarantor to the effect that all of the conditions to release in this Section 5 have been satisfied. (b) Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in Article Eleven of the Indenture. 6. No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Parent, the Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Parent, the Company or the Subsidiary Guarantors under the Notes, the Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. 7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 8. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 9. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. 10. Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. Dated: , ---------------- ---- [Guaranteeing Subsidiary] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INSIGHT HEALTH SERVICES HOLDINGS CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INSIGHT HEALTH SERVICES CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- WILKES-BARRE IMAGING, L.L.C. By: InSight Health Corp., as the sole member and sole manager By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- 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: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- PARKWAY IMAGING CENTER, LLC By: ------------------------------------ Name: ---------------------------------- INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. DIAGNOSTIC SOLUTIONS 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: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- MAXUM HEALTH SERVICES CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- 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: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- PHOENIX REGIONAL PET CENTER-THUNDERBIRD, LLC By: Comprehensive Medical Imaging Centers, Inc., as the sole member By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- 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: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- U.S. Bank National Association, as Trustee By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EX-4.7 10 y13913exv4w7.txt EX-4.7: SECURITY AGREEMENT Exhibit 4.7 EXECUTION VERSION SECURITY AGREEMENT DATED AS OF SEPTEMBER 22, 2005 AMONG THE LOAN PARTIES FROM TIME TO TIME PARTY HERETO AND U.S. BANK NATIONAL ASSOCIATION, AS COLLATERAL AGENT TABLE OF CONTENTS*

PAGE ---- ARTICLE I DEFINITIONS Section 1.01. Defined Terms.............................................. 1 Section 1.02. Terms Defined in the UCC................................... 1 Section 1.03. Additional Definitions..................................... 2 Section 1.04. Terms Generally............................................ 10 ARTICLE II SECURITY INTERESTS Section 2.01. Grant of Security Interests................................ 10 Section 2.02. Continuing Liability of Each Loan Party.................... 12 Section 2.03. Security Interests Absolute................................ 12 Section 2.04. Maintaining the Account Collateral......................... 14 Section 2.05. Collateral Agent Not Responsible........................... 14 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01. Title to Collateral........................................ 14 Section 3.02. Validity, Perfection and Priority of Security Interests.... 14 Section 3.03. No Consents................................................ 15 Section 3.04. Insurance.................................................. 15 Section 3.05. Intellectual Property...................................... 15 ARTICLE IV COVENANTS Section 4.01. Delivery of Perfection Certificate; Initial Perfection and Delivery of Search Reports................................. 16 Section 4.02. Change of Name, Identity, Structure or Location; Subjection to Other Security Agreements............................... 16 Section 4.03. Further Actions............................................ 17 Section 4.04. Delivery of Instruments, Etc............................... 17 Section 4.05. Certificates of Title...................................... 18 Section 4.06. Insurance.................................................. 18 Section 4.07. Information Regarding Collateral........................... 18 Section 4.08. Covenants Regarding Intellectual Property.................. 18 Section 4.09. Deposit Accounts and Securities Accounts................... 20 Section 4.10. Claims..................................................... 20

- ---------- * Table of Contents is not part of the Security Agreement. i ARTICLE V GENERAL AUTHORITY; REMEDIES Section 5.01. General Authority.......................................... 20 Section 5.02. Remedies upon Event of Default............................. 22 Section 5.03. Limitation on Duty of Collateral Agent in Respect of Collateral.............................................. 25 Section 5.04. Application of Proceeds.................................... 25 ARTICLE VI COLLATERAL AGENT Section 6.01. Concerning the Collateral Agent............................ 26 Section 6.02. Appointment of Co-Collateral Agent......................... 26 ARTICLE VII MISCELLANEOUS Section 7.01. Notices.................................................... 27 Section 7.02. No Waivers; Non-Exclusive Remedies......................... 27 Section 7.03. Compensation and Expenses of the Collateral Agent; Indemnification............................................ 28 Section 7.04. Enforcement................................................ 29 Section 7.05. Amendments and Waivers..................................... 30 Section 7.06. Successors and Assigns..................................... 30 Section 7.07. Governing Law.............................................. 30 Section 7.08. Limitation of Law; Severability............................ 30 Section 7.09. Counterparts; Effectiveness................................ 30 Section 7.10. Additional Loan Parties.................................... 31 Section 7.11. Termination; Release of Loan Parties....................... 31 Section 7.12. Entire Agreement........................................... 32 ii SCHEDULES: Schedule 1.01A - Claims Schedule 1.01B - Excluded Deposit Accounts Schedule 3.03 - Consents Schedule 4.01 - Filings to Perfect Security Interests EXHIBITS: Exhibit A-1 - Form of Grant of Security Interest in United States Patents and Trademarks Exhibit A-2 - Form of Grant of Security Interest in United States Copyrights Exhibit B - Form of Deposit Account Control Agreement Exhibit C - Form of Description of Collateral Exhibit D - Form of Perfection Certificate Exhibit E - Form of Accession Agreement ANNEXES: Annex I - Schedule VI to Perfection Certificate iii SECURITY AGREEMENT dated as of September 22, 2005 (as amended, modified or supplemented from time to time, this "AGREEMENT") among the LOAN PARTIES from time to time party hereto, U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent for the benefit of the Finance Parties referred to herein (together with its successor or successors in such capacity, the "COLLATERAL AGENT"). InSight Health Services Corp. ("INSIGHT") intends to issue Senior Secured Floating Rate Notes due 2011 (together with any Additional Notes (as defined in the Indenture) and any Exchange Notes (as defined in the Indenture), and as amended, restated, supplemented or modified from time to time, the "SENIOR SECURED NOTES") pursuant to an Indenture dated as of the date hereof (as amended, restated, supplemented or modified from time to time and including any agreement extending the maturity of, refinancing or otherwise restructuring all or any portion of the obligations of InSight under such Indenture or any successor agreement, the "INDENTURE") among InSight and U.S. Bank National Association, as Trustee (together with its successor or successors in such capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the Senior Secured Notes will be guaranteed by InSight Health Services Holdings Corp. ("HOLDINGS") each of the parties listed on the signature pages hereto as "Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic subsidiaries of Holdings that become a party hereto pursuant to Section 7.10 hereof (collectively, the "SUBSIDIARY GUARANTORS" and, together with Holdings, "GUARANTORS"). Holdings, InSight and the Subsidiary Guarantors are herein referred to individually as a "LOAN PARTY" and, collectively, as the "LOAN PARTIES". The Indenture requires the Loan Parties to secure their obligations under the Senior Secured Notes and their obligations under any guaranties thereof through a grant of a first lien security interest over the Collateral (as defined herein), subject to Permitted Liens. The Indenture further requires that such security interests in the Collateral be granted pursuant to security documents to a collateral agent acting for the benefit of the holders from time to time of the Senior Secured Notes. Consequently the Trustee and the Collateral Agent have entered into a Collateral Agency Agreement dated as of the date hereof (as amended, modified or supplemented from time to time, the "COLLATERAL AGENCY AGREEMENT") which, among other things, governs certain actions of the Trustee and the Collateral Agent in connection with the Senior Secured Notes and the Collateral, respectively. Accordingly, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Defined Terms. Terms defined in the introductory section hereof have the respective meanings set forth therein. Capitalized terms defined in the Indenture and not otherwise defined herein have, as used herein, the respective meanings provided for therein. Section 1.02. Terms Defined in the UCC. Unless otherwise defined herein or the context otherwise requires, the following terms, together with any uncapitalized terms used herein which are defined in the UCC, have the respective meanings provided in the UCC: (i) Accounts, (ii) As-Extracted Collateral; (iii) Certificated Security; (iv) Chattel Paper; (v) Documents; (vi) Financial Asset; (vii) Instruments; (viii) Inventory; (ix) Investment Property; (x) Payment Intangibles; (xi) Proceeds; (xii) Securities Account; (xiii) Securities Intermediary; (xiv) Security; (xv) Security Certificate; (xvi) Security Entitlements; and (xvii) Uncertificated Security. Section 1.03. Additional Definitions. The following additional terms, as used herein, have the following respective meanings: "ACCOUNT CONTROL AGREEMENT" means (i) with respect to a Deposit Account, a deposit account control agreement, substantially in the form of Exhibit B hereto (or in such other form as to which an opinion of counsel is delivered to the Collateral Agent opining that such agreement is sufficient to grant the Collateral Agent a perfected security interest under the UCC in such Deposit Account), among one or more Loan Parties, the Collateral Agent and the bank which maintains such Deposit Account and (ii) with respect to a Securities Account, a securities account control agreement, substantially in the form of Exhibit B to the Pledge Agreement (or in such other form as to which an opinion of counsel is delivered to the Collateral Agent opining that such agreement is sufficient to grant the Collateral Agent a perfected security interest under the UCC in such Securities Account), among one or more Loan Parties, the Collateral Agent and the Securities Intermediary which maintains such Securities Account, in each case as the same may be amended, modified or supplemented from time to time. "CAPITAL STOCK" has the meaning given to it in the Indenture. "CLAIMS" means all "commercial tort claims" (as defined in the UCC), including, without limitation, each of the claims described on Schedule 1.01A hereto, as such Schedule may be amended, modified or supplemented from time to time. "COLLATERAL" has the meaning set forth in Section 2.01 of this Agreement. "COLLATERAL ACCOUNTS" means one or more Securities Accounts or Deposit Accounts established with or in the possession or under the control of the Collateral Agent into which cash, Cash Equivalents and similar assets (other than cash, Cash Equivalents and similar assets constituting Receivables or Related Assets) or Proceeds (including Proceeds of insurance policies, awards of condemnation or other compensation) of any Collateral are deposited from time to time, collectively. "COLLATERAL AGENT" means U.S. Bank National Association, in its capacity as collateral agent for the Finance Parties, and its successor or successors in such capacity. "COMPUTER HARDWARE" means all computer and other electronic data processing hardware of a Loan Party, whether now or hereafter owned, licensed or leased by such Loan Party, including, without limitation, all integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware, all documentation, flowcharts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing and all options, warranties, services contracts, program 2 services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing. "COPYRIGHT" means any of the following, whether now existing or hereafter arising, created or acquired: (i) the United States and foreign copyrights described on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule may be amended, modified or supplemented from time to time) and any renewals thereof; (ii) all other common law and/or statutory rights in all copyrightable subject matter under the Laws of the United States or any other country (whether or not the underlying works of authorship have been published); (iii) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental, derivative or collective work registrations and pending applications for registrations in the United States Copyright Office or any other country; (iv) all tangible property embodying or incorporating any or all of the foregoing, whether in completed form or in some lesser state of completion, and all masters, duplicates, drafts, versions, variations and copies thereof, in all formats; (v) all claims for, and rights to sue for, past, present and future infringement of any of the foregoing; (vi) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Copyright Licenses in connection therewith; and (vii) all rights in any of the foregoing, whether arising under the Laws of the United States or any foreign country or otherwise, to copy, record, synchronize, broadcast, transmit, perform and/or display any of the foregoing or any matter which is the subject of any of the foregoing in any manner and by any process now known or hereafter devised. "COPYRIGHT LICENSE" means any written agreement now or hereafter in existence granting to any Loan Party any rights, whether exclusive or non-exclusive, to use another Person's copyrights or copyright applications, or pursuant to which any Loan Party has granted to any other Person, any right, whether exclusive or non-exclusive, with respect to any Copyright, whether or not registered, including, without limitation, the Copyright Licenses described on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule may be amended, modified or supplemented from time to time). "DEFAULT" means any event which is, or after notice or passage of time or both would be, an Event of Default. 3 "DEPOSIT ACCOUNTS" means all "deposit accounts" (as defined in the UCC), whether or not evidenced by an Instrument, and all certificates and Instruments, if any, from time to time representing, evidencing or deposited into such deposit accounts. "EQUIPMENT" means all "equipment" (as defined in the UCC), including all items of machinery, equipment, Computer Hardware, furnishings and fixtures of every kind, whether or not affixed to real property, as well as all motor vehicles, automobiles, trucks, trailers, railcars, barges and vehicles of every description, handling and delivery equipment, all additions to, substitutions for, replacements of or accessions to any of the foregoing, all attachments, components, parts (including spare parts) and accessories whether installed thereon or affixed thereto and all fuel for any thereof and all options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights and indemnifications relating to any of the foregoing. "EVENT OF DEFAULT" means an "Event of Default" as defined in the Indenture. "EXCLUDED DEPOSIT ACCOUNTS" means each of the Deposit Accounts that are excluded from the requirements of Sections 4.01 and 4.12 only (including accounts constituting Receivables and Related Assets), and, as of the Issue Date, listed on Schedule 1.01B hereto. "EXCLUDED EQUIPMENT" means at any date any Equipment of a Loan Party which is subject to, or secured by, a Capital Lease Obligation or Purchase Money Indebtedness if and to the extent that (i) the express terms of a valid and enforceable restriction in favor of a Person who is not a Group Company contained in the agreements or documents granting or governing such Capital Lease Obligation or Purchase Money Indebtedness prohibits, or requires any consent or establishes any other conditions for, an assignment thereof, or a grant of a security interest therein, by a Loan Party and (ii) such restriction relates only to the asset or assets acquired by a Loan Party with the Proceeds of such Capital Lease Obligation or Purchase Money Indebtedness and attachments thereto or substitutions therefor; provided that all Proceeds paid or payable to any Loan Party from any sale, transfer or assignment or other voluntary or involuntary disposition of such Equipment and all rights to receive such Proceeds shall be included in the Collateral to the extent not otherwise required to be paid to the holder of the Capital Lease Obligation or Purchase Money Indebtedness secured by such Equipment. "EXCLUDED SECURITIES ACCOUNTS" means each of the Securities Accounts that are excluded from the requirements of Sections 4.01 and 4.12 only (including accounts constituting Receivables and Related Assets), and, as of the Issue Date, listed on Schedule 1.01B hereto. "EXEMPT DEPOSIT ACCOUNTS" means (i) Deposit Accounts the balance of which consists exclusively of (A) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of a Loan Party to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of any of the Loan Parties and (B) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of one or more Loan Parties, and (ii) all segregated Deposit Accounts constituting (and the balance of which consists solely of funds set aside in connection with) taxes accounts, payroll accounts and trust accounts. 4 "FAIR MARKET VALUE" has the meaning given to it in the Indenture. "FINANCE PARTY" means each Noteholder, the Trustee, the Collateral Agent, each Indemnitee and their respective successors and assigns, and "FINANCE PARTIES" means any two or more of them, collectively. "GENERAL INTANGIBLES" means all "general intangibles" (as defined in the UCC) and also means and includes (i) all Payment Intangibles and other obligations and indebtedness owing to any Loan Party (other than any such Payment Intangibles and other obligations and indebtedness comprising Receivables and Related Assets), from whatever source arising, (ii) all Claims, Judgments and/or Settlements, (iii) all rights or claims in respect of refunds for taxes paid, (iv) all rights in respect of any pension plans or similar arrangements maintained for employees of any Loan Party or any member of the ERISA Group, (v) all interests in limited liability companies and/or partnerships which interests do not constitute Securities and (vi) all Supporting Obligations of any kind given by any Person with respect to all or any of the foregoing. "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "GROUP COMPANY" means any of Holdings, InSight or their respective Subsidiaries (regardless of whether or not consolidated with Holdings or InSight for purposes of GAAP), and "GROUP COMPANIES" means all of them, collectively. "GUARANTEE" means the guarantee by any Guarantor of the Note Obligations. "INDEBTEDNESS" has the meaning set forth in the Indenture. "INDEMNITEE" has the meaning set forth in Section 7.03(c) of this Agreement. "INTELLECTUAL PROPERTY" means all Patents, Trademarks, Copyrights, Software, Licenses, rights in intellectual property, goodwill, trade secrets, confidential or proprietary technical and business information, know-how, show-how, domain names, mask works, customer lists, vendor lists, subscription lists, data bases and related documentation, registrations, franchises and all other intellectual or other similar property rights. "INTELLECTUAL PROPERTY SECURITY AGREEMENT" means a Grant of Security Interest in United States Patents and Trademarks or a Grant of Security Interest in United States Copyrights (as the context may require) substantially in the form of Exhibit A-1 or A-2 to this Agreement, respectively, between one or more Loan Parties and the Collateral Agent, as the same may be amended, modified or supplemented from time to time. "ISSUE DATE" means September 22, 2005. 5 "JUDGMENTS" means all judgments, decrees, verdicts, decisions or orders issued in resolution of or otherwise in connection with a Claim, whether or not final or subject to appeal, and including all rights of enforcement relating thereto and any and all Proceeds thereof. "LAW" means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority. "LICENSE" means any Patent License, Trademark License, Copyright License, Software License or other license or sublicense as to which any Loan Party is a party (other than those license agreements constituting Excluded Contracts; provided that rights to payments under any such license shall be included in the Collateral to the extent permitted thereby or by Section 9-406 and 9-408 of the UCC). "LIQUID INVESTMENTS" has the meaning set forth in Section 2.05 of this Agreement. "MATERIAL ADVERSE EFFECT" means (i) any material adverse effect upon the business, assets, properties, liabilities, results of operations or financial condition of Holdings, InSight and the Restricted Subsidiaries, taken as a whole, (ii) a material adverse effect on the ability of a Loan Party to consummate the transactions contemplated by the Note Documents to occur on the Issue Date, (iii) a material adverse effect on the ability of any Loan Party to perform any of its obligations under any Note Document to which it is a party or (iv) a material adverse effect on the rights and benefits of the Finance Parties under any Note Document. "MOODY'S" means Moody's Investors Service, Inc., and its successors. "NEGLIGIBLE ECONOMIC VALUE" shall mean the economic value of the Intellectual Property, in the reasonable business judgment of the Loan Parties, is such that the expense to maintain, defend, use, register, or prosecute the Intellectual Property is less than, or approximately equivalent to, the economic value received by the Loan Parties from the Intellectual Property. "NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the Registration Rights Agreement related thereto and the Collateral Documents, in each case including all exhibits and schedules thereto, and all other agreements, documents and instruments relating to the Senior Secured Notes, in each case as the same may be amended, modified or supplemented from time to time in accordance with the provisions thereof. "NOTEHOLDERS" means the holders from time to time of the Senior Secured Notes. "PATENT" means any of the following: 6 (i) the United States and foreign patents described on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule may be amended, modified or supplemented from time to time) and any renewals thereof; (ii) all other letters patent and design letters patent of the United States or any other country; (iii) all applications filed or in preparation for filing for letters patent and design letters patent of the United States or any other country including, without limitation, applications in the United States Patent and Trademark Office or in any similar office or agency of the United States or any other country or political subdivision thereof; (iv) all reissues, divisions, continuations, continuations-in-part, revisions, renewals or extensions thereof; (v) all claims for, and rights to sue for, past, present or future infringement of any of the foregoing; (vi) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Patent Licenses in connection therewith; and (vii) all rights corresponding to any of the foregoing whether arising under the Laws of the United States or any foreign country or otherwise. "PATENT LICENSE" means any written agreement now or hereafter in existence granting to any Loan Party any right, whether exclusive or non-exclusive, with respect to any Person's patent or any invention now or hereafter in existence, whether or not patentable, or pursuant to which any Loan Party has granted to any other Person, any right, whether exclusive or non-exclusive, with respect to any Patent or any invention now or hereafter in existence, whether or not patentable and whether or not a Patent or application for Patent is in or hereafter comes into existence on such invention, including, without limitation, the Patent Licenses described on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule may be amended, modified or supplemented from time to time). "PERFECTION CERTIFICATE" means with respect to each Loan Party a certificate, substantially in the form of Exhibit D hereto, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Collateral Agent. "PERMITTED LIEN" means any Lien permitted under Section 1.01 the Indenture. "PLEDGED ACCOUNT BANK" has the meaning set forth in Section 2.04(a). "PROPERTY" means any interest in any kind of property or asset, whether real, personal or mixed and whether tangible or intangible. 7 "PURCHASE MONEY INDEBTEDNESS" means Indebtedness of InSight or any of its Restricted Subsidiaries incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment used in the business of InSight or any Restricted Subsidiary or the cost of installation, construction or improvement thereof, and the payment of any sales or other taxes associated therewith. "RECORDABLE INTELLECTUAL PROPERTY" means Intellectual Property the transfer of which is required to be recorded in the United States Patent and Trademark Office or the United States Copyright Office in order to be effective against subsequent third party transferees; provided that the following shall not be considered "RECORDABLE INTELLECTUAL PROPERTY" hereunder: (i) unregistered United States Copyrights, (ii) unregistered United States Trademarks and (iii) non-exclusive Licenses. "RESTRICTED SUBSIDIARY" has the meaning set forth in the Indenture. "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and its successors. "SECURITY INTERESTS" means the security interests in the Collateral granted under this Agreement securing the Note Obligations. "SETTLEMENTS" means all right, title and interest of a Loan Party in, to and under any settlement agreement or other agreement executed in settlement or compromise of any Claim, including all rights to enforce such agreements and all payments thereunder or arising in connection therewith. "SOFTWARE" means all "software" (as defined in the UCC), and also means and includes all software programs, whether now or hereafter owned, licensed or leased by a Loan Party, designed for use on Computer Hardware, including, without limitation, all operating system software, utilities and application programs in whatever form and whether or not embedded in goods, all source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever, all firmware associated with any of the foregoing all documentation, flowcharts, logic diagrams, web pages, manuals, specifications, training materials, charts and pseudo codes associated with any of the foregoing, and all options, warranties, services contracts, program services, test rights, maintenance rights, support rights, renewal rights and indemnifications relating to any of the foregoing. "SOFTWARE LICENSE" means any agreement (including any agreement constituting a Copyright License, Patent License and/or Trademark License) now or hereafter in existence granting to any Loan Party any right, whether exclusive or non-exclusive, to use another Person's Software, or pursuant to which any Loan Party has granted to any other Person, any right, whether exclusive or non-exclusive, to use any Software, whether or not subject to any registration. "SUPPORTING OBLIGATION" means a guarantee or other secondary obligation supporting, or any Lien securing, the payment or performance of one or more General Intangibles, Documents, Assigned Agreements or Investment Property. 8 "TRADEMARK" means any of the following: (i) the United States and foreign trademarks described on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule may be amended, modified or supplemented from time to time) and any renewals thereof; (ii) all other trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, slogans, certification marks, collective marks, brand names and trade dress which are or have been used in the United States or in any state, territory or possession thereof, or in any other place, nation or jurisdiction, along with all prints and labels on which any of the foregoing have appeared or appear, package and other designs, and any other source or business identifiers, and general intangibles of like nature, and the rights in any of the foregoing which arise under applicable Law; (iii) the goodwill of the business symbolized thereby or associated with each of the foregoing; (iv) all registrations and applications in connection therewith, including, without limitation, registrations and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, but excluding in all cases all intent-to-use United States trademark applications for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. Section 1051(c) or 15 U.S.C. Section 1051(d), respectively, or if filed, has not been deemed in conformance with 15 U.S.C. Section 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office, provided that upon such filing and acceptance, such intent-to-use applications shall be included in the definition of Trademark; (v) all reissues, extensions and renewals thereof; (vi) all claims for, and rights to sue for, past, present or future infringements of any of the foregoing; (vii) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Trademark Licenses in connection therewith; and (viii) all rights corresponding to any of the foregoing whether arising under the Laws of the United States or any foreign country or otherwise. "TRADEMARK LICENSE" means any written agreement now or hereafter in existence granting to any Loan Party any right, whether exclusive or non-exclusive, to use another Person's trademarks or trademark applications, or pursuant to which any Loan Party has granted to any other Person, any right, whether exclusive or non-exclusive, to use any Trademark, whether or not registered, including, without limitation, the Trademark Licenses described on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule may be amended, 9 modified or supplemented from time to time) and the rights to prepare for sale, sell and advertise for sale, all of the inventory now or hereafter owned by any Loan Party and now or hereafter covered by such license agreements. "UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of Law, the perfection, the effect of perfection or non-perfection or the priority of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. "US SUBSIDIARY" means with respect to any Person each Subsidiary of such Person which, at the time of determination, is incorporated in or organized under the Laws of the United States of America, any State thereof or the District of Columbia, and "US SUBSIDIARIES" means all of them, collectively. Section 1.04. Terms Generally. Terms defined in the introductory paragraphs hereof and the definitions in Section 1.03 shall apply equally to both the singular and plural forms of the terms defined. Wherever the context may require, any pronouns shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless otherwise stated herein or the context shall otherwise require. Unless otherwise expressly provided herein, the word "day" means a calendar day. ARTICLE II SECURITY INTERESTS Section 2.01. Grant of Security Interests. To secure the due and punctual payment of all Note Obligations, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due or to become due, in accordance with the terms thereof and to secure the performance of all of the obligations of each Loan Party hereunder and the other Loan Parties hereunder and under the other Note Documents, each Loan Party hereby grants to the Collateral Agent for the benefit of the Finance Parties a security interest in, and each Loan Party hereby pledges and mortgages to the Collateral Agent for the benefit of the Finance Parties, all of such Loan Party's right, title and interest in, to and under the following, whether now owned or existing or hereafter acquired, created or arising, whether tangible or intangible, and regardless of where located (other than any item which on any date constitutes an Excluded Contract or Excluded Equipment) (all of which are herein collectively called the "COLLATERAL"): (i) all Inventory; (ii) all General Intangibles; (iii) all Intellectual Property; 10 (iv) all Documents and all Supporting Obligations of any kind given by any Person with respect thereto; (v) all Chattel Paper; (vi) all Equipment; (vii) all Investment Property and all Supporting Obligations of any kind given by any Person with respect thereto; (viii) all Deposit Accounts (other than Excluded Deposit Accounts and Exempt Deposit Accounts); (ix) the Collateral Accounts, all cash and other property deposited therein or credited thereto from time to time, the Liquid Investments made pursuant to Section 2.07 and other monies and property of any kind of any Loan Party maintained with or in the possession of or under the control of the Collateral Agent; (x) all Securities Accounts; (xi) all books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) of each Loan Party pertaining to any of the Collateral; and (xii) all Proceeds of all or any of the Collateral described in clauses (i) through (xii) hereof; provided, however, that, the Collateral shall not include (i) any Voting Stock that is issued by a Foreign Subsidiary (that is a corporation for United States federal income tax purposes) and owned by any Loan Party, if and to the extent that the inclusion of such Voting Stock in the Collateral would cause the Collateral pledged by such Loan Party hereunder or under any other Note Document to include in the aggregate more than 65% of the total combined voting power of all classes of Voting Stock of such Foreign Subsidiary, (ii) assets securing Purchase Money Indebtedness or Capital Lease Obligations permitted to be incurred pursuant to the Indenture, (iii) Excluded Contracts, (iv) any Capital Stock owned by any Loan Party and issued by an entity that is not a Wholly Owned Subsidiary of such Loan Party to the extent (and only with respect to such portion of such Capital Stock that would be prohibited as referred to below) that any joint venture agreement, between or among any Loan Party and one or more third parties with respect to a Permitted Joint Venture, by the express terms of a valid and enforceable restriction in favor of such third parties prohibits, or requires any consent for, the granting of a security interest in such Capital Stock by such Loan Party, (v) any Capital Stock and other securities of InSight, any of its Subsidiaries or any of Holdings' Subsidiaries to the extent that the pledge of such Capital Stock or other securities to secure the Note Obligations would cause InSight, such Subsidiary or such Subsidiary of Holdings, as the case may be, to be required to file separate financial statements with the Commission pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time), (vi) all Receivables and Related Assets and (vii) any proceeds or products from any and all of the foregoing unless such proceeds or products would otherwise constitute Collateral. 11 Notwithstanding the foregoing, if granting or perfecting any Lien to secure the Note Obligations on any Collateral cannot be granted or perfected under applicable law, none of InSight or the Guarantors will be required to grant or perfect, as applicable, such Lien. Section 2.02. Continuing Liability of Each Loan Party. Anything herein to the contrary notwithstanding, no Loan Party shall by virtue of this Agreement be relieved of any obligation to observe and perform the terms and conditions to be observed and performed by it under any contract, agreement, warranty or other obligation with respect to the Collateral. Neither the Collateral Agent nor any Finance Party shall have any obligation or liability under any such contract, agreement, warranty or obligation by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any Finance Party of any payment relating to any Collateral, nor shall the Collateral Agent or any Finance Party be required to perform or fulfill any of the obligations of any Loan Party with respect to any of the Collateral, to make any inquiry as to the nature or sufficiency of any payment received by it or the sufficiency of the performance of any party's obligations with respect to any Collateral. Furthermore, neither the Collateral Agent nor any Finance Party shall be required to file any claim or demand to collect any amount due or to enforce the performance of any party's obligations with respect to the Collateral. Section 2.03. Security Interests Absolute. All rights of the Collateral Agent, all security interests hereunder and all obligations of each Loan Party hereunder are unconditional and absolute and independent and separate from any other security for or guaranty of the Note Obligations, whether executed by such Loan Party, any other Loan Party or any other Person. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be released, discharged or otherwise affected or impaired by: (i) any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any Note Obligation under any other Note Document or any other agreement or instrument evidencing or securing any Note Obligation, by operation of Law or otherwise; (ii) any change in the manner, place, time or terms of payment of any Finance obligation or any other amendment, supplement or modification to any Note Document or any other agreement or instrument evidencing or securing any Note Obligation; (iii) any release, non-perfection or invalidity of any direct or indirect security for any Note Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Note Obligation or any release of any other obligor or Loan Parties in respect of any Note Obligation; (iv) any change in the existence, structure or ownership of any Loan Party, or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting a Loan Party or its assets or any resulting disallowance, release or discharge of all or any portion of any Note Obligation; (v) the existence of any claim, set-off or other right which any Loan Party may have at any time against any other Loan Party, any Finance Party or any other 12 Person, whether in connection herewith or any unrelated transaction; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (vi) any invalidity or unenforceability relating to or against any Loan Party for any reason of any Note Document or any other agreement or instrument evidencing or securing any Note Obligation or any provision of applicable Law or regulation purporting to prohibit the payment by any Loan Party of any Note Obligation; (vii) any failure by any Finance Party: (A) to file or enforce a claim against any Loan Party or its estate (in a bankruptcy or other proceeding); (B) to give notice of the existence, creation or incurrence by any Loan Party of any new or additional indebtedness or obligation under or with respect to the Note Obligations; (C) to commence any action against any Loan Party; (D) to disclose to any Loan Party any facts which such Finance Party may now or hereafter know with regard to any Loan Party; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Note Obligations; (viii) any direction as to application of payment by any Loan Party or any other Person; (ix) any subordination by any Finance Party of the payment of any Note Obligation to the payment of any other liability (whether matured or unmatured) of any Loan Party to its creditors; (x) any act or failure to act by the Collateral Agent or any other Finance Party under this Agreement or otherwise which may deprive any Loan Party of any right to subrogation, contribution or reimbursement against any other Loan Party or any right to recover full indemnity for any payments made by such Loan Party in respect of the Note Obligations; or (xi) any other act or omission to act or delay of any kind by any Loan Party or any Finance Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of any Loan Party's obligations hereunder (other than final payment in full of the Note Obligations). Each Loan Party has irrevocably and unconditionally delivered this Agreement to the Collateral Agent, for the benefit of the Finance Parties, and the failure by any other Person to sign this Agreement or a security agreement similar to this Agreement or otherwise shall not discharge the obligations of any Loan Party hereunder. This Agreement shall remain fully enforceable against each Loan Party irrespective of any defenses that any other Loan Party may have or assert in respect of the Note Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Loan Party may assert the defense of final payment in full of the Note Obligations. 13 Section 2.04. Maintaining the Account Collateral. (a) Each Loan Party will maintain Deposit Accounts (other than Excluded Deposit Accounts and Exempt Deposit Accounts) only with the financial institution acting as Collateral Agent hereunder or with a financial institution (a "PLEDGED ACCOUNT BANK") that has entered into an Account Control Agreement with such Loan Party and the Collateral Agent. (b) Each Loan Party will maintain Securities Accounts (other than Excluded Securities Accounts and Exempt Securities Accounts) only with the financial institution acting as Collateral Agent hereunder or with a financial institution that has entered into an Account Control Agreement with such Loan Party and the Collateral Agent. Section 2.05. Collateral Agent Not Responsible. The Collateral Agent shall not be responsible for proper application by any Loan Party of any amount distributed to such Loan Party pursuant to this Article II. ARTICLE III REPRESENTATIONS AND WARRANTIES Each Loan Party represents and warrants that: Section 3.01. Title to Collateral. Such Loan Party has good and marketable title to, or valid license or leasehold interests in, all of the Collateral in which it has granted a security interest hereunder, free and clear of any Liens other than (i) Permitted Liens, (ii) Liens in respect of motor vehicles that will be terminated by the Loan Party after the Issue Date in accordance with Section 4.07 hereof and (iii) Liens in respect of which such Loan Party has delivered UCC-3 termination statements or partial release financing statements on the Issue Date. No Collateral having a value individually or collectively in excess of $250,000 (other than Inventory in transit or Inventory in the possession of a carrier or similar bailee as to which the provisions of Section 4.04 of this Agreement have been complied with) is in the possession or control of any Person asserting any claim thereto or security interest therein (other than financial institutions under an Account Control Agreement), except that the Collateral Agent or its designee may have possession and/or control of Collateral as contemplated hereby and by the other Note Documents. Section 3.02. Validity, Perfection and Priority of Security Interests. (a) The Security Interests constitute valid security interests under the UCC securing the Note Obligations. (b) When UCC-1 financing statements naming the Collateral Agent as secured party and containing a description of the Collateral in the form specified in Exhibit C hereto shall have been filed in the respective offices specified in Schedule 4.01 hereto, the Security Interests will constitute perfected security interests in all right, title and interest of each Loan Party in the Collateral to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all other Liens and rights of others therein except for Permitted Liens. 14 (c) When each Intellectual Property Security Agreement has been filed with the United States Patent and Trademark Office and/or with the United States Copyright Office, the Security Interests will (assuming that the financing statements referred to in paragraph (b) above have been filed in the appropriate filing offices) constitute perfected security interests in all right, title and interest of such Loan Party in the Recordable Intellectual Property therein described to the extent that a security interest therein may be perfected by filing in such office, prior to all other Liens and rights of others therein except for Permitted Liens. (d) When each Account Control Agreement has been executed and delivered to the Collateral Agent, the Security Interests will constitute perfected security interests in all right, title and interest of the Loan Parties in the Deposit Accounts and Securities Accounts, as applicable, subject thereto, prior to all other Liens and rights of others therein and subject to no adverse claims except for Permitted Liens. Section 3.03. No Consents. No consent of any other Person (including, without limitation, any stockholder or creditor of such Loan Party or any of its Subsidiaries) and no order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any Governmental Authority is required to be obtained by the Loan Party in connection with the execution, delivery or performance of this Agreement, or in connection with the exercise of the rights and remedies of the Collateral Agent pursuant to this Agreement, except (i) as may be required to perfect (as described in Schedule 4.01 hereto) and maintain the perfection of the security interests created hereby, (ii) with respect to vehicles represented by a certificate of title, (iii) in connection with the disposition of the Collateral by Laws affecting the offering and sale of securities generally or as described in Schedule 3.03 hereto, (iv) certain remedial actions may be limited by applicable Laws or (v) as contemplated by the definition of Excluded Contracts; provided, however, that (i) the registration of Copyrights in the United States Copyright office may be required to obtain a security interest therein that is effective against subsequent transferees under United States Federal copyright law and (ii) to the extent that recordation of the Security Interests in the United States Patent and Trademark Office or the United States Copyright Office is necessary to perfect the Security Interests or to render the Security Interests effective against subsequent third parties, such recordations will not have been made with respect to the items that are not Recordable Intellectual Property. Section 3.04. Insurance. On the Issue Date, each Loan Party's insurance complies with the provisions of Section 4.09. Section 3.05. Intellectual Property. (a) Schedule VI to the Loan Party's Perfection Certificate, attached hereto as Annex I is a true, correct and complete list of all Copyrights and Copyright Licenses owned by the Grantors as of the date hereof. (b) Schedule VI to the Loan Party's Perfection Certificate, attached hereto as Annex I is a true, correct and complete list of all Patents and Patent Licenses owned by the Grantors as of the date hereof. 15 (c) Schedule VI to the Loan Party's Perfection Certificate, attached hereto as Annex I is a true, correct and complete list of all Trademarks and Trademark Licenses owned by the Grantors as of the date hereof. (d) Except as set forth in Schedule VI to the Loan Party's Perfection Certificate, attached hereto as Annex I, none of the Intellectual Property is the subject of any licensing or franchise agreement pursuant to which any Grantor is the licensor or franchisor. (e) Each Loan Party is the exclusive owner of the entire right, title, and interest in and to, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. No claim has been asserted or is pending by any Person challenging or questioning the use by any Loan Party of any of the Intellectual Property owned by any Loan Party or the validity, enforceability or effectiveness of any of the Intellectual Property owned by any Loan Party or the Loan Party's rights to any Intellectual Property, nor does any Loan Party know of any basis for any such claim, except as otherwise set forth in the Indenture. The use by the Loan Parties of the Intellectual Property does not infringe or misappropriate the Intellectual Property rights of any Person in any respect, nor does any Loan Party know of any basis for any such claim, except as otherwise set forth in the Indenture. No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or any Loan Party's rights in, any Intellectual Property. ARTICLE IV COVENANTS Each Loan Party covenants and agrees that until the payment in full of all Note Obligations, other than contingent indemnification obligations for which no claim has been made, such Loan Party will comply with the following: Section 4.01. Delivery of Perfection Certificate; Initial Perfection and Delivery of Search Reports. On or prior to the Issue Date, such Loan Party shall (i) deliver its Perfection Certificate to the Collateral Agent, and (ii) cause all filings and recordings specified in Schedule 4.01 hereto to be delivered to the Collateral Agent for filing or recording, as applicable, within the time periods specified in such schedule. The information set forth in the Perfection Certificate shall be correct and complete in all material respects as of the Issue Date. The Loan Parties represent and warrant that duly executed Account Control Agreements with respect to each of the Loan Parties' Deposit Accounts (other than Exempt Deposit Accounts and Excluded Deposit Accounts, with respect to which no Account Control Agreements shall be required hereunder), if any, and Securities Accounts (other than Excluded Securities Accounts), if any, have been delivered to the Collateral Agent and are in full force and effect. Section 4.02. Change of Name, Identity, Structure or Location; Subjection to Other Security Agreements. Such Loan Party will not change its name, identity, structure or location (determined as provided in Section 9-307 of the UCC) in any manner, and shall not become bound, as provided in Section 9-203(d) of the UCC, by a security agreement entered into by another Person, in each case, unless it shall have given the Collateral Agent not less than 10 days' prior notice thereof. Such Loan Party shall not in any event change the location of its chief executive office or its name, identity, structure or location (determined as provided in 16 Section 9-307 of the UCC), or become bound, as provided in Section 9-203(d) of the UCC, by a security agreement entered into by another Person, if such change would cause the Security Interests in any Collateral to lapse or cease to be perfected unless such Loan Party has taken on or before the date of lapse all actions necessary to ensure that the Security Interests in the Collateral do not lapse or cease to be perfected. Section 4.03. Further Actions. Each Loan Party will, from time to time at its expense and in such manner and form as the Collateral Agent may reasonably request, execute, deliver, file and record any financing statement, instrument, document, agreement or other paper and take any other action (including, without limitation, any filings of financing or continuation statements under the UCC and any filings with the United States Patent and Trademark Office and the United States Copyright Office) that from time to time may be reasonably necessary or advisable under the UCC or with respect to Recordable Intellectual Property, or that the Collateral Agent may reasonably request, in order to create, preserve, perfect, confirm or validate the Security Interests or to enable the Collateral Agent and the Finance Parties to obtain the full benefit of this Agreement or to exercise and enforce any of its rights, powers and remedies created hereunder or under applicable Law with respect to any of the Collateral. To the extent permitted by applicable Law but without limiting such Loan Party's obligations to itself comply with the first sentence of this Section 4.03, such Loan Party hereby authorizes the Collateral Agent to file, in the name of such Loan Party or otherwise and without the signature or other separate authorization or authentication of such Loan Party appearing thereon, such UCC financing statements or continuation statements as the Collateral Agent may reasonably deem necessary or appropriate to further perfect or maintain the perfection of the Security Interests. Such Loan Party agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. The Loan Parties shall pay the costs of, or incidental to, any recording or filing of any financing or continuation statements or other assignment documents concerning the Collateral. Section 4.04. Delivery of Instruments, Etc. Such Loan Party will promptly deliver each Instrument and each Certificated Security (other than (i) Cash Equivalents held in a Deposit Account or a Securities Account and subject to an effective Account Control Agreement unless maintained with the Collateral Agent or as otherwise required by Section 4.13 hereof, (ii) Instruments and Certificated Securities not constituting Collateral, (iii) Instruments or Certificated Securities received in connection with bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers in the ordinary course of business and (iv) Instruments and Certificated Securities having individually, a face amount of less than $250,000) to the Collateral Agent, appropriately indorsed to the Collateral Agent; provided that so long as no Event of Default shall have occurred and be continuing, and except as required by any other Note Document, such Loan Party may (unless otherwise provided in Section 2.04(b)) retain for collection in the ordinary course of business any Instruments received by it in the ordinary course of business, and the Collateral Agent shall, promptly upon request of such Loan Party, make appropriate arrangements for making any other Instrument or Certificated Security pledged by such Loan Party available to it for purposes of presentation, collection or renewal (any such arrangement to be effected, to the extent deemed appropriate to the Collateral Agent, against a trust receipt or like document). 17 Section 4.05. Certificates of Title. Within 90 days following the Issue Date (or such later date as the Collateral Agent may agree in its sole discretion), such Loan Party shall in the case of Equipment constituting one or more titled vehicles deliver to the Collateral Agent any and all certificates of title, applications for title or similar evidence of ownership of such Equipment and shall cause the Collateral Agent to be named as sole lienholder on any such certificate of title or other evidence of ownership. Section 4.06. Insurance. On or prior to the Issue Date, such Loan Party will cause the Collateral Agent to be named as an insured party and loss payee, effective at all times on and after the Issue Date, on each insurance policy covering risks relating to any of its Inventory and Equipment. No such insurance policy shall purport to include any liability on the part of the Collateral Agent and the Finance Parties for insurance premiums and each such insurance policy shall provide that the insurer shall provide at least 30 days (10 days in the case of non-payment of premium) prior written notice to the Collateral Agent of any proposed cancellation, termination or material modification thereof. Such Loan Party hereby appoints the Collateral Agent as its attorney in fact, effective during the continuance of an Event of Default, to make proof of loss, claims for insurance and adjustments with insurers, and to execute or endorse all documents, checks or drafts in connection with payments made as a result of any such insurance policies. Such Loan Party assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Loan Party to pay the Note Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Loan Party. Section 4.07. Information Regarding Collateral. Such Loan Party will, promptly upon request, provide to the Collateral Agent all information and evidence it may reasonably request concerning the Collateral to enable the Collateral Agent to enforce the provisions of this Agreement. Section 4.08. Covenants Regarding Intellectual Property. Except in the case of subparagraphs (a), (b), (c), (e) and (f) below where the failure to do so could not reasonably be expected to have a Material Adverse Effect and subject to the rights of Loan Parties to dispose of assets and property in accordance with the Indenture: (a) Such Loan Party (either itself or through licensees) will, for each Patent, not do any act, or omit to do any act, whereby any Patent may become invalidated or dedicated to the public, and shall continue to mark any products covered by a Patent as required by the patent laws of all applicable jurisdictions. (b) Such Loan Party (either itself or, if permitted by Law, through its licensees or its sublicensees) will, for each Trademark, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity from non-use, material alteration, naked licensing or genericide, (ii) display such Trademark with proper notice, including notice of federal registration to the extent permitted by applicable Law and consistent with past practice, (iii) not knowingly use or knowingly permit the use of such 18 Trademark in violation of any third party rights and (iv) not permit any assignment in gross of such Trademark. (c) Such Loan Party (either itself or through licensees) will, for each work covered by a Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice. (d) Such Loan Party shall promptly notify the Collateral Agent if it knows or has reason to know that any Patent, Trademark or Copyright (or any application or registration relating thereto) may become abandoned or dedicated to the public, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court, other than ordinary course United States Patent and Trademark Office actions) regarding such Loan Party's ownership of any Patent, Trademark, Copyright or Software, its right to register the same or to keep, use or maintain the same. (e) Such Loan Party will take all commercially reasonable steps at its sole cost, expense and risk to file, maintain and pursue each application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to preserve and maintain all common law rights in any Trademarks and each registration of the Patents, Trademarks and Copyrights, including filing and paying fees for applications for renewal, reissues, divisions, extensions, revisions, continuations, continuations-in-part, affidavits of use, affidavits of incontestability and maintenance, and, unless such Loan Party shall reasonably determine that any such action would be of Negligible Economic Value, to initiate opposition, interference, reexamination and cancellation proceedings against third parties. (f) If any rights to any Patent, Trademark, Copyright, Software or License relating thereto is believed infringed, misappropriated, breached or diluted by a third party, such Loan Party shall notify the Collateral Agent promptly after it learns thereof and shall, unless such Loan Party shall reasonably determine that any such action would be of Negligible Economic Value, promptly take such action at its sole cost, expense and risk as is consistent with past practice of such Loan Party to enforce its rights and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as such Loan Party shall reasonably deem appropriate under the circumstances to protect such Patent, Trademark, Copyright, Software or License. Such Loan Party will take all actions reasonably necessary to prevent any of the Intellectual Property from becoming forfeited, abandoned, dedicated to the public, invalidated or impaired in any way. (g) Within 45 days after the end of each fiscal quarter of InSight, each Loan Party will (i) inform the Collateral Agent of: (1) all applications for Patents, Trademarks or Copyrights filed during such fiscal quarter by such Loan Party or by any agent, employee, licensee or delegate on its behalf with the United States Patent and Trademark Office or the United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision 19 thereof and (2) any newly registered Intellectual Property acquired by such Loan Party during such fiscal quarter and (ii) upon request of the Collateral Agent, execute any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Security Interests in the foregoing described in clause (i) of this Section, including without limitation, such registrations, licenses, applications, any resulting Patent, Trademark or Copyright and the goodwill or accounts and general intangibles of such Loan Party relating thereto or represented thereby, and such Loan Party hereby appoints the Collateral Agent its attorney-in-fact to execute and file such writings for the foregoing purposes. (h) Prior to the Collateral Agent's giving of notice to the Loan Parties during the continuance of an Event of Default, the Loan Parties shall have the exclusive right to sue for past, present and future infringement of the Intellectual Property including the right to seek injunctions and/or money damages, in an effort by the Loan Parties to protect the Intellectual Property against encroachment by third parties, provided, however: (i) Any money damages awarded or received by the Loan Parties on account of such suit (or the threat of such suit) shall constitute Collateral. (ii) Following written notice given by the Collateral Agent to the Loan Parties during the continuance of any Event of Default, the Collateral Agent may terminate or limit the Loan Parties' rights under this Section 4.11(j). Section 4.09. Deposit Accounts and Securities Accounts. No Loan Party shall establish after the date hereof or permit to exist any Deposit Account (other than Exempt Deposit Accounts or Excluded Deposit Accounts) or any Securities Account (other than Excluded Securities Accounts and except any such account maintained with the Collateral Agent or constituting Collateral Accounts) without promptly delivering to the Collateral Agent a fully executed Account Control Agreement with respect to such account. Subject to Section 2.04(b) hereof and the rights of the Collateral Agent under Article V hereof, each Loan Party shall cause all cash (other than cash constituting Receivables or Related Assets) and cash Proceeds of Collateral hereunder to be deposited in a Deposit Account maintained with the Collateral Agent or with respect to which an effective Account Control Agreement has been delivered to the Collateral Agent. Section 4.10. Claims. In the event any Claim constituting Collateral in excess of $1,000,000 arises or otherwise becomes known after the date hereof, the applicable Loan Party will deliver to the Collateral Agent a supplement to Schedule 1.01A hereto describing such Claim and expressly subjecting such Claim, all Judgments and/or Settlements with respect thereto and all Proceeds thereof to the Security Interests hereunder. ARTICLE V GENERAL AUTHORITY; REMEDIES Section 5.01. General Authority. Each Loan Party hereby irrevocably appoints the Collateral Agent and any officer or agent thereof as its true and lawful attorney-in-fact, with 20 full power of substitution, in the name of such Loan Party, the Collateral Agent, the Finance Parties or otherwise, for the sole use and benefit of the Collateral Agent and the Finance Parties, but at such Loan Party's expense, to the extent permitted by Law and subject to the Collateral Agency Agreement, to exercise at any time and from time to time while an Event of Default has occurred and is continuing all or any of the following powers with respect to all or any of the Collateral, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable until the Note Obligations (other than contingent indemnification obligations for which no claim has been made) are paid in full: (i) to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement; (ii) to receive, take, endorse, assign and deliver any and all checks, notes, drafts, acceptances, documents and other negotiable and non-negotiable Instruments taken or received by such Loan Party as, or in connection with, Collateral; (iii) to commence, settle, compromise, compound, prosecute, defend or adjust any Claim, suit, action or proceeding with respect to, or in connection with, the Collateral; (iv) to sell, transfer, assign or otherwise deal in or with the Collateral or the Proceeds or avails thereof, including, without limitation, for the implementation of any assignment, lease, License, sublicense, grant of option, sale or other disposition of any Patent, Trademark, Copyright or Software or any action related thereto, as fully and effectually as if the Collateral Agent were the absolute owner thereof; (v) to extend the time of payment of any or all of the Collateral and to make any allowance and other adjustments with respect thereto; and (vi) to do, at its option, but at the expense of such Loan Party, at any time or from time to time, all acts and things which the Collateral Agent deems necessary to protect or preserve the Collateral and to realize upon the Collateral. Section 5.02. Remedies upon Event of Default. (a) If any Event of Default has occurred and is continuing, the Collateral Agent may, in addition to all other rights and remedies granted to it in this Agreement and any other agreement securing, evidencing or relating to the Note Obligations: (i) exercise on behalf of the Finance Parties all rights and remedies of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, (ii) without demand of performance or other demand or notice of any kind (except as herein provided or as may be required by mandatory provisions of Law) to or upon any Loan Party or any other Person (all of which demands and/or notices are hereby waived by each Loan Party), (A) withdraw all cash and Liquid Investments in the Collateral Accounts and apply such cash and Liquid Investments and other cash, if any, then held by it as Collateral as specified in Section 5.04, (B) give notice and take sole possession and control of all amounts on deposit in or credited to any Deposit Account (other than an Excluded Deposit Account or an Exempt Deposit Account) or Securities Account 21 (other than an Excluded Securities Account) pursuant to the related Account Control Agreement and apply all such funds as specified in Section 5.04 hereof and (C) if there shall be no such cash, Liquid Investments or other amounts or if such cash, Liquid Investments and other amounts shall be insufficient to pay all the Note Obligations in full or cannot be so applied for any reason or if the Collateral Agent determines to do so, collect, receive, appropriate and realize upon the Collateral and/or sell, assign, give an option or options to purchase or otherwise dispose of and deliver the Collateral (or contract to do so) or any part thereof at public or private sale, at any office of the Collateral Agent or elsewhere in such manner as is commercially reasonable and as the Collateral Agent may deem best, for cash, on credit or for future delivery, without assumption of any credit risk and at such price or prices as the Collateral Agent may deem satisfactory. (b) The Collateral Agent shall give each Loan Party not less than 10 days' prior notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. Any such notice shall (i) in the case of a public sale, state the time and place fixed for such sale, (ii) in the case of a private sale, state the day after which such sale may be consummated, (iii) contain the information specified in UCC Section 9-613, (iv) be authenticated and (v) be sent to the parties required to be notified pursuant to Section 9-611(c) of the UCC; provided that, if the Collateral Agent fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC. The Collateral Agent and each Loan Party agree that such notice constitutes reasonable notification within the meaning of Section 9-611 of the UCC. Except as otherwise provided herein, each Loan Party hereby waives, to the extent permitted by applicable Law, notice and judicial hearing in connection with the Collateral Agent's taking possession or disposition of any of the Collateral. (c) The Collateral Agent or any Finance Party may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale). Each Loan Party will execute and deliver such documents and take such other action as the Collateral Agent deems necessary or advisable in order that any such sale may be made in compliance with Law. Upon any such sale, the Collateral Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free from any claim or right of whatsoever kind. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix in the notice of such sale. At any such sale, the Collateral may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may determine. The Collateral Agent shall not be obligated to make any such sale pursuant to any such notice. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned without further notice. In the case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the selling price is paid by the purchaser thereof, but the Collateral Agent shall not incur any liability in the case of the failure of such 22 purchaser to take up and pay for the Collateral so sold and, in the case of any such failure, such Collateral may again be sold upon like notice. (d) For the purpose of enforcing any and all rights and remedies under this Agreement, the Collateral Agent may, if any Event of Default has occurred and is continuing, (i) require each Loan Party to, and each Loan Party agrees that it will, at its expense and upon the request of the Collateral Agent, forthwith assemble, store and keep all or any part of the Collateral as directed by the Collateral Agent and make it available at a place designated by the Collateral Agent which is, in the Collateral Agent's opinion, reasonably convenient to the Collateral Agent and such Loan Party, whether at the premises of such Loan Party or otherwise, it being understood that such Loan Party's obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Loan Party of such obligation; (ii) to the extent permitted by applicable Law, enter, with or without process of law and without breach of the peace, any premise where any of the Collateral is or may be located, and without charge or liability to any Loan Party, seize and remove such Collateral from such premises; (iii) have access to and use such Loan Party's books and records relating to the Collateral; and (iv) prior to the disposition of the Collateral, store or transfer it without charge in or by means of any storage or transportation facility owned or leased by such Loan Party, process, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent the Collateral Agent deems appropriate and, in connection with such preparation and disposition, use without charge any Intellectual Property or technical process used by such Loan Party. The Collateral Agent may also render any or all of the Collateral unusable at any Loan Party's premises and may dispose of such Collateral on such premises without liability for rent or costs. (e) Without limiting the generality of the foregoing, if any Event of Default has occurred and is continuing: (i) the Collateral Agent may (subject to the express terms of any valid and enforceable restriction in favor of a Person who is not a Group Company that prohibits, requires any consent, or establishes any other conditions for, a license thereof) license, or sublicense, whether general, special or otherwise, and whether on an exclusive (if consistent with past business practices) or non-exclusive basis, any Patents, Trademarks, Copyrights or Software included in the Collateral throughout the world for such term or terms, on such conditions and in such manner as the Collateral Agent shall in its sole and commercially reasonable discretion determine; (ii) the Collateral Agent may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the exclusive right to enforce) against any licensor, sublicensor, licensee or sublicensee all rights and remedies of any Loan Party in, to and under any License and take or refrain from taking any action under any provision thereof, and each Loan Party hereby releases the Collateral Agent and each of the Finance Parties from, and agrees to hold the Collateral Agent and each of the Finance Parties free and harmless from and against any claims arising out of, any lawful action so taken or omitted to be taken with respect thereto; 23 (iii) upon request by the Collateral Agent, each Loan Party will use its commercially reasonable efforts to obtain all requisite consents or approvals by the licensor, sublicensor, licensee or sublicensee of each License to effect the assignment of all of such Loan Party's right, title and interest thereunder to the Collateral Agent or its designee and will execute and deliver to the Collateral Agent a power of attorney, in form and substance reasonably satisfactory to the Collateral Agent, for the implementation of any lease, assignment, License, sublicense, grant of option, sale or other disposition of a Patent, Trademark, Copyright or Software; and (iv) the Collateral Agent may direct each Loan Party to refrain, in which event each such Loan Party shall refrain, from using or practicing any Trademark, Patent, Copyright or Software in any manner whatsoever, directly or indirectly, and shall, if requested by the Collateral Agent, change such Loan Party's name to eliminate therefrom any use of any Trademark and will execute such other and further documents as the Collateral Agent may request to further confirm this change and transfer ownership of the Trademarks, Patents, Copyrights, Software and registrations and any pending applications therefor to the Collateral Agent. (f) In the event of any disposition following the occurrence and during the continuance of any Event of Default of any Patent, Trademark, Copyright or Software pursuant to this Article V, each Loan Party shall supply its know-how and expertise relating to the manufacture and sale of the products or services bearing Trademarks or the products, services or works made or rendered in connection with or under Patents, Trademarks, Copyrights or Software, and its customer lists and other records relating to such Patents, Trademarks, Copyrights or Software and to the distribution of said products, services or works, to the Collateral Agent. (g) If any Event of Default has occurred and is continuing, the Collateral Agent, instead of exercising the power of sale conferred upon it pursuant to this Section 5.02, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction, and may in addition institute and maintain such suits and proceedings as the Collateral Agent may deem appropriate to protect and enforce the rights vested in it by this Agreement. (h) If any Event of Default has occurred and is continuing, the Collateral Agent shall, to the extent permitted by applicable Law, without notice to any Loan Party or any party claiming through any Loan Party, without regard to the solvency or insolvency at such time of any Person then liable for the payment of any of the Note Obligations, without regard to the then value of the Collateral and without requiring any bond from any complainant in such proceedings, be entitled as a matter of right to the appointment of a receiver or receivers (who may be the Collateral Agent) of the Collateral or any part thereof, and of the profits, revenues and other income thereof, pending such proceedings, with such powers as the court making such appointment shall confer, and to the entry of an order directing that the profits, revenues and other income of the property constituting the whole or any part of the Collateral be segregated, sequestered and impounded for the benefit of the Collateral Agent and the Finance Parties, and 24 each Loan Party irrevocably consents to the appointment of such receiver or receivers and to the entry of such order. (i) Each Loan Party agrees, to the extent it may lawfully do so, that it will not at any time in any manner whatsoever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, moratorium, turnover or redemption law, or any Law permitting it to direct the order in which the Collateral shall be sold, now or at any time hereafter in force which may delay, prevent or otherwise affect the performance or enforcement of this Agreement, and each Loan Party hereby waives all benefit or advantage of all such Laws. Each Loan Party covenants that it will not hinder, delay or impede the execution of any power granted to the Collateral Agent or any other Finance Party in any Note Document. (j) Each Loan Party, to the extent it may lawfully do so, on behalf of itself and all who claim through or under it, including, without limitation, any and all subsequent creditors, vendees, assignees and lienors, waives and releases all rights to demand or to have any marshalling of the Collateral upon any sale, whether made under any power of sale granted herein or pursuant to judicial proceedings or under any foreclosure or any enforcement of this Agreement, and consents and agrees that all of the Collateral may at any such sale be offered and sold as an entirety. (k) Each Loan Party waives, to the extent permitted by Law, presentment, demand, protest and any notice of any kind (except the notices expressly required hereunder or in the other Note Documents) in connection with this Agreement and any action taken by the Collateral Agent with respect to the Collateral. Section 5.03. Limitation on Duty of Collateral Agent in Respect of Collateral. Beyond the exercise of reasonable care in the custody thereof, neither the Collateral Agent nor the Finance Parties shall have any duty to exercise any rights or take any steps to preserve the rights of any Loan Party in the Collateral in its or their possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, nor shall the Collateral Agent or any Finance Party be liable to any Loan Party or any other Person for failure to meet any obligation imposed by Section 9-207 of the UCC or any successor provision. Each Loan Party agrees that the Collateral Agent shall at no time be required to, nor shall the Collateral Agent be liable to any Loan Party for any failure to, account separately to any Loan Party for amounts received or applied by the Collateral Agent from time to time in respect of the Collateral pursuant to the terms of this Agreement. Without limiting the foregoing, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Collateral Agent in good faith. Section 5.04. Application of Proceeds. 25 (a) Priority of Distributions. The proceeds of any sale of, or other realization upon, all or any part of the Collateral and any cash held in the Collateral Accounts shall be applied as set forth in Section 4.06 of the Collateral Agency Agreement. The Collateral Agent may make distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof. (b) Deficiencies. It is understood that the Loan Parties shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the amount of the Note Obligations. ARTICLE VI COLLATERAL AGENT Section 6.01. Concerning the Collateral Agent. The provisions of Article VI of the Collateral Agency Agreement shall inure to the benefit of the Collateral Agent in respect of this Agreement and shall be binding upon all Loan Parties, all Finance Parties and upon the parties hereto in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Collateral Agent therein set forth: (i) The Collateral Agent is authorized to take all such action as is provided to be taken by it as Collateral Agent hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein or as to any matters which permit but do not require action by the Collateral Agent (including, without limitation, the timing and methods of realization upon the Collateral), the Collateral Agent shall act or refrain from acting in accordance with written instructions from the Directing Noteholders as contemplated by the Collateral Agency Agreement or, in the absence of such instructions or provisions, subject to the terms of the Collateral Agency Agreement, in accordance with its discretion. (ii) The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Security Interests in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder unless such action or omission constitutes gross negligence or willful misconduct. The Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement or any Note Document by any Loan Party. (iii) Any use by the Collateral Agent of the Intellectual Property, as authorized hereunder in connection with the exercise of the Collateral Agent's rights and remedies under this Agreement and under the Indenture shall be coextensive with the Loan Parties' rights thereunder and with respect thereto and without any liability for royalties or other related charges. Section 6.02. Appointment of Co-Collateral Agent. At any time or times, in order to comply with any legal requirement in any jurisdiction, the Collateral Agent may in consultation with InSight and, unless an Event of Default shall have occurred and be continuing, 26 with its consent (not to be unreasonably withheld or delayed) appoint another bank or trust company or one or more other persons, either to act as co-agent or co-agents, jointly with the Collateral Agent, or to act as separate agent or agents on behalf of the Finance Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Collateral Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 6.01). Notwithstanding any such appointment but only to the extent not inconsistent with such legal requirements or, in the reasonable judgment of the Collateral Agent, not unduly burdensome to it or any such co-agent, such Loan Party shall be entitled to deal solely and directly with the Collateral Agent rather than any such co-agent in connection with the Collateral Agent's rights and obligations under this Agreement. ARTICLE VII MISCELLANEOUS Section 7.01. Notices. (a) Unless otherwise specified herein, all notices, requests or other communications to any party hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered to the address or facsimile number: (i) in the case of Holdings, InSight, any Subsidiary Guarantor or any Noteholder or the Trustee, as set forth in Section 13.02 of the Indenture, (ii) in the case of the Collateral Agent, as set forth on the signature pages hereof or (iii) in the case of any party, to such other address, facsimile number or electronic mail address as such party shall hereafter specify for the purpose of communications hereunder by notice to the other parties hereto. Each such notice, request or other communication shall be effective upon the earlier to occur of (i) actual receipt by the intended recipient and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the intended recipient, (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid and (C) if delivered by facsimile, when sent and receipt has been confirmed electronically. Rejection or refusal to accept, or the inability to deliver because of a changed address of which no notice was given shall not affect the validity of notice given in accordance with this section. (b) This Agreement may be transmitted and/or signed by facsimile and, if so transmitted or signed shall, subject to requirements of Law, have the same force and effect as a manually-signed original and shall be binding on all Loan Parties and the Finance Parties. The Collateral Agent may also require that this Agreement be confirmed by a manually-signed original hereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. Section 7.02. No Waivers; Non-Exclusive Remedies. No failure or delay on the part of any Finance Party to exercise, no course of dealing with respect to, and no delay in exercising, any right, power or privilege under this Agreement or any other Note Document or any other document or agreement contemplated hereby or thereby and no course of dealing between any Finance Party and any of the Loan Parties shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or privilege hereunder or under any Note Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein and in the other 27 Note Documents are cumulative and are not exclusive of any other remedies provided by Law. Without limiting the foregoing, nothing in this Agreement shall impair the right of any Finance Party to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of any Loan Party other than its indebtedness under the Note Documents. Each Loan Party agrees, to the fullest extent it may effectively do so under applicable Law, that any holder of a participation in a Note Obligation, whether or not acquired pursuant to the terms of any applicable Note Document, may exercise rights of set-off or counterclaim or other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Loan Party in the amount of such participation. Section 7.03. Compensation and Expenses of the Collateral Agent; Indemnification. (a) Expenses. The Loan Parties, jointly and severally, agree to pay (i) all reasonable out-of-pocket expenses of the Collateral Agent, including fees and disbursements of special and local counsel for the Collateral Agent, in connection with the preparation and administration of this Agreement or any document or agreement contemplated hereby, any waiver or consent hereunder or any amendment hereof or any Default or Event of Default or alleged Default or Event of Default and (ii) all taxes which the Collateral Agent or any other Finance Party may be required to pay by reason of the security interests granted in the Collateral (including any applicable transfer taxes) or to free any of the Collateral from the lien thereof. (b) Protection of Collateral. If any Loan Party fails to comply with the provisions of any Note Document, such that the value of any material portion of Collateral or the validity, perfection, rank or value of any Security Interest is thereby materially diminished or potentially materially diminished, after notice to such Loan Party (unless in the reasonable judgment of the Collateral Agent, the giving of such notice would be impractical) the Collateral Agent may, but shall not be required to, effect such compliance on behalf of such Loan Party, and the Loan Parties shall reimburse the Collateral Agent for the costs thereof within 30 days of receipt of a reasonably detailed written invoice therefor. All insurance expenses and all expenses of protecting, storing, warehousing, appraising, handling, maintaining and shipping the Collateral, or in respect of the sale or other disposition thereof, including any and all excise, property, sales and use taxes imposed by any state, federal or local authority on any of the Collateral, or in respect of periodic appraisals and inspections of the Collateral, shall be borne and paid by the Loan Parties. If any Loan Party fails to promptly pay any portion thereof when due, the Collateral Agent may, at its option, but shall not be required to, after notice to such Loan Party (unless in the reasonable judgment of the Collateral Agent, the giving of such notice would be impractical) pay the same and charge the Loan Parties' account therefor, and the Loan Parties agree to reimburse the Collateral Agent therefor on demand. All sums so paid or incurred by the Collateral Agent for any of the foregoing and any and all other sums for which any Loan Party may become liable hereunder and all costs and expenses (including attorneys' fees, legal expenses and court costs) reasonably incurred by the Collateral Agent or any Finance Party in enforcing or protecting the Security Interests or any of their rights or remedies under this Agreement, shall, together with interest thereon from demand and until paid at the rate applicable to interest at the highest rate applicable under the Note Documents in respect of overdue obligations, be additional Note Obligations hereunder. 28 (c) Indemnification. Each Loan Party agrees to indemnify the Collateral Agent, each other Finance Party and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact and their respective successors and assigns (each, an "INDEMNITEE" and, collectively, "INDEMNITEES") and hold each Indemnitee harmless from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by, imposed on or asserted against such Indemnitee in connection with any investigation or administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any other Collateral Document or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights under, this Agreement or any other Collateral Document or in any way relating to or arising out of the manufacture, ownership, ordering, purchasing, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the Laws of any country, state or other Governmental Authority, or any tort (including, without limitation, any claims, arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage) or contract claim; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct or that of its affiliates, directors, trustees, agents or employees as determined by a court of competent jurisdiction in a final, non-appealable judgment or order. Each Loan Party agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action, judgment or suit, such Loan Party shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to notify the Loan Parties of any such assertion of which such Indemnitee has knowledge. (d) Contribution. If and to the extent that the obligations of any Loan Party under this Section 7.03 are unenforceable for any reason, each Loan Party hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable Law. (e) Obligations; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Note Obligations. The indemnity obligations of the Loan Parties contained in this Section 7.03 shall continue in full force and effect notwithstanding the full payment of all Note Obligations and notwithstanding the discharge thereof. Section 7.04. Enforcement. The Finance Parties agree that this Agreement may be enforced only by the action of the Collateral Agent, acting upon the instructions of the Directing Noteholders, if so required under the Collateral Agency Agreement, and that no other Finance Party shall have any right individually to seek to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Finance Parties upon the terms of this Agreement and the Collateral Agency Agreement. 29 Section 7.05. Amendments and Waivers. Any provision of this Agreement may be amended, changed, discharged, terminated or waived if, but only if, such amendment or waiver is in writing and is signed by each Loan Party affected by such amendment, change, discharge, termination or waiver (it being understood that the addition or release of any Loan Party hereunder shall not constitute an amendment, change, discharge, termination or waiver affecting any Loan Party other than the Loan Party so added or released and it being further understood and agreed that any supplement to Schedule 1.01 delivered pursuant to Section 4.15 hereof shall not require the consent of any Loan Party) and by the Collateral Agent (with the consent of the Directing Noteholders or the Trustee, as the case may be, to the extent required by the Collateral Agency Agreement). Section 7.06. Successors and Assigns. This Agreement shall be binding upon each of the parties hereto and inure to the benefit of the Collateral Agent and the Finance Parties and their respective successors and assigns. In the event of an assignment of all or any of the Note Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. No Loan Party shall assign or delegate any of its rights and duties hereunder without the prior written consent of all of the Finance Parties. Section 7.07. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Section 7.08. Limitation of Law; Severability. (a) All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of Law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of Law which may be controlling and be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable Law. (b) If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by Law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Finance Parties in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction. Section 7.09. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective with respect to each Loan Party when the Collateral Agent shall receive counterparts hereof executed by itself and such Loan Party. 30 Section 7.10. Additional Loan Parties. It is understood and agreed that any Subsidiary of InSight that is required by any Note Document to execute a counterpart of this Agreement after the date hereof shall automatically become a Loan Party hereunder with the same force and effect as if originally named as a Loan Party hereunder by executing an instrument of accession or joinder substantially in the form of Exhibit E hereto and delivering the same to the Collateral Agent. Concurrently with the execution and delivery of such instrument of accession or joinder, such Subsidiary shall take all such actions and deliver to the Collateral Agent all such documents and agreements as such Subsidiary would have been required to deliver to the Collateral Agent on or prior to the date of this Agreement had such Subsidiary been a party hereto on the date of this Agreement. Such additional materials shall include, among other things, an opinion of counsel to the extent required under the Indenture and supplements to Schedules 1.01A and B, 3.04, 3.05 and 4.01 hereto (which Schedules shall thereupon automatically be amended and supplemented to include all information contained in such supplements) such that, after giving effect to the joinder of such Subsidiary, each of Schedules 1.01A and B, 3.04, 3.05 and 4.01 hereto is true, complete and correct in all material respects with respect to such Subsidiary as of the effective date of such accession or joinder. The execution and delivery of any such instrument of accession or joinder, and the amendment and supplementation of the Schedules hereto as provided in the immediately preceding sentence, shall not require the consent of any other Loan Party or Finance Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement. Section 7.11. Termination; Release of Loan Parties. (a) Termination. Upon the full payment and performance of all Note Obligations (other than contingent indemnification obligations), the Security Interests shall terminate and all rights to the Collateral shall revert to the Loan Parties. In addition, at any time and from time to time prior to such termination of the Security Interests, the Collateral Agent may release any of the Collateral or subordinate its Security Interests therein to Liens in favor of certain third parties with the prior written consent of the Directing Noteholders or as provided in Article V of the Collateral Agency Agreement. Upon any such termination of the Security Interests or release of Collateral, the Collateral Agent will, upon request by and at the expense of any Loan Party (and, in the case of a release of Collateral, upon receipt of a written certification of a Responsible Officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) execute and deliver to such Loan Party such documents as such Loan Party shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may be. Any such documents shall be without recourse to or warranty by the Collateral Agent or the other Finance Parties. The Collateral Agent shall have no liability whatsoever to any other Finance Party as a result of any release of Collateral by it as permitted by this Section 7.11. Upon any release of Collateral pursuant to this Section 7.11, none of the Finance Parties shall have any continuing right or interest in such Collateral or the Proceeds thereof. Upon satisfaction and discharge of the Indenture as provided in Article 12 of the Indenture, or legal defeasance or covenant defeasance of the Indenture as provided in Article 8 of the Indenture and the Note Obligations under the Note Documents, as applicable, shall be deemed to be paid in full for purposes of Sections 7.04, 7.05 and this Section 7.11(a). 31 (b) Release of Loan Parties. If any part of the Collateral (x) is taken by eminent domain, condemnation or other similar circumstances, or (y) is sold, transferred, otherwise disposed of or liquidated in compliance with the requirements of the Note Documents (or such sale, transfer, other disposition or liquidation has been approved in writing by the Directing Noteholders), then in each such case, such Collateral shall be automatically released from the Security Interests created hereby and the Collateral Agent, at the request and expense of such Loan Party, will (upon receipt of a written certification of a Responsible Officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) assign, transfer and deliver to such Loan Party (without recourse and without representation or warranty) such of the Collateral as is then being (or has been) so taken, sold, transferred, disposed of or liquidated as may be in the possession or control of the Collateral Agent and has not theretofore been released pursuant to this Agreement and deliver to the applicable Loan Party all documents and other releases reasonably requested by such Loan Party (including UCC termination statements) to evidence the release of such Collateral from the Security Interests. Further, upon the release of a Guarantor from its obligations under all guaranties of the Note Obligations in accordance with the provisions thereof and the other Note Documents, such Guarantor (and the Collateral assigned by such Guarantor pursuant hereto) shall be automatically released from this Agreement and the Collateral Agent will, upon request by and at the expense of such Guarantor, execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request to evidence the release of such Guarantor and such Collateral. (c) Other Releases. If property that constitutes either (A) all or substantially all of the Collateral securing Note Obligations or (B) less than all or substantially all of the Collateral securing Note Obligations is released with the consent of the Directing Noteholders in accordance with the Collateral Agency Agreement, then in each such case, the Collateral Agent, at the request and expense of the relevant Loan Party, will (upon receipt of a written certification of a Responsible Officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) duly release from the security interest created hereby and assign, transfer and deliver to such Loan Party (without recourse and without representation or warranty) such of the Collateral as is then being (or has been) so released as maybe in the possession or control of the Collateral Agent and has not theretofore been released pursuant to this Agreement, and execute and deliver to such Loan Party such documents and instruments (including UCC termination statements) as such Loan Party may reasonably request to evidence the release of such Collateral. In addition, if any Capital Stock or other securities shall, after the Issue Date, meet the criteria of any of clauses (ii), (iv) or (v) of the proviso of Section 2.01, such Capital Stock or other securities shall automatically be deemed to be released from the Collateral and the Lien of this Agreement and the Collateral Agent shall promptly after receipt of an Officer's Certificate deliver such Capital Stock or other securities then in its possession to the applicable Loan Party together with such releases and other documents as may be reasonably requested by such Loan Party. Section 7.12. Entire Agreement. This Agreement and the other Collateral Documents constitute the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, and any contemporaneous oral agreements and understandings relating to the subject matter hereof and thereof. 32 [Signature Pages Follow] 33 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first written above. LOAN PARTIES: INSIGHT HEALTH SERVICES HOLDINGS CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer INSIGHT HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: 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 S-1 By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer S-2 PARKWAY IMAGING CENTER, LLC By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNivenYoung Title: Manager INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. MAXUM HEALTH SERVICES CORP. DIAGNOSTIC SOLUTIONS 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer S-3 MAXUM HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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 ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer S-4 COLLATERAL AGENT: U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent By: /s/ Jean Clarke ------------------------------------ Name: Jean Clarke Title: Assistant Vice President Attention: Telephone: 212-361-6173 Telecopier: 212-361-6153 S-5 EXHIBIT A-1 to SECURITY AGREEMENT FORM OF GRANT OF SECURITY INTEREST IN UNITED STATES PATENTS AND TRADEMARKS FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [Loan Party Name], [Loan Party Description] (the "GRANTOR"), having its chief executive office at [Loan Party Notice Address], hereby grants to [Collateral Agent Name], as Collateral Agent, (the "GRANTEE"), with offices at [Collateral Agent Notice Address], a security interest in and mortgages all of the Grantor's right, title and interest in, to and under the following (all of the following items or types of property being herein collectively referred to as the "PATENT AND TRADEMARK COLLATERAL"), whether presently existing or hereafter arising or acquired: (i) each United States patent and patent application, including each Patent and patent application referred to on Schedule A hereto; (ii) each Patent License, including each Patent License listed on Schedule A hereto; (iii) each United States trademark, trademark registration and trademark application, and all of the goodwill of the business connected with the use of, and symbolized by, each trademark, trademark registration and trademark application, including each Trademark, Trademark registration and Trademark application referred to in Schedule B hereto; (iv) each Trademark License, whether registered or not, including each Trademark License referred to in Schedule B hereto, and all of the goodwill of the business connected with the use of, and symbolized by, each Trademark; and (v) all products and proceeds of the foregoing, including any claim by the Assignor against third parties for past, present or future infringement of any Patent, or past, present or future infringement or dilution of any Trademark or Trademark registration, including any Patent, Trademark or Trademark registration listed on Schedule A or B hereto, or under any Patent, Trademark or Trademark registration licensed under any Patent License or Trademark License, including any such license listed on Schedule A or B hereto, or for injury to the goodwill associated with any Trademark, Trademark registration or Trademark License. THIS GRANT OF SECURITY INTEREST is granted in conjunction with the security interests granted to the Grantee pursuant to the Security Agreement among the Grantor, the Grantee and certain other parties dated as of September 22, 2005, as amended, modified or supplemented from time to time (the "SECURITY AGREEMENT"). THIS GRANT OF SECURITY INTEREST has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are without prejudice to, and are in addition to those set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant of Security Interest are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern. THIS GRANT OF SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. IN WITNESS WHEREOF, the undersigned have executed this Grant of Security Interest as of the _______ day of ____________, 200__. [LOAN PARTY NAME], as Grantor By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [COLLATERAL AGENT NAME], as Collateral Agent, as Grantee By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- STATE OF ___________________) ) ____________ OF ____________) The foregoing instrument was acknowledged before me this _______ day of ____________, 20__ by ____________ as ____________ of [LOAN PARTY NAME], [LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME]. ---------------------------------------- Notary Public My commission expires: ----------------- Notarial Seal A-2 Schedule A to Patent and Trademark Grant of Security Interest PATENTS AND PATENT APPLICATIONS

Serial No. or Patent No. Date Issue Title Inventor Country Patent Holder - ------------- ---- ----- ----- -------- ------- -------------

PATENT LICENSES

Licensor Licensee Patent Number(s) Date - -------- -------- ---------------- ----

A-3 Schedule B to Patent and Trademark Grant of Security Interest TRADEMARKS

Registration No. Country Issue Date Mark - ---------------- ------- ---------- ----

TRADEMARK APPLICATIONS

Serial No. Country Filing Date Mark - ---------- ------- ----------- ----

TRADEMARK LICENSES

Serial or Issue or Grantor Registration No. Country Filing Date Mark - ------- ---------------- ------- ----------- ----

A-4 EXHIBIT B-2 to SECURITY AGREEMENT FORM OF GRANT OF SECURITY INTEREST IN UNITED STATES COPYRIGHTS FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [Loan Party Name], [Loan Party Description] (the "GRANTOR"), having its chief executive office at [Loan Party Notice Address], hereby grants to [Collateral Agent Name], as Collateral Agent (the "GRANTEE"), with offices at [Collateral Agent Notice Address], a security interest in mortgages all of the Grantor's right, title and interest in, to and under the following (all of the following items or types of property being herein collectively referred to as the "COPYRIGHT COLLATERAL"), whether presently existing or hereafter arising or acquired: (i) each United States copyright and any renewals thereof, including each Copyright listed on Schedule A hereto; (ii) each Copyright License, including each Copyright License listed on Schedule A hereto; (iii) all registrations and applications for registration of any such copyright in the United States, including registrations, recordings, supplemental, derivative or collective work registrations and pending applications for registrations in the United States Copyright Office, including each Copyright registration and Copyright application listed on Schedule A hereto; (iv) all computer programs, web pages, computer data bases and computer program flow diagrams, including all source codes and object codes related to any or all of the foregoing; (v) all tangible property embodying or incorporating any or all of the foregoing; and (vi) all products, proceeds and related accounts of the foregoing, including any claim by the Assignor against third parties for past, present or future infringement of any Copyright including any Copyright listed on Schedule A hereto, or under any Copyright licensed under any Copyright License, including any such license listed on Schedule A hereto, whether registered or not. THIS GRANT OF SECURITY INTEREST is granted in conjunction with the security interests granted to the Grantee pursuant to the Security Agreement among the Grantor, the Grantee and certain other parties dated as of September 22, 2005, as amended, modified or supplemented from time to time (the "SECURITY AGREEMENT"). THIS GRANT OF SECURITY INTEREST has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are without prejudice to, and are in addition to, those set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant of Security Interest are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern. THIS GRANT OF SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. IN WITNESS WHEREOF, the undersigned have executed this Grant of Security Interest as of the _______ day of ____________, 200__. [LOAN PARTY NAME], as Grantor By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [COLLATERAL AGENT NAME], as Collateral Agent, as Grantee By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- STATE OF ___________________ ) ) ____________ OF ____________ ) The foregoing instrument was acknowledged before me this _______ day of ____________, 20__ by ____________ as ____________ of [LOAN PARTY NAME], [LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME]. ---------------------------------------- My commission expires: Notarial Seal Notary Public B-2 Schedule A to Copyright Grant of Security Interest COPYRIGHTS AND COPYRIGHT APPLICATIONS

Serial No. or Registration No. Country Issue or Filing Date Description - ------------------------------ ------- -------------------- -----------

B-3 EXHIBIT B to SECURITY AGREEMENT FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT [Bank Name] (together with it successors and assigns, the "BANK") has established and maintains for [Loan Party Name], [Loan Party Description] (together with its successors and permitted assigns, the "LOAN PARTY"), for the use of the Loan Party the deposit account listed on Schedule I hereto (the "ACCOUNT"). The Loan Party and [Collateral Agent Name] (together with its successor or successors in such capacity, the "COLLATERAL AGENT") entered into a Security Agreement dated as of September 22, 2005 (as the same may be amended, supplemented or modified from time to time, the "SECURITY AGREEMENT"), under which the Loan Party has granted a security interest in favor of the Collateral Agent in all right, title and interest of the Loan Party in, to and under: (i) the Accounts; (ii) all checks, money orders, drafts, instruments, electronic funds transfers and other items and forms of remittance and all funds and other amounts at any time paid, deposited or credited (whether for collection, provisionally or otherwise), held or otherwise in the possession or under the control of, or in transit to, the Bank or any agent or custodian thereof for credit to or to be deposited in the Account; (iii) all funds and cash balances or other amounts in or attributable to the Account; and (iv) any and all proceeds of any of the foregoing (the Account and all of such other items of collateral being herein referred to collectively as the "DEPOSIT ACCOUNT COLLATERAL") to secure the payment and performance of the Note Obligations (as defined in the Security Agreement). Capitalized terms defined or used in the Security Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein. The Loan Party desires that the Bank enter into this Deposit Account Control Agreement (as amended, supplemented or modified from time to time, this "AGREEMENT") to perfect the security interest of the Collateral Agent in the Deposit Account Collateral, to vest in the Collateral Agent control of the Account and to provide for the rights of the parties under this Agreement. Accordingly, the parties hereto agree as follows: Section 1. Control by the Collateral Agent. (a) Notwithstanding any other term or provision of this Agreement or any other agreement between the Bank and the Loan Party or otherwise, the Bank is hereby authorized and directed by the Loan Party to, and the Bank agrees that the Bank will comply with instructions (within the meaning of Section 8-102(a)(12) of the UCC) originated by the Collateral Agent directing the disposition of funds from time to time in the Account or as to any other matters relating to the Account or any of the other Deposit Account Collateral without further consent by the Loan Party (which instructions may include the giving of stop payment orders for any items being presented to the Account for payment). The Bank is hereby irrevocably authorized by the Loan Party to change the designation of the customer on the Account to the Collateral Agent upon the request of the Collateral Agent, and the Bank shall so change the customer designation promptly upon such request by the Collateral Agent. (b) In addition, effective upon the receipt by the Bank of written notice from the Collateral Agent that the Collateral Agent is exercising exclusive control over the Account (such notice being referred to as a "NOTICE OF EXCLUSIVE CONTROL"), the Bank shall not permit the Loan Party or any of its Affiliates to withdraw any amounts from, to draw upon or to otherwise exercise any authority or powers with respect to the Account and all Deposit Account Collateral related thereto, and the Bank shall not at any such time honor any instructions of the Loan Party or any of its Affiliates with respect to the Account, other than those approved in writing by the Collateral Agent or a court of competent jurisdiction. Until the receipt by the Bank of a Notice of Exclusive Control, the Loan Party shall be entitled to present items drawn on and otherwise to withdraw or direct the disposition of funds from the Account. Section 2. Maintenance of Account. In addition to, and not in lieu of, the obligations of the Bank to honor instructions of the Collateral Agent, etc. as agreed in Section 1 hereof, the Bank agrees to maintain the Account as follows: (a) Maintenance of Account Generally. The Bank shall follow its usual operational procedures for the handling of any checks, money orders, drafts, instruments, electronic funds transfers or other forms of remittance and all funds of the Loan Party received in or for credit or deposit to the Account and shall maintain a record of all such Deposit Account Collateral. (b) Interest. Until such time as the Bank receives a Notice of Exclusive Control delivered by the Collateral Agent in accordance with Section 1(b) above, the Loan Party may direct the Bank with respect to the retention and/or distribution of interest and other payments on Deposit Account Collateral deposited in or credited to the Account. All interest and other payments on Deposit Account Collateral deposited in or credited to the Account shall be deposited and retained in the Account or otherwise distributed as instructed by the Collateral Agent. (c) Statements and Confirmations. At such time or times as the Collateral Agent may request, the Bank will promptly report to the Collateral Agent the amounts received in the Account. Copies of all statements of account, reports, deposit tickets, deposited items, debit and credit advices and records and communications concerning the Account and/or any Deposit Account Collateral deposited therein or credited thereto shall be sent by the Bank to each of the Loan Party and the Collateral Agent at their respective addresses referred to in Section 6 below. (d) Tax Reporting. All items of income, gain, expense and loss recognized in the Account shall be reported to the Internal Revenue Service and all state and local taxation authorities under the name and taxpayer identification number of the Loan Party. (e) Notices of Adverse Claims. Upon receipt of notice of any lien, charge or other adverse claim against any Deposit Account Collateral (including any writ, garnishment, judgment, warrant of attachment, execution or similar process), the Bank will promptly notify the Collateral Agent and the Loan Party thereof. C-2 Section 3. No Liability of Bank. This Agreement shall not subject the Bank to any obligation or liability except as expressly set forth herein. In particular, the Bank shall have no duty to investigate whether the obligations of the Loan Party to the Collateral Agent or any other Finance Party are in default or whether the Collateral Agent is entitled under the Security Agreement or otherwise to give any instructions or Notice of Exclusive Control. The Bank is fully entitled to rely upon such instructions as it believes in good faith to have originated from the Collateral Agent (even if such instructions are contrary to or inconsistent with any instructions or demands given by the Loan Party). Section 4. Subordination of Lien; Waiver of Set-Off. If the Bank has or subsequently obtains by agreement, operation of law or otherwise a security interest or other Lien in the Account or any Deposit Account Collateral deposited therein or credited thereto, the Bank hereby agrees that such security interest or other Lien shall be subordinate to the security interest of the Collateral Agent. The Deposit Account Collateral will not be subject to deduction, set-off, banker's lien or any other right in favor of any other Person other than the Collateral Agent, except that the Bank may set off (i) all amounts due to the Bank in respect of its customary fees and expenses for the Account, (ii) the amount of any checks, automated clearinghouse transfers or other forms of remittance that have been credited to the Account and subsequently returned unpaid and (iii) any overdrafts arising as a result thereof. Section 5. Representations, Warranties and Covenants of the Bank. The Bank hereby represents, warrants and covenants that: (a) The Bank has established the Account in the name of the Loan Party. [Except as provided in the foregoing sentence, the] [The] Bank shall not change the name or account number of the Account without the prior written consent of the Collateral Agent. (b) The Account is a "deposit account" as defined in the UCC. (c) Except for the claims and interest of the Collateral Agent and of the Loan Party in the Deposit Account Collateral, the Bank does not know of any claim to, interest in or adverse claim to, the Account or any Deposit Account Collateral deposited therein or credited thereto. (d) There are no other agreements entered into between the Bank and the Loan Party with respect to the Account or any Deposit Account Collateral deposited therein or credited thereto, and the Bank has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other Person relating to the Account and/or any Deposit Account Collateral deposited therein or credited thereto pursuant to which it has agreed or will agree to comply with instructions originated by such other Person as to the disposition of funds in or from the Account or with respect to any other dealings with any of the Deposit Account Collateral. (e) The Bank will not agree that any Person other than the Loan Party or the Collateral Agent is the Bank's customer with respect to the Account. C-3 (f) This Agreement constitutes a valid and binding agreement of the Bank, enforceable against the Bank in accordance with its terms. (g) The Bank acknowledges that it holds and will hold possession of the Deposit Account Collateral consisting of instruments and money as bailee for the Collateral Agent and for the benefit of the Collateral Agent and the Finance Parties. Section 6. Notices. All notices, requests or other communications to any party hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given to such party: (i) in the case of the Collateral Agent, at: [Collateral Agent Notice Address]; (ii) in the case of the Loan Party, at: [Loan Party Notice Address]; and (iii) in the case of the Bank, at: [Bank Notice Address]. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this paragraph and electronic confirmation of receipt is received, (ii) if given by mail, 48 hours after such communication is deposited, certified mail, return receipt requested, in the mails with appropriate first class postage prepaid, addressed as aforesaid, or (iii) if given by other means, when delivered at the address specified in this paragraph. Rejection or refusal to accept, or the inability to deliver because of a changed address of which no notice was given shall not affect the validity of notice given in accordance with this paragraph. Section 7. Indemnification of the Bank. The Loan Party agrees that (i) the Bank is released from any and all liabilities to the Loan Party arising from the terms of this Agreement and the compliance by the Bank with the terms hereof, except to the extent that such liabilities arise from the Bank's bad faith, willful misconduct or gross negligence, (ii) neither the Bank nor the Collateral Agent shall have any liability to the Loan Party for wrongful dishonor of any items as a result of any instructions of the Collateral Agent and (iii) the Loan Party, its successors and permitted assigns shall at all times indemnify the Bank, its affiliates and the respective directors, officers, trustees, agents and employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee harmless from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by, imposed on or asserted against such Indemnitee in connection with any investigation or administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or in any other way connected with the enforcement of any of the terms hereof, or the preservation of any rights hereunder, or in any way relating to or arising out of the maintenance, delivery, control, acceptance, possession, return or other disposition of the Account or any Deposit Account Collateral on deposit therein or credited thereto, the violation of the Laws of any country, state or other governmental body or unit, or any tort or contract claim; provided that no Indemnitee shall have the right to be indemnified hereunder for such C-4 Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment or order. Section 8. Conflicts with Other Agreements. In the event of any conflict between this Agreement (or any portion hereof) and any other agreement (including any other agreement between the Bank and the Loan Party with respect to the Account) now existing or hereafter entered into, the terms of this Agreement shall control. Section 9. Amendments and Waivers. Any provision of this Agreement may be amended, modified or waived if, but only if, such amendment or waiver is in writing and is signed by the Loan Party, the Collateral Agent and the Bank. Section 10. Successors and Assigns. This Agreement shall be binding upon each of the parties hereto and inure to the benefit of the Collateral Agent and the Finance Parties and their respective successors and permitted assigns. In the event of an assignment of all or any of the Note Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. Section 11. Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York, except as otherwise required by mandatory provisions of Law. Notwithstanding any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Bank's "jurisdiction" within the meaning of Section 9-304 of the UCC. Section 12. Severability. (a) All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of Law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of Law which may be controlling and be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable Law. (b) If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by Law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Collateral Agent and the other Finance Parties in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction. Section 13. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when the Collateral Agent shall receive counterparts hereof executed by itself, the Bank and the Loan Party. Delivery of an executed counterpart of this Agreement by facsimile shall have the same force and effect as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by facsimile shall also deliver an C-5 original executed counterpart, but failure to do so shall not affect the validity, enforceability or binding effect of this Agreement. Section 14. Termination. Except as hereinafter set forth, the obligations of the Bank to the Collateral Agent pursuant to this Agreement shall continue in effect until the Security Interests of the Collateral Agent in the Deposit Accounts have been terminated pursuant to the terms of the Security Agreement and the Collateral Agent has notified the Bank of such termination in writing. The Collateral Agent agrees to provide such notice of termination upon the request of the Loan Party on or after the termination of the Collateral Agent's Security Interest in the Account pursuant to the terms of the Security Agreement. The Bank may terminate this Agreement only upon 30 days' notice to the Collateral Agent, by canceling the Account and transferring all funds, if any, deposited in or credited to the Account to another deposit account with another bank to be designated by the Collateral Agent or otherwise to the order of the Collateral Agent. After any such termination, the Bank shall nonetheless be obligated promptly to transfer to such other bank anything from time to time received in or for credit to the Account. The termination of this Agreement shall not terminate the Account or alter the obligations of the Bank to the Loan Party pursuant to any other agreement with respect to the Account. [Signature Pages Follow] C-6 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first written above. LOAN PARTY: [LOAN PARTY NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [Address] ------------------------------ ------------------------------ Attention: ----------------------------- Telephone: ----------------------------- Telecopier: ---------------------------- COLLATERAL AGENT: [COLLATERAL AGENT NAME], as Collateral Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [Address] ------------------------------ ------------------------------ Attention: ----------------------------- Telephone: ----------------------------- Telecopier: ---------------------------- DEPOSITARY BANK: [DEPOSITARY BANK NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [Address] ------------------------------ ------------------------------ Attention: ----------------------------- Telephone: ----------------------------- Telecopier: ---------------------------- EXHIBIT C to SECURITY AGREEMENT FORM OF DESCRIPTION OF COLLATERAL DESCRIPTION FOR FACE OF UCC-1: [To Follow] D-1 EXHIBIT D to SECURITY AGREEMENT PERFECTION CERTIFICATE This Perfection Certificate, dated as of September 22, 2005, is delivered in connection with the Security Agreement (as amended, restated or otherwise modified, the "SECURITY AGREEMENT") dated as of September 22, 2005 among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (the "ISSUER"), the other Grantors identified therein, and U.S. BANK NATIONAL ASSOCIATION, as Trustee (together with any successor(s) thereto in such capacity, the "COLLATERAL AGENT" for each of the Finance Parties). All capitalized terms used herein and not otherwise defined shall have the respective meanings provided for such terms in the Security Agreement. The following information is true and complete as of the date hereof, and is being provided by InSight Health Services Corp. on behalf of the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries. ARTICLE I NAMES Section 1.01. The exact corporate names of the Issuer, and each of the Issuer's U.S. Subsidiaries, directly or indirectly owned (as indicated below), as such names appear in their respective certificates of incorporation of formation, as applicable, are as follows: Section 1.02. Set forth below is each other corporate name, that the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries has had in the last five years, together with the date of the relevant change: Section 1.03. Except as set forth in Schedule 1 hereto, neither the Issuer nor any of the Issuer's wholly-owned U.S. Subsidiaries has changed its identity or corporate structure in any way within the past five years. Section 1.04. The following is a list of all other names (including trade names or similar appellations) used by the Issuer or any of the Issuer's wholly-owned U.S. Subsidiaries or any of their divisions or other business units at any time during the past five years: ARTICLE II TAXPAYER IDENTIFICATION NUMBERS Section 2.01. The exact corporate taxpayer identification numbers of the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries are as follows: Section 2.02. Set forth below is each other corporate taxpayer identification number the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries has had since its organization together with the date of the relevant change: E-1 Section 2.03. The following is a list of all other taxpayer identification numbers used by the Issuer or any of the Issuer's wholly-owned U.S. Subsidiaries or any of their divisions or other business units at any time during the past five years: Section 2.04. The chief executive offices of the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries are located at the following addresses:

Name Mailing Address County State - ---- --------------- ------ -----

Section 2.05. The following are all locations where the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries maintain any books and records relating to any of the Collateral consisting of accounts, contract rights, chattel paper, general intangibles or mobile goods:

Name Mailing Address County State - ---- --------------- ------ -----

Section 2.06. The following are all the locations where the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries maintain any equipment not identified above:

Name Mailing Address County State - ---- --------------- ------ -----

Section 2.07. The following are the names and addresses of all persons other than the Issuer and the Issuer's wholly-owned U.S. Subsidiaries which have possession of any of the Issuer's or any of the Issuer's U.S. Subsidiaries' equipment:

Name Mailing Address County State - ---- --------------- ------ -----

Section 2.08. The following are all the locations where the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries maintain any inventory not identified above (identify whether locations are owned by the Issuer or a Subsidiary, leased by the Issuer or a subsidiary or are public warehouses):

Name Mailing Address County State - ---- --------------- ------ -----

Section 2.09. The following are the names and addresses of all persons or entities other than the Company, such as lessees, consignees, warehousemen or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral: E-2

Name Mailing Address County State - ---- --------------- ------ -----

Of the persons and entities listed above in this clause (h): (a) The following persons and entities are warehouses which issue warehouse receipts: (b) The following persons and entities process or finish inventory or other goods for the Company: (c) The following persons and entities hold inventory or other goods on consignment for the Company: (d) The following persons and entities have possession of assets of the Company for the purposes indicated: ARTICLE III CONSIGNED INVENTORY Approximate dollar amount of Inventory of the Issuer and the Issuer's U.S. Subsidiaries consigned to third parties at any time. $________. ARTICLE IV INVENTORY LOCATED OUTSIDE OF U.S. Approximate dollar amount of inventory of the Issuer and the Issuer's U.S. Subsidiaries located outside of the United States of America at any time. $__________. ARTICLE V UNUSUAL TRANSACTIONS Except for those purchases, acquisitions and other transactions described below, all of the Collateral has been originated by the Issuer and its wholly-owned U.S. Subsidiaries in the ordinary course of the Company's business or consists of goods which have been acquired by the Company in the ordinary course from a person in the business of selling goods of that kind.

Date of Description of Description of Collateral Acquisition Transaction Seller - ------------------------- ----------- ------------------

E-3 ARTICLE VI INTELLECTUAL PROPERTY The following is a complete list of all patents, copyrights, trademarks, trade names and servicemarks registered in the name of the Issuer and its wholly-owned U.S. Subsidiaries: UNITED STATES: a. Patents Registration No. b. Copyrights Registration No. c. Trademarks, Trade Name and Service Marks Registration No. FOREIGN JURISDICTIONS: a. Patents County of Registration Registration No. b. Copyrights County of Registration Registration No. c. Trademarks, Trade Name County of and Service Marks Registration Registration No. ARTICLE VII SECURITIES AND INSTRUMENTS The following is a complete list of all stock, bonds, debentures, notes and other securities owned by the Issuer and each of its wholly-owned U.S. Subsidiaries (provide name of issuer, a description of security and value):

Issuer Description of Security Value - ------ ----------------------- -----

ARTICLE VIII REPRESENTATIONS AND WARRANTIES The Issuer hereby represents and warrants to each Finance Party that as of the date hereof, (a) the representations, warranties and statements contained in Article III of the Security Agreement (together with any schedules or attachments referred to therein and annexed thereto) are true and correct in all respects and (b) the Issuer is in compliance with the covenants E-4 contained in Article IV of the Security Agreement (together with any schedules or attachments referred to therein and annexed thereto). E-5 IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of September, 2005. INSIGHT HEALTH SERVICES CORPORATION By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- E-6 SCHEDULE 1 CHANGES IN IDENTITY OR CORPORATE STRUCTURE E-7 EXHIBIT E to SECURITY AGREEMENT FORM OF LOAN PARTY ACCESSION AGREEMENT LOAN PARTY ACCESSION AGREEMENT dated as of ____________ among the NEW LOAN PARTY referred to herein, and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent. InSight Health Services Corp., a Delaware corporation (together with its successors and permitted assigns, "INSIGHT"), has issued Senior Secured Floating Rate Notes due 2011 (together with any Additional Notes referred to below, the "SENIOR SECURED NOTES") pursuant to an Indenture dated as of September 22, 2005 (as amended, restated, supplemented or modified from time to time and including any agreement extending the maturity of, refinancing or otherwise restructuring all or any portion of the obligations of InSight under such Indenture or any successor agreement, the "INDENTURE") among InSight, the guarantors named therein and U.S. Bank National Association, as Trustee (together with its successor or successors in such capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the Senior Secured Notes have been guaranteed by InSight Health Services Holdings Corp., a California corporation (together with its successors and permitted assigns, "HOLDINGS"), [_______________], and all other direct and indirect wholly-owned domestic subsidiaries of Holdings pursuant to the Indenture and the Guaranties and have been secured pursuant to (i) the Security Agreement, dated as of September 22, 2005 among the Loan Parties (as defined below) and U.S. Bank National Association, as Collateral Agent (the "SECURITY AGREEMENT"), and (ii) the Pledge Agreement, dated as of September 22, 2005, among the Loan Parties and U.S. Bank National Association, as Collateral Agent (the "PLEDGE AGREEMENT"). Each of Holdings, InSight, [__________] and [__________] are referred to in the Security Agreement and the Pledge Agreement individually as a "LOAN PARTY" and, collectively, as the "LOAN PARTIES"). Capitalized terms defined in the Security Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for them therein. [New Loan Party Name], [New Loan Party Description] (the "NEW LOAN PARTY"), was [formed] [acquired] by [InSight] [Guarantor]. Section 4.12 of the Indenture requires InSight to cause each Wholly-Owned Restricted Subsidiary (as such term is defined in the Indenture) that is a Domestic Subsidiary formed or acquired after the Issue Date to become a party to the Security Agreement as an additional "LOAN PARTY" and to become a party to the Pledge Agreement as an additional "LOAN PARTY". The Security Agreement and the Pledge Agreement specify that such additional Subsidiaries may become "LOAN PARTIES" under each of the Security Agreement and the Pledge Agreement by execution and delivery of a counterpart of each such Document. To induce the Noteholders under the Indenture, the New Loan Party has agreed to execute and deliver this Loan Party Accession Agreement (as the same may be amended, supplemented or modified from time to time, this "AGREEMENT") in order to evidence its agreement to become a "LOAN PARTY" F-1 under each of the Security Agreement and the Pledge Agreement. Accordingly, the parties hereto agree as follows: Section 1. Security Agreement. In accordance with Section 7.10 of the Security Agreement, the New Loan Party hereby (i) agrees that, by execution and delivery of a counterpart signature page to the Security Agreement in the form attached hereto as Exhibit A, the New Loan Party shall become a "LOAN PARTY" under the Security Agreement with the same force and effect as if originally named therein as a Loan Party (as defined in the Security Agreement), (ii) acknowledges receipt of a copy of and agrees to be obligated and bound as a "LOAN PARTY" by all of the terms and provisions of the Security Agreement, (iii) grants to the Collateral Agent for the benefit of the Finance Parties a continuing security interest in the Collateral of the New Loan Party (as defined in the Security Agreement), in each case to secure the full and punctual payment of the Note Obligations (as defined in the Security Agreement) in accordance with the terms thereof and to secure the performance of all of the obligations of each Loan Party under the Indenture and the other Note Documents, (iv) represents and warrants that each of Schedules 1.01, 3.06 and 4.01 to the Security Agreement, as amended, supplemented and modified as set forth on Schedules 1.01, 3.06 and 4.01 hereto, is complete and accurate with respect to the New Loan Party as of the date hereof after giving effect to the New Loan Party's accession to the Security Agreement as an additional Loan Party thereunder and (v) acknowledges and agrees that, from and after the date hereof, each reference in the Security Agreement to a "LOAN PARTY" or the "LOAN PARTIES" shall be deemed to include the New Loan Party. Section 2. Pledge Agreement. In accordance with Section 8.10 of the Pledge Agreement, the New Loan Party hereby (i) agrees that, by execution and delivery of a counterpart signature page to the Pledge Agreement in the form attached hereto as Exhibit B, the New Loan Party shall become a "LOAN PARTY" under the Pledge Agreement with the same force and effect as if originally named therein as a Loan Party (as defined in the Pledge Agreement), (ii) acknowledges receipt of a copy of and agrees to be obligated and bound as a "LOAN PARTY" by all of the terms and provisions of the Pledge Agreement, (iii) grants to the Collateral Agent for the benefit of the Finance Parties a continuing security interest in the Collateral (as defined in the Pledge Agreement) of the New Loan Party, in each case to secure the full and punctual payment of the Note Obligations (as defined in the Pledge Agreement) in accordance with the terms thereof and to secure the performance of all of the obligations of each Loan Party under the Indenture and the other Note Documents, (iv) represents and warrants that each of Schedules I, II, III, IV, and V to the Pledge Agreement, as amended, supplemented and modified as set forth on Schedules I, II, III, IV, and V hereto, is complete and accurate in all material respects with respect to the New Loan Party as of the date hereof after giving effect to the New Loan Party's accession to the Pledge Agreement as an additional Loan Party thereunder and (v) acknowledges and agrees that, from and after the date hereof, each reference in the Pledge Agreement to a "LOAN PARTY" or the "LOAN PARTIES" shall be deemed to include the New Loan Party. Section 3. Representations and Warranties. The New Loan Party hereby represents and warrants that: F-2 (a) This Agreement has been duly authorized, executed and delivered by the New Loan Party, and each of this Agreement and the Security Agreement and the Pledge Agreement, as acceded to hereby by the New Loan Party, constitutes a valid and binding agreement of the New Loan Party, enforceable against the New Loan Party in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforceability of creditors' rights generally and by equitable principles of general applicability (regardless of whether such enforceability is considered in a proceeding in equity or at law). (b) Each of the representations and warranties contained in the Indenture, the Security Agreement, the Pledge Agreement and each of the other Note Documents applicable to the New Loan Party is true and correct in all material respects as of the date hereof, with the same effect as though such representations and warranties had been made on and as of the date hereof after giving effect to the accession of the New Loan Party as an additional "LOAN PARTY" under each of the Security Agreement and the Pledge Agreement. (c) Attached hereto as Exhibit D is a correct and complete Perfection Certificate relating to the New Loan Party and its Collateral. Section 4. Effectiveness. This Agreement and the accession of the New Loan Party to the Security Agreement and the Pledge Agreement as provided herein shall become effective with respect to the New Loan Party when (i) the Collateral Agent shall have received a counterpart of this Agreement duly executed by such New Loan Party and (ii) the Collateral Agent, as applicable, shall have received duly executed counterpart signature pages to each of the Security Agreement and the Pledge Agreement as contemplated hereby. Section 5. Integration; Confirmation. On and after the date hereof, each of the Security Agreement and the Pledge Agreement and the respective Schedules thereto shall be supplemented as expressly set forth herein; all other terms and provisions of each of the Security Agreement, the Pledge Agreement, the other Note Documents and the respective Schedules thereto shall continue in full force and effect and unchanged and are hereby confirmed in all respects. Section 6. Expenses. The New Loan Party agrees to pay (i) all reasonable out-of-pocket expenses of the Collateral Agent, including reasonable fees and disbursements of special and local counsel for the Collateral Agent, in connection with the preparation, execution and delivery of this Agreement and any document or agreement contemplated hereby and (ii) all taxes which the Collateral Agent or any Finance Party may be required to pay by reason of the security interests granted in the Collateral (including any applicable transfer taxes). Section 7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. F-3 Section 8. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may be transmitted and/or signed by facsimile and if so transmitted or signed, shall, subject to requirements of law, have the same force and effect as a manually signed original and shall be binding on the New Loan Party, the Collateral Agent and the other Finance Parties. The Collateral Agent may also require that this Agreement be confirmed by a manually signed original hereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. [Signature Page Follows] F-4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. INSIGHT HEALTH SERVICES CORP. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [NEW LOAN PARTY NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXHIBIT A COUNTERPART TO SECURITY AGREEMENT The undersigned hereby executes this counterpart to the Security Agreement dated as of September 22, 2005 by the Loan Parties party thereto from time to time in favor of U.S. Bank National Association, as Collateral Agent, and, as of the date hereof, assumes all of the rights and obligations of a "LOAN PARTY" thereunder. Date: [NEW LOAN PARTY NAME] ---------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXHIBIT B COUNTERPART TO PLEDGE AGREEMENT The undersigned hereby executes this counterpart to the Amended and Restated Pledge Agreement dated as of September 22, 2005 by Loan Parties party thereto from time to time in favor of U.S. Bank National Association, as Collateral Agent, and, as of the date hereof, assumes all of the rights and obligations of a "LOAN PARTY" thereunder. Date: [NEW LOAN PARTY NAME] ---------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXHIBIT C PERFECTION CERTIFICATE EX-4.8 11 y13913exv4w8.txt EX-4.8: PLEDGE AGREEMENT Exhibit 4.8 EXECUTION VERSION PLEDGE AGREEMENT DATED AS OF SEPTEMBER 22, 2005 AMONG THE LOAN PARTIES FROM TIME TO TIME PARTY HERETO AND U.S. BANK NATIONAL ASSOCIATION, AS COLLATERAL AGENT TABLE OF CONTENTS

PAGE ---- ARTICLE I DEFINITIONS SECTION 1.01 Defined Terms............................................... 1 SECTION 1.02 Defined in the UCC.......................................... 1 SECTION 1.03 Additional Definitions...................................... 2 SECTION 1.04 Terms Generally............................................. 8 ARTICLE II THE SECURITY INTERESTS SECTION 2.01 Grant of Security Interests................................. 8 SECTION 2.02 Security Interests Absolute................................. 9 SECTION 2.03 Continuing Liability of the Loan Parties.................... 11 ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.01 Title to Collateral......................................... 11 SECTION 3.02 Validity, Perfection and Priority of Security Interests..... 11 SECTION 3.03 Collateral.................................................. 12 SECTION 3.04 No Consents................................................. 12 ARTICLE IV COVENANTS SECTION 4.01 Delivery of Collateral...................................... 13 SECTION 4.02 Delivery of Perfection Certificate; Filing of Financing Statements and Delivery of Search Reports............................. 13 SECTION 4.03 Further Assurances.......................................... 13 SECTION 4.04 Additional Collateral....................................... 14 SECTION 4.05 Information Regarding Collateral............................ 14

ii ARTICLE V DISTRIBUTIONS ON COLLATERAL; VOTING SECTION 5.01 Right to Receive Distributions on Collateral; Voting........ 14 ARTICLE VI GENERAL AUTHORITY; REMEDIES SECTION 6.01 General Authority........................................... 17 SECTION 6.02 Remedies upon Event of Default.............................. 18 SECTION 6.03 Securities Act.............................................. 19 SECTION 6.04 Other Rights of the Collateral Agent........................ 19 SECTION 6.05 Limitation on Duty of Collateral Agent in Respect of Collateral............................................................ 20 SECTION 6.06 Waiver and Estoppel......................................... 20 SECTION 6.07 Application of Proceeds..................................... 20 ARTICLE VII THE COLLATERAL AGENT SECTION 7.01 Concerning the Collateral Agent............................. 21 SECTION 7.02 Appointment of Co-Collateral Agent.......................... 21 SECTION 7.03 Appointment of Sub-Agents................................... 22 ARTICLE VIII MISCELLANEOUS SECTION 8.01 Notices..................................................... 22 SECTION 8.02 No Waivers; Non-Exclusive Remedies.......................... 22 SECTION 8.03 Compensation and Expenses of the Collateral Agent; Indemnification....................................................... 23 SECTION 8.04 Enforcement................................................. 24 SECTION 8.05 Amendments and Waivers...................................... 24 SECTION 8.06 Successors and Assigns...................................... 25 SECTION 8.07 Governing Law............................................... 25 iii SECTION 8.08 Limitation of Law; Severability............................. 25 SECTION 8.09 Counterparts; Effectiveness................................. 25 SECTION 8.10 Additional Loan Parties..................................... 25 SECTION 8.11 Termination; Release of Loan Parties........................ 26 SECTION 8.12 Entire Agreement............................................ 27 SCHEDULES: Schedule I - List of Pledged Shares Schedule II - List of Pledged Notes Schedule III - List of Pledged LLC Interests Schedule IV - List of Pledged Partnership Interests Schedule 3.04 - Consents EXHIBITS: Exhibit A - Form of Issuer Control Agreement Exhibit B - Form of Securities Account Control Agreement iv PLEDGE AGREEMENT dated as of September 22, 2005 (as amended, modified or supplemented from time to time, this "AGREEMENT") among the LOAN PARTIES from time to time party hereto and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent for the benefit of the Finance Parties referred to herein (together with its successor or successors in such capacity, the "COLLATERAL AGENT"). InSight Health Services Corp. ("INSIGHT") intends to issue Senior Secured Floating Rate Notes due 2011 (together with any Additional Notes (as defined in the Indenture) and any Exchange Notes (as defined in the Indenture), and as amended, restated, supplemented or modified from time to time, the "SENIOR SECURED NOTES") pursuant to an Indenture dated as of the date hereof (as amended, restated, supplemented or modified from time to time and including any agreement extending the maturity of, refinancing or otherwise restructuring all or any portion of the obligations of InSight under such Indenture or any successor agreement, the "INDENTURE") among InSight and U.S. Bank National Association, as Trustee (together with its successor or successors in such capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the Senior Secured Notes will be guaranteed by InSight Health Services Holdings Corp. ("HOLDINGS"), each of the parties listed on the signature pages hereto as "Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic subsidiaries of Holdings that become a party hereto pursuant to Section 8.10 hereof (collectively, the "SUBSIDIARY GUARANTORS" and, together with Holdings, "GUARANTORS"). Holdings, InSight and the Subsidiary Guarantors are herein referred to individually as a "LOAN PARTY" and, collectively, as the "LOAN PARTIES". The Indenture requires the Loan Parties to secure their obligations under the Senior Secured Notes and their obligations under any guaranties thereof through the grant of a first lien security interest over the Collateral (as defined below). The Indenture further requires that such security interests in the Collateral be granted pursuant to security documents to a collateral agent acting for the benefit of the holders from time to time of the Senior Secured Notes. Consequently, the Trustee and the Collateral Agent have entered into a Collateral Agency Agreement dated as of the date hereof (as amended, modified or supplemented from time to time, the "COLLATERAL AGENCY AGREEMENT") which, among other things, governs certain actions of the Trustee and the Collateral Agent in connection with the Senior Secured Notes and the Collateral, respectively. Accordingly, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01 Defined Terms. Terms defined in the introductory section hereof have the respective meanings set forth therein. Capitalized terms defined in the Indenture and not otherwise defined herein have, as used herein, the respective meanings provided for therein. SECTION 1.02 Defined in the UCC. Unless otherwise defined herein or the context otherwise requires, the following terms, together with any uncapitalized terms used 1 herein which are defined in the UCC have the respective meanings provided for in the UCC: (i) Certificated Security; (ii) Financial Asset; (iii) Investment Property; (iv) Payment Intangibles; (v) Proceeds; (vi) Securities Account; (vii) Securities Intermediary; (viii) Security; (ix) Security Certificate; and (x) Uncertificated Security. SECTION 1.03 Additional Definitions. The following additional terms, as used herein, have the following respective meanings: "CAPITAL STOCK" has the meaning given to it in the Indenture. "COLLATERAL" has the meaning set forth in Section 2.01. "COLLATERAL AGENT" means U.S. Bank National Association, in its capacity as collateral agent for the Finance Parties, and its successor or successors in such capacity. "DEFAULT" means any event which is, or after notice or passage of time or both would be, an Event of Default. "DELIVERY" when used with respect to Collateral means: (i) in the case of Collateral constituting Certificated Securities, transfer thereof to the Collateral Agent or its nominee or custodian by physical delivery to the Collateral Agent or its nominee or custodian, such Collateral to be in suitable form for transfer by delivery, or accompanied by duly executed instruments of transfer or assignment in blank; (ii) in the case of Collateral constituting Uncertificated Securities, (A) registration thereof on the books and records of the issuer thereof in the name of the Collateral Agent or its nominee or custodian (who may not be a Securities Intermediary) or (B) the execution and delivery by the issuer thereof of an effective agreement, substantially in the form of Exhibit A hereto, pursuant to which such issuer agrees that it will comply with instructions originated by the Collateral Agent or such nominee or custodian without further consent of the registered owner of such Collateral or any other Person; (iii) in the case of Collateral constituting Security Entitlements or other Financial Assets deposited in or credited to a Securities Account, (A) completion of all actions necessary to constitute the Collateral Agent or its nominee or custodian the entitlement holder with respect to each such Security Entitlement or (B) the execution and delivery by the relevant Securities Intermediary of an effective agreement, substantially in the form of Exhibit B hereto, pursuant to which such Securities Intermediary agrees to comply with all entitlement orders originated by the Collateral Agent or such nominee or custodian without further consent by the relevant entitlement holder or any other Person; (iv) in the case of LLC Interests and Partnership Interests issued by one or more Loan Parties which do not constitute Securities, (A) compliance with the provisions of clause (i) above for each such item of Collateral which is represented by a certificate and (B) compliance with the provisions of clause (ii) above for each such item of Collateral which is not evidenced by a certificate; 2 (v) in the case of Collateral which constitute Instruments, transfer thereof to the Collateral Agent or its nominee or custodian by physical delivery to the Collateral Agent or its nominee or custodian indorsed to, or registered in the name of, the Collateral Agent or its nominee or custodian or indorsed in blank; (vi) in the case of cash, transfer thereof to the Collateral Agent or its nominee or custodian by physical delivery to the Collateral Agent or its nominee or custodian; and (vii) in each case such additional or alternative procedures as may hereafter become appropriate to grant control of, or otherwise perfect a security interest in, any Collateral in favor of the Collateral Agent or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof. "EVENT OF DEFAULT" means an "Event of Default" as defined in the Indenture. "FAIR MARKET VALUE" has the meaning given to it in the Indenture. "FEDERAL SECURITIES LAWS" has the meaning set forth in Section 6.03(a) of this Agreement. "FINANCE PARTY" means each Noteholder, the Trustee, the Collateral Agent, each Indemnitee and their respective successors and assigns, and "Finance Parties" means any two or more of them, collectively. "GENERAL INTANGIBLES" means all "general intangibles" (as defined in the UCC), including, without limitation, (i) all Payment Intangibles and other obligations and indebtedness owing to any Loan Party in respect of Collateral and (ii) all interests in limited liability companies and/or partnerships which interests do not constitute Securities. "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "GUARANTEE" means the guarantee by any Guarantor of the Note Obligations. "INDEMNITEE" has the meaning set forth in Section 8.03(c) of this Agreement. "INSTRUMENTS" means: (i) the promissory notes described on Schedule II hereto, as such Schedule may be amended, supplemented or modified from time to time (the "PLEDGED NOTES"), and all interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged Notes; (ii) all additional or substitute promissory notes from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged Notes, and all 3 interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute notes; (iii) all promissory notes, bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations constituting "instruments" within the meaning of the UCC; and (iv) to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof. "ISSUE DATE" means September 22, 2005. "LAW" means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority. "LLC INTERESTS" means: (i) the limited liability company membership interests described on Schedule III hereto, as such Schedule may be amended, supplemented or modified from time to time (the "PLEDGED LLC INTERESTS"), and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged LLC Interests; (ii) all additional or substitute limited liability company membership interests from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged LLC Interests, and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute membership interests; (iii) all right, title and interest of any Loan Party in each limited liability company to which any Pledged LLC Interest relates, including, without limitation: (A) all interests of such Loan Party in the capital of such limited liability company and in all profits, losses and assets, whether tangible or intangible and whether real, personal or mixed, of such limited liability company, and all other distributions to which such Loan Party shall at any time be entitled in respect of such Pledged LLC Interests; (B) all other payments due or to become due to such Loan Party in respect of Pledged LLC Interests, whether under any limited liability company agreement or operating agreement or otherwise and whether as contractual obligations, damages, insurance proceeds or otherwise; 4 (C) all of such Loan Party's claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Pledged LLC Interests; (D) all present and future claims, if any, of such Loan Party against any such limited liability company for moneys loaned or advanced, for services rendered or otherwise (exclusive of claims for salary and other employee compensation); and (E) all of such Loan Party's rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Loan Party relating to such Pledged LLC Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Loan Party in respect of such Pledged LLC Interests and any such limited liability company, to make determinations, to exercise any election (including, without limitation, election of remedies) or option to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or give receipt for any of the foregoing or for any assets of any such limited liability company, to enforce or execute any checks or other instruments or orders, to file any claims and to take any other action in connection with any of the foregoing; and (iv) to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof. "NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the Registration Rights Agreement related thereto and the Collateral Documents, in each case including all exhibits and schedules thereto, and all other agreements, documents and instruments relating to the Senior Secured Notes, in each case as the same may be amended, modified or supplemented from time to time in accordance with the provisions thereof. "NOTEHOLDERS" means the holders from time to time of the Senior Secured Notes. "PARTNERSHIP INTERESTS" means: (i) the partnership interests described on Schedule IV hereto, as such Schedule may be amended, supplemented or modified from time to time (the "PLEDGED PARTNERSHIP INTERESTS"), and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged Partnership Interests; (ii) all additional or substitute partnership interests from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged Partnership Interests, and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute partnership interests; 5 (iii) all right, title and interest of any Loan Party in each partnership to which any Pledged Partnership Interest relates, including, without limitation: (A) all interests of such Loan Party in the capital of such partnership and in all profits, losses and assets, whether tangible or intangible and whether real, personal or mixed, of such partnership, and all other distributions to which such Loan Party shall at any time be entitled in respect of such Pledged Partnership Interests; (B) all other payments due or to become due to such Loan Party in respect of Pledged Partnership Interests, whether under any partnership agreement or otherwise and whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of such Loan Party's claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement, or at law or otherwise in respect of such Pledged Partnership Interests; (D) all present and future claims, if any, of such Loan Party against any such partnership for moneys loaned or advanced, for services rendered or otherwise (exclusive of claims for salary and other employee compensation); and (E) all of such Loan Party's rights under any partnership agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Loan Party relating to such Pledged Partnership Interests, including any power to terminate, cancel or modify any partnership agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Loan Party in respect of such Pledged Partnership Interests and any such partnership, to make determinations, to exercise any election (including, without limitation, election of remedies) or option to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or give receipt for any of the foregoing or for any assets of any such partnership, to enforce or execute any checks or other instruments or orders, to file any claims and to take any other action in connection with any of the foregoing; and (iv) to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof. "PERFECTION CERTIFICATE" means with respect to each Loan Party a certificate, substantially in the form of Exhibit E to the Security Agreement, completed and supplemented with the schedules and attachments contemplated thereby. "PLEDGE AGREEMENT" means this Agreement, as the same may be amended, supplemented or modified from time to time. "PLEDGED LLC INTERESTS" has the meaning set forth in clause (i) of the definition of "LLC Interests". 6 "PLEDGED NOTES" has the meaning set forth in clause (i) of the definition of "Instruments". "PLEDGED PARTNERSHIP INTERESTS" has the meaning set forth in clause (i) of the definition of "Partnership Interests". "PLEDGED SHARES" has the meaning set forth in clause (i) of the definition of "Stock". "PROPERTY" means any interest in any kind of property or asset, whether real, personal or mixed and whether tangible or intangible. "SECURITY ENTITLEMENTS" means all "security entitlements" (as defined in the UCC), including all rights and property interests with respect to Financial Assets deposited in or credited to Securities Accounts. "SECURITY INTERESTS" means the security interests in the Collateral granted under this Agreement securing the Note Obligations. "STOCK" means: (i) the shares of stock and other Securities described on Schedule I hereto, as such Schedule may be amended, supplemented or modified from time to time (the "PLEDGED SHARES"), and all dividends, interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Pledged Shares; (ii) all additional or substitute shares of capital stock or other equity interests of any class of any issuer from time to time issued to or otherwise acquired by any Loan Party in any manner in respect of Pledged Shares, the certificates representing such additional or substitute shares, and all dividends, interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of such additional or substitute shares; and (iii) to the extent not otherwise included in the foregoing, all cash and non-cash proceeds thereof. "SUBSIDIARY GUARANTORS" has the meaning set forth in the introductory paragraphs hereto. "SUPPORTING OBLIGATION" means a guaranty or other secondary obligation supporting, or any Lien securing, the payment or performance of one or more Instruments, Investment Property or other item of Collateral. "UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection, the 7 effect of perfection or non-perfection or the priority of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. "US SUBSIDIARY" means with respect to any Person each Subsidiary of such Person which, at the time of determination, is incorporated in or organized under the law of the United States of America, any State thereof or the District of Columbia, and "US SUBSIDIARIES" means all of them, collectively. "US SUBSIDIARY GUARANTOR" means each Subsidiary Guarantor which, at the time of determination, is incorporated in or organized under the laws of the United States of America, any State thereof or the District of Columbia, and "US SUBSIDIARY GUARANTORS" means all of them, collectively. SECTION 1.04 Terms Generally. Terms defined in the introductory paragraphs hereof and the definitions in Section 1.03 shall apply equally to both the singular and plural forms of the terms defined. Wherever the context may require, any pronouns shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless otherwise stated herein or the context shall otherwise require. Unless otherwise expressly provided herein, the word "day" means a calendar day. ARTICLE II THE SECURITY INTERESTS SECTION 2.01 Grant of Security Interests. To secure the due and punctual payment of all Note Obligations, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due or to become due, in accordance with the terms thereof and to secure the performance of all of the obligations of each Loan Party and the other Loan Parties hereunder and under the other Note Documents, each Loan Party hereby grants to the Collateral Agent for the benefit of the Finance Parties a security interest in, and each Loan Party hereby pledges and collaterally assigns to the Collateral Agent for the benefit of the Finance Parties, all of such Loan Party's right, title and interest in, to and under the following, whether now owned or existing or hereafter acquired, created or arising, whether tangible or intangible, and regardless of where located (all of which are herein collectively called the "COLLATERAL"): (i) Stock; (ii) Instruments; (iii) LLC Interests; 8 (iv) Partnership Interests; (v) Investment Property (other than Investment Property maintained in any Excluded Securities Account (as defined in the Security Agreement); (vi) Financial Assets (other than Financial Assets maintained in any Excluded Securities Account (as defined in the Security Agreement); and (vii) all Proceeds of all or any of the Collateral described in clauses (i) through (vi) hereof; provided, however, that the Collateral shall not include (v) cash or other distributions in respect of federal, state and/or local income taxes payable by any Loan Party or any direct or indirect equity holder of any Loan Party in respect of the income and profits of any limited liability company, partnership or other entity which is not a corporation for United States federal income tax purposes, (w) any Voting Stock owned by any Loan Party which constitutes Voting Stock issued by a Foreign Subsidiary of such Loan Party that is a corporation for United States Federal Income tax purposes, in each case if and to the extent that the inclusion of such Voting Stock in the Collateral would cause the Collateral pledged by such Loan Party hereunder or under any other Note Document to include in the aggregate more than 65% of the total combined voting power of all classes of Voting Stock of such Foreign Subsidiary, (x) Excluded Contracts, (y) any Capital Stock owned by any Loan Party and issued by an entity that is not a Wholly Owned Subsidiary of such Loan Party to the extent (and only with respect to such portion of such Capital Stock that would be prohibited as referred to below) that any joint venture agreement, between or among any Loan Party and one or more third parties with respect to a Permitted Joint Venture, by the express terms of a valid and enforceable restriction in favor of such third parties prohibits, or requires any consent for, the granting of a security interest in such Capital Stock by such Loan Party, (z) any Capital Stock and other securities of InSight, any of its Subsidiaries or any of Holdings' Subsidiaries to the extent that the pledge of such Capital Stock or other securities to secure the Note Obligations would cause Holdings, such Subsidiary, or such Subsidiary of Holdings, as the case may be, to be required to file separate financial statements with the Securities and Exchange Commission pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time) of the Securities and Exchange Commission, (aa) any Receivables and Related Assets and (bb) any proceeds or products from any and all of the foregoing. Notwithstanding the foregoing, if granting or perfecting any Lien to secure the Note Obligations on any Collateral cannot be granted or perfected under applicable law, none of InSight or the Guarantors will be required to grant or perfect, as applicable, such Lien. SECTION 2.02 Security Interests Absolute. All rights of the Collateral Agent, all security interests hereunder and all obligations of each Loan Party hereunder are unconditional and absolute and independent and separate from any other security for or guaranty of the Note Obligations, whether executed by such Loan Party, any other Loan Party or any other Person. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be released, discharged or otherwise affected or impaired by: 9 (i) any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any obligation of any Loan Party under any Note Document or any other agreement or instrument evidencing or securing any Note Obligation, by operation of law or otherwise; (ii) any change in the manner, place, time or terms of payment of any Note Obligation or any other amendment, supplement or modification to any Note Document or any other agreement or instrument evidencing or securing any Note Obligation; (iii) any release, non-perfection or invalidity of any direct or indirect security for any Note Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Note Obligation or any release of any other obligor in respect of any Note Obligation; (iv) any change in the existence, structure or ownership of any Loan Party, or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting any Loan Party or its assets or any resulting disallowance, release or discharge of all or any portion of any Note Obligation; (v) the existence of any claim, set-off or other right which any Loan Party may have at any time against any other Loan Party or any Finance Party or any other Person, whether in connection herewith or any unrelated transaction; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (vi) any invalidity or unenforceability relating to or against any Loan Party for any reason of any Note Document or any other agreement or instrument evidencing or securing any Note Obligation or any provision of applicable law or regulation purporting to prohibit the payment by any Loan Party of any Note Obligation; (vii) any failure by any Finance Party: (A) to file or enforce a claim against any Loan Party or its estate (in a bankruptcy or other proceeding); (B) to give notice of the existence, creation or incurrence by any Loan Party of any new or additional indebtedness or obligation under or with respect to the Note Obligations; (C) to commence any action against any Loan Party; (D) to disclose to any Loan Party any facts which such Finance Party may now or hereafter know with regard to any Loan Party; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Note Obligations; (viii) any direction as to application of payment by any Loan Party or any other Person; (ix) any subordination by any Finance Party of the payment of any Note Obligation to the payment of any other liability (whether matured or unmatured) of any Loan Party to its creditors; (x) any act or failure to act by the Collateral Agent or any other Finance Party under this Agreement or otherwise which may deprive any Loan Party of any right to 10 subrogation, contribution or reimbursement against any other Loan Party or any right to recover full indemnity for any payments made by such Loan Party in respect of the Note Obligations; or (xi) any other act or omission to act or delay of any kind by any Loan Party or any Finance Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of any Loan Party's obligations hereunder (other than final payment in full of the Note Obligations). Each Loan Party has irrevocably and unconditionally delivered this Agreement to the Collateral Agent, for the benefit of the Finance Parties, and the failure by any other Person to sign this Agreement or a pledge agreement similar to this Agreement or otherwise shall not discharge the obligations of any Loan Party hereunder. This Agreement shall remain fully enforceable against each Loan Party irrespective of any defenses that any other Loan Party may have or assert in respect of the Note Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Loan Party may assert the defense of final payment in full of the Note Obligations. SECTION 2.03 Continuing Liability of the Loan Parties. The Security Interests are granted as security only and shall not subject the Collateral Agent or any Finance Party to, or transfer or in any way affect or modify, any obligation or liability of any Loan Party with respect to any of the Collateral or any transaction in connection therewith. ARTICLE III REPRESENTATIONS AND WARRANTIES Each Loan Party represents and warrants that: SECTION 3.01 Title to Collateral. Such Loan Party is the legal, record and beneficial owner of, and has good and marketable title to, all of the Collateral pledged by it hereunder, free and clear of any Liens other than (i) Permitted Liens and (ii) Liens in respect of which such Loan Party has delivered UCC-3 termination statements or partial release financing statements to the Collateral Agent on the Issue Date. No Collateral is in the possession or control of any Person asserting any claim thereto or security interest therein, except that the Collateral Agent or its nominee, custodian or a Securities Intermediary acting on its behalf may have possession and/or control of Collateral as contemplated hereby and by the other Note Documents. SECTION 3.02 Validity, Perfection and Priority of Security Interests. The Security Interests constitute valid security interests under the UCC securing the Note Obligations. Upon Delivery of all Collateral to the Collateral Agent in accordance with the provisions hereof and when UCC-1 financing statements naming the Collateral Agent as secured party and containing a description of the Collateral in the form specified in Exhibit E to the 11 Security Agreement shall have been filed in the respective offices specified in Schedule 4.01 to the Security Agreement, the Security Interests shall constitute perfected security interests in all right, title and interest of such Loan Party in the Collateral (subject to the requirements of Section 9-315 of the UCC with respect to any proceeds of Collateral and to the further requirement that additional steps may be necessary to perfect the Security Interests in dividends or other distributions in kind), in each case prior to all other Liens and rights of others therein except for Permitted Liens, and, to the extent control of such Collateral may be obtained pursuant to Article 8 and/or 9 of the UCC, the Collateral Agent will have control of the Collateral subject to no adverse claims of any other Person. SECTION 3.03 Collateral. (a) Schedules I, II, III and IV hereto (as such schedules may be amended, supplemented or modified from time to time by delivery of such amended, supplemented or modified Schedules to the Collateral Agent in compliance with this Agreement) set forth (i) the name and jurisdiction of organization of, and the ownership interest (including percentage owned and number of shares, units or other equity interests) of such Loan Party in the Stock, LLC Interests and Partnership Interests issued by each of such Loan Party's direct Subsidiaries which are required to be included in the Collateral and pledged hereunder, (ii) all other Stock, LLC Interests and Partnership Interests directly owned by such Loan Party that are required to be included in the Collateral and pledged hereunder and (iii) the issuer, date and amount of all notes having a face value in excess of $500,000 directly owned or held by such Loan Party that are required to be included in the Collateral and pledged hereunder. Such Loan Party holds all such Collateral directly unless otherwise indicated on such Schedule (i.e., not through a Subsidiary, Securities Intermediary or any other Person). (b) All Collateral consisting of Pledged Shares, Pledged LLC Interests and Pledged Partnership Interests has been duly authorized and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights of any Person. Except as set forth on Schedules I, III and IV hereto, and, in the case of clause (i) below, except as excluded from the Collateral by the proviso to Section 2.01, (i) such Collateral constitutes 100% of the issued and outstanding shares of capital stock or other equity interests of the respective issuers thereof owned by the relevant Loan Party, (ii) no issuer of Collateral other than any Permitted Joint Venture has outstanding any security convertible into or exchangeable for any shares of its capital stock or other equity interests or any warrant, option, convertible security, instrument or other interest entitling the holder thereof to acquire any such shares or any security convertible into or exchangeable for such shares and (iii) there are no voting trusts, stockholder agreements, proxies or other agreements in effect with respect to the voting or transfer of such shares of its capital stock (other than in respect of any Permitted Joint Venture). Except as otherwise permitted by the Note Documents, no Loan Party is now and or will become a party to or otherwise bound by any agreement, other than this Agreement and the Note Documents which restricts in any manner the rights of the Collateral Agent or any other present or future holder of any Collateral to transfer or otherwise dispose of Pledged Shares. SECTION 3.04 No Consents. No consent of any other Person (including, without limitation, any stockholder or creditor of such Loan Party or any of its Subsidiaries) and no order, consent, approval, license, authorization or validation of, or filing, recording or 12 registration with, or exemption by any Governmental Authority is required to be obtained by the Loan Party in connection with the execution, delivery or performance of this Agreement, or in connection with the exercise of the rights and remedies of the Collateral Agent pursuant to this Agreement, except as may be required under the Collateral Agency Agreement or in connection with the disposition of the Collateral by laws affecting the offering and sale of securities generally or as described in Schedule 3.04 hereto. ARTICLE IV COVENANTS Each Loan Party covenants and agrees that until the payment in full of all Note Obligations (other than contingent indemnification obligations for which a claim has not been made), such Loan Party will comply with the following: SECTION 4.01 Delivery of Collateral. All Collateral shall be Delivered to and held by or on behalf of the Collateral Agent pursuant hereto; provided that so long as no Event of Default shall have occurred and be continuing, and except as required by any other Note Document, each Loan Party may retain any Collateral (i) consisting of Instruments (other than Pledged Notes and any additional or substitute promissory notes issued to or otherwise acquired by such Loan Party in respect of Pledged Notes) received by it in the ordinary course of business or (ii) which it is otherwise entitled to receive and retain pursuant to Section 5.01 hereof, and the Collateral Agent shall, promptly upon request of any Loan Party, make appropriate arrangements for making any Collateral consisting of an Instrument or a Certificated Security pledged by such Loan Party available to it for purposes of presentation, collection or renewal (any such arrangement to be effected, to the extent deemed appropriate to the Collateral Agent, against a trust receipt or like document). All Collateral Delivered hereunder and shall be accompanied by any required transfer tax stamps. The Collateral Agent shall have the right at any time upon the request of the Directing Noteholders made during the continuance of and Event of Default, and upon notice to any Loan Party, to cause any or all of the Collateral to be transferred of record into the name of the Collateral Agent or its nominee. SECTION 4.02 Delivery of Perfection Certificate; Filing of Financing Statements and Delivery of Search Reports. On or prior to the Issue Date, such Loan Party shall deliver its Perfection Certificate to the Collateral Agent and shall cause all filings to have been delivered to the Collateral Agent for filing and recordings and other actions specified in Schedule 4.01 to the Security Agreement to have been completed as required by the Security Agreement. The information set forth in the Perfection Certificate is correct and complete in all material respects. SECTION 4.03 Further Assurances. Such Loan Party will, from time to time at its expense at the request of the Collateral Agent and in such manner and form as the Collateral Agent may require, execute, deliver, file and record any financing statement, specific assignment, instrument, document, agreement or other paper and take any other action (including, without limitation, any filings of financing or continuation statements under the UCC) that from time to time may be reasonably necessary or desirable, or that the Collateral Agent may reasonably request, in order to create, preserve, perfect, confirm or validate the 13 Security Interests or to enable the Collateral Agent and the Finance Parties to obtain the full benefit of this Agreement or to exercise and enforce any of its rights, powers and remedies created hereunder or under applicable law with respect to any of the Collateral. To the extent permitted by applicable law but without limiting such Loan Party's obligations to itself comply with the first sentence of this Section 4.04, such Loan Party hereby authorizes the Collateral Agent to execute and file, in the name of such Loan Party or otherwise and without the signature or other separate authorization or authentication of such Loan Party appearing thereon, such UCC financing statements or continuation statements as the Collateral Agent in its reasonably discretion may deem necessary or appropriate to further perfect or maintain the perfection of the Security Interests. Such Loan Party agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. The Loan Parties shall pay the costs of, or incidental to, any recording or filing of any financing or continuation statements concerning the Collateral. SECTION 4.04 Additional Collateral. Except as otherwise not prohibited by any other Note Document, such Loan Party will cause each issuer of the Collateral that is a Subsidiary of such Loan Party not to issue any stock, other securities, limited liability company membership interests, partnership interests, promissory notes or other instruments in addition to or in substitution for the Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and Pledged Notes issued by such issuer, except to a Loan Party, and, in the event that any issuer of Collateral at any time issues any additional or substitute stock, other securities, limited liability company membership interests, partnership interests, promissory notes or other instruments to a Loan Party, such Loan Party will (subject to the proviso to Section 2.01) immediately Deliver all such items to the Collateral Agent to hold as Collateral hereunder and will promptly thereafter deliver to the Collateral Agent such supplements to Schedules I through IV hereto as are necessary to cause such Schedules to be complete and accurate at such time and certifying that such Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and/or Pledged Notes have been duly pledged with the Collateral Agent hereunder. SECTION 4.05 Information Regarding Collateral. Such Loan Party will, promptly upon request, provide to the Collateral Agent all information and evidence it may reasonably request concerning the Collateral to enable the Collateral Agent to enforce the provisions of this Agreement. ARTICLE V DISTRIBUTIONS ON COLLATERAL; VOTING SECTION 5.01 Right to Receive Distributions on Collateral; Voting. (a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent has delivered a written notice to InSight stating its intent to exercise remedies under clauses (b) and (c) of this Section 5.1: (i) Each Loan Party shall be entitled to exercise any and all voting, management, administration and other consensual rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement and 14 the other Note Documents; provided, however, that no Loan Party shall exercise or refrain from exercising any such right if such action would violate or be inconsistent with any of the terms of this Agreement or any other Note Document, or would have the effect of impairing the position or interests of the Collateral Agent or any other Finance Party hereunder or thereunder. (ii) Each Loan Party shall be entitled to receive and retain any and all dividends, interest, distributions, cash, instruments and other payments and distributions made upon or in respect of the Collateral; provided, however, that (other than, for the avoidance of doubt, any dividends, interest, distributions, cash, instruments and other payments and distributions made upon, consisting of or in respect of Receivables or Related Assets) any and all: (A) dividends, interest and other payments and distributions paid or payable other than in cash in respect of, and instruments and other property other than in cash received, receivable or otherwise distributed in respect of, or in exchange for, any Collateral; (B) dividends and other payments and distributions paid or payable in cash in respect of any Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus; (C) additional stock, other securities, limited liability company membership interests, partnership interests, promissory notes or other instruments or property paid or distributed in respect of any Pledged Shares, Pledged LLC Interests or Pledged Partnership Interests by way of share-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; (D) all other or additional stock, other securities, limited liability company membership interests, partnership interests, promissory notes or other instruments or property which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of shares, conveyance of assets, liquidation or similar reorganization; and (E) cash paid, payable or otherwise distributed in respect of principal of, in redemption of, or in exchange for, any Collateral; shall be forthwith (i) Delivered to the Collateral Agent or its nominee or custodian to hold as Collateral hereunder or (ii) in the case of any amount referred to in the proviso of this Section 5.01(a)(ii) paid or distributed in cash, forthwith deposited in a Deposit Account maintained with the Collateral Agent or with respect to which an effective Account Control Agreement as contemplated by Section 4.13 of the Security Agreement has been delivered to the Collateral Agent and shall, if received by any Loan Party, be received in trust for the benefit of the Collateral Agent and the Finance Parties, be segregated from the other property or funds of such Loan Party and be forthwith Delivered, in the same form as so received, to the Collateral Agent 15 or its nominee or custodian to hold as Collateral or deposited in a Deposit Account as contemplated by clause (ii) above. (iii) The Collateral Agent shall, upon receiving a written request from any Loan Party accompanied by a certificate signed by an authorized officer of such Loan Party stating that no Event of Default has occurred and is continuing, execute and deliver (or cause to be executed and delivered) to such Loan Party or as specified in such request all proxies, powers of attorney, consents, ratifications and waivers and other instruments as such Loan Party may reasonably request for the purpose of enabling such Loan Party to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends, interest, distributions, cash, instruments or other payments or distributions which it is authorized to receive and retain pursuant to paragraph (ii) above in respect of any of the Collateral which is registered in the name of the Collateral Agent or its nominee. (b) Upon the occurrence and during the continuance of an Event of Default and following written notice from the Collateral Agent to InSight stating its intent to exercise remedies under clauses (b) and (c) of this Section 5.01: (i) All rights of each Loan Party to receive the dividends, interest, distributions, cash, instruments and other payments and distributions which it would otherwise be authorized to receive and retain pursuant to Section 5.01(a)(ii) above shall cease (other than, for the avoidance of doubt, the rights of each Loan Party to receive any dividends, interest, distributions, cash, instruments and other payments and distributions made upon, consisting of or relating to Receivables or Related Assets), and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to receive and hold as Collateral such dividends, interest, distributions, cash, instruments and other payments and distributions; provided that all cash dividends and other cash distributions in respect of federal, state and/or local income taxes payable by any Loan Party or any direct or indirect equity holder of any Loan Party in respect of income and profits of any limited liability company, partnership or other entity which is not a corporation for United States federal income tax purposes shall be paid to the respective Loan Party free and clear of any Liens created hereby regardless of whether an Event of Default shall have occurred and be continuing. (ii) All dividends, interest, distributions, cash, instruments and other payments and distributions which are received by any Loan Party contrary to the provisions of paragraph (i) of this Section 5.01(b) shall be received in trust for the benefit of the Collateral Agent and the Finance Parties, shall be segregated from other property or funds of such Loan Party and shall be forthwith Delivered, in the same form as so received to the Collateral Agent or its nominee or custodian to hold as Collateral. (c) Upon the occurrence and during the continuance of an Event of Default and following written notice from the Collateral Agent to InSight stating its intent to exercise remedies under clauses (b) and (c) of this Section 5.01, all rights of such Loan Party to exercise the voting, management, administration and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 5.01(a)(i) above shall cease, all such rights shall thereupon become vested in the Collateral Agent, who shall thereupon have the sole right to 16 exercise such voting and other consensual rights, and such Loan Party shall take all actions as may be necessary or appropriate to effect such right of the Collateral Agent. ARTICLE VI GENERAL AUTHORITY; REMEDIES SECTION 6.01 General Authority. Each Loan Party hereby irrevocably appoints the Collateral Agent and any officer or agent thereof as its true and lawful attorney-in-fact, with full power of substitution, in the name of such Loan Party, the Collateral Agent, the Finance Parties or otherwise, for the sole use and benefit of the Collateral Agent and the Finance Parties, but at such Loan Party's expense, to the extent permitted by law, to exercise at any time and from time to time while an Event of Default has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable until the Note Obligations (excluding contingent indemnification obligations) are paid in full: (i) to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement; (ii) to receive, take, endorse, assign and deliver any and all checks, notes, drafts, acceptances, documents and other negotiable and non-negotiable instruments taken or received by such Loan Party as, or in connection with, the Collateral; (iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and to otherwise demand, sue for, collect, receive and give acquittance for any and all monies due on or by virtue of any Collateral; (iv) to commence, settle, compromise, compound, prosecute, defend or adjust any claim, suit, action or proceeding with respect to, or in connection with, the Collateral; (v) to sell, transfer, assign or otherwise deal in or with the Collateral or the proceeds or avails thereof, as fully and effectually as if the Collateral Agent were the absolute owner thereof; (vi) to extend the time of payment of any or all of the Collateral and to make any allowance and other adjustments with respect thereto; (vii) subject to the giving of notice to the relevant Loan Party in accordance with Section 5.01(a) hereof, to vote all or any part of the Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and/or Pledged Notes (whether or not transferred into the name of the Collateral Agent) and give all consents, waivers and ratifications in respect of the Collateral; and (viii) to do, at its option, but at the expense of such Loan Party, at any time or from time to time, all acts and things which the Collateral Agent deems necessary to protect or preserve the Collateral and to realize upon the Collateral. 17 SECTION 6.02 Remedies upon Event of Default. (a) If an Event of Default shall have occurred and be continuing, the Collateral Agent may, in addition to all other rights and remedies granted to it in this Agreement and in any other agreement securing, evidencing or relating to the Note Obligations: (i) exercise on behalf of the Finance Parties all rights and remedies of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, (ii) without demand of performance or other demand or notice of any kind (except as herein provided or as may be required by mandatory provisions of law) to or upon any Loan Party or any other Person (all of which demands and/or notices are hereby waived by each Loan Party), (A) apply all cash, if any, then held by it as Collateral as specified in Section 6.07 hereof and (B) if there shall be no such cash or if such cash shall be insufficient to pay all the Note Obligations in full or cannot be so applied for any reason or if the Collateral Agent determines to do so, collect, receive, appropriate and realize upon the Collateral and/or sell, assign, give an option or options to purchase or otherwise dispose of and deliver the Collateral (or contract to do so) or any part thereof in one or more parcels (which need not be in round lots) at public or private sale or at broker's board or on any securities exchange, at any office of the Collateral Agent or elsewhere in such manner as is commercially reasonable and as the Collateral Agent may deem best, for cash, on credit or for future delivery without assumption of any credit risk and at such price or prices as the Collateral Agent may deem satisfactory. (b) The Collateral Agent shall give each Loan Party not less than 10 days' prior notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral which threatens to decline speedily in value or is of a type customarily sold on a recognized market. Any such notice shall (i) in the case of a public sale, state the time and place fixed for such sale, (ii) in the case of a sale at a broker's board or on a securities exchange, state the board or exchange at which such sale is to be made and the day on which the Collateral, or the portion thereof being sold, will first be offered for sale, (iii) in the case of a private sale, state the day after which such sale may be consummated, (iv) contain the information specified in Section 9-613 of the UCC, (v) be authenticated and (vi) be sent to the parties required to be notified pursuant to Section 9-611(c) of the UCC; provided that, if the Collateral Agent fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC. The Collateral Agent and each Loan Party agree that such notice constitutes reasonable notification within the meaning of Section 9-611 of the UCC. Except as otherwise provided herein, each Loan Party hereby waives, to the extent permitted by applicable law, notice and judicial hearing in connection with the Collateral Agent's taking possession or disposition of any of the Collateral. (c) The Collateral Agent or any Finance Party may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations, at any private sale). Each Loan Party will execute and deliver such documents and take such other action as the Collateral Agent reasonably deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale, the Collateral Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely and free 18 from any claim or right of whatsoever kind. Any such public sale shall be held at such time or times within ordinary bankers hours and at such place or places as the Collateral Agent may fix in the notice of such sale. At any such sale, the Collateral may be sold in one lot as an entirety or in such parcels, as the Collateral Agent may determine. The Collateral Agent shall not be obligated to make any such sale pursuant to any such notice. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned without further notice. In the case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the selling price is paid by the purchaser thereof, but the Collateral Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in the case of such failure, such Collateral may again be sold upon like notice. SECTION 6.03 Securities Act. In view of the position of the Loan Parties in relation to the Collateral, or because of other present or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being herein called the "FEDERAL SECURITIES LAWS") with respect to any disposition of the Collateral permitted hereunder. Each Loan Party understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Without limiting the generality of the foregoing, the provisions of this Section 6.03 would apply if, for example, the Collateral Agent were to place all or any part of the Collateral for private placement by an investment banking firm, or if such investment banking firm purchased all or any part of the Collateral for its own account, or if the Collateral Agent placed all or any part of the Collateral privately with a purchaser or purchasers. SECTION 6.04 Other Rights of the Collateral Agent. (a) The Collateral Agent, instead of exercising the power of sale conferred upon it pursuant to Section 6.02, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction, and may in addition institute and maintain such suits and proceedings as the Collateral Agent may deem appropriate to protect and enforce the rights vested in the Collateral Agent by this Agreement. (b) The Collateral Agent shall, to the extent permitted by applicable law, without notice to any Loan Party or any party claiming through any Loan Party, without regard to the solvency or insolvency at such time of any Person then liable for the payment of any of the Note Obligations, without regard to the then value of the Collateral and without requiring any bond from any complainant in such proceedings, be entitled as a matter of right to the appointment of a receiver or receivers (who may be the Collateral Agent) of the Collateral or any 19 part thereof, and of the profits, revenues and other income thereof, pending such proceedings, with such powers as the court making such appointment shall confer, and to the entry of an order directing that the profits, revenues and other income of the property constituting the whole or any part of the Collateral be segregated, sequestered and impounded for the benefit of the Collateral Agent and the Finance Parties, and each Loan Party irrevocably consents to the appointment of such receiver or receivers and to the entry of such order. SECTION 6.05 Limitation on Duty of Collateral Agent in Respect of Collateral. Beyond the exercise of reasonable care in the custody thereof, neither the Collateral Agent nor any Finance Party shall have any duty to exercise any rights or take any steps to preserve the rights of any Loan Party in the Collateral in its or their possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. Each Loan Party agrees that the Collateral Agent shall at no time be required to, nor shall the Collateral Agent be liable to any Loan Party for any failure to, account separately to any Loan Party for amounts received or applied by the Collateral Agent from time to time in respect of the Collateral pursuant to the terms of this Agreement. Without limiting the foregoing, the Collateral Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be (and in so doing shall be deemed to have exercised reasonable care in respect thereof) to accord the Collateral treatment substantially equal to that which the Collateral Agent accords its own property, and (i) shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any agent or bailee selected by the Collateral Agent in good faith or (ii) shall not have any duty or responsibility for ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters. SECTION 6.06 Waiver and Estoppel. (a) Each Loan Party, to the extent it may lawfully do so, on behalf of itself and all who claim through or under it, including without limitation any and all subsequent creditors, vendees, assignees and lienors, waives and releases all rights to demand or to have any marshalling of the Collateral upon any sale, whether made under any power of sale granted herein or pursuant to judicial proceedings or under any foreclosure or any enforcement of this Agreement, and consents and agrees that all of the Collateral may at any such sale be offered and sold as an entirety. (b) Each Loan Party waives, to the extent permitted by law, presentment, demand, protest and any notice of any kind (except the notices expressly required hereunder) in connection with this Agreement and any action taken by the Collateral Agent with respect to the Collateral. SECTION 6.07 Application of Proceeds. (a) Priority of Distributions. The proceeds of any sale of, or other realization upon, all or any part of the Collateral (including any proceeds received and held pursuant to Section 5.01) and any cash held by the Collateral Agent or its nominee or custodian hereunder 20 shall be applied as provided in Section 4.06 of the Collateral Agency Agreement. The Collateral Agent may make distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof. (b) Deficiencies. It is understood that the Loan Parties shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the amount of the Note Obligations. ARTICLE VII THE COLLATERAL AGENT SECTION 7.01 Concerning the Collateral Agent. The provisions of Article VI of the Collateral Agency Agreement shall inure to the benefit of the Collateral Agent in respect of this Agreement and shall be binding upon all Loan Parties and all Finance Parties and upon the parties hereto in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Collateral Agent therein set forth: (i) The Collateral Agent is authorized to take all such actions as are provided to be taken by it as Collateral Agent hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein or as to any matters which permit but do not require action by the Collateral Agent (including, without limitation, the timing and methods of realization upon the Collateral) the Collateral Agent shall act or refrain from acting in accordance with written instructions from the Directing Noteholders as contemplated by the Collateral Agency Agreement or, in the absence of such instructions, subject to the terms of the Collateral Agency Agreement, in accordance with its discretion. (ii) The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Security Interests in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder unless such action or omission constitutes gross negligence or willful misconduct. The Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement or any Note Document by any Loan Party. SECTION 7.02 Appointment of Co-Collateral Agent. At any time or times, in order to comply with any legal requirement in any jurisdiction, the Collateral Agent may, in consultation with InSight and, unless an Event of Default shall have occurred and be continuing, with its consent (not to be unreasonably withheld or delayed), appoint another bank or trust company or one or more other persons, either to act as co-agent or co-agents, jointly with the Collateral Agent, or to act as separate agent or agents on behalf of the Finance Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Collateral Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 7.01 above). Notwithstanding any such appointment but only to the extent 21 not inconsistent with such legal requirements or, in the reasonable judgment of the Collateral Agent, not unduly burdensome to it or any such co-agent, each Loan Party shall be entitled to deal solely and directly with the Collateral Agent rather than any such co-agent in connection with the Collateral Agent's rights and obligations under this Agreement. SECTION 7.03 Appointment of Sub-Agents. The Collateral Agent shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and Pledged Notes, which may be held (in the discretion of the Collateral Agent) in the name of the relevant Loan Party, endorsed or assigned in blank or in favor of the Collateral Agent or any nominee or custodian of the Collateral Agent or a sub-agent appointed by the Collateral Agent. ARTICLE VIII MISCELLANEOUS SECTION 8.01 Notices. (a) Unless otherwise specified herein, all notices, requests or other communications to any party hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered to the address or facsimile number: (i) in the case of Holdings, InSight, any Subsidiary Guarantor or any Noteholder or the Trustee, as set forth in Section 13.02 of the Indenture, (ii) in the case of the Collateral Agent, as set forth on the signature pages hereof, or (iii) in the case of any party, to such other address, facsimile number or electronic mail address as such party shall hereafter specify for the purpose of communications hereunder by notice to the other parties hereto. Each such notice, request or other communication shall be effective upon the earlier to occur of (i) actual receipt by the intended recipient and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the intended recipient, (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid and (C) if delivered by facsimile, when sent and receipt has been confirmed electronically. Rejection or refusal to accept, or the inability to deliver because of a changed address of which no notice was given shall not affect the validity of notice given in accordance with this Section. (b) This Agreement may be transmitted and/or signed by facsimile and, if so transmitted or signed shall, subject to requirements of Law, have the same force and effect as a manually-signed original and shall be binding on all Loan Parties, the Collateral Agent and the Finance Parties. The Collateral Agent may also require that this Agreement be confirmed by a manually-signed original hereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. SECTION 8.02 No Waivers; Non-Exclusive Remedies. No failure or delay on the part of the Collateral Agent or any Finance Party to exercise, no course of dealing with respect to, and no delay in exercising, any right, power or privilege under this Agreement or any other Note Document or any other document or agreement contemplated hereby or thereby shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided herein and in the other Note Documents are 22 cumulative and are not exclusive of any other remedies provided by law. Without limiting the foregoing, nothing in this Agreement shall impair the right of any Finance Party to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of any Loan Party other than its indebtedness under the Note Documents. Each Loan Party agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note Obligation, whether or not acquired pursuant to the terms of any applicable Note Document, may exercise rights of set-off or counterclaim or other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Loan Party in the amount of such participation. SECTION 8.03 Compensation and Expenses of the Collateral Agent; Indemnification. (a) Expenses. The Loan Parties, jointly and severally, agree to pay (i) all reasonable out-of-pocket expenses of the Collateral Agent, including fees and disbursements of special and local counsel for the Collateral Agent, in connection with the preparation and administration of this Agreement or any document or agreement contemplated hereby, any waiver or consent hereunder or any amendment hereof or any Default or Event of Default or alleged Default or Event of Default, and (ii) all taxes which the Collateral Agent or any other Finance Party may be required to pay by reason of the security interests granted in the Collateral (including any applicable transfer taxes) or to free any of the Collateral from the lien thereof. (b) Protection of Collateral. If any Loan Party fails to comply with the provisions of any Note Document, such that the value of any material portion of Collateral or the validity, perfection, rank or value of any Security Interest is thereby materially diminished or potentially materially diminished, after notice to such Loan Party (unless in the reasonable judgment of the Collateral Agent, notice is impractical) the Collateral Agent if requested by the Directing Noteholders may, but shall not be required to, effect such compliance on behalf of such Loan Party, and the Loan Parties shall reimburse the Collateral Agent for the costs thereof on demand. Any and all excise, property, sales and use taxes imposed by any state, federal or local authority on any of the Collateral, or in respect of periodic appraisals of the Collateral, or in respect of the sale or other disposition thereof shall be borne and paid by the Loan Parties. If any Loan Party fails to promptly pay any portion thereof when due, the Collateral Agent may, at its option, but shall not be required to, pay the same and charge the Loan Parties' account therefor, and the Loan Parties agree to reimburse the Collateral Agent therefor on demand. All sums so paid or incurred by the Collateral Agent for any of the foregoing and any and all other sums for which any Loan Party may become liable hereunder and all costs and expenses (including attorneys' fees, legal expenses and court costs) reasonably incurred by the Collateral Agent or any Noteholder in enforcing or protecting the Security Interests or any of their rights or remedies under this Agreement, shall, together with interest thereon from demand and until paid at the rate applicable to interest at the highest rate applicable under the Note Documents in respect of overdue obligations, be additional Note Obligations hereunder. (c) Indemnification. Each Loan Party agrees to indemnify the Collateral Agent, each other Finance Party and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact and their respective successors and assigns (each, an "INDEMNITEE" and, collectively, "INDEMNITEES") and hold each Indemnitee harmless from and 23 against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by, imposed on or asserted against such Indemnitee in connection with any investigation or administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any other Collateral Document or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights hereunder, or in any way relating to or arising out of the ownership, purchasing, delivery, control, acceptance, financing, possession, sale, return or other disposition of the Collateral, the violation of the laws of any country, state or other governmental body or unit, or any tort or contract claim; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment or order. Each Loan Party agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action, judgment or suit, such Loan Party shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to notify the Loan Parties of any such assertion of which such Indemnitee has knowledge. (d) Contribution. If and to the extent that the obligations of any Loan Party under this Section 8.03 are unenforceable for any reason, each Loan Party hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. (e) Obligations; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Note Obligations. The indemnity obligations of the Loan Parties contained in this Section 8.03 shall continue in full force and effect notwithstanding the full payment of all Note Obligations and notwithstanding the discharge thereof. SECTION 8.04 Enforcement. The Finance Parties agree that this Agreement may be enforced only by the action of the Collateral Agent, acting upon the instructions of the Directing Noteholders, if so required under the Collateral Agency Agreement, and that no other Finance Party shall have any right individually to seek to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Finance Parties upon the terms of this Agreement and the Collateral Agency Agreement. SECTION 8.05 Amendments and Waivers. Any provision of this Agreement may be amended, changed, discharged, terminated or waived if, but only if, such amendment or waiver is in writing and is signed by each Loan Party affected by such amendment, change, discharge, termination or waiver (it being understood that the addition or release of any Loan Party hereunder shall not constitute an amendment, change, discharge, termination or waiver affecting any Loan Party other than the Loan Party so added or released and it being further understood and agreed that any supplement to Schedules I, II, III and IV hereto shall not require the consent of any Loan Party) and by the Collateral Agent (with the consent of the Directing Noteholders or the Trustee, as the case may be, to the extent required by the Collateral Agency Agreement). 24 SECTION 8.06 Successors and Assigns. This Agreement shall be binding upon each of the parties hereto and inure to the benefit of the Collateral Agent and the Finance Parties and their respective successors and assigns. In the event of an assignment of all or any of the Note Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. No Loan Party shall assign or delegate any of its rights and duties hereunder without the prior written consent of all of the Finance Parties. SECTION 8.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTIONS OTHER THAN NEW YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTIONS. SECTION 8.08 Limitation of Law; Severability. (a) All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law which may be controlling and be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law. (b) If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Collateral Agent and the Finance Parties in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction. SECTION 8.09 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective with respect to each Loan Party when the Collateral Agent shall receive counterparts hereof executed by itself and such Loan Party. SECTION 8.10 Additional Loan Parties. It is understood and agreed that any Subsidiary of InSight that is required by any Note Document to execute a counterpart of this Agreement after the date hereof shall automatically become a Loan Party hereunder with the same force and effect as if originally named as a Loan Party hereunder by executing an instrument of accession or joinder substantially in the form of Exhibit F to the Security Agreement and delivering the same to the Collateral Agent. Concurrently with the execution and delivery of such instrument of accession or joinder, such Subsidiary shall take all such actions and deliver to the Collateral Agent all such documents and agreements as such Subsidiary would 25 have been required to deliver to the Collateral Agent on or prior to the date of this Agreement had such Subsidiary been a party hereto on the date of this Agreement. Such additional materials shall include, among other things, an opinion of counsel to the extent required under the Indenture and supplements to Schedules I, II, III and IV hereto and to Schedule 4.01 of the Security Agreement (which Schedules shall thereupon automatically be amended and supplemented to include all information contained in such supplements) such that, after giving effect to the accession or joinder of such Subsidiary, each of Schedules I, II, III and IV hereto and Schedule 4.01 to the Security Agreement is true, complete and correct in all material respects with respect to such Subsidiary as of the effective date of such accession or joinder. The execution and delivery of any such instrument of accession or joinder, and the amendment and supplementation of the Schedules hereto as provided in the immediately preceding sentence, shall not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement. SECTION 8.11 Termination; Release of Loan Parties. (a) Termination. Upon the full payment and performance of all Note Obligations (other than contingent indemnification obligations), the Security Interests shall terminate and all rights to the Collateral shall revert to the Loan Parties. In addition, at any time and from time to time prior to such termination of the Security Interests, the Collateral Agent may release any of the Collateral or subordinate its Security Interests therein to Liens in favor of certain third parties with the prior written consent of the Directing Noteholders or as provided in Article V of the Collateral Agency Agreement. Upon any such termination of the Security Interests or release of Collateral, the Collateral Agent will, upon request by and at the expense of any Loan Party (and, in the case of a release of Collateral, upon receipt of a written certification of a Responsible Officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) execute and deliver to such Loan Party such documents as such Loan Party shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may be. Any such documents shall be without recourse to or warranty by the Collateral Agent or the other Finance Parties. The Collateral Agent shall have no liability whatsoever to any other Finance Party as a result of any release of Collateral by it as permitted by this Section 8.11. Upon any release of Collateral pursuant to this Section 8.11, none of the Finance Parties shall have any continuing right or interest in such Collateral or the Proceeds thereof. Upon satisfaction and discharge of the Indenture as provided in Article 12 of the Indenture, or legal defeasance or covenant defeasance of the Indenture as provided in Article 8 of the Indenture, the Note Obligations under the Note Documents shall be deemed to be paid in full for purposes of Section 8.04, 8.05 and this Section 8.11(a). (b) Release of Loan Parties. If any part of the Collateral (x) is taken by eminent domain, condemnation or other similar circumstances or (y) is sold, transferred, otherwise disposed of or liquidated in compliance with the requirements of the Note Documents (or such sale, transfer, other disposition or liquidation has been approved in writing by the Directing Noteholders), then in each such case, such Collateral shall be automatically released from the Security Interests created hereby and the Collateral Agent, at the request and expense of the relevant Loan Party, will (upon receipt of a written certification of a Responsible Officer of 26 InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) assign, transfer and deliver to such Loan Party (without recourse and without representation or warranty) such of the Collateral as is then being (or has been) so taken, sold, transferred, disposed of or liquidated as may be in the possession or control of the Collateral Agent and has not theretofore been released pursuant to this Agreement and deliver to the applicable Loan Party all documents and other releases reasonably requested by such Loan Party (including UCC termination statements) to evidence the release of such Collateral from the Security Interests. Further, upon the release of a Guarantor from its obligations under all guaranties of the Note Obligations in accordance with the provisions thereof and the other Note Documents, such Guarantor (and the Collateral assigned by such Guarantor pursuant hereto) shall be automatically released from this Agreement and the Collateral Agent will, upon request by and at the expense of such Guarantor, execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request to evidence the release of such Guarantor and such Collateral. (c) Other Releases. If property that constitutes either (A) all or substantially all of the Collateral securing Note Obligations or (B) less than all or substantially all of the Collateral securing Note Obligations is released with the consent of the Directing Noteholders in accordance with the Collateral Agency Agreement, then in each such case, the Collateral Agent, at the request and expense of such Loan Party, will (upon receipt of a written certification of a Responsible Officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) duly release from the security interest created hereby and assign, transfer and deliver to such Loan Party (without recourse and without representation or warranty) such of the Collateral as is then being (or has been) so released as may be in the possession or control of the Collateral Agent and has not theretofore been released pursuant to this Agreement, and execute and deliver to such Loan Party such documents and instruments (including UCC termination statements) as such Loan Party may reasonably request to evidence the release of such Collateral. In addition, if any Capital Stock or other securities shall, after the Issue Date, meet the criteria of any of clauses (w), (x) or (y) of the proviso of Section 2. 01, such Capital Stock or other securities shall automatically be deemed to be released from the Collateral and the Lien of this Agreement and the Collateral Agent shall promptly after receipt of an Officer's Certificate deliver such Capital Stock or other securities then in its possession to the applicable Loan Party together with such releases and other documents as may be reasonably requested by such Loan Party. SECTION 8.12 Entire Agreement. This Agreement and the other Collateral Documents constitute the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, and any contemporaneous oral agreements and understandings relating to the subject matter hereof and thereof. [Signature Pages Follow] 27 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. LOAN PARTIES: INSIGHT HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer INSIGHT HEALTH SERVICES HOLDINGS CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer SIGNATURE PAGE - 1 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer PARKWAY IMAGING CENTER, LLC By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Manager SIGNATURE PAGE - 2 INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. MAXUM HEALTH SERVICES CORP. DIAGNOSTIC SOLUTIONS 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer SIGNATURE PAGE - 3 MAXUM HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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 ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer SIGNATURE PAGE - 4 COLLATERAL AGENT: U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent By: /s/ Jean Clarke ------------------------------------ Name: Jean Clarke Title: Assistant Vice President Attention: ----------------------------- Telephone: 212-361-6173 Telecopier: 212-361-6153 SIGNATURE PAGE - 5 EXHIBIT A to PLEDGE AGREEMENT FORM OF ISSUER CONTROL AGREEMENT CONTROL AGREEMENT dated as of [As of DATE] among [LOAN PARTY NAME], [COLLATERAL AGENT NAME], as Collateral Agent, and [ISSUER NAME]. [Loan Party Name], [Loan Party Description] (together with its successors and permitted assigns, the "LOAN PARTY"), and [Collateral Agent Name], as Collateral Agent (together with its successor or successors in such capacity, the "COLLATERAL AGENT"), propose to enter into a Pledge Agreement dated as of September 22, 2005 (as the same may be amended, supplemented or modified from time to time, the "PLEDGE AGREEMENT"), under which the Loan Party will pledge to the Collateral Agent, and will grant a security interest in favor of the Collateral Agent in, all right, title and interest of the Loan Party in, to and under any and all (i) Uncertificated Securities (as defined in the Pledge Agreement), (ii) Partnership Interests (as defined in the Pledge Agreement) and (iii) LLC Interests (as defined in the Pledge Agreement), in each case issued from time to time by [Issuer Name], [Issuer Description] (together with its successors, the "ISSUER"), whether now existing or hereafter from time to time acquired by the Loan Party (all of such Uncertificated Securities, Partnership Interests and LLC Interests being herein collectively referred to as the "PLEDGED INTERESTS") to secure the payment and performance of the Note Obligations (as defined in the Pledge Agreement). Capitalized terms defined or otherwise used in the Pledge Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein. The Loan Party desires that the Issuer enter into this Agreement to perfect the security interest of the Collateral Agent in the Pledged Interests, to vest in the Collateral Agent control of the Pledged Interests and to provide for the rights of the parties under this Control Agreement. Accordingly, the parties hereto agree as follows: 1. Control by the Collateral Agent. The Loan Party hereby irrevocably agrees that, for so long as this Control Agreement remains in effect, the Collateral Agent shall have exclusive control of the Pledged Interests. In furtherance of such agreement, the Loan Party hereby irrevocably authorizes and directs the Issuer, and the Issuer hereby agrees, (i) to comply with any and all instructions (within the meaning of Section 8-102(a)(12) of the UCC) originated by the Collateral Agent regarding any or all of the Pledged Interests without further consent by the Loan Party or any other Person, and (ii) subject to the provisions of Section 2 of this Control Agreement, (A) not to comply with any instructions regarding any or all of the Pledged Interests originated by any Person other than the Collateral Agent or a court of competent jurisdiction and (B) to distribute as instructed by the Collateral Agent all interest, redemptions, distributions, dividends and other payments from time to time paid with respect to any Pledged Interests (other than, for the avoidance of doubt, any interest, redemptions, distributions, dividends and other payments made on, consisting of or relating to Receivables or Related Assets). In the case of any conflict between any instruction originated by the Collateral Agent and any instruction originated by any other Person, the Issuer shall comply only with the instruction originated by the Collateral Agent. 2. Maintenance of Pledged Interests. In addition to, and not in lieu of, the obligation of the Issuer to honor instructions and entitlement orders as agreed in Section 1 hereof, the Issuer agrees follows: (a) Subject to the rights of the Loan Party described herein, the Issuer agrees that, from and after the date hereof, the Pledged Interests shall be under the exclusive dominion and control of the Collateral Agent. (b) Upon notice by the Collateral Agent during the continuance of an Event of Default, the Issuer shall notify the Loan Party that the Pledged Interests are subject to the sole control of the Collateral Agent and, thereafter, the Issuer will not accept any direction or instructions with respect to the Pledged Interests from any Person other than the Collateral Agent, unless otherwise ordered by a court of competent jurisdiction. (c) Until such time as the Issuer receives a notice of sole control delivered by the Collateral Agent in accordance with Section 2(b) above, the Loan Party may exercise all voting and other rights pertaining to the Pledged Interests. (d) Until such time as the Issuer receives a notice of sole control delivered by the Collateral Agent in accordance with Section 2(b) above, the Loan Party may direct the Issuer with respect to the distribution of interest, redemptions, distributions, dividends and other payments on Pledged Interests. (e) To the extent requested by the Collateral Agent, all material notices, statements of accounts, reports, prospectuses, financial statements and other communications to be sent to the Loan Party by the Issuer in respect of the Issuer will also be sent to the Collateral Agent at the following address: [COLLATERAL AGENT NOTICE ADDRESS] 3. No Liability of Issuer. This Control Agreement shall not subject the Issuer to any obligation or liability except as expressly set forth herein. In particular, the Issuer need not investigate whether the Collateral Agent is entitled under the Pledge Agreement or otherwise to give an instruction or notice of sole control. 4. Representations and Warranties of the Issuer. The Issuer hereby represents and warrants that: (a) Except for the claims and interests of the Collateral Agent and the Loan Party in the Pledged Interests, the Issuer does not know of any claim to, or interest in, any Pledged Interests. If any Person asserts any Lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) other than a Permitted Lien against any Pledged Interest, the Issuer will promptly following its knowledge thereof notify the Collateral Agent and the Loan Party thereof. (b) There are no other agreements entered into between the Issuer and the Loan Party with respect to the Pledged Interests, and the Issuer has not entered into, and until the termination of this Control Agreement will not enter into, any agreement with any other Person relating to the Pledged Interests, in each case pursuant to which it has agreed or will agree to comply with instructions originated by such other Person. (c) This Control Agreement constitutes a valid and binding agreement of the Issuer, enforceable against the Issuer in accordance with its terms, except as enforceability may be limited by applicable bankruptcy insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally. (d) The pledge by the Loan Party of, and the granting by the Loan Party of a security interest in, the Pledged Interests to the Collateral Agent does not violate the charter, by-laws, partnership agreement, operating agreement or any other agreement governing the Issuer or the Pledged Interests. (e) The Pledged Interests are fully-paid and nonassessable. 5. Notices. All notices, requests or other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (i) in the case of the Collateral Agent, at: [Collateral Agent Notice Address]; (ii) in the case of the Loan Party, at: [Loan Party Notice Address]; and (iii) in the case of the Issuer, at: [Issuer Notice Address]. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this paragraph and the appropriate answerback is received, (ii) if given by facsimile transmission, when transmitted to the facsimile number specified in this paragraph and confirmation of receipt is received, (iii) if given by mail, 48 hours after such communication is deposited, certified mail, return receipt requested, in the mails with appropriate first class postage prepaid, addressed as aforesaid or (iv) if given by other means, when delivered at the address specified in this paragraph. Rejection or refusal to accept, or the inability to deliver because of a changed address of which no notice was given shall not affect the validity of notice given in accordance with this paragraph. 6. Conflict with Other Agreements. In the event of any conflict between this Control Agreement (or any portion hereof) and any other agreement now existing or hereafter entered into, the terms of this Control Agreement shall prevail. 7. Amendments and Waivers. Any provision of this Control Agreement may be amended, changed, discharged, terminated or waived if, but only if, such amendment, change, discharge, termination or waiver is in writing and is signed by the Collateral Agent, the Issuer and the Loan Party. 8. Successors and Assigns. This Control Agreement shall be binding upon each of the parties hereto and inure to the benefit of the Collateral Agent and the other Finance Parties and their respective successors and assigns. In the event of an assignment of all or any of the Note Obligations, the rights hereunder, to the extent applicable to the Indebtedness so assigned, may be transferred with such indebtedness. 9. Governing Law. This Control Agreement shall be governed by and construed in accordance with the Laws of the State of New York. 10. Severability. (a) All rights, remedies and powers provided in this Control Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Control Agreement are intended to be subject to all applicable mandatory provisions of law which may be controlling and be limited to the extent necessary so that they will not render this Control Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law. (b) If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Collateral Agent and the Finance Parties in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction. 11. Counterparts; Effectiveness. This Control Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Control Agreement shall become effective when the Collateral Agent shall have received counterparts hereof executed by itself, the Issuer and the Loan Parties. [Signature Pages Follow] IN WITNESS WHEREOF, the parties hereto have caused this Control Agreement to be duly executed by their respective authorized officers as of the day and year first written above. LOAN PARTY: [LOAN PARTY NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- ISSUER: [ISSUER NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- [COLLATERAL AGENT NAME], as Collateral Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXHIBIT B to PLEDGE AGREEMENT ACCOUNT CONTROL AGREEMENT ACCOUNT CONTROL AGREEMENT dated as of [As of Date] among [LOAN PARTY NAME], [COLLATERAL AGENT NAME], as Collateral Agent, and [SECURITIES INTERMEDIARY NAME]. [Loan Party Name], [Loan Party Description] (together with its successors and permitted assigns, the "LOAN PARTY"), and [Collateral Agent Name], as Collateral Agent (together with its successor or successors in such capacity, the "COLLATERAL AGENT"), propose to enter into a Pledge Agreement dated as of September 22, 2005 (as the same may be amended, supplemented or modified from time to time, the "PLEDGE AGREEMENT"), under which the Loan Party will pledge to the Collateral Agent, and will grant a security interest in favor of the Collateral Agent in, all right, title and interest of the Loan Party in, to and under (i) securities account number [Account Number] (the "ACCOUNT") maintained by [Securities Intermediary Name], [Securities Intermediary Description] (together with its successors and assigns, the "SECURITIES INTERMEDIARY"), for the Loan Party, together with (ii) any and all (A) Security Entitlements (as defined in the Pledge Agreement), (B) Investment Property (as defined in the Pledge Agreement) and (C) other Financial Assets (as defined in the Pledge Agreement), in each case from time to time deposited in or credited to the Account (the Account and all of such Security Entitlements, Investment Property and Financial Assets being herein collectively referred to as the "PLEDGED INTERESTS") to secure the payment and performance of the Note Obligations (as defined in the Pledge Agreement). Capitalized terms defined or otherwise used in the Pledge Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein. The Loan Party desires that the Securities Intermediary enter into this Account Control Agreement to perfect the security interest of the Collateral Agent in the Pledged Interests, to vest in the Collateral Agent control of the Pledged Interests and to provide for the rights of the parties under this Account Control Agreement. Accordingly, the parties hereto agree as follows: 1. Control by the Collateral Agent. The Loan Party hereby irrevocably agrees that, for so long as this Account Control Agreement remains in effect, the Collateral Agent shall have control of the Account and all Pledged Interests deposited therein or credited thereto. In furtherance of such agreement, the Loan Party hereby irrevocably authorizes and directs the Securities Intermediary, and the Securities Intermediary hereby agrees, (i) to comply with any and all instructions (within the meaning of Section 8-102(a)(12) of the UCC) and entitlement orders (within the meaning of Section 8-102(a)(8) of the UCC) originated by the Collateral Agent regarding any or all of the Pledged Interests without further consent by the Loan Party or any other Person, and (ii) subject to the provisions of Section 2 of this Account Control Agreement, (A) not to comply with any instructions or entitlement orders regarding any or all of the Pledged Interests originated by any Person other than the Loan Party, Collateral Agent or a court of competent jurisdiction and (B) to deposit or retain in the Account, or to distribute as otherwise instructed by the Collateral Agent, all interest, redemptions, distributions, dividends and other payments from time to time received or paid with respect to any Pledged Interests deposited in or credited to the Account. In the case of any conflict between any instruction or entitlement order originated by the Collateral Agent and any instruction or entitlement order originated by any other Person, the Securities Intermediary shall comply only with the instruction or entitlement order originated by the Collateral Agent. 2. Maintenance of Account. In addition to, and not in lieu of, the obligation of the Securities Intermediary to honor instructions and entitlement orders as agreed in Section 1 hereof, the Securities Intermediary agrees to maintain the Account as follows: (a) Maintenance of Account Generally. Subject to the rights of the Loan Party described herein, the Securities Intermediary agrees that, from and after the date hereof, the Account shall be under the dominion and control of the Collateral Agent and all Financial Assets of the Loan Party, whether or not deposited in or credited to the Account, shall be held by the Securities Intermediary solely for the benefit of the Collateral Agent. The Securities Intermediary shall follow its usual operational procedures for the handling of any Financial Assets or other property of the Loan Party received in the Account and shall maintain a record of all Financial Assets or other property received in the Account. (b) Notice of Sole Control. Upon notice by the Collateral Agent, the Securities Intermediary shall notify the Loan Party that the Account is subject to the sole control of the Collateral Agent and, thereafter, the Securities Intermediary will not accept any direction, instructions or entitlement orders with respect to the Account or the Pledged Interests on deposit therein or credited thereto from any Person other than the Collateral Agent, unless otherwise ordered by a court of competent jurisdiction. (c) Registration of Securities, Etc. All Securities or other property underlying any Financial Assets deposited in or credited to the Account shall be registered in the name of the Securities Intermediary, endorsed to the Securities Intermediary or in blank or credited to another Securities Account or Securities Accounts maintained in the name of the Securities Intermediary, and in no case will any Financial Asset deposited in or credited to the Account be registered in the name of the Loan Party, payable to the order of the Loan Party or specially indorsed to the Loan Party, except to the extent the foregoing have been specially indorsed by the Loan Party to the Securities Intermediary or in blank. (d) Voting Rights. Until such time as the Securities Intermediary receives a notice of sole control delivered by the Collateral Agent in accordance with Section 2(b) above, the Loan Party may direct the Securities Intermediary with respect to the voting of any Pledged Interests deposited in or credited to the Account. (e) Permitted Investments. Until such time as the Securities Intermediary receives a notice of sole control delivered by the Collateral Agent in accordance with Section 2(b) above, the Loan Party may direct the Securities Intermediary with respect to the selection of Investments to be made in the Account. (f) Interest and Dividends. Until such time as the Securities Intermediary receives a notice of sole control delivered by the Collateral Agent in accordance with Section 2(b) above, the Loan Party may direct the Securities Intermediary with respect to the retention and/or distribution of interest, redemptions, distributions, dividends and other payments on Pledged Interests deposited in or credited to the Account. (g) Statements and Confirmations. Copies of all notices, statements of accounts, reports, confirmations, prospectuses, financial statements and other communications concerning the Account and/or any Pledged Interests deposited therein or credited thereto shall be sent by the Securities Intermediary to each of the Loan Party and the Collateral Agent at their respective addresses referred to in Section 7 below. (h) Tax Reporting. All items of income, gain, expense and loss recognized in the Account shall be reported to the Internal Revenue Service and all state and local taxation authorities under the name and taxpayer identification number of the Loan Party. 3. Financial Assets Election. The Securities Intermediary and each other party hereto hereby agrees that each item of property (whether Investment Property, Financial Asset, Security, Instrument or cash) deposited in or credited to the Account shall constitute a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC. 4. No Liability of Securities Intermediary. This Account Control Agreement shall not subject the Securities Intermediary to any obligation or liability except as expressly set forth herein. In particular, the Securities Intermediary need not investigate whether the Collateral Agent is entitled under the Pledge Agreement or otherwise to give an entitlement order, instructions or notice of sole control. 5. Subordination of Lien; Waiver of Set-Off. If the Securities Intermediary has or subsequently obtains by agreement, operation of law or otherwise a security interest in the Account or any Pledged Interest deposited therein or credited thereto, the Securities Intermediary hereby agrees that such security interest shall be subordinate to the Security Interest of the Collateral Agent. The Pledged Interests and other items deposited in or credited to the Account will not be subject to deduction, set-off, banker's lien or any other right in favor of any other Person other than the Collateral Agent (except that the Securities Intermediary may set off (i) all amounts due to the Securities Intermediary in respect of customary fees and expenses for the routine maintenance and operation of the Account, (ii) the face amount of any checks which have been credited to the Account but are subsequently returned unpaid because of uncollected or insufficient funds and (iii) the purchase price of any property purchased for the Account). 6. Representations and Warranties of the Securities Intermediary. The Securities Intermediary hereby represents and warrants that: (a) The Securities Intermediary has established the Account in the name of "[Collateral Agent Name], as Collateral Agent", and the Securities Intermediary shall not change the name or account number of the Account without the prior written consent of the Collateral Agent. (b) The Account is a "securities account" as defined in Section 8-501(a) of the UCC, and the Securities Intermediary is a "securities intermediary" as defined in Section 8-102(a)(14) of the UCC and is acting in such capacity in connection with the Account and this Account Control Agreement. (c) Except for the claims and interest of the Collateral Agent and of the Loan Party in the Pledged Interests, the Securities Intermediary does not know of any claim to, or interest in, the Account or in any Pledged Interest deposited therein or credited thereto. If any Person asserts any Lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Account or any Pledged Interest deposited therein or credited thereto, the Securities Intermediary will promptly notify the Collateral Agent and the Loan Party thereof. (d) There are no other agreements entered into between the Securities Intermediary and the Loan Party with respect to the Account or any Pledged Interest deposited therein or credited thereto, and the Securities Intermediary has not entered into, and until the termination of this Account Control Agreement will not enter into, any agreement with any other Person relating to the Account and/or any Pledged Interests deposited therein or credited thereto pursuant to which it has agreed or will agree to comply with instructions or entitlement orders originated by such other Person. (e) This Account Control Agreement constitutes a valid and binding agreement of the Securities Intermediary, enforceable against the Securities Intermediary in accordance with its terms. 7. Notices. All notices, requests or other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (i) in the case of the Collateral Agent, at: [Collateral Agent Notice Address]; (ii) in the case of the Loan Party, at: [Loan Party Notice Address]; and (iii) in the case of the Securities Intermediary, at: [Securities Intermediary Notice Address]. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this paragraph and the appropriate answerback is received, (ii) if given by facsimile transmission, when transmitted to the facsimile number specified in this paragraph and confirmation of receipt is received, (iii) if given by mail, 48 hours after such communication is deposited, certified mail, return receipt requested, in the mails with appropriate first class postage prepaid, addressed as aforesaid or (iv) if given by other means, when delivered at the address specified in this paragraph. Rejection or refusal to accept, or the inability to deliver because of a changed address of which no notice was given shall not affect the validity of notice given in accordance with this paragraph. 8. Indemnification of Securities Intermediary. The Loan Party agrees that (i) the Securities Intermediary is released from any and all liabilities to the Loan Party arising from the terms of this Account Control Agreement and the compliance by the Securities Intermediary with the terms hereof, except to the extent that such liabilities arise from the Securities Intermediary's bad faith, willful misconduct or gross negligence and (ii) the Loan Party, its successors and permitted assigns shall at all times indemnify the Securities Intermediary, its affiliates and the respective directors, officers, trustees, agents and employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee harmless from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by, imposed on or asserted against such Indemnitee in connection with any investigation or administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Account Control Agreement or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights hereunder, or in any way relating to or arising out of the maintenance, delivery, control, acceptance, possession, return or other disposition of the Account or any Pledged Interests on deposit therein or credited thereto, the violation of the laws of any country, state or other governmental body or unit, or any tort or contract claim; provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment or order. In performing its duties hereunder, the Securities Intermediary shall be entitled to rely upon notices and other communications it believes in good faith to have been originated by the appropriate party. 9. Conflicts with Other Agreements. In the event of any conflict between this Account Control Agreement (or any portion hereof) and any other agreement now existing or hereafter entered into, the terms of this Account Control Agreement shall prevail. 10. Amendments and Waivers. Any provision of this Account Control Agreement may be amended, modified or waived if, but only if, such amendment or waiver is in writing and is signed by the Loan Party, the Collateral Agent and the Securities Intermediary. 11. Successors and Assigns. This Account Control Agreement shall be binding upon each of the parties hereto and inure to the benefit of the Collateral Agent and the Finance Parties and their respective successors and permitted assigns. In the event of an assignment of all or any of the Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. 12. Governing Law. This Account Control Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as otherwise required by mandatory provisions of law. Notwithstanding any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary's jurisdiction and the Account (as well as the Security Entitlements related thereto) shall be governed by the laws of the State of New York. 13. Severability. (a) All rights, remedies and powers provided in this Account Control Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Account Control Agreement are intended to be subject to all applicable mandatory provisions of law which may be controlling and be limited to the extent necessary so that they will not render this Account Control Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law. (b) If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Collateral Agent and the Finance Parties in order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction. 14. Counterparts; Effectiveness. This Account Control Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Account Control Agreement shall become effective when the Collateral Agent shall receive counterparts hereof executed by itself, the Securities Intermediary and the Loan Party. 15. Termination. Except as hereinafter set forth, the obligations of the Securities Intermediary to the Collateral Agent pursuant to this Account Control Agreement shall continue in effect until the Security Interests of the Collateral Agent in the Account have been terminated pursuant to the terms of the Pledge Agreement and the Collateral Agent has notified the Securities intermediary of such termination in writing. The Collateral Agent agrees to provide such notice of termination upon the request of the Loan Party on or after the termination of the Collateral Agent's Security Interest in the Account pursuant to the terms of the Pledge Agreement. The Securities Intermediary may terminate this Account Control Agreement only upon 30 days' notice to the Collateral Agent, by canceling the Account and transferring all funds, if any, deposited in or credited to the Account to another Securities Account with another securities intermediary to be designated by the Collateral Agent. After any such termination, the Securities Intermediary shall nonetheless be obligated promptly to transfer to such other securities intermediary anything from time to time received in the Account. The termination of this Account Control Agreement shall not terminate the Account or alter the obligations of the Securities Intermediary to the Loan Party pursuant to any other agreement with respect to the Account. [Signature Pages Follow] IN WITNESS WHEREOF, the parties hereto have caused this Control Agreement to be duly executed by their respective authorized officers as of the day and year first written above. LOAN PARTY: [LOAN PARTY NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- SECURITIES INTERMEDIARY: [SECURITIES INTERMEDIARY NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- COLLATERAL AGENT; [COLLATERAL AGENT NAME], as Collateral Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EX-4.9 12 y13913exv4w9.txt EX-4.9: COLLATERAL AGENCY AGREEMENT Exhibit 4.9 EXECUTION VERSION COLLATERAL AGENCY AGREEMENT DATED AS OF SEPTEMBER 22, 2005 AMONG INSIGHT HEALTH SERVICES CORP., INSIGHT HEALTH SERVICES HOLDINGS CORP. AND THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES HEREOF U.S. BANK NATIONAL ASSOCIATION AS INDENTURE TRUSTEE AND U.S. BANK NATIONAL ASSOCIATION, AS COLLATERAL AGENT TABLE OF CONTENTS* ARTICLE I DEFINITIONS Section 1.01. Definitions.................................................. 1 Section 1.02. Rules of Interpretation...................................... 4 ARTICLE II OBLIGATIONS AND POWERS OF THE COLLATERAL AGENT Section 2.01. Appointment of the Collateral Agent.......................... 4 Section 2.02. Actions under Collateral Documents........................... 4 Section 2.03. Instructions of Directing Noteholders........................ 5 Section 2.04. Certain Actions under the Collateral Documents............... 5 Section 2.05. Other Actions by the Collateral Agent........................ 6 Section 2.06. Nature of Duties............................................. 6 Section 2.07. No Obligations Imposed....................................... 6 Section 2.08. Inspection................................................... 7 ARTICLE III ACTIONS BY NOTEHOLDERS; VOTING Section 3.01. Directing Noteholders Defined................................ 7 Section 3.02. Exceptional Decisions........................................ 7 Section 3.03. Certificates of the Trustee.................................. 8 Section 3.04. Calculations Binding......................................... 8 ARTICLE IV EXERCISE OF REMEDIES; APPLICATION OF COLLATERAL PROCEEDS Section 4.01. General Limitation on Exercise of Remedies................... 8 Section 4.02. Notices of Events of Default................................. 8 Section 4.03. Notices of Acceleration...................................... 8 - ---------- * The Table of Contents is not a part of the Collateral Agency Agreement. i Section 4.04. Remedies..................................................... 8 Section 4.05. No Inconsistent Actions...................................... 8 Section 4.06. Application of Proceeds...................................... 8 Section 4.07. Credit Bid Rights............................................ 9 ARTICLE V CERTAIN OBLIGATIONS ENFORCEABLE BY THE LOAN PARTIES Section 5.01. Release of Liens............................................. 10 Section 5.02. Delivery of Copies to the Trustee............................ 10 Section 5.03. Collateral Agent Not required to Make Filings or Recordations.............................................. 10 Section 5.04. No Actions to Address Exceptions............................. 11 ARTICLE VI THE COLLATERAL AGENT Section 6.01. No Implied Duty.............................................. 11 Section 6.02. Appointment of Co-Agents and Sub-Agents...................... 11 Section 6.03. Other Agreements............................................. 11 Section 6.04. Solicitation of Instructions................................. 11 Section 6.05. Limitation of Liability...................................... 11 Section 6.06. Documents in Satisfactory Form............................... 12 Section 6.07. Entitled to Rely............................................. 12 Section 6.08. Events of Default............................................ 12 Section 6.09. Actions by Collateral Agent.................................. 12 Section 6.10. Security or Indemnity in Favor of the Collateral Agent....... 12 Section 6.11. Resignation or Removal of the Collateral Agent............... 13 Section 6.12. Appointment of Successor Collateral Agent.................... 13 Section 6.13. Succession................................................... 13 ii ARTICLE VII MISCELLANEOUS Section 7.01. Amendment.................................................... 13 Section 7.02. Further Assurances........................................... 14 Section 7.03. Successors and Assigns....................................... 14 Section 7.04. Delay and Waiver............................................. 15 Section 7.05. Notices...................................................... 15 Section 7.06. Entire Agreement............................................. 16 Section 7.07. Compensation and Expenses.................................... 16 Section 7.08. Indemnity.................................................... 17 Section 7.09. Obligations Secured.......................................... 18 Section 7.10. Severability................................................. 18 Section 7.11. Governing Law; Submission to Jurisdiction.................... 18 Section 7.12. Waiver of Right to Trial by Jury............................. 19 Section 7.13. Section Titles............................................... 19 Section 7.14. Counterparts; Effectiveness.................................. 19 iii SCHEDULES: Schedule 2.02 - Issue Date Collateral Documents EXHIBITS: Exhibit A - Form of Security Agreement Exhibit B - Form of Pledge Agreement iv This Collateral Agency Agreement (this "AGREEMENT") is entered into as of September 22, 2005 among INSIGHT HEALTH SERVICES HOLDINGS CORP., a Delaware corporation ("HOLDINGS"), INSIGHT HEALTH SERVICES CORP. ("INSIGHT"), the other Guarantors party hereto, U.S. BANK NATIONAL ASSOCIATION, as Trustee for the Noteholders under the Indenture (as defined below) (together with its successor or successors in such capacity, the "TRUSTEE"), and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent (together with its successor or successors in such capacity, the "COLLATERAL AGENT"). InSight intends to issue Senior Secured Floating Rate Notes due 2011 (together with any Additional Notes (as defined in the Indenture) and any Exchange Notes (as defined in the Indenture), and as amended, restated, supplemented or modified from time to time, the "SENIOR SECURED NOTES") pursuant to an Indenture dated as of the date hereof (as amended, restated, supplemented or modified from time to time and including any agreement extending the maturity of, refinancing or otherwise restructuring all or any portion of the obligations of InSight under such Indenture or any successor agreement, the "INDENTURE") among InSight and U.S. Bank National Association, as Trustee (together with its successor or successors in such capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the Senior Secured Notes will be guaranteed by Holdings, each of the parties listed on the signature pages hereto as "Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic subsidiaries of Holdings (collectively, the "SUBSIDIARY GUARANTORS") and together with Holdings, "GUARANTORS"). Holdings, InSight, and the Subsidiary Guarantors are herein referred to individually as a "LOAN PARTY" and, collectively, as the "LOAN PARTIES." The Indenture requires the Loan Parties to secure their obligations under the Senior Secured Notes through the grant of a first lien security interest in the Collateral (subject to Permitted Liens). The Indenture further requires that such security interests in the Collateral be granted pursuant to security documents to a collateral agent acting for the benefit of the holders from time to time of the Senior Secured Notes. The Loan Parties and the Collateral Agent will enter into a Security Agreement, a Pledge Agreement and certain other Collateral Documents referred to therein securing the Senior Secured Notes and all related obligations. This Agreement sets forth the terms on which the Collateral Agent has undertaken to accept, hold and enforce such security interests and all related rights, interests and powers as agent for, and for the benefit exclusively of, the present and future holders of the Senior Secured Notes. Accordingly, in consideration of the mutual agreements set forth herein, the Trustee and the Collateral Agent hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. Capitalized terms defined in the introductory paragraphs hereof have the respective meanings provided for therein. Unless otherwise defined herein, capitalized terms shall have the meaning set forth in the Indenture. In addition, as used in this Agreement, the following terms have the following meanings: "ACCOUNT CONTROL AGREEMENT" has the meaning set forth in the Security Agreement. "AFFILIATE" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "AGREEMENT" means this Collateral Agency Agreement, as amended, modified or supplemented from time to time. "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day which banking institutions in New York, New York or San Francisco, California or at a place of payment are authorized by law, regulation or executive order to remain closed. "COLLATERAL" means all of the property which is subject or is purported to be subject to the Liens granted by the Collateral Documents. "COLLATERAL AGENT" means U.S. Bank National Association, as collateral agent, and its successor or successors in such capacity. "COLLATERAL DOCUMENTS" means, collectively, this Agreement, the Security Agreement, the Pledge Agreement, the Account Control Agreements, each Perfection Certificate (as defined in the Security Agreement) and all other pledges, agreements, financing statements, filings or other documents that grant or evidence the Lien in the Collateral in favor of the Collateral Agent for the benefit of the Finance Parties, as they may be amended from time to time. "CONTROL" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ability to exercise voting power, by contract or otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto. "DEBTOR RELIEF LAWS" means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law or foreign law relating to bankruptcy, insolvency, receivership, winding up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law. "DIRECTING NOTEHOLDERS" means at any time Noteholders holding more than 50% of the then aggregate outstanding principal amount of the Senior Secured Notes (including, without limitation, Noteholders providing consents obtained in connection with a tender offer or exchange offer for, or purchase of, Senior Secured Notes). "EVENT OF DEFAULT" means an "EVENT OF DEFAULT" as defined in the Indenture. "EXCEPTIONAL DECISIONS" has the meaning set forth in Section 3.02. 2 "FINANCE PARTY" means any of the Collateral Agent, the Trustee, any Noteholder, and any Indemnitee (as defined in the Security Agreement) and "FINANCE PARTIES" means two or more of them collectively. "INSOLVENCY PROCEEDING" means (i) any voluntary or involuntary case or proceeding under any Debtor Relief Law with respect to any Loan Party, (ii) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, with respect to any Loan Party or with respect to any of their respective assets, (iii) any liquidation, dissolution, reorganization or winding up of any Loan Party, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy and (iv) any assignment for the benefit of Noteholders or any other marshaling of assets and liabilities of any Loan Party. "NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the Registration Rights Agreement related thereto and the Collateral Documents, in each case including all exhibits and schedules thereto, and all other agreements, documents and instruments relating to the Senior Secured Notes, in each case as the same may be amended, modified or supplemented from time to time in accordance with the provisions thereof. "NOTEHOLDERS" means the holders from time to time of the Senior Secured Notes. "OFFICER'S CERTIFICATE" has the meaning set forth in Section 5.01. "PLEDGE AGREEMENT" means the Pledge Agreement, substantially in the form of Exhibit B hereto, dated as of the date hereof among the Loan Parties and the Collateral Agent, as the same may be amended, modified or supplemented from time to time. "PROCEEDS" has the meaning specified for such term in the Uniform Commercial Code as in effect from time to time in the State of New York. "RESPONSIBLE OFFICER" means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer or secretary or assistant secretary of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. "SECURITY AGREEMENT" means the Security Agreement, substantially in the form of Exhibit A hereto, dated as of the date hereof among the Loan Parties and the Collateral Agent, as the same may be amended, modified or supplemented from time to time. "SUBSIDIARY" has the meaning set forth in the Indenture. "TRUST INDENTURE ACT" means Trust Indenture Act of 1939, as amended, and rules and regulations promulgated thereunder and interpretations thereof. 3 "UNIFORM COMMERCIAL CODE" or "UCC" has the meaning specified in the Security Agreement. Section 1.02. Rules of Interpretation. Terms defined in the introductory paragraphs hereof and the definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Wherever the context may require, any pronouns shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless otherwise stated herein or the context shall otherwise require. Unless otherwise expressly provided herein, the word "day" means a calendar day. ARTICLE II OBLIGATIONS AND POWERS OF THE COLLATERAL AGENT Section 2.01. Appointment of the Collateral Agent. The Collateral Agent is hereby appointed by the Trustee as collateral agent hereunder, and the Collateral Agent hereby agrees to act as Collateral Agent pursuant to the terms of this Agreement. The Trustee on behalf of itself and on behalf of the Noteholders directs the Collateral Agent to enter into the Collateral Documents listed on Schedule 2.02. Section 2.02. Actions under Collateral Documents. The Collateral Agent hereby irrevocably undertakes and agrees, on the terms and conditions set forth in this Agreement, to act as agent for the benefit exclusively of the present and future Noteholders and any other holders from time to time of the Note Obligations and in such capacity to accept, hold, administer and enforce all collateral security at any time delivered to it by any Loan Party as security for the Note Obligations and all rights, interests and powers at any time granted or enforceable in respect of such collateral security under the Collateral Documents listed on Schedule 2.02 and, subject to Section 7.01(b), all other Collateral Documents, or applicable law. Without limiting the generality of the foregoing, the Collateral Agent agrees that it will, as agent for the benefit exclusively of the present and future Noteholders and the other holders from time to time of the Note Obligations, but subject to the terms and conditions hereof: (i) enter into the Collateral Documents, receive, hold, administer and enforce the security interests granted to it thereunder, perform its obligations thereunder and protect, exercise and enforce the interests, rights, powers and remedies granted or available to it thereunder or pursuant thereto or in connection therewith; (ii) take all lawful and commercially reasonable actions that it may deem necessary or advisable to protect or preserve its interest in the Collateral; (iii) maintain control over the Collateral Accounts, if any, established by any of the Loan Parties, pursuant to the Account Control Agreements related thereto; (iv) deliver and receive notices pursuant to the Collateral Documents; 4 (v) sell, assign, collect, assemble, foreclose on, institute legal proceedings with respect to, or otherwise exercise or enforce the rights and remedies of a secured party (including an insurance beneficiary or a loss payee) with respect to the Collateral and its other interests, rights, powers and remedies; (vi) remit to the Trustee, as required by Section 4.07 all cash proceeds received by the Collateral Agent from the collection, foreclosure or enforcement of its interest in the Collateral or any of its other interests, rights, powers or remedies; (vii) subject to Section 3.02 and Section 7.01(b), amend the Collateral Documents as from time to time authorized and directed by the Directing Noteholders, and amend the Collateral Documents as required by Section 3.02(d); and (viii) release any Lien granted to it by any Collateral Document upon any Collateral if and as required by Section 2.04 and Section 5.01. The Collateral Agent is irrevocably authorized and empowered to enter into and perform its obligations under, and to protect, perfect, exercise and enforce its interest, rights, powers and remedies, in each case under and pursuant to the Collateral Documents and applicable law and to act as set forth in this Article II or as requested in any lawful directions given to it from time to time in respect of any matter by the Directing Noteholders. The Loan Parties acknowledge and consent to the undertakings of the Collateral Agent set forth in this Article II, and agree to each of the other provisions of this Agreement applicable to them. Section 2.03. Instructions of Directing Noteholders. Subject to the terms and conditions of this Agreement, the Collateral Agent shall follow the instructions of the Directing Noteholders from time to time conveyed to it by the Trustee, subject to and consistent with the Collateral Agent's rights and obligations expressed in the Collateral Documents and in accordance with applicable law. No direction given to the Collateral Agent (whether given by the Directing Noteholders through the Trustee, by the Trustee, or otherwise by any Person) which imposes, or purports to impose, upon the Collateral Agent any obligation not set forth in this Agreement or any other Collateral Document shall be binding upon the Collateral Agent unless the Collateral Agent elects, at its sole option, to accept direction (i) pursuant to the instructions of the Directing Noteholders or (ii) from the Trustee. No instruction of the Directing Noteholders shall be effective to impose any obligation or liability upon the Trustee, unless it is a signatory party thereto. Section 2.04. Certain Actions under the Collateral Documents. Without limiting the provisions of Section 2.02, the Collateral Agent is hereby authorized and directed, and agrees for the benefit of the Loan Parties, without notice to or consent from any Noteholder: (i) to release (upon receipt of a written certification of a responsible officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) one or more Loan Parties from their obligations under, and the Liens of, the Collateral Documents, and to release the Collateral or any portion thereof, as required by Section 7.11 of the Security Agreement, Section 8.11 of the Pledge Agreement or any other pertinent provision of any Note 5 Document; (ii) to receive or execute perfection certificates, control agreements and other Loan Party deliverables as contemplated by the Collateral Documents; (iii) to release funds deposited in the Collateral Accounts established and maintained under the Security Agreement as required by Section 2.06 of the Security Agreement; (iv) to make available to each Loan Party any Instrument or Certificated Security pledged by such Loan Party for the purposes set forth in, and as required by, Section 4.01 of the Pledge Agreement; and (v) to deliver such instruments as may be required from time to time to enable each Loan Party to exercise the voting and other rights which it is entitled to exercise under Section 5.01(a)(i) of the Pledge Agreement. Section 2.05. Other Actions by the Collateral Agent. The Collateral Agent shall provide the Trustee with a copy of all notices received from the Loan Parties under the Collateral Documents. The Collateral Agent shall timely file Uniform Commercial Code continuation statements to continue the perfection of the security interests under the Collateral Documents. During any period when the Collateral Agent is exercising remedies against any Loan Party or the Collateral, the Collateral Agent shall furnish the Trustee with reports of its activities in connection therewith upon the occurrence of significant events and upon the request of the Trustee. Section 2.06. Nature of Duties. Except to the extent otherwise provided in Section 2.05, the duties of the Collateral Agent hereunder and under the Collateral Documents shall be ministerial and administrative in nature. The Collateral Agent shall not have by reason of this Agreement or the Collateral Documents a fiduciary or trust relationship with respect to the Trustee, any Noteholder or any other holder from time to time of Note Obligations, and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to imply such obligations or impose, upon the Collateral Agent, any obligations whatsoever arising under this Agreement, the Indenture or any Collateral Document, except as expressly set forth herein or in the Collateral Documents. For the limited purpose of holding and distributing or applying Proceeds of Collateral and Cash Equivalents, the Collateral Agent shall hold such Proceeds and Cash Equivalents in trust for the benefit of the Trustee in accordance with its rights provided for herein. Section 2.07. No Obligations Imposed. None of the Trustee, any Noteholder or any other holder of Note Obligations shall have: (i) except in connection with the instructions of the Directing Noteholders to which it is a signatory party, any responsibility or duty whatsoever in respect of the Collateral or the Collateral Documents or any other interest, right, power or remedy granted to or enforceable by the Collateral Agent, it being understood and agreed by the Collateral Agent and by each Loan Party that, except in connection with the instructions of the Directing Noteholders to which it is a signatory party, only the Collateral Agent shall be bound by, or liable for breach of, the obligations of the Collateral Agent set forth in or arising under the Collateral Documents, including all obligations imposed by law upon a secured party relating the protection, maintenance, release or enforcement of any security interest in any Collateral or any other interest, right, power or remedy of the Collateral Agent; or (ii) except in connection with the instructions of the Directing Noteholders to which it is a signatory party, any liability whatsoever for any act or omission of the Collateral Agent, whether or not constituting a breach of its undertaking and obligations under this Agreement or otherwise constituting wrongful conduct. 6 Section 2.08. Inspection. The Collateral Agent will permit the Trustee or any Noteholder at any time or from time to time, during normal business hours, to inspect and copy any and all Collateral Documents and other documents, notices, certificates, instructions or communications received by the Collateral Agent in its capacity as such. ARTICLE III ACTIONS BY NOTEHOLDERS; VOTING Section 3.01. Directing Noteholders Defined. Except with respect to Exceptional Decisions as defined in Section 3.02, all instructions to the Collateral Agent (including, without limitation, delivery of a notice of foreclosure, foreclosure and appointment of a receiver) shall be given by the Directing Noteholders to the Collateral Agent through the Trustee. Section 3.02. Exceptional Decisions. Certain circumstances set forth in Section 3.02(b) and (c) shall call for "EXCEPTIONAL DECISIONS", as such term is used herein, and instruction to the Collateral Agent in connection with such circumstances shall be effected as provided below: (a) Amendment of Collateral Documents. The Collateral Agent shall not agree to any amendment of the Collateral Documents except upon instructions given by the Directing Noteholders in accordance with Section 3.01; provided that no agreement of any Noteholder shall be required for (A) any amendment, modification or supplement to the Collateral Documents (1) to cure any ambiguity, typographical error, defect or inconsistency if such amendment, modification or supplement does not adversely affect the rights of the Noteholders or (2) pursuant to Section 9.01 of the Indenture or (B) such amendments to financing statements or other Collateral Documents as stated in the opinion provided in Section 2.02(iii); and provided, further, that any amendment to the provisions of the Collateral Documents that releases any Collateral shall be governed by Section 3.02(c). (b) Amendment of this Agreement. The Collateral Agent shall not agree to any amendment of this Agreement except upon instructions given by the Directing Noteholders in accordance with Section 3.01; provided that no agreement of any Noteholder shall be required for any amendment, modification or supplement to this Agreement (x) to cure any ambiguity, typographical error, defect or inconsistency if such amendment, modification or supplement does not adversely affect the rights of the Noteholders or (y) pursuant to Section 9.01 of the Indenture; and provided, further, that any amendment to the definition of "DIRECTING NOTEHOLDERS" and any amendment to Sections 3.01, 3.02, 4.06, 4.07 and 7.01 will require notice to the Collateral Agent by the Trustee of the concurrence of all of the Noteholders. (c) Release of All or Substantially All Collateral. The Collateral Agent shall not release all or substantially all Collateral from the lien and security interests created by the Collateral Documents except as expressly provided therein (including, without limitation, Section 7.11 of the Security Agreement and Section 8.11 of the Pledge Agreement) or in Article V hereof or except upon notice to the Collateral Agent by the Trustee of the concurrence of all of the Noteholders. 7 (d) Amendments to Other Collateral Documents. Subject to Section 7.01(b), The Collateral Agent agrees for the benefit of the Loan Parties that it shall execute any amendment, modification or supplement to any Collateral Document approved in accordance with Article IX of the Indenture. Section 3.03. Certificates of the Trustee. Concurrently with any calculation of Directing Noteholders, the Trustee shall certify to the Collateral Agent the votes cast by the Noteholders. Section 3.04. Calculations Binding. All calculations regarding satisfaction of compliance with the definition of the Directing Noteholders shall be made by the Collateral Agent upon receipt of and in exclusive reliance upon the certificates described in Section 3.03, and shall be binding upon the Noteholders. ARTICLE IV EXERCISE OF REMEDIES; APPLICATION OF COLLATERAL PROCEEDS Section 4.01. General Limitation on Exercise of Remedies. The Trustee shall not be entitled to exercise any remedies directly under the Collateral Documents, but only by providing instructions to the Collateral Agent in accordance with this Agreement. Section 4.02. Notices of Events of Default. The Trustee shall notify the Collateral Agent if an Event of Default has occurred under (and as defined in) the Indenture of which it has actual knowledge and of the forbearance, waiver or other termination, if any, of such Event of Default. Section 4.03. Notices of Acceleration. If any Note Obligations are accelerated, the Trustee shall notify the Collateral Agent of such acceleration, certifying: (i) that such acceleration has occurred and (ii) the principal, interest, fees and other amounts owed by the Loan Parties (such certification being herein referred to as a "NOTICE OF ACCELERATION"). Section 4.04. Remedies. Upon receipt by the Collateral Agent of a Notice of Acceleration from the Trustee or upon receipt by the Collateral Agent of notice of the commencement by or against one or more Loan Parties of an Insolvency Proceeding and subject to the provisions of this Agreement, including Section 6.10, the Collateral Agent shall retain legal counsel acceptable to the Trustee and shall exercise such remedies under the Collateral Documents as it shall be instructed by the Directing Noteholders. Section 4.05. No Inconsistent Actions. The Trustee agrees to take no action in an Insolvency Proceeding with respect to any Loan Party or the Collateral which is inconsistent with the terms of this Agreement. Section 4.06. Application of Proceeds. In the event of the realization of Proceeds of any collection or disposition of Collateral pursuant to the exercise of remedies under the Collateral Documents, the Collateral Agent shall distribute such Proceeds to the specified Persons in the following order of priority: 8 FIRST, to the payment of advances made and liabilities incurred by the Collateral Agent in order to protect the Liens granted by the Collateral Documents or the Collateral, with interest thereon at the rate that would then be applicable to the Senior Secured Notes, and the payment of all reasonable costs and expenses incurred by the Collateral Agent or Trustee in connection with the preservation, collection, foreclosure or enforcement of the Liens granted by the Collateral Documents or any interest, right, power or remedy of the Collateral Agent or in connection with the collection or enforcement of any of the Loan Obligations in any Insolvency Proceeding, including all reasonable fees and disbursements of attorneys, accountants, consultants, appraisers and other professionals engaged by the Collateral Agent or the Trustee and reasonable compensation of the Collateral Agent or the Trustee for services rendered in connection therewith; SECOND, to the payment of accrued and unpaid interest on the Senior Secured Notes; THIRD, to the payment of any due and unpaid premium, if any, in respect of the prepayment or payment of the Senior Secured Notes; FOURTH, to the payment of the due and unpaid principal of the Senior Secured Notes; FIFTH, to any remaining unpaid amounts of the Note Obligations; and SIXTH, to other Persons as their interests may appear or as instructed by a court of competent jurisdiction. No party hereto shall be entitled to a distribution on any lower priority pursuant to clauses FIRST through SIXTH above unless and until all higher priorities have been paid in full. Section 4.07. Credit Bid Rights. (a) If, during the continuance of an Event of Default, the Collateral Agent forecloses any of its Liens upon any Collateral, whether by public sale or private sale or judicial foreclosure or otherwise, and if directed by the Directing Noteholders to exercise its credit bid rights as provided in this Section 4.07, the Collateral Agent, acting for and on behalf of the holders of Note Obligations, shall be entitled (to the fullest extent it may lawfully do so) to use and apply then due and payable Note Obligations as a credit on account of the purchase price payable by the Collateral Agent for any Collateral sold to the Collateral Agent at the corresponding foreclosure sale for all purposes related to bidding and making settlement or payment of the purchase price at such foreclosure sale. (b) If, in connection with or, during the continuance of an Event of Default, in anticipation of any foreclosure of any of the Collateral Agent's Liens upon any Collateral, Senior Secured Notes representing at least a majority in outstanding principal amount of Senior Secured Notes then outstanding are transferred to and registered in the name of a single transferee for purposes of facilitating or executing a bid for such Collateral at the corresponding foreclosure sale, such transferee shall be entitled (to the fullest extent it may lawfully do so) to use and apply 9 all then due and payable Note Obligations outstanding to such transferee as a credit on account of the purchase price payable by such transferee for any Collateral sold to such transferee at such foreclosure sale, for all purposes related to bidding and making settlement or payment of the purchase price at such foreclosure sale, but only if all Noteholders consent thereto or if each Noteholder has been offered the opportunity to transfer to such transferee any or all of the Senior Secured Notes outstanding held by such Noteholder on terms equivalent to the most favorable terms offered by such transferee to any Noteholder for or in connection with any transfer of Senior Secured Notes to such transferee. (c) Each of the Loan Parties hereby grants, confirms and agrees to cooperate with and permit the exercise and enforcement of the rights set forth in this Section 4.07. ARTICLE V CERTAIN OBLIGATIONS ENFORCEABLE BY THE LOAN PARTIES Section 5.01. Release of Liens. (a) The Collateral Agent agrees for the benefit of the Loan Parties that if the Collateral Agent at any time receives a written certification signed by a Responsible Officer (an "OFFICER'S CERTIFICATE") stating that the Collateral Agent is permitted or required (x) by the Indenture, (y) by Section 7.11 of the Security Agreement or Section 8.11 of the Pledge Agreement or (z) pursuant to the instructions of the Directing Noteholders, to release any property of any Loan Party described in such Officer's Certificate from any Lien granted by a Collateral Document specified in such Officer's Certificate, accompanied by the proposed document or instrument releasing such Lien as to such property, then, subject to Article VI, the Collateral Agent will (upon receipt of a written certification of a Responsible Officer of InSight that the Trustee has received all documents, if any, required by the Trust Indenture Act and the Indenture) within three Business Days thereafter, release such Lien upon such property by executing (and if necessary acknowledging in recordable form) such proposed document or instrument reasonably requested by the Loan Parties and delivering it to the applicable Loan Party requesting the same. Any such document shall be without recourse to or warranty by the Collateral Agent or the other Finance Parties. (b) Any Collateral that is released automatically pursuant to Section 7.11 of the Security Agreement, Section 8.11 of the Pledge Agreement or any other Collateral Document shall be deemed to be automatically released under this Agreement without any action on the part of the Collateral Agent. Section 5.02. Delivery of Copies to the Trustee. The applicable Loan Party shall deliver to the Trustee requesting the same a copy of each Officer's Certificate delivered to the Collateral Agent pursuant to Section 5.01, together with copies of all documents delivered to the Collateral Agent with such Officer's Certificate. The Trustee shall not be obligated to take notice thereof or to act thereon. Section 5.03. Collateral Agent Not required to Make Filings or Recordations. The Collateral Agent is not required to file, register or record any instrument releasing or subordinating its security interest in any Collateral. 10 Section 5.04. No Actions to Address Exceptions. Each Noteholder acknowledges that actions will not be taken to address the exceptions noted in Section 3.04 of the Security Agreement and that the Collateral Agent may not have a perfected security interest with respect to the matters specified therein. ARTICLE VI THE COLLATERAL AGENT Section 6.01. No Implied Duty. The Collateral Agent shall not have any duties or responsibilities except those expressly assumed by it in this Agreement and the other Collateral Documents and shall not be required to take any action which is contrary to applicable law or any provision of this Agreement or the other Collateral Documents. Where the Collateral Agent is permitted but not required to take any action pursuant to any Collateral Document, the Collateral Agent may take any such action but shall have no obligation to take any such action without the direction of the Directing Noteholders and the Collateral Agent shall not be liable to any party for not taking such action if the Directing Noteholders have not directed the Collateral Agent to take such action. The Collateral Agent makes no representation as to the existence, validity, value, genuineness, perfection, priority or the collectibility of any security or other document or other instrument held by or delivered to the Collateral Agent. The Collateral Agent shall not be called upon to advise any party as to the wisdom in taking or refraining to take any action with respect to the Collateral. Section 6.02. Appointment of Co-Agents and Sub-Agents. The Collateral Agent may employ agents and appoint sub-agents or co-collateral agents as it determines appropriate in the performance of its duties hereunder. The Collateral Agent will exercise reasonable care in selecting any such agent, sub-agent or co-collateral agent but shall not otherwise be responsible or liable for any act or omission of any such agent, sub-agent or co-collateral agent. Section 6.03. Other Agreements. The Collateral Agent has accepted and is bound by the Collateral Documents delivered to it as of the date of this Agreement and listed on Schedule 2.02 and, subject to Section 7.01(b) and this Article VI, shall accept and be bound by all Collateral Documents delivered to it at any time after the date of this Agreement. The Collateral Agent shall not otherwise be bound by, or obligated to take cognizance of the provisions of, any agreement to which it is not a party, including the Indenture. The Collateral Agent shall not be responsible for compliance with the terms of any Note Document by any Loan Party and shall have no duty to monitor any such compliance. Section 6.04. Solicitation of Instructions. The Collateral Agent may at any time solicit confirmatory instructions, including from the Directing Noteholders or an order of a court of competent jurisdiction, as to any action which it may be requested or required to take, or which it may propose to take, in the performance of any of its obligations under this Agreement. Section 6.05. Limitation of Liability. The Collateral Agent shall not be responsible or liable for any action taken or omitted to be taken by it hereunder or under any Collateral Document, except for its own gross negligence or willful misconduct. 11 Section 6.06. Documents in Satisfactory Form. The Collateral Agent shall be entitled to require that all agreements, certificates, opinions, instruments and other documents at any time submitted to it, including those expressly provided for in this Agreement, be delivered to it in a form and upon substantive provisions reasonably satisfactory to it. Section 6.07. Entitled to Rely. The Collateral Agent may rely conclusively upon any certificate, notice or other document (including any electronic transmission) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons and need not investigate any fact or matter stated in any such document. The Collateral Agent may seek and rely upon any judicial order or judgment, upon any advice, opinion or statement of legal counsel, independent consultants and other experts selected by it in good faith and upon any certification, instruction, notice or other writing delivered to it by any Loan Party in compliance with the provisions of this Agreement or delivered to it by the Trustee as to the Noteholders whose action or consent is required for an instruction of Directing Noteholders, without being required to determine the authenticity thereof or the correctness of any fact stated therein or the propriety or validity of service thereof. The Collateral Agent may act in reliance upon any instrument comporting with the provisions of this Agreement or any signature reasonably believed by it to be genuine and may assume that any Person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so. To the extent an officers' certificate or an opinion of counsel is required or permitted under this Agreement to be delivered to the Collateral Agent in respect of any matter, the Collateral Agent may rely conclusively on such officers' certificate or opinion of counsel as to such matter. The Collateral Agent may request an opinion of counsel, a certificate of a Responsible Officer, or both, at any time when it is required or requested to take any action (other than pursuant to Sections 2.04, 3,02, 5.01, and 6.03 hereof or any similar provision of any Collateral Document) hereunder or under any Collateral Document stating that such action is permitted or authorized pursuant to the terms hereof and of the Note Documents and that all conditions precedent to the taking of such action have been complied with and the Collateral Agent may rely conclusively on such officer's certificate or opinion of counsel with respect thereto. Section 6.08. Events of Default. The Collateral Agent shall not be required to inquire as to the occurrence or absence of any Event of Default under the Indenture or any other Note Document and shall not be affected by or required to act upon any notice or knowledge as to the occurrence of any Event of Default unless and until it receives a notice pursuant to Section 4.02. Section 6.09. Actions by Collateral Agent. As to any matter not expressly provided for by this Agreement, the Collateral Agent shall act or refrain from acting as directed by the Directing Noteholders and shall be fully protected in doing so. Section 6.10. Security or Indemnity in Favor of the Collateral Agent. The Collateral Agent shall not be required to advance or expend any funds or otherwise incur any financial liability in the performance of its duties or the exercise of its powers or rights hereunder unless it has been provided with security or indemnity which it, in its discretion, deems sufficient against any and all liability or expense which may be incurred by it by reason of taking or continuing to take such action. The Loan Parties hereby jointly and severally agree to provide 12 such security or indemnity to the Collateral Agent promptly upon request by the Collateral Agent therefor. Section 6.11. Resignation or Removal of the Collateral Agent. Subject to the appointment of a successor Collateral Agent as provided in Section 6.12 and the acceptance of such appointment by the successor Collateral Agent, (i) the Collateral Agent may resign at any time by giving not less than 45 days' notice of resignation to the Trustee and InSight, and (ii) the Collateral Agent may be removed at any time, with or without cause, pursuant to the instructions of the Directing Noteholders. Section 6.12. Appointment of Successor Collateral Agent. Upon any such resignation or removal, a successor Collateral Agent may be appointed by the Trustee or by the instructions of the Directing Noteholders with the consent of InSight. If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment within 45 days after the predecessor Collateral Agent gave notice of resignation or was removed, the retiring Collateral Agent may appoint a successor Collateral Agent, or petition a court of competent jurisdiction for appointment of a successor Collateral Agent, which shall be a bank or trust company (i) authorized to exercise corporate trust powers, (ii) acceptable to the Trustee, (iii) having a combined capital and surplus of at least $50,000,000 and (iv) maintaining an office in New York, New York. Section 6.13. Succession. When the Person so appointed as successor Collateral Agent accepts such appointment: (i) such Person shall succeed to and become vested with all the rights, powers, privileges and duties of the predecessor Collateral Agent, and the predecessor Collateral Agent shall be discharged from its duties and obligations hereunder, and (ii) the predecessor Collateral Agent, upon payment of all amounts owed to it, shall promptly transfer all Collateral within its possession or control to the possession or control of the successor Collateral Agent and shall execute and deliver such notices, instructions and assignments as may be necessary or desirable or reasonably requested by the successor Collateral Agent to transfer to the successor Collateral Agent all Liens, interests, rights, powers and remedies of the predecessor Collateral Agent in respect of the Collateral or under the Collateral Documents. Thereafter the predecessor Collateral Agent shall remain entitled to enforce the immunities granted to it in this Article VI. ARTICLE VII MISCELLANEOUS Section 7.01. Amendment. (a) This Agreement may be amended or supplemented from time to time by the written agreement of the Loan Parties and the Collateral Agent, acting pursuant to the instructions of the Directing Noteholders if so required pursuant to Article III and in compliance with Section 3.02. 13 (b) Notwithstanding anything contained herein or in any Collateral Document, any (x) Collateral Document entered into after the Issue Date that is not in the form attached to any Collateral Document entered into on the Issue Date or (y) amendment or supplement to any Collateral Document that, in each case, imposes any obligation upon the Collateral Agent not contemplated by this Agreement or the other Collateral Documents in effect on the Issue Date or adversely affects the rights of the Collateral Agent in its individual capacity will become effective only with the consent of the Collateral Agent in its individual capacity. The Collateral Agent shall promptly receive copies of all Collateral Documents executed after the Issue Date. Section 7.02. Further Assurances. (a) At any time or from time to time, each Loan Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as may be necessary or appropriate, and such other instruments, acts or things as the Collateral Agent may reasonably request, in order to assure and confirm that each Subsidiary required by the Indenture to guarantee payment of the Note Obligations has duly guaranteed payment of all the Note Obligations and that the Collateral Agent holds, for the exclusive benefit of all present and future holders of Note Obligations, duly created, enforceable and perfected first priority Liens (subject only to Permitted Liens (as defined in the Security Agreement)) upon all interests in Collateral at any time owned or acquired by the Loan Parties or any of such Subsidiary or as the Collateral Agent or the Trustee otherwise may reasonably request in order to carry out and give full effect to the intents and purposes of the Note Documents. (b) Upon request of the Collateral Agent at any time and from time to time, each of the Loan Parties will, and will cause each of its Subsidiaries to, promptly execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents and take such other actions as shall be required or which the Collateral Agent may reasonably request to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, as contemplated by the Indenture and the Collateral Documents, upon the Collateral Agent for the exclusive benefit of the holders of the Note Obligations. If any Loan Party or such Subsidiary fails to do so, the Collateral Agent is hereby irrevocably authorized and empowered, with full power of substitution, to execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents and, subject to the provisions of the Collateral Documents, take such other actions in the name, place and stead of the Loan Parties or such Subsidiary, but the Collateral Agent will have no obligation to do so and no liability for any action taken or omitted by it in good faith in connection therewith. Section 7.03. Successors and Assigns. (a) This Agreement is legally binding upon and enforceable against the Collateral Agent. Except as provided in Section 6.02 or in any Collateral Document, the Person acting as Collateral Agent may not, in its individual capacity, delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights shall be void. All obligations of the Collateral Agent hereunder shall inure to the benefit of, and be enforceable by, the Trustee and each present and future holder of Note Obligations, each of whom shall be entitled to enforce this Agreement as a third party beneficiary hereof, and all of their respective successors and assigns. 14 (b) This Agreement is further binding upon each of the Loan Parties and their respective successors. No Loan Party may delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights shall be void. (c) The obligations of the Collateral Agent set forth in Sections 5.01 and 5.02 of this Agreement shall also be enforceable by the Loan Parties directly affected by any breach thereof and their respective successors and assigns. Section 7.04. Delay and Waiver. No failure to exercise, no course of dealing with respect to the exercise of, and no delay in exercising, any right, power or remedy arising under this Agreement or any of the other Collateral Documents shall impair any such right, power or remedy or operate as a waiver thereof. No single or partial exercise of any such right, power or remedy shall preclude any other or future exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. Section 7.05. Notices. Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given may be given to the following addresses: If to the Collateral Agent: If to the Trustee: If to any Loan Party: Each notice hereunder shall be in writing and may be personally served or sent by facsimile or United States mail or courier service and shall be deemed to have been given when 15 delivered in person or by courier service and signed for against receipt thereof, upon receipt of facsimile, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided, no notice to the Collateral Agent or the Trustee shall be effective unless and until received by its officer responsible for the administration of the transaction contemplated hereby. Each party may change its address for notice hereunder to any other location within the continental United States by giving written notice thereof to the other parties as set forth in this Section 7.05. Section 7.06. Entire Agreement. This Agreement states the complete agreement of the parties relating to the undertaking of the Collateral Agent set forth herein and supersedes all oral negotiations and prior writings in respect of such undertaking. Section 7.07. Compensation and Expenses. Each of the Loan Parties jointly and severally agrees to pay, promptly within 30 days following demand: (i) all reasonable out-of-pocket costs and expenses incurred in the preparation, execution, delivery, filing, recordation, administration or enforcement of this Agreement or any other Collateral Document or any consent, amendment, waiver or other modification relating thereto; (ii) all reasonable out-of-pocket fees, expenses and disbursements of legal counsel and any auditors, accountants, consultants or appraisers or other professional advisors and agents engaged by the Collateral Agent in connection with the negotiation, preparation, closing, administration, performance or enforcement of this Agreement and the other Collateral Documents or any consent, amendment waiver or other modification relating thereto and any other document or matter requested by one or more Loan Parties; (iii) all reasonable out-of-pocket costs and expenses of creating, perfecting, or releasing the Collateral Agent's security interests in the Collateral, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums; (iv) all reasonable out-of-pocket costs of any opinion of counsel required hereby to be delivered to the Collateral Agent or requested by the Collateral Agent in connection herewith; (v) all other reasonable out-of-pocket costs and expenses incurred by the Collateral Agent in connection with the negotiation, preparation and execution of the Collateral Documents and any consents, amendments, waivers or other modifications thereto and the transactions contemplated thereby or the exercise of its rights or performance of its obligations by the Collateral Agent thereunder; and (vi) all costs and expenses incurred by the Collateral Agent in connection with the preservation, collection, foreclosure or enforcement of the Liens granted by the Collateral Documents or any interest, right, power or remedy of the Collateral Agent or in connection with the collection or enforcement of any of the Note Obligations or the proof, protection, administration or resolution of any claim based upon the Note Obligations in any Insolvency Proceeding, including all fees and disbursements of 16 attorneys, accountants, auditors, consultants, appraisers and other professionals engaged by the Collateral Agent or the Trustee. The agreements in this Section 7.07 shall survive repayment of the Senior Secured Notes. Section 7.08. Indemnity. (a) In addition to the payment of costs and expenses pursuant to Section 7.07, whether or not the transactions contemplated hereby shall be consummated, each of the Loan Parties jointly and severally agrees to defend (subject to the Indemnitees' selection of counsel), indemnify, pay and hold harmless, the Collateral Agent and the Trustee and each of their respective Affiliates and each and all of the directors, officers, partners, trustees, employees, attorneys and agents, and in each case their respective heirs, representatives, successors and assigns (each of the foregoing, an "INDEMNITEE") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by, imposed on or asserted against such Indemnitee in connection with any investigation or administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights hereunder ("INDEMNIFIED LIABILITIES"); provided, no Indemnitee shall be entitled to indemnification hereunder with respect to any Indemnified Liability to the extent such Indemnified Liability is found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee. (b) All amounts due under Section 7.08(a) shall be payable not later than 10 days after written demand therefor. (c) To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in Section 7.08(a) may be unenforceable in whole or in part because they are violative of any law or public policy, each of the Loan Parties shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them. (d) No Loan Party shall ever assert any claim against any Indemnitee, on any theory of liability, for any lost profits or special, indirect or consequential damages or (to the fullest extent lawful) any punitive damages arising out of, in connection with, or as a result of, this Agreement or any other Note Document or any agreement or instrument or transaction contemplated hereby or relating in any respect to any Indemnified Liability, and each Loan Party hereby forever waives, releases and agrees not to sue upon any claim for any such lost profits or special, indirect, consequential or (to the fullest extent lawful) punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor. (e) No Finance Party shall ever assert any claim against the Collateral Agent each of its Affiliates and each and all of the directors, officers, partners, trustees, employees, 17 attorneys and agents, and in each case their respective heirs, representatives, successors and assigns, on any theory of liability, for any lost profits or special, indirect or consequential damages or (to the fullest extent lawful) any punitive damages arising out of, in connection with, or as a result of, this Agreement or any other Note Document or any agreement or instrument or transaction contemplated hereby or relating in any respect to any Indemnified Liability, and each Finance Party hereby forever waives, releases and agrees not to sue upon any claim for any such lost profits or special, indirect, consequential or (to the fullest extent lawful) punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor. (f) The agreements in this Section 7.08 shall survive repayment of the Senior Secured Notes and all other amounts payable hereunder. Section 7.09. Obligations Secured. All obligations of the Loan Parties set forth in or arising under this Agreement shall be Note Obligations and are secured by all Liens granted by the Collateral Documents. Section 7.10. Severability. If any provision of this Agreement is invalid, illegal or unenforceable in any respect or in any jurisdiction, the validity, legality and enforceability of such provision in all other respects and of all remaining provisions, and of such provision in all other jurisdictions, shall not in any way be affected or impaired thereby. Section 7.11. Governing Law; Submission to Jurisdiction. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. (b) Any legal action or proceeding with respect to this Agreement or any other Collateral Document may be brought in the courts of the State of New York in New York County, or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each Loan Party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts. Each Loan Party irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such court and any claim that any such proceeding brought in any such court has been brought in an inconvenient forum. (c) Each Loan Party hereby consents to process being served in any such suit, action or proceeding by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to Holdings' or such Loan Party's address referred to in Section 7.05, as the case may be. Each Loan Party agrees that such service (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon and personal delivery to it. Nothing in this Section 7.11 shall affect the right of the Collateral Agent 18 or the Trustee to serve process in any manner permitted by law or limit the right of any of them to bring proceedings against one or more Loan Parties in the courts of any jurisdiction or jurisdictions. Section 7.12. Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY TERM LOAN DOCUMENT OR ANY NOTE DOCUMENT IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY NOTE DOCUMENT OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. Section 7.13. Section Titles. The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement, except when used to reference such sections. Section 7.14. Counterparts; Effectiveness. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which shall together constitute one and the same document. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually executed counterpart thereof. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by each party of written or telephonic notification of such execution and authorization of delivery thereof. [Signature Pages Follow] 19 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. INSIGHT HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer INSIGHT HEALTH SERVICES HOLDINGS CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer PARKWAY IMAGING CENTER, LLC By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Manager S-2 INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. MAXUM HEALTH SERVICES CORP. DIAGNOSTIC SOLUTIONS 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer S-3 MAXUM HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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 ------------------------------------ Name: Mitch C. Hill Title: 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer 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 ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer S-4 U.S. BANK NATIONAL ASSOCIATION, as Trustee By: /s/ Jean Clarke ------------------------------------ Name: Jean Clarke Title: Assistant Vice President U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent By: /s/ Jean Clarke ------------------------------------ Name: Jean Clarke Title: Assistant Vice President S-5 EXHIBIT A FORM OF SECURITY AGREEMENT EXHIBIT B FORM OF PLEDGE AGREEMENT EX-4.10 13 y13913exv4w10.txt EX-4.10: REGISTRATION RIGHTS AGREEMENT Exhibit 4.10 EXECUTION COPY $300,000,000 SENIOR SECURED FLOATING RATE NOTES DUE 2011 REGISTRATION RIGHTS AGREEMENT DATED AS OF SEPTEMBER 22, 2005 BY AND AMONG INSIGHT HEALTH SERVICES CORP., INSIGHT HEALTH SERVICES HOLDINGS CORP., THE SUBSIDIARY GUARANTORS LISTED IN SCHEDULE A HERETO -AND- BANC OF AMERICA SECURITIES LLC, CIBC WORLD MARKETS CORP. This Registration Rights Agreement (this "AGREEMENT") is made and entered into as of September 22, 2005, by and among InSight Health Services Corp., a Delaware corporation (the "COMPANY"), InSight Health Services Holdings Corp., a Delaware corporation ("HOLDINGS"), the subsidiaries of the Company listed in Schedule A herein (the "SUBSIDIARY GUARANTORS," and, together with Holdings, the "GUARANTORS") and Banc of America Securities LLC and CIBC World Markets Corp. (the "PURCHASERS"). The Company is offering and selling to the Purchasers the Company's Senior Secured Floating Rate Notes due 2011 (the "NOTES") pursuant to the Purchase Agreement, dated September 16, 2005 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors and the Purchasers. Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to them under the indenture dated the date hereof (the "INDENTURE") among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee (the "Trustee") relating to the Notes and the Exchange Notes (as defined below). The parties hereby agree as follows: Section 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings: ACT: The Securities Act of 1933, as amended. AFFILIATE: As defined in Rule 144 under the Act. BROKER-DEALER: Any broker or dealer registered under the Exchange Act. CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture. CLOSING DATE: The date hereof. COMMISSION: The Securities and Exchange Commission. CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes of this Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange Offer Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the period required pursuant to Section 3(b) hereof and (c) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Notes tendered by Holders thereof pursuant to the Exchange Offer. CONSUMMATION DEADLINE: As defined in Section 3(b) hereof. EFFECTIVENESS DEADLINE: As defined in Section 3(a) hereof. EXCHANGE ACT: The Securities Exchange Act of 1934, as amended. 2 EXCHANGE NOTES: The Company's Senior Secured Floating Rate Notes due 2011 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as contemplated by Section 4 hereof. EXCHANGE OFFER: The exchange and issuance by the Company of a principal amount of Exchange Notes (which shall be registered pursuant to the Exchange Offer Registration Statement) equal to the outstanding principal amount of Notes that are tendered by such Holders in connection with such exchange and issuance. EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement relating to the Exchange Offer, including the related Prospectus. EXEMPT RESALES: The transactions in which the Purchasers propose to sell the Notes to certain "qualified institutional buyers," as such term is defined in Rule 144A under the Act and pursuant to Regulation S under the Act. FILING DEADLINE: As defined in Section 3(a) hereof. HOLDERS: As defined in Section 2 hereof. PROSPECTUS: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such prospectus. RECOMMENCEMENT DATE: As defined in Section 6(d) hereof. REGISTRATION DEFAULT: As defined in Section 5 hereof. REGISTRATION STATEMENT: Any registration statement of the Company and the Guarantors relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, (i) that is filed pursuant to the provisions of this Agreement and (ii) including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein. REGULATION S: Regulation S promulgated under the Act. RULE 144: Rule 144 promulgated under the Act. SHELF EFFECTIVENESS DEADLINE: As defined in Section 4(a) hereof. SHELF FILING DEADLINE: As defined in Section 4(a) hereof. SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof. SUSPENSION NOTICE: As defined in Section 6(d) hereof. TIA: The Trust Indenture Act of 1939 as in effect on the date of the Indenture. 3 TRANSFER RESTRICTED SECURITIES: Each (A) Note, until the earliest to occur of (i) the date on which such Note is exchanged in the Exchange Offer for an Exchange Note which is entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Act, (ii) the date on which such Note has been disposed of in accordance with a Shelf Registration Statement (and the purchasers thereof have been issued Exchange Notes) or (iii) the date on which such Note is distributed to the public pursuant to Rule 144 under the Act or is saleable pursuant to Rule 144(k) under the Act (or similar provisions then in effect) and (B) Exchange Note held by a Broker-Dealer until the date on which such Exchange Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including the delivery of the Prospectus contained therein). Section 2. Holders. A Person is deemed to be a holder of Transfer Restricted Securities (each, a "Holder") whenever such Person owns Transfer Restricted Securities. Section 3. Registered Exchange Offer. (a) Unless the Exchange Offer shall not be permitted by applicable federal law (after the procedures set forth in Section 6(a)(i) below have been complied with), the Company and the Guarantors shall (i) cause the Exchange Offer Registration Statement to be filed with the Commission as soon as practicable after the Closing Date, but in no event later than 120 days after the Closing Date (such 120th day being the "FILING DEADLINE"), (ii) use its best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 180 days after the Closing Date (such 180th day being the "EFFECTIVENESS DEADLINE") and (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause it to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting (i) registration of the Exchange Notes to be offered in exchange for the Notes that are Transfer Restricted Securities and (ii) resales of Exchange Notes by any Broker-Dealer that tendered Notes into the Exchange Offer that such Broker-Dealer acquired for its own account as a result of market making activities or other trading activities (other than Notes acquired directly from the Company or any of their respective Affiliates) as contemplated by Section 3(c) below. (b) The Company and the Guarantors shall use their respective reasonable best efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 30 days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Notes shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their respective reasonable best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no 4 event later than 45 days thereafter, and in no event shall such Exchange Offer be Consummated later than 210 days after the Closing Date (such 210th day being the "CONSUMMATION DEADLINE"). (c) The Company shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Broker-Dealer who holds Transfer Restricted Securities that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities (other than Notes acquired directly from the Company or any of their respective Affiliates), may exchange such Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of Distribution" section shall also contain all other information with respect to such sales by such Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer, except to the extent required by the Commission as a result of a change in policy, rules or regulations after the date of this Agreement. See the Shearman & Sterling no-action letter (available July 2, 1993). Because any such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of any Exchange Notes received by such Broker-Dealer in the Exchange Offer, the Company and the Guarantors shall permit the use of the Prospectus contained in the Exchange Offer Registration Statement by such Broker-Dealer to satisfy such prospectus delivery requirement through the Consummation Deadline and thereafter as provided in the remainder of this paragraph. To the extent necessary to ensure that the prospectus contained in the Exchange Offer Registration Statement is available for sales of Exchange Notes by any Broker-Dealer that acquired Exchange Notes as a result of market-making or similar activities such that the Broker-Dealer would be required to deliver a prospectus under the Act upon a subsequent sale or other disposition of the Exchange Notes, then the Company and the Guarantors agree to use their respective reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented, amended and current as required by and subject to the provisions of Section 6(a) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of 180 days (as extended pursuant to Section 6(d)(i)) from the Consummation Deadline or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold pursuant thereto if any such Broker-Dealer desiring such action shall notify the Company in writing that such Broker-Dealer acquired Exchange Notes as a result of market-making or other similar activities such that the Broker-Dealer would be required to deliver a prospectus under the Act upon a subsequent sale or other disposition of the Exchange Notes. The Company and the Guarantors shall provide copies of the latest version of such Prospectus to such Broker-Dealers, in such number as such Broker-Dealers may reasonably request promptly upon such request, and in no event later than two Business Days after the date of such request, at any time during such period. Section 4. Shelf Registration. (a) If (i) the Exchange Offer is not permitted by applicable law (after the Company and the Guarantors have complied with the procedures set forth in Section 6(a)(i) below) or (ii) any Holder of Transfer Restricted Securities shall notify the 5 Company in writing within 30 days following the Consummation Deadline that (A) such Holder was prohibited by law or Commission policy from participating in the Exchange Offer or (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and holds Notes acquired directly from the Company or any of their Affiliates, or (iii) the Exchange Offer has not been Consummated on or prior to the Consummation Deadline, then the Company and the Guarantors shall: (x) cause to be filed, on or prior to 45 days after the earliest of (i) the date on which the Company determines that the Exchange Offer Registration Statement cannot be filed as a result of clause (a)(i) above, (ii) the date on which the Company receives the notice specified in clause (a)(ii) above, or (iii) if the Exchange Offer has not been consummated on or prior to the Consummation Deadline, the Consummation Deadline (such earliest date, the "SHELF FILING DEADLINE"), a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities, and (y) shall use their respective best efforts to cause such Shelf Registration Statement to become effective on or prior to 90 days after the Shelf Filing Deadline for the Shelf Registration Statement (such 90th day the "SHELF EFFECTIVENESS DEADLINE"). If, after the Company and the Guarantors filed an Exchange Offer Registration Statement that satisfies the requirements of Section 3(a) above, the Company and the Guarantors are required to file and make effective a Shelf Registration Statement solely because the Exchange Offer is not permitted under applicable federal law (i.e., clause (a)(i) above), then the filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above; provided that, in such event, the Company and the Guarantors shall remain obligated to use best efforts to meet the Shelf Effectiveness Deadline set forth in clause (y) above. To the extent necessary to ensure that the Shelf Registration Statement is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a) and the other securities required to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and the Guarantors shall use their respective best efforts to keep any Shelf Registration Statement required by this Section 4(a) continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(b) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years (as extended pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Shelf Registration Statement have been sold pursuant thereto. (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be 6 entitled to liquidated damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such information. Each selling Holder agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. The Company shall not be obligated to supplement such Shelf Registration Statement after it has been declared effective by the Commission more than one time per quarterly period solely to reflect additional Holders. Section 5. Liquidated Damages. If (i) the Exchange Offer Registration Statement required by this Agreement is not filed with the Commission on or prior to the Filing Deadline, (ii) such Exchange Offer Registration Statement has not been declared effective by the Commission on or prior to the Effectiveness Deadline or the Exchange Offer has not been Consummated on or prior to the Consummation Deadline or (iii) a Shelf Registration Statement has not been declared effective on or prior to the Shelf Effectiveness Deadline (each such event referred to in clauses (i) through (iii), a "REGISTRATION DEFAULT"), then the Company will pay to each Holder of Transfer Restricted Securities affected thereby liquidated damages in an amount equal to $.05 per week per $1,000 in principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues for the first 30-day period immediately following the occurrence of a Registration Default referred to in clause (i) above or for the first 90-day period following the occurrence of a Registration Default referred to in clauses (ii) and (iii) above. The amount of the liquidated damages shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 30-day period in the case of clause (i) above or 90-day period in the case of clauses (ii) or (iii) above until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.30 per week per $1,000 in principal amount of Transfer Restricted Securities. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement, in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement and the Consummation of the Exchange Offer, in the case of (ii) above or (3) upon effectiveness of the Shelf Registration Statement, in the case of (iii) above, as applicable, the liquidated damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii) or (iii), as applicable, shall cease to accrue. All accrued liquidated damages shall be paid to the Holders entitled thereto, in the manner provided for the payment of interest in the Indenture, on each Interest Payment Date, as more fully set forth in the Indenture and the Notes. Notwithstanding the fact that any securities for which liquidated damages are due cease to be Transfer Restricted Securities, all obligations of the Company and the Guarantors to pay accrued liquidated damages with respect to such securities shall survive until such time as such obligations with respect to such securities shall have been satisfied in full. Section 6. Registration Procedures. (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall (x) comply with all applicable provisions of Section 6(c) below, (y) use their respective reasonable best efforts to effect such exchange and to permit the resale of Exchange Notes by any Broker-Dealer that tendered in the Exchange Offer Notes that such Broker-Dealer acquired for its own account as a result of its market making 7 activities or other trading activities (other than Notes acquired directly from the Company or any of their Affiliates) being sold in accordance with the intended method or methods of distribution thereof, and (z) comply with all of the following provisions: (i) If, following the date hereof there has been announced a change in Commission policy with respect to exchange offers such as the Exchange Offer, that in the reasonable opinion of counsel to the Company raises a substantial question as to whether the Exchange Offer is permitted by applicable federal law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Transfer Restricted Securities. The Company and the Guarantors hereby agree to pursue the issuance of such a decision to the Commission staff level, but shall not be required to take commercially unreasonable action to effect a change of Commission policy. In connection with the foregoing, the Company and the Guarantors hereby agree to take all such other actions as may be requested by the Commission or otherwise reasonably required in connection with the issuance of such decision, including without limitation (A) participating in telephonic conferences with the Commission, (B) delivering to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursuing a resolution (which need not be favorable) by the Commission staff. (ii) As a condition to its participation in the Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company and the Guarantors (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course of business. As a condition to its participation in the Exchange Offer each Holder using the Exchange Offer to participate in a distribution of the Exchange Notes shall acknowledge and agree that if the resales are of Exchange Notes obtained by such Holder in exchange for Notes acquired directly from the Company or an Affiliate thereof, it (1) could not, under Commission policy as in effect on the date of this Agreement, rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (including, if applicable, any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Act in connection with a secondary resale transaction and that such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K. 8 (iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Company's and each Guarantor's information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above, if applicable. (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Company and the Guarantors shall: (i) comply with all the provisions of Section 6(c) below and use their respective reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company and the Guarantors will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof, and (ii) issue, upon the request of any Holder or purchaser of Notes covered by any Shelf Registration Statement contemplated by this Agreement, Exchange Notes having an aggregate principal amount equal to the aggregate principal amount of Notes sold pursuant to the Shelf Registration Statement and surrendered to the Company for cancellation; the Company shall register Exchange Notes on the Shelf Registration Statement for this purpose and issue the Exchange Notes to the purchaser(s) of securities subject to the Shelf Registration Statement in the names as such purchaser(s) shall designate. (c) General Provisions. In connection with any Registration Statement and any related Prospectus required by this Agreement, the Company and the Guarantors shall: (i) use their respective reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus 9 contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein (in light of the circumstances under which they were made) not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement curing such defect, and, if Commission review is required, use their respective reasonable best efforts to cause such amendment to be declared effective as soon as practicable. (ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as the case may be; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii) with respect to a Shelf Registration Statement, advise each selling Holder promptly and, if requested by such selling Holder, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the Guarantors shall use their respective reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv) subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective 10 amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (v) furnish to the Purchasers and, with respect to a Shelf Registration Statement, each selling Holder named in any Registration Statement or Prospectus in connection with such exchange or sale, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which such Holders shall reasonably object within five Business Days after the receipt thereof. A Holder shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein (in light of the circumstances under which they were made) not misleading or fails to comply with the applicable requirements of the Act; (vi) with respect to a Shelf Registration Statement, promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to each selling Holder, upon such selling Holder's reasonable request, in connection with such exchange or sale, if any; (vii) with respect to a Shelf Registration Statement, subject to appropriate confidentiality agreements being entered into, make available, at reasonable times, for inspection by each selling Holder and any attorney or accountant retained by such Holders, all financial and other records, pertinent corporate documents of the Company and the Guarantors and cause at reasonable times the Company's and the Guarantors' officers, directors and employees to supply all information reasonably requested by any such Holder, attorney or accountant at reasonable times in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; (viii) with respect to a Shelf Registration Statement, if requested by any selling Holders in connection with such sale, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holders may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Transfer Restricted Securities; and make all required filings of such Prospectus supplement or 11 post-effective amendment as soon as reasonably practicable after the Company is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (ix) with respect to a Shelf Registration Statement, furnish to each selling Holder in connection with such exchange or sale, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (x) with respect to a Shelf Registration Statement, deliver to each Holder, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Holder reasonably may request; the Company and the Guarantors hereby consent to the use (in accordance with law, rules, regulations and orders) of the Prospectus and any amendment or supplement thereto by each selling Holder in connection with the public offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; (xi) upon the request of any Holders who collectively hold an aggregate principal amount of Notes in excess of 20% of the outstanding Transfer Restricted Securities (the "REQUESTING HOLDERS") enter into an underwriting agreement and make such representations and warranties and take all such other actions in connection therewith as may be reasonable and customary in underwritten offerings in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any applicable Registration Statement contemplated by this Agreement as may be reasonably requested by any Requesting Holder in connection with any sale or resale pursuant to any applicable Registration Statement. In such connection, the Company and the Guarantors shall: (A) upon request of any Requesting Holder furnish (or in the case of paragraphs (2) and (3) below, use their best efforts to cause to be furnished) to each Requesting Holder, upon Consummation of the Exchange Offer or upon the effectiveness of the Shelf Registration Statement, as the case may be: (1) a certificate, dated such date, signed on behalf of the Company and each Guarantor by (x) the President or any Vice President and (y) a principal financial or accounting officer of the Company, and such Guarantor, confirming, as of the date thereof, the matters set forth in Section 5(e) of the Purchase Agreement and such other similar matters as such Holders may reasonably request; (2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company, covering matters similar to those set forth in paragraphs (b), (c) and (d) of Section 5 of the Purchase Agreement and Exhibits A, B and C thereto, subject to the same conditions with respect thereto and to the delivery thereof and such other matter as such Requesting Holder may reasonably request which are 12 customarily covered in Company counsel opinions to underwriters in underwritten public offerings, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing (relying as to materiality to the extent such counsel deems appropriate upon the statements of officers and other representatives of the Company and the Guarantors) and without independent check or verification), no facts came to such counsel's attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation of the Exchange Offer, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data and statistical data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and (3) customary comfort letter or letters, as the case may be, as of the date of effectiveness of the Shelf Registration Statement from the Company's independent accountants and from any other accountants which have audited or reviewed the financial statements of any other entity or entities included or incorporated by reference in the Registration Statement, in each case, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with underwritten public offerings, delivered according to Statement of Auditing Standards Nos. 71, 72, 76 and 100 (or any successor bulletins), with respect to the audited and unaudited financial statements and other financial information included or incorporated by reference in the Registration Statement; and (B) deliver such other documents and certificates as may be reasonably requested by the selling Holders to evidence compliance with the matters covered 13 in clause (A) above and with any customary conditions contained in the any agreement entered into by the Company and the Guarantors pursuant to this clause (xi); (xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders and their counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders may reasonably request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided, however, that neither the Company nor any Guarantor shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xiii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such Transfer Restricted Securities in such denominations and such names as the selling Holders may request at least two Business Days prior to any sale of such Transfer Restricted Securities; (xiv) use their respective best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xii) above; (xv) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with certificates for the Transfer Restricted Securities which are in a form eligible for deposit with The Depository Trust Company; (xvi) otherwise use their respective reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of Rule 158 under the Act); (xvii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee to effect such changes to the Indenture 14 as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use its best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; (xviii) provide promptly to each Holder, upon request, each document filed with the Commission pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act if not obtainable from the Commission; and (xix) the Company and the Guarantors will be deemed not to have used their reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if the Company or any of the Guarantors voluntarily and knowingly takes any action that would, or omits to take any action which omission would, result in any such Registration Statement not being declared effective or in the Holders of Registrable Securities covered thereby not being able to exchange or offer and sell such Registrable Securities during that period as and to the extent contemplated hereby, unless (i) such action is required by applicable law or (ii) such action is taken by the Company and the Guarantors in good faith and for valid business reasons (but not including avoidance of the Company's or the Guarantors', as applicable, obligations hereunder), including a material corporate transaction, so long as the Company and the Guarantors promptly comply with the requirements of Section 6(c)(iv) thereof, if applicable. (d) Restrictions on Selling Holders. With respect to a Shelf Registration Statement, each selling Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice referred to in Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact or the happening of any event of the kind described in Section 6(c)(iii)(D) hereof, or upon receipt of a notice from the Company pending the announcement of a material corporate transaction that the Shelf Registration Statement is unusable (in each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until (i) such selling Holder has received copies of the supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such selling Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will either (i) destroy any Prospectuses, other than permanent file copies, then in such Holder's possession which have been replaced by the Company with more recently dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of the Suspension Notice. The time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by a number of days equal to the number of days in the period from and including the date of delivery of the Suspension Notice to the date of delivery of the Recommencement Date. 15 Section 7. Registration Expenses. (a) All expenses incident to the Company's and the Guarantors' performance of or compliance with this Agreement will be borne, jointly and severally, by the Company and the Guarantors, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses; (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Guarantors and, subject to Section 7(b) below, one counsel for the Holders of Transfer Restricted Securities chosen by the Holders of a majority of the outstanding Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance). The Company will, in any event, bear its and the Guarantors' internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors. (b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors will reimburse the Purchasers and the Holders of Transfer Restricted Securities who are tendering Notes into the Exchange Offer and/or selling or reselling Notes or Exchange Notes pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Shearman & Sterling LLP unless another firm shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. Section 8. Indemnification. (a) The Company and the Guarantors agree, jointly and severally, to indemnify and hold harmless each Holder, its directors, officers, any underwriter in any underwritten public offering of Transfer Restricted Securities pursuant to a Shelf Registration Statement and each Person, if any, who controls such Holder or underwriter (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from and against (i) any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Transfer Restricted Securities are registered under the Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not 16 misleading; (ii) any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided that (subject to Section 8(d) below) any such settlement is effected with the written consent of the Company and the Guarantors; and (iii) any and all expenses whatsoever, as incurred (including the fees and disbursements of counsel chosen by any indemnified party, subject to the limitations in Section 8(c) below), reasonably incurred in investigating, preparing or defending against any litigation or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company and the Guarantors by any Purchaser, such Holder or such underwriter expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto); provided, further, that the Company will not be liable to any Purchaser, Holder (in its capacity as Holder) or underwriter (or any person who controls such party within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) with respect to any such untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary Prospectus to the extent that the Company shall sustain the burden of proving that any such loss, liability, claim, damage or expense resulted from the fact that such Purchaser, Holder (in its capacity as Holder) or underwriter, as the case may be, sold Transfer Restricted Securities to a Person to whom such Purchaser, Holder (in its capacity as Holder) or underwriter, as the case may be, failed to send or give, at or prior to the written confirmation of the sale of such Transfer Restricted Securities a copy of the final Prospectus (as amended or supplemented) if the Company has previously furnished copies thereof (sufficiently in advance of the closing of such sale to allow for distribution of the final Prospectus in a timely manner) to such Purchaser, Holder (in its capacity as Holder) or underwriter, as the case may be, and the loss, liability, claim, damage or expense of such Purchaser, Holder (in its capacity as Holder) or underwriter, as the case may be, resulted solely from an untrue statement or omission or alleged untrue statement or omission of a material fact contained in or omitted from such preliminary Prospectus which was corrected in the final Prospectus. (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors, and their respective directors and officers, and each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company, or the Guarantors to the same extent as the foregoing indemnity from the Company and the Guarantors set forth in section (a) above, but only with reference to information relating to such Holder furnished in writing to the Company by such Holder expressly for use in any Registration Statement. In no event shall any Holder, its directors, officers or any Person who controls such Holder be liable or responsible for any amount in excess of the amount by which the total amount received by such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages that such Holder, its directors, officers or any Person who controls such Holder has 17 otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. (c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity may be sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required to assume the defense of such action pursuant to this Section 8(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Holder). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party within a reasonable period of time after notification by the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed promptly following receipt of invoice therefor as they are incurred. Such firm shall be designated in writing by a majority of the Holders, in the case of the parties indemnified pursuant to Section 8(a), and by the Company and Guarantors, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final non-appealable judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the final terms of such proposed settlement as soon as practicable prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have 18 been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding. (d) To the extent that the indemnification provided for in this Section 8 is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from their sale of Transfer Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company and the Guarantors, on the one hand, and of the Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and of the Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or such Guarantor, on the one hand, or by the Holder, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and judgments referred to above shall be deemed to include, subject to the limitations set forth in the third sentence of Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company, the Guarantors and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any matter, including any action that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 8, no Holder, its directors, its officers or any Person, if any, who controls such Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total received by such Holder with respect to the sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' obligations to contribute pursuant to this Section 8(d) are 19 several in proportion to the respective principal amount of Transfer Restricted Securities held by each Holder hereunder and not joint. Section 9. Rule 144A and Rule 144. The Company and each Guarantor agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon written request of any Holder, to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby in a timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144. Section 10. Miscellaneous. (a) Remedies. The Company and the Guarantors acknowledge and agree that any failure by the Company and/or the Guarantors to comply with their respective obligations under Sections 3 and 4 hereof may result in material irreparable injury to the Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, any Purchaser or any Holder may obtain such relief as may be required to specifically enforce the Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. None of the Company or the Guarantors will, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. None of the Company or the Guarantors has previously entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's or the Guarantors' securities under any agreement in effect on the date hereof. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 10(c)(i), the Company has obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose Transfer Restricted Securities are being tendered pursuant to the Exchange Offer, and that does not affect directly or indirectly the rights of other Holders whose Transfer Restricted Securities are not being tendered pursuant to such Exchange Offer, may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities subject to such Exchange Offer. 20 (d) Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder. (e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), facsimile, or air courier guaranteeing overnight delivery: (1) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and (2) (i) If to the Company or any Guarantor: InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, CA 92630 Facsimile: 949-462-3703 Attention: General Counsel with copies to: J.W. Childs Associates, L.P. 111 Huntington Avenue Suite 2900 Boston, MA 02199 Facsimile: 617-753-1101 Attention: Edward D. Yun and to: The Halifax Group, L.L.C. 1133 Connecticut Avenue N.W. Suite 700 Washington, D.C. 20036 Facsimile: 202-296-7133 Attention: David W. Dupree and to: Kaye Scholer LLP 425 Park Avenue New York, NY 10022 Facsimile: 212-836-8689 Attention: Stephen C. Koval, Esq. 21 All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if by facsimile; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture. (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 22 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. INSIGHT HEALTH SERVICES HOLDINGS CORP. By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary INSIGHT HEALTH SERVICES CORP. By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary WILKES-BARRE IMAGING, L.L.C. By: InSight Health Corp., as the sole member and sole manager By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary PARKWAY IMAGING CENTER, LLC By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Manager INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. MAXUM HEALTH SERVICES CORP. DIAGNOSTIC SOLUTIONS 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/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary MAXUM HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ Name: Mitch C. Hill Title: Executive Vice President and Chief Financial Officer By: /s/ Marilyn U. MacNiven-Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary PHOENIX REGIONAL PET CENTER-THUNDERBIRD, LLC By: Comprehensive Medical Imaging Centers, Inc., as the sole member By: /s/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary 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/ Marilyn U. MacNiven Young ------------------------------------ Name: Marilyn U. MacNiven-Young Title: Executive Vice President, General Counsel and Secretary This foregoing Agreement is hereby confirmed and accepted by the Purchasers as of the date first written above. BANC OF AMERICA SECURITIES LLC CIBC WORLD MARKETS CORP. By: Banc of America Securities LLC By: /s/ R. Sean Snipes --------------------------------- Name: R. Sean Snipes Title: Managing Director SCHEDULE A SUBSIDIARY GUARANTORS

Subsidiary Guarantor Jurisdiction of Organization - -------------------- ---------------------------- InSight Health Corp. Delaware Signal Medical Services, Inc. Delaware Open MRI, Inc. Delaware Maxum Health Corp. Delaware Radiosurgery Centers, Inc. Delaware Maxum Health Services Corp. Delaware Maxum Health Services of North Texas, Inc. Texas Maxum Health Services of Dallas, Inc. Texas NDDC, Inc. Texas Diagnostic Solutions Corp. Delaware InSight Imaging Services Corp. Delaware Valencia MRI, LLC California San Fernando Valley Regional PET Center, LLC California Parkway Imaging Center, LLC Nevada Wilkes-Barre Imaging, LLC Pennsylvania Comprehensive Medical Imaging, Inc. Delaware Comprehensive Medical Imaging Centers, Inc. Delaware Comprehensive Open MRI - Garland, Inc. Delaware Comprehensive Medical Imaging - Biltmore, Inc. Delaware Comprehensive Medical Imaging - San Francisco, Inc. Delaware Comprehensive Medical Imaging - Fremont, Inc. Delaware TME Arizona, Inc. Texas

Comprehensive Open MRI-East Mesa, Inc. Delaware IMI of Arlington, Inc. Delaware Comprehensive Medical Imaging - Fairfax, Inc. Delaware IMI of Kansas City, Inc. Delaware Comprehensive Medical Imaging - Bakersfield, Inc. Delaware Phoenix Regional PET Center - Thunderbird LLC Arizona Woodbridge MRI Texas Jefferson MRI - Bala Texas Jefferson MRI Texas Mountain View MRI Texas Los Gatos Imaging Center Texas Mesa MRI Texas Syncor Diagnostics Bakersfield, LLC California Syncor Diagnostics Sacramento, LLC California Comprehensive Open MRI-Carmichael/Folsom, LLC California MRI Associates, L.P. Indiana Orange County Regional PET Center - Irvine, LLC California EX-5.1 14 y13913exv5w1.txt EX-5.1: OPINION OF KAYE SCHOLER LLP Exhibit 5.1 KAYE SCHOLER LLP 425 Park Avenue New York, New York 10022-3598 212 836-8000 Fax 212 836-8689 www.kayescholer.com October 28, 2005 InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, California 92630 Ladies and Gentlemen: We are acting as counsel to InSight Health Services Corp., a Delaware corporation (the "Company") and the parties identified on Schedule A hereto (the "Guarantors") in connection with the registration under the Securities Act of 1933, as amended (the "Securities Act"), of up to $300 million of the Company's Senior Secured Floating Rate Notes due 2011 (the "Exchange Notes") to be offered in exchange for its outstanding Senior Secured Floating Rate Notes due 2011 (the "Original Notes") that were issued pursuant to the Indenture, dated as of September 22, 2005 (the "Indenture"), among the Company, the Guarantors and U.S. Bank National Association, as trustee (the "Trustee"). This opinion is being delivered to you for filing as an exhibit to the Registration Statement on Form S-4 (the "Registration Statement") being filed by the Company and the Guarantors with the Securities and Exchange Commission (the "Commission") on the date hereof. In connection herewith, we have examined the (i) Registration Statement, (ii) Indenture, (iii) Original Notes, (iv) Exchange Notes (and the related Guarantees of the Guarantors (the "Guarantees")) (the Indenture, the Exchange Notes and the Guarantees are collectively referred to herein as the "Documents") and (v) such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. On the basis of the foregoing and subject to the qualifications and assumptions set forth herein, we are of the opinion that: 1. When (A) the Registration Statement has been declared effective, (B) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), and (C) the Exchange Notes have been duly executed by the Company and authenticated by the Trustee in accordance with the terms of the Indenture and duly issued and delivered against exchange of the Original Notes as described in the Registration Statement, the Exchange Notes will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization and similar laws affecting creditors' rights generally and general principles of equity (regardless of whether such principles are considered in a proceeding in equity or at law). KAYE SCHOLER LLP 2 2. When (A) the Registration Statement has been declared effective, (B) the Indenture has been duly qualified under the TIA, and (C) the Exchange Notes have been duly executed by the Company and authenticated by the Trustee in accordance with the terms of the Indenture and duly issued and delivered against exchange of the Original Notes as described in the Registration Statement, each Guarantee of the Exchange Notes by a Guarantor will constitute a valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization and similar laws affecting creditors' rights generally and general principles of equity (regardless of whether such principles are considered in a proceeding in equity or at law). 3. Assuming that the Indenture has been duly authorized, executed and delivered by the Trustee, the Indenture constitutes a valid and binding obligation of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization and similar laws affecting creditors' rights generally and general principles of equity (regardless of whether such principles are considered in a proceeding in equity or at law). The foregoing opinions are limited to the laws of the State of New York and we do not express any opinion on the law of any other jurisdiction. We consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the use of our name under the caption "Legal Matters" in the prospectus included therein. Our opinion is rendered solely for your information in connection with the foregoing, and may not be relied upon by any other person or for any other purpose without our prior written consent. In giving this opinion, we do not thereby admit that we are within the category of persons whose consent is required by the Securities Act or the rules and regulations of the Commission. Very truly yours, /s/ Kaye Scholer LLP -------------------- New York Chicago Los Angeles Washington, D.C. West Palm Beach Frankfurt Hong Kong London Shanghai SCHEDULE A InSight Health Services Holdings Corp. InSight Health Corp. Signal Medical Services, Inc. Open MRI, Inc. Maxum Health Corp. Radiosurgery Centers, Inc. Maxum Health Services Corp. MRI Associates, L.P. Maxum Health Services of North Texas, Inc. Maxum Health Services of Dallas, Inc. NDDC, Inc. Diagnostic Solutions Corp. Wilkes-Barre Imaging, L.L.C. Orange County Regional PET Center -- Irvine, LLC San Fernando Valley Regional PET Center, LLC Valencia MRI, LLC Parkway Imaging Center, LLC 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. Comprehensive OPEN MRI -- Carmichael/Folsom, LLC Syncor Diagnostics Sacramento, LLC Syncor Diagnostics Bakersfield, LLC Phoenix Regional PET Center -- Thunderbird, LLC Mesa MRI Mountain View MRI Los Gatos Imaging Center Woodbridge MRI Jefferson MRI -- Bala Jefferson MRI New York Chicago Los Angeles Washington, D.C. West Palm Beach Frankfurt Hong Kong London Shanghai EX-10.1 15 y13913exv10w1.txt EX-10.1: AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT Exhibit 10.1 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made on September 22, 2005, by and among INSIGHT HEALTH SERVICES CORP. (individually and, in its capacity as the representative of the other Borrowers pursuant to SECTION 4.4, "INSIGHT HEALTH"), a Delaware corporation, 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 various financial institutions listed on the signature pages hereof (together with their respective successors and permitted assigns, the "Lenders"); and BANK OF AMERICA, N.A., a national bank, in its capacity as collateral and administrative agent for the Lenders pursuant to Section 13 (together with its successors in such capacity "Administrative Agent"). Capitalized terms used in this Agreement have the meanings assigned to them in SECTION 1. RECITALS: InSight Health, as the Borrower, Subsidiary Guarantors (as defined in the below defined Existing Loan Agreement), Parent, the financial institutions party thereto from time to time, Bank of America, N.A., as Administrative Agent, Wachovia Bank, National Association, as Syndication Agent, and The CIT Group/Business Credit, Inc., as Documentation Agent, entered into that certain Credit Agreement dated as of October 17, 2001 (as at any time amended, modified, supplemented or restated, the "Existing Credit Agreement"). InSight Health, as the Borrower, Parent, Subsidiary Guarantors, and Bank of America, N.A., as Administrative Agent, also entered into that certain Security Agreement dated as of October 17, 2001 (as at any time amended, modified, supplemented or restated, the "Existing Security Agreement"). Borrowers have requested that the Existing Credit Agreement and the Existing Security Agreement be amended and restated to make available an amended and restated credit facility in accordance with the terms and conditions contained herein. Each Borrower has requested that Lenders make available a revolving credit and letter of credit facility to Borrowers, which shall be used by Borrowers to finance their mutual and collective enterprise of the provision of diagnostic imaging services through an integrated network of fixed-site centers and mobile facilities. In order to utilize the financial powers of each Borrower in the most efficient and economical manner, and in order to facilitate the financing of each Borrower's needs, Lenders will, at the request of any Borrower, make loans to all Borrowers under the revolving credit facility on a combined basis and in accordance with the provisions hereinafter set forth. Borrowers' business is a mutual and collective enterprise and Borrowers believe that the consolidation of all revolving credit loans under this Agreement will enhance the aggregate borrowing powers of each Borrower and ease the administration of their revolving credit loan relationship with Lenders, all to the mutual advantage of Borrowers. Lenders' willingness to extend credit to Borrowers and to administer each Borrower's collateral security therefor, on a combined basis as more fully set forth in this Agreement, is done solely as an accommodation to Borrowers and at Borrowers' request in furtherance of Borrowers' mutual and collective enterprise. Each Borrower has agreed to be jointly and severally liable for loans and all outstanding other obligations under this Agreement and to guarantee the obligations of each of the other Borrowers under this Agreement and each of the other Loan Documents. NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and to induce the Administrative Agent and the Lenders to amend and restate the Existing Credit Agreement and the Existing Security Agreement and to extend credit to Borrowers hereunder, for Ten Dollars ($10.00) and other good and valuable consideration, the parties hereto, intending to be bound hereby, agree as follows: SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION 1.1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings ascribed to them (terms used in the singular to have the same meaning when used in the plural, and vice versa): Account - shall have the meaning given to the term "account" in the UCC and shall include any and all rights of a Borrower to payment for goods sold or leased or for services rendered that are not evidenced by an Instrument or Chattel Paper, whether or not they have been earned by performance. For the avoidance of doubt, when used in reference to a Borrower the term shall include each Health-Care-Insurance Receivable of such Borrower. Account Debtor - a Person who is or becomes obligated under or on account of an Account, Chattel Paper or General Intangible. Accounts Formula Amount - on any date of determination thereof, (i) if there are no Revolver Loans outstanding on such date and the LC Obligations that have not been Cash Collateralized do not exceed $2,000,000 on such date, an amount equal to the sum of 85% of the net amount of Eligible Retail Receivables on such date plus 85% of the net amount of Eligible Wholesale Receivables on such date or (ii) if Revolver Loans are outstanding on such date or the LC Obligations that have not been Cash Collateralized exceed $2,000,000 on such date, an amount equal to the lesser of (a) 85% of the net amount of Eligible Retail Receivables on such date plus 85% of the net amount of Eligible Wholesale Receivables on such date or (b) the Cash Collection Limit as of such date. As used herein, the phrase "net amount of Eligible Wholesale Receivables" or "net amount of Eligible Retail Receivables" shall mean the face amount of such Accounts on any date less any and all returns, rebates, discounts (which may, at Administrative Agent's option, be calculated on shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with, or any interest accrued on the amount of, such Accounts at such date. Acquisition Agreement - with respect to each Acquisition Transaction, each stock purchase agreement or asset purchase agreement, as the context may require, to be executed and delivered by and among a Borrower or an Acquisition Subsidiary, as purchaser, and each owner, as seller, of the Equity Interests or assets to be sold to such Borrower or Acquisition Subsidiary, together with any and all permitted amendments, modifications and supplements thereto, restatements thereof and substitutes therefor. Acquisition Consideration - shall mean the consideration given and to be given by a Borrower or any Acquisition Subsidiary for or in an Acquisition Transaction (other than Equity -2- Interests of Parent and contributions made by any Equity Investor to the capital of Parent that are contributed by Parent to InSight Health), including the fair market value of any Cash, Property, Equity Interests (other than Equity Interests of Parent and contributions made by any Equity Investor to the capital of Parent that are contributed by Parent to InSight Health), and the amount of any Acquisition Funded Debt assumed or incurred by such Borrower or Acquisition Subsidiary in connection with such Acquisition Transaction. Acquisition Documents - individually and collectively, as the context may require, each Acquisition Agreement and any and all other agreements, documents or instruments at any time executed and delivered by a Borrower or an Acquisition Subsidiary, in connection with an Acquisition Transaction. Acquisition Funded Debt - with respect to any Acquisition Target, the sum of (a) the aggregate principal amount of Debt for borrowed money which would, in accordance with GAAP, be classified as long-term Debt, together with the current maturities thereof and the face amount of all outstanding letters of credit plus (b) all Debt outstanding under any revolving credit, line of credit or renewals thereof, notwithstanding that any such Debt is created within one year of the expiration of such agreement plus (c) all Capitalized Lease Obligations, in each case that remain outstanding following consummation of an Acquisition Transaction. Acquisition Subsidiary - a Subsidiary formed by a Borrower after the Restatement Effective Date to purchase all of the issued and outstanding Equity Interests, or all or substantially all of the assets of an Acquisition Target or a division or separate line of business of an Acquisition Target, subject to the satisfaction of each of the following conditions : (i) no Default or Event of Default exists at the time or would result therefrom; (ii) Borrowers deliver to Administrative Agent any and all documents, agreements, financial statements, projections and instruments requested by Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent in all respects, in connection with such formation, including (a) such documents and instruments as may be necessary to grant or confirm to Administrative Agent, for the benefit of Secured Parties, a first priority perfected Lien (subject to Permitted Liens) on all of the assets of the Subsidiary, including the Equity Interests in such Subsidiary, and (b) a Joinder Agreement executed by such Subsidiary, together with other collateral documents and opinions of counsel as may be reasonably requested by Administrative Agent, each in form and substance reasonably satisfactory to Administrative Agent; and (iii) Borrowers shall give Administrative Agent at least 5 days prior written notice before forming such Subsidiary and provide copies of all organizational documents of such Subsidiary to Administrative Agent. Acquisition Target - a Person whose Equity Interests or assets are to be purchased pursuant to an Acquisition Transaction. Acquisition Transaction - a transaction pursuant to an Acquisition Agreement for the purchase of all of the issued and outstanding Equity Interests, or all or substantially all of the assets, of an Acquisition Target, or for the purchase of all or substantially all of the assets of a division or separate line of business of an Acquisition Target. Adjusted EBITDA - for any fiscal period of Borrowers and their Subsidiaries, the sum for such period of (i) Adjusted Net Earnings, plus (ii) any provision for taxes based on income, to the extent deducted in the calculation of Adjusted Net Earnings, plus (iii) interest expense, to the extent deducted in the calculation of Adjusted Net Earnings, plus (iv) depreciation and amortization, to the extent deducted in the calculation of Adjusted Net Earnings, plus (v) income from minority interests, plus (vi) transaction costs and expenses relating to the effectiveness of -3- this Agreement and the issuance and sale of the Senior Notes and, without duplication of clause (iv) of this definition of Adjusted EBITDA, unamortized loan costs with respect to the Senior Subordinated Notes and the Existing Credit Agreement, plus (vii) management fees and expenses paid to the Sponsors or any of their respective Affiliates in accordance with SECTION 10.2.4, plus (viii) any extraordinary, unusual or non-recurring expenses or losses not requiring the expenditure of cash in the current or any future period, plus (ix) purchase accounting adjustments not requiring the expenditure of cash in the current or any future period required or permitted by GAAP in connection with any Permitted Acquisition Adjusted LIBOR Rate - for any Interest Period, with respect to LIBOR Loans, the rate of interest per annum determined pursuant to the following formula: Offshore Base Rate Adjusted LIBOR Rate = ------------------ 1.00 - Eurodollar Reserve Percentage Where, "Offshore Base Rate" means the rate per annum appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) 2 Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) 2 Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates. If for any reason none of the foregoing rates is available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum determined by Administrative Agent as the rate of interest at which Dollar deposits in the approximate amount of the applicable LIBOR Loan would be offered by BofA's London Branch to major banks in the offshore Dollar market at their request at or about 11:00 a.m. (London time) 2 Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. "Eurodollar Reserve Percentage" means for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day applicable to member banks under regulations issued from time to time by the Board of Governors for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Offshore Rate for each outstanding LIBOR Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. Adjusted Net Earnings - with respect to any fiscal period, the net earnings (or loss) for such fiscal period of Borrowers and their Subsidiaries, all as reflected on the financial statement of Borrowers and their Subsidiaries supplied to Administrative Agent and Lenders pursuant to SECTION 10.1.3, but excluding: (i) any gain or loss arising from the sale of capital assets; (ii) any gain arising from any write-up of assets; (iii) net earnings of any entity (other than a Subsidiary of a Borrower) in which a Borrower has an ownership interest unless such net earnings have actually been received by a Borrower in the form of cash Distributions; (iv) any portion of the net earnings of any Subsidiary which for any reason is unavailable for payment of Distributions to a -4- Borrower; (v) the earnings of any Person to which any assets of a Borrower shall have been sold, transferred or disposed of, or into which a Borrower shall have merged, or been a party to any consolidation or other form of reorganization, prior to the date of such transaction; and (vi) any gain or loss arising from extraordinary items, all as determined in accordance with GAAP on a Consolidated basis. Administrative Agent Indemnitees - Administrative Agent, its Affiliates and all of their present and future officers, directors, employees, agents and attorneys. Administrative Agent Professionals - attorneys, accountants, appraisers, business valuation experts, environmental engineers or consultants, turnaround consultants and other professionals or experts retained by Administrative Agent. Affiliate - a Person (i) who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, another Person; (ii) who beneficially owns or holds 10% or more of any class of the Equity Interests of another Person; or (iii) 10% or more of the Equity Interests with power to vote of which is beneficially owned or held by another Person or a Subsidiary of another Person. For purposes hereof, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of any Equity Interest, by contract or otherwise. Agreement - this Loan and Security Agreement and all Exhibits and Schedules thereto. Anti-Kickback Statutes - Section 1128B(b) of the Social Security Act and any other similar law, rule or regulation adopted by any Governmental Authority. Anti-Terrorism Laws - any laws relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act. Applicable Law - all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Loan Document or Material Contract in question, including all applicable common law and equitable principles; all provisions of applicable state, federal and foreign constitutions, statutes, rules, regulations and orders of Governmental Authorities; and all orders, judgments and decrees of all courts and arbitrators. Applicable Margin - a percentage equal to 0% with respect to Revolver Loans that are Base Rate Loans, 2.50% with respect to Revolver Loans that are LIBOR Loans and .50% with respect to the Unused Line Fee. Approved Credit Enhancement - in Administrative Agent's reasonable discretion and at its option, either (i) an irrevocable letter of credit that is in form and substance reasonably acceptable to Administrative Agent, issued or confirmed by a bank reasonably acceptable to Administrative Agent, and payable in Dollars at a place of payment within the United States that is reasonably acceptable to Administrative Agent, which letter of credit is assigned to Administrative Agent for the benefit of Secured Parties (with such assignment acknowledged by the issuing or confirming bank) or, if so requested by Administrative Agent, duly transferred to Administrative Agent for the benefit of Secured Parties (together with sufficient documentation to permit direct draws under any such letter of credit by Administrative Agent for the benefit of Secured Parties) or (ii) credit insurance that is issued by a credit insurance company reasonably acceptable to Administrative Agent and is in form and substance reasonably acceptable to -5- Administrative Agent (which credit insurance shall be payable to Administrative Agent for the benefit of Secured Parties in Dollars). Asset Disposition - a sale, lease, license, consignment or other transfer or disposition of Property of an Obligor, including a termination of rights of any Obligor under any lease, license agreement or other contract or a disposition of Property in connection with a sale-leaseback transaction or synthetic lease. Assignment and Acceptance - an assignment and acceptance entered into by a Lender and an Eligible Assignee and accepted by Administrative Agent, in the form of EXHIBIT G. Availability - on any date, the amount that Borrowers are entitled to borrow as Revolver Loans on such date, such amount being the difference derived when the sum of the principal amount of Revolver Loans then outstanding (including any outstanding Swingline Loans) is subtracted from the Borrowing Base on such date. If the amount of Revolver Loans outstanding on any date is equal to or greater than the Borrowing Base, then Availability on such date shall be zero or a negative number, as applicable. Availability Reserve - on any date of determination thereof, an amount equal to the sum of the following (without duplication): (i) any amounts which any Obligor is obligated to pay to Administrative Agent, Lenders or other Persons pursuant to the provisions of any of the Loan Documents that Administrative Agent or any Lender elects to pay for the account of such Obligor in accordance with authority contained in any of the Loan Documents; (ii) the LC Reserve; (iii) the aggregate amount of reserves established by Administrative Agent from time to time in its discretion in respect of Banking Relationship Debt; (iv) the aggregate amount of all liabilities and obligations that are secured by Liens upon any of the Collateral that are senior in priority to Administrative Agent's Liens if such Liens are not Permitted Liens (provided that the imposition of a reserve hereunder on account of such Liens shall not be deemed a waiver of the Event of Default that arises from the existence of such Liens) or are Permitted Liens under SECTION 10.2.5(II); (v) the Professional Fees Reserve; and (vi) such additional reserves, in such amounts as Administrative Agent in its reasonable discretion, exercised in a manner consistent with its customary practices or otherwise in good faith, may elect to impose from time to time. The burden of establishing lack of good faith shall be on Borrowers. Average Liquidity - for any period, an amount equal to the sum of the amount of Liquidity on each day during such period divided by the number of days in such period. Average Revolver Loan Balance - for any period, the amount obtained by adding the unpaid balance of Revolver Loans and LC Obligations at the end of each day for the period in question and by dividing such sum by the number of days in such period. Bank Products - any one or more of the following types of products, services or facilities extended to any Obligor by BofA or any Affiliate of BofA: (i) commercial credit cards; (ii) merchant card services; (iii) products or services under Cash Management Agreements; (iv) products under Hedging Agreements; (v) interstate depository network services; and (vi) such other banking products or services provided by BofA or any Affiliate of BofA as may be requested by any Obligor, other than Letters of Credit. Banking Relationship Debt - Debt or other liabilities or obligations of an Obligor to BofA (or any Affiliate of BofA) arising out of or relating to Bank Products. -6- Bankruptcy Code - title 11 of the United States Code. Base Rate - the rate of interest announced or quoted by BofA from time to time as its prime rate. The prime rate announced by BofA is a reference rate and does not necessarily represent the lowest or best rate charged by BofA. BofA from time to time makes loans or other extensions of credit at, above or below its announced prime rate. If the prime rate is discontinued by BofA as a standard, a comparable reference rate designated by BofA as a substitute therefor shall be the Base Rate. Base Rate Loan - a Loan, or portion thereof, during any period in which it bears interest at a rate based upon the Base Rate. Black Diamond - Black Diamond Management and any and all of its Affiliates. Blocked Person - as defined in SECTION 9.1.27(II). Board of Governors - the Board of Governors of the Federal Reserve System. BofA - Bank of America, N.A. a national bank, and its successors and assigns. BofA Indemnitees - BofA, its Affiliates and all of their present and future officers, directors, employees, agents and attorneys. Borrower Agent - as defined in SECTION 4.4. Borrowing - a borrowing consisting of Loans of one Type made on the same day by Lenders (or by BofA in the case of a Borrowing funded by Swingline Loans) or a conversion of a Loan or Loans of one Type from Lenders on the same day. Borrowing Base - on any date of determination thereof, an amount equal to the lesser of: (a) the aggregate amount of the Revolver Commitments on such date minus the LC Reserve on such date, or (b) an amount equal to (i) the Accounts Formula Amount on such date minus (ii) the Availability Reserve on such date. Borrowing Base Certificate - a certificate, in the form set forth on EXHIBIT K, by which Borrowers shall certify to Administrative Agent and Lenders the amount of the Borrowing Base as of the date of the certificate and the calculation of such amount. Business Day - any day excluding Saturday, Sunday and any other day that is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are closed; provided, however, that when used with reference to a LIBOR Loan (including the making, continuing, prepaying or repaying of any LIBOR Loan), the term "Business Day" shall also exclude any day on which banks are not open for dealings in Dollar deposits on the London interbank market. Capital Adequacy Regulation - any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case regarding capital adequacy of any bank or of any corporation controlling a bank. -7- Capital Expenditures - expenditures made or liabilities incurred by a Borrower for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto, including the total principal portion of Capitalized Lease Obligations. Capitalized Lease Obligation - any Debt represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP. Cash - money, currency or a credit balance in a Deposit Account. Cash Collateral - cash, and any interest or other income earned thereon, that is deposited with Administrative Agent in accordance with this Agreement for the Pro Rata benefit of Lenders to Cash Collateralize any LC Obligations or other Obligations. Cash Collateral Account - a demand deposit, money market or other account established by Administrative Agent at such financial institution as Administrative Agent may select in its discretion, which account shall be in Administrative Agent's name and subject to Administrative Agent's Liens for the benefit of Secured Parties. Cash Collateralize - with respect to LC Obligations arising from Letters of Credit outstanding on any date or Obligations arising under Hedging Agreements on such date, the deposit with Administrative Agent of immediately available funds into the Cash Collateral Account in an amount equal to 104% of the aggregate Undrawn Amount of such Letters of Credit and other LC Obligations, plus (ii) all Obligations existing under such Hedging Agreements. Cash Collection Limit - on any date of determination thereof, an amount equal to the Monthly Cash Collections for the most recent month ending prior to such date divided by the actual number of days in such month multiplied by 35. Cash Equivalents - (i) United States dollars (including such dollars as are held in overnight deposits and demand deposits with U.S. banks); (ii) marketable direct obligations issued or unconditionally guaranteed by the United States government and backed by the full faith and credit of the United States government having maturities of not more than 12 months from the date of acquisition; (iii) marketable direct obligations issued by any State of the United States of America or any political subdivision of any such State or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-2 from S&P or at least P-2 of Moody's; (iv) certificates of deposit demand deposits, Eurodollar time deposits, time deposit accounts, term deposit accounts and time deposits having maturities of not more than 12 months from the date of acquisition, bankers' acceptances having maturities of not more than 12 months from the date of acquisition and overnight bank deposits, in each case issued by any commercial bank organized under the laws of the United States, any state thereof or the District of Columbia, which at the time of acquisition have capital and assets of not less than $100 million; (v) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clauses (i), (ii), (iii) and (iv) entered into with any financial institution meeting the qualifications specified in clause (iv) above; (vi) commercial paper having at the time of investment therein or a contractual commitment to invest therein a rating of A-2 (or better) by S&P or P-2 (or better) by Moody's, and having a maturity within 12 months after the date of acquisition thereof; and (vii) shares of any money market fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) - (vi), (b) has net assets not less than $500,000,000 and (c) has at least the second highest rating obtainable from either Moody's or S&P. -8- Cash Management Agreements - any agreement entered into from time to time between any Borrower or any of its Subsidiaries, on the one hand, and BofA or any of its Affiliates, on the other, in connection with cash management services for operating, collections, payroll and trust accounts of such Borrower or its Subsidiaries including automatic clearinghouse services, controlled disbursement services, electronic funds transfer services, information reporting services, lockbox services, stop payment services and wire transfer services. Cash Taxes Paid - for any period, the provision by Borrowers and their Subsidiaries for income taxes as shown on the profit and loss statement of Borrowers for such period minus any increase (or plus any decrease) in the provision for deferred taxes of Borrowers and their Subsidiaries, determined on a Consolidated basis in accordance with GAAP. CERCLA - the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) Change of Control - the occurrence of any of the following: (i) Sponsors and Sponsor Related Parties cease to own and control, beneficially and of record, 51% of the Equity Interests in Parent; (ii) Parent ceases to own and control, beneficially and of record, all of the Equity Interests in InSight Health; (iii) except in the case of any Permitted Asset Disposition, InSight Health ceases to own and control, beneficially and of record, all of the Equity Interests in each of the other Borrowers; (iv) all or substantially all of InSight Health's assets are sold as an entirety to any Person or related group of Persons; (v) InSight Health is merged with or into another Person, other than a Borrower; (vi) any Person or related group of Persons acquires by way of a purchase, merger, consolidation or other business combination a majority of the Equity Interests entitled to vote in the election of directors of InSight Health; or (vii) a change in the majority of the board of directors of InSight Health unless approved by the then majority of the board of directors of InSight Health or by Sponsors and Sponsor Related Parties. Chattel Paper - shall have the meaning given to the term "chattel paper" in the UCC. Claims - all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, awards, costs (including remedial response costs), charges, expenses and disbursements of any kind or nature (including reasonable attorneys', accountants', consultants', or paralegals' fees and expenses) which may at any time (including at any time following Full Payment of the Obligations or termination of the Commitments, resignation or replacement of Administrative Agent or replacement of any Lender), be imposed on, incurred by, or asserted against any Indemnitee in any way relating to or arising out of (i) the administration or enforcement of or performance under any of the Loan Documents or consummation of any of the transactions described herein, (ii) any action taken or omitted to be taken by any Indemnitee under or in connection with any of the Loan Documents or Applicable Law, (iii) the existence, perfection or realization upon Administrative Agent's Liens upon any Collateral, (iv) the exercise by Administrative Agent or any Lender of any of its rights or remedies under any of the Loan Documents or Applicable Law, or (v) the failure of any Obligor to observe, perform or discharge any of such Obligor's covenants or duties under any of the Loan Documents or the inaccuracy or incompleteness of any representation or warranty of any Borrower in any of the Loan Documents, in each case including any reasonable out-of-pocket costs or expenses incurred by any Indemnitee in connection with any investigation, litigation, arbitration or other judicial or non-judicial proceeding (including any Insolvency Proceeding or appellate proceedings) whether or not such Indemnitee is a party thereto. This definition of Claims is subject to the provisions of SECTION 15.3. -9- CMS - Centers for Medicare and Medicaid Services and any successor thereto. Collateral - all of the Property and interests in Property described in SECTION 7; all Property described in any of the Security Documents as security for the payment or performance of any of the Obligations; and all other Property and interests in Property that now or hereafter secure the payment and performance of any of the Obligations. Collection Accounts - collectively, the Retail Collection Accounts and the Wholesale Collection Accounts. Commercial Payor - any Third Party Payor which is (i) a commercial medical insurance company that is organized under the laws of any jurisdiction of the United States and has its principal office in the United States, (ii) a Blue Cross/Blue Shield Plan or (iii) a health maintenance organization or other managed care organization, preferred provider organization or other institutional obligor that is organized under the laws of any jurisdiction of the United States and has its principal office in the United States. Commitment - at any date for any Lender, the amount of such Lender's Revolver Commitment on such date, and "Commitments" means the aggregate amount of all Revolver Commitments on such date. Commitment Termination Date - the date that is the soonest to occur of (i) the last day of the Term; (ii) the date on which either Borrowers or Administrative Agent terminates the Revolver Commitments pursuant to SECTION 6.2; or (iii) the date on which the Revolver Commitments are automatically terminated pursuant to SECTION 12.2. Compliance Certificate - a Compliance Certificate to be provided by Borrowers to Administrative Agent in accordance with, and in the form annexed as EXHIBIT E to, this Agreement and the supporting schedules to be annexed thereto. Concentration Account - shall have the meaning ascribed to it in SECTION 8.2.5(I) hereof. Consolidated - the consolidation in accordance with GAAP of the accounts or other items as to which such term applies. Contingent Obligation - with respect to any Person, any obligation of such Person arising from any guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including (i) the direct or indirect guaranty, endorsement (other than for collection or deposit in the Ordinary Course of Business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (ii) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, (iii) any obligation of such Person, whether or not contingent, (A) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (B) to advance or supply funds (1) for the purchase or payment of any such primary obligations or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to purchase Property or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (D) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be -10- deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith. Contractual Adjustment Allowance - on any date, an amount determined by Borrowers, but acceptable to Administrative Agent in its Credit Judgment, intended to represent the amount of Retail Receivables as of such date that Borrowers do not expect to be paid in Cash, such reserve to be computed in accordance with Borrowers' historical practices. Control Agreements - the control agreements to be executed by certain depository and other institutions of a Borrower in favor of Administrative Agent with respect to certain Deposit Accounts and other accounts of Borrowers, including the Concentration Account, the Investment Accounts and each Wholesale Collection Account, for the benefit of Secured Parties, as security for the Obligations. Controlled Disbursement Account - a demand deposit account maintained by Borrowers at BofA or any of its Affiliates and to which proceeds of Loans may be transferred from time to time. Credit Judgment - Administrative Agent's judgment exercised in a manner consistent with its customary practices or otherwise in good faith, based upon its consideration of any factor that it believes (i) will or could reasonably be expected to affect adversely the quantity, quality, mix or value of any Collateral, the enforceability or priority of Administrative Agent's Liens or the amount that Administrative Agent and Lenders would be likely to receive (after taking into account delays in the payment and estimated costs of enforcement) in the collection of the Accounts or liquidation of any of the Collateral; (ii) suggests that any collateral report or financial information delivered to Administrative Agent by any Person on behalf of any Obligor is incomplete, inaccurate or misleading in any material respect; (iii) materially increases the likelihood of any Insolvency Proceeding involving any Obligor; or (iv) creates or reasonably could be expected to create or result in a Default or Event of Default. In exercising such judgment, Administrative Agent may consider such factors already included in or tested by the definition of Eligible Accounts, as well as any of the following: (a) the financial and business climate of Borrowers' industry; (b) changes in collection history and dilution with respect to the Accounts; (c) material changes in any concentration risks with respect to Accounts; and (d) any of the factors that could materially increase the credit risk of lending to any of Borrowers on the security of the Collateral. The burden of establishing lack of good faith shall be on Borrowers. Current Asset - on any date, any asset that would be properly classified as a current asset in accordance with GAAP on such date. CWA - the Clean Water Act (33 U.S.C. Sections 1251 et seq.). Debt - as applied to a Person means, without duplication: (i) all obligations of such Person for Money Borrowed and all obligations of such Person evidenced by bonds, notes or similar instruments; (ii) all obligations of such Person for the deferred purchase price of Property or services (excluding accounts payable and other accrued liabilities incurred in the Ordinary Course of Business; (iii) all Contingent Obligations of such Person in respect of items that would constitute Debt under clause (i) or (ii) of this definition; (iii) all reimbursement obligations in -11- connection with letters of credit or letter of credit guaranties issued for the account of such Person; and (iv) in the case of a Borrower (without duplication), the Obligations. The Debt of a Person shall include any recourse Debt of any partnership or joint venture in which such Person is a general partner or joint venturer. Default - an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default. Default Rate - on any date, a rate per annum that is equal to (i) in the case of each Revolver Loan outstanding on such date, 2% in excess of the rate otherwise applicable to such Loans on such date, and (ii) in the case of any of the other Obligations outstanding on such date, 2% plus the highest Applicable Margin for Base Rate Loans. Deposit Account - shall have the meaning given to the term "deposit account" in the UCC. Deposit Accounts Collateral - all Deposit Accounts of Borrowers in existence on the Restatement Effective Date and identified on SCHEDULE 8.3 and each Deposit Account established by a Borrower after the Restatement Effective Date for the purpose of depositing collections on Accounts or other proceeds of Collateral therein. Distribution - in respect of any entity, (i) any payment of dividends or other distributions on Equity Interests of the entity (except distributions in Equity Interests) and (ii) any purchase, redemption or other acquisition or retirement for value of Equity Interests of the entity or any Subsidiary of the entity unless made contemporaneously from the net proceeds of the sale of Equity Interests, including Upstream Payments of the type described in clause (c) of the definition of such term. Document - shall have the meaning given to the term "document" in the UCC. Dollars and the sign $ - lawful money of the United States of America. Dominion Account - a Deposit Account established by Borrowers at BofA or at another bank selected by Borrowers, but acceptable to Administrative Agent in its reasonable discretion, and over which, upon written notice from Administrative Agent of the existence of a Restrictive Trigger Event, Administrative Agent shall have exclusive access and dominion for withdrawal purposes. Electronic Chattel Paper - shall have the meaning given to the term "electronic chattel paper" in the UCC. Eligible Account - an Eligible Retail Receivable or Eligible Wholesale Receivable, or both of them, as the context requires. Eligible Assignee - a Person that is a Lender, a U.S. based Affiliate of a Lender or an Approved Fund (as defined below); a commercial bank, finance company, or other financial institution, in each case that is organized under the laws of the United States or any state, has total assets in excess of $10 billion, extends asset-based lending facilities of the type contemplated herein in the Ordinary Course of Business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of ERISA or any other Applicable Law, is acceptable to Administrative Agent and, unless an Event of Default exists, Borrowers (such approval by -12- Borrowers, when required, not to be unreasonably withheld or delayed and to be deemed given by Borrowers if no objection is received by the assigning Lender and Administrative Agent from Borrowers within 7 Business Days after notice of such proposed assignment has been provided by the assigning Lender as set forth in SECTION 14.3 ); and, at any time that an Event of Default exists, any other Person acceptable to Administrative Agent in its discretion. In no event and under no circumstances shall Black Diamond be an Eligible Assignee. The term "Approved Fund" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the Ordinary Course of Business of such Person and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender. Eligible Cash - Cash or Cash Equivalents on deposit in the Concentration Account, the Investment Accounts or any other Deposit Account that is at all times subject to a Lien in favor of Administrative Agent, and, at all times after October 28, 2005, with respect to which Administrative Agent has "control" under (and as defined in) the UCC. Eligible Retail Receivable - a Retail Receivable which arises in the Ordinary Course of Business of a Borrower from the rendition or performance of services, is payable in Dollars, is subject to Administrative Agent's duly perfected Lien and is deemed by Administrative Agent, in its Credit Judgment, to be an Eligible Retail Receivable. Without limiting the generality of the foregoing, no Retail Receivable shall be an Eligible Retail Receivable if: (i) the Third Party Payor is an Affiliate of a Borrower, a Person controlled by an Affiliate of a Borrower or a Blocked Person; (ii) the Retail Receivable is unbilled; (iii) it is outstanding more than 120 days after the billing date, but only to the extent of 50% of such Retail Receivable; (iv) the total unpaid Retail Receivables of the Third Party Payor exceed 25% of the aggregate amount of all Accounts, to the extent of such excess; (v) any covenant, representation or warranty contained in the Agreement with respect to such Retail Receivable has been breached in any material respect; (vi) the Third Party Payor is also such Borrower's creditor or supplier, or the Third Party Payor has disputed liability with respect to such Retail Receivable, or the Third Party Payor has made any claim with respect to any other Retail Receivable due from such Third Party Payor to such Borrower, or the Retail Receivable otherwise is or may reasonably be expected to become subject to any right of setoff (to the extent not waived in writing by such Third Party Payor), counterclaim (to the extent not waived in writing by such Third Party Payor), recoupment (to the extent not waived in writing by such Third Party Payor), reserve or chargeback, provided that the Retail Receivables of such Third Party Payor shall be ineligible only to the extent of such offset, counterclaim, recoupment, disputed amount, reserve or chargeback; (vii) an Insolvency Proceeding has been commenced by or against the Third Party Payor or the Third Party Payor has failed, suspended business or ceased to be Solvent; (viii) the Third Party Payor is located in a state in which such Borrower is deemed to be doing business under the laws of such state and which denies creditors access to its courts in the absence of qualification to transact business in such state or of the filing of any reports with such state, unless such Borrower has qualified as a foreign entity authorized to transact business in such state or has filed all required reports; (ix) the Retail Receivable is subject to a Lien other than a Permitted Lien; (x) the Retail Receivable is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (xi) the Retail Receivable represents a progress billing or a retainage; (xii) such Borrower has made any agreement with the Third Party Payor for any deduction therefrom, except for discounts, adjustments or allowances which are made in the Ordinary Course of Business and which discounts or allowances are reflected in the calculation of the net amount of such Retail Receivable; (xiii) the Retail Receivable represents, in whole or in part, a billing for interest, fees or late charges; (xiv) the total Eligible Retail Receivables due from Account Debtors other than Third Party Payors exceeds $588,000, to the extent of such excess; (xv) it is not evidenced by an -13- invoice, statement or other electronic or documentary evidence satisfactory to Administrative Agent; (xvi) to the extent it constitutes a credit balance that is more than 120 days old; (xvii) it arises under or in connection with an agreement in respect of which Borrowers have posted a performance, surety or similar bond; (xviii) it has been turned over or submitted to a third party for collection; or (xix) the Account Debtor on such Retail Receivable has been characterized by Borrowers as falling into an "unknown financial class." In addition to the foregoing, on any date the balance of Eligible Retail Receivables on such date shall be reduced by the aggregate of the Contractual Adjustment Allowance on such date and the Professional Fees Allowance on such date. Eligible Wholesale Receivable - a Wholesale Receivable that arises in the Ordinary Course of Business of a Borrower from the rendition of services, is payable in Dollars, is subject to Administrative Agent's duly perfected Lien, and is deemed by Administrative Agent, in its Credit Judgment, to be an Eligible Wholesale Receivable. Without limiting the generality of the foregoing, no Account shall be an Eligible Wholesale Receivable if: (i) it arises out of a sale made by a Borrower to an Affiliate of a Borrower, a Person controlled by an Affiliate of a Borrower or a Blocked Person; (ii) it is unpaid more than 90 days after the original invoice date; (iii) 50% or more of the Accounts from the Account Debtor are not deemed Eligible Accounts hereunder; (iv) the total unpaid Accounts of the Account Debtor exceed 25% of the aggregate amount of all Accounts or exceed a credit limit established by Administrative Agent, in its Credit Judgment, for such Account Debtor, in each case to the extent of such excess; (v) any covenant, representation or warranty contained in this Agreement with respect to such Account has been breached in any material respect; (vi) the Account Debtor is also such Borrower's creditor or supplier, or has disputed liability with respect to such Account or has made any claim with respect to any other Account due from such Account Debtor to such Borrower, or the Account otherwise is or may reasonably be expected to become subject to any right of setoff (to the extent not waived in writing by such Account Debtor), counterclaim (to the extent not waived in writing by such Account Debtor), recoupment (to the extent not waived in writing by such Account Debtor), reserve, defense or chargeback, provided that the Accounts of such Account Debtor shall be ineligible only to the extent of such dispute or right of offset, counterclaim, recoupment, reserve, defense or chargeback; (vii) an Insolvency Proceeding has been commenced by or against the Account Debtor or the Account Debtor has failed, suspended or ceased doing business; (viii) the Account Debtor is not Solvent; (ix) it arises from a sale to an Account Debtor organized under the laws of any jurisdiction outside of the United States or that has its principal office, assets or place of business outside the United States except to the extent that the sale is supported or secured by an Approved Credit Enhancement; (x) the Account Debtor is located in a jurisdiction in which such Borrower is deemed to be doing business under the laws of such jurisdiction and which denies creditors access to its courts in the absence of qualification to transact business in such jurisdiction or of the filing of any reports with such jurisdiction, unless such Borrower has qualified as a foreign entity authorized to transact business in such jurisdiction or has filed all required reports; (xi) the Account is subject to a Lien other than a Permitted Lien; (xii) the Account is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (xiii) the Account represents a progress billing or a retainage; (xiv) such Borrower has made any agreement with the Account Debtor for any deduction therefrom, except for discounts or allowances which are made in the Ordinary Course of Business and which discounts or allowances are reflected in the calculation of the face value of each invoice related to such Account; (xv) the Account represents, in whole or in part, a billing for interest, fees or late charges; (xvi) the Account Debtor has made a partial payment with respect to such Account; (xvii) to the extent it constitutes a credit balance that is more than 90 days old; or (xviii) it arises under or in connection with an agreement in respect of which Borrowers have posted a performance, surety or similar bond. -14- Enforcement Action - action taken or to be taken by Administrative Agent, during any period that an Event of Default exists, to enforce collection of the Obligations or to realize upon the Collateral (whether by judicial action, under power of sale, by self-help repossession, by notification to Account Debtors, or by exercise of rights of setoff or recoupment). Environmental Laws - all federal, state, local and foreign laws, rules, regulations, codes, ordinances, orders and consent decrees (together with all programs, permits and guidance documents promulgated by regulatory agencies, to the extent having the force of law), now or hereafter in effect, that relate to public health (but excluding occupational safety and health, to the extent regulated by OSHA) or the protection or pollution of the environment, whether new or hereafter in effect, including CERCLA, RCRA and CWA. Environmental Release - a release as defined in CERCLA or under any other applicable Environmental Laws. Equity Interest - the interest of (i) a shareholder in a corporation, (ii) a partner (whether general or limited) in a partnership (whether general, limited or limited liability), (iii) a member in a limited liability company, or (iv) any other Person having any other form of equity security or ownership interest, together, in each case, with any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing (but excluding any debt security that is exchangeable for or convertible into such Equity Interests). Equity Investors - collectively, Sponsors and their respective Affiliates, and officers, employees and directors of Parent or any of its Subsidiaries. ERISA - the Employee Retirement Income Security Act of 1974. Event of Default - as defined in SECTION 12. Excluded Taxes - any (A) income, branch profits or franchise taxes imposed on (or measured by) net income or gross receipts (other than any such taxes imposed solely as a result of Borrower's activities in a jurisdiction) (B) any tax that is imposed on amounts payable to the Lender at the time the Lender becomes a party to this Agreement (or designates a new lending office) and (C) any taxes attributable to Lender's failure to comply with SECTION 5.9.3 of this Agreement. Executive Order No. 13224 - Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001. Existing Credit Agreement - as defined in the Recitals hereto. Extraordinary Expenses - all reasonable out-of-pocket costs, expenses, fees (including fees incurred to Administrative Agent Professionals) or advances that Administrative Agent or any Lender may suffer or incur during any period that an Event of Default exists, or during the pendency of an Insolvency Proceeding of an Obligor, on account of or in connection with (i) the audit, inspection, repossession, storage, repair, appraisal, insuring, completion of the manufacture of, preparing for sale, advertising for sale, selling, collecting or otherwise preserving or realizing upon any Collateral; (ii) any action, suit, litigation, arbitration, contest or other judicial or non-judicial proceeding (whether instituted by or against Administrative Agent, any Lender, any Obligor, any representative of creditors of any Obligor or any other Person) in any way arising out of or relating to any of the Collateral (or the validity, perfection, priority or avoidability of -15- Administrative Agent's Liens with respect to any of the Collateral), any of the Loan Documents or the validity, allowance or amount of any of the Obligations, including any lender liability or other Claims asserted against Administrative Agent or any Lender; (iii) the exercise, protection or enforcement of any rights or remedies of Administrative Agent in, or the monitoring of, any Insolvency Proceeding; (iv) the settlement or satisfaction of any Liens upon any Collateral (whether or not such Liens are Permitted Liens); (v) the collection or enforcement of any of the Obligations, whether by Enforcement Action or otherwise; (vi) the negotiation, documentation, and closing of any amendment, waiver, restructuring or forbearance agreement with respect to the Loan Documents or Obligations; (vi) amounts advanced by Administrative Agent pursuant to SECTIONS 8.1.3 OR 15.10; or (viii) the enforcement of any of the provisions of any of the Loan Documents. Such costs, expenses and advances may include transfer fees, taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers' fees and commissions, auctioneers' fees and commissions, accountants' fees, environmental study fees, wages and salaries paid to employees of any Borrower or independent contractors in liquidating any Collateral, travel expenses, all other fees and expenses payable or reimbursable by Borrowers or any other Obligor under any of the Loan Documents, and all other fees and expenses associated with the enforcement of rights or remedies under any of the Loan Documents, but excluding compensation paid to employees (including inside legal counsel who are employees) of Administrative Agent or any Lender. Fee Letter - the fee letter agreement between Administrative Agent and Borrower Agent. FEIN - with respect to any Person, the Federal Employer Identification Number of such Person. Financial Covenant Trigger Amount - on any date of determination, shall mean an amount equal to $15,000,000. Fiscal Quarter - each quarter of Borrowers and their Subsidiaries for accounting and tax purposes, ending on September 30, December 31, March 31 and June 30 of each year. Fiscal Year - the fiscal year of Borrowers and their Subsidiaries for accounting and tax purposes, which ends on June 30 of each year and when preceded by the designation of a calendar year (e.g., 2005 Fiscal Year) means the fiscal year of Borrowers and their Subsidiaries ended on June 30 of such designated calendar year. Fixed Charge Coverage Ratio - for any period, the ratio of (a) Adjusted EBITDA for such period minus Capital Expenditures (excluding Capital Expenditures financed with Funded Debt other than Revolver Loans) for such period minus Distributions for such period (other than Distributions to a Borrower), net of any contributions of equity capital paid in Cash to a Borrower from (1) repayments of loans made by a Borrower to an officer, director or employee of a Borrower or any other Obligor pursuant to clause (xii)(a) of the definition of Restricted Investment from whom Parent's Equity Interests are repurchased and (2) proceeds from resales of Parent's Equity Interests so repurchased, minus Cash Taxes Paid for such period minus the amount of investments permitted pursuant to clause (xvi) of the definition of Restricted Investment during such period, to (b) the sum of all Fixed Charges for such period, all calculated for Borrowers and their Subsidiaries on a Consolidated basis. Fixed Charges - for any fiscal period, the sum of (i) Interest Expense for such period plus (ii) scheduled principal payments on Funded Debt (including scheduled principal payments on Capitalized Lease Obligations but excluding the Revolver Loans). -16- FLSA - the Fair Labor Standards Act of 1938. Foreign Lender - any Lender that is organized under the laws of a jurisdiction other than the laws of the United States, any state thereof or the District of Columbia. Full Payment - with respect to any of the Obligations, the full and final payment in full, in cash (or immediately available funds) and in Dollars, of such Obligations, including all interest, fees and other charges payable in connection therewith under any of the Loan Documents, whether such interest, fees or other charges accrue or are incurred prior to or during the pendency of an Insolvency Proceeding and whether or not any of the same are allowed or recoverable in any Bankruptcy Case pursuant to Section 506 of the Bankruptcy Code or otherwise; with respect to any LC Obligations represented by undrawn Letters of Credit and Banking Relationship Debt (including Debt arising under Hedging Agreements), the depositing of cash with Administrative Agent or delivery to Administrative Agent of a Supporting LC, as security for the payment of such Obligations, not to exceed 104% of the aggregate undrawn amount of such Letters of Credit and 100% of Administrative Agent's good faith estimate of the amount of Banking Relationship Debt due and to become due after termination of such Bank Products; and with respect to any Obligations that are contingent in nature (other than Obligations consisting of LC Obligations or Banking Relationship Debt), such as a right of Administrative Agent or a Lender to indemnification by any Obligor, the depositing of cash with Administrative Agent, or delivery to Administrative Agent of a Supporting LC, in an amount equal to 100% of such Obligations or, if such Obligations are unliquidated in amount and represent a claim which has been overtly asserted against Administrative Agent or a Lender and for which an indemnity has been provided by Borrowers in any of the Loan Documents, in an amount that is equal to such claim or Administrative Agent's good faith estimate of such claim. None of the Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated. Funded Debt - with respect to Borrowers and their Subsidiaries, the sum, without duplication, of (i) the aggregate amount of Debt of Borrowers and their Subsidiaries consisting of or relating to (a) the borrowing of money or the obtaining of credit (other than trade payables incurred in the Ordinary Course of Business), including the Obligations, Debt under the Senior Notes and the Senior Subordinated Notes, and any other notes or bonds, (b) the deferred purchase price of assets (other than trade payables incurred in the Ordinary Course of Business), or (c) Capitalized Lease Obligations, plus (ii) Debt of the type referred to in clause (i) of another Person guaranteed by a Borrower or Subsidiary, in each case as determined on a Consolidated basis. GAAP - generally accepted accounting principles in the United States of America in effect from time to time. General Intangibles - shall have the meaning given to the term "general intangibles" in the UCC and shall include each Borrower's choses in action, causes of action, company or other business records, inventions, blueprints, designs, patents, patent applications, trademarks, trademark applications, trade names, trade secrets, service marks, goodwill, brand names, copyrights, registrations, licenses, franchises, customer lists, permits, tax refund claims, computer programs, operational manuals, internet addresses and domain names, insurance refunds and premium rebates, all rights to indemnification and all other intangible property of such Borrower of every kind and nature (other than Accounts). Goods - shall have the meaning given to the term "goods" in the UCC. -17- Government Payor - any Third Party Payor which is (i) the United States of America acting under the Medicaid or Medicare programs established pursuant to the Social Security Act, or under the TRICARE program, (ii) any state or the District of Columbia acting pursuant to a health plan adopted pursuant to Title XIX of the Social Security Act (or any successor legislation), (iii) any other Governmental Authority or (iv) an agent, carrier, administrator or intermediary for any of the foregoing. Governmental Approvals - all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities. Governmental Authority - any federal, state, municipal, national, foreign or other governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the District of Columbia or a foreign entity or government. Governmental Receivable - a Retail Receivable in respect of which the Third Party Payor is a Government Payor. Guarantors - Parent and each Person who hereafter guarantees payment or performance of the whole or any part of the Obligations. Guaranty - each guaranty agreement now or hereafter executed by a Guarantor in favor of Administrative Agent with respect to any of the Obligations. Health-Care-Insurance Receivable - shall have the meaning given to the term "health-care-insurance receivable" in the UCC. Healthcare Laws - Medicaid Regulations, Medicare Regulations, Anti-Kickback Statutes, TRICARE (10 U.S.C. Sections 1071-1106), and all other applicable current and future laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or binding agreements issued, promulgated or entered into by the Food and Drug Administration, CMS, HHS, the Office of Inspector General of HHS, the Drug Enforcement Administration or any other Governmental Authority, including any state or local professional licensing laws, certificate of need laws and state reimbursement laws, relating in any way to the conduct of the business of any Borrower or any of the Subsidiaries or the provision of healthcare services generally. Healthcare Purchaser - a health maintenance organization, prepaid health clinic, managed care plan, preferred provider organization or other institutional, governmental or commercial purchaser of healthcare services, which has engaged any Borrower or any of the Subsidiaries to provide diagnostic imaging services to Members of health plans offered by such purchaser pursuant to a Private Provider Agreement. Hedging Agreement - any interest rate protection agreement, foreign currency exchange agreement, forward contract, currency swap agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. HHS - the Department of Health and Human Services. -18- Hostile Acquisition - any investment in a Person, resulting in control of such Person, involving a tender offer or proxy contest that has not been recommended or approved by the board of directors or similar body of such Person that is the subject of the investment prior to the first public announcement or disclosure relating to such investment. Impermissible Qualification - any qualification or exception to the opinion or certification of any independent public accountant as to any financial statement of Borrowers which (i) is of a "going concern" or similar nature or (ii) relates to the limited scope of examination of matters relevant to such financial statements. Indemnitees - the Administrative Agent Indemnitees, the Lender Indemnitees, Issuing Bank Indemnitees, and the BofA Indemnitees. Indentures - collectively, the Senior Note Indenture and the Senior Subordinated Note Indenture. Initial Lender - BofA, in its capacity as a "Lender" under this Agreement on the Restatement Effective Date. Insolvency Proceeding - any action, case or proceeding commenced by or against a Person under any state, federal or foreign law, or any agreement of such Person for (i) the entry of an order for relief under any chapter of the Bankruptcy Code or other insolvency or debt adjustment law (whether state, federal or foreign), (ii) the appointment of a receiver (or administrative receiver), trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property, (iii) an assignment or trust mortgage for the benefit of creditors of such Person, or (iv) the liquidation, dissolution or winding up of the affairs of such Person. Instrument - shall have the meaning given to the term "instrument" in the UCC. Intellectual Property - all intellectual and similar Property of a Person of every kind and description, including inventions, designs, patents, patent applications, copyrights, trademarks, service marks, trade names, mask works, trade secrets, proprietary information, know-how, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, all books and records describing or used in connection with the foregoing and all licenses, or other rights to use any of the foregoing. Interest Expense - for any period, interest expense (other than interest payable-in-kind) for such period minus interest income for such period. Interest Period - shall have the meaning ascribed to it in SECTION 3.1.3. Investment Accounts - InSight Health Services Corp. account no. 881586 maintained with BofA and InSight Health Corp. investment sweep account no. 211500418005 maintained with Banc of America Securities, LLC, and any replacement of either of the foregoing. Investment Property - shall have the meaning given to the term "investment property" in the UCC and shall include all Securities (whether certificated or uncertificated), security entitlements, securities accounts, commodity contracts and commodity accounts. Issuing Bank - BofA or an Affiliate of BofA. -19- Issuing Bank Indemnitees - Issuing Bank and all of its present and future officers, directors, employees, agents and attorneys. LC Application - an application by any or all Borrowers to Issuing Bank, pursuant to a form approved by Issuing Bank, for the issuance of a Letter of Credit, that is submitted to Issuing Bank at least 3 Business Days prior to the requested issuance of such Letter of Credit. LC Conditions - the following conditions, the satisfaction of each of which is required before Issuing Bank shall be obligated to issue a Letter of Credit: (i) each of the conditions set forth in SECTION 11.2 has been and continues to be satisfied, including the absence of any Default or Event of Default; (ii) after giving effect to the issuance of the requested Letter of Credit and all other unissued Letters of Credit for which an LC Application has been signed by a Borrower and approved by Administrative Agent and Issuing Bank, the LC Obligations would not exceed $10,000,000 and no Out-of-Formula Condition would exist, and, if no Revolver Loans are outstanding, the LC Obligations do not, and would not upon the issuance of the requested Letter of Credit, exceed the Borrowing Base; (iii) such Letter of Credit has an expiration date that is no more than 1 year from the date of issuance; (iv) the currency in which payment is to be made under the Letter of Credit is Dollars; and (v) the form of the proposed Letter of Credit is satisfactory to Administrative Agent and Issuing Bank in their reasonable discretion, provides for sight drafts only and does not contain any language that automatically increases the amount available to be drawn under the Letter of Credit. LC Documents - any and all agreements, instruments and documents (including an LC Application) required by Issuing Bank to be executed by Borrowers or any other Person and delivered to Issuing Bank for the issuance, amendment or renewal of a Letter of Credit. LC Facility - the subfacility for Letters of Credit established as part of the Revolver Commitments pursuant to Section 2.3. LC Obligations - on any date, an amount (in Dollars) equal to the sum of (without duplication) (i) all amounts then due and payable by any Obligor on such date by reason of any payment that is made by Issuing Bank under a Letter of Credit that has not been repaid to Issuing Bank, plus (ii) the aggregate undrawn amount of all Letters of Credit which are then outstanding or for which an LC Application has been delivered to and accepted by Issuing Bank, plus (iii) all fees and other amounts due or to become due in respect of Letters of Credit outstanding on such date. LC Request - a Letter of Credit Request from Borrowers to Issuing Bank in the form of EXHIBIT I annexed hereto. LC Reserve - at any date, the aggregate of all LC Obligations on such date, other than (i) LC Obligations that Borrowers shall Cash Collateralize on or prior to such date and (ii) the portion of LC Obligations described in clause (iii) of the definition thereof. Lender Indemnitees - Lenders and all of their respective present and future officers, directors, employees, agents and attorneys. Lenders - shall have the meaning given to it in the preamble to this Agreement and shall include BofA (whether in its capacity as a provider of Loans under SECTION 2 or as the provider of Swingline Loans under SECTION 4.1.3 ) and any other Person who may from time to time become a "Lender" under this Agreement. -20- Letter of Credit - any standby letter of credit issued by Issuing Bank for the account of any Borrower. Letter-of-Credit Right - shall have the meaning given to the term "letter-of-credit-right" in the UCC. LIBOR Lending Office - with respect to a Lender, the office designated as a LIBOR Lending Office for such Lender on the signature page hereof (or on any Assignment and Acceptance, in the case of an assignee) and such other office of such Lender or any of its Affiliates that is hereafter designated by written notice to Administrative Agent. LIBOR Loan - a Loan, or portion thereof, during any period in which it bears interest at a rate based upon the applicable Adjusted LIBOR Rate. Lien - any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property). For the purpose of this Agreement, a Borrower shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes. Lien Waiver - an agreement duly executed in favor of Administrative Agent, in form and content acceptable to Administrative Agent, by which for locations leased by an Obligor, an owner or mortgagee of premises upon which any Property of an Obligor is located agrees to waive or subordinate any Lien it may have with respect to such Property in favor of Administrative Agent's Lien therein and to permit Administrative Agent to enter upon such premises and remove such Property or to use such premises to store or dispose of such Property. Liquidity - on any date, an amount equal to the sum of (i) Availability on such date plus (ii) the amount of Eligible Cash on such date. Loan - a Revolver Loan (and each Base Rate Loan and LIBOR Loan comprising such Loan). Loan Account - the loan account established by each Lender on its books pursuant to SECTION 5.8. Loan Documents - this Agreement, the Other Agreements and the Security Documents. Loan Year - a period commencing each calendar year on the same month and day as the date of this Agreement and ending on the same month and day in the immediately succeeding calendar year, with the first such period (i.e. the first Loan Year) to commence on the date of this Agreement. Management Agreement - that certain management agreement dated as of October 17, 2001, among J.W. Childs Advisors II, L.P., Halifax Genpar, L.P., Parent and InSight Health, as the same may be amended, modified, restated or supplemented from time to time to the extent not adverse in any material respect to Administrative Agent or Lenders. -21- Margin Stock - shall have the meaning ascribed to it in Regulation U and of the Board of Governors. Material Adverse Effect - the effect of any event, condition, action, omission or circumstance, which, alone or when taken together with other events, conditions, actions, omissions or circumstances occurring or existing concurrently therewith, (i) has any material adverse effect upon the business, operations, Properties or financial condition of any Obligor; (ii) has or could be reasonably expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any of the other Loan Documents; (iii) has any adverse effect upon the Liens of Administrative Agent with respect to the Collateral or the priority of any such Liens; (iv) has any material adverse effect upon the ability of any Obligor to perform its obligations under this Agreement or any of the other Loan Documents, including repayment of any of the Obligations when due; or (v) has any material adverse effect upon the ability of Administrative Agent or any Lender to enforce or collect the Obligations or realize upon any of the Collateral in accordance with the Loan Documents and Applicable Law. Material Contract - an agreement to which an Obligor is a party (other than the Loan Documents) for which breach, termination, cancellation, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect. Maximum Rate - the maximum non-usurious rate of interest permitted by Applicable Law that at any time, or from time to time, may be contracted for, taken, reserved, charged or received on the Debt in question or, to the extent that at any time Applicable Law may thereafter permit a higher maximum non-usurious rate of interest, then such higher rate. Notwithstanding any other provision hereof, the Maximum Rate shall be calculated on a daily basis (computed on the actual number of days elapsed over a year of 365 or 366 days, as the case may be). Medicaid Certification - certification by CMS or a state agency or entity under contract with CMS that health maintenance, management or care operations are in material compliance with all of the conditions of participation set forth in the Medicaid Regulations. Medicaid Provider Agreement - an agreement entered into between a state agency or other such entity administering the Medicaid program and a health maintenance management or care operation under which the health maintenance, management or care operation agrees to provide services for Medicaid patients in accordance with the terms of the agreement and Medicaid Regulations. Medicaid Regulations - collectively, (i) all federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act and any statute succeeding thereto); (ii) all applicable provisions of all federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (i) above and all federal administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (i) above; (iii) all state statutes and plans for medical assistance enacted in connection with the statutes and provisions described in clauses (i) and (ii) above; and (iv) all applicable provisions of all rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (iii) above and all stated administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (ii) above. -22- Medicare Certification - certification by CMS or a state agency or entity under contract with CMS that the health maintenance, management or care operation is in material compliance with all of the conditions of participation set forth in the Medicare Regulations. Medicare Provider Agreement - an agreement entered into between a state agency or other such entity administering the Medicare program and a health maintenance, management or care operation under which the health maintenance, management or care operation agrees to provide services for Medicare patients in accordance with the terms of the agreement and Medicare Regulations. Medicare Regulations - collectively, all federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act and any statute succeeding thereto, together with applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of Governmental Authorities (including HHS, CMS, the Office of the Inspector General for HHS or any Persons succeeding to the functions of any of the foregoing) promulgated pursuant to or in connection with any of the foregoing having the force of law. Member - an individual who is a member, subscriber or enrollee, or any dependent of any member subscriber or enrollee, under any health plan offered by a Healthcare Purchaser. Money Borrowed - as applied to any Obligor, without duplication, (i) Debt arising from the lending of money by any other Person to such Obligor; (ii) Debt, whether or not in any such case arising from the lending of money by another Person to such Obligor, (A) which is represented by notes payable or drafts accepted that evidence extensions of credit, or (B) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, (iii) Debt that constitutes a Capitalized Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of letters of credit; and (v) Debt of such Obligor under any guaranty of obligations that would constitute Debt for Money Borrowed under clauses (i) through (iii) hereof, if owed directly by such Obligor. Monthly Cash Collections - for any month, an amount equal to (i) Cash collections by Borrowers on account of Wholesale Receivables for such month plus (ii) Cash collections by Borrowers on account of Retail Receivables for such month plus (iii) Cash reimbursements to Borrowers from Subsidiaries that are not Borrowers for such month minus Cash refunds made by Borrowers during such month. Moody's - Moody's Investors Services, Inc. Multiemployer Plan - has the meaning set forth in Section 4001(a)(3) of ERISA. Notes - each Revolver Note and any other promissory note executed by Borrowers at Administrative Agent's request to evidence any of the Obligations. Notice of Borrowing - as defined in SECTION 4.1.1(I). Notice of Conversion/Continuation - as defined in SECTION 3.1.2(II). -23- Obligations - in each case, whether now in existence or hereafter arising, (i) the principal of, and interest and premium, if any, on the Loans, (ii) all LC Obligations and all other obligations of any Obligor to Administrative Agent or Issuing Bank arising in connection with the issuance of any Letter of Credit, (iii) all liabilities and obligations of Borrowers under any indemnity for Claims, (iv) all Extraordinary Expenses, and (v) all other Debts, liabilities, covenants, duties and obligations (including Contingent Obligations) now or at any time or times hereafter owing by any Obligor to Administrative Agent or any Lender under or pursuant to this Agreement or any of the other Loan Documents, or owing by any Obligor to Administrative Agent or BofA (or any Affiliate of BofA) with respect to Banking Relationship Debt, in each case, whether evidenced by any note or other writing, whether arising from any extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including all interest, charges, expenses, fees or other sums chargeable to any or all Obligors under any of the Loan Documents. Obligor - each Borrower and each Guarantor, and any other Person that is at any time liable for the payment of the whole or any part of the Obligations or that has granted in favor of Administrative Agent a Lien upon any of such Person's assets to secure payment of any of the Obligations. Ordinary Course of Business - with respect to any transaction involving any Person, the ordinary course of such Person's business, as undertaken by such Person in good faith and not for the purpose of evading any covenant or restriction in any Loan Document. Organic Documents - with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, partnership agreement, certificate of partnership, certificate of formation or similar agreement or instrument governing the formation or operation of such Person. OSHA - the Occupational Safety and Hazard Act of 1970. Other Agreements - the Notes, the Fee Letter, the Lien Waiver, each Cash Management Agreement, Hedging Agreement or other document, instrument or agreement relating to Bank Products to which an Obligor is party with BofA or any of its Affiliates, and any and all other agreements, instruments and documents (other than this Agreement and the Security Documents), heretofore, now or hereafter executed by any Borrower, any other Obligor or any other Person and delivered to Administrative Agent or any Lender, or otherwise executed by Administrative Agent or any Lender in favor of any Person on behalf or for the account of an Obligor, in each case in respect of the transactions contemplated by this Agreement or other Loan Documents. Out-of-Formula Condition - as defined in SECTION 2.1.2. Out-of-Formula Loan - a Revolver Loan made or existing when an Out-of-Formula Condition exists or the amount of any Revolver Loan which, when funded, results in an Out-of-Formula Condition. Parent - InSight Health Services Holdings Corp., a Delaware corporation. Participant - as defined in SECTION 14.2.1. Participating Lender - as defined in SECTION 2.3.2(I). -24- Payment Account - an account maintained by Administrative Agent to which all monies from time to time deposited to a Dominion Account shall be transferred during a Restrictive Trigger Event and all other collections on Accounts shall be sent in immediately available federal funds. Payment Intangible - shall have the meaning given to the term "payment intangible" in the UCC. Payment Item - each check, draft, or other item of payment payable to a Borrower, including those evidencing or constituting proceeds of any of the Collateral. Pending Revolver Loans - at any date, the aggregate principal amount of all Revolver Loans which have been requested in any Notice of Borrowing received by Administrative Agent but which have not theretofore been advanced by Administrative Agent or Lenders. Permitted Acquisition - (i) if at the time of and after giving pro forma effect to such Acquisition Transaction, there are no Revolver Loans outstanding and the LC Obligations that have not been Cash Collateralized do not exceed $2,000,000, any Acquisition Transaction, provided that such Acquisition Transaction is not a Hostile Acquisition; and (ii) if at the time of or after giving pro forma effect to such Acquisition Transaction, there are Revolver Loans outstanding or the LC Obligations that have not been Cash Collateralized exceed $2,000,000, any Acquisition Transaction, provided that: (a) the Acquisition Target's business is in a Permitted Business Field; (b) Administrative Agent shall have received copies of (i) with respect to any Acquisition Transaction involving Acquisition Consideration of more than $3,000,000, the Acquisition Documents, (ii) with respect to any Acquisition Transaction involving Acquisition Consideration of more than $3,000,000, historical financial statements, if available, or other financial information of the Acquisition Target in form and substance reasonably acceptable to Administrative Agent and (iii) all other financial information, lien search results and other documents and information with respect to the Acquisition Target as Administrative Agent may reasonably request, all of which shall be reasonably acceptable to Administrative Agent; (c) if the acquired assets are to be included in the Borrowing Base simultaneously with the consummation of the Permitted Acquisition, Administrative Agent's examiners shall have completed a field exam of the Acquisition Target, in scope and with results reasonably acceptable to Administrative Agent, or if such field exam is not conducted, then the assets of such Acquisition Target shall not be included in the Borrowing Base and shall be ineligible for borrowing purposes until such exam is conducted in scope and with results reasonably acceptable to Administrative Agent; (d) no Default or Event of Default shall exist at the time of the Acquisition Transaction or after giving pro forma effect thereto; (e) Borrowers shall have delivered to Administrative Agent a certificate executed by the chief financial officer of Borrowers which demonstrates to the reasonable satisfaction of Administrative Agent that (i) at the time of and after giving pro forma effect to such Acquisition Transaction Borrowers shall have Liquidity of not less than $22,500,000 and for the 30-day period preceding the date of such Acquisition, Average Liquidity shall not be less than $22,500,000, and (ii) at the time of such Acquisition Transaction and after giving effect thereto, -25- Borrowers shall maintain, on a pro forma basis for the 12-month period ending on the Restatement Effective Date a Fixed Charge Coverage Ratio of 1.10 to 1.0; (f) any Debt incurred to any or all of the sellers in connection with such Acquisition Transaction shall be unsecured; (g) the Acquisition Transaction is not a Hostile Acquisition; (h) Borrower shall have notified Administrative Agent in writing of the Acquisition Transaction (and provided to Administrative Agent an information package with respect to the Acquisition Transaction) at least 14 days prior to the scheduled closing date of the Acquisition Transaction; (i) if the Acquisition Transaction involves Acquisition Consideration greater than $3,000,000, Administrative Agent contemporaneously with the closing of such Acquisition Transaction shall have received (i) such documents and instruments as may be necessary to grant or confirm to Administrative Agent a first priority perfected Lien on assets of the Acquisition Target so acquired that are consistent with the "Collateral" hereunder and (ii) if the Acquisition Target acquired is not merged into a Borrower or an Acquisition Subsidiary that already is a "Borrower" under the Agreement and, after giving effect to the Acquisition Transaction, the Acquisition Target is a wholly-owned Subsidiary of a Borrower or Acquisition Subsidiary, Administrative Agent shall have received a Joinder Agreement executed by such Acquisition Target, together with such other collateral documents and opinions of counsel as may be reasonably requested by Administrative Agent, each in form and substance reasonably satisfactory to Administrative Agent; and (j) Pro forma EBITDA of the Acquisition Target for the 12-month period ending on the last day of the most recent month for which Administrative Agent has received financial statements shall be equal to or greater than $0. Permitted Asset Disposition - (i) if at the time of and after giving pro forma effect to such Asset Disposition there are no Revolver Loans outstanding and the LC Obligations that have not been Cash Collateralized do not exceed $2,000,000, any Asset Disposition; and (ii) if at the time of or after giving pro forma effect to such Asset disposition there are Revolver Loans outstanding or the LC Obligations that have not been Cash Collateralized exceed $2,000,000, any Asset Disposition that consists of any of the following: (a) the disposition of damaged, obsolete or worn out Property in the Ordinary Course of Business; (b) the sale of inventory in the Ordinary Course of Business; (c) dispositions permitted by SECTION 10.2.1; (d) the sale of Equity Interests of any Subsidiary of InSight Health to a Borrower or a Guarantor; (e) any disposition of real Property to a Governmental Authority as a result of a condemnation of such real Property; -26- (f) the abandonment or cancellation of Intellectual Property that is not material or is no longer used or useful in any material respect in the business of Borrowers and their Subsidiaries, taken as a whole; (g) licenses, leases and subleases of real or personal Property in the Ordinary Course of Business; (h) dispositions of Property to any Borrower, Guarantor or Subsidiary thereof, provided that if the transferor is a Borrower or a Guarantor then the transferee must be a Borrower or Guarantor; (i) sales of Cash Equivalents in the Ordinary Course of Business on ordinary business terms; (j) non-exclusive licenses and sublicenses of Intellectual Property in the Ordinary Course of Business; (k) sales or forgiveness of Accounts in the Ordinary Course of Business in connection with the collection or compromise thereof, including sales of Accounts which arise from or constitute a workers' compensation claim or a personal injury claim; and (l) the disposition of Property (other than Collateral) having a fair market value not to exceed $10,000,000 in the aggregate for any Fiscal Year. Permitted Business Field - the business engaged in by Borrowers on the Restatement Effective Date or a business substantially similar or reasonably related, complementary or incidental to the business engaged in by Borrowers on the Restatement Effective Date and reasonable extensions thereof. Permitted Contingent Obligations - Contingent Obligations arising from endorsements of items of payment for collection or deposit in the Ordinary Course of Business; Contingent Obligations arising from Hedging Agreements entered into in the Ordinary Course of Business; Contingent Obligations of any Borrower and its Subsidiaries existing as of the Restatement Effective Date, including extensions and renewals thereof that do not increase the amount of such Contingent Obligations as of the date of such extension or renewal; Contingent Obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to Administrative Agent title insurance policies; Contingent Obligations with respect to customary indemnification obligations in contracts entered into in the Ordinary Course of Business and in favor of sellers in connection with Permitted Acquisitions; Contingent Obligations consisting of reimbursement obligations from time to time owing by any Borrower to Issuing Bank with respect to Letters of Credit (but in no event to include reimbursement obligations at any time owing by a Borrower to any other Person that may issue letters of credit for the account of Borrowers); Contingent Obligations of an Obligor in respect of Debt of another Obligor; Contingent Obligations of an Obligor or any Subsidiary thereof on an unsecured basis that do not constitute Debt of such Obligor; Contingent Obligations of a Subsidiary that is not an Obligor in respect of obligations (including Debt) of another Subsidiary that is not an Obligor; and other Contingent Obligations not to exceed $25,000,000 in the aggregate at any time. Permitted Lien - a Lien of a kind specified in SECTION 10.2.5. -27- Permitted Purchase Money Debt - Purchase Money Debt of Borrowers and their Subsidiaries that is unsecured or is secured only by a Purchase Money Lien. For the purposes of this definition, the principal amount of any Purchase Money Debt consisting of capitalized leases shall be computed as a Capitalized Lease Obligation. Permitted Restrictive Agreement - an agreement of a Borrower or a Subsidiary which is a Restrictive Agreement by virtue of the following: (a) conditions imposed by Applicable Law or by any Loan Document; (b) in the case of clause (b) of the definition of Restrictive Agreement, an agreement that applies to assets encumbered by Permitted Liens as long as such restriction applies only to the asset encumbered by such Permitted Lien; (c) restrictions and conditions contained in such agreement existing on the Restatement Effective Date (but shall not apply to any amendment or modification expanding the scope of any such restriction or condition); (d) restrictions in such agreement in effect at the time any Person becomes a Subsidiary of a Borrower, provided that such agreement was not entered into in contemplation of such Person becoming a Subsidiary of a Borrower; (e) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary of a Borrower (or the assets of a Subsidiary of a Borrower) pending such sale, provided such restrictions and conditions apply only to the Subsidiary of such Borrower that is to be sold (or whose assets are to be sold) and such sale is permitted hereunder; (f) in the case of clause (b) of the definition of Restrictive Agreement, customary provisions in leases and contracts in the Ordinary Course of Business between a Borrower or any of its Subsidiaries and its customers and other contracts restricting the assignment thereof; (g) restrictions in the Senior Note Documents and the Senior Subordinated Note Documents; (h) restrictions in agreements governing Debt listed in SCHEDULE 10.2.3 and Refinancing Debt thereof and that are no more restrictive, taken as a whole, with respect to such restrictions than those contained in such agreements on the Restatement Effective Date; (i) customary provisions with respect to the disposition or distribution of assets or Property, and provisions restricting the incurrence of the Obligations, in joint venture agreements, limited liability company operating agreements, partnership agreements and stockholders agreements for Affiliates that are not Borrowers; and (j) customary provisions with respect to the disposition or distribution of assets or Property in asset sale agreements, agreements in respect of sales of Equity Interests and other similar agreements entered into in connection with transactions not prohibited under this Agreement, provided that such encumbrance or restriction shall only be effective against the assets or Property that are the subject of such agreements. Permitted Senior Subordinated Note Repurchase - the repurchase or redemption of Senior Subordinated Notes (i) on or within 2 Business Days after the Restatement Effective Date for an -28- amount equal to $50,000,000 and (ii) any subsequent repurchase or redemption of Senior Subordinated Notes so long as the following conditions are satisfied, as determined by Administrative Agent: (a) if there are any Revolver Loans outstanding at the time of or if Revolver Loans are employed for such repurchase or redemption, the Fixed Charge Coverage Ratio for the 12-month period ending as of the last day of the most recent month for which financial statements have been received by Administrative Agent in accordance with SECTION 10.1.3(A) preceding the date of repurchase or redemption is at least 1.1 to 1.0 on a pro forma basis after giving effect to such repurchase or redemption; (b) Liquidity at the time of such repurchase and after giving pro forma effect thereto is at least $22,500,000; (c) no Event of Default exists or would result therefrom; (d) Borrower Agent shall have given Administrative Agent at least 5 Business Days prior written notice of such Permitted Senior Subordinated Notes Repurchase; (e) simultaneously with any Permitted Senior Subordinated Notes Repurchase, the acquired Senior Subordinated Notes shall be cancelled; (f) both before and after giving pro forma effect to any Permitted Senior Subordinated Notes Repurchase, each Borrower and each of its Subsidiaries is Solvent; and (g) on or immediately before the effective date of any Permitted Senior Subordinated Notes Repurchase, Borrower Agent shall have furnished to Administrative Agent a certificate setting forth, in reasonable detail, Borrower Agent's calculation of the amounts to be paid in Cash in respect of principal of Senior Subordinated Notes to be repurchased and the accrued and unpaid interest, premium, fees, expenses and commissions payable in connection with closing such Permitted Senior Subordinated Notes Repurchase, together with the calculations required to determine compliance with this definition of Permitted Senior Subordinated Note Repurchase. Person - an individual, partnership, corporation, limited liability company, limited liability partnership, joint stock company, land trust, business trust, or unincorporated organization, or a Governmental Authority. Plan - an employee pension benefit plan that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and that is either (i) maintained by Borrower for employees or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which Borrower is then making or accruing an obligation to make contributions or has within the preceding 5 years made or accrued such contributions. Private Provider Agreement - an agreement entered into between any Borrower and a Healthcare Purchaser under which such Borrower agrees to provide services for Members of a health plan offered by such Healthcare Purchaser. Professional Fees Allowance - on any date, an amount equal to that portion of aggregate uncollected Retail Receivables that, upon collection, will be payable to physicians as fees and other amounts due from Borrowers under all PSAs. -29- Professional Fees Reserve - on any date, an amount equal to that portion of Accounts that have been collected by Borrowers as of such date that is due from Borrowers to physicians as fees and other amounts due from Borrowers under all PSAs, as adjusted to deduct amounts attributable to and owing by Subsidiaries that are not Borrowers to the extent that such Subsidiaries have sufficient Cash on hand to pay such amounts as are due and payable as of such date. Pro Rata - with respect to any Lender on any date, a percentage ( expressed as a decimal rounded to the ninth decimal place) arrived at by dividing the amount of the Total Commitments of such Lender on such date by the aggregate amount of the Commitments of all Lenders on such date. Projections - (i) prior to the Restatement Effective Date and thereafter until Administrative Agent and Lenders receive new projections pursuant to SECTION 10.1.5, the projections of Borrowers' financial condition, results of operations, and cash flow for the Fiscal Year ending June 30, 2006; and (ii) thereafter, the projections most recently received by Administrative Agent and Lenders pursuant to and as required by SECTION 10.1.5. Properly Contested - in the case of any Debt or Tax of an Obligor that is not paid as and when due or payable by reason of such Obligor's bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Debt or Tax is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such Obligor has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non-payment of such Debt or Tax will not reasonably be expected to have a Material Adverse Effect and will not result in a forfeiture or sale of any Collateral; (iv) no Lien is imposed upon any Collateral with respect to such Debt or Tax unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Administrative Agent (except only with respect to property taxes that have priority as a matter of Applicable Law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; and (v) if the Debt or Tax results from, or is determined by the entry, rendition or issuance against an Obligor of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review. Property - any interest in any kind of property or asset, whether real, personal or mixed and whether tangible or intangible. Provider Agreement - the Medicaid Provider Agreement, the Medicare provider Agreement, any Private Provider Agreement or any other agreement by which a Third Party Payor is obligated to pay for services rendered to patients of any Borrower, or all of them, as the context requires. PSA - each Professional Services Agreement entered into by a Borrower and a physician or group of physicians in connection with the provision of diagnostic imaging services. Purchase Money Debt - means and includes (i) Debt (other than the Obligations) for the payment of all or any part of the purchase price of any fixed asset, (ii) any Debt (other than the Obligations) incurred at the time of or within 90 days prior to or after the acquisition of any fixed asset for the purpose of financing all or any part of the purchase price thereof, and (iii) any renewals, extensions or refinancings (but not any increases in the principal amounts) thereof outstanding at the time. -30- Purchase Money Lien - a Lien upon fixed assets which secures Purchase Money Debt, but only if such Lien shall at all times be confined solely to the fixed assets acquired through the incurrence of the Purchase Money Debt secured by such Lien. RCRA - the Resource Conservation and Recovery Act (42 U.S.C. Sections 6991-6991i). Refinancing Conditions - the following conditions, each of which must be satisfied before Refinancing Debt shall be permitted under SECTION 10.2.3: (i) the Refinancing Debt is in an aggregate principal amount that does not exceed the aggregate principal amount of the Debt being extended, renewed or refinanced (except by an amount equal to accrued interest thereon and the amount of all reasonable costs, expenses and premiums incurred in connection with such extension, renewal or refinancing), (ii) the Refinancing Debt has a later or equal final maturity and a longer or equal weighted average life than the Debt being extended, renewed or refinanced, (iii) the Refinancing Debt does not bear a rate of interest that exceeds, as of the date of such extension, renewal or refinancing, a market rate (as determined in good faith by a Senior Officer) for Debt of such type issued by an entity similar to the Borrower that is liable on the Debt being extended, renewed or refinanced, (iv) if the Debt being extended, renewed or refinanced is subordinate to the Obligations, the Refinancing Debt is subordinated to the same extent (except in the case of Permitted Senior Subordinated Note Repurchases with the proceeds of Senior Notes or Revolver Loans hereunder), (v) the covenants contained in any instrument or agreement relating to the Refinancing Debt, taken as a whole, are not materially less favorable to Borrowers than those relating to the Debt being extended, renewed or refinanced, (vi) at the time of and after giving effect to such extension, renewal or refinancing, no Default or Event of Default shall exist, (vii) no additional Lien is granted to secure the repayment of the Refinancing Debt (except in the case of Permitted Senior Subordinated Note Repurchases with the proceeds of Senior Notes or Revolver Loans hereunder), and (viii) no additional Obligor is or may become obligated on the Refinancing Debt. Refinancing Debt - Debt for Money Borrowed that is permitted by SECTION 10.2.3 and that is the subject or the result of an extension, renewal or refinancing. Register - the register maintained by Administrative Agent in accordance with SECTION 5.8.2. Regulation D - Regulation D of the Board of Governors. Reimbursement Date - as defined in SECTION 2.3.1(III). Rentals - all payments which a lessee is required to make under the terms of any lease. Report - as defined in SECTION 13.1.5. Reportable Event - any of the events set forth in Section 4043(c) of ERISA. Required Lenders - at any date of determination thereof, Lenders having Commitments representing at least 51% of the aggregate Commitments at such time; provided, however, that if any Lender shall be in breach of any of its obligations hereunder to Borrowers or Administrative Agent, including any breach resulting from its failure to honor its Commitment in accordance with the terms of this Agreement, then, for so long as such breach continues, the term "Required Lenders" shall mean Lenders (excluding each Lender that is in breach of its obligations under this Agreement) having Commitments representing at least 51% of the aggregate -31- Commitments (excluding the Commitments of each Lender that is in breach of its obligations under this Agreement) at such time; provided further, that if all of the Commitments have been terminated, the term "Required Lenders" shall mean Lenders (excluding each Lender that is in breach of its obligations under this Agreement) holding Loans (including Swingline Loans) representing at least 51% of the aggregate principal amount of Loans (including Swingline Loans) outstanding at such time. Restatement Effective Date - September 22, 2005. Restricted Investment - any acquisition of Property by a Borrower or any of its Subsidiaries in exchange for cash or other Property, whether in the form of an acquisition of Equity Interests or Debt, or the purchase or acquisition by such Borrower or any Subsidiary of any other Property, or a loan, advance or capital contribution, except the following: (i) acquisitions of fixed assets to be used in the Ordinary Course of Business of such Borrower or any of its Subsidiaries; (ii) acquisitions of goods to be used in the provision of services by such Borrower or any of its Subsidiaries in the Ordinary Course of Business; (iii) acquisitions of Current Assets in the Ordinary Course of Business of such Borrower or any of its Subsidiaries; (iv) investments to the extent existing on the Restatement Effective Date; (v) Cash Equivalents; (vi) loans and other advances of money to the extent not prohibited by SECTION 10.2.2; (vii) Permitted Acquisitions; (viii) Permitted Senior Subordinated Note Repurchases; (vii) Hedging Agreements entered into in the Ordinary Course of Business and not for speculative purposes; (ix) Debt permitted pursuant to Section 10.2.3; (x) Distributions to the extent permitted under this Agreement; (xi) extensions of trade credit in the Ordinary Course of Business; (xii) Permitted Contingent Obligations; (xii) loans and advances to employees, officers and directors of any Borrower or Guarantor or Subsidiary thereof (a) to the extent the proceeds thereof are used to acquire Equity Interests of Parent so long as any cash proceeds received by Parent are contemporaneously remitted to InSight Health and (b) in the Ordinary Course of Business (including for travel, entertainment and relocation expenses) in an aggregate amount for all such loans and advances permitted by this clause (b) not to exceed $500,000 at any one time outstanding; (xiii) investments consisting of Equity Interests, obligations, securities or other Property received by any Guarantor, Borrower or Subsidiary thereof in settlement of Accounts (created in the Ordinary Course of Business); (xiv) intercompany investments (a) by any Subsidiary of InSight Health in InSight Health or another Borrower or Guarantor, and (b) by any Subsidiary of InSight Health that is not a Borrower or Guarantor in any Person that is not a Borrower or Guarantor; (xv) investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the Ordinary Course of Business; and (xvi) expenditures of Cash to purchase Equity Interests of or funding of loans to joint ventures or other business organizations that are Affiliates but not Obligors. Restrictive Agreement - an agreement that, if and for so long as an Obligor or any Subsidiary of such Obligor is a party thereto, would prohibit, condition or restrict such Obligor's or Subsidiary's right to: (a) incur or repay any of the Obligations; (b) grant Liens upon any of such Obligor's or Subsidiary's assets (including Liens granted in favor of Administrative Agent pursuant to the Loan Documents); or (c) declare or make Distributions; amend, modify, extend or renew any of the Loan Documents; Restrictive Trigger Event - for purposes of Section 8.2.5(ii), if Liquidity is less than $15,000,000 and there are any Revolver Loans outstanding. Retail Collection Account - shall have the meaning ascribed to it in SECTION 8.2.5(I). -32- Retail Receivable - an Account arising from (i) the provision of diagnostic imaging services or (ii) the provision of management of services by InSight Health to any Subsidiary that is not a Borrower. Retained Rights - with respect to any Governmental Receivable, the rights of any Obligor or any Subsidiary thereof granted by Applicable Law with respect to such Governmental Receivable, including, and as applicable, the collection thereof and discretion over the transfer thereof to any Person (including Administrative Agent) and to enforce the claim giving rise to such Governmental Receivable against the applicable Governmental Authority, in the absence of a court order in the manner expressly contemplated by Applicable Law. Revolver Commitment - at any date for any Lender, the obligation of such Lender to make Revolver Loans and to purchase participations in LC Obligations pursuant to the terms and conditions of this Agreement, which shall not exceed the principal amount set forth opposite such Lender's name under the heading "Revolver Commitment" on the signature pages of this Agreement or the principal amount set forth in the Assignment and Acceptance by which it became a Lender, as modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable Assignment and Acceptance; and "Revolver Commitments" means the aggregate principal amount of the Revolver Commitments of all Lenders, the maximum amount of which on any date shall be $30,000,000, as reduced from time to time pursuant to SECTION 2.1.5. Revolver Loan - a loan made by Lenders as provided in SECTION 2.1 (including any Out-of-Formula Loan) or a Swingline Loan funded solely by BofA. Revolver Note - a Revolver Note to be executed by Borrowers in favor of each Lender in the form of EXHIBIT A attached hereto, which shall be in the face amount of such Lender's Revolver Commitment and which shall evidence all Revolver Loans (other than Swingline Loans) made by such Lender to Borrowers pursuant to this Agreement. S&P - Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. Schedule of Accounts - as defined in SECTION 8.2.1. SEC - Securities and Exchange Commission. Secured Parties - Administrative Agent, Issuing Bank, Lenders (including BofA as the provider of Swingline Loans) and BofA (and any Affiliate of BofA) as the provider of any Bank Products. Security - shall have the same meaning as in Section 2(1) of the Securities Act of 1933. Security Agreement - the Security Agreement executed and delivered by Parent on or before the Restatement Effective Date to secure its Debt under its Guaranty. Security Documents - each Guaranty, the Control Agreements, the Security Agreement and all other instruments and agreements now or at any time hereafter securing the whole or any part of the Obligations. Senior Note Documents - the Senior Notes, the Senior Notes Indenture and any and all other agreements, instruments and documents executed in connection therewith or related thereto. -33- Senior Note Indenture - the indenture to be entered into by InSight Health and Guarantors in connection with the issuance of the Senior Notes. Senior Notes - the $300,000,000 Senior Secured Floating Rate Notes of InSight Health due 2011 that shall be issued under the Senior Notes Indenture (and any Senior Secured Floating Rate Notes of InSight Health due 2011 issued in exchange therefor in an exchange offer) (plus any principal amounts issued in lieu of Cash interest). Senior Notes Trustee - U.S. Bank National Association, and any of its successors and assigns. Senior Officer - the chairman of the board of directors, the president or the chief financial officer of a Borrower. Senior Subordinated Notes - the 9-7/8% Senior Subordinated Notes due 2001 issued by InSight Health, in the aggregate original principal amount of $250,000,000. Senior Subordinated Note Documents - the Senior Subordinated Notes, the Senior Subordinated Notes Indenture and any and all other agreements, instruments and documents executed in connection therewith or related thereto. Senior Subordinated Notes Indenture - the Indenture dated October 31, 2001, among U.S. Bank National Association, as Trustee, and InSight Health and Guarantors, pursuant to which InSight Health issued the Senior Subordinated Notes. Settlement Report - a report delivered by Administrative Agent to Lenders summarizing the amount of the outstanding Revolver Loans as of the Settlement Date and the calculation of the Borrowing Base as of such Settlement Date. Social Security Act - the Social Security Act as codified at 42 U.S.C. Section 1395 et seq. Software - shall have the meaning given to the term "software" in the UCC. Solvent - as to any Person, such Person (i) owns Property whose fair salable value is greater than the amount required to pay all of such Person's debts (including contingent, subordinated, unmatured and unliquidated liabilities), (ii) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities), of such Person as they become absolute and matured, (iii) is able to pay all of its debts as such debts mature, (iv) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage, (v) is not "insolvent" within the meaning of Section 101(32) of the Bankruptcy Code, and (vi) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any of the Loan Documents, or made any conveyance pursuant to or in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Subsidiaries. As used herein, the term "fair salable value" of a Person's assets means the amount that may be realized within a reasonable time, either through collection or sale of such assets at the regular market value, based upon the amount that could be obtained for such assets within such period by a capable and diligent seller from an interested buyer who is willing (but is under no compulsion) to purchase under ordinary selling conditions. -34- Sponsor Related Party - (i) any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Sponsor or (ii) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more of the Sponsors and/or such other Persons referred to in the immediately preceding clause (i). Sponsors - means J.W. Childs Associates, L.P., J.W. Childs Equity Partners II, L.P., The Halifax Group, L.L.C, Halifax Capital Partners, L.P. and their respective Affiliates Statutory Reserves - on any date, the percentage (expressed as a decimal) established by the Board of Governors which is the then stated maximum rate for all reserves (including all basic, emergency, supplemental or other marginal reserve requirements and taking into account any transitional adjustments or other scheduled in reserve requirements) applicable to any member bank of the Federal Reserve System in respect to Eurocurrency Liabilities (or any successor category of liabilities under Regulation D). Such reserve percentage shall include those imposed pursuant to said Regulation D. The Statutory Reserve shall be adjusted automatically on and as of the effective date of any change in such percentage. Subordinated Debt - Debt incurred by a Borrower that is expressly subordinated and made junior in right of payment to the Full Payment of the Obligations and, to the extent that such Debt is incurred on or after the Restatement Effective Date, such Debt is payable on terms and conditions (including terms relating to interest, fees, repayment and subordination) that are reasonably satisfactory to Administrative Agent. Subsidiary - any Person in which more than 50% of its outstanding Voting Securities is owned directly or indirectly by a Borrower, by one or more other Subsidiaries of such Borrower or by a Borrower and one or more other Subsidiaries. Supporting LC - an irrevocable letter of credit that is in form and substance reasonably acceptable to Administrative Agent, issued or confirmed by a bank reasonably acceptable to Administrative Agent, and payable in Dollars at a place of payment within the United States that is reasonably acceptable to Administrative Agent, which letter of credit names Administrative Agent as the beneficiary thereof. Supporting Obligation - shall have the meaning given to the term "supporting obligation" in the UCC. Swingline Loan - as defined in SECTION 4.1.3 (II). Taxes - any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever nature, including income, receipts, excise, property, sales, use, transfer, license, payroll, withholding, social security and franchise taxes now or hereafter imposed or levied by the United States or any other Governmental Authority and all interest, penalties, additions to tax and similar liabilities with respect thereto, but excluding Excluded Taxes. Term - as defined in SECTION 6.1. Third Party Payor - any Person (other than the customer or patient) that is responsible for payment of all or any portion of an Account, including any commercial or non-profit insurer, any -35- Healthcare Purchaser and any Governmental Authority making payment pursuant to any Healthcare Law. For the avoidance of doubt, the term "Third Party Payors" shall include all Government Payors and all Commercial Payors. Transferee - as defined in SECTION 14.3.3. Type - any type of a Loan determined with respect to the interest option applicable thereto, which shall be either a LIBOR Loan or a Base Rate Loan. UCC - the Uniform Commercial Code (or any successor statute) as adopted and in force in the State of New York or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code (or any successor statute) of such state. Undrawn Amount - on any date with respect to a particular Letter of Credit, the total amount then available to be drawn under such Letter of Credit in Dollars. Unused Line Fee - as defined in SECTION 3.2.2. Upstream Payment - collectively: (a) Distributions by a Subsidiary to a Borrower or any Obligor (other than Parent); (b) Distributions by a Subsidiary of a Borrower that is not wholly-owned by such Borrower to the holders of its Equity Interests, provided that such Distributions are made pro rata to all holders of its Equity Interests, taking into account the relative preferences, if any, on the various classes of Equity Interests of such non-wholly owned Subsidiary; (c) so long as no Default or Event of Default shall have occurred and be continuing, Distributions by InSight Health to Parent to permit Parent to purchase, redeem or otherwise acquire or retire for value Parent's Equity Interests from present or former officers, directors or employees of any Obligor or Subsidiary thereof (or permitted transferees, assigns, estates or heirs of the foregoing) upon the death, disability or termination of employment of such officer, director or employee, provided, that the aggregate amount of payments under this paragraph (c) after the Restatement Effective Date (net of (i) repayment of loans related to Equity Interests made by an Obligor or Subsidiary thereof pursuant to clause (xii)(a) of the definition of Restricted Investment and repaid in connection with such purchase, redemption or other acquisition for value of such Equity Interests and (ii) any proceeds received by Parent and contributed to InSight Health after the date hereof in connection with resales of any Equity Interests so purchased) shall not exceed $7,500,000 in the aggregate; (d) Distributions to Parent for its proportionate share (as determined based upon pre-tax income) of the tax liability of the affiliated group of corporations that file consolidated federal income tax returns (or that file state or local income tax returns on a consolidated basis), provided that any refunds received by Parent attributable to InSight Health or any of its Subsidiaries shall promptly be returned by Parent to InSight Health through a contribution or purchase of common Equity Interests of InSight Health from InSight Health; (e) Distributions to Parent in amounts required for the Parent to pay franchise taxes and other fees required to maintain its existence and provide for all other customary operating costs of Parent to the extent attributable to the ownership and operation of InSight Health and its -36- Subsidiaries, including in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other customary costs and expenses including all costs and expenses with respect to filings with the SEC; (f) Distributions to Parent to the extent necessary to enable the payment of management fees permitted under SECTION 10.2.4; and (g) cashless exercises of options or warrants. USA Patriot Act - the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001). Voting Securities - Equity Interests of any class or classes of a corporation or other entity the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors or individuals performing similar functions. Wholesale Collection Account - shall have the meaning ascribed to it in SECTION 8.2.5(I). Wholesale Receivable - an Account that is not a Retail Receivable. 1.2. ACCOUNTING TERMS. Unless otherwise specified herein, all terms of an accounting character used in this Agreement shall be interpreted, all accounting determinations under this Agreement shall be made, and all financial statements required to be delivered under this Agreement shall be prepared in accordance with GAAP, applied on a basis consistent with the most recent audited Consolidated financial statements of Borrowers and their Subsidiaries heretofore delivered to Administrative Agent and Lenders, except for any change required by GAAP. 1.3. OTHER TERMS. All other terms contained in this Agreement shall have, when the context so indicates, the meanings provided for by the UCC to the extent the same are used or defined therein. 1.4. CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding." The section titles, table of contents and list of exhibits appear as a matter of convenience only and shall not affect the interpretation of this Agreement. All references to statutes shall include all related rules and implementing regulations and any amendments of same and any successor statutes, rules and regulations; to any agreement, instrument or other documents (including any of the Loan Documents) shall include any and all modifications and supplements thereto and any and all restatements, extensions or renewals thereof to the extent such modifications, supplements, restatements, extensions or renewals of any such documents are permitted by the terms thereof; to any Person (including, Administrative Agent, a Borrower, a Lender or BofA) shall mean and include the successors and permitted assigns of such Person; to "including" and "include" shall be understood to mean "including, without limitation" (and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters to matters similar to the matters specifically mentioned); to the time of day shall mean the time of day on the day in question in New York, New York, unless otherwise expressly provided in this Agreement; or to the "discretion" of Administrative Agent or a Lender shall mean the reasonable discretion of such Person. A Default or an Event of Default shall be deemed to exist at all times during the period commencing on the date that such -37- Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing by Administrative Agent (acting with the consent or at the direction of the Lenders or the Required Lenders, as applicable) pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided in this Agreement; and an Event of Default shall "continue" or be "continuing" until such Event of Default has been waived in writing by Administrative Agent (acting with the consent or at the direction of the Lenders or the Required Lenders, as applicable). All calculations of Value shall be in Dollars, all Loans shall be funded in Dollars and all Obligations shall be repaid in Dollars. Whenever the phrase "to the best of Borrowers' knowledge" or words of similar import relating to the knowledge or the awareness of a Borrower are used in this Agreement or other Loan Documents, such phrase shall mean and refer to the actual knowledge of a Senior Officer of any Borrower. SECTION 2. CREDIT FACILITY Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lenders severally agree to the extent and in the manner hereinafter set forth to make their respective shares of the Commitments available to Borrowers in an aggregate amount up to $30,000,000, as set forth hereinbelow: 2.1. COMMITMENT. 2.1.1. Revolver Loans. Each Lender agrees, severally to the extent of its Revolver Commitment and not jointly with the other Lenders, upon the terms and subject to the conditions set forth herein, to make Revolver Loans to Borrowers on any Business Day during the period from the Restatement Effective Date through the Business Day before the last day of the Term, not to exceed in aggregate principal amount outstanding at any time such Lender's Revolver Commitment at such time, which Revolver Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided, however, that Lenders shall have no obligation to Borrowers whatsoever to honor any request for a Revolver Loan on or after the Commitment Termination Date or if at the time of the proposed funding thereof the aggregate principal amount of all of the Revolver Loans then outstanding (including Swingline Loans) and Pending Revolver Loans exceeds, or would exceed after the funding of such Revolver Loan, the Borrowing Base. Each Borrowing of Revolver Loans shall be funded by Lenders on a Pro Rata basis in accordance with their respective Revolver Commitments (except for BofA with respect to Swingline Loans). The Revolver Loans shall bear interest as set forth in SECTION 3.1. Each Revolver Loan shall, at the option of Borrowers, be made or continued as, or converted into, part of one or more Borrowings that, unless specifically provided herein, shall consist entirely of Base Rate Loans or LIBOR Loans. 2.1.2. Out-of-Formula Loans. If the unpaid balance of Revolver Loans outstanding at any time should exceed the Borrowing Base at such time (an "Out-of-Formula Condition"), such Revolver Loans shall nevertheless constitute Obligations that are secured by the Collateral and entitled to all of the benefits of the Loan Documents. In the event that Lenders are willing in their discretion to make Out-of-Formula Loans or are required to do so by SECTION 13.9.4, such Out-of-Formula Loans shall be payable within 2 Business Days of demand and shall bear interest as provided in SECTION 3.1.5 or as otherwise agreed among Administrative Agent, Borrowers and Lenders. 2.1.3. Use of Proceeds. The proceeds of the Revolver Loans shall be used by Borrowers solely for one or more of the following purposes: (i) to pay any of the Obligations in accordance with this Agreement; and (ii) to make expenditures for other lawful corporate purposes of Borrowers to the extent such expenditures are not prohibited by this Agreement or Applicable Law. In no event may any Revolver Loan proceeds be used by any Borrower (iii) to purchase or to carry, or to reduce, retire or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related -38- purpose that violates the provisions of Regulations T, U or X of the Board of Governors, or (iv) to fund any operations or finance any investments or activities in, or to make payments to, a Blocked Person. 2.1.4. Revolver Notes. The Revolver Loans made by each Lender and interest accruing thereon shall be evidenced by the records of Administrative Agent and such Lender and by the Revolver Note payable to such Lender (or the assignee of such Lender), which shall be executed by Borrowers, completed in conformity with this Agreement and delivered to such Lender. All outstanding principal amounts and accrued interest under the Revolver Notes shall be due and payable as set forth in SECTION 5.2. 2.1.5. Voluntary Reductions of Revolver Commitments. Borrowers shall have the right to permanently reduce the amount of the Revolver Commitments, on a Pro Rata basis for each Lender, at any time and from time to time upon written notice to Administrative Agent of such reduction, which notice shall specify the amount of such reduction, shall be irrevocable once given, shall be given at least 5 Business Days prior to the requested reduction. Administrative Agent shall promptly transmit such notice to each Lender. If on the effective date of any such reduction in the Revolver Commitments and after giving effect thereto an Out-of-Formula Condition exists, then the provisions of SECTION 5.2.1(III) shall apply, except that such repayment shall be due immediately upon such effective date without further notice to or demand upon Borrowers. If the Commitments are reduced to zero, then such reduction shall be deemed a termination of the Commitments by Borrowers pursuant to SECTION 6.2.2. The Revolver Commitments, once reduced, may not be reinstated without the written consent of all Lenders. 2.2. RESERVED. 2.3. LC FACILITY. 2.3.1. Issuance of Letters of Credit. Subject to all of the terms and conditions hereof, Issuing Bank agrees to establish the LC Facility pursuant to which, during the period from the date hereof to the last day of the Term, Issuing Bank shall issue one or more Letters of Credit on Administrative Agent's request therefor from time to time, subject to the following terms and conditions: (i) Each Borrower acknowledges that Issuing Bank's willingness to issue any Letter of Credit is conditioned upon Issuing Bank's receipt of (A) an LC Application with respect to the requested Letter of Credit and (B) such other instruments and agreements as Issuing Bank may customarily require for the issuance of a letter of credit of equivalent type and amount as the requested Letter of Credit. Issuing Bank shall have no obligation to issue any Letter of Credit unless (x) Issuing Bank receives an LC Request and LC Application at least 3 Business Days prior to the date of issuance of a Letter of Credit, and (y) each of the LC Conditions is satisfied on the date of Issuing Bank's receipt of the LC Request and at the time of the requested issuance of a Letter of Credit. (ii) Letters of Credit may be requested by a Borrower only if they are to be used (a) to support obligations of such Borrower incurred in the Ordinary Course of Business of such Borrower, on a standby basis, or (b) for such other purposes as Administrative Agent and Lenders may approve from time to time in writing. (iii) Borrowers shall comply with all of the terms and conditions imposed on Borrowers by Issuing Bank that are contained in any LC Application or in any other agreement customarily or reasonably required by Issuing Bank in connection with the issuance of any Letter of Credit. If Issuing Bank shall honor any request for payment under a Letter of Credit, -39- Borrowers shall be jointly and severally obligated to pay to Issuing Bank, in Dollars on the same day as the date on which payment was made by Issuing Bank (the "Reimbursement Date"), an amount equal to the amount paid by Issuing Bank under such Letter of Credit (or, if payment thereunder was made by Issuing Bank in a currency other than Dollars, an amount equal to the Dollar equivalent of such currency, as determined by Issuing Bank, as of the time of Issuing Bank's payment under such Letter of Credit, in each case), together with interest from and after the Reimbursement Date until Full Payment is made by Borrowers at the Default Rate for Revolver Loans constituting Base Rate Loans. Until Issuing Bank has received payment from Borrowers in accordance with the foregoing provisions of this clause (iii), Issuing Bank, in addition to all of its other rights and remedies under this Agreement and any LC Application, shall be fully subrogated to the rights and remedies of each beneficiary under such Letter of Credit whose claims against Borrowers have been discharged with the proceeds of such Letter of Credit. Whether or not a Borrower submits any Notice of Borrowing to Administrative Agent, Borrowers shall be deemed to have requested from Lenders a Borrowing of Base Rate Loans in an amount necessary to pay to Issuing Bank all amounts due Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro Rata share of such Borrowing whether or not any Default or Event of Default has occurred or exists, the Commitments have been terminated, the funding of the Borrowing would result in (or increase the amount of) any Out-of-Formula Condition, or any of the conditions set forth in Section 11 are not satisfied. (iv) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary thereof. The obligation of Borrowers to reimburse Issuing Bank for any payment made by Issuing Bank under a Letter of Credit shall be absolute, unconditional, irrevocable and joint and several and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right which Borrowers may have at any time against a beneficiary of any Letter of Credit. The rights, remedies, powers and privileges of Issuing Bank under this Agreement with respect to Letters of Credit shall be in addition to, and cumulative with, all rights, remedies, powers and privileges of Issuing Bank under any of the LC Documents. Nothing herein shall be deemed to release Issuing Bank from any liability or obligation that it may have in respect to any Letter of Credit arising out of and directly resulting from its own gross negligence or willful misconduct. (v) No Letter of Credit shall be extended or amended in any respect that is not solely ministerial, unless all of the LC Conditions are met as though a new Letter of Credit were being requested and issued. (vi) Unless otherwise provided in any of the LC Documents, each LC Application and each standby Letter of Credit shall be subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce No. 500, and any amendments or revisions thereto. -40- 2.3.2. Participations. (i) Immediately upon the issuance of any Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received from Issuing Bank, without recourse or warranty, an undivided interest and participation equal to the Pro Rata share of such Lender (a "Participating Lender") in all LC Obligations arising in connection with such Letter of Credit, but in no event greater than an amount which, when added to such Lender's Pro Rata share of all Revolver Loans and LC Obligations then outstanding, exceeds such Lender's Revolver Commitment; provided, however, that if Issuing Bank shall have received written notice from a Lender on or before the Business Day immediately prior to the date of Issuing Bank's issuance of a Letter of Credit that one or more of the conditions set forth in Section 11 or Section 2.3.1 has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit or any other Letter of Credit until such notice is withdrawn in writing by that Lender or until the Required Lenders shall have effectively waived such condition in accordance with this Agreement. In no event shall Issuing Bank be deemed to have notice or knowledge of any existence of any Default or Event of Default or the failure of any conditions in Sections 11 or 2.3.1 to be satisfied prior to its receipt of such notice from a Lender. (ii) If Issuing Bank makes any payment under a Letter of Credit and Borrowers do not repay or cause to be repaid the amount of such payment on the Reimbursement Date, Issuing Bank shall promptly notify Administrative Agent, which shall promptly notify each Participating Lender, of such payment and each Participating Lender shall promptly (and in any event within 1 Business Day after its receipt of notice from Administrative Agent) and unconditionally pay to Administrative Agent, for the account of Issuing Bank, in immediately available funds, the amount of such Participating Lender's Pro Rata share of such payment, and Administrative Agent shall promptly pay such amounts to Issuing Bank. If a Participating Lender does not make its Pro Rata share of the amount of such payment available to Administrative Agent on a timely basis as herein provided, such Participating Lender agrees to pay to Administrative Agent for the account of Issuing Bank, forthwith on demand, such amount together with interest thereon at the Federal Funds Rate until paid. The failure of any Participating Lender to make available to Administrative Agent for the account of Issuing Bank such Participating Lender's Pro Rata share of the LC Obligations shall not relieve any other Participating Lender of its obligation hereunder to make available to Administrative Agent its Pro Rata share of the LC Obligations. No Participating Lender shall be responsible for the failure of any other Participating Lender to make available to Administrative Agent its Pro Rata share of the LC Obligations on the date such payment is to be made. (iii) Whenever Issuing Bank receives a payment on account of the LC Obligations, including any interest thereon, as to which Administrative Agent has previously received payments from any Participating Lender for the account of Issuing Bank, Issuing Bank shall promptly pay to each Participating Lender which has funded its participating interest therein, in immediately available funds, an amount equal to such Participating Lender's Pro Rata share thereof. (iv) The obligation of each Participating Lender to make payments to Administrative Agent for the account of Issuing Bank in connection with Issuing Bank's payment under a Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with the terms and conditions of this Agreement under all circumstances and irrespective of whether or not Borrowers may assert or have any claim for any lack of validity or unenforceability of this Agreement or any of the other Loan Documents; the existence of any Default or Event of Default; -41- any draft, certificate or other document presented under a Letter of Credit having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; the existence of any setoff or defense any Obligor may have with respect to any of the Obligations; or the termination of the Commitments. (v) Neither Issuing Bank nor any of its officers, directors, employees or agents shall be liable to any Participating Lender for any action taken or omitted to be taken under or in connection with any of the LC Documents except as a result of actual gross negligence or willful misconduct on the part of Issuing Bank. Issuing Bank does not assume any responsibility for any failure or delay in performance or breach by a Borrower or any other Person of its obligations under any of the LC Documents. Issuing Bank does not make to Participating Lenders any express or implied warranty, representation or guaranty with respect to the Collateral, the LC Documents, or any Obligor. Issuing Bank shall not be responsible to any Participating Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of or any of the LC Documents; the validity, genuineness, enforceability, collectibility, value or sufficiency of any of the Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or any Account Debtor. In connection with its administration of and enforcement of rights or remedies under any of the LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting upon, any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts and to advise it concerning its rights, powers and privileges under the LC Documents and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to the LC Documents and shall not be liable for the negligence, default or misconduct of any such agents or attorneys-in-fact selected by Issuing Bank with reasonable care. Issuing Bank shall not have any liability to any Participating Lender by reason of Issuing Bank's refraining to take any action under any of the LC Documents without having first received written instructions from the Required Lenders to take such action. (vi) Upon the request of any Participating Lender, Issuing Bank shall furnish to such Participating Lender copies (to the extent then available to Issuing Bank) of each outstanding Letter of Credit and related LC Documents as may be in the possession of Issuing Bank and reasonably requested from time to time by such Participating Lender. 2.3.3. Cash Collateral Account. If any LC Obligations, whether or not then due or payable, shall for any reason be outstanding (i) at any time that an Event of Default exists, (ii) on any date that Availability is less than zero or (iii) on or at any time after the Commitment Termination Date, then Borrowers shall, on Issuing Bank's or Administrative Agent's request, forthwith pay to Issuing Bank the amount of any LC Obligations that are then due and payable and shall, upon the occurrence of any of the events described in clauses (i) and (iii) hereinabove, Cash Collateralize all outstanding Letters of Credit or deliver to Administrative Agent a Supporting LC in a face amount equal to 104% of the aggregate Undrawn Amounts of such Letters of Credit. If notwithstanding the occurrence of one or more of the events described in clauses (i) and (iii) in the immediately preceding sentence Borrowers fail to Cash Collateralize, or provide a Supporting LC as provided hereinabove with respect to, any outstanding Letters of Credit on the first Business Day following Administrative Agent's or Issuing Bank's demand therefor, Lenders may (and shall upon direction of Administrative Agent) advance such amount as Revolver Loans (whether or not the Commitment Termination Date has occurred or an Out-of-Formula Condition is created thereby). Such cash (together with any interest accrued thereon) shall be held by -42- Administrative Agent in the Cash Collateral Account and may be invested, in Administrative Agent's discretion, in Cash Equivalents. Each Borrower hereby pledges to Administrative Agent and grants to Administrative Agent a security interest in, for the benefit of Administrative Agent in such capacity and for the Pro Rata Benefit of Lenders, all Cash Collateral held in the Cash Collateral Account from time to time and all proceeds thereof, as security for the payment of all Obligations (including LC Obligations), whether or not then due or payable. From time to time after cash is deposited in the Cash Collateral Account, Administrative Agent may apply Cash Collateral then held in the Cash Collateral Account to the payment of any amounts, in such order as Administrative Agent may elect, as shall be or shall become due and payable by Borrowers to Issuing Bank, Administrative Agent or any Lender with respect to the LC Obligations. Neither Borrowers nor any other Person claiming by, through or under or on behalf of Borrowers shall have any right to withdraw any of the Cash Collateral held in the Cash Collateral Account, including any accrued interest, provided that upon termination or expiration of all Letters of Credit and the payment and satisfaction of all of the LC Obligations, any Cash Collateral remaining in the Cash Collateral Account (plus accrued interest thereon, if any)shall be returned to Borrowers unless an Event of Default then exists (in which event Administrative Agent may apply such Cash Collateral to the payment of any other Obligations outstanding and, to the extent so applied, such Cash Collateral shall be applied in accordance with the provisions of SECTION 5.6, with any surplus to be turned over to Borrowers). 2.3.4. Indemnifications (i) In addition to and without limiting any other indemnity which Borrowers may have to any Indemnitees under any of the Loan Documents, each Borrower hereby agrees to indemnify and defend each of the Indemnitees and to hold each of the Indemnitees harmless from and against any and all Claims which any Indemnitee may suffer, incur or be subject to as a consequence, directly or indirectly, of (a) the issuance of, payment or failure to pay or any performance or failure to perform under any Letter of Credit, (b) any suit, investigation or proceeding as to which Administrative Agent or any Lender is or may become a party to as a consequence, directly or indirectly, of the issuance of any Letter of Credit or the payment or failure to pay thereunder or (c) Issuing Bank following any instructions of a Borrower with respect to any Letter of Credit or any Document received by Issuing Bank with reference to any Letter of Credit. The foregoing indemnity obligations of Borrowers are subject to the provisions of SECTION 15.3 hereof. (ii) Each Participating Lender agrees to indemnify and defend each of the Issuing Bank Indemnitees (to the extent the Issuing Bank Indemnitees are not reimbursed by Borrowers or any other Obligor, but without limiting the indemnification obligations of Borrowers under this Agreement), to the extent of such Lender's Pro Rata share of the Revolver Commitments, from and against any and all Claims which may be imposed on, incurred by or asserted against any of the Issuing Bank Indemnitees in any way related to or arising out of Issuing Bank's administration or enforcement of rights or remedies under any of the LC Documents or any of the transactions contemplated thereby (including costs and expenses which Borrowers are obligated to pay under SECTION 15.2). 2.4. BANK PRODUCTS. Borrowers may request BofA to provide, or to arrange for one or more of its Affiliates to provide, Bank Products, but BofA shall have no obligation whatsoever to provide, or to arrange for the provision of, any Bank Products. If Bank Products are provided by an Affiliate of BofA under any of the Loan Documents, Borrowers agree to indemnify and hold Administrative Agent, BofA and Lenders harmless from and against any and all Claims at any time incurred by Administrative Agent, BofA or any Lenders that arise from any indemnity given to such Affiliates that relate to such Bank Products. Borrowers acknowledge that obtaining Bank Products from BofA or BofA's Affiliates -43- hereunder is in the discretion of BofA or BofA's Affiliates and is subject to all rules and regulations of BofA or BofA's Affiliates that are applicable to such Bank Products. SECTION 3. INTEREST, FEES AND CHARGES 3.1. INTEREST. 3.1.1. Rates of Interest. Borrowers agree to pay interest in respect of all unpaid principal amounts of the Revolver Loans from the respective dates such principal amounts are advanced until paid (whether at stated maturity, on acceleration or otherwise) at a rate per annum equal to the applicable rate indicated below: (i) for Revolver Loans made or outstanding as Base Rate Loans, the Applicable Margin plus the Base Rate in effect from time to time; or (ii) for Revolver Loans made or outstanding as LIBOR Loans, the Applicable Margin plus the Adjusted LIBOR Rate for the applicable Interest Period selected by Borrowers in conformity with this Agreement. Upon determining the Adjusted LIBOR Rate for any Interest Period requested by Borrowers, Administrative Agent shall promptly notify Borrowers thereof by telephone and, if so requested by Borrowers, confirm the same in writing. Such determination shall, absent manifest error, be final, conclusive and binding on all parties and for all purposes. The applicable rate of interest for all Loans (or portions thereof) bearing interest based upon the Base Rate shall be increased or decreased, as the case may be, by an amount equal to any increase or decrease in the Base Rate, with such adjustments to be effective as of the opening of business on the day that any such change in the Base Rate becomes effective. Interest on each Loan shall accrue from and including the date on which such Loan is made, converted to a Loan of another Type or continued as a LIBOR Loan to (but excluding) the date of any repayment thereof; provided, however, that, if a Loan is repaid on the same day made, one day's interest shall be paid on such Loan. 3.1.2. Conversions and Continuations. (i) Borrowers may on any Business Day, subject to the giving of a proper Notice of Conversion/Continuation as hereinafter described, elect (A) to continue all or any part of a LIBOR Loan by selecting a new Interest Period therefor, to commence on the last day of the immediately preceding Interest Period, or (B) to convert all or any part of a Loan of one Type into a Loan of another Type; provided, however, during the period that any Event of Default exists, Administrative Agent may (and shall at the direction of the Required Lenders) declare that no Loan may be made or continued as or converted into a LIBOR Loan. Any conversion of a LIBOR Loan into a Base Rate Loan shall be made on the last day of the Interest Period for such LIBOR Loan. Any conversion or continuation made with respect to less than the entire outstanding balance of the Loans must be allocated among Lenders on a Pro Rata basis and the Interest Period for Loans converted into or continued as LIBOR Loans shall be coterminous for each Lender. (ii) Whenever Borrowers desire to convert or continue Loans under SECTION 3.1.2(I), Borrower Agent shall give Administrative Agent written notice (or telephonic notice promptly confirmed in writing) substantially in the form of EXHIBIT C (a "Notice of Conversion/Continuation"), signed by an authorized officer of Borrower Agent, at least 1 Business Day before the requested conversion date, in the case of a conversion into Base Rate -44- Loans, and at least 3 Business Days before the requested conversion or continuation date, in the case of a conversion into or continuation of LIBOR Loans. Promptly after receipt of a Notice of Conversion/Continuation, Administrative Agent shall notify each Lender in writing of the proposed conversion or continuation. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify the aggregate principal amount of the Loans to be converted or continued, the date of such conversion or continuation (which shall be a Business Day) and whether the Loans are being converted into or continued as LIBOR Loans (and, if so, the duration of the Interest Period to be applicable thereto and, in the absence of any specification by Borrowers of the Interest Period, an Interest Period of one month will be deemed to be specified) or Base Rate Loans. If, upon the expiration of any Interest Period in respect of any LIBOR Loans, Borrowers shall have failed to deliver the Notice of Conversion/Continuation, Borrowers shall be deemed to have elected to convert such LIBOR Loans to Base Rate Loans. 3.1.3. Interest Periods. In connection with the making or continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrowers shall select an interest period (each an "Interest Period") to be applicable to such LIBOR Loan, which interest period shall commence on the date such LIBOR Loan is made and shall end on a numerically corresponding day in the first, second, third or sixth month thereafter; provided, however, that: (i) the initial Interest Period for a LIBOR Loan shall commence on the date of such Borrowing (including the date of any conversion from a Loan of another Type) and each Interest Period occurring thereafter in respect of such Revolver Loan shall commence on the date on which the next preceding Interest Period expires; (ii) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that, if any Interest Period in respect of LIBOR Loans would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day; (iii) any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall expire on the last Business Day of such calendar month; and (iv) no Interest Period shall extend beyond the last day of the Term. 3.1.4. Interest Rate Not Ascertainable. If Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) that on any date for determining the Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising after the date of this Agreement affecting the London interbank market or any Lender's position in such market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Adjusted LIBOR Rate, then, and in any such event, Administrative Agent shall forthwith give notice (by telephone promptly confirmed in writing) to Borrowers of such determination. Until Administrative Agent notifies Borrowers that the circumstances giving rise to the suspension described herein no longer exist (which Administrative Agent agrees to do promptly after such circumstance no longer exists, the obligation of Lenders to make LIBOR Loans shall be suspended, and such affected Loans then outstanding shall, at the end of the then applicable Interest Period or at such earlier time as may be required by Applicable Law, bear the same interest as Base Rate Loans. 3.1.5. Default Rate of Interest. Borrowers shall pay interest at a rate per annum equal to the Default Rate (i) with respect to any portion of the principal amount of the Obligations (and, to the -45- extent permitted by Applicable Law, all past due interest) that is not paid on the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise) until Full Payment thereof; (ii) with respect to the principal amount of all of the Obligations (and, to the extent permitted by Applicable Law, all past due interest) upon the earlier to occur of (x) Borrower Agent's receipt of notice from Administrative Agent of the Required Lenders' election to charge the Default Rate based upon the existence of any Event of Default under SECTION 10.3 (which notice Administrative Agent shall send only with the consent or at the direction of the Required Lenders), whether or not acceleration or demand for payment of the Obligations has been made, or (y) the commencement by or against any Borrower of an Insolvency Proceeding whether or not under the circumstances described in clauses (i) or (ii) hereof Lenders elect to accelerate the maturity or demand payment of any of the Obligations; and (iii) with respect to the principal amount of any Out-of-Formula Loans (unless otherwise agreed in writing by the Required Lenders), whether or not demand for payment thereof has been made by Administrative Agent. To the fullest extent permitted by Applicable Law, the Default Rate shall apply and accrue on any judgment entered with respect to any of the Obligations and to the unpaid principal amount of the Obligations during any Insolvency Proceeding of a Borrower. Each Borrower acknowledges that the cost and expense to Administrative Agent and each Lender attendant upon the occurrence of an Event of Default are difficult to ascertain or estimate and that the Default Rate is a fair and reasonable estimate to compensate Administrative Agent and Lenders for such added cost and expense. Interest accrued at the Default Rate shall be due and payable ON DEMAND. 3.2. FEES. In consideration of Lenders' establishment of the Commitments in favor of Borrowers, and Administrative Agent's agreement to serve as collateral and administrative agent hereunder, Borrowers jointly and severally agree to pay the following fees: 3.2.1. Closing Fee. Borrowers shall be jointly and severally obligated to pay to Administrative Agent, for the Pro Rata Benefit of the Initial Lender, a closing fee in the amount set forth in the Fee Letter, which shall be paid on the Restatement Effective Date. 3.2.2. Unused Line Fee. Borrowers shall be jointly and severally obligated to pay to Administrative Agent for the Pro Rata benefit of Lenders a fee (the "Unused Line Fee") equal to the Applicable Margin for the Unused Line Fee divided by 360 days and multiplied by the number of days in the Fiscal Quarter and then multiplied by the amount by which the Average Revolver Loan Balance for any Fiscal Quarter (or portion thereof that the Commitments are in effect) is less than the aggregate amount of the Revolver Commitments, such fee to be paid quarterly, in arrears, on the first day of each Fiscal Quarter; but if the Commitments are terminated on a day other than the first day of a Fiscal Quarter, then any such Unused Line Fee payable for the Fiscal Quarter in which termination shall occur shall be paid on the effective date of such termination. 3.2.3. LC Facility Fees. Borrowers shall be jointly and severally obligated to pay: (a)(i) to Administrative Agent for the Pro Rata account of each Lender for all Letters of Credit, the Applicable Margin in effect for Revolver Loans that are LIBOR Loans on a per annum basis based on the average amount available to be drawn under Letters of Credit outstanding and all Letters of Credit that are paid or expire during the period of measurement, payable monthly, in arrears, on the first Business Day of the following month; (ii) to Issuing Bank for its own account a Letter of Credit fronting fee of .125% per annum based upon the face amount of each Letter of Credit issued during the period of measurement, payable monthly, in arrears, on the first Business Day of the following month; and (iii) to Issuing Bank for its own account all customary charges associated with the issuance, amending, negotiating, payment, processing and administration of all Letters of Credit. All Letter of Credit fees that are expressed as a percentage shall be increased to a percentage that is 2% greater than the percentage that would otherwise be applicable to Revolver Loans when the Default Rate is in effect. -46- 3.2.4. Audit and Appraisal Fees and Expenses. Borrowers shall reimburse Administrative Agent for all reasonable out-of-pocket costs and expenses incurred by Administrative Agent in connection with examinations and reviews of any Obligor's books and records up to 2 times per Loan Year unless an Event of Default exists (in which event, there shall be no limit on the number of examinations and reviews for which Borrowers shall be obligated to reimburse Administrative Agent) and, in each case, shall pay to Administrative Agent the standard amount charged by Administrative Agent per day ($850 per day as of the Restatement Effective Date) for each day that an employee or agent of Administrative Agent shall be engaged in an examination or review of any Obligor's books and records. The foregoing shall not be construed to limit Administrative Agent's right to conduct audits as provided in SECTION 10.1.1. 3.2.5. Agency Fee. In consideration of BofA's service as Administrative Agent hereunder, Borrowers shall be jointly and severally obligated to pay to Administrative Agent, an agency fee in the amount set forth in the Fee Letter, which shall be paid on the Restatement Effective Date and thereafter on each anniversary of the Restatement Effective Date. 3.2.6. General Provisions. All fees shall be fully earned by the identified recipient thereof pursuant to the foregoing provisions of this Agreement on the due date thereof (and, in the case of Letters of Credit, upon each issuance, renewal or extension of such Letter of Credit) and, except as otherwise set forth herein or required by Applicable Law, shall not be subject to rebate, refund or proration. All fees provided for in SECTION 3.2 are and shall be deemed to be compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. 3.3. COMPUTATION OF INTEREST AND FEES. All fees and other charges provided for in this Agreement that are calculated as a per annum percentage of any amount and all interest shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days. For purposes of computing interest and other charges hereunder, each Payment Item and other form of payment received by Administrative Agent (with the date of such receipt to be governed by SECTION 5.7) shall be deemed applied by Administrative Agent and Lenders on account of the Obligations (subject to final payment of such items) on the Business Day on which Administrative Agent receives collected funds in the Payment Account, and Administrative Agent shall be deemed to have received such Payment Item on the date specified in SECTION 5.7. Each determination by Administrative Agent of interest and fees hereunder shall be presumptive evidence of the correctness of such interest and fees. 3.4. REIMBURSEMENT OBLIGATIONS. 3.4.1. Borrowers shall reimburse Administrative Agent and Lenders for any Extraordinary Expenses incurred by Administrative Agent or any Lender, on the sooner to occur of Administrative Agent's demand therefor or Administrative Agent's receipt of any proceeds of Collateral in connection with any Enforcement Action (subject to the provisions of SECTION 5.6 with respect to the application of any proceeds of Collateral). Borrowers shall also reimburse Administrative Agent for all legal, accounting, appraisal, consulting and other fees and expenses suffered or incurred by Administrative Agent in connection with: (i) the negotiation and preparation (and internal legal review) of any of the Loan Documents, any amendment or modification thereto; (ii) the administration of the Loan Documents and the transactions contemplated thereby; (iii) action taken to perfect or maintain the perfection or priority of any of Administrative Agent's Liens with respect to any of the Collateral; (iv) any inspection of or audits conducted by Administrative Agent with respect to any Obligor's books and records in accordance with SECTION 3.2.4; (v) any effort by Administrative Agent to verify or appraise any of the Collateral. All amounts chargeable to or reimbursable by Borrowers under this SECTION 3.4 shall constitute Obligations that are secured by all of the Collateral and shall be payable ON DEMAND to Administrative Agent. Borrowers shall also reimburse -47- Administrative Agent for reasonable out-of-pocket expenses incurred by Administrative Agent in its administration of any of the Collateral to the extent and in the manner provided in SECTION 8 or in any of the other Loan Documents. The foregoing shall be in addition to, and shall not be construed to limit, any other provision of any of the Loan Documents regarding the indemnification or reimbursement by Borrowers of Claims suffered or incurred by Administrative Agent or any Lender. 3.4.2. If at any time Lender shall agree to indemnify any Person against losses or damages that such Person may suffer or incur in its dealings or transactions with Borrowers, or shall guarantee or otherwise assure payment of any liability or obligation of Borrowers to such Person, or otherwise shall provide assurances of Borrowers' payment or performance under any agreement with such Person, including indemnities, guaranties or other assurances of payment or performance given by Lender with respect to Banking Relationship Debt, then the Contingent Obligation of Lender providing any such indemnity, guaranty or other assurance of payment or performance, together with any payment made or liability incurred by Lender in connection therewith, shall constitute Obligations that are secured by the Collateral and Borrowers shall repay, on demand, any amount so paid or any liability incurred by Lender in connection with any such indemnity, guaranty, or assurance. Nothing herein shall be construed to impose upon Lender any obligation to provide any such indemnity, guaranty or assurance. The foregoing agreement of Borrowers shall apply whether or not such indemnity, guaranty or assurance is in writing or oral, provided that Administrative Agent provides Borrower's with notice of the existence thereof, shall survive termination of the Commitment and Full Payment of the Obligations and any other provisions of the Loan Documents regarding reimbursement or indemnification by Borrowers of Claims suffered or incurred by Lender. 3.5. BANK CHARGES. Borrowers shall pay to Administrative Agent, ON DEMAND, any and all fees, costs or expenses which Administrative Agent pays to a bank or other similar institution (including any fees paid by Administrative Agent or any Lender to any Participant) arising out of or in connection with (i) the forwarding to a Borrower or any other Person on behalf of Borrower by Administrative Agent of proceeds of Loans made by Lenders to a Borrower pursuant to this Agreement and (ii) the depositing for collection by Administrative Agent of any Payment Item received or delivered to Administrative Agent on account of the Obligations. Each Borrower acknowledges and agrees that Administrative Agent may charge such costs, fees and expenses to Borrowers based upon Administrative Agent's good faith estimate of such costs, fees and expenses as they are incurred by Administrative Agent. 3.6. ILLEGALITY. Notwithstanding anything to the contrary contained elsewhere in this Agreement, if (i) any change after the date hereof in any law or regulation or in the interpretation thereof by any Governmental Authority charged with the administration thereof shall make it unlawful for a Lender to make or maintain a LIBOR Loan or to give effect to its obligations as contemplated hereby with respect to a LIBOR Loan or (ii) at any time such Lender determines that the making or continuance of any LIBOR Loan has become impracticable as a result of a contingency occurring after the date hereof which adversely affects the London interbank market or the position of such Lender in such market, then such Lender shall give after such determination Administrative Agent and Borrowers notice thereof and may thereafter (1) declare that LIBOR Loans will not thereafter be made by such Lender, whereupon any request by a Borrower for a LIBOR Loan from such Lender shall be deemed a request for a Base Rate Loan unless such Lender's declaration shall be subsequently withdrawn (which declaration shall be withdrawn promptly after the cessation of the circumstances described in clause (i) or (ii) above); and (2) require that all outstanding LIBOR Loans made by such Lender be converted to Base Rate Loans, under the circumstances of clause (i) or (ii) of this SECTION 3.6 insofar as such Lender determines the continuance of LIBOR Loans to be impracticable, in which event all such LIBOR Loans of such Lender shall be converted automatically to Base Rate Loans as of the date of any Borrower's receipt of the aforesaid notice from such Lender. -48- 3.7. INCREASED COSTS. If, by reason of (a) the introduction after the date hereof or any change after the date hereof (including any change by way of imposition or increase of Statutory Reserves or other reserve requirements) in or in the interpretation of any law or regulation, or (b) the compliance after the date hereof with any guideline or request from any central bank or other Governmental Authority or quasi-Governmental Authority exercising control over banks or financial institutions generally (whether or not having the force of law): (i) any Lender shall be subject after the date hereof to any Tax, duty or other charge with respect to any LIBOR Loan or Letter of Credit or its obligation to make LIBOR Loans or to issue Letters of Credit or to participate in the LC Obligations arising from the issuance of Letters of Credit, or a change shall result in the basis of taxation of payment to Lender of the principal of or interest on its LIBOR Loans or its obligation to make LIBOR Loan, issue Letters of Credit or participate in the LC Obligations arising from the issuance of Letters of Credit (except for Excluded Taxes); or (ii) any reserve (including any imposed by the Board of Governors), special deposits or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender shall be imposed or deemed applicable or any other condition affecting its LIBOR Loans or Letters of Credit or its obligation to make LIBOR Loans or to issue Letters of Credit or participate in the LC Obligations arising form the issuance of Letters of Credit shall be imposed on such Lender or the London interbank market; and as a result thereof there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining LIBOR Loans or issuing Letters of Credit (except to the extent already included in the determination of the applicable Adjusted LIBOR Rate for LIBOR Loans), or there shall be a reduction in the amount received or receivable by such Lender, then such Lender shall, promptly after determining the existence or amount of any such increased costs for which such Lender seeks payment hereunder, give any Borrower notice thereof and Borrowers shall from time to time, upon written notice from and demand by such Lender (with a copy of such notice and demand to Administrative Agent), pay to Administrative Agent for the account of such Lender, within 5 Business Days after the date specified in such notice and demand, an additional amount sufficient to indemnify such Lender against such increased costs. A certificate as to the amount of such increased costs (and setting forth the calculation thereof in reasonable detail), submitted to Borrowers by such Lender, shall be final, conclusive and binding for all purposes, absent manifest error. If any Lender shall advise Administrative Agent at any time that, because of the circumstances described hereinabove in this SECTION 3.7 or any other circumstances arising after the date of this Agreement affecting such Lender or the London interbank market or such Lender's position in such market, the Adjusted LIBOR Rate, as determined by Administrative Agent, will not adequately and fairly reflect the cost to such Lender of funding LIBOR Loans or issuing Letters of Credit, then, and in any such event: (i) Administrative Agent shall forthwith give notice (by telephone confirmed promptly in writing) to Borrowers and Lenders of such event; (ii) Borrowers' right to request and such Lender's obligation to make LIBOR Loans or to issue Letters of Credit or participate in the LC Obligations arising from the issuance of Letters of Credit shall be immediately suspended and Borrowers' right to continue a LIBOR Loan as such beyond the then applicable Interest Period or to request a Letter of Credit shall also be suspended, until each condition giving rise to such suspension no longer exists; and -49- (iii) such Lender shall make a Base Rate Loan as part of the requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for all purposes, be considered part of such Borrowing. For purposes of this SECTION 3.7, all references to a Lender shall be deemed to include any bank holding company or bank parent of such Lender. If any Lender provides notice that, due to the circumstances described in this SECTION 3.7, the Adjusted LIBOR Rate will not adequately and fairly reflect the cost to such Lender of funding LIBOR Loans or participating in the LC Obligations arising from the issuance of Letters of Credit, then such Lender may be replaced pursuant to the provisions of SECTION 13.17. 3.8. CAPITAL ADEQUACY. If any Lender determines that (i) the introduction after the date hereof of any Capital Adequacy Regulation, (ii) any change after the date hereof in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance after the date hereof by such Lender or any corporation or other entity controlling such Lender with any Capital Adequacy Regulation, affects the amount of capital required or expected to be maintained by such Lender or any Person controlling such Lender and (taking into consideration such Lender's or such corporation's or other entity's policies with respect to capital adequacy and such Lender's desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitments, loans, credits or obligations under this Agreement, then: (a) Administrative Agent shall promptly, after its receipt of a certificate from such Lender setting forth such Lender's determination of such occurrence, give notice thereof to Borrowers and Lenders; and (b) Borrowers shall pay to Administrative Agent, for the account of such Lender, as an additional fee from time to time, ON DEMAND, such amount as such Lender certifies to be the amount reasonably calculated to compensate such Lender for such reduction. A certificate of such Lender claiming entitlement to compensation as set forth above will be conclusive in the absence of manifest error. Such certificate will set forth the nature of the occurrence giving rise to such compensation, the additional amount or amounts to be paid to such Lender (including the basis for Lender's determination of such amount), and the method by which such amounts were determined. In determining such amount, such Lender may use any reasonable averaging and attribution method. For purposes of this SECTION 3.8 all references to a Lender shall be deemed to include any bank holding company or bank parent of such Lender. 3.9. MITIGATION. Each Lender agrees that, with reasonable promptness after such Lender becomes aware that such Lender is entitled to receive payments under SECTIONS 3.6, 3.7 OR 3.8, or is or has become subject to U.S. withholding taxes payable by any Borrower in respect of its Loans, it will, to the extent not inconsistent with any internal policy of such Lender or any applicable legal or regulatory restriction, (i) use all reasonable efforts to make, fund or maintain the Commitment of such Lender or the Loans of such Lender through another lending office of such Lender or (ii) take such other reasonable measures, if, as a result thereof, the circumstances which would relieve Borrowers from their obligations to pay such additional amounts (or reduce the amount of such payments), or such withholding taxes would be reduced, and if the making, funding or maintaining of such Commitment or Loans through such other lending office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Commitment or Loans or the interests of such Lender. 3.10. FUNDING LOSSES. If for any reason (other than due to a default by Lender or as a result of a Lender's refusal to honor a LIBOR Loan request due to circumstances described in this Agreement) a Borrowing of, or conversion to or continuation of, LIBOR Loans does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), or if any repayment (including any conversions pursuant to SECTION 3.1.2) of any of its LIBOR Loans occurs -50- on a date that is not the last day of an Interest Period applicable thereto, or if for any reason Borrowers default in their obligation to repay LIBOR Loans when required by the terms of this Agreement, then Borrowers shall be jointly and severally obligated to pay to Administrative Agent an administrative fee of $150 and to each Lender an amount equal to all losses and expenses (other than loss of profit) which such Lender may sustain or incur as a consequence thereof, including any such loss or expense arising from the liquidation or redeployment of funds obtained by it to maintain its LIBOR Loans or from fees payable to terminate the deposits from which such funds were obtained. Borrowers shall pay all such amounts due to any Lender upon presentation by such Lender of a statement setting forth the amount and such Lender's calculation thereof, which statement shall be deemed true and correct absent manifest error. For purposes of this SECTION 3.10, all references to a Lender shall be deemed to include any bank holding company or bank parent of such Lender. 3.11. MAXIMUM INTEREST. Regardless of any provision contained in any of the Loan Documents, in no contingency or event whatsoever shall the aggregate of all amounts that are contracted for, charged or received by Administrative Agent and Lenders pursuant to the terms of this Agreement or any of the other Loan Documents and that are deemed interest under Applicable Law exceed the highest rate permissible under any Applicable Law. No agreements, conditions, provisions or stipulations contained in this Agreement or any of the other Loan Documents or the exercise by Administrative Agent of the right to accelerate the payment or the maturity of all or any portion of the Obligations, or the exercise of any option whatsoever contained in any of the Loan Documents, or the prepayment by Borrowers of any of the Obligations, or the occurrence of any contingency whatsoever, shall entitle Administrative Agent or any Lender to charge or receive in any event, interest or any charges, amounts, premiums or fees deemed interest by Applicable Law (such interest, charges, amounts, premiums and fees referred to herein collectively as "Interest") in excess of the Maximum Rate, and in no event shall Borrowers be obligated to pay Interest exceeding such Maximum Rate, and all agreements, conditions or stipulations, if any, which may in any event or contingency whatsoever operate to bind, obligate or compel Borrowers to pay Interest exceeding the Maximum Rate shall be without binding force or effect, at law or in equity, to the extent only of the excess of Interest over such Maximum Rate. If any Interest is charged or received with respect to the Obligations in excess of the Maximum Rate ("Excess"), Borrowers stipulate that any such charge or receipt shall be the result of an accident and bona fide error, and such Excess, to the extent received, shall be applied first to reduce the principal of such Obligations and the balance, if any, returned to Borrowers, it being the intent of the parties hereto not to enter into a usurious or otherwise illegal relationship. Each Borrower recognizes that, with fluctuations in the rates of interest set forth in SECTION 3.1.1, and the Maximum Rate, such an unintentional result could inadvertently occur. All monies paid to Administrative Agent or any Lender hereunder or under any of the other Loan Documents, whether at maturity or by prepayment, shall be subject to any rebate of unearned Interest as and to the extent required by Applicable Law. By the execution of this Agreement, each Borrower covenants that (i) the credit or return of any Excess shall constitute the acceptance by such Borrower of such Excess, and (ii) such Borrower shall not seek or pursue any other remedy, legal or equitable, against Administrative Agent or any Lender, based in whole or in part upon contracting for, charging or receiving any Interest in excess of the Maximum Rate. For the purpose of determining whether or not any Excess has been contracted for, charged or received by Administrative Agent or any Lender, all Interest at any time contracted for, charged or received from Borrowers in connection with any of the Loan Documents shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated and spread in equal parts throughout the full term of the Obligations. Borrowers, Administrative Agent and Lenders shall, to the maximum extent permitted under Applicable Law, (i) characterize any non-principal payment as an expense, fee or premium rather than as Interest and (ii) exclude voluntary prepayments and the effects thereof. The provisions of this SECTION 3.11 shall be deemed to be incorporated into every Loan Document (whether or not any provision of this Section is referred to therein). All such Loan Documents and communications relating to any Interest owed by Borrowers and all figures set forth therein shall, for the sole purpose of computing the extent of -51- Obligations, be automatically recomputed by Borrowers, and by any court considering the same, to give effect to the adjustments or credits required by this SECTION 3.11. SECTION 4. LOAN ADMINISTRATION 4.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS. Borrowings under the Commitments established pursuant TO SECTION 2.1 shall be made and funded as follows: 4.1.1. Notice of Borrowing. (i) Whenever Borrowers desire to make a Borrowing under SECTION 2.1 (other than a Borrowing resulting from a conversion or continuation pursuant to SECTION 3.1.2), Borrowers shall give Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing) of such Borrowing request (a "Notice of Borrowing"), which shall be in the form of EXHIBIT D annexed hereto and signed by an authorized officer of Borrower Agent. Such Notice of Borrowing shall be given by Borrower Agent no later than 2:00 p.m. at the office designated by Administrative Agent from time to time (a) on the Business Day of the requested funding date of such Borrowing, in the case of Base Rate Loans, and (b) at least 2 Business Days prior to the requested funding date of such Borrowing, in the case of LIBOR Loans. Notices received after 2:00 p.m. shall be deemed received on the next Business Day. Any Revolver Loans made by each Lender on the Restatement Effective Date shall be made as Base Rate Loans and thereafter may be made or continued as or converted into Base Rate Loans or LIBOR Loans. Each Notice of Borrowing (or telephonic notice thereof) shall be irrevocable and shall specify (a) the principal amount of the Borrowing, (b) the date of Borrowing (which shall be a Business Day), (c) whether the Borrowing is to consist of Base Rate Loans or LIBOR Loans, (d) in the case of LIBOR Loans, the duration of the Interest Period to be applicable thereto, and (e) the account of Borrowers to which the proceeds of such Borrowing are to be disbursed. (ii) Unless payment is otherwise timely made by Borrowers, the becoming due of any amount required to be paid with respect to any of the Obligations (whether as principal, accrued interest, fees or other charges, including Extraordinary Expenses and LC Obligations, and any amounts owed to BofA or any Affiliate of BofA for Banking Relationship Debt) shall be deemed irrevocably to be a request (without any requirement for the submission of a Notice of Borrowing) for Revolver Loans on the due date of, and in an aggregate amount required to pay, such Obligations, and the proceeds of such Revolver Loans may be disbursed by way of direct payment of the relevant Obligation and shall bear interest as Base Rate Loans. (iii) If Borrowers elect to establish a Controlled Disbursement Account with BofA or any Affiliate of BofA, then the presentation for payment by BofA of any check or other item of payment drawn on the Controlled Disbursement Account at a time when there are insufficient funds in such account to cover such check shall be deemed irrevocably to be a request (without any requirement for the submission of a Notice of Borrowing) for Revolver Loans on the date of such presentation and in an amount equal to the aggregate amount of the items presented for payment, and the proceeds of such Revolver Loans may be disbursed to the Controlled Disbursement Account and shall bear interest as Base Rate Loans. (iv) Neither Administrative Agent nor any Lender shall have any obligation to honor any deemed request for a Revolver Loan on or after the Commitment Termination Date or when an Out-of-Formula Condition exists or would result therefrom or when any condition precedent in SECTION 11 is not satisfied, but may do so in the discretion of Administrative Agent (or at the direction of the Required Lenders) and without regard to the existence of, and without -52- being deemed to have waived, any Default or Event of Default and regardless of whether such Revolver Loan is funded after the Commitment Termination Date. 4.1.2. Fundings by Lenders. Subject to its receipt of notice from Administrative Agent of a Notice of Borrowing as provided in SECTION 4.1.1(I) (except in the case of a deemed request by Borrower Agent for a Revolver Loan as provided in SECTION 4.1.1(II) or (III) or SECTION 4.1.3(II), in which event no Notice of Borrowing need be submitted), each Lender shall timely honor its Revolver Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans that is properly requested and that Borrowers are entitled to receive under the Loan Agreement. Administrative Agent shall endeavor to notify Lenders of each Notice of Borrowing (or deemed request for a Borrowing pursuant to SECTION 4.1.1(II) or (III)), by 2:00 p.m. on the proposed funding date (in the case of Base Rate Loans) or by 2:00 p.m. at least 2 Business Days before the proposed funding date (in the case of LIBOR Loans). Each Lender shall deposit with Administrative Agent an amount equal to its Pro Rata share of the Borrowing requested or deemed requested by Borrowers at Administrative Agent's designated bank in immediately available funds not later than 2:00 p.m. on the date of funding of such Borrowing, unless Administrative Agent's notice to Lenders is received after 2:00 p.m. on the proposed funding date of a Base Rate Loan, in which event Lenders shall deposit with Administrative Agent their respective Pro Rata shares of the requested Borrowing on or before 11:00 a.m. of the next Business Day. Subject to its receipt of such amounts from Lenders, Administrative Agent shall make the proceeds of the Revolver Loans received by it available to Borrowers by disbursing such proceeds in accordance with Borrower Agent's disbursement instructions set forth in the applicable Notice of Borrowing. Neither Administrative Agent nor any Lender shall have any liability on account of any delay by any bank or other depository institution in treating the proceeds of any Revolver Loan as collected funds or any delay in receipt, or any loss, of funds that constitute a Revolver Loan, the wire transfer of which was initiated by Administrative Agent in accordance with wiring instructions provided to Administrative Agent. Unless Administrative Agent shall have been notified in writing by a Lender prior to the proposed time of funding that such Lender does not intend to deposit with Administrative Agent an amount equal to such Lender's Pro Rata share of the requested Borrowing (or deemed request for a Borrowing pursuant to clauses (ii) or (iii) of SECTION 4.1.1), Administrative Agent may assume that such Lender has deposited or promptly will deposit its share with Administrative Agent and Administrative Agent may in its discretion disburse a corresponding amount to Borrowers on the applicable funding date. If a Lender's Pro Rata share of such Borrowing is not in fact deposited with Administrative Agent, then, if Administrative Agent has disbursed to Borrowers an amount corresponding to such share, then such Lender agrees to pay, and in addition Borrowers agree to repay, to Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is disbursed by Administrative Agent to or for the benefit of Borrowers until the date such amount is paid or repaid to Administrative Agent, (a) in the case of Borrowers, at the interest rate applicable to such Borrowing and (b) in the case of such Lender, at the Federal Funds Rate. If such Lender repays to Administrative Agent such corresponding amount, such amount so repaid shall constitute a Revolver Loan, and if both such Lender and Borrowers shall have repaid such corresponding amount, Administrative Agent shall promptly return to Borrowers such corresponding amount in same day funds. A notice from Administrative Agent submitted to any Lender with respect to amounts owing under this SECTION 4.1.2 shall be conclusive, absent manifest error. 4.1.3. Settlement and Swingline Loans. (i) In order to facilitate the administration of the Revolver Loans under this Agreement, Lenders and Administrative Agent agree (which agreement shall be solely between Lenders and Administrative Agent and shall not be for the benefit of or enforceable by any Borrower) that settlement among them with respect to the Revolver Loans may take place on a periodic basis on dates determined from time to time by Administrative Agent (each a -53- "Settlement Date"), which may occur before or after the occurrence or during the continuance of a Default or Event of Default and whether or not all of the conditions set forth in SECTION 11 have been met. On each Settlement Date, payment shall be made by or to each Lender in the manner provided herein and in accordance with the Settlement Report delivered by Administrative Agent to Lenders with respect to such Settlement Date so that, as of each Settlement Date and after giving effect to the transaction to take place on such Settlement Date, each Lender shall hold its Pro Rata share of all Revolver Loans and participations in LC Obligations. Administrative Agent shall request settlement with the Lenders on a basis not less frequently than once every 5 Business Days. (ii) Between Settlement Dates, Administrative Agent may request BofA to advance, and BofA may, but shall in no event be obligated to, advance to Borrowers out of BofA's own funds the entire principal amount of any Borrowing of Revolver Loans that are Base Rate Loans requested or deemed requested pursuant to this Agreement (any such Revolver Loan funded exclusively by BofA being referred to as a "Swingline Loan"). Each Swingline Loan shall constitute a Revolver Loan hereunder and shall be subject to all of the terms, conditions and security applicable to other Revolver Loans, except that all payments thereon shall be payable to BofA solely for its own account. The obligation of Borrowers to repay such Swingline Loans to BofA shall be evidenced by the records of BofA and need not be evidenced by any promissory note. Unless a funding is required by all Lenders pursuant to SECTION 13.9.4, Administrative Agent may but shall not be required to request BofA to make any Swingline Loan if (A) Administrative Agent shall have received written notice from any Lender that one or more of the applicable conditions precedent set forth in SECTION 11 will not be satisfied on the requested funding date for the applicable Borrowing and Administrative Agent has made a determination (without any liability to any Person) that such condition precedent will not be satisfied, (B) the requested Borrowing would exceed the amount of Availability on the funding date or (C) the aggregate amount of Swingline Loans outstanding exceeds (or with the funding of the requested Swingline Loan, would exceed) $5,000,000. BofA shall not be required to determine whether the applicable conditions precedent set forth in SECTION 11 have been satisfied or the requested Borrowing would exceed the amount of Availability on the funding date applicable thereto prior to making, in its discretion, any Swingline Loan. On each Settlement Date, or, if earlier, on demand by Administrative Agent for payment thereof, the then outstanding Swingline Loans shall be immediately due and payable. As provided in SECTION 4.1.1(II), Borrowers shall be deemed to have requested (without the necessity of submitting any Notice of Borrowing) Revolver Loans to be made on each Settlement Date in the amount of all outstanding Swingline Loans and to have Administrative Agent cause the proceeds of such Revolver Loans to be applied to the repayment of such Swingline Loans and interest accrued thereon. Administrative Agent shall notify the Lenders of the outstanding balance of Revolver Loans prior to 11:00 a.m. on each Settlement Date and each Lender (other than BofA) shall deposit with Administrative Agent an amount equal to its Pro Rata share of the amount of Revolver Loans deemed requested in immediately available funds not later than 2:00 p.m. on such Settlement Date. Each Lender's obligation to make such deposit with Administrative Agent shall be absolute and unconditional, without defense, offset, counterclaim or other defense, and without regard to whether any of the conditions precedent set forth in SECTION 11 are satisfied, any Out-of-Formula Condition exists or the Commitment Termination Date has occurred. If, as the result of the commencement by or against Borrowers of any Insolvency Proceeding or otherwise, any Swingline Loan may not be repaid by the funding by Lenders of Revolver Loans, then each Lender (other than BofA) shall be deemed to have purchased a participating interest in any unpaid Swingline Loan in an amount equal to such Lender's Pro Rata share of such Swingline Loan and shall transfer to BofA, in immediately available funds not later than the second Business Day after BofA's request therefor, the amount of such Lender's participation. The proceeds of Swingline Loans may be used solely -54- for purposes for which Revolver Loans generally may be used in accordance with SECTION 2.1.3. If any amounts received by BofA in respect of any Swingline Loans are later required to be returned or repaid by BofA to Borrowers or any other Obligor or their respective representatives or successors-in-interest, whether by court order, settlement or otherwise, the other Lenders shall, on demand by BofA with notice to Administrative Agent, pay to Administrative Agent for the account of BofA, an amount equal to each other Lender's Pro Rata share of all such amounts required to be returned or repaid. 4.1.4. Disbursement Authorization. Each Borrower hereby irrevocably authorizes Administrative Agent to disburse the proceeds of each Revolver Loan requested by any Borrower, or deemed to be requested pursuant to SECTION 4.1.1 or SECTION 4.1.3(II) as follows: (i) the proceeds of each Revolver Loan requested under SECTION 4.1.1(I) shall be disbursed by Administrative Agent in accordance with the terms of the written disbursement letter from Borrowers in the case of the initial Borrowing, and, in the case of each subsequent Borrowing, by transfer to such bank account of Borrowers as may be directed by Borrowers from time to time or elsewhere if pursuant to a written direction from any Borrower; and (ii) the proceeds of each Revolver Loan requested under SECTION 4.1.1(II) or SECTION 4.1.3(II) shall be disbursed by Administrative Agent by way of direct payment of the relevant interest or other Obligation. Any Loan proceeds received by any Borrower or in payment of any of the Obligations shall be deemed to have been received by all Borrowers. 4.1.5. Telephonic Notices. Each Borrower authorizes Administrative Agent and Lenders to extend, convert or continue Loans, effect selections of Types of Loans and transfer funds to or on behalf of Borrowers based on telephonic notices or instructions from any individual whom Administrative Agent or any Lender in good faith believes to be acting on behalf of any Borrower. If requested by Administrative Agent, Borrowers shall confirm each such telephonic request for a Borrowing or conversion or continuation of Loans by prompt delivery to Administrative Agent of the required Notice of Borrowing or Notice of Conversion/Continuation, as applicable, duly executed by an authorized officer of Borrower Agent. If the written confirmation differs in any material respect from the action taken by Administrative Agent or Lenders, the records of Administrative Agent and Lenders shall govern. Neither Administrative Agent nor any Lender shall have any liability for any loss suffered by any Borrower as a result of Administrative Agent's or any Lender's acting upon its understanding of telephonic instructions or requests from a person believed in good faith by Administrative Agent or any Lender to be a person authorized by a Borrower to give such instructions or to make such requests on Borrowers' behalf. 4.2. DEFAULTING LENDER. If any Lender shall, at any time, fail to make any payment to Administrative Agent or BofA that is required hereunder, Administrative Agent may, but shall not be required to, retain payments that would otherwise be made to such defaulting Lender hereunder and apply such payments to such defaulting Lender's defaulted obligations hereunder, at such time, and in such order, as Administrative Agent may elect in its discretion. With respect to the payment of any funds from Administrative Agent to a Lender or from a Lender to Administrative Agent, the party failing to make the full payment when due pursuant to the terms hereof shall, on demand by the other party, pay such amount together with interest on such amount at the Federal Funds Rate. The failure of any Lender to fund its portion of any Loan or payment in respect of an LC Obligation shall not relieve any other Lender of its obligation, if any, to fund its portion of the Revolver Loan or payment in respect of an LC Obligation on the date of Borrowing, but no Lender shall be responsible for the failure of any other Lender to make any Loan or payment in respect of an LC Obligation. Solely as among the Lenders and solely for purposes of (i) voting upon or consenting to amendments, waivers, actions or inactions under any of the Loan Documents, or with respect to the Collateral or any Obligations, and (ii) determining a defaulting Lender's share of payments and proceeds of Collateral pending such defaulting Lender's cure of its defaults hereunder, a defaulting Lender shall not be deemed to be a "Lender" and such Lender's Commitment shall -55- be deemed to be zero (0). The provisions of this Section 4.2 shall be solely for the benefit of Administrative Agent and Lenders and may not be enforced by Borrowers. 4.3. SPECIAL PROVISIONS GOVERNING LIBOR LOANS. 4.3.1. Number of LIBOR Loans. In no event may the number of LIBOR Loans outstanding at any time to any Lender exceed 4. 4.3.2. Minimum Amounts. Each Borrowing of LIBOR Loans pursuant to SECTION 4.1.1(I), and each continuation of or conversion to LIBOR Loans pursuant to SECTION 3.1.2, shall be in a minimum amount of $1,000,000 and integral multiples of $50,000 in excess of that amount. 4.3.3. LIBOR Lending Office. Each Lender's initial LIBOR Lending Office is set forth opposite its name on the signature pages hereof. Each Lender shall have the right at any time and from time to time to designate a different office of itself or of any Affiliate as such Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR Loans to such LIBOR Lending Office. No such designation or transfer shall result in any liability on the part of Borrowers for increased costs or expenses resulting solely from such designation or transfer. Increased costs for expenses resulting from a change in Applicable Law occurring subsequent to any such designation or transfer shall be deemed not to result solely from such designation or transfer. 4.3.4. Funding of LIBOR Loans. Each Lender may, if it so elects, fulfill its obligation to make, continue or convert LIBOR Loans hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to make or maintain such LIBOR Loans; provided, however, that such LIBOR Loans shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of Borrowers to repay such LIBOR Loans shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility and provided Borrowers bear no increased costs as a result of Lenders funding through a foreign branch or Affiliate. The calculation of all amounts payable to Lender under SECTIONS 3.7 and 3.10 shall be made as if each Lender had actually funded or committed to fund its LIBOR Loan through the purchase of an underlying deposit in an amount equal to the amount of such LIBOR Loan and having a maturity comparable to the relevant Interest Period for such LIBOR Loans; provided, however, each Lender may fund its LIBOR Loans in any manner it deems fit and the foregoing presumption shall be utilized only for the calculation of amounts payable under SECTIONS 3.7 and 3.10. 4.4. BORROWER AGENT. Each Borrower hereby irrevocably appoints InSight Health, and InSight Health agrees to act under this Agreement, as the agent and representative of itself and each other Borrower for all purposes under this Agreement (in such capacity, "Borrower Agent"), including requesting Borrowings, selecting whether any Loan or portion thereof is to bear interest as a Base Rate Loan or a LIBOR Loan, and receiving account statements and other notices and communications to Borrowers (or any of them) from Administrative Agent. Administrative Agent may rely, and shall be fully protected in relying, on any Notice of Borrowing, Notice of Conversion/Continuation, disbursement instructions, reports, information, Borrowing Base Certificate or any other notice or communication made or given by Borrower Agent, whether in its own name, on behalf of any Borrower or on behalf of "the Borrowers," and Administrative Agent shall have no obligation to make any inquiry or request any confirmation from or on behalf of any other Borrower as to the binding effect on such Borrower of any such Notice of Borrowing, Notice of Conversion Continuation, instruction, report, information, Borrowing Base Certificate or other notice or communication, nor shall the joint and several character of Borrowers' liability for the Obligations be affected, provided that the provisions of this SECTION 4.3 shall not be construed so as to preclude any Borrower from directly requesting Borrowings or taking other actions permitted to be taken by "a Borrower" hereunder. Administrative Agent may maintain a single -56- Loan Account in the name of "InSight Health Services Corp." hereunder, and each Borrower expressly agrees to such arrangement and confirms that such arrangement shall have no effect on the joint and several character of such Borrower's liability for the Obligations. 4.5. ALL LOANS TO CONSTITUTE ONE OBLIGATION. The Loans and LC Obligations shall constitute one general obligation of Borrowers and (unless otherwise expressly provided in any Security Document) shall be secured by Administrative Agent's Lien upon all of the Collateral; provided, however, that Administrative Agent and each Lender shall be deemed to be a creditor of each Borrower and the holder of a separate claim against each Borrower to the extent of any Obligations jointly and severally owed by Borrowers to Administrative Agent or such Lender. SECTION 5. PAYMENTS 5.1. GENERAL PAYMENT PROVISIONS. All payments (including all prepayments) of principal of and interest on the Loans, LC Obligations and other Obligations that are payable to Administrative Agent or any Lender shall be made to Administrative Agent in Dollars without any offset or counterclaim and free and clear of (and without deduction for) any present or future Taxes other than Excluded Taxes, as required by Applicable Law, and, with respect to payments made other than by application of balances in the Payment Account, in immediately available funds not later than 2:00 p.m. on the due date (and payment made after such time on the due date to be deemed to have been made on the next succeeding Business Day). Borrowers shall, at the time Borrowers make any payment under this Agreement, specify to Administrative Agent the Obligations to which such payment is to be applied and, if Borrowers fail so to specify or if the application specified by Borrowers would be inconsistent with the terms of this Agreement or if an Event of Default exists, Administrative Agent shall distribute such payment to Lenders for application to the Obligations in such manner as Administrative Agent, subject to the provisions of this Agreement, may determine to be appropriate. All payments received by Administrative Agent shall be subject to the rights of offset that Administrative Agent may have as to amounts otherwise to be remitted to a particular Lender by reason of amounts due Administrative Agent from such Lender under any of the Loan Documents, without prejudice to the rights of Borrowers. 5.2. REPAYMENT OF REVOLVER LOANS. 5.2.1. Payment of Principal. The outstanding principal amounts with respect to the Revolver Loans shall be repaid as follows: (i) Any portion of the Revolver Loans consisting of the principal amount of Base Rate Loans shall be paid by Borrowers to Administrative Agent, for the Pro Rata benefit of Lenders (or, in the case of Swingline Loans, for the sole benefit of BofA) unless timely converted to a LIBOR Loan in accordance with this Agreement, (a) if a Restrictive Trigger Event has occurred and is continuing, upon each receipt by Administrative Agent or any Lender of any proceeds of Accounts (other than that portion thereof payable to physicians pursuant to PSAs), or within 7 Business Days of each receipt by Borrowers of any such proceeds, in each case to the extent of such proceeds, (b) the Commitment Termination Date, and (c) in the case of Swingline Loans, if a Restrictive Trigger Event has occurred and is continuing, the earlier of BofA's demand for payment or on each Settlement Date with respect to all Swingline Loans outstanding on such date. (ii) Any portion of the Revolver Loans consisting of the principal amount of LIBOR Loans shall be paid by Borrowers to Administrative Agent, for the Pro Rata benefit of Lenders, unless continued as a LIBOR Loan in accordance with the terms of this Agreement, immediately upon (a) the last day of the Interest Period applicable thereto and (b) the -57- Commitment Termination Date. In no event shall Borrowers be authorized to make a voluntary prepayment with respect to any Revolver Loan outstanding as a LIBOR Loan prior to the last day of the Interest Period applicable thereto unless (x) otherwise agreed in writing by Administrative Agent or Borrowers are otherwise expressly authorized or required by any other provision of this Agreement to pay any LIBOR Loan outstanding on a date other than the last day of the Interest Period applicable thereto, and (y) Borrowers pay to Administrative Agent, for the Pro Rata benefit of Lenders, concurrently with any prepayment of a LIBOR Loan, any amount due Administrative Agent and Lenders under SECTION 3.10 as a consequence of such prepayment. Notwithstanding the foregoing provisions of this SECTION 5.2.1(II), if, on any date that Administrative Agent receives proceeds of Accounts or other Collateral, there are no Revolver Loans outstanding as Base Rate Loans, Administrative Agent may either hold such proceeds as cash security for the timely payment of the Obligations or apply such proceeds to any outstanding Revolver Loans bearing interest as LIBOR Loans as the same become due and payable (whether at the end of the applicable Interest Periods or on the Commitment Termination Date). (iii) Notwithstanding anything to the contrary contained elsewhere in this Agreement, if an Out-of-Formula Condition shall exist, Borrowers shall, on the sooner to occur of 2 Business Days after Administrative Agent's demand or 2 Business Days after any Borrower has obtained knowledge of such Out-of-Formula Condition, repay the outstanding Revolver Loans that are Base Rate Loans in an amount sufficient to reduce the aggregate unpaid principal amount of all Revolver Loans by an amount equal to such excess; and, if such payment of Base Rate Loans is not sufficient to eliminate the Out-of-Formula Condition, then Borrowers shall immediately deposit with Administrative Agent, for the Pro Rata benefit of Lenders, for application to any outstanding Revolver Loans bearing interest as LIBOR Loans as the same become due and payable (whether at the end of the applicable Interest Periods or on the Commitment Termination Date) cash in an amount sufficient to eliminate such Out-of-Formula Condition, and Administrative Agent may (a) hold such deposit as cash security pending disbursement of same for application to the Obligations, or (b) if an Event of Default exists, immediately apply such proceeds to the payment of the Obligations, including the Revolver Loans outstanding as LIBOR Loans (in which event Borrowers shall also pay to Administrative Agent for the benefit of Lenders any amounts required by SECTION 3.10 to be paid by reason of the prepayment of a LIBOR Loan prior to the last day of the Interest Period applicable thereto). 5.2.2. Payment of Interest. Interest accrued on the Revolver Loans shall be due and payable on (i) the first day of each month (for the immediately preceding month), computed through the last day of the preceding month, with respect to any Revolver Loan that is a Base Rate Loan and (ii) the last day of the applicable Interest Period in the case of a LIBOR Loan. Accrued interest shall also be paid by Borrowers on the Commitment Termination Date. With respect to any Base Rate Loan converted into a LIBOR Loan pursuant to SECTION 3.1.2 on a day when interest would not otherwise have been payable with respect to such Base Rate Loan, accrued interest to the date of such conversion on the amount of such Base Rate Loan so converted shall be paid on the conversion date. 5.3. RESERVED. 5.4. PAYMENT OF OTHER OBLIGATIONS. The balance of the Obligations requiring the payment of money, including LC Obligations and Extraordinary Expenses incurred by Administrative Agent or any Lender, shall be repaid by Borrowers to Administrative Agent for allocation among Administrative Agent and Lenders as provided in the Loan Documents, or, if no date of payment is otherwise specified in the Loan Documents, ON DEMAND. -58- 5.5. MARSHALING; PAYMENTS SET ASIDE. None of Administrative Agent or Lenders shall be under any obligation to marshal any assets in favor of Borrowers or any other Obligor or against or in payment of any or all of the Obligations. To the extent that Borrowers make a payment to Administrative Agent or Lenders or Administrative Agent or any Lender receives payment from the proceeds of any Collateral or exercises its right of setoff, and such payment or the proceeds of such Collateral or setoff (or any part thereof) are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other Person, then to the extent of any loss by Administrative Agent or Lenders, the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment or proceeds had not been made or received and any such enforcement or setoff had not occurred. The provisions of the immediately preceding sentence of this SECTION 5.5 shall survive any termination of the Commitments and Full Payment of the Obligations. 5.6. ALLOCATION OF PAYMENTS. 5.6.1. Allocation. At any time that an Event of Default exists or Administrative Agent receives a payment or Collateral proceeds in an amount that is insufficient to pay all amounts then due and payable to Administrative Agent and Lenders, all monies to be applied to the Obligations, whether such monies represent voluntary or mandatory payments or prepayments by one or more Obligors or are received pursuant to demand for payment or realized from any disposition of Collateral and irrespective of any designation by Borrowers of the Obligations that are intended to be satisfied, shall be allocated among Administrative Agent and such of the Lenders as are entitled thereto (and, with respect to monies allocated to Lenders, on a Pro Rata basis unless otherwise provided herein): (i) first, to Administrative Agent to pay the amount of Extraordinary Expenses that have not been reimbursed to Administrative Agent by Borrowers or Lenders, together with interest accrued thereon at the rate applicable to Revolver Loans that are Base Rate Loans, until Full Payment of all such Obligations; (ii) second, to Administrative Agent to pay principal and accrued interest on any portion of the Revolver Loans which Administrative Agent may have advanced on behalf of any Lender and for which Administrative Agent has not been reimbursed by such Lender or Borrowers, until Full Payment of all such Obligations; (iii) third, to BofA to pay the principal and accrued interest on any portion of the Swingline Loans outstanding, to be shared with Lenders that have acquired and paid for a participating interest in such Swingline Loans, until Full Payment of all such Obligations; (iv) fourth, to the extent that Issuing Bank has not received from any Participating Lender a payment as required by SECTION 2.3.2, to Issuing Bank to pay all such required payments from each Participating Lender, until Full Payment of all such Obligations; (v) fifth, to Administrative Agent to pay any Claims that have not been paid pursuant to any indemnity of Administrative Agent Indemnitees by any Obligor, or to pay amounts owing by Lenders to Administrative Agent Indemnitees pursuant to SECTION 13.6, in each case together with interest accrued thereon at the rate applicable to Revolver Loans that are Base Rate Loans, until Full Payment of all such Obligations; (vi) sixth, to Administrative Agent to pay any fees due and payable to Administrative Agent, until Full Payment of all such Obligations; (vii) seventh, to each Lender, ratably, for any Claims that such Lender has paid to Administrative Agent Indemnitees pursuant to its indemnity of Administrative Agent Indemnitees and any Extraordinary Expenses that such Lender has reimbursed to Administrative Agent or such Lender has incurred, to the extent that such Lender has not been reimbursed by Obligors therefor, until Full Payment of all such Obligations; (viii) eighth, to Issuing Bank to pay principal and interest with respect to LC Obligations (or to the extent any of the LC Obligations are contingent and an Event of Default then exists, deposited in the Cash Collateral Account to Cash Collateralize the LC Obligations), which payment shall be shared with the Participating Lenders in accordance with SECTION 2.3.2(III), until Full Payment of all such Obligations; (ix) ninth, to Lenders in payment of the unpaid principal and accrued interest in respect of the Loans and other Obligations (excluding Banking Relationship Debt) then outstanding, in such order of application as shall be designated by Administrative Agent (acting at the direction or with the consent of the Required Lenders), until Full Payment of all such Obligations; (x) -59- tenth, to BofA or any Affiliate of BofA in payment of any Banking Relationship Debt owed to such Person and secured by the Collateral hereunder, until Full Payment of all such Obligations; and (xi) eleventh, to Borrowers as provided in SECTION 5.7. The allocations set forth in this SECTION 5.6 are solely to determine the rights and priorities of Administrative Agent and Lenders as among themselves and may be changed by Administrative Agent and Lenders without notice to or the consent or approval of any Borrower or any other Person. 5.6.2. Erroneous Allocation. Administrative Agent shall not be liable for any allocation or distribution of payments made by it in good faith and, if any such allocation or distribution is subsequently determined to have been made in error, the sole recourse of any Lender to which payment was due but not made shall be to recover from the other Lenders any payment in excess of the amount to which such other Lenders are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them). 5.7. APPLICATION OF PAYMENTS AND COLLATERAL PROCEEDS. All Payment Items received by Administrative Agent by 2:00 p.m., on any Business Day shall be deemed received on that Business Day. All Payment Items received by Administrative Agent after 2:00 p.m., on any Business Day shall be deemed received on the following Business Day. Each Borrower irrevocably waives the right to direct the application of any and all payments and Collateral proceeds at any time or times hereafter received by Administrative Agent or any Lender from or on behalf of Borrowers, and each Borrower does hereby irrevocably agree that Administrative Agent shall have the continuing exclusive right to apply and reapply any and all such payments and Collateral proceeds received at any time or times hereafter by Administrative Agent or its agent against the Obligations, in such manner as Administrative Agent may deem advisable, notwithstanding any entry by Administrative Agent upon any of its books and records; provided, however, that any payments or proceeds of Collateral received by Administrative Agent on any date that an Event of Default does not exist shall be applied in accordance with any provisions of this Agreement that govern the application of such payment or proceeds. If, as the result of Administrative Agent's collection of proceeds of Accounts and other Collateral as authorized by SECTION 8.2.6 a credit balance exists, such credit balance shall not accrue interest in favor of Borrowers, but shall be remitted to Borrowers unless (x) there exists an Event of Default and (y) there are LC Obligations outstanding that have not been Cash Collateralized. Administrative Agent may apply such credit balance against any of the Obligations upon and after the occurrence of an Event of Default, and to the extent so applied, such credit balance shall be applied in the manner specified in SECTION 5.6.1. 5.8. LOAN ACCOUNTS; ACCOUNT STATED. 5.8.1. Loan Accounts. Each Lender shall maintain in accordance with its usual and customary practices an account or accounts (a "Loan Account") evidencing the Debt of Borrowers to such Lender resulting from each Loan owing to Lender from time to time, including the amount of principal and interest payable to such Lender from time to time hereunder and under each Note payable to such Lender. Any failure of a Lender to record in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers hereunder (or under any Note) to pay any amount owing hereunder to such Lender. 5.8.2. The Register. Administrative Agent shall maintain a register (the "Register"), which shall include a master account and a subsidiary account for each Lender and in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of each Loan comprising such Borrowing and any Interest Period applicable thereto, (ii) the effective date and amount of each Assignment and Acceptance delivered to and accepted by it and the parties thereto, (iii) the amount of any principal or interest due and payable or to become due and payable from Borrowers to each Lender hereunder or under the Notes, and (iv) the amount of any sum received by -60- Administrative Agent from Borrowers or any other Obligor and each Lender's Pro Rata share thereof. The Register shall be available for inspection by Borrowers or any Lender at the offices of Administrative Agent at any reasonable time and from time to time upon reasonable prior notice. Any failure of Administrative Agent to record in the Register, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers hereunder (or under any Note) to pay any amount owing with respect to the Loans or provide the basis for any claim against Administrative Agent. The Obligations and Letters of Credit are registered obligations and the right, title and interest of any Lender and their assignees in and to such Obligations and Letters of Credit as the case may be, shall be transferable only upon notation of such transfer in the Register. Solely for purposes of this SECTION 5.8.2 and for tax purposes only, Administrative Agent shall be Borrowers' agent for purposes of maintaining the Register (but Administrative Agent shall have no liability whatsoever to any Borrower or any other Person on account of any inaccuracies contained in the Register). This SECTION 5.8.2 shall be construed so that the Obligations and Letters of Credit are at all times maintained in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code of 1986, as amended, and any related regulations (and any other relevant or successor provisions of the Internal Revenue Code of 1986, as amended, or such regulations). 5.8.3. Entries Binding. The entries made in the Register and each Loan Account shall constitute rebuttably presumptive evidence of the information contained therein; provided, however, that if a copy of information contained in the Register or any Loan Account is provided to any Person, or any Person inspects the Register or any Loan Account, at any time or from time to time, then the information contained in the Register or the Loan Account, as applicable, shall be conclusive and binding on such Person for all purposes absent manifest error, unless such Person notifies Administrative Agent in writing within 30 days after such Person's receipt of such copy or such Person's inspection of the Register or Loan Account of its intention to dispute the information contained therein. 5.9. TAXES. 5.9.1. Gross Up. If Borrowers shall be required by Applicable Law to withhold or deduct any Taxes (other than Excluded Taxes) from or in respect of any sum payable under this Agreement or any of the other Loan Documents, (a) the sum payable to Administrative Agent or such Lender shall be increased as may be necessary so that, after making all required withholding or deductions, Administrative Agent or such Lender (as the case may be) receives an amount equal to the sum it would have received had no such withholding or deductions been made, (b) Borrowers shall make such withholding or deductions, and (c) Borrowers shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with Applicable Law. 5.9.2. Refund. If Administrative Agent or any Lender receives a refund, credit, or other reduction of taxes in respect of any Taxes paid by Borrowers pursuant to this SECTION 5.9, such Person shall, within 30 days from the date of actual receipt of such refund or the filing of the tax return in which such credit or other reduction results in a lower tax payment, pay over such refund or the amount of such tax reduction to Borrowers (but only to the extent of Taxes paid by Borrowers pursuant to this SECTION 5.9), net of all out-of-pocket expenses of such Person, and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund). 5.9.3. Foreign Lenders. Each Foreign Lender, on or prior to the date of its execution and delivery of this Agreement, on or prior to the date on which it designates a new lending office, and on or prior to the date on which it becomes a Lender, in the case of an assignee, and from time to time thereafter if requested in writing by Borrowers, shall provide Borrowers with duplicate executed originals of (A) Internal Revenue Service Form W-8 BEN, or any successor form, certifying that such Lender is entitled to benefits under any income tax treaty to which the United States is a party which reduces to -61- zero the rate of withholding tax on payments of interest, or (B) Internal Revenue Service Form W-8ECI, or any successor form, certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States; or (C) with respect to any Lender that is not a bank and is eligible for exemption from tax under SECTION 881(C) or 871(H) of the Internal Revenue Code of 1986, as amended, Internal Revenue Service Form W-8 BEN, or any successor form, and a certificate substantially in the form of Exhibit J hereto. Each Foreign Lender who does not deliver a Form W-8ECI represents that all services performed hereunder with respect to any fees received or to be received will have been, and will be, performed outside of the United States. 5.9.4. Remedy. In the event that Borrowers are required to pay additional amounts pursuant to SECTION 3.7 or SECTION 5.9.1 hereof, Borrowers may, upon notice to such Lender, either prepay in whole or in part the outstanding balance on any Loan held by such Lender or require such Lender to assign and delegate, without recourse all of its interests, rights and obligations under this Agreement to an assignee selected by Borrowers that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment). 5.10. NATURE AND EXTENT OF EACH BORROWER'S LIABILITY. 5.10.1. Joint and Several Liability. Each Borrower shall be liable for, on a joint and several basis, and hereby guarantees the timely payment by all other Borrowers of, all of the Loans and other Obligations, regardless of which Borrower actually may have received the proceeds of any Loans or other extensions of credit hereunder or the amount of such Loans received or the manner in which Administrative Agent or any Lender accounts for such Loans or other extensions of credit on its books and records, it being acknowledged and agreed that Loans to any Borrower inure to the mutual benefit of all Borrowers and that Administrative Agent and Lenders are relying on the joint and several liability of Borrowers in extending the Loans and other financial accommodations hereunder. Each Borrower hereby unconditionally and irrevocably agrees that upon default in the payment when due (whether at stated maturity, by acceleration or otherwise) of any principal of, or interest owed on, any of the Loans or other Obligations, such Borrower shall forthwith pay the same, without notice or demand. 5.10.2. Unconditional Nature of Liability. Each Borrower's joint and several liability hereunder with respect to, and guaranty of, the Loans and other Obligations shall, to the fullest extent permitted by Applicable Law, be unconditional irrespective of (i) the validity, enforceability, avoidance or subordination of any of the Obligations or of any promissory note or other document evidencing all or any part of the Obligations, (ii) the absence of any attempt to collect any of the Obligations from any other Obligor or any Collateral or other security therefor, or the absence of any other action to enforce the same, (iii) the waiver, consent, extension, forbearance or granting of any indulgence by Administrative Agent or any Lender with respect to any provision of any instrument evidencing or securing the payment of any of the Obligations, or any other agreement now or hereafter executed by any other Borrower and delivered to Administrative Agent or any Lender, (iv) the failure by Administrative Agent to take any steps to perfect or maintain the perfected status of its security interest in or Lien upon, or to preserve its rights to, any of the Collateral or other security for the payment or performance of any of the Obligations or Administrative Agent's release of any Collateral or of its Liens upon any Collateral, (v) Administrative Agent's or Lenders' election, in any proceeding instituted under the Bankruptcy Code, for the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the release or compromise, in whole or in part, of the liability of any Obligor for the payment of any of the Obligations, (viii) any amendment or modification of any of the Loan Documents or any waiver of a Default or Event of Default, (ix) any increase in the amount of the Obligations beyond any limits imposed herein or in the amount of any interest, fees or other charges payable in connection therewith, or any decrease in the same, (x) the disallowance of all or any portion of Administrative Agent's or any Lender's claims against -62- any other Obligor for the repayment of any of the Obligations under Section 502 of the Bankruptcy Code, or (xi) any other circumstance that might constitute a legal or equitable discharge or defense of any Obligor (other than prior payment). After the occurrence and during the continuance of any Event of Default, Administrative Agent may proceed directly and at once, without notice to any Obligor, against any or all of Obligors to collect and recover all or any part of the Obligations, without first proceeding against any other Obligor or against any Collateral or other security for the payment or performance of any of the Obligations, and each Borrower waives any provision under Applicable Law that might otherwise require Administrative Agent to pursue or exhaust its remedies against any Collateral or Obligor before pursuing another Obligor. Each Borrower consents and agrees that Administrative Agent shall be under no obligation to marshal any assets in favor of any Obligor or against or in payment of any or all of the Obligations. 5.10.3. No Reduction in Liability for Obligations. No payment or payments made by an Obligor or received or collected by Administrative Agent from a Borrower or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Borrower under this Agreement, each of whom shall remain jointly and severally liable for the payment and performance of all Loans and other Obligations until Full Payment of the Obligations. 5.10.4. Contribution. Each Borrower is unconditionally obligated to repay the Obligations as a joint and several obligor under this Agreement. If, as of any date, the aggregate amount of payments made by a Borrower on account of the Obligations and proceeds of such Borrower's Collateral that are applied to the Obligations exceeds the aggregate amount of Loan proceeds actually used by such Borrower in its business (such excess amount being referred to as an "Accommodation Payment"), then each of the other Borrowers (each such Borrower being referred to as a "Contributing Borrower") shall be obligated to make contribution to such Borrower (the "Paying Borrower") in an amount equal to (A) the product derived by multiplying the sum of each Accommodation Payment of each Borrower by the Allocable Percentage of the Borrower from whom contribution is sought less (B) the amount, if any, of the then outstanding Accommodation Payment of such Contributing Borrower (such last mentioned amount which is to be subtracted from the aforesaid product to be increased by any amounts theretofore paid by such Contributing Borrower by way of contribution hereunder, and to be decreased by any amounts theretofore received by such Contributing Borrower by way of contribution hereunder); provided, however, that a Paying Borrower's recovery of contribution hereunder from the other Borrowers shall be limited to that amount paid by the Paying Borrower in excess of its Allocable Percentage of all Accommodation Payments then outstanding of all Borrowers. As used herein, the term "Allocable Percentage" shall mean, on any date of determination thereof, a fraction the denominator of which shall be equal to the number of Borrowers who are parties to this Agreement on such date and the numerator of which shall be 1; provided, however, that such percentages shall be modified in the event that contribution from a Borrower is not possible by reason of insolvency, bankruptcy or otherwise by reducing such Borrower's Allocable Percentage equitably and by adjusting the Allocable Percentage of the other Borrowers proportionately so that the Allocable Percentages of all Borrowers at all times equals 100%. 5.10.5. Subordination. Each Borrower hereby subordinates any claims, including any right of payment, subrogation, contribution and indemnity, that it may have from or against any other Obligor, and any successor or assign of any other Obligor, including any trustee, receiver or debtor-in-possession, howsoever arising, due or owing or whether heretofore, now or hereafter existing, to the Full Payment of all of the Obligations (other than contingent indemnification obligations for which no claim has been made). -63- SECTION 6. TERM AND TERMINATION OF COMMITMENT 6.1. TERM OF COMMITMENTS. Subject to each Lender's right to cease making Loans and other extensions of credit to Borrowers when any Default or Event of Default exists or upon termination of the Commitments as provided in SECTION 6.2, the Commitments shall be in effect for a period (the "Term") commencing on the date hereof and continuing until the close of business on September 22, 2010, unless sooner terminated as provided in SECTION 6.2. 6.2. TERMINATION. 6.2.1. Termination by Administrative Agent. Administrative Agent may (and upon the direction of the Required Lenders, shall) terminate the Commitment without notice at any time that an Event of Default exists; provided, however, that the Commitment shall automatically terminate as provided in SECTION 12.2. 6.2.2. Termination by Borrowers. Upon at least 30 days prior written notice to Administrative Agent, Borrowers may, at their option, terminate the Commitments; provided, however, no such termination by Borrowers shall be effective until Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made). Any notice of termination given by Borrowers shall be irrevocable unless Administrative Agent otherwise agrees in writing. Borrowers may elect to terminate the Commitments in their entirety only, provided that nothing contained herein shall affect Borrowers' right to voluntarily reduce the Revolver Commitments as provided in SECTION 2.1.5. No section of this Agreement, Type of Loan available hereunder or Commitment may be terminated by Borrowers singly. 6.2.3. Reserved. 6.2.4. Effect of Termination. On the effective date of termination of the Commitments by Administrative Agent or by Borrowers, all of the Obligations (other than contingent indemnification obligations for which no claim has been made) shall be immediately due and payable; Lenders shall have no obligation to make any Loans; Issuing Bank shall have no obligation to issue any Letters of Credit, and BofA may terminate any Bank Products (including any services or products under Cash Management Agreements). All undertakings, agreements, covenants, warranties and representations of Borrowers contained in the Loan Documents shall survive any such termination, and Administrative Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents notwithstanding such termination until Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made). Notwithstanding the Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made), Administrative Agent shall not be required to terminate its Liens in any of the Collateral unless, with respect to any loss or damage Administrative Agent may incur as a result of the dishonor or return of any Payment Items applied to the Obligations, Administrative Agent shall have received either (i) a written agreement, executed by Borrowers and any Person deemed financially responsible by Administrative Agent whose loans or other advances to Borrowers are used in whole or in part to satisfy the Obligations, indemnifying Administrative Agent and Lenders from any such loss or damage; or (ii) such monetary reserves and Liens on the Collateral for such period of time as Administrative Agent, in its reasonable discretion, may deem necessary to protect Administrative Agent from any such loss or damage. The provisions of SECTIONS 3.4, 5.5, 5.9 and this SECTION 6.2.4 and all obligations of Borrowers to indemnify Administrative Agent or any Lender pursuant to this Agreement or any of the other Loan Documents, shall in all events survive any termination of the Commitment and Full Payment of the Obligations. SECTION 7. COLLATERAL -64- 7.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and performance of all of the Obligations, each Borrower hereby grants to Administrative Agent, for the benefit of Secured Parties, a continuing security interest in and Lien upon all of the following Property and interests in Property of such Borrower, whether now owned or existing or hereafter created, acquired or arising and wheresoever located: (i) all Accounts; (ii) all Instruments, Chattel Paper (including Electronic Chattel Paper), Documents, Letter-of-Credit Rights and Supporting Obligations, in each case to the extent arising out of, relating to, or given in exchange or settlement for or to evidence the obligation to pay any Account; (iii) all General Intangibles that arise out of or are related to any Account or from which any Account arises; (iv) all of the Deposit Accounts Collateral; (v) all monies now or at any time or times hereafter in the possession or under the control of Administrative Agent or a bailee of Administrative Agent, including any Cash Collateral in any Cash Collateral Account; (vi) all products and cash and non-cash proceeds of the foregoing, including proceeds of insurance in respect of any of the foregoing; (vii) all books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and other computer materials and records) of such Borrower pertaining to any of the foregoing. 7.2. RESERVED. 7.3. RESERVED. 7.4. CERTAIN AFTER-ACQUIRED COLLATERAL. Borrowers shall promptly notify Administrative Agent in writing upon any Borrower's obtaining any Collateral after the Restatement Effective Date consisting of Deposit Accounts (other than Deposit Accounts into which payments with respect to Governmental Receivables are directly deposited or transferred), Letter-of-Credit Rights or Chattel Paper, to the extent such Deposit Accounts, Letter-of-Credit Rights or Chattel Paper arise out of, relate to or are given in exchange or settlement for or to evidence the obligation to pay any Account, and, upon Administrative Agent's request, shall promptly execute such documents and do such other acts or things reasonably deemed appropriate by Administrative Agent to confer upon Administrative Agent a duly perfected first priority Lien (subject to Permitted Liens), upon and (to the extent applicable for the perfection of a Lien) control with respect to such Collateral; and promptly notify Administrative Agent in writing upon any Borrower's obtaining any Collateral after the Restatement Effective Date consisting of Documents or Instruments to the extent they arise out of, relate to or are given in exchange or settlement for or to evidence the obligation to pay any Account, and, upon Administrative Agent's request, shall promptly execute such documents and do such other acts or things reasonably deemed appropriate by Administrative Agent to deliver to it possession of such Documents as are negotiable and such Instruments, to the extent they arise out of, relate to or are given in exchange or settlement for or to evidence the obligation to pay any Account. 7.5. NO ASSUMPTION OF LIABILITY. The security interest granted pursuant to this Agreement is granted as security only and shall not subject Administrative Agent or any Lender to, or in any way alter or modify, any obligation or liability of Borrowers with respect to or arising out of the Collateral. 7.6. LIEN PERFECTION; FURTHER ASSURANCES. Promptly after Administrative Agent's request therefor, Borrowers shall execute or cause to be executed and deliver to Administrative Agent such instruments, assignments or other documents as are necessary under the UCC or other Applicable Law to perfect (or continue the perfection of) Administrative Agent's Lien upon the Collateral and shall take such other action as may be requested by Administrative Agent to give effect to or carry out the intent and purposes of this Agreement. Unless prohibited by Applicable Law, each Borrower hereby irrevocably authorizes Administrative Agent to execute and file in any jurisdiction any financing statement or amendment thereto on such Borrower's behalf, including financing statements that indicate the Collateral as set forth in this SECTION 7. Each Borrower also hereby ratifies its authorization for Administrative Agent to have filed in any jurisdiction any like financing statement or amendment thereto if filed prior to -65- the date hereof. The parties agree that a carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu thereof. SECTION 8. COLLATERAL ADMINISTRATION 8.1. GENERAL PROVISIONS. 8.1.1. Location of Collateral. Collateral shall at all times be kept by Borrowers at one or more of the business locations of Borrowers set forth in SCHEDULE 9.1.6 hereto and shall not be moved therefrom, without the prior written approval of Administrative Agent, except that in the absence of an Event of Default and acceleration of the maturity of the Obligations in consequence thereof, Borrowers may move any record relating to any Collateral to a location in the United States other than those shown on SCHEDULE 9.1.6 hereto so long as Borrowers have given Administrative Agent at least 5 days prior written notice of such new location and prior to moving to such location there have been filed any UCC-1 financing statements or other appropriate documentation necessary to perfect or continue perfection of Administrative Agent's first priority Liens subject to Permitted Liens with respect to such Collateral. 8.1.2. Insurance of Collateral; Condemnation Proceeds. Borrowers shall, upon request by Administrative Agent, deliver the originals or certified copies of all insurance policies to Administrative Agent with certificates of insurance reasonably satisfactory to Administrative Agent naming Administrative Agent as an additional insured with respect to Borrowers' general liability insurance. If any Borrower fails to provide and pay for such insurance, Administrative Agent may, at its option, but shall not be required to, procure the same and charge Borrowers therefor. Each Borrower agrees to deliver to Administrative Agent, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies (other than reports with respect to professional liability insurance). 8.1.3. Protection of Collateral. All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all Taxes imposed under any Applicable Law on any of the Collateral or in respect of the sale thereof, and all other payments required to be made by Administrative Agent to any Person to realize upon any Collateral shall be borne and paid by Borrowers. Administrative Agent shall not be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is in Administrative Agent's actual possession) or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, or other Person whomsoever, but the same shall be at Borrowers' sole risk. 8.1.4. Defense of Title to Collateral. Each Borrower shall at all times defend such Borrower's title to the Collateral and Administrative Agent's Liens therein against all Persons and all claims and demands whatsoever other than Permitted Liens and Permitted Asset Dispositions. 8.2. ADMINISTRATION OF ACCOUNTS. 8.2.1. Records and Schedules of Accounts. Each Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon. Each Borrower shall also provide to Administrative Agent on or before the 25th day of each month, a detailed aged trial balance of all Accounts existing as of the last day of the preceding month, specifying the names, face value, dates of invoices and due dates for each Account Debtor obligated on an Account so listed ("Schedule of Accounts"), and, upon Administrative Agent's request therefor, copies of all documents, including repayment histories and present status reports relating to the Accounts so scheduled and such other matters and information relating to the status of then existing Accounts as Administrative Agent -66- shall reasonably request. In addition, at any time that there are Revolver Loans outstanding or LC Obligations that have not been Cash Collateralized exceed $2,000,000, if an Account in the face amount in excess of $1,000,000 ceases to be an Eligible Account in whole or in part, Borrowers shall notify Administrative Agent of such occurrence promptly (and in any event within 7 Business Days) after any Borrower's having obtained knowledge of such occurrence and the Borrowing Base shall thereupon be adjusted to reflect such occurrence. To the extent permitted by Applicable Law, each Borrower shall deliver to Administrative Agent copies of invoices or invoice registers related to all of its Accounts. 8.2.2. Discounts, Disputes and Returns. At any time that there are Revolver Loans outstanding or LC Obligations that have not been Cash Collateralized exceed $2,000,000, if any Borrower grants any discounts, allowances or credits on an Eligible Account in excess of 5% of the amount of such Account that are not shown on the face of the invoice for the Eligible Account involved, such Borrower shall report such discounts, allowances or credits, as the case may be, to Administrative Agent as part of the next required Schedule of Accounts. At any time that there are Revolver Loans outstanding or LC Obligations that have not been Cash Collateralized exceed $2,000,000, if any amounts due and owing in excess of $750,000 are in dispute between any Borrower and any Account Debtor, such Borrower shall provide Administrative Agent with written notice thereof at the time of submission of the next Schedule of Accounts. 8.2.3. Taxes. If an Account of any Borrower includes a charge for any Taxes payable to any Governmental Authority, Administrative Agent is authorized, in its discretion, to pay the amount thereof to the proper taxing authority for the account of such Borrower and to charge Borrowers therefor; provided, however, that neither Administrative Agent nor Lenders shall be liable for any Taxes that may be due by Borrowers. 8.2.4. Account Verification. Whether or not a Default or an Event of Default exists, Administrative Agent shall have the right at any time, in the name of Administrative Agent, any designee of Administrative Agent or any Borrower to verify the validity, amount or any other matter relating to any Wholesale Receivable of such Borrower by mail, telephone, telegraph or otherwise. Borrowers shall cooperate fully with Administrative Agent in an effort to facilitate and promptly conclude any such verification process. 8.2.5. MAINTENANCE OF DOMINION ACCOUNT. (i) Borrowers shall establish and maintain a system of cash management that is acceptable to Agent with BofA or such other bank or banks as may be selected by Borrowers and be reasonably acceptable to Administrative Agent. Such system of cash management shall include (i) a lockbox (or lockboxes), and related Deposit Account (or Deposit Accounts), for remittance and deposit (including by way of electronic funds transfer) of collections or payments with respect to Wholesale Receivables (each a "Wholesale Collection Account"), (ii) a Deposit Account (or Deposit Accounts) into which collections and payments with respect to Retail Receivables (including Governmental Receivables) are deposited or remitted by electronic funds transfer or otherwise (each a "Retail Collection Account"), (iii) a Deposit Account that constitutes a "concentration account" (the "Concentration Account") into which collected funds from the Collection Accounts (other than amounts payable to physicians pursuant to PSAs) shall be transferred within 7 Business Days of receipt thereof and (iv) such other Deposit Accounts and/or lockboxes as Borrowers shall deem to be necessary or appropriate to conduct their business operations. Borrowers shall have access to the funds that are deposited in the foregoing Deposit Accounts, provided that (a) Borrowers shall not deposit proceeds of Property constituting collateral security for the Senior Notes therein, (b) Borrowers shall not deposit the proceeds of any Collateral into any Deposit Account maintained for or in connection -67- with the Senior Notes or into which the proceeds of collateral security for the Senior Notes are, or are intended to be, deposited and (c) the provisions of SECTION 8.2.5(II) shall control after the occurrence of a Restrictive Trigger Event. (ii) If a Restrictive Trigger Event occurs at any time, then all monies in the Concentration Account and in each Wholesale Collection Account shall be deposited each day in the Payment Account and applied to the Obligations as determined by Administrative Agent in accordance with this Agreement. If thereafter, a Restrictive Trigger Event does not exist during any period of 90 consecutive days, then as soon as practicable, but in any event within 5 Business Days, Administrative Agent will permit Borrowers to access the monies in the Concentration Account and in each Wholesale Collection Account for use as provided in SECTIONS 2.1.3 and 8.2.5(I) hereof. 8.2.6. Collection of Accounts and Proceeds of Collateral. To expedite collection of Accounts, each Borrower shall endeavor in the first instance to make collection of such Borrower's Accounts for Administrative Agent and Lenders and, in connection therewith, shall use commercially reasonable efforts to keep in full force and effect any Supporting Obligation or collateral security relating to each such Account. All Payment Items received by any Borrower in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower as trustee of an express trust for Administrative Agent's and Lenders' benefit; Borrowers shall promptly, and in any event no later than the seventh Business Day after the date of receipt thereof, deposit the same in kind in the Collection Accounts; and Administrative Agent may remit such proceeds to Lenders for application to the Obligations in the manner authorized by this Agreement. Administrative Agent retains the right at all times that an Event of Default exists to notify Account Debtors on Wholesale Receivables of any Borrower that Wholesale Receivables have been assigned to Administrative Agent, to collect Wholesale Receivables directly in its own name (and, in connection therewith, and to charge to Borrowers the collection costs and expenses incurred by Administrative Agent, including reasonable attorneys' fees). At any time an Event of Default exists, Administrative Agent shall have the right to settle or adjust all disputes and claims directly with the Account Debtor on Wholesale Receivables and to compromise the amount or extend the time for payment of any Wholesale Receivables upon such terms and conditions as Administrative Agent may deem advisable, and to charge the deficiencies, costs and expenses thereof, including attorneys' fees, to Borrowers. 8.3. ADMINISTRATION OF DEPOSIT ACCOUNTS. Each Borrower represents that, as of the Restatement Effective Date, SCHEDULE 8.3 (as the same may be amended or supplemented from time to time) sets forth all of the Deposit Accounts maintained by each Borrower that arise out or relate to the Accounts, including Deposit Accounts into which all Payment Items relating to any Collateral are deposited; a Borrower is the sole account holder of each such Deposit Account and is not aware of any Person (other than Administrative Agent) having either dominion or control (within the meaning of Section 9-104 of the UCC) over any such Deposit Account or any property deposited therein (other than any such control that has been released or terminated on or before the Restatement Effective Date and control arising by operation of law in favor the depository bank in which such Deposit Account is maintained); and each Borrower has taken all actions required to establish Administrative Agent's "control" (within the meaning of Section 9-104 of the UCC) over the Concentration Account, the Investment Accounts and any other Deposit Account that relates to the Accounts (other than any Deposit Account specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of such Borrower's employees or into which payments with respect to Governmental Receivables are directly deposited or transferred). Each Borrower shall promptly notify Administrative Agent of any additional Deposit Account of the type described above in this SECTION 8.3 opened and any Deposit Account of the type described above in SECTION 8.3 that is closed, and will amend SCHEDULE 8.3 to reflect such addition or deletion. -68- 8.4. BORROWING BASE CERTIFICATES. Borrowers shall deliver to Administrative Agent (and Administrative Agent shall, on request from a Lender, promptly deliver to such Lender) a Borrowing Base Certificate: (a) on the Restatement Effective Date; (b) if there are no Revolver Loans outstanding and the LC Obligations that have not been Cash Collateralized do not exceed $2,000,000, on the 25th day of the month following the end of each Fiscal Quarter, prepared as of the last day of such Fiscal Quarter, or if there are Revolver Loans outstanding or LC Obligations that have not been Cash Collateralized exceed $2,000,000, on the Business Day that the initial Revolver Loan is requested, or deemed requested by Borrower or the LC Obligations that are not Cash Collateralized initially exceed $2,000,000, and on the 25th day of each month thereafter, prepared as of the last day of the previous month; (c) if there are Revolver Loans outstanding or the LC Obligations that have not been Cash Collateralized exceed $2,000,000, on any Business Day on which Borrowers shall dispose of any Eligible Accounts having a face amount in excess of $250,000 to the extent permitted pursuant to clause (ii)(k) of the definition of Permitted Asset Disposition; (d) during the continuance of an Event of Default, at such other times as Administrative Agent may request, provided that Borrowers may deliver Borrowing Base Certificates more frequently at their option. All calculations of Availability in connection with any Borrowing Base Certificate shall originally be made by Borrowers and certified by an authorized officer to Administrative Agent, provided that Administrative Agent shall have the right to review and adjust, in the exercise of its Credit Judgment, any such calculation to the extent that such calculation is not in accordance with this Agreement or does not accurately reflect the amount of the Availability Reserve. In no event shall the Borrowing Base on any date be deemed to exceed the amount of the Borrowing Base shown on the Borrowing Base Certificate most recently received by Administrative Agent, as the calculation in such Borrowing Base Certificate may be adjusted from time to time by Administrative Agent as herein authorized. SECTION 9. REPRESENTATIONS AND WARRANTIES 9.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Administrative Agent and Lenders to enter into this Agreement and to make available the Commitments, each Borrower warrants and represents to Administrative Agent and Lenders that: 9.1.1. Organization and Qualification. Each Borrower and each of its Subsidiaries is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Borrower and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all states and jurisdictions in which the failure of such Borrower or Subsidiary, as the case may be, to be so qualified would reasonably be expected to have a Material Adverse Effect. 9.1.2. Power and Authority. Each Borrower and each Guarantor is duly authorized and empowered to enter into, execute, deliver and perform each of the Loan Documents to which it is a party. The execution, delivery and performance of this Agreement and each of the other Loan Documents have been duly authorized by all necessary action and do not and will not (i) require any consent or approval of any of the holders of the Equity Interests of any Borrower or any of its Subsidiary other than those obtained on or prior to the date hereof; (ii) contravene the Organic Documents of any Borrower or any of its Subsidiaries; (iii) violate, or cause any Borrower or any of its Subsidiaries to be in default under, any provision of any Applicable Law, order, writ, judgment, injunction, decree, determination or award in effect having applicability to any Borrower or any of its Subsidiaries; (iv) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which any Borrower or any of its Subsidiaries is a party or by which it or its Properties may be bound or affected; or (v) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Properties now owned or hereafter acquired by any -69- Borrower or any of its Subsidiaries, except in the case of clauses (iii), (iv) or (v) of this SECTION 9.1.2 as would not reasonably be expected to have a Material Adverse Effect. 9.1.3. Legally Enforceable Agreement. The Loan Documents when delivered will be, legal, valid and binding obligations of each Borrower and each of its Subsidiaries signatories thereto enforceable against them in accordance with the respective terms of such Loan Documents, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights. 9.1.4. Capital Structure. As of the date hereof, SCHEDULE 9.1.4 hereto states (i) the correct name of each Borrower, its jurisdiction of incorporation and the percentage of its Equity Interests having voting powers owned by each Person. Each Borrower has good title to all of the shares it purports to own of the Equity Interests of each of its Subsidiaries, free and clear in each case of any Lien other than Permitted Liens. All such Equity Interests have been duly issued and are fully paid and non-assessable. 9.1.5. Corporate Names. To the best of its knowledge, during the 5-year period preceding the date of this Agreement, no Borrower nor any of its Subsidiaries has been known as or used any corporate, fictitious or trade names except those listed on SCHEDULE 9.1.5 hereto. To the best of its knowledge, except as set forth on SCHEDULE 9.1.5, no Borrower nor any of its Subsidiaries has been the surviving corporation of a merger or consolidation or acquired all or substantially all of the assets of any Person. 9.1.6. Business Locations; Agent for Process. As of the date hereof, the chief executive office and other places of business of each Borrower and its Subsidiaries are as listed on SCHEDULE 9.1.6 hereto. 9.1.7. Title to Properties; Priority of Liens. Each Borrower and each of its Subsidiaries has good title to all of its personal Property, including all Property reflected in the financial statements referred to in SECTION 9.1.9 or delivered pursuant to SECTION 10.1.3, except as could not be reasonably be expected to have a Material Adverse Effect, in each case free and clear of all Liens except Permitted Liens. Each Borrower has paid or discharged, and has caused each of its Subsidiaries to pay and discharge, all material lawful claims which, if unpaid, might become a Lien against any Properties of such Borrower or any such Subsidiary that is not a Permitted Lien. The Liens granted to Administrative Agent pursuant to this Agreement and the other Security Documents are duly perfected, first priority Liens, subject only to those Permitted Liens that are expressly permitted by the terms of this Agreement to have priority over the Liens of Administrative Agent. 9.1.8. Wholesale Receivables and Retail Receivables. (i) Wholesale Receivables. Administrative Agent may rely, in determining which Wholesale Receivables are Eligible Wholesale Receivables, on all statements and representations made by Borrowers with respect to any Account. With respect to each Eligible Wholesale Receivable, each Borrower warrants that: (a) it is genuine and in all respects what it purports to be, and it is not evidenced by a judgment; (b) it arises out of a completed, bona fide sale and delivery of goods or rendition of services by a Borrower in the Ordinary Course of Business and substantially in accordance with the terms and conditions of all purchase orders, contracts -70- or other documents relating thereto and forming a part of the contract between a Borrower and the Account Debtor; (c) it is for a sum certain maturing as stated in the duplicate invoice covering such sale or rendition of services, a copy of which has been furnished or is available to Administrative Agent on request; (d) such Account, and Administrative Agent's security interest therein, is not, subject to any offset, Lien, deduction, defense, dispute, counterclaim or any other adverse condition except for disputes and except for offsets or deductions contemplated by the invoice evidencing an Account or arising in the Ordinary Course of Business and disclosed to Administrative Agent, each such Account is absolutely owing to a Borrower and is not contingent in any respect or for any reason; (e) the contract under which such Account arose does not condition or restrict a Borrower's right to assign to Administrative Agent the right to payment thereunder unless such Borrower has obtained the Account Debtor's consent to such collateral assignment or complied with any conditions to such assignment (regardless of whether under the UCC or other Applicable Law any such restrictions are ineffective to prevent the grant of a Lien upon such Account in favor of Administrative Agent); (f) such Borrower has not made any agreement with any Account Debtor thereunder for any extension, compromise, settlement or modification of any such Account or any deduction therefrom, except discounts or allowances which are granted by a Borrower in the Ordinary Course of Business and which are reflected in the calculation of the net amount of each respective invoice related thereto and are reflected in the Schedules of Accounts submitted to Administrative Agent pursuant to SECTION 8.2.1; (g) to the best of such Borrower's knowledge, there are no facts, events or occurrences which are reasonably likely to impair the validity or enforceability of such Account or reduce the amount payable thereunder from the face amount of the invoice and statements delivered to Administrative Agent with respect thereto; (h) to the best of such Borrower's knowledge, the Account Debtor thereunder (1) had the capacity to contract at the time any contract or other document giving rise to the Account was executed and (2) is Solvent; and (i) to the best of such Borrower's knowledge, there are no proceedings or actions which are threatened or pending against any Account Debtor thereunder and which are reasonably likely to result in any material adverse change in such Account Debtor's financial condition or the collectibility of such Account. (ii) Retail Receivables. Administrative Agent may rely, in determining which Retail Receivables are Eligible Retail Receivables, on all statements and representations made by Borrowers with respect to any Retail Receivable. With respect to each Eligible Retail Receivable, each Borrower warrants that: (a) all information relating to such Retail Receivable that has been delivered to Administrative Agent is true and correct in all material respects. With respect to each such Retail Receivable, such Retail Receivable has been billed after the date the services -71- or goods giving rise to such Retail Receivable were rendered or provided, as applicable, all information set forth in the bill and supporting claim documents is true, complete and correct in all material respects and each bill contains an express direction requiring the Third Party Payor to remit payments as set forth in SECTION 8.2.6; (b) such Retail Receivable is payable in an amount not less than its Net Realizable Value by the Third Party Payor identified by Borrowers as the payor thereon and is recognized as such by such Third Party Payor. There is no payor on such Retail Receivable other than the Third Party Payor identified by Borrower as the payor primarily liable on such Retail Receivable; (c) no such Retail Receivable (1) requires the approval of any Person for the grant of a Lien in such Retail Receivable to Administrative Agent hereunder or (2) is past the statutory limit for collection applicable to the Third Party Payor; (d) the patient received the services constituting the basis of such Retail Receivable in the Ordinary Course of Business; (e) the fees and charges charged by such Borrower for the services constituting the basis for such Account were when rendered consistent with (1) the usual, customary and reasonable fees charged by such Borrower or (2) negotiated fee contracts with, or imposed fee schedules from, the applicable Third Party Payor; (f) the Third Party Payor with respect to such Retail Receivable is, to such Borrower's actual knowledge but without inquiry, located in the United States and is (1) a Person which in the Ordinary Course of Business agrees to pay for healthcare services received by individuals, including commercial insurance companies and non-profit insurance companies issuing health or other types of insurance, employers or unions, self-insured healthcare organizations, preferred provider organizations and health insured, prepaid maintenance organizations, (2) a state, an agency or instrumentality of a state or a political subdivision of a state or (3) the United States or an agency or instrumentality of the United States; (g) if requested by Administrative Agent, a copy of each related Provider Agreement to which a Borrower is a party has been delivered to Administrative Agent unless any such delivery is prohibited by the terms of the Provider Agreement or by Applicable Law; and (h) neither such Retail Receivable nor the related Provider Agreement contravenes any material Applicable Laws applicable thereto and no Borrower is in violation of any such Applicable Law. 9.1.9. Financial Statements; Fiscal Year. The Consolidated balance sheet of Borrowers and such other Persons described therein as of March 31, 2005, and the related statements of income, changes in stockholder's equity, and changes in financial position for the periods ended on such dates, have been prepared in accordance with GAAP, and present fairly in all material respects the Consolidated financial positions of Borrowers and such Persons at such dates and the results of Borrowers' operations for such periods. Since March 31, 2005, there has been no material adverse change in the Consolidated financial condition of Borrowers and such other Persons as shown on the Consolidated balance sheet as of such date, except as set forth in the form 8-K filed September 1, 2005 and the form 8-K filed September 16, 2005 filed by Parent with the SEC. -72- 9.1.10. Full Disclosure. The financial statements referred to in SECTION 9.1.9 do not contain any untrue statement of a material fact and neither this Agreement nor any other written statement, when taken together, contains or omits any material fact necessary to make the statements contained herein or therein not materially misleading. There is no fact or circumstance in existence on the date hereof which any Borrower has failed to disclose to Administrative Agent in writing that would reasonably be expected to have a Material Adverse Effect. 9.1.11. Solvent Financial Condition. Each Borrower and its Subsidiaries is now Solvent and, after giving effect to the Loans to be made hereunder, the LC Obligations to be incurred in connection herewith and the consummation of the other transactions described in the Loan Documents, will be Solvent. 9.1.12. Surety Obligations. As of the date hereof, no Borrower nor any of its Subsidiaries is obligated as surety or indemnitor under any surety, performance or similar bond issued to assure payment, performance or completion of performance of any undertaking or obligation of any Person. 9.1.13. Taxes. The FEIN of each of each Borrower and each of its Subsidiaries is as shown on SCHEDULE 9.1.13. Each Borrower and each of its Subsidiaries has filed all material federal, state and local tax returns and other material reports it is required by law to file and has paid, or made provision for the payment of, all material Taxes upon it, its income and Properties as and when such Taxes are due and payable, except to the extent being Properly Contested. The provision for Taxes on the books of each Borrower and each of its Subsidiaries are adequate in accordance with GAAP or all years not closed by applicable statutes, and for its current Fiscal Year. 9.1.14. Intellectual Property. Each Borrower and each of its Subsidiaries owns or has the lawful right to use all Intellectual Property necessary for the present and planned future conduct of its business without any conflict with the rights of others, except in each case as could not reasonably be expected to have an Material Adverse Effect. 9.1.15. Governmental Approvals. Each Borrower and each of its Subsidiaries has, and is in good standing with respect to, all Governmental Approvals necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its Properties as now owned or leased by it, except in each case as could not reasonably be expected to have a Material Adverse Effect. 9.1.16. Compliance with Laws. Each Borrower and each of its Subsidiaries has duly complied with, and its Properties, business operations and leaseholds are in compliance in all material respects with, the provisions of all Applicable Law, including all Healthcare Laws (except to the extent that any such noncompliance with Applicable Law could not reasonably be expected to have a Material Adverse Effect). Without limiting the generality of the foregoing, except to the extent that any failure of Borrower or any of its Subsidiaries to comply with an Applicable Law could not reasonably be expected to have a Material Adverse Effect: (i) neither any Borrower nor any of the Subsidiaries is engaged in or has engaged in any course of conduct that could subject any of their respective Properties to any Lien, seizure or other forfeiture under any criminal law, racketeer-influenced and corrupt organizations law, civil or criminal, or other similar laws; and (ii) neither any Borrower nor any of the Subsidiaries has engaged in any activities that are prohibited under any Medicaid Regulations or Medicare Regulations, or -73- any related state or local statutes or regulations, or which are prohibited by binding rules of professional conduct, including the following: (a) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any application for any benefit or payment; (b) knowingly and willfully making or causing to be made a false statement or representation of a material fact for use in determining rights to any benefit or payment; (c) failing to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another Person, with intent to secure such benefit or payment fraudulently; (d) knowingly and willfully soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, or offering to pay such remuneration (1) in return for referring an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by or pursuant to any Medicare Regulations, any Medicaid Regulations or any other Applicable Law (including any Anti-Kickback Statutes) relating to Third Party Payors or (2) in return for purchasing, leasing or ordering or arranging for or recommending the purchasing, leasing or ordering of any good, facility, service or item for which payment may be made in whole or in part by or pursuant to any Medicare Regulations, Medicaid Regulations or other Applicable Law relating to Third Party Payors. 9.1.17. Burdensome Contracts. No Borrower nor any of its Subsidiaries is a party or subject to any contract, agreement, or charter or other corporate restriction, which has or could be reasonably expected to have a Material Adverse Effect. 9.1.18. Litigation. Except as set forth on SCHEDULE 9.1.18, there are no actions, suits, proceedings or investigations pending or, to the knowledge of any Borrower, threatened on the date hereof against or affecting any Borrower or any of its Subsidiaries, or the business, operations, Properties, prospects, profits or condition of any Borrower or any of its Subsidiaries, (i) which relate to any of the Loan Documents or any of the transactions contemplated thereby or (ii) which could reasonably be expected to have a Material Adverse Effect. To the knowledge of each Borrower, no Borrower nor any of its Subsidiaries is in default on the date hereof with respect to any order, writ, injunction, judgment, decree or rule of any court, Governmental Authority or arbitration board or tribunal that could reasonably be expected to have a Material Adverse Effect.. 9.1.19. No Defaults. No event has occurred and no condition exists which would, upon or immediately after the execution and delivery of this Agreement or any Borrower's performance hereunder, constitute a Default or an Event of Default. 9.1.20. Reserved. 9.1.21. ERISA. Except as disclosed on SCHEDULE 9.1.21, no Borrower nor any of its Subsidiaries has any Plan on the date hereof. Each Borrower and each of its Subsidiaries is in material compliance with the requirements of ERISA and the regulations promulgated thereunder with respect to each Plan. No fact or situation that is reasonably likely to result in a Material Adverse Effect exists in connection with any Plan. No Borrower nor any of its Subsidiaries has any withdrawal liability in connection with a Multiemployer Plan. 9.1.22. Labor Relations. Except as described on SCHEDULE 9.1.22, no Borrower nor any of its Subsidiaries is on the date hereof a party to or bound by any collective bargaining agreement. On the date hereof, there are no material grievances, disputes or controversies with any union or any other organization of any Borrower's or any Subsidiary's employees, or, to any Borrower's knowledge, any -74- threats of strikes, work stoppages or any asserted pending demands for collective bargaining by any union or organization. 9.1.23. Not a Regulated Entity. No Obligor is (i) an "investment company" or a "person directly or indirectly controlled by or acting on behalf of an investment company" within the meaning of the Investment Company Act of 1940; (ii) a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935; or (iii) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code or any other Applicable Law regarding its authority to incur Debt. 9.1.24. Margin Stock. No Borrower nor any of its Subsidiaries is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. 9.1.25. Anti-Terrorism Laws. (i) General. No Borrower nor any of its Affiliates is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law. (ii) Executive Order No. 13224. (a) No Borrower nor, to the best of its knowledge, any of its Affiliates is any of the following (each a "Blocked Person"): (1) a Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (2) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (3) a Person or entity with which any bank or other financial institution is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (4) a Person or entity that commits, threatens or conspires to commit or supports "terrorism" as defined in Executive Order No. 13224; (5) a Person or entity that is named as a "specially designated national" on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control ("OFAC") at its official website or any replacement website or other replacement official publication of such list; (6) a Person or entity who is affiliated with a Person or entity listed above; or (7) an agency of the government of, an organization directly or indirectly controlled by, or a Person resident in, a country on any official list maintained by OFAC. (b) No Borrower nor, to the best of its knowledge, any of its Affiliates (1) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, (2) has any of its assets in a Blocked Person, (3) deals in, or otherwise engages in any transaction relating to, any Property or interests in Property blocked pursuant to Executive Order No. 13224, or (4) derives any of its operating income from investments in or transactions with a Blocked Person. 9.1.26. Payable Practices. No Borrower nor any of its Subsidiaries has made any material change in its historical accounts payable practices from those in effect immediately prior to the Restatement Effective Date. -75- 9.1.27. Not the Holder of Plan Assets. No Borrower is an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of an "employee benefit plan" (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA or any "plan" (within the meaning of Section 4975 of the Internal Revenue Code), and neither the execution of this Agreement nor the funding of any Loans gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code. 9.1.28. Reimbursement from Third Party Payors. The Accounts, after giving effect to the Contractual Adjustment Allowance in effect from time to time, have been and will continue to be adjusted to reflect reimbursement policies of Third Party Payors. In particular, Accounts relating to such Third Party Payors do not and will not exceed amounts any obligee is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to its usual charges. 9.1.29. Licensing, Accreditation and Other Governmental Approvals. Except to the extent that the failure to have or maintain the same is not reasonably likely to have a Material Adverse Effect, each Borrower and each of the Subsidiaries has, and is in good standing with respect to, all Governmental Approvals necessary to continue to conduct its business as heretofore or proposed to be conducted by it and to own or lease and operate its Properties as now owned or leased by it. Except to the extent that the same is not reasonably likely to have a Material Adverse Effect, each Borrower and each of the Subsidiaries has, to the extent applicable: (i) obtained (or been duly assigned) all required certificates of need or determinations of need as required by the relevant Governmental Authority for the acquisition, construction, expansion of, investment in or operation of its businesses as currently operated; (ii) obtained and maintains in good standing all required licenses; (iii) to the extent prudent and customary in the industry in which such Person is engaged, obtained and maintains accreditation from all generally recognized accrediting agencies; (iv) obtained and maintains Medicaid Certification and Medicare Certification; and (v) entered into and maintains in good standing such Person's Medicare Provider Agreement and Medicaid Provider Agreement. 9.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each representation and warranty contained in this Agreement and the other Loan Documents shall be deemed to be made on the Restatement Effective Date and reaffirmed by each Borrower on each day that Borrowers request or are deemed to have requested any Loan, Letter of Credit or other extension of credit hereunder, except for changes in the nature of a Borrower's or, if applicable, any Subsidiary's business or operations that may occur after the date hereof in the Ordinary Course of Business so long as Administrative Agent has consented to such changes or such changes are not violative of any provision of this Agreement. Notwithstanding the foregoing, representations and warranties which by their terms are applicable only as of a specific date shall be deemed made only at and as of such date. 9.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties of Borrowers contained in this Agreement or any of the other Loan Documents shall survive the execution, delivery and acceptance thereof by Administrative Agent, Lenders and the parties thereto and the closing of the transactions described therein or related thereto. SECTION 10. COVENANTS AND CONTINUING AGREEMENTS 10.1. AFFIRMATIVE COVENANTS. For so long as there are any Commitments outstanding and thereafter until Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made), each Borrower covenants that it shall and shall cause each Subsidiary to: -76- 10.1.1. Visits and Inspections. Permit representatives of Administrative Agent, up to 2 times per Loan Year unless an Event of Default exists, but only during normal business hours and (except when an Event of Default exists) upon reasonable prior notice to a Borrower, to visit the Properties of such Borrower and each of its Subsidiaries to inspect, audit and make extracts from such Borrower's and each Subsidiary's books and records, and discuss with its officers, its employees and its independent accountants, such Borrower's and each Subsidiary's business, financial condition, business prospects and results of operations. If an Event of Default exists, there shall be no limit on the number of such visits Administrative Agent and/or Lenders shall be permitted to undertake. Representatives of each Lender shall be authorized to accompany Administrative Agent on each such visit and inspection and to participate with Administrative Agent therein, but at their own expense, unless an Event of Default exists. Neither Administrative Agent nor any Lender shall have any duty to make any such inspection and shall not incur any liability by reason of its failure to conduct or delay in conducting any such inspection. Administrative Agent and Lenders shall comply with all applicable privacy laws in connection with such investigations and/or audits. 10.1.2. Notices. Notify Administrative Agent and Lenders in writing, promptly after a Borrower's obtaining knowledge thereof, of: (i) of the commencement of any litigation affecting any Obligor, whether or not the claims asserted in such litigation are considered by Borrowers to be covered by insurance, and of the institution of any administrative proceeding, in each case to the extent that such litigation or proceeding could reasonably be expected to have a Material Adverse Effect, provided that notice shall not be required to be given to the extent prohibited by Applicable Law; (ii) any material labor dispute to which any Obligor may become a party, any pending or threatened strikes or walkouts relating to any of its plants or other facilities, and the expiration of any labor contract to which it is a party or by which it is bound; (iii) any material default by any Obligor under, or termination of, any note, indenture, loan agreement, mortgage, lease, deed, guaranty or other similar agreement relating to any Debt of such Obligor exceeding $1,000,000; (iv) the existence of any Default or Event of Default; (v) any judgment against any Obligor in an amount exceeding $1,000,000; (vi) any violation or asserted violation by any Borrower of any Applicable Law (including Healthcare Laws, ERISA, OSHA, FLSA, or any Environmental Laws) which could reasonably be expected to have a Material Adverse Effect; (vii) any Environmental Release by an Obligor or on any Property owned or occupied by an Obligor; (viii) the discharge of Borrowers' independent accountants or any withdrawal of resignation by such independent accountants from their acting in such capacity; (ix) any investigation of any Obligor by any Governmental Authority (including the SEC or the U.S. Department of Justice); (x) any notice received by an Obligor from HHS, CMS or any other federal or state agency relating to the suspension or termination of an Obligor's participation in the Medicare or Medicaid program or of payments to such Obligor thereunder; and (xi) the incurrence of Debt of the type permitted pursuant to SECTION 10.2.3(X). 10.1.3. Financial and Other Information. Keep adequate records and books of account with respect to its business activities in which proper entries are made reflecting all material financial transactions that are necessary to permit preparation of financial statements in accordance with GAAP; and cause to be prepared and furnished to Administrative Agent and Lenders the following (all to be prepared in accordance with GAAP applied on a consistent basis, unless Borrowers' certified public accountants concur in any change therein, such change is disclosed to Administrative Agent and is consistent with GAAP (provided, that for purposes of determining compliance with the covenant contained in SECTION 10.3, all accounting terms employed herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP as in effect on the Restatement Effective Date and applied on a basis consistent with the application used in the financial statements referred to in Section 9.1.9): (i) as soon as available, and in any event within 120 days after the close of each Fiscal Year audited balance sheets of Borrowers and their respective Subsidiaries as of the -77- end of such Fiscal Year and the related statements of income, shareholders' equity and cash flow, on a Consolidated basis, certified without an Impermissible Qualification by a firm of independent certified public accountants of recognized national standing selected by Borrowers but reasonably acceptable to Administrative Agent and setting forth in each case in comparative form the corresponding Consolidated figures for the preceding Fiscal Year; (ii) as soon as available, and in any event within 30 days after the end of each month hereafter (but within 60 days after the last month in a Fiscal Year), unaudited balance sheets of Borrowers and its Subsidiaries as of the end of such month and the related unaudited statements of income and cash flow for such month and for the portion of Borrowers' Fiscal Year then elapsed, on a Consolidated basis, setting forth in each case in comparative form the corresponding figures for the preceding Fiscal Year and certified by the principal financial officer of Borrowers as prepared in accordance with GAAP and fairly presenting in all material respects the Consolidated financial position and results of operations of Borrowers and their Subsidiaries for such month and year-to-date period subject only to changes from audit and year-end adjustments and except that such statements need not contain notes; (iii) promptly after the sending or filing thereof, as the case may be, copies of any proxy statements, financial statements or reports which any Borrower has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses which any Borrower files with the SEC or any Governmental Authority which may be substituted therefor, or any national securities exchange; and copies of any press releases or other statements made available by a Borrower to the public concerning material changes to or developments in the business of such Borrower; (iv) promptly after the sending or filing thereof, copies of any annual report to be filed in accordance with ERISA in connection with each Plan; and (v) such other data and information (financial or otherwise) as Administrative Agent, from time to time, may reasonably request, bearing upon or related to the Collateral or any Borrower's or Subsidiary's financial condition or results of operations. The timely delivery by Borrowers to Administrative Agent of the annual report on form 10-K for Parent and its Consolidated Subsidiaries shall satisfy Borrowers' obligations under SECTION 10.1.3(I) above, provided that such form 10-K satisfies all of the requirements of SECTION 10.1.3(I). Concurrently with the delivery of the financial statements described in clause (i) of this SECTION 10.1.3, Borrowers shall deliver to Administrative Agent a copy of the accountants' letter to Borrowers' management that is prepared in connection with such financial statements. Concurrently with the delivery of the financial statements described in clauses (i) and (ii) of this SECTION 10.1.3, Borrowers shall cause to be prepared and furnished to Administrative Agent a Compliance Certificate executed by the chief financial officer of Borrowers. 10.1.4. Off-Site Data Storage. Store duplicate or back-up copies of Borrowers' billing records, updated daily, at an off-site facility. 10.1.5. Projections. No later than 60 days after the end of each Fiscal Year of Borrowers, deliver to Administrative Agent the Projections of Borrowers for the forthcoming Fiscal Year, prepared on a month by month basis. -78- 10.1.6. Taxes. Pay and discharge all material Taxes prior to the date on which such Taxes become delinquent or penalties attach thereto, except and to the extent only that such Taxes are being Properly Contested. 10.1.7. Compliance with Laws. Comply with all Applicable Law, including ERISA, all Healthcare Laws, all Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws and all laws, statutes, regulations and ordinances regarding the collection, payment and deposit of Taxes, and obtain and keep in force any and all Governmental Approvals necessary to the ownership of its Properties or to the conduct of its business, in each case to the extent that any such failure to comply, obtain or keep in force could be reasonably expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, if any Environmental Release shall occur at or on any of the owned real Property of any Borrower or any of its Subsidiaries, Borrowers shall, or shall cause the applicable Subsidiary to, act promptly and diligently to investigate the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, whether or not ordered or otherwise directed to do so by any Governmental Authority. 10.1.8. Insurance. Maintain with its current insurers or with other financially sound and reputable insurers having a rating of at least A or better by Best's Ratings, a publication of A.M. Best Company, (i) insurance with respect to its Properties and business against such casualties and contingencies of such type (including product liability, workers' compensation, larceny, embezzlement, or other criminal misappropriation insurance) and in such amounts and with such coverages, limits and deductibles as is customary in the business of such Borrower or such Subsidiary and (ii) business interruption insurance in an amount not less than $25,000,000. 10.1.9. Post-Closing Obligations. (i) On or before October 28, 2005, Administrative Agent shall have received a fully executed Control Agreement with respect to the Concentration Account, the Wholesale Collection Accounts and the Investment Accounts, each of which shall be in form and substance reasonably acceptable to Administrative Agent. (ii) On or before November 30, 2005, Borrowers shall have terminated, or shall have caused to be terminated, UCC financing statement no. 0411460354 naming Syncor Diagnostics Sacramento LLC as debtor and US Bank Trust NA as Custodian or Trustee filed April 12, 2004 with the California Secretary of State 10.2. NEGATIVE COVENANTS. For so long as there are any Commitments outstanding and thereafter until Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made), each Borrower covenants that it shall not and shall not permit any of its Subsidiaries to: 10.2.1. Fundamental Changes. (a) Merge, reorganize, consolidate or amalgamate with any Person, or liquidate, wind up its affairs or dissolve itself, in each case whether in a single transaction or in a series of related transactions, except that (i) a Borrower may be merged or consolidated with or into any of its Subsidiaries provided that such Borrower shall be the continuing or surviving Person, (ii) any Obligor other than the Parent may be merged or consolidated with or into any other Obligor other than the Parent, (iii) any Subsidiary of an Obligor which is not an Obligor may be merged or consolidated with or into any Obligor provided that such Obligor shall be the continuing or surviving corporation, (iv) any Subsidiary which is not an Obligor may be merged or consolidated with or into any other Subsidiary that is not an Obligor, (v) any Obligor or Subsidiary thereof may be merged or consolidated with or into any Person in connection with a Permitted Asset Disposition, (vi) any Obligor or Subsidiary thereof may be merged or -79- consolidated with or into any Person in connection with a Permitted Acquisition, provided that, if such transaction involves a Borrower, such Borrower shall be the continuing or surviving Person and (vii) any Subsidiary that is not an Obligor may dissolve, liquidate or wind up its affairs at any time provided that such dissolution, liquidation or winding up, as applicable, could not reasonably be expected to have a Material Adverse Effect; or (b) without providing 10 days prior written notice to Lender, (i) change a Borrower's name or conduct business under any new fictitious name or (ii) change a Borrower's FEIN, organizational identification number or state of organization. 10.2.2. Reserved. 10.2.3. Permitted Debt. Create, incur, assume, guarantee or suffer to exist any Debt, except: (i) the Obligations; (ii) Debt existing on the Restatement Effective Date; (iii) Permitted Purchase Money Debt; (iv) Permitted Contingent Obligations; (v) Debt of any Person that is in existence at the time that it becomes or is consolidated into or merged with a Subsidiary of such Borrower or that is secured by any asset acquired by any Borrower or any Subsidiary at the time of any such acquisition, provided that such Debt is not incurred in contemplation of such Person becoming a Subsidiary or such acquisition of such asset by any Borrower or any of its Subsidiaries, as the case may be; (vi) Debt of an Obligor to any other Obligor or a Subsidiary that is not an Obligor; (vii) Debt of a Subsidiary that is not an Obligor to another Subsidiary that is not an Obligor; (viii) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Ordinary Course of Business, provided that such Debt is extinguished within 5 Business Days of its incurrence; (ix) Hedging Agreements entered into in the Ordinary Course of Business and not for speculative purposes; (x) Debt of a Borrower and its Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds, bankers' acceptances and similar obligations and trade-related letters of credit, in each case provided that such Debt is incurred in the Ordinary Course of Business and not in connection with Debt for Money Borrowed, including those incurred to secure health, safety and environmental obligations in the Ordinary Course of Business; (xi) Debt arising from agreements of a Borrower or any Subsidiary of a Borrower providing for indemnification, adjustment of purchase price, earn-outs or similar obligations, in each case, incurred or assumed in connection with the acquisition of any business, assets or a Subsidiary of a Borrower, other than guarantees of Debt incurred by any Person -80- acquiring all or any portion of such business, assets or a Subsidiary of a Borrower for the purpose of financing such acquisition; (xii) Debt incurred by a Subsidiary that is not an Obligor which is non-recourse to the Obligors; (xiii) Debt incurred by a Borrower or any Subsidiary thereof to finance the payment of insurance premiums; (xv) Non-cash pay Debt owed to Sponsors, provided that such Debt shall be subordinated to the Obligations on terms reasonably satisfactory to Administrative Agent; (xvi) Debt of InSight Health under the Senior Notes up to an aggregate principal amount of $300,000,000; (xvii) Debt that is not included in any of the preceding paragraphs of this SECTION 10.2.3, is not secured by a Lien and does not exceed at any time, in the aggregate, the sum of $30,000,000 as to all Borrowers and all of their Subsidiaries; and (xviii) Refinancing Debt so long as each of the Refinancing Conditions is met with respect thereto. None of the provisions of this SECTION 10.2.3 that authorize any Obligor to incur any Debt shall be deemed to override, modify or waive any of the provisions of SECTION 10.3, which shall constitute an independent and separate covenant and obligation of each Borrower. 10.2.4. Affiliate Transactions. Enter into, or be a party to any transaction with any Affiliate, except: (i) the transactions contemplated by the Loan Documents; (ii) payment of reasonable compensation to officers and employees for services actually rendered to Parent, Borrowers or their respective Subsidiaries; (iii) payment of customary directors' fees and indemnities and reimbursements paid to directors of Parent and its Subsidiaries; (iv) so long as no Event of Default under SECTION 12.1.1 or 12.1.10 is in existence, the payment of fees of the Sponsors contemplated by the Management Agreement in an aggregate amount not to exceed $500,000 during any Fiscal Year, (v) the issuance or sale of Equity Interests of Parent (and the exercise of any warrants, options or other rights to acquire Equity Interests of Parent), to the extent not prohibited in this Agreement, (vi) transactions between Borrowers, between or among any Borrower and any Guarantor (other than Parent) or between and among Obligors (other than Parent), (vii) transactions existing prior to the date hereof (and renewals or replacements thereof on terms, in each case taken as a whole, not more disadvantageous to the applicable Obligor or Subsidiary); (viii) transactions expressly permitted under this Agreement; and (ix) transactions with Affiliates in the Ordinary Course of Business and pursuant to the reasonable requirements of such Borrower's or such Subsidiary's business and upon fair and reasonable terms that are fully disclosed to Administrative Agent and are no less favorable to such Borrower or such Subsidiary than such Borrower or such Subsidiary would obtain in a comparable arm's length transaction with a Person not an Affiliate or stockholder of such Borrower or such Subsidiary. -81- 10.2.5. Limitation on Liens. Create or suffer to exist any Lien upon any of its Property, income or profits, whether now owned or hereafter acquired, except the following (collectively, "Permitted Liens"): (i) Liens at any time granted to secure the Obligations; (ii) Liens for Taxes (excluding any Lien imposed pursuant to any of the provisions of ERISA) not yet due or delinquent or being Properly Contested; (iii) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by Applicable Law (excluding any Lien for Taxes but including any Lien imposed pursuant to any of the provisions of ERISA) arising in the Ordinary Course of Business of a Borrower or a Subsidiary, but only if and for so long as (x) payment in respect of any such Lien is not overdue for a period of more than 30 days or the obligations secured by any such Liens are being Properly Contested and (y) such Liens do not materially detract from the value of the Property of such Borrower or such Subsidiary, taken as a whole, and do not materially impair the use thereof in the operation of Borrowers' and their Subsidiaries' business, taken as a whole; (iv) Purchase Money Liens securing Permitted Purchase Money Debt; (v) Liens securing Debt of a Subsidiary of a Borrower to another Borrower or to another such Subsidiary; (vi) Liens arising by virtue of the rendition, entry or issuance against such Borrower or any of its Subsidiaries, or any Property of such Borrower or any of its Subsidiaries, of any judgment, writ, order, or decree for an amount that exceeds, individually or in the aggregate, $25,000 for so long as each Lien (a) is in existence for less than 30 consecutive days after it first arises or is being Properly Contested and (b) is at all times junior in priority to any Liens in favor of Lender; (vii) Liens incurred or deposits made in the Ordinary Course of Business to secure the performance of tenders, bids, leases, contracts (other than for the repayment of Money Borrowed), statutory obligations, performance and return of money bonds and other similar obligations or arising as a result of progress payments under government contracts, provided that, to the extent any such Liens attach to any of the Collateral, such Liens are at all times subordinate and junior to the Liens upon the Collateral in favor of Administrative Agent; (viii) easements, rights-of-way, restrictions, covenants or other agreements of record and other similar charges or encumbrances on real Property of such Borrower or a any of its Subsidiaries that do not secure any monetary obligation and do not interfere with the ordinary conduct of the business of the Borrowers and their Subsidiaries, taken as a whole; (ix) normal and customary rights of setoff upon deposits of cash in favor of banks and other depository institutions and Liens of a collecting bank arising under the UCC on checks and other items of payment in the course of collection; (x) Liens to secure the Senior Notes on Property of Borrowers other than the Collateral that secure the Senior Notes; -82- (xi) such other Liens as appear on SCHEDULE 10.2.5, to the extent provided therein (and renewals, replacements, refinancings and extensions thereof to the extent not prohibited under this Agreement), provided that no such Lien shall at any time be extended to or cover any Property other than the Property subject thereto on the Restatement Effective Date.; and (xii) pledges or deposits in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA; (xiii) Liens on Property of a Person existing at the time such Person is acquired or merged with or into or consolidated with an Obligor or Subsidiary thereof to the extent permitted hereunder (and not created in anticipation or contemplation thereof), provided that such Liens do not extend to Property not subject to such Liens at the time of acquisition (other than improvements thereon) and are no more favorable to the lienholders than such existing Lien; (xiv) any interest or title of a lessor under any lease entered into by a Borrower or any Subsidiary thereof in the Ordinary Course of Business; (xv) Liens solely on any cash earnest money deposits made by a Borrower or any Subsidiary thereof in connection with any letter of intent or purchase agreement permitted hereunder; (xvi) Liens in favor of customs and revenue authorities arising as a matter of Applicable Law to secure payment of customs duties in connection with the importation of Goods; (xvii) Liens of sellers of Goods to a Borrower and any of its Subsidiaries arising under Article 2 of the Uniform Commercial Code or similar provisions of Applicable Law in the Ordinary Course of Business, covering only the Goods sold and securing only the unpaid purchase price for such Goods and related expenses; (xviii) Liens deemed to exist in connection with Investments in repurchase agreements permitted under SECTION 10.2.13; (xix) to the extent constituting a Lien, Retained Rights; (xx) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto to the extent permitted hereunder; and (xxi) Liens on Property other than the Collateral not otherwise permitted by this Section so long as the aggregate outstanding principal amount of Debt secured thereby does not exceed $3,000,000 at any time. The foregoing negative pledge shall not apply to any Margin Stock to the extent that the application of such negative pledge to such Margin Stock would require filings or other actions by any Lender under Regulation U or other regulations of the Board of Governors, or otherwise result in a violation of any such regulations. 10.2.6. Restrictions on Payment of Certain Debt. Make any payments with respect to any Subordinated Debt other than (a) payment of regularly scheduled installments of principal and -83- interest and fees and other charges when required to be paid by any instrument or agreement evidencing such Subordinated Debt, but in each case only to the extent that payment thereof is not violative of any subordination agreement relating to such Subordinated Debt and (b) Permitted Senior Subordinated Note Repurchases. 10.2.7. Distributions. Declare or make any Distributions, except for Upstream Payments. 10.2.8. Disposition of Assets. Make any Asset Disposition other than a Permitted Asset Disposition. 10.2.9. Restricted Investments. Make or have any Restricted Investment. 10.2.10. Tax Consolidation. File or consent to the filing of any consolidated income tax return with any Person other than Parent or any Subsidiary or any Subsidiary of Parent. 10.2.11. Accounting Changes. Establish a fiscal year different from the Fiscal Year. 10.2.12. Organic Documents. Amend, modify or otherwise change any of the terms or provisions in any of its Organic Documents as in effect on the date hereof, except for changes that do not affect in any way (i) such Borrower's or any of its Subsidiaries' right and authority to enter into and perform the Loan Documents to which it is a party, (ii) the perfection of Administrative Agent's Liens in any Collateral, or (iii) the authority or obligation of an Obligor to pay or perform any of the Obligations. 10.2.13. Restrictive Agreements. Enter into or become a party to any Restrictive Agreement, other than a Permitted Restrictive Agreement. 10.2.14. Hedging Agreements. Enter into any Hedging Agreement, other than Hedging Agreements entered into in the Ordinary Course of Business to hedge or mitigate risks to which any Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities and not for any speculative purpose. 10.2.15. Anti-Terrorism Laws. Conduct any business or engage in any transaction or dealing with any Blocked Person (as defined in SECTION 9.1.27(II)), including making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person; deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224; or engage in on conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or the USA Patriot Act. Borrowers shall deliver to Administrative Agent and Lenders any certification or other evidence requested from time to time by Administrative Agent or any Lender, in its discretion, confirming each Borrower's compliance with this SECTION 10.2.21. 10.2.16. Conduct of Business. Engage in any business other than the business engaged in by it on the Restatement Effective Date and any business or activities which are substantially similar, related or incidental thereto and reasonable extensions thereof. 10.2.17. Multiemployer Plans. Become, or permit any Subsidiary to become a party to a Multiemployer Plan. 10.2.18. Amendments to Indentures Amend, modify or supplement, or permit any Subsidiary to amend, modify or supplement (or consent to any amendment, modification or supplement -84- of) any of the Senior Note Documents or Senior Subordinated Note Documents, if such amendment, modification or supplement provides for any of the following or has any of the following effects: (i) increases the overall principal amount of any Debt evidenced by any of the Senior Notes or Senior Subordinated Notes or increases the amount of any single scheduled installment of principal or interest in excess of amounts otherwise permitted under this Agreement; (ii) shortens or accelerates the date upon which any installment of principal or interest becomes due under the Senior Notes or Senior Subordinated Notes or adds any additional redemption or pre-payment provisions; (iii) shortens the final maturity date of such Debt or otherwise accelerates the amortization schedule with respect to such Debt; (iv) increases the rate of interest accruing in respect of the principal amount of such Debt; (v) provides for the payment of additional fees or increases the amount of existing fees with respect to such Debt; (vi) amends or modifies any financial or negative covenant (or a covenant that prohibits or restricts a Borrower or any of its Subsidiaries from taking certain actions) in a manner which is more onerous or more restrictive in any material respect to such Borrower or such Subsidiary or that is otherwise materially adverse to such Borrower, or its Subsidiaries and/or Lenders, or, in the case of adding covenants, that places material additional restriction on such Borrower or such Subsidiary or that requires such Borrower or such Subsidiary to comply with more restrictive financial ratios or requires such Borrower to better its financial performance from that set forth in the existing financial covenants (taking into account, the aggregate adjustments, if any, to the thresholds and exceptions applicable thereto on a covenant-by-covenant basis); (vii) results in any of the Loan Documents not constituting a "Credit Agreement" under the Senior Note Documents and Senior Subordinated Note Documents; or (viii) amends, modifies or adds any affirmative covenant in a manner which, when taken as a whole, is materially adverse to a Borrower or its Subsidiaries and/or Lenders. 10.3. Financial Covenant. 10.3.1. Financial Covenant Test Levels. Subject to SECTION 10.3.2 hereof, for so long as there are any Commitments outstanding and thereafter until Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made), Borrowers covenant that they shall: (i) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of at least 1.10 to 1.0 measured as of the last day of each Fiscal Quarter for the 4 Fiscal Quarters then ended. 10.3.2. Applicability of Financial Covenant. The financial covenant set forth in SECTION 10.3.1 shall be effective only if, on any Business Day, (a) there are (i) any Revolver Loans -85- outstanding hereunder or (ii) the LC Obligations that have not been Cash Collateralized exceed $2,500,000 on such Business Day, and (b) Liquidity is, at the close of business on such Business Day, less than the Financial Covenant Trigger Amount. From and after such date, the provisions of SECTION 10.3.1 shall be effective at all times unless and until (i) Liquidity shall exceed the Financial Covenant Trigger Amount for a period of 90 consecutive days and (ii) any Event of Default then existing is waived by Administrative Agent. Within 10 Business Days after the date on which the provisions of SECTION 10.3.1(I) are activated as set forth above in this SECTION 10.3.2, Borrowers shall deliver to Administrative Agent a Compliance Certificate which reflects Borrowers' compliance or non-compliance with the provisions of SECTION 10.3.1 as of the last day of the most recent Fiscal Quarter then ended. SECTION 11. CONDITIONS PRECEDENT 11.1. CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSIONS. Initial Lender shall not be required to fund any requested Loan on the Restatement Effective Date or otherwise extend credit to Borrowers on the Restatement Effective Date and Issuing Bank shall have no obligation to issue any Letter of Credit on the Restatement Effective Date, each of the following conditions has been satisfied: 11.1.1. Loan Documents. Each of the Loan Documents shall have been duly executed and delivered to Administrative Agent by each of the signatories thereto (and, with the exception of the Notes, in sufficient counterparts for each Initial Lender) and no Default or Event of Default shall exist. 11.1.2. Minimum Liquidity. Administrative Agent shall have determined, and Initial Lender shall be satisfied, that, immediately after Borrowers have paid (or made provision for payment of) all fees and closing costs incurred in connection with the Commitments, and after increasing the Availability Reserve in the amount of any payables of Borrowers that are stretched beyond Borrowers' customary payment practices, Liquidity is not less than $22,500,000. 11.1.3. Evidence of Perfection and Priority of Liens. Administrative Agent shall have received each document (including any Uniform Commercial Code financing statement) necessary to perfect the Liens of Administrative Agent in the Collateral and evidence in form reasonably satisfactory to Administrative Agent and Initial Lender that such Liens constitute valid and perfected Liens, and that there are no other Liens upon any Collateral except for Permitted Liens. 11.1.4. Organic Documents. Administrative Agent shall have received copies of the Organic Documents of each Obligor, and all amendments thereto, certified by the Secretary of State or other appropriate official of the jurisdiction of each Obligor's organization. 11.1.5. Good Standing Certificates. Administrative Agent shall have received good standing certificates for each Obligor, issued by the Secretary of State or other appropriate official of such Obligor's jurisdiction of organization and each other jurisdiction where the failure of such Obligor to be qualified could reasonably be expected to have a Material Adverse Effect. 11.1.6. Opinion Letters. Administrative Agent and Initial Lender shall have received a favorable, written opinion of Kaye Scholer LLP. 11.1.7. Insurance. Administrative Agent shall have received certificates of insurance with respect to Borrowers' property and liability insurance policies, in form reasonably acceptable to Administrative Agent, together with an endorsement naming Administrative Agent as an additional insured with respect to Borrowers' liability insurance policies, all as required by the Loan Documents. -86- 11.1.8. Payment of Fees. Borrowers shall have paid, or made provision for the payment on the Restatement Effective Date of, all fees and expenses to be paid hereunder to Administrative Agent and Lenders on the Restatement Effective Date. 11.1.9. LC Conditions. With respect to the issuance of any Letter of Credit on the Restatement Effective Date, each of the LC Conditions is satisfied. 11.1.10. Senior Notes. InSight Health shall have received a gross principal amount of at least $300,000,000 from the issuance of the Senior Notes. 11.1.11. Financial Statements; Projections. Administrative Agent shall have received, reviewed and found acceptable all historical and pro forma financial statements and Projections of Borrowers and their Subsidiaries as Administrative Agent shall reasonably require. 11.1.12. Senior Note Documents and Senior Subordinated Note Documents. Administrative Agent shall have received and reviewed the Senior Note Documents and Senior Subordinated Note Documents and determined that the transactions contemplated by this Agreement and the other Loan Documents do not and would not violate or constitute a default or event of default thereunder and that the Senior Note Documents and Senior Subordinated Note Documents do not otherwise restrict the transactions contemplated by this Agreement and the other Loan Documents in a manner that is not acceptable to Administrative Agent. 11.1.13. Initial Borrowing Base Certificate. Administrative Agent shall have received the initial Borrowing Base Certificate from Borrowers. 11.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Lenders shall not be required to fund any Loans or otherwise extend any credit to or for the benefit of Borrowers and Issuing Bank shall have no obligation to issue any Letter of Credit, unless and until each of the following conditions has been and continues to be satisfied: 11.2.1. No Defaults. No Default or Event of Default exists at the time, or would result from the funding, of any Loan or other extension of credit. 11.2.2. Representations and Warranties. Each of the representations and warranties by an Obligor in any of the Loan Documents (including any representations and warranties in any certificate furnished at any time in connection herewith) are true and correct in all material respects on and as of the date of each extension of credit hereunder (except for those representations or warranties which expressly relate to an earlier date). 11.2.3. No Litigation. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of, this Agreement or any of the other Loan Documents or the consummation of the transactions contemplated hereby or thereby. 11.2.4. No Material Adverse Effect. No event shall have occurred and no condition shall exist which has or could be reasonably expected to have a Material Adverse Effect. 11.2.5. Borrowing Base Certificate. Administrative Agent shall have received each Borrowing Base Certificate then required by the terms of this Agreement. -87- 11.2.6. LC Conditions. With respect to the issuance of any Letter of Credit after the Restatement Effective Date, each of the LC Conditions is satisfied. 11.3. LIMITED WAIVER OF CONDITIONS PRECEDENT. If Lenders shall make any Loan or otherwise extend any credit to Borrowers under this Agreement at a time when any of the foregoing conditions precedent are not satisfied (regardless of whether the failure of satisfaction of any such conditions precedent was known or unknown to Administrative Agent or Lenders), the funding of such Loan or other extension of credit shall not operate as a waiver of the right of Administrative Agent and Lenders to insist upon the satisfaction of all conditions precedent with respect to each subsequent Borrowing requested by Borrowers or a waiver of any Event of Default as a consequence of the failure of any such conditions to be satisfied, unless Administrative Agent, with the prior consent of the Required Lenders, in writing waives the satisfaction of any condition precedent, in which event such waiver shall only be applicable for the specific instance given and only to the extent and for the period of time expressly stated in such written waiver. SECTION 12. EVENTS OF DEFAULT; REMEDIES ON DEFAULT 12.1. EVENTS OF DEFAULT. The occurrence or existence of any one or more of the following events or conditions shall constitute an "Event of Default" (each of which Events of Default shall be deemed to exist unless and until waived by Administrative Agent and Lenders in accordance with the provisions of SECTION 13.9: 12.1.1. Payment of Obligations. Borrowers shall fail to pay (a) when due the principal of any Revolver Loans or any reimbursement obligations arising from drawings under Letters of Credit, or (b) when due any interest on Loans or on reimbursement obligations arising from drawings under Letters of Credit, or of fees or other amounts owing hereunder, under any other Loan Documents or in connection herewith or therewith and, in each case in this clause (b), such failure shall continue for 5 or more Business Days. 12.1.2. Misrepresentations. Any representation, warranty or other written statement to Administrative Agent or any Lender by or on behalf of any Obligor, whether made in or furnished in compliance with or in reference to any of the Loan Documents (including any representation made in any Borrowing Base Certificate), proves to have been false or misleading in any material respect when made or furnished or when reaffirmed pursuant to SECTION 9.2. 12.1.3. Breach of Specific Covenants. Any Borrower shall fail or neglect to perform, keep or observe any covenant contained in SECTIONS 7.6, 8.2.5, 8.2.6, 10.1.1, 10.1.6, 10.2 or 10.3 on the date that such Borrower is required to perform, keep or observe such covenant. 12.1.4. Breach of Other Covenants. Any Obligor shall fail or neglect to perform, keep or observe any covenant contained in this Agreement (other than a covenant which is dealt with specifically elsewhere in SECTION 12.1) or any other Loan Document and the breach of such other covenant is not cured within 30 days after the sooner to occur of any Senior Officer's receipt of notice of such breach from Administrative Agent or the date on which such failure or neglect first becomes known to any Senior Officer. 12.1.5. Other Defaults. There shall occur any default or event of default on the part of any Borrower or any Subsidiary under: (i) the Senior Notes; (ii) the Senior Subordinated Notes; or (iii) any other agreement, document or instrument to which such Borrower or such Subsidiary is a party or by which such Borrower or such Subsidiary or any of their respective Properties is bound, creating or relating to any Debt for Money Borrowed or Capitalized Lease Obligations (other than the Obligations, -88- the Senior Notes or the Senior Subordinated Notes) in excess of $1,000,000 if the payment or maturity of such Money Borrowed or Capitalized Lease Obligations may be accelerated in consequence of such default or event of default or demand for payment of such Debt for Money Borrowed or Capital Lease Obligations may be made. 12.1.6. Reserved. 12.1.7. Solvency. Any Obligor shall cease to be Solvent. 12.1.8. Insolvency Proceedings. Any Insolvency Proceeding shall be commenced by any Obligor; an Insolvency Proceeding is commenced against any Obligor and any of the following events occur: such Obligor consents to the institution of the Insolvency Proceeding against it, the petition commencing the Insolvency Proceeding is not timely controverted by such Obligor, the petition commencing the Insolvency Proceeding is not dismissed within 60 days after the date of the filing thereof (provided that, in any event, during the pendency of any such period, Lenders shall be relieved from their obligation to make Loans or otherwise extend credit to or for the benefit of Borrowers hereunder), an interim trustee is appointed to take possession all or a substantial portion of the Properties of such Obligor or to operate all or any substantial portion of the business of such Obligor or an order for relief shall have been issued or entered in connection with such Insolvency Proceeding; or any Obligor shall make an offer of settlement extension or composition to its unsecured creditors generally. 12.1.9. Business Disruption. There shall occur a cessation of a substantial part of the business of any Obligor for a period which could be reasonably expected to have a Material Adverse Effect; or any Obligor shall suffer the loss or revocation of any license or permit now held or hereafter acquired by such Obligor which could reasonably be expected to have a Material Adverse Effect; or any Obligor shall be enjoined, restrained or in any way prevented by court, governmental or administrative order from conducting all or any material part of its business affairs which could reasonably be expected to have a Material Adverse Effect. 12.1.10. ERISA. A Reportable Event shall occur which Administrative Agent, in its reasonable discretion, shall determine constitutes grounds for the termination by the Pension Benefit Guaranty Corporation of any Plan or for the appointment by the appropriate United States district court of a trustee for any Plan, or if any Plan shall be terminated or any such trustee shall be requested or appointed, or if any Borrower, any Subsidiary or any Obligor is in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Plan resulting from such Borrower's, such Subsidiary's or such Obligor's complete or partial withdrawal from such Plan, in each case to the extent such occurrence could reasonably be expected to have a Material Adverse Effect. 12.1.11. Challenge to or Insufficiency of Loan Documents. Any Obligor or any of its Affiliates shall challenge or contest (or support the challenge or contest of others) in any action, suit or proceeding the validity or enforceability of any of the Loan Documents, the legality or enforceability of any of the Obligations or the perfection or priority of any Lien granted to Administrative Agent, or any of the Loan Documents ceases to be in full force or effect for any reason other than a full or partial waiver or release by Administrative Agent and Lenders in accordance with the terms thereof. 12.1.12. Judgment. One or more judgments or orders for the payment of money in an amount that exceeds, individually or in the aggregate, $1,000,000 (other than amounts covered by (x) insurance for which the insurer thereof has been notified of such claim and has not challenged such coverage or (y) valid third party indemnifications for which the indemnifying party thereof has been notified of such claim and has not challenged such indemnification) shall be entered against any Borrower or any other Obligor and (i) enforcement proceedings shall have been commenced by any creditor upon -89- such judgment or order, (ii) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect or (iii) results in the creation or imposition of a Lien upon any of the Collateral that is not a Permitted Lien. 12.1.13. Repudiation of or Default Under Guaranty. Any Guarantor shall revoke or attempt to revoke the Guaranty signed by such Guarantor, shall repudiate such Guarantor's liability thereunder. 12.1.14. Criminal Forfeiture. Any Obligor is criminally indicted or convicted for (i) a felony committed in the conducted of the business of such Obligor or (ii) any state or federal law (including the Controlled Substances Act, the Money Laundering Control Act of 1986, and the Illegal Exportation of War Materials Act) that could lead to a forfeiture of any material (as determined by Administrative Agent in the exercise of its discretion) Collateral. 12.1.15. Change of Control. A Change of Control shall occur. 12.1.16. Loss of Certification. Any Medicaid Certification or Medicare Certification of a Borrower, or any physician, medical professional corporation or other Person with which a Borrower has entered into a services, management or similar agreement shall expire, terminate, be canceled or otherwise lost, the result of which shall or could reasonably be expected to have a Material Adverse Effect. 12.1.17. Change of Deposit Account Instructions. Any action is taken by a Borrower in contravention of any instruction given by Administrative Agent regarding the Collection Accounts, the Concentration Account, the Investment Accounts or any Deposit Accounts subject to Control Agreements, any Control Agreement is amended or terminated without the written consent of Administrative Agent, or if any Borrower fails, within 7 Business Days of receipt, to forward collections of Accounts that it receives to a Collection Account at a time when a Restrictive Trigger Event has occurred. 12.2. ACCELERATION OF OBLIGATIONS; TERMINATION OF COMMITMENT. Without in any way limiting the right of Administrative Agent to demand payment of any portion of the Obligations payable on demand in accordance with this Agreement upon or at any time after the occurrence of an Event of Default (other than pursuant to SECTION 12.1.10) and for so long as such Event of Default shall exist, Administrative Agent may in its discretion (and, upon receipt of written instructions to do so from the Required Lenders, shall) (a) declare the principal of and any accrued interest on the Loans and all other Obligations owing under any of the Loan Documents to be, whereupon the same shall become without further notice or demand (all of which notice and demand each Borrower expressly waives), forthwith due and payable and Borrowers shall forthwith pay to Administrative Agent the entire principal of and accrued and unpaid interest on the Loans and other Obligations plus reasonable attorneys' fees and court costs if such principal and interest are collected by or through an attorney-at-law and (b) terminate the Revolver Commitments; provided, however, that upon the occurrence of an Event of Default specified in SECTION 12.1.10, all of the Obligations shall become automatically due and payable without declaration, notice or demand by Administrative Agent to or upon any Borrower or any other Obligor and the Revolver Commitments shall automatically terminate as if terminated by Administrative Agent pursuant to SECTION 6.2.1 and with the effects specified in SECTION 6.2.4. 12.3. OTHER REMEDIES. Upon and after the occurrence of an Event of Default and for so long as such Event of Default shall exist, Administrative Agent may in its discretion (and, upon receipt of -90- written direction of the Required Lenders, shall) institute any Enforcement Action and exercise from time to time the following rights and remedies (subject to Applicable Law): 12.3.1. All of the rights and remedies of a secured party under the UCC or under other Applicable Law, and all other legal and equitable rights to which Administrative Agent may be entitled under any of the Loan Documents, all of which rights and remedies shall be cumulative and shall be in addition to any other rights or remedies contained in this Agreement or any of the other Loan Documents, and none of which shall be exclusive. 12.3.2. The right to collect all amounts at any time payable to a Borrower from any Account Debtor or other Person at any time indebted to such Borrower. 12.3.3. The right to enter any premises where any of the Collateral shall be located (or deemed to be located) or where any books and records compromising part of the Collateral shall be located and to keep and, if applicable, store such Collateral on said premises until sold (and if said premises be owned or leased by a Borrower, then such Borrower agrees not to charge Administrative Agent for storage of any Collateral therein). 12.3.4. The right to sell or otherwise dispose of all or any Collateral in its then condition, at public or private sale or sales, with such notice as may be required by Applicable Law, in lots or in bulk, for cash or on credit, all as Administrative Agent, in its discretion, may deem advisable. Each Borrower agrees that any requirement of notice to any Borrower or any other Obligor of any proposed public or private sale or other disposition of Collateral by Administrative Agent shall be deemed reasonable notice thereof if given at least 10 days prior thereto, and such sale may be at such locations as Administrative Agent may designate in said notice. Administrative Agent shall have the right to conduct such sales on any Borrower's or any other Obligor's premises, without charge therefor, and such sales may be adjourned from time to time in accordance with Applicable Law. Administrative Agent shall have the right to sell, lease or otherwise dispose of the Collateral, or any part thereof, for cash, credit or any combination thereof, and Administrative Agent may purchase all or any part of the Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of such purchase price, may set off the amount of such price against the Obligations. The proceeds realized from the sale or other disposition of any Collateral may be applied, after allowing 2 Business Days for collection, first to any Extraordinary Expenses incurred by Administrative Agent and then to the remainder of the Obligations as specified in SECTION 5.6.1. 12.3.5. The right to obtain the appointment of a receiver, without notice of any kind whatsoever, to take possession of the Collateral and to exercise such rights and powers as the court appointing such receiver shall confer upon such receiver. 12.3.6. The right to require Borrowers to Cash Collateralize outstanding Letters of Credit, and, if Borrowers fail promptly to make such deposit, Lenders may (and shall upon the direction of the Required Lenders) advance such amount as a Revolver Loan (whether or not an Out-of-Formula Condition exists or is created thereby or the Commitments have been terminated). Any such deposit or advance shall be held by Administrative Agent in the Cash Collateral Account to fund future payments on any Letter of Credit. When all Letters of Credit have been drawn upon or expired, any amounts remaining in the Cash Collateral Account shall be applied against any outstanding Obligations, or, after Full Payment of all Obligations, returned to Borrowers. Administrative Agent is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (exercisable without payment of royalty or other compensation to any -91- Obligor or any other Person) any or all of each Borrower's Intellectual Property and all of each Borrower's computer hardware and software, and any Property of a similar nature, in realizing on the Collateral. 12.4. SETOFF. In addition to any Liens granted under any of the Loan Documents and any rights now or hereafter available under Applicable Law, Administrative Agent and each Lender (and each of their respective Affiliates) is hereby authorized by Borrowers at any time that an Event of Default exists, without notice to Borrowers or any other Person (any such notice being hereby expressly waived), to set off and to appropriate and apply any and all deposits, general or special (including certificates of deposit whether matured or unmatured (but not including trust accounts or any Collection Account into which payments with respect to Governmental Receivables are directly deposited or transferred)) and any other Debt at any time held or owing by such Lender or any of their Affiliates to or for the credit or the account of any Borrower against and on account of the Obligations of Borrowers arising under the Loan Documents to Administrative Agent, such Lender or any of their Affiliates, including all Loans and LC Obligations and all claims of any nature or description arising out of or in connection with this Agreement, irrespective of whether or not (i) Administrative Agent or such Lender, shall have made any demand hereunder, (ii) Administrative Agent, at the request or with the consent of the Required Lenders, shall have declared the principal of and interest on the Loans and other amounts due hereunder to be due and payable as permitted by this Agreement and even though such Obligations may be contingent or unmatured or (iii) the Collateral for the Obligations is adequate. Notwithstanding the foregoing, each of Administrative Agent and Lenders agree that Administrative Agent shall not, without the express consent of the Required Lenders, and that it shall (to the extent that it is lawfully entitled to do so) upon the request of the Required Lenders, exercise its setoff rights hereunder, subject to the limitations set forth in this SECTION 12.4, against any accounts of any Borrower now or hereafter maintained with Administrative Agent, such Lender or any Affiliate of any of them, but no Borrower shall have any claim or cause of action against Administrative Agent or any Lender for any setoff made, subject to the limitations set forth in this SECTION 12.4, without the consent of the Required Lenders, and the validity of any such setoff shall not be impaired by the absence of such consent. If any party (or its Affiliate) exercises the right of setoff provided for and permitted hereunder, such party shall be obligated to share any such setoff in the manner and to the extent required by this SECTION 12.4 and SECTION 13.5. Notwithstanding anything herein to the contrary, Administrative Agent and its Affiliates shall not nor shall it be entitled to, and each other Secured Party and its Affiliates (and each Participant of any Lender and Affiliates) hereby waives any and all rights it may have to, set-off or appropriate any or all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by each Secured Party and its Affiliates and each Participant of any Lender and its Affiliates or any branch or agency thereof to or for the credit or the account of any Obligor, to the extent necessary for the Obligors and each Secured Party and its Affiliates and each Participant of any Lender and its Affiliates to remain in compliance with all Healthcare Laws. -92- 12.5. REMEDIES CUMULATIVE; NO WAIVER. 12.5.1. All covenants, conditions, provisions, warranties, guaranties, indemnities, and other undertakings of Borrowers contained in this Agreement, the other Loan Documents, or any other agreement between Administrative Agent of any Lender and any Obligor, heretofore, concurrently, or hereafter entered into, shall be deemed cumulative to and not in derogation or substitution of any of the terms, covenants, conditions, or agreements of Borrowers herein contained. The rights and remedies of Administrative Agent and Lenders under this Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies that Administrative Agent or any Lender would otherwise have. 12.5.2. The failure or delay of Administrative Agent or any Lender to require strict performance by Borrowers of any provision of any of the Loan Documents or to exercise or enforce any rights, Liens, powers or remedies under any of the Loan Documents or with respect to any Collateral shall not operate as a waiver of such performance, Liens, rights, powers and remedies, but all such requirements, Liens, rights, powers, and remedies shall continue in full force and effect until all Loans and all other Obligations owing or to become owing from Borrowers to Administrative Agent and Lenders shall have been fully satisfied. None of the undertakings, agreements, warranties, covenants and representations of Borrowers contained in this Agreement or any of the other Loan Documents and no Event of Default by any Borrower under this Agreement or any other Loan Documents shall be deemed to have been suspended or waived by Administrative Agent or any Lender, unless such suspension or waiver is by an instrument in writing specifying such suspension or waiver and is signed by a duly authorized representative of Administrative Agent or such Lender and directed to Borrowers. 12.5.3. If Administrative Agent or any Lender shall accept performance by a Borrower, in whole or in part, of any obligation that such Borrower is required by any of the Loan Documents to perform only when a Default or Event of Default exists, or if Administrative Agent or any Lender shall exercise any right or remedy under any of the Loan Documents that may not be exercised other than when a Default or Event of Default exists, Administrative Agent's or such Lender's acceptance of such performance by a Borrower or Administrative Agent's or such Lender's exercise of any such right or remedy shall not operate to waive any such Event of Default or to preclude the exercise by Administrative Agent or any Lender of any other right or remedy, unless otherwise expressly agreed in writing by Administrative Agent or such Lender, as the case may be. SECTION 13. ADMINISTRATIVE AGENT 13.1. APPOINTMENT, AUTHORITY AND DUTIES OF ADMINISTRATIVE AGENT. 13.1.1. Each Lender hereby irrevocably appoints and designates BofA as Administrative Agent to act as herein specified. Administrative Agent may, and each Lender by its acceptance of a Note and becoming a party to this Agreement shall be deemed irrevocably to have authorized Administrative Agent to, enter into all Loan Documents to which Administrative Agent is or is intended to be a party and all amendments hereto and all Security Documents at any time executed by any Obligor, for its benefit and the Pro Rata benefit of Lenders and, except as otherwise provided in this SECTION 13, to exercise such rights and powers under this Agreement and the other Loan Documents as are specifically delegated to Administrative Agent by the terms hereof and thereof, together with such other rights and powers as are reasonably incidental thereto. Each Lender agrees that any action taken by Administrative Agent or the Required Lenders in accordance with the provisions of this Agreement or the other Loan Documents, and the exercise by Administrative Agent or the Required Lenders of any of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all Lenders. Without limiting the generality of the foregoing, Administrative Agent shall -93- have the sole and exclusive right and authority to (a) act as the disbursing and collecting agent for Lenders with respect to all payments and collections arising in connection with this Agreement and the other Loan Documents; (b) execute and deliver as Administrative Agent each Loan Document (including each Lien Waiver) and accept delivery of each such agreement by any Obligor or any other Person; (c) act as collateral Administrative Agent for Secured Parties for purposes of the perfection of all security interests and Liens created by this Agreement or the Security Documents and, subject to the direction of the Required Lenders, for all other purposes stated therein, provided that Administrative Agent hereby appoints, authorizes and directs each Lender to act as a collateral sub-agent for Administrative Agent and the other Lenders for purposes of the perfection of all security interests and Liens with respect to a Borrower's Deposit Accounts maintained with, and all cash and Cash Equivalents held by, such Lender; (d) subject to the direction of the Required Lenders, manage, supervise or otherwise deal with the Collateral; and (e) except as may be otherwise specifically restricted by the terms of this Agreement and subject to the direction of the Required Lenders, exercise all remedies given to Administrative Agent with respect to any of the Collateral under the Loan Documents relating thereto, Applicable Law or otherwise. The duties of Administrative Agent shall be ministerial and administrative in nature, and Administrative Agent shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship with any Lender (or any of Lender's participants). Unless and until its authority to do so is revoked in writing by Required Lenders, Administrative Agent alone shall be authorized to determine whether any Accounts constitute Eligible Accounts (basing such determination in each case upon the meanings given to such terms in SECTION 1), or whether to impose or release any reserve, and to exercise its own Credit Judgment in connection therewith, which determinations and judgments, if exercised in good faith, shall exonerate Administrative Agent from any liability to Lenders or any other Person for any errors in judgment. 13.1.2. Administrative Agent (which term, as used in this sentence, shall include reference to Administrative Agent's officers, directors, employees, attorneys, agents and Affiliates and to the officers, directors, employees, attorneys and agents of Administrative Agent's Affiliates) shall not: (a) have any duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents or (b) be required to take, initiate or conduct any Enforcement Action (including any litigation, foreclosure or collection proceedings hereunder or under any of the other Loan Documents) except to the extent directed to do so by the Required Lenders during the continuance of any Event of Default. The conferral upon Administrative Agent of any right hereunder shall not imply a duty on Administrative Agent's part to exercise any such right unless instructed to do so by the Required Lenders in accordance with this Agreement. 13.1.3. Administrative Agent may perform any of its duties by or through its agents and employees and may employ one or more Administrative Agent Professionals and shall not be responsible for the negligence or misconduct of any such Administrative Agent Professionals selected by it with reasonable care. Borrowers shall promptly (and in any event, ON DEMAND) reimburse Administrative Agent for all reasonable expenses (including all Extraordinary Expenses) incurred by Administrative Agent pursuant to any of the provisions hereof or of any of the other Loan Documents or in the execution of any of Administrative Agent's duties hereby or thereby created or in the exercise of any right or power herein or therein imposed or conferred upon it or Lenders (excluding, however, general overhead expenses), and each Lender agrees promptly to pay to Administrative Agent, ON DEMAND, such Lender's Pro Rata share of any such reimbursement for expenses (including Extraordinary Expenses) that is not timely made by Borrowers to Administrative Agent. 13.1.4. The rights, remedies, powers and privileges conferred upon Administrative Agent hereunder and under the other Loan Documents may be exercised by Administrative Agent without the necessity of the joinder of any other parties unless otherwise required by Applicable Law. If Administrative Agent shall request instructions from the Required Lenders with respect to any act or -94- action (including the failure to act) in connection with this Agreement or any of the other Loan Documents, Administrative Agent shall be entitled to refrain from such act or taking such action unless and until Administrative Agent shall have received instructions from the Required Lenders; and Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Administrative Agent as a result of Administrative Agent acting or refraining from acting hereunder or under any of the Loan Documents pursuant to or in accordance with the instructions of the Required Lenders except for Administrative Agent's own gross negligence or willful misconduct in connection with any action taken by it. Notwithstanding anything to the contrary contained in this Agreement, Administrative Agent shall not be required to take any action that is in its opinion contrary to Applicable Law or the terms of any of the Loan Documents or that would in its reasonable opinion subject it or any of its officers, employees or directors to personal liability. 13.1.5. Administrative Agent shall promptly, upon receipt thereof, forward to each Lender (i) copies of any significant written notices, reports, certificates and other information received by Administrative Agent from any Obligor (but only if and to the extent such Obligor is not required by the terms of the Loan Documents to supply such information directly to Lenders) and (ii) copies of the results of any field audits or other examinations made or prepared by or on behalf of Administrative Agent with respect to Borrowers or the Collateral (each, a "Report" and collectively, "Reports"). Administrative Agent shall conduct field audits of Borrowers at any time or times reasonably requested by any Lender (but in no event shall Administrative Agent be obliged to honor such requests more frequently than twice a calendar year unless an Event of Default exists). 13.2. AGREEMENTS REGARDING COLLATERAL AND EXAMINATION REPORTS. 13.2.1. Lenders hereby irrevocably authorize Administrative Agent to release any Lien with respect to any Collateral (i) upon the termination of the Commitments and Full Payment of the Obligations (other than contingent indemnification obligations for which no claim has been made), (ii) that is the subject of an Asset Disposition which Borrowers certify in writing to Administrative Agent is a Permitted Asset Disposition (and Administrative Agent may rely conclusively on any such certificate without further inquiry), or (iii) with the written consent of all Lenders. Administrative Agent shall have no obligation whatsoever to any of the Lenders to assure that any of the Collateral exists or is owned by a Borrower or is cared for, protected or insured or has been encumbered, or that Administrative Agent's Liens have been properly, sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority or to exercise any duty of care with respect to any of the Collateral. 13.2.2. Administrative Agent and Lenders each hereby appoints each other Lender as agent for the purpose of perfecting Liens (for the benefit of Secured Parties) in any Collateral that, in accordance with the UCC or any other Applicable Law, can be perfected only by possession. Should any Lender obtain possession of any such Collateral, such Lender shall notify Administrative Agent thereof, and, promptly upon Administrative Agent's request therefor, shall deliver such Collateral to Administrative Agent or otherwise deal with such Collateral in accordance with Administrative Agent's instructions. 13.2.3. Each Lender agrees that neither BofA nor Administrative Agent makes any representation or warranty as to the accuracy or completeness of any Report and shall not be liable for any information contained in or omitted from any such Report; agrees that the Reports are not intended to be comprehensive audits or examinations and that BofA or Administrative Agent or any other Person performing any audit or examination will inspect only specific information regarding Obligations or the Collateral and will rely significantly upon Borrowers' books and records as well as upon representations of Borrowers' officers and employees; agrees to keep all Reports confidential and strictly for its internal -95- use and not to distribute the Reports (or the contents thereof) to any Person (except to its Participants, attorneys, accountants and other Persons with whom such Lender has a confidential relationship) or use any Report in any other manner; and, without limiting the generality of any other indemnification contained herein, agrees to hold Administrative Agent and any other Person preparing a Report harmless from any action that the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any Loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender's participation in, or its purchase of, a loan or loans of any Obligor, and to pay and protect, and indemnify, defend and hold Administrative Agent and each other such Person preparing a Report harmless from and against all claims, actions, proceedings, damages, costs, expenses and other amounts (including attorneys' fees) incurred by Administrative Agent and any such other Person preparing a Report as the direct or indirect result of any third parties who might obtain all or any part of any Report through the indemnifying Lender. 13.3. RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be entitled to rely, and shall be fully protected in so relying, upon any certification, notice or other communication (including any thereof by telephone, telex, telegram, telecopier message or cable) believed by it to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of Administrative Agent Professionals selected by Administrative Agent. Without limiting the generality of the foregoing, Administrative Agent may rely upon any Notice of Borrowing, LC Request, Notice of Conversion/Continuation or any similar notice or request believed by Administrative Agent to be genuine. As to any matters not expressly provided for by this Agreement or any of the other Loan Documents, Administrative Agent shall in all cases be fully protected in acting or refraining from acting hereunder and thereunder in accordance with the instructions of the Required Lenders, and such instructions of the Required Lenders and any action taken or failure to act pursuant thereto shall be binding upon Lenders. 13.4. ACTION UPON DEFAULT. Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default or an Event of Default unless it has received written notice from a Lender or any or all Borrowers specifying the occurrence and nature of such Default or Event of Default. If Administrative Agent shall receive such a notice of a Default or an Event of Default or shall otherwise acquire actual knowledge of any Default or Event of Default, Administrative Agent shall promptly notify Lenders in writing and Administrative Agent shall take such action and assert such rights under this Agreement and the other Loan Documents, or shall refrain from taking such action and asserting such rights, as the Required Lenders shall direct from time to time. If any Lender shall receive a notice of a Default or an Event of Default or shall otherwise acquire actual knowledge of any Default or Event of Default, such Lender shall promptly notify Administrative Agent and the other Lenders in writing. As provided in SECTION 13.3, Administrative Agent shall not be subject to any liability by reason of acting or refraining to act pursuant to any request of the Required Lenders except for its own willful misconduct or gross negligence in connection with any action taken by it. In no event shall the Required Lenders, without the prior written consent of each Lender, direct Administrative Agent to accelerate and demand payment of the Loans held by one Lender without accelerating and demanding payment of all other Loans or to terminate the Commitments of one or more Lenders without terminating the Commitments of all Lenders. Each Lender agrees that, except as otherwise provided in any of the Loan Documents or with the written consent of Administrative Agent and the Required Lenders, it will not take any legal action or institute any action or proceeding against any Obligor with respect to any of the Obligations or Collateral or accelerate or otherwise enforce its portion of the Obligations. Without limiting the generality of the foregoing, none of Lenders may exercise any right that it might otherwise have under Applicable Law to credit bid at foreclosure sales, UCC sales or other similar sales or dispositions of any of the Collateral except as authorized by Administrative Agent and the Required Lenders. Notwithstanding anything to the contrary set forth in this SECTION 13.4 or elsewhere in this Agreement, each Lender shall be authorized -96- to take such action to preserve or enforce its rights against any Obligor where a deadline or limitation period is otherwise applicable and would, absent the taking of specified action, bar the enforcement of Obligations held by such Lender against such Obligor, including the filing of proofs of claim in any Insolvency Proceeding. 13.5. RATABLE SHARING. If any Lender shall obtain any payment or reduction (including any amounts received as adequate protection of a bank account deposit treated as cash collateral under the Bankruptcy Code) of any Obligation of Borrowers (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) in excess of its Pro Rata share of payments or reductions on account of such Obligations obtained by all of the Lenders, such Lender shall forthwith (i) notify the other Lenders and Administrative Agent of such receipt and (ii) purchase from the other Lenders such participations in the affected Obligations as shall be necessary to cause such purchasing Lender to share the excess payment or reduction, net of costs incurred in connection therewith, on a Pro Rata basis, provided that if all or any portion of such excess payment or reduction is thereafter recovered from such purchasing Lender or additional costs are incurred, the purchase shall be rescinded and the purchase price restored to the extent of such recovery or such additional costs, but without interest. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this SECTION 13.5 may, to the fullest extent permitted by Applicable Law, exercise all of its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of Borrowers in the amount of such participation. 13.6. INDEMNIFICATION OF ADMINISTRATIVE AGENT INDEMNITEES. 13.6.1. Each Lender agrees to indemnify and defend the Administrative Agent Indemnitees (to the extent not reimbursed by Borrowers, but without limiting the indemnification obligations of Obligors under any of the Loan Documents), on a Pro Rata basis, and to hold each of the Administrative Agent Indemnitees harmless from and against, any and all Claims which may be imposed on, incurred by or asserted against any of the Administrative Agent Indemnitees in any way related to or arising out of any of the Loan Documents or referred to herein or therein or the transactions contemplated thereby (including the costs and expenses which Borrowers are obligated to pay under SECTION 15.2 or amounts Administrative Agent may be called upon to pay in connection with any lockbox or Dominion Account arrangement contemplated hereby or under any indemnity, guaranty or other assurance of payment or performance given by Administrative Agent pursuant to SECTION 3.4.2 or the enforcement of any of the terms of any Loan Documents). 13.6.2. Without limiting the generality of the foregoing provisions of this SECTION 13.6, if Administrative Agent should be sued by any receiver, trustee in bankruptcy, debtor-in-possession or other Person on account of any alleged preference or fraudulent transfer received or alleged to have been received from any Borrower or any other Obligor as the result of any transaction under the Loan Documents, then in such event any monies paid by Administrative Agent in settlement or satisfaction of such suit, together with all Extraordinary Expenses incurred by Administrative Agent in the defense of same, shall be promptly reimbursed to Administrative Agent by Lenders to the extent of each Lender's Pro Rata share. 13.6.3. Without limiting the generality of the foregoing provisions of this SECTION 13.6, if at any time (whether prior to or after the Commitment Termination Date) any action or proceeding shall be brought against any of the Administrative Agent Indemnitees by an Obligor or by any other Person claiming by, through or under an Obligor, to recover damages for any act taken or omitted by Administrative Agent under any of the Loan Documents or in the performance of any rights, powers or remedies of Administrative Agent against any Obligor, any Account Debtor, the Collateral or with respect to any Loans, or to obtain any other relief of any kind on account of any transaction involving any Administrative Agent Indemnitees under or in relation to any of the Loan Documents, each Lender agrees -97- to indemnify, defend and hold the Administrative Agent Indemnitees harmless with respect thereto and to pay to the Administrative Agent Indemnitees such Lender's Pro Rata share of such amount as any of the Administrative Agent Indemnitees shall be required to pay by reason of a judgment, decree, or other order entered in such action or proceeding or by reason of any compromise or settlement agreed to by the Administrative Agent Indemnitees, including all interest and costs assessed against any of the Administrative Agent Indemnitees in defending or compromising such action, together with attorneys' fees and other legal expenses paid or incurred by the Administrative Agent Indemnitees in connection therewith; provided, however, that no Lender shall be liable to any Administrative Agent Indemnitee for any of the foregoing to the extent that they arise solely from the willful misconduct or gross negligence of such Administrative Agent Indemnitee. In Administrative Agent's discretion, Administrative Agent may also reserve for or satisfy any such judgment, decree or order from proceeds of Collateral prior to any distributions therefrom to or for the account of Lenders. 13.7. LIMITATION ON RESPONSIBILITIES OF ADMINISTRATIVE AGENT. Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall have received further assurances to its satisfaction from Lenders of their indemnification obligations under SECTION 13.6 against any and all Indemnified Claims which may be incurred by Administrative Agent by reason of taking or continuing to take any such action. Administrative Agent shall not be liable to Lenders for any action taken or omitted to be taken under or in connection with this Agreement or the other Loan Documents except as a result and to the extent of losses caused by the Administrative Agent's actual gross negligence or willful misconduct. Administrative Agent does not assume any responsibility for any failure or delay in performance or breach by any Obligor or any Lender of its obligations under this Agreement or any of the other Loan Documents. Administrative Agent does not make to Lenders, and no Lender makes to Administrative Agent or the other Lenders, any express or implied warranty, representation or guarantee with respect to the Obligations, the Collateral, the Loan Documents or any Obligor. Neither Administrative Agent nor any of its officers, directors, employees, attorneys or agents shall be responsible to Lenders, and no Lender nor any of its agents, attorneys or employees shall be responsible to Administrative Agent or the other Lenders, for: (i) any recitals, statements, information, representations or warranties contained in any of the Loan Documents or in any certificate or other document furnished pursuant to the terms hereof; (ii) the execution, validity, genuineness, effectiveness or enforceability of any of the Loan Documents; (iii) the genuineness, enforceability, collectibility, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; (iv) the validity, enforceability or collectibility of any the Obligations; or (v) the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or any Account Debtor. Neither Administrative Agent nor any of its officers, directors, employees, attorneys or agents shall have any obligation to any Lender to ascertain or inquire into the existence of any Default or Event of Default, the observance or performance by any Obligor of any of the duties or agreements of such Obligor under any of the Loan Documents or the satisfaction of any conditions precedent contained in any of the Loan Documents. Administrative Agent may consult with and employ legal counsel, accountants and other experts and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. 13.8. SUCCESSOR ADMINISTRATIVE AGENT AND CO-AGENTS. 13.8.1. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, Administrative Agent may resign at any time by giving at least 30 days written notice thereof to each Lender and Borrowers. Upon receipt of any notice of such resignation, the Required Lenders, after prior consultation with (but without having to obtain consent of) each Lender, shall have the right to appoint a successor Administrative Agent which shall be (i) a Lender, (ii) a United States based affiliate of a Lender, or (iii) a commercial bank that is organized under the laws of the United States or of any State thereof and has a combined capital surplus of at least $200,000,000 and, provided no -98- Default or Event of Default then exists, is reasonably acceptable to Borrowers (and for purposes hereof, any successor to BofA shall be deemed acceptable to Borrowers). If no successor Administrative Agent is appointed prior to the effective date of the resignation of Administrative Agent, then Administrative Agent may appoint, after consultation with Lenders and Borrower Agent, a successor agent from among Lenders. Upon the acceptance by a successor Administrative Agent of an appointment to serve as an Administrative Agent hereunder, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent without further act, deed or conveyance, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder but shall continue to enjoy the benefits of the indemnification set forth in SECTIONS 13.6 and 15.2. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this SECTION 13 (including the provisions of SECTION 13.6) shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent. Notwithstanding anything to the contrary contained in this Agreement, any successor by merger or acquisition of the stock or assets of BofA shall continue to be Administrative Agent hereunder without further act on the part of the parties hereto unless such successor shall resign in accordance with the provisions hereof. 13.8.2. It is the intent of the parties that there shall be no violation of any Applicable Law denying or restricting the right of financial institutions to transact business as agent or otherwise in any jurisdiction. In case of litigation under any of the Loan Documents, or in case Administrative Agent deems that by reason of present or future laws of any jurisdiction Administrative Agent might be prohibited from exercising any of the powers, rights or remedies granted to Administrative Agent or Lenders hereunder or under any of the Loan Documents or from holding title to or a Lien upon any Collateral or from taking any other action which may be necessary hereunder or under any of the Loan Documents, Administrative Agent may appoint an additional Person as a separate collateral agent or co-collateral agent which is not so prohibited from taking any of such actions or exercising any of such powers, rights or remedies. If Administrative Agent shall appoint an additional Person as a separate collateral agent or co-collateral agent as provided above, each and every remedy, power, right, claim, demand or cause of action intended by any of the Loan Documents to be exercised by or vested in or conveyed to Administrative Agent with respect thereto shall be exercisable by and vested in such separate collateral agent or co-collateral agent, but only to the extent necessary to enable such separate collateral agent or co-collateral agent to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate collateral agent or co-collateral agent shall run to and be enforceable by either of them. Should any instrument from Lenders be required by the separate collateral agent or co-collateral agent so appointed by Administrative Agent in order more fully and certainly to vest in and confirm to him or it such rights, powers, duties and obligations, any and all of such instruments shall, on request, be executed, acknowledged and delivered by Lenders whether or not a Default or Event of Default then exists. In case any separate collateral agent or co-collateral agent, or a successor to either, shall die, become incapable of acting, resign or be removed, all the estates, properties, rights, powers, duties and obligations of such separate collateral agent or co-collateral agent, so far as permitted by Applicable Law, shall vest in and be exercised by the Administrative Agent until the appointment of a new collateral agent or successor to such separate collateral agent or co-collateral agent. 13.9. CONSENTS, AMENDMENTS AND WAIVERS ; OUT-OF-FORMULA LOANS. 13.9.1. No amendment or modification of any provision of this Agreement or any of the other Loan Documents, nor any waiver of any Default or Event of Default, shall be effective without the prior written agreement or consent of the Required Lenders; provided, however, that (i) without the prior written consent of Administrative Agent, no amendment or waiver shall be effective with respect to any provision in any of the Loan Documents (including -99- SECTION 3.4 and this SECTION 13) to the extent such provision relates to the rights, duties, immunities, exculpation, indemnification or discretion of Administrative Agent; (ii) without the prior written consent of Issuing Bank, no amendment or waiver with respect to any of the LC Obligations or the provisions of Sections 2.3, 4.1.3 or 11.2.6 shall be effective; (iii) without the prior written consent of each affected Lender, no amendment or waiver shall be effective that would (1) increase or otherwise modify any Commitment of such Lender (other than to reduce such Lender's Commitment on a proportionate basis with the same Commitments of other Lenders); (2) alter (other than to increase) the rate of interest payable in respect of any Obligations owed to such Lender; (3) waive or defer collection of any interest or fee payable to such Lender pursuant to SECTION 3; or (4) subordinate the payment of any Obligations owed to such Lender to the payment of any Debt (except as expressly provided in SECTION 5.6.1); and (iv) without the prior written consent of all Lenders, no amendment or waiver shall be effective that would (1) waive any Default or Event of Default if the Default or Event of Default relates to any Borrower's failure to observe or perform any covenant that may not be amended without the unanimous written consent of Lenders (and, where so provided hereinafter, the written consent of Administrative Agent) as hereinafter set forth; (2) alter the provisions of SECTIONS 3.6, 3.7, 3.8, 3.10, 5.6, 5.7, 7.1 (except to add to the categories of Property of Borrowers constituting Collateral), 13.9, 15.2, 15.3, 15.4 or 15.16; (3) amend the definitions of "Pro Rata" or "Required Lenders" (and the other defined terms used in such definitions), or any provision of this Agreement obligating Administrative Agent to take certain actions at the direction of the Required Lenders, or any provision of any of the Loan Documents regarding the Pro Rata treatment or obligations of Lenders; or (4) subordinate the priority of any Liens granted to Administrative Agent under any of the Loan Documents to consensual, non-statutory Liens granted after the Restatement Effective Date to any other Person, except as currently provided in or contemplated by the Loan Documents (including a subordination in favor of the holders of Permitted Liens that are permitted to have priority over Administrative Agent's Liens) and except for Liens granted by an Obligor to financial institutions with respect to amounts on deposit with such financial institutions to cover returned items, processing and analysis charges and other charges in the Ordinary Course of Business that relate to deposit accounts with such financial institutions. Notwithstanding the foregoing, the consent or agreement of Borrowers shall not be necessary to the effectiveness of any amendment or waiver of any provision of this Agreement that deals solely with the rights and duties of Lenders and Administrative Agent as among themselves, including SECTIONS 5.6.1 and 15. The making of any Loans hereunder by any Lender during the existence of a Default or Event of Default shall not be deemed to constitute a waiver of such Default or Event of Default. Any waiver or consent granted by Lenders hereunder shall be effective only if in writing and then only in the specific instance and for the specific purpose for which it was given. 13.9.2. No Borrower will, directly or indirectly, pay or cause to be paid any remuneration or other thing of value, whether by way of supplemental or additional interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for or as an inducement to the consent to or agreement by such Lender with any waiver or amendment of any of the terms and provisions of this Agreement or any of the other Loan Documents to the extent that the agreement of all Lenders to any such waiver or amendment is required, unless such remuneration or thing of value is concurrently paid, on the same terms, on a Pro Rata or other mutually agreed upon basis to all Lenders; provided, however, that Borrowers may contract to pay a fee only to those Lenders who actually vote in writing to approve any waiver or amendment of the terms and provisions of this Agreement or any of the other Loan Documents to the extent that such waiver or amendment may be implemented by vote of the Required Lenders and such waiver or amendment is in fact approved. -100- 13.9.3. Any request, authority or consent of any Person who, at the time of making such request or giving such a authority or consent, is a Lender, shall be conclusive and binding upon any Transferee of such Lender. 13.9.4. Unless otherwise directed in writing by the Required Lenders, Administrative Agent may require Lenders to honor requests by Borrowers for Out-of-Formula Loans (in which event, and notwithstanding anything to the contrary set forth in SECTION 2.1.1 or elsewhere in this Agreement, Lenders shall continue to make Revolver Loans up to their Pro Rata share of the Commitments) and to forbear from requiring Borrowers to cure an Out-of-Formula Condition, (1) when no Event of Default exists (or if an Event of Default exists, when the existence of such Event of Default is not known by Administrative Agent), if and for so long as (i) such Out-of-Formula Condition does not continue for a period of more than 14 consecutive days, following which no Out-of-Formula Condition exists for at least 60 consecutive days before another Out-of-Formula Condition exists, (ii) the amount of the Revolver Loans outstanding at any time does not exceed the aggregate of the Commitments at such time, and (iii) the Out-of-Formula Condition is not known by Administrative Agent at the time in question to exceed $2,500,000; and (2) regardless of whether or not an Event of Default exists, if Administrative Agent discovers the existence of an Out-of-Formula Condition not previously known by it to exist, but Lenders shall be obligated to continue making such Revolver Loans as directed by Administrative Agent only (A) if the amount of the Out-of-Formula Condition is not increased by more than $500,000 above the amount determined by Administrative Agent to exist on the date of discovery thereof and (B) for a period not to exceed 30 Business Days. In no event shall any Borrower or any other Obligor be deemed to be a beneficiary of this SECTION 13.9.4 or authorized to enforce any of the provisions of this SECTION 13.9.4. 13.10. DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby acknowledges and represents that it has, independently and without reliance upon Administrative Agent or the other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Obligor and its own decision to enter into this Agreement and to fund the Loans to be made by it hereunder and to purchase participations in the LC Obligations pursuant to SECTION 2.3.2, and each Lender has made such inquiries concerning the Loan Documents, the Collateral and each Obligor as such Lender feels necessary and appropriate, and has taken such care on its own behalf as would have been the case had it entered into the other Loan Documents without the intervention or participation of the other Lenders or Administrative Agent. Each Lender hereby further acknowledges and represents that the other Lenders and Administrative Agent have not made any representations or warranties to it concerning any Obligor, any of the Collateral or the legality, validity, sufficiency or enforceability of any of the Loan Documents. Each Lender also hereby acknowledges that it will, independently and without reliance upon the other Lenders or Administrative Agent, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making Loans and in taking or refraining to take any other action under this Agreement or any of the other Loan Documents. Except for notices, reports and other information expressly required to be furnished to Lenders by Administrative Agent hereunder, Administrative Agent shall not have any duty or responsibility to provide any Lender with any notices, reports or certificates furnished to Administrative Agent by any Obligor or any credit or other information concerning the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession of Administrative Agent or any of Administrative Agent's Affiliates. 13.11. REPRESENTATIONS AND WARRANTIES OF LENDERS. Each Lender represents and warrants to each Borrower, Administrative Agent and the other Lenders that it has the power to enter into and perform its obligations under this Agreement and the other Loan Documents, and that it has taken all necessary and appropriate action to authorize its execution and performance of this Agreement and the other Loan Documents to which it is a party, each of which will be binding upon it and the obligations -101- imposed upon it herein or therein will be enforceable against it in accordance with the respective terms of such documents; and none of the consideration used by it to make or fund its Loans or to participate in any other transactions under this Agreement constitutes for any purpose of ERISA or Section 4975 of the Internal Revenue Code assets of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of the Internal Revenue Code and the rights and interests of such Lender in and under the Loan Documents shall not constitute plan assets under ERISA. 13.12. THE REQUIRED LENDERS. As to any provisions of this Agreement or the other Loan Documents under which action may or is required to be taken upon direction or approval of the Required Lenders, the direction or approval of the Required Lenders shall be binding upon each Lender to the same extent and with the same effect as if each Lender joined therein. Notwithstanding anything to the contrary contained in this Agreement, Borrowers shall not be deemed to be a beneficiary of, or be entitled to enforce, sue upon or assert as a defense to any of the Obligations, any provisions of this Agreement that requires Administrative Agent or any Lender to act, or conditions their authority to act, upon the direction or consent of the Required Lenders; and any action taken by Administrative Agent or any Lender that requires the consent or direction of the Required Lenders as a condition to taking such action shall, insofar as Borrowers are concerned, be presumed to have been taken with the requisite consent or direction of the Required Lenders. 13.13. SEVERAL OBLIGATIONS. The obligations and Commitment of each Lender under this Agreement and the other Loan Documents are several and neither Administrative Agent nor any Lender shall be responsible for the performance by the other Lenders of its obligations or Commitment hereunder or thereunder. Notwithstanding any liability of Lenders stated to be joint and several to third Persons under any of the Loan Documents, such liability shall be shared, as among Lenders, Pro Rata. 13.14. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its obligation to lend under this Agreement, the Loans made by it and each Note issued to it, Administrative Agent shall have the same rights and powers hereunder and under the other Loan Documents as any other Lender or holder of a Note and may exercise the same as though it were not performing the duties specified herein; and the terms "Lenders," "Required Lenders," or any similar term shall, unless the context clearly otherwise indicates, include Administrative Agent in its capacity as a Lender. Administrative Agent and its Affiliates may each accept deposits from, maintain deposits or credit balances for, invest in, lend money to, act as trustee under indentures of, serve as financial advisor to, and generally engage in any kind of business with any Borrower or any other Obligor, or any Affiliate of any Borrower or any other Obligor, as if it were any other bank and without any duty to account therefor (or for any fees or other consideration received in connection therewith) to the other Lenders. BofA or its affiliates may receive information regarding any Borrower or any of such Borrower's Affiliates and account debtors (including information that may be subject to confidentiality obligations in favor of Borrowers or any of their Affiliates) and Lenders acknowledge that neither Administrative Agent nor BofA shall be under any obligation to provide such information to Lenders to the extent acquired by BofA in its individual capacity and not as Administrative Agent hereunder. 13.15. NO THIRD PARTY BENEFICIARIES. This SECTION 13 is not intended to confer any rights or benefits upon Borrowers or any other Person except Lenders and Administrative Agent, and no Person (including any Borrower) other than Lenders and Administrative Agent shall have any right to enforce any of the provisions of this SECTION 13 except as expressly provided in SECTION 13.17. As between Borrowers and Administrative Agent, any action that Administrative Agent may take or purport to take on behalf of Lenders under any of the Loan Documents shall be conclusively presumed to have been authorized and approved by Lenders as herein provided. -102- 13.16. NOTICE OF TRANSFER. Administrative Agent may deem and treat a Lender party to this Agreement as the owner of such Lender's portion of the Revolver Loans for all purposes, unless and until a written notice of the assignment or transfer thereof executed by such Lender has been received by Administrative Agent. 13.17. REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected Lender") shall have (i) failed to fund its Pro Rata share of any Loan requested (or deemed requested) by Borrowers which such Lender is obligated to fund under the terms of this Agreement and which such failure has not been cured, (ii) requested compensation from Borrowers under SECTION 3.7 to recover increased costs incurred by such Lender (or its parent or holding company) which are not being incurred generally by the other Lenders (or their respective parents or holding companies), (iii) delivered a notice pursuant to SECTION 3.6 claiming that such Lender is unable to extend LIBOR Loans to Borrowers for reasons not generally applicable to the other Lenders, (iv) defaulted in paying or performing any of its obligations to Administrative Agent, or (v) failed or refused to give its consent to any amendment, waiver or action for which consent of all of the Lenders is required and in respect of which the Required Lenders have consented, then, in any such case and in addition to any other rights and remedies that Administrative Agent, any other Lender or any Borrower may have against such Affected Lender, any Borrower or Administrative Agent may make written demand on such Affected Lender (with a copy to Administrative Agent in the case of a demand by Borrowers and a copy to Borrowers in the case of a demand by Administrative Agent) for the Affected Lender to assign, and such Affected Lender shall assign pursuant to one or more duly executed Assignment and Acceptances within 5 Business Days after the date of such demand, to one or more Lenders willing to accept such assignment or assignments, or to one or more Eligible Assignees designated by Administrative Agent, all of such Affected Lender's rights and obligations under this Agreement (including its Commitment and all Loans owing to it) in accordance with SECTION 14. Administrative Agent is hereby irrevocably authorized to execute one or more Assignment and Acceptances as attorney-in-fact for any Affected Lender which fails or refuses to execute and deliver the same within 5 Business Days after the date of such demand. The Affected Lender shall be entitled to receive, in cash and concurrently with execution and delivery of each such Assignment and Acceptance, all amounts owed to the Affected Lender hereunder or under any other Loan Document, including the aggregate outstanding principal amount of the Loans owed to such Lender, together with accrued interest thereon through the date of such assignment (but excluding any prepayment penalty or termination charge. Upon the replacement of any Affected Lender pursuant to this SECTION 13.17, such Affected Lender shall cease to have any participation in, entitlement to, or other right to share in the Liens of Administrative Agent in any Collateral and such Affected Lender shall have no further liability to Administrative Agent, any Lender or any other Person under any of the Loan Documents (except as provided in SECTION 13.6 as to events or transactions which occur prior to the replacement of such Affected Lender), including any commitment to make Loans or purchase participations in LC Obligations. Administrative Agent shall have the right at any time, but shall not be obligated to, upon written notice to any Lender and with the consent of such Lender (which may be granted or withheld in such Lender's discretion), to purchase for Administrative Agent's own account all of such Lender's right, title and interest in and to this Agreement, the other Loan Documents and the Obligations (together with such Lender's interest in the Commitments), for the face amount of the Obligations owed to such Lender (or such greater or lesser amount as Administrative Agent and Lender may mutually agree upon). 13.18. REMITTANCE OF PAYMENTS AND COLLECTIONS. 13.18.1. All payments by any Lender to Administrative Agent shall be made not later than the time set forth elsewhere in this Agreement on the Business Day such payment is due; provided, however, that if such payment is due ON DEMAND by Administrative Agent and such demand is made on the paying Lender after 11:00 a.m. on such Business Day, then payment shall be made by 11:00 a.m. on the next Business Day. Payment by Administrative Agent to any Lender shall be made by wire transfer, -103- promptly following Administrative Agent's receipt of funds for the account of such Lender and in the type of funds received by Administrative Agent; provided, however, that if Administrative Agent receives such funds at or prior to 12:00 noon, Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on such Business Day, but if Administrative Agent receives such funds after 12:00 noon, Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on the next Business Day. 13.18.2. With respect to the payment of any funds from Administrative Agent to a Lender or from a Lender to Administrative Agent, the party failing to make full payment when due pursuant to the terms hereof shall, ON DEMAND by the other party, pay such amount together with interest thereon at the Federal Funds Rate. In no event shall Borrowers be entitled to receive any credit for any interest paid by Administrative Agent to any Lender, or by any Lender to Administrative Agent, at the Federal Funds Rate as provided herein. 13.18.3. If Administrative Agent pays any amount to a Lender in the belief or expectation that a related payment has been or will be received by Administrative Agent from an Obligor and such related payment is not received by Administrative Agent, then Administrative Agent shall be entitled to recover such amount from each Lender that receives such amount. If Administrative Agent determines at any time that any amount received by it under this Agreement or any of the other Loan Documents must be returned to an Obligor or paid to any other Person pursuant to any Applicable Law, court order or otherwise, then, notwithstanding any other term or condition of this Agreement or any of the other Loan Documents, Administrative Agent shall not be required to distribute such amount to any Lender. SECTION 14. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS 14.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of Borrowers, Administrative Agent and Lenders and their respective successors and assigns (which, in the case of Administrative Agent, shall include any successor Administrative Agent appointed pursuant to SECTION 13.8), except that (i) no Borrower shall have the right to assign its rights or delegate performance of any of its obligations under any of the Loan Documents and (ii) any assignment by any Lender must be made in compliance with SECTION 14.3. Administrative Agent may treat the Person which made any Loan or holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with SECTION 14.3 in the case of an assignment thereof or, in the case of any other transfer, a written notice of the transfer is filed with Administrative Agent. Any assignee or transferee of any rights with respect to any Note or Loan agrees by acceptance thereof to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the holder of a Note, shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note or Notes issued in exchange therefor. 14.2. PARTICIPATIONS. 14.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary course of its business and in accordance with Applicable Law, at any time sell to one or more banks or other financial institutions (each a "Participant") a participating interest in any of the Obligations owing to such Lender, any Commitment of such Lender or any other interest of such Lender under any of the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the holder of its Loans and Commitments for all purposes under the Loan Documents, all amounts payable by Borrowers under this Agreement and any of the Notes shall be determined as if such Lender -104- had not sold such participating interests, and Borrowers and Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents. If a Lender sells a participation to a Person other than an Affiliate of such Lender, then such Lender shall give prompt written notice thereof to Borrowers and the other Lenders. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of SECTION 5.9 unless Borrowers are notified of the participation sold to Participant and such Participant agrees, for the benefit of Borrowers, to comply with SECTION 5.10 as though such Participant were a Lender. 14.2.2. Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than an amendment, modification or waiver with respect to any Loans or Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the stated interest rate or the stated rates at which fees are payable with respect to any such Loan or Commitment, postpones the Commitment Termination Date, or any date fixed for any regularly scheduled payment of interest or fees on such Loan or Commitment, or releases from liability any Borrower or any Guarantor or releases any substantial portion of any of the Collateral. 14.2.3. Benefit of Set-Off. Each Borrower agrees that each Participant shall be deemed to have the right of set-off provided in SECTION 12.4 in respect of its participating interest in amounts owing under the Loan Documents to the same extent and subject to the same requirements under this Agreement (including SECTION 13.5) as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of set-off provided in SECTION 12.4 with respect to the amount of participating interests sold to each Participant. Lenders agree to share with each Participant, and each Participant by exercising the right of set-off provided in SECTION 12.4 agrees to share with each Lender, any amount received pursuant to the exercise of its right of set-off, such amounts to be shared in accordance with SECTION 13.5 as if each Participant were a Lender. This SECTION 14.2.3 is subject to the limitations set forth in the last sentence of SECTION 12.4. 14.2.4. Notices. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent that any such notice may be required, and neither Administrative Agent nor any other Lender shall have any obligation, duty or liability to any Participant of any other Lender. Without limiting the generality of the foregoing, neither Administrative Agent nor any Lender shall have any obligation to give notices or to provide documents or information to a Participant of another Lender. 14.3. ASSIGNMENTS. 14.3.1. Permitted Assignments. Subject to its compliance with SECTION 14.3.2, a Lender may, in accordance with Applicable Law, at any time assign to any Eligible Assignee all or any part of its rights and obligations under the Loan Documents, so long as (i) each assignment is of a constant, and not a varying, ratable percentage of all of the transferor Lender's rights and obligations under the Loan Documents with respect to the Loans and the LC Obligations and, in the case of a partial assignment, is in a minimum principal amount of $5,000,000 (unless otherwise agreed by Administrative Agent in its discretion) and integral multiples of $1,000,000 in excess of that amount; (ii) except in the case of an assignment in whole of a Lender's rights and obligations under the Loan Documents or an assignment by one original signatory to this Agreement to another such signatory, immediately after giving effect to any assignment, the aggregate amount of the Commitments retained by the transferor Lender shall in no event be less than $5,000,000 (unless otherwise agreed by Administrative Agent in its discretion); and (iii) the parties to each such assignment shall execute and deliver to Administrative Agent, for its acceptance and -105- recording, an Assignment and Acceptance. Nothing contained herein shall limit in any way the right of a Lender to pledge or assign all or any portion of its rights under this Agreement or with respect to any of the Obligations to (x) any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors and any Operating Circular issued by such Federal Reserve Bank, provided that, in each case, no such pledge or assignment of a security interest shall release any Lender from any of its obligations hereunder or substitute any such pledgee or assignee for any Lender as a party hereto, (y) direct or indirect contractual counterparties in swap agreements relating to the Loans, provided that any payment by Borrowers to the assigning Lender in respect of any assigned Obligations in accordance with the terms of this Agreement shall satisfy Borrowers' obligations hereunder in respect of such assigned Obligations to the extent of such payment, and no such assignment shall release the assigning Lender from its obligations hereunder. 14.3.2. Effect; Effective Date. Upon (i) delivery to Administrative Agent of a notice of assignment substantially in the form attached as EXHIBIT H hereto, together with any consents required by SECTION 14.3.1, and (ii) the recordation of the assignment on the Register and (iii) payment of a $1,500 fee to the Administrative Agent for processing any assignment to an Eligible Assignee that is not an Affiliate of the transferor Lender, such assignment shall become effective. The Assignment and Acceptance shall contain a representation and warranty by the Eligible Assignee that the assignment evidenced thereby will not result in a non-exempt "prohibited transaction" under Section 406 of ERISA. On and after the effective date of such assignment, such Eligible Assignee shall for all purposes be a Lender party to this Agreement and the other Loan Document executed by the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents to the same extent as if it were an original party thereto, and no further consent or action by Borrowers, Lenders or Administrative Agent shall be required to release the transferor Lender with respect to the Commitment (or portion thereof) of such Lender and Obligations assigned to such Eligible Assignee. Without limiting the generality of the foregoing, such Eligible Assignee shall be subject to and bound by all of the Loan Documents. Upon the consummation of any assignment to an Eligible Assignee pursuant to this SECTION 14.3, the transferor Lender, Administrative Agent and Borrowers shall make appropriate arrangements so that replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Eligible Assignee, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment. If the transferor Lender shall have assigned all of its interests, rights and obligations under this Agreement pursuant to SECTION 14.3.1, then (i) such transferor Lender shall no longer have any obligation to indemnify Administrative Agent with respect to any transactions, events or occurrences that transpire after the effective date of such assignment, (ii) each Eligible Assignee to which such transferor Lender shall make an assignment shall be responsible to Administrative Agent to indemnify Administrative Agent in accordance with this Agreement with respect to transactions, events and occurrences transpiring on and after the effective date of such assignment to it, and (iii) the transferor Lender shall continue to be entitled to the benefits of those provisions of the Loan Documents (including indemnities from Obligors) that survive Full Payment of the Obligations. 14.3.3. Dissemination of Information. Each Borrower authorizes each Lender and Administrative Agent to disclose to any Participant, any Eligible Assignee or any other Person acquiring an interest in the Loan Documents by operation of law (each a "Transferee"), and any prospective Transferee, any and all information in Administrative Agent's or such Lender's possession concerning each Borrower, the Subsidiaries of each Borrower or the Collateral, subject to appropriate confidentiality undertakings on the part of such Transferee. 14.4. TAX TREATMENT. If any interest in any Loan Document is transferred to any Transferee that is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of SECTION 5.9.3. -106- SECTION 15. MISCELLANEOUS 15.1. POWER OF ATTORNEY. Each Borrower hereby irrevocably designates, makes, constitutes and appoints Administrative Agent (and all Persons designated by Administrative Agent) as such Borrower's true and lawful attorney (and agent in-fact) and Administrative Agent, or Administrative Agent's designee, may, without notice to such Borrower and in either such Borrower's or Administrative Agent's name, but at the cost and expense of Borrowers: 15.1.1. At such time or times as Administrative Agent or said designee, in its discretion, may determine during the continuance of Restrictive Trigger Event, endorse such Borrower's name on any Payment Item or other proceeds of the Collateral (including proceeds of insurance) which come into the possession of Administrative Agent or under Administrative Agent's control. 15.1.2. At any time that an Event of Default exists and subject to Applicable Law: (i) demand payment of the Accounts from the Account Debtors, enforce payment of the Accounts by legal proceedings or otherwise, and generally exercise all of such Borrower's rights and remedies with respect to the collection of the Accounts; (ii) settle, adjust, compromise, discharge or release any of the Accounts or other Collateral or any legal proceedings brought to collect any of the Accounts or other Collateral; (iii) sell or assign any of the Accounts and other Collateral upon such terms, for such amounts and at such time or times as Administrative Agent deems advisable; (iv) prepare, file and sign such Borrower's name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of Lien, assignment or satisfaction of Lien or similar document in connection with any of the Collateral; (v) receive, open and dispose of all mail addressed to such Borrower and to notify postal authorities to change the address for delivery thereof to such address as Administrative Agent may designate; (vi) endorse the name of such Borrower upon any Payment Item relating to any Collateral and deposit the same to the account of Administrative Agent for application to the Obligations; (vii) endorse the name of such Borrower upon any Chattel Paper, Document, Instrument, invoice, freight bill, bill of lading or similar document or agreement relating to any Accounts or Inventory of any Obligor and any other Collateral; (viii) use such Borrower's stationery and sign the name of such Borrower to verifications of the Accounts and notices thereof to Account Debtors; (ix) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to any Collateral; (x) make and adjust claims under policies of insurance; (xi) sign the name of such Borrower to and file any proof of claim in an Insolvency Proceeding of any Account Debtor and on notices of Liens; (xii) take all action as may be necessary to obtain the payment of any letter of credit or banker's acceptance of which such Borrower is a beneficiary; and (xiii) do all other acts and things necessary, in Administrative Agent's determination, to fulfill such Borrower's obligations under any of the Loan Documents. 15.2. GENERAL INDEMNITY. Whether or not any of the transactions contemplated by any of the Loan Documents are consummated, each Borrower agrees to indemnify and defend the Indemnitees and hold the Indemnitees harmless from and against any Claims that may be instituted or asserted against or are incurred by any of the Indemnitees. Without limiting the generality of the foregoing, this indemnity shall extend to any Claims instituted or asserted against or incurred by any of the Indemnitees (x) under any Environmental Laws or (other similar laws by reason of a Borrower's or any other Person's failure to comply with laws applicable to solid or hazardous waste materials or other toxic substances) or (y) under any Anti-Terrorism Laws, including any fines assessed against Administrative Agent or any Lender by any Governmental Authority as a result of conduct of an Obligor. Additionally, if any Taxes (excluding Excluded Taxes but including any intangibles tax, stamp tax or recording tax) shall be payable by any party on account of the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of any of the other Loan Documents, or the creation or repayment of any of the Obligations hereunder, by reason of any Applicable Law now or hereafter in effect, Borrowers shall pay (and shall promptly reimburse Administrative Agent and Lenders for their payment of) all such Taxes, including -107- any interest and penalties thereon, and will indemnify and hold Indemnitees harmless from and against all liability in connection therewith. 15.3. SURVIVAL OF AND LIMITATIONS UPON INDEMNITIES. Notwithstanding anything to the contrary in this Agreement or any of the other Loan Documents, the obligation of each Borrower and each Lender with respect to each indemnity given by it in this Agreement shall survive the Full Payment of the Obligations, the termination of any of the Commitments and the resignation of Administrative Agent. Notwithstanding anything to the contrary contained in this Agreement, no Borrower shall have any obligation under this Agreement to indemnify an Indemnitee with respect to any Claim to the extent that it is determined in a final, non-appealable judgment by a court of competent jurisdiction that such Claim resulted from the gross negligence or willful misconduct of such Indemnitee. 15.4. RESERVED. 15.5. SEVERABILITY. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of this Agreement shall be prohibited by or invalid under Applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 15.6. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the Other Agreements and the Security Documents are hereby made cumulative with the provisions of this Agreement. Without limiting the generality of the foregoing, the parties acknowledge that this Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters and that such limitations, tests and measures are cumulative and each must be performed, except as may be expressly stated to the contrary in this Agreement. Except as otherwise provided in any of the other Loan Documents by specific reference to the applicable provision of this Agreement, if any provision contained in this Agreement is in direct conflict with, or inconsistent with, any provision in any of the other Loan Documents, the provision contained in this Agreement shall govern and control. 15.7. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement and any amendments hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. Loan Documents may be executed by facsimile and the effectiveness of any such Loan Documents and signatures thereon shall, subject to Applicable Law, have the same force and effect as manually signed originals and shall be binding on all parties thereto. Administrative Agent may require that any such documents and signatures be confirmed by a manually-signed original thereof, provided that the failure to request or deliver the same shall not limit the effectiveness of any facsimile signature. 15.8. CONSENT. Whenever the consent of Administrative Agent or Lenders (or any combination of Lenders) is required to be obtained under this Agreement or any of the other Loan Documents as a condition to any action, inaction, condition or event, each party whose consent is required shall be authorized to give or withhold its consent in its discretion and to condition its consent upon the giving of additional collateral security for the Obligations, the payment of money or any other matter. 15.9. NOTICES AND COMMUNICATIONS. 15.9.1. Except as otherwise provided in SECTION 4.1.5, all notices, requests and other communications to or upon a party hereto shall be in writing (including facsimile transmission or similar writing) and shall be given to such party at the address or facsimile number for such party on the -108- signature pages hereof (or, in the case of a Person who becomes a Lender after the date hereof, at the address shown on the applicable Assignment and Acceptance by which such Person became a Lender) or at such other address or facsimile number as such party may hereafter specify for the purpose by notice to Administrative Agent and Borrowers in accordance with the provisions of this SECTION 15.9. 15.9.2. Except as otherwise provided in SECTION 4.1.5, each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified herein for the noticed party and confirmation of receipt is received, (ii) if given by mail, 3 Business Days after such communication is deposited in the U.S. Mail, with first-class postage pre-paid, addressed to the noticed party at the address specified herein, or (iii) if given by personal delivery, when duly delivered with receipt acknowledged in writing by the noticed party. In no event shall a voicemail message be effective as a notice, communication or confirmation under any of the Loan Documents. Notwithstanding the foregoing, no notice to or upon Administrative Agent or BofA pursuant to SECTIONS 2.3, 3.1.2, 4.1 or 6.2.2 shall be effective until after actually received by Administrative Agent. Any written notice, request or demand that is not sent in conformity with the provisions hereof shall nevertheless be effective on the date that such notice, request or demand is actually received by the individual to whose attention at the noticed party such notice, request or demand is required to be sent. Any notice received by Borrower Agent shall be deemed to have been received by all Borrowers. 15.9.3. Electronic mail and intranet websites may be used only to distribute routine communications, such as financial statements, Borrowing Base Certificates and other information required by SECTION 8 and SECTION 10.1.3, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose as effective notice under this Agreement or any of the other Loan Documents. Administrative Agent and Lenders shall be authorized to rely and act upon any notices (including telephonic communications) purportedly given by or on behalf of any Borrower even if such notices were made in a manner other than as specified herein, were incomplete or were not preceded or followed by any other form of notice specified or required herein, or the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrowers jointly and severally agree to indemnify and defend each Indemnitee from all losses, costs, expenses and liabilities resulting from the reliance by any such Indemnitee on each telephone communication purportedly given by or on behalf of any Borrower other than to the extent constituting gross negligence or willful misconduct of the Indemnitee. 15.10. PERFORMANCE OF BORROWERS' OBLIGATIONS. If any Borrower shall fail to discharge any covenant, duty or obligation hereunder or under any of the other Loan Documents, Administrative Agent may, in its discretion at any time or from time to time during the continuance of an Event of Default and subject to Applicable Law, for such Borrower's account and at Borrowers' expense, pay any amount or do any act required of Borrowers hereunder or under any of the other Loan Documents or otherwise lawfully requested by Administrative Agent to (i) enforce any of the Loan Documents or collect any of the Obligations, (ii) preserve, protect, insure or maintain or realize upon any of the Collateral, or (iii) preserve, defend, protect or maintain the validity or priority of Administrative Agent's Liens in any of the Collateral, including the payment of any judgment against any Borrower. All payments that Administrative Agent may make under this Section and all reasonable out-of-pocket costs and expenses (including Extraordinary Expenses) that Administrative Agent pays or incurs in connection with any action taken by it hereunder shall be reimbursed to Administrative Agent by Borrowers, ON DEMAND, with interest from the date such payment is made or such costs or expenses are incurred to the date of payment thereof at the Default Rate applicable for Revolver Loans that are Base Rate Loans. Any payment made or other action taken by Administrative Agent under this Section shall be without prejudice to any right to assert, and without waiver of, an Event of Default hereunder and to without prejudice to Administrative Agent's right proceed thereafter as provided herein or in any of the other Loan Documents. -109- 15.11. CREDIT INQUIRIES. Each Borrower hereby authorizes and permits Administrative Agent and Lenders (but Administrative Agent and Lenders shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning such Borrower or any of its Subsidiaries. 15.12. TIME OF ESSENCE. Time is of the essence of this Agreement, the Other Agreements and the Security Documents. 15.13. INDULGENCES NOT WAIVERS. Administrative Agent's or any Lender's failure at any time or times hereafter, to require strict performance by Borrowers of any provision of this Agreement shall not waive, affect or diminish any right of Administrative Agent or any Lender thereafter to demand strict compliance and performance therewith. 15.14. ENTIRE AGREEMENT; EXHIBITS AND SCHEDULES. This Agreement and the other Loan Documents, together with all other instruments, agreements and certificates executed by the parties pursuant to any Loan Document, embody the entire understanding and agreement between the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and inducements, whether express or implied, oral or written, regarding the same subject matter. Each of the Exhibits and each of the Schedules attached hereto are incorporated into this Agreement and by this reference made a part hereof. 15.15. INTERPRETATION. No provision of this Agreement or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having, or being deemed to have, structured, drafted or dictated such provision. The paragraph and section headings are for convenience of reference only and shall not affect the substantive meaning of any provision of this Agreement. 15.16. OBLIGATIONS OF LENDERS SEVERAL. The Obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations or Commitment of any other Lender. Nothing contained in this Agreement and no action taken by Lenders pursuant hereto shall be deemed to constitute Lenders to be a partnership, association, joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled, to the extent not otherwise restricted hereunder, to protect and enforce its rights arising out of this Agreement and any of the other Loan Documents, and it shall not he necessary for Administrative Agent or any other Lender to be joined as an additional party in any proceeding for such purpose. 15.17. CONFIDENTIALITY. Administrative Agent and Lenders each agrees to take normal and reasonable precautions to maintain the confidentiality of any Information (defined below) for a period of 24 months following the Commitment Termination Date, except that Administrative Agent and any Lender may disclose such information (i) to their respective Affiliates and individuals employed or retained by Administrative Agent or such Lender who are or are expected to become engaged in evaluating, approving, structuring, administering or otherwise giving professional advice with respect to any of the Loans or Collateral, including any of their respective legal counsel, auditors or other professional advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (ii) to any party to this Agreement from time to time; (iii) pursuant to Applicable Law, the order of any court or administrative agency provided, however, that, prior to disclosure pursuant to this clause (iii), reasonable efforts shall be made to give the Borrowers notice of request for disclosure and the Borrowers shall be given a reasonable opportunity, at its expense, to prevent the disclosure or have the Information maintained as confidential under a protective order; (iv) upon the request or demand of any regulatory agency or other Governmental Authority having jurisdiction over Administrative Agent or such Lender or in accordance with Administrative Agent's or Lender's regulatory compliance policies, -110- (v) to the extent reasonably required in connection with any litigation (with respect to any of the Loan Documents or any of the transactions contemplated thereby) to which Administrative Agent, any Lender or their respective Affiliates may be a party, (vi) to the extent reasonably required in connection with the exercise of any remedies hereunder, (vii) to any actual or proposed Participant, Eligible Assignee or any other Transferee of all or part of a Lender's rights hereunder so long as such Person has agreed in writing to be bound by the provisions of this Section, (viii) to the National Association of Insurance Commissioners or any similar organization or to any nationally recognized rating agency that requires access to information about Lender's portfolio in connection with ratings issued with respect to such Lender, or (ix) with the consent of Borrowers. As used in this SECTION 15.17, "Information" means all information received from the Obligors relating to an Obligor or any of its Subsidiaries or their business, other than any such information that is available to Agent or Lenders on a nonconfidential basis prior to disclosure by an Obligor. 15.18. CERTIFICATIONS REGARDING INDENTURES. Each Borrower hereby certifies to Administrative Agent and Lenders that neither the execution or performance of this Agreement by Borrowers nor the incurrence of any Debt pursuant to the terms of this Agreement or any of the other Loan Documents by Borrowers violates any of the Indentures, including (i) Section 4.09 of the Senior Subordinated Note Indenture, or (ii) Sections 4.09 or 4.12 of the Senior Note Indenture. Each Borrower further certifies to Administrative Agent and Lenders that this Agreement constitutes a "Credit Agreement" under each of the foregoing Indentures, that all Loans collectively constitute "Senior Bank Debt" under the Senior Subordinated Notes Indenture and "Permitted Indebtedness" under the "Credit Agreement" and that the Liens of Administrative Agent hereunder are permitted under each of the Indentures. 15.20. GOVERNING LAW. This Agreement has been negotiated, executed and delivered, and shall be deemed to have been made, in New York, New York, and shall be governed by and construed in accordance with the internal laws (but without regard to conflict of law principles) of the State of New York, but giving effect to federal laws relating to national banks. 15.21. USA PATRIOT ACT NOTICE. Administrative Agent hereby notifies Borrowers that pursuant to the requirements of the USA Patriot Act, Administrative Agent is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow Administrative Agent to identify each Borrower in accordance with the USA Patriot Act. 15.22. CONSENT TO FORUM. Each Borrower hereby consents to the non-exclusive jurisdiction of any United States federal court sitting in or with direct or indirect jurisdiction over the Southern District of New York or any New York state or superior court sitting in New York County, New York, in any action, suit or other proceeding arising out of or relating to this Agreement or any of the other Loan Documents and each Borrower irrevocably agrees that all claims and demands in respect of any such action, suit or proceeding may be heard and determined in any such court and irrevocably waives any objection it may now or hereafter have as to the venue of any such action, suit or proceeding brought in any such court or that such court is an inconvenient forum. Nothing herein shall limit the right of Administrative Agent or any Lender to bring proceedings against any Borrower in the courts of any other jurisdiction. Any judicial proceeding commenced by any Borrower against Administrative Agent, BofA, any Lender or any holder of any of the Obligations, or any Affiliate of Administrative Agent, BofA, any Lender or any holder of any Obligations, involving, directly or indirectly, any matter in any way arising out of, related to or connected with any Loan Document shall be brought only in a United States federal court sitting in or with direct jurisdiction over the Southern District of New York or any New York state or superior court sitting in New York County, New York. Nothing in this Agreement shall be deemed to preclude the enforcement by Administrative Agent of any judgment or order obtained in such forum or -111- the taking of any action under this Agreement to enforce same in any other appropriate forum or jurisdiction. 15.23. WAIVERS BY BORROWERS. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH ADMINISTRATIVE AGENT AND EACH LENDER HEREBY ALSO WAIVE) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (II) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE AGENT ON WHICH SUCH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT MAY DO IN THIS REGARD IN CONNECTION WITH AN ENFORCEMENT ACTION BY ADMINISTRATIVE AGENT; (III) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ADMINISTRATIVE AGENT TO EXERCISE ANY OF ADMINISTRATIVE AGENT'S REMEDIES; (IV) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (V) ANY CLAIM AGAINST ADMINISTRATIVE AGENT OR ANY LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF, OR THE TAKING OF ANY ENFORCEMENT ACTION; OR RELATED TO ANY OF THE LOAN DOCUMENTS, ANY TRANSACTION THEREUNDER OR THE USE OF THE PROCEEDS OF ANY LOANS; AND (VI) NOTICE OF ACCEPTANCE HEREOF. EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT'S AND LENDERS' ENTERING INTO THIS AGREEMENT AND THAT ADMINISTRATIVE AGENT AND LENDERS ARE RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWERS. EACH BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. [Remainder of page intentionally left blank; signatures begin on following page] -112- IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on the day and year specified at the beginning of this Agreement. 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] PARKWAY IMAGING CENTER, LLC By: /s/ Brian G. Drazba ------------------------------------ Name: Brian G. Drazba Title: Manager INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. DIAGNOSTIC SOLUTIONS 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] MAXUM HEALTH SERVICES CORP. By: /s/ Mitch C. Hill ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer By: /s/ Marilyn MacNiven Young ------------------------------------ MARILYN MACNIVEN-YOUNG, Secretary 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] MESI 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 Address for all Borrowers: c/o InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, California 92630 Attention: Mitch C. Hill Telecopier: (949) 462-0042 With copies to: InSight Health Services Corp. 26250 Enterprise Court Suite 100 Lake Forest, California 92630 Attention: General Counsel Telecopier: (949) 462-3703 Kaye Scholer LLP 425 Park Avenue New York, New York 10022-3598 Attention: Ed Gabbay Telecopier: (212) 836-6476 [Signatures continued on following page] AGENT: BANK OF AMERICA, N.A., as Administrative Agent By: /s/ Elizabeth L. Walker ------------------------------------ Name: Elizabeth L. Walker Title: SVP Address for Agent: Bank of America, N.A., as Administrative Agent 300 Galleria Parkway Suite 800 Atlanta, Georgia 30339 Attention: Loan Administration Manager Telecopier: (770) 859-2483 With a copy to: Parker, Hudson, Rainer & Dobbs LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, N.E. Atlanta, Georgia 30303 Attention: C. Edward Dobbs Telecopier: (404) 522-8409 [Signatures continued on following page] LENDER: BANK OF AMERICA, N.A. By: /s/ Elizabeth L. Walker ------------------------------------ Name: Elizabeth L. Walker Title: SVP Address for Lender: Bank of America, N.A., as Lender 300 Galleria Parkway Suite 800 Atlanta, Georgia 30339 Attention: Loan Administration Manager Telecopier: (770) 859-2483 With a copy to: Parker, Hudson, Rainer & Dobbs LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, N.E. Atlanta, Georgia 30303 Attention: C. Edward Dobbs Telecopier: (404) 522-8409 EXHIBIT A FORM OF REVOLVER NOTE September __, 2005 U.S. $30,000,000.00 New York, New York FOR VALUE RECEIVED, the undersigned, INSIGHT HEALTH SERVICES CORP., a Delaware corporation (hereinafter referred to as "Borrower Agent"), and those subsidiaries of Borrower Agent listed on the signature pages hereto (Borrower Agent and each of its subsidiaries listed on the signature pages hereto, being referred to collectively herein as "Borrowers," and individually as a "Borrower"), hereby unconditionally, and jointly and severally, promise to pay to the order of _____________________ (herein, together with any subsequent holder hereof, called the "Holder") the principal sum of $30,000,000 or such lesser sum as may constitute Holder's Pro Rata share of the outstanding principal amount of all Revolver Loans pursuant to the terms of the Loan Agreement (as defined below) on the date on which such outstanding principal amounts become due and payable pursuant to SECTION 5.2 of the Loan Agreement, in strict accordance with the terms thereof. Borrowers likewise unconditionally, and jointly and severally, promise to pay to Holder interest from and after the date hereof on the Holder's Pro Rata share of the outstanding principal amount of Revolver Loans at such interest rates, payable at such times, and computed in such manner as are specified in SECTION 3.1 of the Loan Agreement, in strict accordance with the terms thereof. This Revolver Note ("Note") is issued pursuant to, and is one of the "Revolver Notes" referred to in, the Amended and Restated Loan and Security Agreement dated September 22, 2005 (as the same may be amended from time to time, the "Loan Agreement"), among Borrowers, Bank of America, N.A., as collateral and administrative agent (in such capacity, together with its successors in such capacity, the "Administrative Agent") for itself and the financial institutions from time to time parties thereto as lenders ("Lenders"), and such Lenders, and Holder is and shall be entitled to all benefits thereof and of all Loan Documents executed and delivered in connection therewith. This Note is subject to certain restrictions on transfer or assignment as provided in the Loan Agreement. All capitalized terms used herein, unless otherwise defined herein, shall have the meanings ascribed to such terms in the Loan Agreement. The repayment of the principal balance of this Note is subject to the provisions of SECTION 5.2 of the Loan Agreement. The entire unpaid principal balance and all accrued interest on this Note shall be due and payable immediately upon the termination of the Commitments as set forth in SECTION 6.2 of the Loan Agreement. All payments of principal and interest shall be made in Dollars in immediately available funds to Administrative Agent for Holder's benefit as specified in the Loan Agreement. Upon or after the occurrence of an Event of Default and for so long as such Event of Default exists, the principal balance and all accrued interest of this Note may be declared (or shall become) due and payable in the manner and with the effect provided in the Loan Agreement, and the unpaid principal balance hereof shall bear interest at the Default Rate as and when provided in SECTION 3.1.5 of the Loan Agreement. Borrowers jointly and severally agree to pay, and save Holder harmless against, any liability for the payment of, all costs and expenses, including, but not limited to, reasonable attorneys' fees, if this Note is collected by or through an attorney-at-law. All principal amounts of Revolver Loans made by Holder to Borrowers pursuant to the Loan Agreement, and all accrued and unpaid interest thereon, shall be deemed outstanding under this Note and shall continue to be owing by Borrowers until paid in accordance with the terms of this Note and the Loan Agreement. In no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid to Holder for the use, forbearance or detention of money advanced hereunder exceed the highest lawful rate permissible under any law which a court of competent jurisdiction may deem applicable hereto; and, in the event of any such payment inadvertently paid by Borrowers or inadvertently received by Holder, such excess sum shall be, at Borrowers' option, returned to Borrowers forthwith or credited as a payment of principal, but shall not be applied to the payment of interest. It is the intent hereof that Borrowers not pay or contract to pay, and that Holder not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Borrowers under Applicable Law. Time is of the essence of this Note. To the fullest extent permitted by Applicable Law, each Borrower, for itself and its legal representatives, successors and assigns, expressly waives presentment, demand, protest, notice of dishonor, notice of non-payment, notice of maturity, notice of protest, presentment for the purpose of accelerating maturity, diligence in collection, and the benefit of any exemption or insolvency laws. Wherever possible each provision of this Note shall be interpreted in such a manner as to be effective and valid under Applicable Law, but if any provision of this Note shall be prohibited or invalid under Applicable Law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or remaining provisions of this Note. No delay or failure on the part of Holder in the exercise of any right or remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise by Holder of any right or remedy preclude any other right or remedy. Holder, at its option, may enforce its rights against any Collateral securing this Note without Administrative Agent or Holder enforcing its rights against any Borrower, any Guarantor of the indebtedness evidenced hereby or any other property or indebtedness due or to become due to any Borrower. Each Borrower agrees that, without releasing or impairing any Borrower's liability hereunder, Holder or Administrative Agent may at any time release, surrender, substitute or exchange any Collateral securing this Note and may at any time release any party primarily or secondarily liable for the indebtedness evidenced by this Note. The rights of Holder and obligations of Borrowers hereunder shall be construed in accordance with and governed by the laws (without giving effect to the conflict of law principles thereof) of the State of New York. This Note is intended to take effect as an instrument under seal under New York law. This Note amends and restates the "Revolving Notes" under (and as defined in) the Existing Credit Agreement (the "Prior Notes"). Nothing contained herein is intended to constitute a novation or an accord and satisfaction of the Prior Notes. -2- IN WITNESS WHEREOF, each Borrower has caused this Note to be executed under seal and delivered by its duly authorized officers on the date first above written. BORROWERS: INSIGHT HEALTH SERVICES CORP. By: ------------------------------------ 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: ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer MRI ASSOCIATES, L.P. By: InSight Health Corp., as the general partner By: ------------------------------------ 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: ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer [Signatures continued on following page] -3- PARKWAY IMAGING CENTER, LLC By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- INSIGHT HEALTH CORP. OPEN MRI, INC. MAXUM HEALTH CORP. RADIOSURGERY CENTERS, INC. DIAGNOSTIC SOLUTIONS 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: ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer [Signatures continued on following page] -4- MAXUM HEALTH SERVICES CORP. By: ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer By: ------------------------------------ MARILYN MACNIVEN-YOUNG, Secretary 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: ------------------------------------ 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: ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer [Signatures continued on following page] -5- MESI 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: ------------------------------------ MITCH C. HILL, Executive Vice President and Chief Financial Officer -6- EXHIBIT C FORM OF NOTICE OF CONVERSION/CONTINUATION Date ______________, ______ Bank of America, N.A., as Administrative Agent 300 Galleria Parkway Suite 800 Atlanta, Georgia 30339 Attention: Loan Administration Officer Re: Amended and Restated Loan and Security Agreement dated September 22, 2005, by and among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (hereinafter referred to as "Borrower Agent"), and those subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower Agent and each of its subsidiaries listed on the signature pages thereto, being referred to collectively herein as "Borrowers," and individually as a "Borrower") and BANK OF AMERICA, N.A., as collateral and administrative agent for certain Lenders from time to time parties thereto, and such Lenders (as at any time amended, the "Loan Agreement") Gentlemen: This Notice of Conversion/Continuation is delivered to you pursuant to SECTION 3.1.2 of the Loan Agreement. Unless otherwise defined herein, capitalized terms used herein shall have the meanings attributable thereto in the Loan Agreement. Borrowers hereby give notice of their request as follows: Check as applicable: [ ] A conversion of Loans from one Type to another, as follows: (i) The requested date of the proposed conversion is ______________, 20__ (the "Conversion Date"); (ii) The Type of Loans to be converted pursuant hereto are presently __________________ [select either LIBOR Loans or Base Rate Loans] in the principal amount of $_____________ outstanding as of the Conversion Date; (iii) The portion of the aforesaid Loans to be converted on the Conversion Date is $_____________ (the "Conversion Amount"); (iv) The Conversion Amount is to be converted into a ____________ [select either a LIBOR Loan or a Base Rate Loan] (the "Converted Loan") on the Conversion Date. (v) [In the event a Borrower selects a LIBOR Loan:] Borrowers hereby request that the Interest Period for such Converted Loan be for a duration of _____ [insert length of Interest Period]. [ ] A continuation of LIBOR Loans for new Interest Period, as follows: (i) The requested date of the proposed continuation is _______________, 20__ (the "Continuation Date"); (ii) The aggregate amount of the LIBOR Loans subject to such continuation is $________________; (iii) The duration of the selected Interest Period for the LIBOR Loans which are the subject of such continuation is: _____________ [select duration of applicable Interest Period]; Each Borrower hereby ratifies and reaffirms all of its liabilities and obligations under the Loan Documents and certifies that no Event of Default exists on the date hereof. Borrowers have caused this Notice of Conversion/Continuation to be executed and delivered by their duly authorized representative, this _______ day of ______________, 20__. INSIGHT HEALTH SERVICES CORP. ("Borrower Agent") By: ------------------------------------ Title: --------------------------------- -2- EXHIBIT D FORM OF NOTICE OF BORROWING Date ______________, 20__ Bank of America, N.A., as Administrative Agent 300 Galleria Parkway Suite 800 Atlanta, Georgia 30339 Attention: Loan Administration Officer Re: Amended and Restated Loan and Security Agreement dated September 22, 2005, by and among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (hereinafter referred to as "Borrower Agent"), and those subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower Agent and each of its subsidiaries listed on the signature pages thereto, being referred to collectively herein as "Borrowers," and individually as a "Borrower"), and BANK OF AMERICA, N.A., as collateral and administrative agent for certain Lenders from time to time parties thereto, and such Lenders (as at any time amended, the "Loan Agreement") Gentlemen: This Notice of Borrowing is delivered to you pursuant to SECTION 4.1 of the Loan Agreement. Unless otherwise defined herein, capitalized terms used herein shall have the meanings attributable thereto in the Loan Agreement. Borrowers hereby request a Revolver Loan in the aggregate principal amount of $______________, to be made on _____________, _____, and to consist of: Check as applicable: [ ] Base Rate Loans in the aggregate principal amount of $_____________ [ ] LIBOR Loans in the aggregate principal amount of $___________, with Interest Periods as follows: (i) As to $_____________, an Interest Period of ______ month(s); (ii) As to $_____________, an Interest Period of ______ months; (iii) As to $_____________, an Interest Period of ______ months. Each Borrower hereby ratifies and reaffirms all of its liabilities and obligations under the Loan Documents and hereby certifies that no Default or Event of Default exists on the date hereof. Borrowers have caused this Notice of Borrowing to be executed and delivered by their duly authorized representative, this ______ day of _____________, 20__. INSIGHT HEALTH SERVICES CORP. By: ------------------------------------ Title: --------------------------------- EXHIBIT E COMPLIANCE CERTIFICATE [Letterhead of Borrower] __________________, 20__ Bank of America, N.A., as Administrative Agent 300 Galleria Parkway, N.W. Suite 800 Atlanta, Georgia 30339 The undersigned, the chief financial officer of INSIGHT HEALTH SERVICES CORP., a Delaware corporation (hereinafter referred to as "Borrower Agent"), and those subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower Agent and each of its subsidiaries listed on the signature pages thereto, being referred to collectively herein as "Borrowers," and individually as a "Borrower"), gives this certificate to BANK OF AMERICA, N.A. ("Administrative Agent") in accordance with the requirements of SECTION 10.1.3 of that certain Amended and Restated Loan and Security Agreement dated September 22, 2005, among Borrowers, Administrative Agent and the Lenders referenced therein ("Loan Agreement"). Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement. 1. Based upon my review of the balance sheets and statements of income of Borrowers and their Subsidiaries for the [Fiscal Year] [quarterly period] ending __________________, 20__, copies of which are attached hereto, I hereby certify that: (a) If a Financial Covenant Trigger Event has occurred and is continuing, Fixed Charge Coverage Ratio is ____ to ____; (b) Liquidity is $____________; I Capital Expenditures during the period and for the Fiscal Year to date total $_________ for Borrowers. 2. No Default exists on the date hereof, other than: _________________ ___________________________________________________________________ [if none, so state]; and 3. No Event of Default exists on the date hereof, other than _________ _______________________________________________________________ [if none, so state]. 4. As of the date hereof, each Borrower is current in its payment of all accrued rent and other charges to Persons who own or lease any premises where any of the Collateral is located, and there are no pending disputes or claims regarding any Borrower's failure to pay or delay in payment of any such rent or other charges. 5. Attached hereto is a schedule showing the calculations that support Borrowers' compliance [non-compliance] with the financial covenants, as shown above. Very truly yours, ---------------------------------------- Chief Financial Officer EXHIBIT G FORM OF ASSIGNMENT AND ACCEPTANCE Dated as of ______, 20__ Reference is made to the Amended and Restated Loan and Security Agreement dated September 22, 2005 (at any time amended, the "Loan Agreement"), among INSIGHT HEALTH SERVICES CORP. ("Borrower Agent"), those subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower Agent and each of its subsidiaries listed on the signature pages thereto being referred to collectively as "Borrowers" and individually as a "Borrower"), BANK OF AMERICA, N.A., a national bank, in its capacity as collateral and administrative agent ("Administrative Agent") for the financial institutions from time to time party to the Loan Agreement ("Lenders"), and such Lenders. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Loan Agreement. ______________________________________ (the "Assignor") and ______________________________________ (the "Assignee") agree as follows: 1. Assignor hereby assigns to Assignee and Assignee hereby purchases and assumes from Assignor (i) a principal amount of $________ of the outstanding Revolver Loans held by Assignor and $___________ of participations of Assignor in LC Obligations (which amount[S], according to the records of Administrative Agent, represent[S] _______% of the total principal amount of outstanding Revolver Loans and LC Obligations) and (ii) a principal amount of $__________ of Assignor's Revolver Commitment (which amount includes Assignor's outstanding Revolver Loans being assigned to Assignee pursuant to clause (i) above and which, according to the records of Administrative Agent, represents (____%) of the total Revolver Commitments of Lenders under the Loan Agreement) (the "Assigned Interest"), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective from the date on which the following have been satisfied (the "Assignment Effective Date"): (x) Assignor receives the principal amount of the Assigned Interest in the Loans, if any; (y) Administrative Agent receives a copy of this Agreement duly executed by Assignor and Assignee; and (z) Administrative Agent records the assignment in the Register. From and after the Assignment Effective Date, Assignee hereby expressly assumes, and undertakes to perform, all of Assignor's obligations in respect of Assignor's Commitments to the extent, and only to the extent, of Assignee's Assigned Interest, and all principal, interest, fees and other amounts which would otherwise be payable to or for Assignor's account in respect of the Assigned Interest shall be payable to or for Assignee's account, to the extent such amounts have accrued subsequent to the Assignment Effective Date. 2. Assignor (i) represents that as of the date hereof, the aggregate of its Commitments under the Loan Agreement (without giving effect to assignments thereof, which have not yet become effective) is $__________, and the outstanding balance of its Loans and participations in LC Obligations (unreduced by any assignments thereof, which have not yet become effective) is $__________; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto, other than that Assignor is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; [and] (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers, the performance or observance by Borrowers of any of their obligations under the Loan Agreement or any of the Loan Documents[; and (iv) attaches the Notes held by it and requests that Administrative Agent exchange such Notes for new Notes payable to Assignee and the Assignor in the principal amounts set forth on Schedule A hereto]. 3. Assignee (i) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (ii) confirms that it has received a copy of the Loan Agreement, together with copies of the most recent financial statements delivered pursuant to SECTION 10.1.3 thereof, and copies of such other Loan Documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (iii) agrees that it shall, independently and without reliance upon the Assignor and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement; (iv) confirms that it is eligible to become an Assignee; (v) appoints and authorizes Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Loan Agreement as are delegated to Administrative Agent by the terms thereof, together with such powers as are incidental thereto; (vi) agrees that it will strictly observe and perform all the obligations that are required to be performed by it as a "Lender" under the terms of the Loan Agreement and the other Loan Documents; (vii) agrees that it will keep confidential all information with respect to Borrowers furnished to it by Borrowers or the Assignor to the extent provided in the Loan Agreement; and (vii) represents and warrants that the assignment evidenced hereby will not result in a non-exempt "prohibited transaction" under Section 406 of ERISA. 4. Assignee acknowledges and agrees that it will not sell or otherwise dispose of the Assigned Interest or any portion thereof, or grant any participation therein, in a manner which, or take any action in connection therewith which, would violate the terms of any of the Loan Documents. 5. This Agreement and all rights and obligations shall be interpreted in accordance with and governed by the laws of the State of New York. If any provision hereof would be invalid under Applicable Law, then such provision shall be deemed to be modified to the extent necessary to render it valid while most nearly preserving its original intent; no provision hereof shall be affected by another provision's being held invalid. 6. Each notice or other communication hereunder shall be in writing, shall be sent by messenger, by telecopy or facsimile transmission or by first-class mail, shall be deemed given when sent and shall be sent as follows: (a) If to Assignee, to the following address (or to such other address as Assignee may designate from time to time): _________________________ _________________________ _________________________ (b) If to Assignor, to the following address (or to such other address as Assignor may designate from time to time): _________________________ _________________________ _________________________ -2- Payments hereunder shall be made by wire transfer of immediately available Dollars as follows: If to Assignee, to the following account (or to such other account as Assignee may designate from time to time): _________________________ ABA No.__________________ _________________________ Account No.______________ Reference: ______________________ If to Assignor, to the following account (or to such other account as Assignor may designate from time to time): _________________________ _________________________ _________________________ ABA No.___________________ For Account of:___________ Reference: _____________________ IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed and delivered by their respective duly authorized officers, as of the date first above written. ---------------------------------------- ("Assignor") By: ------------------------------------ Title: --------------------------------- ---------------------------------------- ("Assignee") By: ------------------------------------ Title: --------------------------------- -3- SCHEDULE A TO ASSIGNMENT AND ACCEPTANCE EXHIBIT H FORM OF NOTICE Reference is made to (i) the Amended and Restated Loan and Security Agreement dated September 22, 2005 (as at any time amended, the "Loan Agreement") among INSIGHT HEALTH SERVICES CORP. ("Borrower Agent"), those subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower Agent and each of its subsidiaries listed on the signature pages thereto being referred to collectively as "Borrowers" and individually as a "Borrower"), BANK OF AMERICA, N.A., a national bank, in its capacity as collateral and administrative agent ("Administrative Agent") for the financial institutions from time to time party to the Loan Agreement ("Lenders"), and such Lenders, and (ii) the Assignment and Acceptance dated as of ____________, 20__ (the "Assignment Agreement") between __________________ (the "Assignor") and ____________________ (the "Assignee"). Except as otherwise defined herein, capitalized terms used herein which are defined in the Loan Agreement are used herein with the respective meanings specified therein. The Assignor hereby notifies Borrowers and Administrative Agent of Assignor's intent to assign to Assignee pursuant to the Assignment Agreement a principal amount of (i) $________ of the outstanding Revolver Loans and participations in LC Obligations held by Assignor, (ii) $___________ of Assignor's Revolver Commitment (which amount includes the Assignor's outstanding Revolver Loans being assigned to Assignee pursuant to clause (i) above), together with an interest in the Loan Documents corresponding to the interest in the Loans and Commitments so assigned. Pursuant to the Assignment Agreement, Assignee has expressly assumed all of Assignor's obligations under the Loan Agreement to the extent of the Assigned Interest (as defined in the Assignment Agreement). For purposes of the Loan Agreement, Administrative Agent shall deem Assignor's share of the Revolver Commitment to be reduced by $_________ and Assignee's share of the Revolver Commitment [and Term Loan Commitment] to be increased by $_________. The address of the Assignee to which notices, information and payments are to be sent under the terms of the Loan Agreement is: _________________________ _________________________ _________________________ _________________________ Assignee's LIBOR Lending Office address is as follows: _________________________ _________________________ _________________________ _________________________ This Notice is being delivered to Borrowers and Administrative Agent pursuant to SECTION 14.3 of the Loan Agreement. Please acknowledge your receipt of this Notice by executing and returning to Assignee and Assignor a copy of this Notice. IN WITNESS WHEREOF, the undersigned have caused the execution of this Notice, as of _________________, 20__. ---------------------------------------- ("Assignor") By: ------------------------------------ Title: --------------------------------- ---------------------------------------- ("Assignee") By: ------------------------------------ Title: --------------------------------- ACKNOWLEDGED AND AGREED TO AS OF THE DATE SET FORTH ABOVE: BORROWERS:* - ------------------------------------- By: --------------------------------- Title: ------------------------------ - ------------------------------------- By: --------------------------------- Title: ------------------------------ - ------------------------------------- By: --------------------------------- Title: ------------------------------ * No signature required by any Borrower when an Event of Default exists. BANK OF AMERICA, N.A., as Administrative Agent By: --------------------------------- Title: ------------------------------ -2- EXHIBIT I LETTER OF CREDIT REQUEST Bank of America, N.A., as Administrative Agent The Treasury and International Services Group, GA1-006-10-32 600 Peachtree Street. NE, 10th Floor Atlanta, Georgia 30308 Attention: Ms. Sue Sewell This Letter of Credit Request is delivered to you pursuant to the Amended and Restated Loan and Security Agreement, dated September 22, 2005, among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (hereinafter referred to as "Borrower Agent"), and those subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower Agent and each of its subsidiaries listed on the signature pages thereto, being referred to collectively herein as "Borrowers," and individually as a "Borrower"), and various financial institutions as are, or may become, parties thereto (collectively, the "Lenders"), BANK OF AMERICA, N. A., as collateral and administrative agent (in such capacity, the "Administrative Agent") (as the same may be amended, supplemented, restated or otherwise modified from time to time, the "Loan Agreement"). Unless otherwise defined herein, terms used herein have the meanings assigned to them in the Loan Agreement. Borrowers hereby request Issuing Bank to issue a Letter of Credit, as follows: (1) Borrower's/Account Party's Name ______________________ (2) Amount of Letter of Credit: $_____________________ (3) Issuance Date: ______________________ (4) Beneficiary's Name: ______________________ (5) Beneficiary's Address: ______________________ ______________________ ______________________ ______________________ (6) Expiry Date: ______________________ (7) Draw Conditions: ______________________ ______________________ ______________________ ______________________ (8) Single draw [ ] or Multiple draw [ ] ______________________ (9) Purpose of Letter of Credit: ______________________ ______________________ ______________________ ______________________ Attached hereto is Issuing Bank's form of LC Application, completed with the details of the Letter of Credit requested herein. Each Borrower hereby certifies that each of the LC Conditions is now, and will on the date of issuance of the Letter of Credit, be satisfied in all respects and that no Default or Event of Default exists. Each Borrower hereby ratifies and reaffirms all of the Loan Documents and Obligations arising thereunder. IN WITNESS WHEREOF, each Borrower has caused this Letter of Credit Request to be executed and delivered by its duly authorized officer, this ___ day of _________________, 20__. INSIGHT HEALTH SERVICES CORP. ("Borrower Agent") By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -2- EXHIBIT J PORTFOLIO INTEREST EXEMPTION CERTIFICATE Reference is hereby made to the Amended and Restated Loan and Security Agreement dated September 22, 2005 among InSight Health Services Corp. ("InSight Health"), certain subsidiaries of InSight Health (together with InSight Health, collectively "Borrowers") and Bank of America, N.A. as collateral and administrative agent (together with its successors in such capacity, "Administrative Agent") (as at any time amended, the "Loan Agreement"). The undersigned hereby certifies the following on behalf of _____________________________________ ("Lender"): 1. The Lender is not a bank for purposes of SECTION 881(C)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"); 2. The Lender is not a 10-percent shareholder of the Borrower (within the meaning of SECTION 871(H)(3)(B) of the Code); and 3. The Lender is not a controlled foreign corporation related to the Borrower (within the meaning of SECTION 864(D)(4) of the Code. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of the Lender. ---------------------------------------- Date By: --------------------------------- Title: ------------------------------ EXHIBIT K FORM OF BORROWING BASE CERTIFICATE [See Attached] INSIGHT HEALTH SERVICES CORP. AND EACH OF ITS SUBSIDIARIES LISTED ON THE PAGES HERETO, as Borrowers LOAN AND SECURITY AGREEMENT Dated: September 22, 2005 $30,000,000.00 and BANK OF AMERICA, N.A., as Lender TABLE OF CONTENTS

Page ---- Section 1. DEFINITIONS; RULES OF CONSTRUCTION.......................... 2 1.1. Definitions................................................... 2 1.2. Accounting Terms.............................................. 37 1.3. Other Terms................................................... 37 1.4. Certain Matters of Construction............................... 37 Section 2. CREDIT FACILITY............................................. 38 2.1. Commitment.................................................... 38 2.2. Reserved...................................................... 39 2.3. LC Facility................................................... 39 2.4. Bank Products................................................. 43 Section 3. INTEREST, FEES AND CHARGES.................................. 44 3.1. Interest...................................................... 44 3.2. Fees.......................................................... 46 3.3. Computation of Interest and Fees.............................. 47 3.4. Reimbursement Obligations..................................... 47 3.5. Bank Charges.................................................. 48 3.6. Illegality.................................................... 48 3.7. Increased Costs............................................... 49 3.8. Capital Adequacy.............................................. 50 3.9. Mitigation.................................................... 50 3.10. Funding Losses................................................ 50 3.11. Maximum Interest.............................................. 51 Section 4. LOAN ADMINISTRATION......................................... 52 4.1. Manner of Borrowing and Funding Revolver Loans................ 52 4.2. Defaulting Lender............................................. 55 4.3. Special Provisions Governing LIBOR Loans...................... 56 4.4. Borrower Agent................................................ 56 4.5. All Loans to Constitute One Obligation........................ 57 Section 5. PAYMENTS.................................................... 57 5.1. General Payment Provisions.................................... 57 5.2. Repayment of Revolver Loans................................... 57 5.3. Reserved...................................................... 58 5.4. Payment of Other Obligations.................................. 58 5.5. Marshaling; Payments Set Aside................................ 59 5.6. Allocation of Payments........................................ 59 5.7. Application of Payments and Collateral Proceeds............... 60 5.8. Loan Accounts; Account Stated................................. 60 5.9. Taxes......................................................... 61 5.10. Nature and Extent of Each Borrower's Liability................ 62 Section 6. TERM AND TERMINATION OF COMMITMENT........................... 64 6.1. Term of Commitments........................................... 64 6.2. Termination................................................... 64 Section 7. COLLATERAL.................................................. 64 7.1. Grant of Security Interest.................................... 65 7.2. Reserved...................................................... 65

7.3. Reserved...................................................... 65 7.4. Certain After-Acquired Collateral............................. 65 7.5. No Assumption of Liability.................................... 65 7.6. Lien Perfection; Further Assurances........................... 65 Section 8. COLLATERAL ADMINISTRATION................................... 66 8.1. General Provisions............................................ 66 8.2. Administration of Accounts.................................... 66 8.3. Administration of Deposit Accounts............................ 68 8.4. Borrowing Base Certificates................................... 69 Section 9. REPRESENTATIONS AND WARRANTIES.............................. 69 9.1. General Representations and Warranties........................ 69 9.2. Reaffirmation of Representations and Warranties............... 76 9.3. Survival of Representations and Warranties.................... 76 Section 10. COVENANTS AND CONTINUING AGREEMENTS......................... 76 10.1. Affirmative Covenants......................................... 76 10.2. Negative Covenants............................................ 79 10.3. Financial Covenants........................................... 85 Section 11. CONDITIONS PRECEDENT........................................ 86 11.1. Conditions Precedent to Initial Credit Extensions............. 86 11.2. Conditions Precedent to All Credit Extensions................. 87 11.3. Limited Waiver of Conditions Precedent........................ 88 Section 12. EVENTS OF DEFAULT; REMEDIES ON DEFAULT...................... 88 12.1. Events of Default............................................. 88 12.2. Acceleration of Obligations; Termination of Commitment........ 90 12.3. Other Remedies................................................ 90 12.4. Setoff........................................................ 92 12.5. Remedies Cumulative; No Waiver................................ 93 Section 13. ADMINISTRATIVE AGENT........................................ 93 13.1. Appointment, Authority and Duties of Administrative Agent..... 93 13.2. Agreements Regarding Collateral and Examination Reports....... 95 13.3. Reliance By Administrative Agent.............................. 96 13.4. Action Upon Default........................................... 96 13.5. Ratable Sharing............................................... 97 13.6. Indemnification of Administrative Agent Indemnitees........... 97 13.7. Limitation on Responsibilities of Administrative Agent........ 98 13.8. Successor Administrative Agent and Co-Administrative Agents... 98 13.9. Consents, Amendments and Waivers; Out-of-Formula Loans....... 99 13.10. Due Diligence and Non-Reliance................................ 101 13.11. Representations and Warranties of Lenders..................... 101 13.12. The Required Lenders.......................................... 102 13.13. Several Obligations........................................... 102 13.14. Administrative Agent in its Individual Capacity............... 102 13.15. No Third Party Beneficiaries.................................. 102 13.16. Notice of Transfer............................................ 103 13.17. Replacement of Certain Lenders................................ 103 13.18. Remittance of Payments and Collections........................ 103 Section 14. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS........ 104 14.1. Successors and Assigns........................................ 104 14.2. Participations................................................ 104 14.3. Assignments................................................... 105 14.4. Tax Treatment................................................. 106 Section 15. MISCELLANEOUS............................................... 107 15.1. Power of Attorney............................................. 107 15.2. General Indemnity............................................. 107 15.3. Survival of and Limitations Upon Indemnities.................. 108 15.4. Reserved...................................................... 108 15.5. Severability.................................................. 108 15.6. Cumulative Effect; Conflict of Terms.......................... 108 15.7. Counterparts; Facsimile Signatures............................ 108 15.8. Consent....................................................... 108 15.9. Notices and Communications.................................... 108 15.10. Performance of Borrowers' Obligations......................... 109 15.11. Credit Inquiries.............................................. 110 15.12. Time of Essence............................................... 110 15.13. Indulgences Not Waivers....................................... 110 15.14. Entire Agreement; Exhibits and Schedules...................... 110 15.15. Interpretation................................................ 110 15.16. Obligations of Lenders Several................................ 110 15.17. Confidentiality............................................... 110 15.18. Certifications Regarding Indentures........................... 111 15.20. Governing Law................................................. 111 15.22. Consent to Forum.............................................. 111 15.23. Waivers by Borrowers.......................................... 112 LIST OF EXHIBITS AND SCHEDULES Exhibit A Form of Revolver Note Exhibit C Form of Notice of Conversion/Continuation Exhibit D Form of Notice of Borrowing Exhibit E Form of Compliance Certificate Exhibit G Form of Assignment and Acceptance Exhibit H Form of Notice Exhibit I Letter of Credit Request Exhibit J Portfolio Interest Exemption Certificate Exhibit K Form of Borrowing Base Certificate Schedule 8.3 Listing of All Deposit Accounts Schedule 9.1.4 Capital Structure of Borrowers Schedule 9.1.5 Corporate Names Schedule 9.1.6 Borrowers' Business Locations Schedule 9.1.12 Surety Obligations Schedule 9.1.13 Tax Identification Numbers of Borrowers and Subsidiaries Schedule 9.1.18 Litigation Schedule 9.1.21 Pension Plans Schedule 9.1.22 Labor Contracts Schedule 10.2.5 Permitted Liens EX-12.1 16 y13913exv12w1.htm EX-12.1: RATIO OF EARNINGS TO FIXED CHARGES

EXHIBIT 12.1

COMPUTATION OF EARNINGS TO FIXED CHARGES

			InSight (Predecessor)						Holdings
						Period															Pro forma
			Year			from															for Year
			Ended			July 1 to			Years Ended June 30,												Ended
			June 30,			October 17,															June 30,
			2001			2001			2002			2003			2004			2005			2005
Earnings:
	Pretax income (loss) from continuing operations		$	16,425		$	(6,748	)	$	9		$	8,188		$	4,874		$	(12,148	)	$	(13,737	)
	Fixed charges			28,757			7,888			35,979			40,191			43,778			49,409			50,998
	Distributions received from unconsolidated partnerships			970			134			965			1,009			2,054			2,621			2,621
	Less-Equity in earnings of unconsolidated partnerships			971			382			437			1,744			2,181			2,613			2,613
		Total earnings	$	45,181		$	892		$	36,516		$	47,644		$	48,525		$	37,269		$	37,269
Fixed Charges:
	Interest expense		$	24,315		$	6,536		$	32,856		$	37,738		$	40,936		$	45,558		$	47,147
	Interest factor of rental expense			4,442			1,352			3,123			2,453			2,842			3,851			3,851
		Total fixed charges	$	28,757		$	7,888		$	35,979		$	40,191		$	43,778		$	49,409		$	50,998
Ratio of Earnings to Fixed Charges				1.6	x		—			1.0	x		1.2	x		1.1	x		—			—

      The ratio of earnings to fixed charges is unaudited for all periods presented. For purpose of calculating this ratio, earnings consist of net income (loss) plus income taxes and fixed charges. Fixed charges consist of interest expense and the estimated portion of rental expense deemed a reasonable approximation of this interest factor. For the year ended June 30, 2005 on an actual and pro forma basis to give pro forma affect to the offering of the initial notes as if it had been completed an July 1, 2004, we had a deficiency of earnings to fixed charges of approximately $12.1 million and $13.7 million, respectively. On October 17, 2001, Holdings acquired InSight pursuant to an agreement and plan of merger dated June 29, 2001, as amended. Holdings did not have any operating activities until October 17, 2001. The ratio of earnings to fixed charges for the year ended June 30, 2002 reflects the results for the entire fiscal year 2002 and does not include the results of operations of InSight from July 1, 2001 to October 17, 2001. For the period from July 1 to October 17, 2001, InSight had a deficiency of earnings to fixed charges of approximately $7.0 million.

EX-3.77

                                                                    Exhibit 3.77

                             AMENDMENT NUMBER ONE TO
                             JOINT VENTURE AGREEMENT

      This Amendment Number One to Joint Venture Agreement (this "Amendment") is
made effective as of June 8, 2004, and is entered into by Comprehensive Medical
Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the
"Members"), in their capacity as the members or venturers of Los Gatos Imaging
Center, a Texas general partnership (the "Company"). This Amendment amends the
Company's Joint Venture Agreement dated as December 31, 1987 (the "Agreement").
Capitalized terms used in the Amendment and not otherwise defined have the
meanings ascribed in the Agreement.

      Accordingly, the Members hereby agree as follows:

      1.    AMENDMENT TO SECTION 7. The second to last paragraph of Section 7
"MANAGEMENT OF THE JOINT VENTURE", beginning "Notwithstanding the foregoing," is
hereby deleted in its entirety.

      2.    AMENDMENT TO SECTION 14. Section 14 of the Agreement "ASSIGNMENT OF
INTEREST IN THE JOINT VENTURE" is hereby deleted in its entirety.

      3.    EFFECTIVE DATE. This Amendment shall be effective as of the date
written above.

      4.    FULL FORCE AND EFFECT. Except as amended by this Amendment, the
Agreement shall remain in full force and effect; provided, however that wherever
the terms and conditions of this Amendment and the terms and conditions of the
Agreement conflict, the terms and conditions of this Amendment shall be deemed
to supersede the conflicting terms of the Agreement.

      IN WITNESS WHEREOF, the Members have caused this Amendment to be duly
executed as of the date first written above.

                                    COMPREHENSIVE MEDICAL IMAGING, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

                                    COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

EX-3.78

                                                                    Exhibit 3.78

                               SECOND AMENDMENT TO
                             JOINT VENTURE AGREEMENT

     This Second Amendment to Joint Venture Agreement (this "Agreement") is made
effective as of June 8, 2004, and is entered into by Comprehensive Medical
Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the
"Members"), in their capacity as the members or venturers of MRI of Woodbridge,
a Texas general partnership (the "Company"). This Amendment amends the Company's
Joint Venture Agreement dated as of May 5, 1992, as amended by that certain
First Amendment dated as of May 15, 1992 (collectively, the "Agreement").
Capitalized terms used in the Amendment and not otherwise defined have the
meanings ascribed in the Agreement.

     Accordingly, the Members hereby agree as follows:

     1. AMENDMENT TO SECTION 1.2. Section 1.2 is hereby amended to read in its
entirety as follows:

     "1.2. NAME. The name of the Venture shall be, and the business of the
Venture shall be conducted under the name of "Woodbridge MRI." The Venture's
business may be conducted under any other name or names deemed advisable by the
Managing Venturer."

     2. AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is
hereby deleted in its entirety.

     3. EFFECTIVE DATE. This Amendment shall be effective as of the date written
above.

     4. FULL FORCE AND EFFECT. Except as amended by this Amendment, the
Agreement shall remain in full force and effect; provided, however that wherever
the terms and conditions of this Amendment and the terms and conditions of the
Agreement conflict, the terms and conditions of this Amendment shall be deemed
to supersede the conflicting terms of the Agreement.

     IN WITNESS WHEREOF, the Members have caused this Amendment to be duly
executed as of the date first written above.

                                        COMPREHENSIVE MEDICAL IMAGING, INC.


                                        By: /s/ Steven T. Plochocki
                                            ------------------------------------
                                        Name: Steven T. Plochocki
                                        Title: President and Chief
                                        Executive Officer

EX-3.79

                                                                    Exhibit 3.79



                          FIRST AMENDMENT TO BY LAWS
                                      OF
                         MAXUM HEALTH SERVICES CORP.

This First Amendment to By Laws (this "Amendment") of Maxum Health Services
Corp. is effective as of October 26, 2005.

1.      Article 6 "OFFICERS" of the By Laws is hereby deleted in its entirety
and replaced with the following:

                                 "ARTICLE 6.
                                 -----------
                                  OFFICERS

        Section 6.1     Number; Security.  The executive officers of
the corporation shall be the president, one or more vice presidents (including
an executive vice president, if the board of directors so determines), a chief
financial officer, a secretary and a treasurer.  Any two or more offices may be
held by the same person, except the offices of president and secretary.

        Section 6.2     Election; Term of Office.  The executive officers of
the corporation shall be elected annually by the board of directors, and each
such officer shall hold office until the next annual meeting of the board of
directors and until the election of his or her successor, subject to the
provisions of Section 6.4.

        Section 6.3     Subordinate Officers.  The board of directors
may appoint subordinate officers (including assistant secretaries and assistant
treasurers), agents or employees, each of whom shall hold office for such
period and have such powers and duties as the board of directors determines.
The board of directors may delegate to any executive officer or to any
committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.

        Section 6.4     Resignation and Removal of Officers.  Any officer may
resign at any time by delivering his or her resignation in writing to the
president or secretary of the corporation, to take effect at the time specified
in the resignation; the acceptance of a resignation, unless required by its
terms, shall not be necessary to make it effective.  Any officer appointed by
the board of directors or appointed by an executive officer or by a committee
may be removed by the board of directors either with or without cause, and in
the case of an officer appointed by an executive officer or by a committee, by
the officer or committee who appointed him or her or by the president.

        Section 6.5     Vacancies.  A vacancy in any office may be
filled for the unexpired term in the manner prescribed in Sections 6.2 and 6.3
of these by laws for election or appointment to the office.

        Section 6.6     The President.  The president shall be the
chief executive officer of the corporation and shall preside at all meetings of
the board of directors and of the stockholders.  Subject to the control of the
board of directors and the chairman of the board, he or she shall have general
supervision over the business of the corporation and shall have such other
powers

and duties as presidents of corporations usually have or as the board of
directors assigns to him or her.

        Section 6.7     Vice President.  Each vice president shall have
such powers and duties as the board of directors or the president assigns to
him or her.

        Section 6.8     Chief Financial Officer.  The chief financial
officer of the corporation shall have general supervision over all financial
matters of the corporation and shall have such other powers and duties as chief
financial officers usually have or as the board of directors or the president
assigns to him or her.

        Section 6.9     Treasurer.  The treasurer shall be in charge of
the corporation's books and accounts.  Subject to the control of the board of
directors, he or she shall have such other powers and duties as the board of
directors or the president assigns to him or her.

        Section 6.10    Secretary.  The secretary shall be the secretary of,
and keep the minutes of, all meetings of the board of directors and of the
stockholders, shall be responsible for giving notice of all meetings of
stockholders and of the board of directors, and shall keep the seal and, when
authorized by the board of directors, apply it to any instrument requiring it.
Subject to the control of the board of directors, he or she shall have such
powers and duties as the board of directors or the president assigns to him or
her.  In the absence of the secretary from any meeting, the minutes shall be
kept by the person appointed for that purpose by the presiding officer.

        Section 6.11    Salaries.  The board of directors may fix the officers'
salaries, if any, or it may authorize the president to fix the salary of any
other officer."

2.      Except as amended by this Amendment, the By Laws shall remain in full
force and effect; provided, however that wherever the terms and conditions of
this Amendment and the terms and conditions of the By Laws conflict, the terms
and conditions of this Amendment shall be deemed to supersede the conflicting
terms of the By Laws.

EX-3.80

                                                                    Exhibit 3.80

                             AMENDMENT NUMBER ONE TO
                             JOINT VENTURE AGREEMENT

      This Amendment Number One to Joint Venture Agreement (this "Amendment") is
made effective as of June 8, 2004, and is entered into by Comprehensive Medical
Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the
"Members"), in their capacity as the members or venturers of Mountain View MRI,
a Texas general partnership (the "Company"). This Amendment amends the Company's
Joint Venture Agreement dated as April 27, 1990 (the "Agreement"). Capitalized
terms used in the Amendment and not otherwise defined have the meanings ascribed
in the Agreement.

      Accordingly, the Members hereby agree as follows:

      1.    AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is
hereby deleted in its entirety.

      2.    EFFECTIVE DATE. This Amendment shall be effective as of the date
written above.

      3.    FULL FORCE AND EFFECT. Except as amended by this Amendment, the
Agreement shall remain in full force and effect; provided, however that wherever
the terms and conditions of this Amendment and the terms and conditions of the
Agreement conflict, the terms and conditions of this Amendment shall be deemed
to supersede the conflicting terms of the Agreement.

      IN WITNESS WHEREOF, the Members have caused this Amendment to be duly
executed as of the date first written above.

                                    COMPREHENSIVE MEDICAL IMAGING, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

                                    COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

EX-3.81

                                                                    Exhibit 3.81

                             AMENDMENT NUMBER ONE TO
                             JOINT VENTURE AGREEMENT

      This Amendment Number One to Joint Venture Agreement (this "Amendment") is
made effective as of June 8, 2004, and is entered into by Comprehensive Medical
Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the
"Members"), in their capacity as the members or venturers of Mesa MRI, a Texas
general partnership (the "Company"). This Amendment amends the Company's Joint
Venture Agreement dated as December 20, 1991 (the "Agreement"). Capitalized
terms used in the Amendment and not otherwise defined have the meanings ascribed
in the Agreement.

      Accordingly, the Members hereby agree as follows:

      1.    AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is
hereby deleted in its entirety.

      2.    EFFECTIVE DATE. This Amendment shall be effective as of the date
written above.

      3.    FULL FORCE AND EFFECT. Except as amended by this Amendment, the
Agreement shall remain in full force and effect; provided, however that wherever
the terms and conditions of this Amendment and the terms and conditions of the
Agreement conflict, the terms and conditions of this Amendment shall be deemed
to supersede the conflicting terms of the Agreement.

      IN WITNESS WHEREOF, the Members have caused this Amendment to be duly
executed as of the date first written above.

                                    COMPREHENSIVE MEDICAL IMAGING, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

                                    COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

EX-3.82

                                                                    Exhibit 3.82

                             AMENDMENT NUMBER ONE TO
                             JOINT VENTURE AGREEMENT

      This Amendment Number One to Joint Venture Agreement (this "Amendment") is
made effective as of June 8, 2004, and is entered into by Comprehensive Medical
Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the
"Members"), in their capacity as the members or venturers of Jefferson MRI, a
Texas general partnership (the "Company"). This Amendment amends the Company's
Joint Venture Agreement dated as December 29, 1989 (the "Agreement").
Capitalized terms used in the Amendment and not otherwise defined have the
meanings ascribed in the Agreement.

      Accordingly, the Members hereby agree as follows:

      1.    AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is
hereby deleted in its entirety.

      2.    EFFECTIVE DATE. This Amendment shall be effective as of the date
written above.

      3.    FULL FORCE AND EFFECT. Except as amended by this Amendment, the
Agreement shall remain in full force and effect; provided, however that wherever
the terms and conditions of this Amendment and the terms and conditions of the
Agreement conflict, the terms and conditions of this Amendment shall be deemed
to supersede the conflicting terms of the Agreement.

      IN WITNESS WHEREOF, the Members have caused this Amendment to be duly
executed as of the date first written above.

                                    COMPREHENSIVE MEDICAL IMAGING, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

                                    COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

EX-3.83

                                                                    Exhibit 3.83

                             AMENDMENT NUMBER ONE TO
                             JOINT VENTURE AGREEMENT

      This Amendment Number One to Joint Venture Agreement (this "Amendment") is
made effective as of June 8, 2004, and is entered into by Comprehensive Medical
Imaging, Inc., a Delaware corporation ("CMI"), and Comprehensive Medical Imaging
Centers, Inc., a Delaware corporation ("CMIC" and together with CMI, the
"Members"), in their capacity as the members or venturers of Jefferson MRI-Bala,
a Texas general partnership (the "Company"). This Amendment amends the Company's
Joint Venture Agreement dated as December 30, 1992 (the "Agreement").
Capitalized terms used in the Amendment and not otherwise defined have the
meanings ascribed in the Agreement.

      Accordingly, the Members hereby agree as follows:

      1.    AMENDMENT TO ARTICLE VIII. Article VIII "TRANSFERS OF INTERESTS" is
hereby deleted in its entirety.

      2.    EFFECTIVE DATE. This Amendment shall be effective as of the date
written above.

      3.    FULL FORCE AND EFFECT. Except as amended by this Amendment, the
Agreement shall remain in full force and effect; provided, however that wherever
the terms and conditions of this Amendment and the terms and conditions of the
Agreement conflict, the terms and conditions of this Amendment shall be deemed
to supersede the conflicting terms of the Agreement.

      IN WITNESS WHEREOF, the Members have caused this Amendment to be duly
executed as of the date first written above.

                                    COMPREHENSIVE MEDICAL IMAGING, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

                                    COMPREHENSIVE MEDICAL IMAGING CENTERS, INC.

                                    By: /s/ Steven T. Plochocki
                                        --------------------------------------
                                    Name: Steven T. Plochocki
                                    Title: President and Chief Executive Officer

EX-4.6

                                                                     Exhibit 4.6

================================================================================

                          INSIGHT HEALTH SERVICES CORP.

                   SENIOR SECURED FLOATING RATE NOTES DUE 2011

                                   ----------

                                    INDENTURE

                         Dated as of September 22, 2005

                                   ----------

                         U.S. BANK NATIONAL ASSOCIATION

                                     TRUSTEE

                                   ----------

================================================================================

                             CROSS-REFERENCE TABLE*



TRUST INDENTURE
  ACT SECTION                                                  INDENTURE SECTION
- ---------------                                                -----------------
                                                            
310(a)(1) ..................................................      7.10
   (a)(2) ..................................................      7.10
   (a)(3) ..................................................      N.A.
   (a)(4) ..................................................      N.A.
   (a)(5) ..................................................      7.10
   (b) .....................................................      7.10
   (c) .....................................................      N.A.
311(a) .....................................................      7.11
   (b) .....................................................      7.11
   (c) .....................................................      N.A.
312(a) .....................................................      2.06
   (b) .....................................................      13.03
   (c) .....................................................      13.03
313(a) .....................................................      7.06, 13.03
   (b)(1) ..................................................      N.A.
   (b)(2) ..................................................      7.06
   (c) .....................................................      7.06, 13.02
   (d) .....................................................      7.06
314(a) .....................................................      7.06, 13.05
   (b) .....................................................      N.A.
   (c)(1) ..................................................      N.A.
   (c)(2) ..................................................      N.A.
   (c)(3) ..................................................      N.A.
   (d) .....................................................      10.05
   (e) .....................................................      13.05
   (f) .....................................................      N.A.
315(a) .....................................................      N.A.
   (b) .....................................................      N.A.
   (c) .....................................................      N.A.
   (d) .....................................................      N.A.
   (e) .....................................................      N.A.
316(a) (last sentence) .....................................      N.A.
   (a)(1)(A) ...............................................      N.A.
   (a)(1)(B) ...............................................      N.A.
   (a)(2) ..................................................      N.A.
   (b) .....................................................      N.A.
   (c) .....................................................      13.14


- ----------
N.A. means not applicable.

*    This Cross-Reference Table is not part of the Indenture.

                                                               
317(a)(1) ..................................................      N.A.
   (a)(2) ..................................................      N.A.
   (b) .....................................................      N.A.
318(a) .....................................................      N.A.
   (b) .....................................................      N.A.
   (c) .....................................................      13.01



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
CROSS-REFERENCE TABLE....................................................      i

                                   ARTICLE ONE
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01    Definitions..............................................      1
Section 1.02    Other Definitions........................................     25
Section 1.03    Incorporation by Reference of Trust Indenture Act........     26
Section 1.04    Rules of Construction....................................     26

                                   ARTICLE TWO
                                    THE NOTES

Section 2.01    Form and Dating..........................................     27
Section 2.02    Execution and Authentication.............................     28
Section 2.03    Methods of Receiving Payments on the Notes...............     29
Section 2.04    Registrar and Paying Agent...............................     29
Section 2.05    Paying Agent to Hold Money in Trust......................     29
Section 2.06    Holder Lists.............................................     30
Section 2.07    Transfer and Exchange....................................     30
Section 2.08    Replacement Notes........................................     43
Section 2.09    Outstanding Notes........................................     43
Section 2.10    Treasury Notes...........................................     44
Section 2.11    Temporary Notes..........................................     44
Section 2.12    Cancellation.............................................     44
Section 2.13    Defaulted Interest.......................................     44
Section 2.14    CUSIP Numbers............................................     45

                                  ARTICLE THREE
                           REDEMPTION AND PREPAYMENT;
                           SATISFACTION AND DISCHARGE

Section 3.01    Notices to Trustee.......................................     45
Section 3.02    Selection of Notes to Be Redeemed........................     45
Section 3.03    Notice of Redemption.....................................     45
Section 3.04    Effect of Notice of Redemption...........................     46
Section 3.05    Deposit of Redemption Price..............................     46
Section 3.06    Notes Redeemed in Part...................................     47
Section 3.07    Optional Redemption......................................     47
Section 3.08    Mandatory Redemption.....................................     48
Section 3.09    Repurchase Offers........................................     48
Section 3.10    Application of Trust Money...............................     50



                                        i

                                                                         
                                  ARTICLE FOUR
                                    COVENANTS

Section 4.01    Payment of Notes.........................................     50
Section 4.02    Maintenance of Office or Agency..........................     50
Section 4.03    Reports..................................................     51
Section 4.04    Compliance Certificate...................................     51
Section 4.05    Taxes....................................................     52
Section 4.06    Stay, Extension and Usury Laws...........................     52
Section 4.07    Restricted Payments......................................     52
Section 4.08    Dividend and Other Payment Restrictions Affecting
                   Restricted Subsidiaries...............................     57
Section 4.09    Incurrence of Indebtedness and Issuance of Disqualified
                   Stock.................................................     58
Section 4.10    Asset Sales..............................................     62
Section 4.11    Transactions with Affiliates.............................     63
Section 4.12    Liens....................................................     64
Section 4.13    Corporate Existence......................................     65
Section 4.14    Offer to Repurchase upon a Change of Control.............     65
Section 4.15    Limitation on Issuances and Sales of Capital Stock of
                   Restricted Subsidiaries...............................     66
Section 4.16    Designation of Restricted and Unrestricted Subsidiaries..     66
Section 4.17    Payments for Consent.....................................     67
Section 4.18    Limitations on Issuances of Guarantees of Indebtedness...     67
Section 4.19    Additional Guarantees....................................     68
Section 4.20    Sale and Leaseback Transactions..........................     68

                                  ARTICLE FIVE
                                   SUCCESSORS

Section 5.01    Merger, Consolidation or Sale of Assets..................     69

                                   ARTICLE SIX
                              DEFAULTS AND REMEDIES

Section 6.01    Events of Default........................................     70
Section 6.02    Acceleration.............................................     72
Section 6.03    Other Remedies...........................................     73
Section 6.04    Waiver of Past Defaults..................................     73
Section 6.05    Control by Majority......................................     74
Section 6.06    Limitation on Suits......................................     74
Section 6.07    Rights of Holders of Notes to Receive Payment............     74
Section 6.08    Collection Suit by Trustee...............................     75
Section 6.09    Trustee May File Proofs of Claim.........................     75
Section 6.10    Priorities...............................................     75
Section 6.11    Undertaking for Costs....................................     76




                                       ii

                                                                         
                                  ARTICLE SEVEN
                                     TRUSTEE

Section 7.01    Duties of Trustee........................................     76
Section 7.02    Certain Rights of Trustee................................     77
Section 7.03    Individual Rights of Trustee.............................     78
Section 7.04    Trustee's Disclaimer.....................................     78
Section 7.05    Notice of Defaults.......................................     78
Section 7.06    Reports by Trustee to Holders of the Notes...............     78
Section 7.07    Compensation and Indemnity...............................     79
Section 7.08    Replacement of Trustee...................................     80
Section 7.09    Successor Trustee by Merger, Etc.........................     81
Section 7.10    Eligibility; Disqualification............................     81
Section 7.11    Preferential Collection of Claims Against Company........     81

                                  ARTICLE EIGHT
                       DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01    Option to Effect Legal Defeasance or Covenant
                   Defeasance............................................     81
Section 8.02    Legal Defeasance and Discharge...........................     81
Section 8.03    Covenant Defeasance......................................     82
Section 8.04    Conditions to Legal or Covenant Defeasance...............     82
Section 8.05    Deposited Money and U.S. Government Obligations to Be
                   Held in Trust; Other Miscellaneous Provisions.........     83
Section 8.06    Repayment to the Company.................................     84
Section 8.07    Reinstatement............................................     84

                                   ARTICLE NINE
                         AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01    Without Consent of Holders of Notes......................     85
Section 9.02    With Consent of Holders of Notes.........................     86
Section 9.03    Compliance with Trust Indenture Act......................     87
Section 9.04    Revocation and Effect of Consents........................     87
Section 9.05    Notation on or Exchange of Notes.........................     88
Section 9.06    Trustee to Sign Amendments, Etc..........................     88

                                   ARTICLE TEN
                                   COLLATERAL

Section 10.01   Security Documents.......................................     88
Section 10.02   Opinions of Counsel......................................     89
Section 10.03   Possession and Use of the Collateral.....................     89
Section 10.04   Suits to Protect the Collateral..........................     89
Section 10.05   Release of Collateral....................................     89
Section 10.06   Permitted Ordinary Course Activities with respect to
                   Collateral............................................     91
Section 10.07   Actions by the Trustee...................................     92




                                       iii

                                                                         
Section 10.08   Purchaser Protected......................................     92

                                 ARTICLE ELEVEN
                                   GUARANTEES

Section 11.01   Guarantee................................................     92
Section 11.02   Limitation on Guarantor Liability........................     93
Section 11.03   Execution and Delivery of Guarantee......................     94
Section 11.04   Releases of Guarantors...................................     94

                                 ARTICLE TWELVE
                           SATISFACTION AND DISCHARGE

Section 12.01   Satisfaction and Discharge...............................     95
Section 12.02   Deposited Money and U.S. Government Obligations to Be
                   Held in Trust; Other Miscellaneous Provisions.........     96
Section 12.03   Repayment to the Company.................................     96

                                ARTICLE THIRTEEN
                                  MISCELLANEOUS

Section 13.01   Trust Indenture Act Controls.............................     96
Section 13.02   Notices..................................................     96
Section 13.03   Communication by Holders of Notes with Other Holders of
                   Notes.................................................     98
Section 13.04   Certificate and Opinion as to Conditions Precedent.......     98
Section 13.05   Statements Required in Certificate or Opinion............     98
Section 13.06   Rules by Trustee and Agents..............................     99
Section 13.07   No Personal Liability of Directors, Officers, Employees
                   and Stockholders......................................     99
Section 13.08   Governing Law............................................     99
Section 13.09   Consent to Jurisdiction..................................     99
Section 13.10   No Adverse Interpretation of Other Agreements............    100
Section 13.11   Successors...............................................    100
Section 13.12   Severability.............................................    100
Section 13.13   Counterpart Originals....................................    100
Section 13.14   Acts of Holders..........................................    100
Section 13.15   Benefit of Indenture.....................................    101
Section 13.16   Table of Contents, Headings, Etc.........................    102
Section 13.17   Trustee Not Fiduciary for Holders of Senior
                   Indebtedness..........................................    102




                                       iv

                                    EXHIBITS

           
Exhibit A1    FORM OF NOTE

Exhibit A2    FORM OF REGULATION S TEMPORARY GLOBAL NOTE

Exhibit B     FORM OF CERTIFICATE OF TRANSFER

Exhibit C     FORM OF CERTIFICATE OF EXCHANGE

Exhibit D     FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
              ACCREDITED INVESTOR

Exhibit E     FORM OF NOTATION OF GUARANTEE

Exhibit F     FORM OF SUPPLEMENTAL INDENTURE

SCHEDULE I    EXISTING INDEBTEDNESS

SCHEDULE II   AGREEMENTS EXCLUDED FROM TRANSACTIONS WITH AFFILIATES COVENANT




                                        v

          INDENTURE dated as of September 22, 2005 among InSight Health Services
Corp., a Delaware corporation (the "COMPANY"), InSight Health Services Holdings
Corp., a Delaware corporation, (the "PARENT"), the Subsidiary Guarantors (as
defined below) and U.S. Bank National Association, a national banking
association, as trustee.

          The Company, the Parent, the Subsidiary Guarantors and the Trustee (as
defined below) agree as follows for the benefit of each other and for the equal
and ratable benefit of the Holders (as defined below) of the Senior Secured
Floating Rate Notes due 2011:

                                   ARTICLE ONE
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01 Definitions.

          "144A GLOBAL NOTE" means a global note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that shall be issued in a denomination equal to the
outstanding principal amount at maturity of the Notes sold in reliance on Rule
144A.

          "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (a) existing at
the time such Person is merged with or into the Company or a Subsidiary or
becomes a Subsidiary or (b) assumed in connection with the acquisition of assets
from such Person.

          "ADDITIONAL NOTES" means Notes (other than the Notes issued on the
date hereof) issued under this Indenture in accordance with the provisions of
this Indenture.

          "AFFILIATE" means, with respect to any specified person, (a) any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person or (b) any other person that
owns, directly or indirectly, 10% or more of such specified person's Capital
Stock or any executive officer or director of any such specified person or other
person. For the purposes of this definition, "control," when used with respect
to any specified person, means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

          "AFTER-ACQUIRED PROPERTY" means any and all assets or property (other
than Excluded Assets) acquired after the Issue Date, including, without
limitation, any property or assets acquired by the Company or any Guarantor from
a transfer from the Company or a Guarantor, which in each case constitutes
Collateral.

          "AGENT" means any Registrar, Paying Agent or co-registrar.

          "APPLICABLE INDEBTEDNESS" means:

               (1) in respect of Asset Sales involving Collateral, Indebtedness
     secured on a first priority basis by the Collateral; or

               (2) in respect of Asset Sales not involving Collateral, Pari
     Passu Indebtedness.

          "APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.

          "ASSET SALE" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of merger,
consolidation or similar arrangement) (collectively, a "transfer") by the
Company or any Restricted Subsidiary other than in the ordinary course of
business and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Shares of Capital Stock of any of the Company's Restricted
Subsidiaries (which shall be deemed to include the sale, grant or conveyance of
any interest in the income, profits or proceeds therefrom). For the purposes of
this definition, the term "Asset Sale" does not include (a) any transfer of
properties or assets (i) that is governed by Section 5.01 hereof, Section 4.15
hereof (to the extent of clause (a) thereof) or Section 4.07 hereof (ii) between
or among the Company and its Subsidiaries that are Guarantors pursuant to
transactions that do not violate any other provision of this Indenture or (iii)
representing obsolete or permanently retired equipment and facilities, (b) the
sale or exchange of equipment in connection with the purchase or other
acquisition of other equipment, in each case used in the business of the Company
or its Restricted Subsidiaries as it was in existence on the Issue Date or any
business determined by the Board of the Company in its good faith judgment to be
reasonably related thereto; provided, that, to the extent such equipment sold or
exchanged represents Collateral, such other equipment purchased or acquired (A)
shall consist of assets that are not Excluded Assets and (B) shall be expressly
made subject to a first priority perfected Lien with respect to the Notes or (c)
any (1) single transaction or (2) series of related transactions, that involves
assets having a fair market value of less than $2.0 million, provided that the
aggregate fair market value of assets involved in all transactions consummated
from and after the Issue Date under clause (1) or (2) does not exceed $10
million. Notwithstanding anything to the contrary set forth above, a disposition
of Receivables and Related Assets other than pursuant to a Receivables Program
contemplated under Section 4.09 hereof shall be deemed to be an Asset Sale.

          "ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction, including any period for which such
lease has been extended or may, at the option of the lessor, be extended. Such
present value will be calculated using a discount rate equal to the rate of
interest implicit in such transaction, determined in accordance with GAAP;
provided, however, that if such Sale and Leaseback Transaction results in a
Capitalized Lease Obligation, the amount of Indebtedness represented thereby
will be determined in accordance with the definition of "Capitalized Lease
Obligation."

          "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.


                                       2

          "BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have a corresponding meaning.

          "BOARD" means the Company's Board of Directors or the Parent's Board
of Directors, as applicable.

          "BOARD RESOLUTION" means, with respect to a Board, a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company
or the Parent, as the case may be, to have been duly adopted by such Board and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.

          "BROKER-DEALER" has the meaning set forth in the Registration Rights
Agreement.

          "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
authorized or obligated by law or executive order to close. If a payment date is
not a Business Day, payment may be made on the next succeeding day that is a
Business Day, and no interest shall accrue on such payment for the intervening
period.

          "CAPITALIZED LEASE OBLIGATION" means, with respect to any Person, any
lease of any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is required to be accounted for as a capital
lease on the balance sheet of that Person.

          "CAPITAL STOCK" of any Person means any and all shares, interests,
partnership interests, participations, rights in or other equivalents (however
designated) of such Person's equity interest (however designated), whether now
outstanding or issued after the Issue Date.

          "CASH EQUIVALENTS" means, at any date, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) U.S. dollar denominated time deposits
and certificates of deposit of (i) any lender under the Credit Agreement, (ii)
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 or (iii) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at
least P-1 or the equivalent thereof (any such bank being an "Approved Lender"),
in each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes issued by any
Approved Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within twelve months of the date of acquisition,
(d) repurchase agreements entered into by any Person with a bank or trust
company (including any of the lenders under the Credit Agreement) or recognized
securities


                                       3

dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States in which such
Person shall have a perfected first priority security interest (subject to no
other Liens) and having, on the date of purchase thereof, a fair market value of
at least 100% of the amount of the repurchase obligations and (e) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).

          "CHANGE OF CONTROL" means the occurrence of any of the following:

          (a) the consummation of any transaction (including, without
     limitation, any merger or consolidation) (i) prior to a Public Equity
     Offering by the Company or the Parent, the result of which is that the
     Principals and their Related Parties become the "beneficial owner" (as such
     term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of
     less than 50% of the Voting Stock of the Company or the Parent, as the case
     may be (measured by voting power rather than the number of shares), or (ii)
     after a Public Equity Offering of the Company or the Parent, any "person"
     or "group" (as such terms are used in Section 13(d) and 14(d) of the
     Exchange Act), other than the Principals and their Related Parties, become
     the beneficial owner (as defined above), directly or indirectly, of 35% or
     more of the Voting Stock of the Company or the Parent, as the case may be,
     and such person is or becomes, directly or indirectly, the beneficial owner
     of a greater percentage of the voting power of the Voting Stock of the
     Company or the Parent, as the case may be, calculated on a fully diluted
     basis, than the percentage beneficially owned by the Principals and their
     Related Parties;

          (b) the direct or indirect sale, transfer, conveyance or other
     disposition (other than by way of merger or consolidation), in one or a
     series of related transactions, of all or substantially all of the
     properties or assets of the Company and its Subsidiaries or the Parent and
     its Subsidiaries, in each case, taken as a whole, to any "person" (as the
     term is defined in Section 13(d)(3) of the Exchange Act) other than the
     Principals or Related Parties of the Principals;

          (c) the first day on which a majority of the members of the Board of
     the Company or the Parent are not Continuing Directors; or

          (d) the Company or the Parent is liquidated or dissolved or adopts a
     plan of liquidation or dissolution, other than in a transaction that
     complies with the provisions described under Section 5.01 hereof.

          "CLEARSTREAM" means Clearstream Banking, societe anonyme, Luxembourg.

          "COLLATERAL" means collectively all of the property and assets that
are from time to time subject to the Lien of the Security Documents, including
the Liens, if any, required to be granted pursuant to this Indenture or the
Security Documents.


                                       4

          "COLLATERAL AGENCY AGREEMENT" means the Collateral Agency Agreement
dated as of the Issue Date among the Company, the Guarantors, the Trustee and
the Collateral Agent, as the same may be amended, restated, supplemented,
replaced or modified from time to time.

          "COMMON STOCK" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's Common Stock, whether now outstanding or
issued after the date of this Indenture, and includes, without limitation, all
series and classes of such Common Stock.

          "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.

          "CONSOLIDATED EBITDA" means, for any period, the sum of, without
duplication, Consolidated Net Income for such period, plus (or, in the case of
clause (d) below, plus or minus) the following items to the extent included in
computing Consolidated Net Income for such period: (a) Fixed Charges for such
period, plus (b) the provision for federal, state, local and foreign income
taxes of the Company and its Restricted Subsidiaries for such period, plus (c)
the aggregate depreciation and amortization expense of the Company and its
Restricted Subsidiaries for such period, plus (d) any other non-cash charges for
such period, and minus non-cash items increasing Consolidated Net Income for
such period, other than non-cash charges or items increasing Consolidated Net
Income resulting from changes in prepaid assets or accrued liabilities in the
ordinary course of business; plus (e) Minority Interest, provided that fixed
charges, income tax expense, depreciation and amortization expense and non-cash
charges of a Restricted Subsidiary will be included in Consolidated EBITDA only
to the extent (and in the same proportion) that the net income of such
Subsidiary was included in calculating Consolidated Net Income for such period.

          "CONSOLIDATED NET INCOME" means, for any period, the net income (or
net loss) of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, adjusted to the
extent included in calculating such net income or loss by excluding (a) any net
after-tax extraordinary or nonrecurring gains or losses (less all fees and
expenses relating thereto), (b) any net after-tax gains or losses (less all fees
and expenses relating thereto) attributable to Asset Sales or discontinued
operations, (c) the portion of net income (or loss) of any Person (other than
the Company or a Restricted Subsidiary), including Unrestricted Subsidiaries, in
which the Company or any Restricted Subsidiary has an ownership interest, except
to the extent of the amount of dividends or other distributions actually paid to
the Company or any Restricted Subsidiary in cash during such period, (d) the net
income (or loss) of any Person combined with the Company or any Restricted
Subsidiary on a "pooling of interests" basis attributable to any period prior to
the date of combination, (e) the net income (but not the net loss) of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary is at the date of
determination restricted, directly or indirectly, except to the extent that such
net income is actually paid to the Company or a Restricted Subsidiary thereof by
loans, advances, intercompany transfers, principal repayments or otherwise and
(f) the cumulative effect of a change in accounting principles.


                                       5

          "CONSOLIDATED TANGIBLE ASSETS" means, as of the date of determination,
the total assets, less goodwill and other intangibles, shown on the balance
sheet of the Company and its Restricted Subsidiaries as of the most recent date
for which such a balance sheet is available, determined on a consolidated basis
in accordance with GAAP.

          "CONTINUING DIRECTORS" means, as of the date of determination, any
member of the Board of the Company or the Parent, as the case may be, who:

          (a) was a member of such Board on the Reference Date;

          (b) was nominated for election or elected to such Board with the
     approval of the majority of the Continuing Directors who were members of
     such Board at the time of such nomination or election; or

          (c) was nominated by one or more of the Principals and the Related
     Parties.

          "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.

          "CREDIT AGREEMENT" means one or more debt facilities or commercial
paper facilities (including the Revolving Credit Agreement) with banks or other
institutional lenders providing for revolving credit loans, term loans, senior
secured, senior unsecured or subordinated note financings, receivables financing
or letters of credit, in each case together with agreements relating to the
provision of cash and treasury management services and other bank products or
services provided by a lender thereunder or an affiliate thereof and all other
agreements, instruments, and documents (including, without limitation, any
Guarantees and Security Documents) executed or delivered pursuant thereto or in
connection therewith, in each case as such agreement, other agreements,
instruments or documents may be amended, restated, supplemented, extended,
renewed, replaced, refinanced or otherwise modified from time to time,
including, without limitation, any agreement increasing or decreasing the amount
of, extending the maturity of, refinancing or otherwise restructuring all or a
portion of the Indebtedness under such agreements or any successor agreements.

          "CUSTODIAN" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.

          "DEFAULT" means any event that is, or after notice or passage of time
or both would be, an Event of Default.

          "DEFINITIVE NOTE" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.07 hereof,
substantially in the form of Exhibit A1 hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.

          "DEPOSIT ACCOUNTS COLLATERAL" means each Deposit Account maintained by
the Company or any Guarantor on the Issue Date and identified on a schedule to
the Security Documents and each Deposit Account established by the Company or
any Guarantor after the


                                       6

Issue Date into which collections on Accounts and proceeds of other Receivables
and Related Assets are to be deposited. For purposes of this definition,
"Deposit Account" and "Accounts" shall have the meanings provided for by the
UCC.

          "DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.04 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

          "DESIGNATED NONCASH CONSIDERATION" means the fair market value of
noncash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an officer's certificate, setting
forth the basis of such valuation, executed by the principal executive officer
and the principal financial officer of the Company, less the amount of cash or
Cash Equivalents received in connection with a sale of such Designated Noncash
Consideration.

          "DETERMINATION DATE" means, with respect to an Interest Period, the
second London Banking Day preceding the first day of such Interest Period.

          "DISINTERESTED DIRECTOR" means, with respect to any transaction or
series of transactions in respect of which the Board is required to deliver a
resolution of the Board, to make a finding or otherwise take action under this
Indenture, a member of the Board who does not have any material direct or
indirect financial interest in or with respect to such transaction or series of
transactions.

          "DISQUALIFIED STOCK" means any class or series of Capital Stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise (i) is or upon the happening of an
event or passage of time would be, required to be redeemed prior to the final
Stated Maturity of the Notes, (ii) is redeemable at the option of the holder
thereof, at any time prior to such final Stated Maturity or (iii) at the option
of the holder thereof is convertible into or exchangeable for debt securities at
any time prior to such final Stated Maturity; provided that any Capital Stock
that would constitute Disqualified Stock solely as a result of the provisions
therein giving holders thereof the right to cause the issuer thereof to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the Stated Maturity of the Notes will
not constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Sections 4.10 and 4.14
hereof, and such Capital Stock specifically provides that the issuer will not
repurchase or redeem any such stock pursuant to such provisions prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
the provisions contained in Sections 4.10 and 4.14 hereof.

          "EQUITY INTERESTS" means Capital Stock and all warrants, options and
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).


                                       7

          "EQUITY SPONSORS" means J.W. Childs Associates, L.P., J.W. Childs
Equity Partners II, L.P., The Halifax Group, L.L.C. and Halifax Capital
Partners, L.P.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
including the rules and regulations of the SEC promulgated thereunder.

          "EXCHANGE NOTES" means the Notes issued in the Exchange Offer in
accordance with Section 2.07(f) hereof.

          "EXCHANGE OFFER" has the meaning set forth in the Registration Rights
Agreement.

          "EXCLUDED ASSETS" means:

               (1) any interest in real property;

               (2) assets securing Capitalized Lease Obligations or Indebtedness
     under purchase money mortgages incurred pursuant to clause (c)(viii) under
     Section 4.09 hereof provided that such assets that are released from such
     security in connection with the incurrence of Indebtedness pursuant to
     clause (c)(xvi) under Section 4.09 hereof shall not be Excluded Assets;

               (3) Excluded Contracts;

               (4) any Voting Stock that is issued by a Foreign Subsidiary (that
     is a corporation for United States federal income tax purposes) and owned
     by the Company or any Guarantor, if and to the extent that the inclusion of
     such Voting Stock in the Collateral would cause the Collateral pledged by
     the Company or such Guarantor, as the case may be, to include in the
     aggregate more than 65% of the total combined voting power of all classes
     of Voting Stock of such Foreign Subsidiary;

               (5) any Capital Stock owned by the Company or a Guarantor and
     issued by an entity that is not a Wholly Owned Subsidiary of the Company or
     a Guarantor to the extent (and only with respect to such portion of such
     Capital Stock that would be prohibited as referred to below) that any joint
     venture agreement, between or among the Company and/or any Guarantor and
     one or more third parties with respect to a Permitted Joint Venture, by the
     express terms of a valid and enforceable restriction in favor of such third
     parties prohibits, or requires any consent for, the granting of a security
     interest in such Capital Stock by the Company or such Guarantor;

               (6) Receivables and Related Assets;

               (7) any Capital Stock and other securities of the Company, any of
     its Subsidiaries or any of the Parent's subsidiaries to the extent that the
     pledge of such Capital Stock or other securities to secure the Notes or the
     Guarantees would cause the Company, such Subsidiary or such subsidiary of
     the Parent, as the case may be, to be required to file separate financial
     statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in
     effect from time to time); and


                                       8

               (8) proceeds and products from any and all of the foregoing
     excluded collateral described in clauses (1) through (7), unless such
     proceeds or products would otherwise constitute Collateral securing the
     Notes.

          "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in
the Registration Rights Agreement.

          "EXCLUDED CONTRACT" means at any date any rights or interest of the
Company or any Guarantor in, to or under any agreement, contract, license,
instrument, document or other general intangible (referred to solely for
purposes of this definition as a "Contract") to the extent that such Contract by
the express terms of a valid and enforceable restriction in favor of a Person
who is not the Company or any Guarantor, or any requirement of law, prohibits,
or requires any consent or establishes any other condition for, an assignment
thereof or a grant of a security interest therein by the Company or a Guarantor;
provided that: (1) rights to payment under any such Contract otherwise
constituting an Excluded Contract by virtue of this definition shall be included
in the Collateral to the extent permitted thereby or by Section 9-406 or Section
9-408 of the UCC, (2) all proceeds paid or payable to any of the Company or any
Guarantor from any sale, transfer or assignment of such Contract and all rights
to receive such proceeds shall be included in the Collateral and (3) any such
Contract otherwise constituting an Excluded Contract by virtue of this
definition shall be included in the Collateral to the extent the Company or any
Guarantor obtains such consent, or removes such condition specified above.

          "EXISTING INDEBTEDNESS" means the Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement)
outstanding on the Issue Date and listed on Schedule I to this Indenture, until
such amounts are repaid.

          "EXISTING NOTES" means the 9 7/8% Senior Subordinated Notes Due 2011
of the Company.

          "FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of
Consolidated EBITDA for such period to Fixed Charges for such period.

          "FIXED CHARGES" means, for any period, without duplication, the sum of
(a) the amount that, in conformity with GAAP, would be set forth opposite the
caption "interest expense" (or any like caption) on a consolidated statement of
operations of the Company and its Restricted Subsidiaries for such period,
including, without limitation, (i) amortization of original issue discount, (ii)
the net cost of interest rate contracts (including, amortization of discounts),
(iii) the interest portion of any deferred payment obligation, (iv) amortization
of debt issuance costs, (v) the interest component of Capitalized Lease
Obligations, and (vi) imputed interest with respect to Attributable Debt plus
(b) all dividends and distributions paid (whether or not in cash) on Preferred
Stock and Disqualified Stock by the Company or any Restricted Subsidiary (to any
Person other than the Company or any of its Restricted Subsidiaries), other than
dividends on Equity Interests payable solely in Qualified Equity Interests of
the Company, computed on a tax effected basis, plus (c) all interest on any
Indebtedness of any Person guaranteed by the Company or any of its Restricted
Subsidiaries or secured by a lien on the assets of the Company or any of its
Restricted Subsidiaries; provided that Fixed Charges will not include (i) any
gain or loss from extinguishment of debt, including the write-off of debt
issuance costs, and (ii) the fixed


                                       9

charges of a Restricted Subsidiary to the extent (and in the same proportion)
that the net income of such Subsidiary was excluded in calculating Consolidated
Net Income pursuant to clause (e) of the definition thereof for such period.

          "FOREIGN SUBSIDIARY" means a Restricted Subsidiary that is
incorporated in a jurisdiction other than the United States or a state thereof
or the District of Columbia and that has no material operations or assets in the
United States.

          "GAAP" means generally accepted accounting principles in the United
States, consistently applied, that are in effect on the Issue Date.

          "GLOBAL NOTE LEGEND" means the legend set forth in Section
2.07(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.

          "GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A1 or A2 hereto, as appropriate, issued in accordance with
Section 2.01, 2.07(b)(iv), 2.07(d)(ii) or 2.07(f) of this Indenture.

          "GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.

          "GUARANTEE" means a Guarantee of the Notes pursuant to this Indenture.

          "GUARANTORS" means: (1) the Parent; (2) the Subsidiary Guarantors; and
(3) any other Subsidiary that executes a Guarantee in accordance with the
provisions hereof; and their respective successors and assigns.

          "HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person entered into in the ordinary course of business under
(i) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements and other similar financial agreements or arrangements
designed to protect such Person against, or manage the exposure of such Person
to, fluctuations in interest rates, and (ii) forward exchange agreements,
currency swap, currency option and other similar financial agreements or
arrangements designed to protect such Person against, or manage the exposure of
such Person to, fluctuations in foreign currency exchange rates.

          "HOLDER" means a Person in whose name a Note is, at the time of
determination, registered on the registrar's books.

          "IAI GLOBAL NOTE" means the global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited
Investors.


                                       10

          "INDEBTEDNESS" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (a) every obligation of such Person for money
borrowed, (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (d) every obligation of such
Person issued or assumed as the deferred purchase price of property or services,
(e) the attributable value of every Capitalized Lease Obligation of such Person,
(f) all Disqualified Stock of such Person valued at its maximum fixed repurchase
price, plus accrued and unpaid dividends thereon, (g) all obligations of such
Person under or in respect of Hedging Obligations, (h) all Attributable Debt,
and (i) every obligation of the type referred to in clauses (a) through (h) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed. For purposes of this definition, the
"maximum fixed repurchase price" of any Disqualified Stock that does not have a
fixed repurchase price will be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were purchased on any date on
which Indebtedness is required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Stock, such fair market value will be determined in good faith by
the board of directors of the issuer of such Disqualified Stock. Notwithstanding
the foregoing, trade accounts payable and accrued liabilities arising in the
ordinary course of business and any liability for federal, state or local taxes
or other taxes owed by such Person will not be considered Indebtedness for
purposes of this definition.

          "INDENTURE" means this Indenture, as amended or supplemented from time
to time.

          "INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Note through a Participant.

          "INITIAL PURCHASERS" means each of Banc of America Securities LLC and
CIBC World Markets Corp. as initial purchasers under the Purchase Agreement
dated September 16, 2005, among the Company, the Guarantors, Banc of America
Securities LLC and CIBC World Markets Corp.

          "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.

          "INTEREST PERIOD" means the period commencing on and including an
interest payment date and ending on and including the day immediately preceding
the next succeeding interest payment date, with the exception that the first
Interest Period shall commence on and include the Issue Date and end on and
include February 1, 2006.

          "INVESTMENT" in any Person means, (i) directly or indirectly, any
advance, loan or other extension of credit (including, without limitation, by
way of guarantee or similar arrangement) or capital contribution to such Person,
the purchase or other acquisition of any stock, bonds, notes, debentures or
other securities issued by such Person, the acquisition (by purchase or
otherwise) of all or substantially all of the business or assets of such Person,
or the


                                       11

making of any investment in such Person, (ii) the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary and (iii) the fair market value of the
Capital Stock (or any other Investment), held by the Company or any of its
Restricted Subsidiaries, of (or in) any Person that has ceased to be a
Restricted Subsidiary. Investments exclude endorsements for deposit or
collection in the ordinary course of business and extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.

          "ISSUE DATE" means the date on which the Notes are first issued.

          "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.

          "LIBOR" means, with respect to an Interest Period, the rate (expressed
as a percentage per annum) for deposits in United States dollars for a
three-month period beginning on the second London Banking Day after the
Determination Date that appears on Telerate Page 3750 as of 11:00 a.m., London
time, on the Determination Date. If Telerate Page 3750 does not include such a
rate or is unavailable on a Determination Date, the Calculation Agent will
request the principal London office of each of four major banks in the London
interbank market, as selected by the Calculation Agent, to provide such bank's
offered quotation (expressed as a percentage per annum), as of approximately
11:00 a.m., London time, on such Determination Date, to prime banks in the
London interbank market for deposits in a Representative Amount in United States
dollars for a three-month period beginning on the second London Banking Day
after the Determination Date. If at least two such offered quotations are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, the Calculation
Agent will request each of three major banks in New York City, as selected by
the Calculation Agent, to provide such bank's rate (expressed as a percentage
per annum), as of approximately 11:00 a.m., New York City time, on such
Determination Date, for loans in a Representative Amount in United States
dollars to leading European banks for a three-month period beginning on the
second London Banking Day after the Determination Date. If at least two such
rates are so provided, LIBOR for the Interest Period will be the arithmetic mean
of such rates. If fewer than two such rates are so provided, then LIBOR for the
Interest Period will be LIBOR in effect with respect to the immediately
preceding Interest Period.

          "LIEN" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon, or with
respect to, any property of any kind, real or personal, movable or immovable,
now owned or hereafter acquired. A Person will be deemed to own subject to a
Lien any property that such Person has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement.

          "LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.


                                       12

          "LONDON BANKING DAY" is any day in which dealings in United States
dollars are transacted or, with respect to any future date, are expected to be
transacted in the London interbank market.

          "MINORITY INTEREST" means, with respect to any Person, interests in
income of such Person's Subsidiaries held by Persons other than such Person or
another Subsidiary of such Person, as reflected on such Person's consolidated
financial statements.

          "MOODY'S" means Moody's Investors Service and any successor thereof.

          "NET CASH PROCEEDS" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed for, cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse to the Company
or any Restricted Subsidiary), net of (a) brokerage commissions and other fees
and expenses (including fees and expenses of legal counsel and investment banks)
related to such Asset Sale, (b) provisions for all taxes payable as a result of
such Asset Sale, (c) payments made to retire Indebtedness where such
Indebtedness is secured by the assets that are the subject of such Asset Sale,
(d) amounts required to be paid to any Person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in the assets that are
subject to the Asset Sale and (e) appropriate amounts to be provided by the
Company or any Restricted Subsidiary, as the case may be, as a reserve required
in accordance with GAAP against any liabilities associated with such Asset Sale
and retained by the seller after such Asset Sale, including pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale.

          "NON-RECOURSE INDEBTEDNESS" means Indebtedness of a Person (i) as to
which neither the Company nor any of its Restricted Subsidiaries (other than
such Person), (a) provides any guarantee or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or instrument that
would constitute Indebtedness) or (b) is directly or indirectly liable (as a
guarantor or otherwise), and (ii) the obligees of which will have recourse for
repayment of the principal of and interest on such Indebtedness and any fees,
indemnities, expense reimbursements or other amount of whatsoever nature accrued
or payable in connection with such Indebtedness solely against the assets of
such Person and not against any of the assets of the Company or its Restricted
Subsidiaries (other than such Person).

          "NON-U.S. PERSON" means a Person who is not a U.S. Person.

          "NOTES" means the Senior Secured Floating Rate Notes due 2011 of the
Company issued on the date hereof and the Exchange Notes. The Notes and the
Additional Notes, if any, shall be treated as a single class for all purposes
under this Indenture.

          "NOTE OBLIGATIONS" means the Notes, the Guarantees and all other
Obligations of any obligor under this Indenture, the Notes, the Exchange Notes,
the Guarantees and the Security Documents.


                                       13

          "OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

          "OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.

          "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.

          "OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof.

          "PARI PASSU INDEBTEDNESS" means (a) with respect to the Notes,
Indebtedness that ranks pari passu in right of payment to the Notes and (b) with
respect to any Guarantee, Indebtedness that ranks pari passu in right of payment
to such Guarantee.

          "PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and with respect to DTC, shall include Euroclear and
Clearstream).

          "PATIENT RECEIVABLES" means the patient accounts of the Company or any
Guarantor existing or hereinafter created, any and all rights to receive
payments due on such accounts from any obligor or other third-party payor under
or in respect of such accounts (including, without limitation, all insurance
companies, Blue Cross/Blue Shield, Medicare, Medicaid and health maintenance
organizations), and all proceeds of, or in any way derived, whether directly or
indirectly, from any of the foregoing (including, without limitation, all
interest, finance charges and other amounts payable by an obligor in respect
thereof).

          "PERMITTED BUSINESS" means the business conducted by the Company, its
Restricted Subsidiaries and Permitted Joint Ventures as of the Issue Date and
any and all diagnostic imaging and information businesses that in the good faith
judgment of the Board of the Company are reasonably related thereto.

          "PERMITTED INDEBTEDNESS" has the meaning set forth in Section 4.09(c)
hereof.

          "PERMITTED INVESTMENTS" means any of the following:

          (a) Investments in (i) United States dollars (including such dollars
as are held as overnight bank deposits and demand deposits with banks), (ii)
securities with a maturity of one year or less issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof); (iii) certificates of deposit, Euro-dollar time deposits or
acceptances with a maturity of one year or less of any financial institution
that is a member of the Federal


                                       14

Reserve System having combined capital and surplus of not less than
$500,000,000; (iv) any shares of money market mutual or similar funds having
assets in excess of $500,000,000; (v) repurchase obligations with a term not
exceeding seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above; and (vi) commercial paper with a
maturity of one year or less issued by a corporation that is not an Affiliate of
the Company and is organized under the laws of any state of the United States or
the District of Columbia and having a rating (A) from Moody's of at least P-1 or
(B) from S&P of at least A-1;

          (b) Investments by the Company or any Restricted Subsidiary in another
Person, if as a result of such Investment (i) such other Person becomes a
Restricted Subsidiary or (ii) such other Person is merged or consolidated with
or into, or transfers or conveys all or substantially all of its assets to, the
Company or a Restricted Subsidiary;

          (c) Investments by the Company or a Restricted Subsidiary in the
Company or a Restricted Subsidiary;

          (d) Investments in existence on the Reference Date;

          (e) promissory notes or other evidence of Indebtedness received as a
result of Asset Sales permitted under Section 4.10 hereof;

          (f) loans or advances to officers, directors and employees of the
Company or any of its Restricted Subsidiaries made (i) in the ordinary course of
business in an amount not to exceed $5 million in the aggregate at any one time
outstanding or (ii) in connection with the purchase by such Persons of Equity
Interests of the Parent so long as the cash proceeds of such purchase received
by the Parent are contemporaneously remitted by the Parent to the Company as a
capital contribution;

          (g) any Investment by the Company or any Restricted Subsidiary of the
Company in Permitted Joint Ventures made after the Reference Date having an
aggregate fair market value, when taken together with all other Investments made
pursuant to this clause (g) that are at the time outstanding, not exceeding the
greater of (i) $30 million and (ii) 10% of the Consolidated Tangible Assets of
the Company as of the last day of the most recent full fiscal quarter ending
immediately prior to the date of such Investment (with the fair market value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value);

          (h) any Investment by the Company or any Restricted Subsidiary in a
trust, limited liability company, special purpose entity or other similar entity
in connection with a Receivables Program; provided that (A) such Investment is
made by a Receivables Subsidiary and (B) the only assets transferred to such
trust, limited liability company, special purpose entity or other similar entity
consist of Receivables and Related Assets of such Receivables Subsidiary; and

          (i) other Investments that do not exceed $20 million in the aggregate
at any one time outstanding.


                                       15

          "PERMITTED JOINT VENTURE" means any joint venture, partnership or
other Person designated by the Board of the Company, (i) at least 20% of whose
Capital Stock with voting power under ordinary circumstances to elect directors
(or Persons having similar or corresponding powers and responsibilities) is at
the time owned (beneficially or directly) by the Company and/or by one or more
Restricted Subsidiaries of the Company and if the Company owns more than 50% of
the Capital Stock of the Permitted Joint Venture, such Permitted Joint Venture
is either a Restricted Subsidiary of the Company or has been designated as an
Unrestricted Subsidiary of the Company in accordance with the provisions of
Section 4.16 hereof, (ii) (x) if it is an Unrestricted Subsidiary, all
Indebtedness of such Person is Non-Recourse Indebtedness or (y) if it is a
Person other than an Unrestricted Subsidiary, either all Indebtedness of such
Person is Non-Recourse Indebtedness or the only Indebtedness of such Person that
is not Non-Recourse Indebtedness is Indebtedness as to which any guarantee
provided by the Company or a Restricted Subsidiary complies with the provisions
of Sections 4.07 and 4.09 hereof, and (iii) which is engaged in a Permitted
Business; provided, that each of Berwyn Magnetic Resonance Center, LLC, Garfield
Imaging Center, Ltd., Tom's River Imaging Associates, L.P., St. John's Regional
Imaging Center, LLC, Dublin Diagnostic Imaging, LLC, Connecticut Lithotripsy,
LLC, Northern Indiana Oncology Center of Porter Memorial Hospital, LLC, Lockport
MRI, LLC, Wilkes-Barre Imaging, LLC, Sun Coast Imaging Center, LLC, Granada
Hills Open MRI, LLC, Daniel Freeman MRI, LLC, InSight-Premier Health, LLC,
Southern Connecticut Imaging Centers, LLC, Parkway Imaging Center, LLC,
Metabolic Imaging of Kentucky, LLC, Maine Molecular Imaging, LLC, Greater
Waterbury Imaging Center, L.P. and Central Maine Magnetic Imaging Associates,
shall be deemed to be a Permitted Joint Venture. Any such designation (other
than with respect to the Persons identified in the preceding sentence) shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution giving effect to such designation and an officer's certificate
certifying that such designation complied with the foregoing provisions.

          "PERMITTED LIENS" means:

               (1) Liens on Receivables and Related Assets securing Indebtedness
     incurred under paragraph (c)(i) under Section 4.09 hereof in an aggregate
     principal amount not to exceed $125 million less (A) up to $50 million of
     cash (or the fair market value of any other assets) to the extent applied
     to repurchase Existing Notes on the Issue Date or within two Business Days
     from the Issue Date and (B) the aggregate principal amount of any
     Additional Notes issued by the Company.

               (2) Liens in favor of the Company or any Restricted Subsidiary
     that is a Guarantor;

               (3) Liens on property of a Person existing at the time such
     Person is merged with or into or consolidated with the Company or any
     Restricted Subsidiary of the Company; provided that such Liens were in
     existence prior to the contemplation of such merger or consolidation and do
     not extend to any assets other than those of the Person merged into or
     consolidated with the Company or the Restricted Subsidiary;

               (4) Liens on property existing at the time of acquisition thereof
     by the Company or any Restricted Subsidiary of the Company, provided that
     such Liens were in


                                       16

     existence prior to the contemplation of such acquisition and do not extend
     to any property other than the property so acquired by the Company or the
     Restricted Subsidiary;

               (5) Liens securing the Notes (other than Additional Notes) and
     the related Guarantees;

               (6) Liens existing on the Issue Date;

               (7) Liens securing Permitted Refinancing Indebtedness; provided
     that such Liens do not extend to any property or assets other than the
     property or assets that secure the Indebtedness being refinanced;

               (8) Liens to secure Indebtedness (including Capitalized Lease
     Obligations) permitted by paragraph 4.09(c)(viii) hereof provided that any
     such Lien (i) covers only the assets acquired, constructed or improved with
     such Indebtedness and (ii) is created within 90 days of such acquisition,
     construction or improvement;

               (9) Liens on cash or cash equivalents securing Hedging
     Obligations of the Company or any of its Restricted Subsidiaries (a) that
     are incurred for the purpose of fixing, hedging or swapping interest rate,
     commodity price or foreign currency exchange rate risk (or to reverse or
     amend any such agreements previously made for such purposes), and not for
     speculative purposes, or (b) securing letters of credit that support such
     Hedging Obligations;

               (10) Liens incurred or deposits made in the ordinary course of
     business in connection with worker's compensation, unemployment insurance
     or other social security obligations;

               (11) Lien, deposits or pledges to secure the performance of bids,
     tenders, contracts (other than contracts for the payment of Indebtedness),
     leases, or other similar obligations arising in the ordinary course of
     business;

               (12) Carriers', warehousemen's, mechanics', landlords',
     materialmen's, repairmen's or other like Liens arising in the ordinary
     course of business in respect of obligations not overdue for a period in
     excess of 60 days or which are being contested in good faith by appropriate
     proceedings promptly instituted and diligently prosecuted; provided,
     however, that any reserve or other appropriate provision as will be
     required to conform with GAAP will have been made for that reserve or
     provision;

               (13) survey exceptions, encumbrances, easements or reservations
     of, or rights of other for, rights of way, zoning or other restrictions as
     to the use of properties, and defects in title which, in the case of any of
     the foregoing, were not incurred or created to secure the payment of
     Indebtedness, and which in the aggregate do not materially adversely affect
     the value of such properties or materially impair the use for the purposes
     of which such properties are held by the Company or any of its Restricted
     Subsidiaries;


                                       17

               (14) judgment and attachment Liens not giving rise to an Event of
     Default and notices of lis pendens and associated rights related to
     litigation being contested in good faith by appropriate proceedings and for
     which adequate reserves have been made;

               (15) Liens, deposits or pledges to secure public or statutory
     obligations, surety, stay, appeal, indemnity, performance or other similar
     bonds or obligations; any encumbrance on rights of the Company or any
     Guarantor to pledge interest in, or grant control over, Patient Receivables
     to third parties pursuant to applicable statutes; Liens, deposits or
     pledges in lieu of such bonds or obligations, or to secure such bonds or
     obligations, or to secure letters of credit in lieu of or supporting the
     payment of such bonds or obligations; and Liens of sellers of goods to the
     Company and any of its Restricted Subsidiaries arising under Article 2 of
     the UCC in the ordinary course of business, covering only the goods sold
     and securing only the unpaid purchase price for such goods and related
     expenses;

               (16) Liens in favor of collecting or payor banks having a right
     of setoff, revocation, refund or chargeback with respect to money or
     instruments of the Company or any Subsidiary thereof on deposit with or in
     possession of such bank;

               (17) any interest or title of a lessor, licensor or sublicensor
     in the property subject to any lease, license or sublicense (other than any
     property that is the subject of a Sale Leaseback Transaction);

               (18) Liens for taxes, assessments and governmental charges not
     yet delinquent or being contested in good faith and for which adequate
     reserves have been established to the extent required by GAAP;

               (19) Liens arising from precautionary UCC financing statements
     regarding operating leases or consignments;

               (20) Liens or assets directly related to a Sale and Leaseback
     Transaction to secure related Attributable Debt;

               (21) any interest of title of a buyer in connection with, and
     Liens arising from UCC financing statements relating to, a sale of
     Receivables and Related Assets pursuant to a Receivables Program; provided
     that such Liens do not extend to any assets other than Receivables and
     Related Assets;

               (22) Liens on insurance policies and the proceeds thereof
     securing the financing of the premiums with respect thereto; provided that
     such insurance policies are purchased in the ordinary course of business;

               (23) Liens securing Additional Notes and the related Guarantees
     incurred pursuant to clauses 4.09(c)(i), (xiv) or (xvi) hereof in an
     aggregate principal amount not to exceed $125 million less up to $50
     million of cash (or the fair market value of any other assets) to the
     extent applied to repurchase Existing Notes on the Issue Date or within two
     Business Days from the Issue Date; and


                                       18

               (24) Liens not otherwise permitted by this Indenture so long as
     the aggregate outstanding principal amount of the obligations secured
     thereby does not exceed $3 million at any one time outstanding.

          "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount of such Permitted Refinancing
Indebtedness does not exceed the principal amount of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded plus accrued
interest plus the lesser of the amount of any premium required to be paid in
connection with such refinancings pursuant to the terms of such indebtedness or
the amount of any premium reasonably determined by the Company as necessary to
accomplish such refinancing (in each case plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (iii) if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded is subordinated in
right of payment to the Notes, such Permitted Refinancing Indebtedness has a
final maturity date not earlier than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as favorable to
the Holders as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and (iv)
such Permitted Refinancing Indebtedness shall not include Indebtedness of a
Restricted Subsidiary that refinances Indebtedness of the Company, or
Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that
refinances Indebtedness of a Subsidiary Guarantor.

          "PERSON" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, limited liability company or government or any
agency or political subdivision thereof.

          "PREFERRED STOCK" means, with respect to any Person, any and all
shares, interests, partnership interests, participation, rights in or other
equivalents (however designated) of such Person's preferred or preference stock,
whether now outstanding or issued after the Issue Date, and including, without
limitation, all classes and series of preferred or preference stock of such
Person.

          "PRINCIPALS" means the Equity Sponsors and their respective
Affiliates.

          "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.07(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

          "PUBLIC EQUITY OFFERING" means an offer and sale of Capital Stock
(other than Disqualified Stock) of the Company or the Parent pursuant to a
registration statement that has been declared effective by the SEC pursuant to
the Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).


                                       19

          "PURCHASE MONEY OBLIGATIONS" of any Person means any obligations of
such Person to any seller or any other Person incurred or assumed to finance the
construction and/or acquisition of real or personal property to be used in the
business of such Person or any of its Subsidiaries in an amount that is not more
than 100% of the cost of such property, and incurred within 90 days after the
date of such construction or acquisition (excluding accounts payable to trade
creditors incurred in the ordinary course of business); provided that any Lien
on such Indebtedness shall not extend to any property other than the property so
acquired or constructed.

          "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

          "QUALIFIED EQUITY INTEREST" means any Qualified Stock and all
warrants, options or other rights to acquire Qualified Stock (but excluding any
debt security that is convertible into or exchangeable for Capital Stock).

          "QUALIFIED STOCK" of any Person means any and all Capital Stock of
such Person, other than Disqualified Stock.

          "RECEIVABLES AND RELATED ASSETS" means all of the following property
and interests in property of the Company and each Guarantor, whether now owned
or existing or hereafter created, acquired or arising and wheresoever located:
(i) all Accounts; (ii) all Instruments, Chattel Paper (including, without
limitation, Electronic Chattel Paper), Documents, Letter-of-Credit Rights and
Supporting Obligations, in each case to the extent arising out of or relating
to, or given in exchange or settlement for or to evidence the obligation to pay,
any Account; (iii) all General Intangibles that arise out of or relate to any
Account or from which any Account arises; (iv) all of the Deposit Accounts
Collateral; (v) all monies now or at any time or times hereafter in the
possession or under the control of the lenders under the Revolving Credit
Agreement or a bailee of the lenders under the Revolving Credit Agreement,
including, without limitation, any cash collateral in any cash collateral
account, other than any proceeds from the sale or other disposition of any of
the Collateral; (vi) all products and cash and non-cash proceeds of the
foregoing, including, without limitation, proceeds of insurance in respect of
any of the foregoing; and (vii) all books and records (including, without
limitation, customer lists, files, correspondence, tapes, computer programs,
print-outs and other computer materials and records) of the Company or any
Guarantor pertaining to any of the foregoing. For purposes of this definition,
"Accounts," "Instruments," "Chattel Paper," "Electronic Chattel Paper,"
"Documents," "Letter-of-Credit Rights," "Supporting Obligations" and "General
Intangibles" shall have the meanings provided for by the UCC.

          "RECEIVABLES PROGRAM" means, with respect to any Person, any
securitization program pursuant to which such Person pledges, sells or otherwise
transfers or encumbers its Receivables and Related Assets, including a trust,
limited liability company, special purpose entity or other similar entity.

          "RECEIVABLES SUBSIDIARY" means a Wholly Owned Subsidiary (i) created
for the purpose of financing Receivables and Related Assets created in the
ordinary course of business of the Company and its Subsidiaries and (ii) the
sole assets of which consist of Receivables and Related Assets of the Company
and its Subsidiaries and Permitted Investments.


                                       20

          "REFERENCE DATE" means October 17, 2001.

          "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Guarantors
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time.

          "REGULATION S" means Regulation S promulgated under the Securities
Act.

          "REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global Note
or a Regulation S Permanent Global Note, as appropriate.

          "REGULATION S PERMANENT GLOBAL NOTE" means a permanent global Note in
the form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount at maturity of the Regulation S Temporary Global
Note upon expiration of the Restricted Period.

          "REGULATION S TEMPORARY GLOBAL NOTE" means a temporary global Note in
the form of Exhibit A2 hereto bearing the Global Note Legend, the Private
Placement Legend and the Temporary Regulation S Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount at maturity of the
Notes initially sold in reliance on Rule 903 of Regulation S.

          "RELATED PARTY" means:

          (a) any controlling stockholder, partner, member, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual) of any
Principal; or

          (b) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause.

          "REPRESENTATIVE" means the trustee, agent or representative for any
Senior Indebtedness.

          "REPRESENTATIVE AMOUNT" means as at any date an amount equal to, or
approximately equal to, the aggregate principal amount of the Notes then
outstanding.

          "RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.


                                       21

          "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.

          "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.

          "RESTRICTED PERIOD" means the 40-day restricted period as defined in
Regulation S.

          "RESTRICTED SUBSIDIARY" means any Subsidiary other than an
Unrestricted Subsidiary. Notwithstanding anything to the contrary herein or in
the Notes, Toms River Imaging Associates, L.P. will be deemed a Restricted
Subsidiary of the Company so long as the Company, directly or indirectly, own at
least 50% of the Voting Stock thereof.

          "REVOLVING CREDIT AGREEMENT" means the Amended and Restated Loan and
Security Agreement, to be dated as of the Issue Date, among the Company, the
Guarantors, the Lenders party thereto and Bank of America, N.A., as collateral
agent and administrative agent, providing for up to $30 million of revolving
credit borrowings and/or letters of credit, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith.

          "RULE 144" means Rule 144 promulgated under the Securities Act.

          "RULE 144A" means Rule 144A promulgated under the Securities Act.

          "RULE 903" means Rule 903 promulgated under the Securities Act.

          "RULE 904" means Rule 904 promulgated the Securities Act.

          "SALE AND LEASEBACK TRANSACTION" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property or asset in connection with the leasing, or the
resale against installment payments, of such property or asset to the seller or
transferor.

          "SEC" means the Securities and Exchange Commission.

          "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations thereunder.

          "SECURITY DOCUMENTS" means, collectively, the Collateral Agency
Agreement, the Security Agreement (as defined in the Collateral Agency
Agreement), the Pledge Agreement (as defined in the Collateral Agency
Agreement), the Account Control Agreements (as defined in the Collateral Agency
Agreement), and all other pledges, agreements, financing statements, filings or
other documents that grant or evidence the Lien in the Collateral in favor of
the Collateral Agent for the benefit of the Trustee and the Holders of the
Notes, as they may be amended, restated, supplemented, replaced or modified from
time to time.


                                       22

          "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.

          "SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of the
Company that, together with its Subsidiaries, (a) for the most recent fiscal
year of the Company, accounted for more than 10% of the consolidated net
revenues of the Company and its Subsidiaries, (b) as of the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of the Company
and its Restricted Subsidiaries, in the case of either (a) or (b), as set forth
on the most recently available consolidated financial statements of the Company
for such fiscal year or (c) was organized or acquired after the beginning of
such fiscal year and would have been a Significant Subsidiary if it had been
owned during such entire fiscal year.

          "S&P" means Standard & Poor's Ratings Group and any successor thereof.

          "STATED MATURITY" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable and, when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness or any installment of interest
thereon is due and payable.

          "SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment to the Notes or the Guarantee
issued by such Guarantor, as the case may be.

          "SUBSIDIARY" means any Person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by the
Company and/or one or more other Subsidiaries of the Company. Notwithstanding
anything to the contrary herein or in the Notes, Toms River Imaging Associates,
L.P. will be deemed a Subsidiary of the Company so long as the Company, directly
or indirectly, own at least 50% of the Voting Stock thereof.

          "SUBSIDIARY GUARANTORS" means, collectively, all Wholly Owned
Restricted Subsidiaries (including any Person that becomes a Wholly Owned
Restricted Subsidiary after the Issue Date) that are incorporated in the United
States or a state thereof or the District of Columbia.

          "TELERATE PAGE 3750" means the display designated as "Page 3750" on
the Moneyline Telerate service (or such other page as may replace Page 3750 on
that service).

          "TEMPORARY REGULATION S LEGEND" means the legend set forth in Section
2.07(h) hereof, which is required to be placed on the Regulation S Temporary
Global Note.

          "TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939,
as amended (15 U.S.C. Sections 77aaa - 77bbbb), as in effect on the date on
which this Indenture is qualified under the TIA.


                                       23

          "TRUSTEE" means U.S. Bank National Association, until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

          "UCC" means the Uniform Commercial Code (or any successor statute) as
adopted and in force in the State of New York or, when the laws of any other
state govern the method or manner of the perfection or enforcement of any
security interest in any asset, the Uniform Commercial Code (or any successor
statute) of such state.

          "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.

          "UNRESTRICTED GLOBAL NOTE" means a permanent Global Note substantially
in the form of Exhibit A1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

          "UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary that is designated
by the Board of the Company as an Unrestricted Subsidiary in accordance with
Section 4.16 hereof and (b) any Subsidiary of an Unrestricted Subsidiary.

          "U.S. GOVERNMENT OBLIGATIONS" means (i) securities that are (a) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof; and (ii) depositary receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (i) above and held
by such bank for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest of the U.S. Government Obligation evidenced by such
depositary receipt.

          "U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the
Securities Act.

          "VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes has, or might have, voting power by reason of the
happening of any contingency).


                                       24

          "WEIGHTED AVERAGE LIFE TO MATURITY" means, as of the date of
determination with respect to any Indebtedness or Disqualified Stock, the
quotient obtained by dividing (a) the sum of the products of (i) the number of
years from the date of determination to the date or dates of each successive
scheduled principal or liquidation value payment of such Indebtedness or
Disqualified Stock, respectively, multiplied by (ii) the amount of each such
principal or liquidation value payment by (b) the sum of all such principal or
liquidation value payments.

          "WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary,
all of the outstanding Voting Stock (other than directors' qualifying shares or
shares of foreign Restricted Subsidiaries required to be owned by foreign
nationals pursuant to applicable law) of which is owned, directly or indirectly,
by the Company.

          "WHOLLY OWNED SUBSIDIARY" means any Subsidiary, all of the outstanding
Voting Stock (other than directors' qualifying shares or shares of foreign
Subsidiaries required to be owned by foreign nationals pursuant to applicable
law) of which is owned, directly or indirectly, by the Company.

Section 1.02 Other Definitions.



                                                                        DEFINED
                                                                          IN
TERM                                                                    SECTION
- ----                                                                  ----------
                                                                   
"AUTHENTICATION ORDER".............................................      2.02
"CALCULATION AGENT"................................................   Exhibit A1
"CHANGE OF CONTROL OFFER"..........................................       4.14
"CHANGE OF CONTROL PAYMENT"........................................       4.14
"CHANGE OF CONTROL PAYMENT DATE"...................................       4.14
"COMPANY"..........................................................    Preamble
"COVENANT DEFEASANCE"..............................................       8.03
"DTC"..............................................................       2.01
"EVENT OF DEFAULT".................................................       6.01
"EXCESS PROCEEDS"..................................................       4.10
"EXCESS PROCEEDS OFFER"............................................       4.10
"INCUR"............................................................       4.09
"LEGAL DEFEASANCE".................................................       8.02
"OFFER AMOUNT".....................................................       3.09
"OFFER PERIOD".....................................................       3.09
"PARENT"...........................................................    Preamble
"PAYING AGENT".....................................................       2.04
"PAYMENT DEFAULT"..................................................       6.01
"PURCHASE DATE"....................................................       3.09
"REGISTRAR"........................................................       2.04
"RELATED JUDGMENT".................................................      13.09
"RELATED PROCEEDINGS"..............................................      13.09
"REPURCHASE OFFER".................................................       3.09
"RESTRICTED PAYMENTS"..............................................       4.07
"SPECIFIED COURTS".................................................      13.09



                                       25

Section 1.03 Incorporation by Reference of Trust Indenture Act.

          Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.

          The following TIA terms used in this Indenture have the following
meanings:

          "INDENTURE SECURITIES" means the Notes;

          "INDENTURE SECURITY HOLDER" means a Holder of a Note;

          "INDENTURE TO BE QUALIFIED" means this Indenture;

          "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and

          "OBLIGOR" on the Notes means the Company and any successor obligor
     upon the Notes.

          All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.

Section 1.04 Rules of Construction.

          (a) Unless the context otherwise requires:

          (i) a term has the meaning assigned to it;

          (ii) an accounting term not otherwise defined has the meaning assigned
     to it in accordance with GAAP;

          (iii) "or" is not exclusive;

          (iv) words in the singular include the plural, and in the plural
     include the singular;

          (v) provisions apply to successive events and transactions; and

          (vi) references to sections of or rules under the Securities Act shall
     be deemed to include substitute, replacement of successor sections or rules
     adopted by the SEC from time to time.


                                       26

                                   ARTICLE TWO
                                    THE NOTES

Section 2.01 Form and Dating.

          (1) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A1 or A2 hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be issued in registered, global form without interest coupons and only shall be
in minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof.

          The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

          (2) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A1 or A2 attached hereto (including the Global Note
Legend thereon and the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Notes issued in definitive form shall be substantially in the
form of Exhibit A1 attached hereto (but without the Global Note Legend thereon
and without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee in accordance
with instructions given by the Holder thereof as required by Section 2.07
hereof.

          (3) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as custodian for The Depository Trust
Company ("DTC") in New York, New York, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The Restricted
Period shall be terminated upon the receipt by the Trustee of (i) a written
certificate from Euroclear and Clearstream certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount at maturity of the Regulation S Temporary Global Note (except
to the extent of any Beneficial Owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who shall take delivery of a beneficial ownership
interest in a 144A Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.07(a)(ii) hereof), and (ii) an Officers' Certificate
from the Company. Following the termination of the Restricted


                                       27

Period, beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S
Temporary Global Note. The aggregate principal amount of the Regulation S
Temporary Global Note and the Regulation S Permanent Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.

          (4) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Clearstream shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.

Section 2.02 Execution and Authentication.

          Two Officers of the Company shall sign the Notes for the Company by
manual or facsimile signature.

          If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.

          A Note shall not be valid until authenticated by the manual signature
of the Trustee. Such signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.

          The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited.

          The Trustee shall, upon a written order of the Company signed by two
Officers of the Company (an "AUTHENTICATION ORDER") delivered to the Trustee,
authenticate Notes for original issue on the Issue Date in an aggregate
principal amount of $300 million. The Trustee shall authenticate Notes
thereafter in unlimited amount, so long as permitted by the terms of this
Indenture, including without limitation Section 4.09 and Section 4.12, for
original issuance pursuant to an Authentication Order, in aggregate principal
amount as specified in such order (other than as provided in Section 2.08).

          The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.


                                       28

Section 2.03 Methods of Receiving Payments on the Notes.

          If a Holder of Notes has given wire transfer instructions to the
Company at least 10 Business Days before payment is due, the Company shall pay
all principal, interest and premium and Liquidated Damages, if any, on that
Holder's Notes in accordance with those instructions. All other payments on
Notes shall be made at the office or agency of the Paying Agent and Registrar
within the City and State of New York unless the Company elects to make interest
payments by check mailed to the Holders at their addresses set forth in the
register of Holders. Payments of interest to the Trustee as Paying Agent, if the
Trustee then acts as Paying Agent, with respect to any Interest Payment Date (as
defined in the Notes) shall be made by the Company in immediately available
funds for receipt by the Trustee one Business Day prior to the such Interest
Payment Date (or in no event later than 12:30 p.m. Eastern Time on such Interest
Payment Date).

Section 2.04 Registrar and Paying Agent.

          (a) The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without prior notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

          (b) The Company initially appoints DTC to act as Depositary with
respect to the Global Notes.

          (c) The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.

Section 2.05 Paying Agent to Hold Money in Trust.

          The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or one of its
Subsidiaries) shall have no further liability for the money. If the Company or
any of its Subsidiaries acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying


                                       29

Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.

Section 2.06 Holder Lists.

          The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

Section 2.07 Transfer and Exchange.

          (a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes shall be exchanged
by the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 90 days after the date of such notice from the Depositary; (ii)
the Company in its sole discretion determines that the Global Notes (in whole
but not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee; provided that in no event shall the
Regulation S Temporary Global Note be exchanged by the Company for Definitive
Notes prior to (x) the expiration of the Restricted Period and (y) the receipt
by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B)
under the Securities Act; or (iii) there shall have occurred and be continuing a
Default or Event of Default with respect to the Notes. Upon the occurrence of
any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall
be issued in such names as the Depositary shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 2.08 and 2.11 hereof. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.07 or Section 2.08 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.07(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.07(b), (c) or (f) hereof.

          (b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:


                                       30

          (i) Transfer of Beneficial Interests in the Same Global Note.
     Beneficial interests in any Restricted Global Note may be transferred to
     Persons who take delivery thereof in the form of a beneficial interest in
     the same Restricted Global Note in accordance with the transfer
     restrictions set forth in the Private Placement Legend; provided, however,
     that prior to the expiration of the Restricted Period, transfers of
     beneficial interests in the Regulation S Temporary Global Note may not be
     made to a U.S. Person or for the account or benefit of a U.S. Person (other
     than an Initial Purchaser). Beneficial interests in any Unrestricted Global
     Note may be transferred to Persons who take delivery thereof in the form of
     a beneficial interest in an Unrestricted Global Note. No written orders or
     instructions shall be required to be delivered to the Registrar to effect
     the transfers described in this Section 2.07(b)(i).

          (ii) All Other Transfers and Exchanges of Beneficial Interests in
     Global Notes. In connection with all transfers and exchanges of beneficial
     interests that are not subject to Section 2.07(b)(i) above, the transferor
     of such beneficial interest must deliver to the Registrar either (A) (1) a
     written order from a Participant or an Indirect Participant given to the
     Depositary in accordance with the Applicable Procedures directing the
     Depositary to credit or cause to be credited a beneficial interest in
     another Global Note in an amount equal to the beneficial interest to be
     transferred or exchanged and (2) instructions given in accordance with the
     Applicable Procedures containing information regarding the Participant
     account to be credited with such increase or (B) (1) a written order from a
     Participant or an Indirect Participant given to the Depositary in
     accordance with the Applicable Procedures directing the Depositary to cause
     to be issued a Definitive Note in an amount equal to the beneficial
     interest to be transferred or exchanged and (2) instructions given by the
     Depositary to the Registrar containing information regarding the Person in
     whose name such Definitive Note shall be registered to effect the transfer
     or exchange referred to in (1) above; provided that in no event shall
     Definitive Notes be issued upon the transfer or exchange of beneficial
     interests in the Regulation S Temporary Global Note prior to (x) the
     expiration of the Restricted Period and (y) the receipt by the Registrar of
     any certificates required pursuant to Rule 903 under the Securities Act.
     Upon consummation of an Exchange Offer by the Company in accordance with
     Section 2.07(f) hereof, the requirements of this Section 2.07(b)(ii) shall
     be deemed to have been satisfied upon receipt by the Registrar of the
     instructions contained in the Letter of Transmittal delivered by the Holder
     of such beneficial interests in the Restricted Global Notes. Upon
     satisfaction of all of the requirements for transfer or exchange of
     beneficial interests in Global Notes contained in this Indenture and the
     Notes or otherwise applicable under the Securities Act, the Trustee shall
     adjust the principal amount at maturity of the relevant Global Notes
     pursuant to Section 2.07(i) hereof.

          (iii) Transfer of Beneficial Interests to Another Restricted Global
     Note. A beneficial interest in any Restricted Global Note may be
     transferred to a Person who takes delivery thereof in the form of a
     beneficial interest in another Restricted Global Note if the transfer
     complies with the requirements of Section 2.07(b)(ii) above and the
     Registrar receives the following:


                                       31

               (A) if the transferee shall take delivery in the form of a
          beneficial interest in the 144A Global Note, then the transferor must
          deliver a certificate in the form of Exhibit B hereto, including the
          certifications in item (1) thereof; and

               (B) if the transferee shall take delivery in the form of a
          beneficial interest in the Regulation S Temporary Global Note or
          Regulation S Permanent Global Note, then the transferor must deliver a
          certificate in the form of Exhibit B hereto, including the
          certifications in item (2) thereof.

          (iv) Transfer and Exchange of Beneficial Interests in a Restricted
     Global Note for Beneficial Interests in the Unrestricted Global Note. A
     beneficial interest in any Restricted Global Note may be exchanged by any
     Holder thereof for a beneficial interest in an Unrestricted Global Note or
     transferred to a Person who takes delivery thereof in the form of a
     beneficial interest in an Unrestricted Global Note if the exchange or
     transfer complies with the requirements of Section 2.07(b)(ii) above and:

               (A) such exchange or transfer is effected pursuant to the
          Exchange Offer in accordance with the Registration Rights Agreement
          and the Holder of the beneficial interest to be transferred, in the
          case of an exchange, or the transferee, in the case of a transfer,
          certifies in the applicable Letter of Transmittal that it is not (1) a
          Broker-Dealer, (2) a Person participating in the distribution of the
          Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
          144) of the Company;

               (B) such transfer is effected pursuant to the Shelf Registration
          Statement in accordance with the Registration Rights Agreement;

               (C) such transfer is effected by a Broker-Dealer pursuant to the
          Exchange Offer Registration Statement in accordance with the
          Registration Rights Agreement; or

               (D) the Registrar receives the following:

                    (1) if the Holder of such beneficial interest in a
               Restricted Global Note proposes to exchange such beneficial
               interest for a beneficial interest in an Unrestricted Global
               Note, a certificate from such Holder in the form of Exhibit C
               hereto, including the certifications in item (1)(a) thereof; or

                    (2) if the Holder of such beneficial interest in a
               Restricted Global Note proposes to transfer such beneficial
               interest to a Person who shall take delivery thereof in the form
               of a beneficial interest in an Unrestricted Global Note, a
               certificate from such Holder in the form of Exhibit B hereto,
               including the certifications in item (4) thereof;

          and, in each such case set forth in this subparagraph (D), if the
          Registrar so requests or if the Applicable Procedures so require, an
          Opinion of Counsel in form reasonably acceptable to the Registrar to
          the effect that such exchange or


                                       32

          transfer is in compliance with the Securities Act and that the
          restrictions on transfer contained herein and in the Private Placement
          Legend are no longer required in order to maintain compliance with the
          Securities Act.

          If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.

          Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.

          (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

          (i) Beneficial Interests in Restricted Global Notes to Restricted
     Definitive Notes. If any Holder of a beneficial interest in a Restricted
     Global Note proposes to exchange such beneficial interest for a Restricted
     Definitive Note or to transfer such beneficial interest to a Person who
     takes delivery thereof in the form of a Restricted Definitive Note, then,
     upon receipt by the Registrar of the following documentation:

               (A) if the Holder of such beneficial interest in a Restricted
          Global Note proposes to exchange such beneficial interest for a
          Restricted Definitive Note, a certificate from such Holder in the form
          of Exhibit C hereto, including the certifications in item (2)(a)
          thereof;

               (B) if such beneficial interest is being transferred to a QIB in
          accordance with Rule 144A under the Securities Act, a certificate to
          the effect set forth in Exhibit B hereto, including the certifications
          in item (1) thereof;

               (C) if such beneficial interest is being transferred to a
          Non-U.S. Person in an offshore transaction in accordance with Rule 903
          or Rule 904 under the Securities Act, a certificate to the effect set
          forth in Exhibit B hereto, including the certifications in item (2)
          thereof;

               (D) if such beneficial interest is being transferred pursuant to
          an exemption from the registration requirements of the Securities Act
          in accordance with Rule 144 under the Securities Act, a certificate to
          the effect set forth in Exhibit B hereto, including the certifications
          in item (3)(a) thereof;

               (E) if such beneficial interest is being transferred to an
          Institutional Accredited Investor in reliance on an exemption from the
          registration requirements of the Securities Act other than those
          listed in subparagraphs (B) through (D) above, a certificate to the
          effect set forth in Exhibit B hereto, including the certifications,
          certificates and Opinion of Counsel required by item (3) thereof, if
          applicable;


                                       33

               (F) if such beneficial interest is being transferred to the
          Company or any of its Subsidiaries, a certificate to the effect set
          forth in Exhibit B hereto, including the certifications in item (3)(b)
          thereof; or

               (G) if such beneficial interest is being transferred pursuant to
          an effective registration statement under the Securities Act, a
          certificate to the effect set forth in Exhibit B hereto, including the
          certifications in item (3)(c) thereof,

     the Trustee shall cause the aggregate principal amount of the applicable
     Global Note to be reduced accordingly pursuant to Section 2.07(i) hereof,
     and the Company shall execute and the Trustee shall authenticate and
     deliver to the Person designated in the instructions a Definitive Note in
     the appropriate principal amount. Any Definitive Note issued in exchange
     for a beneficial interest in a Restricted Global Note pursuant to this
     Section 2.07(c) shall be registered in such name or names and in such
     authorized denomination or denominations as the Holder of such beneficial
     interest shall instruct the Registrar through instructions from the
     Depositary and the Participant or Indirect Participant. The Trustee shall
     deliver such Definitive Notes to the Persons in whose names such Notes are
     so registered. Any Definitive Note issued in exchange for a beneficial
     interest in a Restricted Global Note pursuant to this Section 2.07(c)(i)
     shall bear the Private Placement Legend and shall be subject to all
     restrictions on transfer contained therein.

          (ii) Beneficial Interests in Regulation S Temporary Global Note to
     Definitive Notes. Notwithstanding Sections 2.07(c)(i)(A) and (C) hereof, a
     beneficial interest in the Regulation S Temporary Global Note may not be
     exchanged for a Definitive Note or transferred to a Person who takes
     delivery thereof in the form of a Definitive Note prior to (x) the
     expiration of the Restricted Period and (y) the receipt by the Registrar of
     any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
     Securities Act, except in the case of a transfer pursuant to an exemption
     from the registration requirements of the Securities Act other than Rule
     903 or Rule 904.

          (iii) Beneficial Interests in Restricted Global Notes to Unrestricted
     Definitive Notes. A Holder of a beneficial interest in a Restricted Global
     Note may exchange such beneficial interest for an Unrestricted Definitive
     Note or may transfer such beneficial interest to a Person who takes
     delivery thereof in the form of an Unrestricted Definitive Note only if:

               (A) such exchange or transfer is effected pursuant to the
          Exchange Offer in accordance with the Registration Rights Agreement
          and the Holder of such beneficial interest, in the case of an
          exchange, or the transferee, in the case of a transfer, certifies in
          the applicable Letter of Transmittal that it is not (1) a
          Broker-Dealer, (2) a Person participating in the distribution of the
          Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
          144) of the Company;

               (B) such transfer is effected pursuant to the Shelf Registration
          Statement in accordance with the Registration Rights Agreement;


                                       34

               (C) such transfer is effected by a Broker-Dealer pursuant to the
          Exchange Offer Registration Statement in accordance with the
          Registration Rights Agreement; or

               (D) the Registrar receives the following:

                    (1) if the Holder of such beneficial interest in a
               Restricted Global Note proposes to exchange such beneficial
               interest for a Definitive Note that does not bear the Private
               Placement Legend, a certificate from such Holder in the form of
               Exhibit C hereto, including the certifications in item (1)(b)
               thereof; or

                    (2) if the Holder of such beneficial interest in a
               Restricted Global Note proposes to transfer such beneficial
               interest to a Person who shall take delivery thereof in the form
               of a Definitive Note that does not bear the Private Placement
               Legend, a certificate from such Holder in the form of Exhibit B
               hereto, including the certifications in item (4) thereof;

          and, in each such case set forth in this subparagraph (D), if the
          Registrar so requests or if the Applicable Procedures so require, an
          Opinion of Counsel in form reasonably acceptable to the Registrar to
          the effect that such exchange or transfer is in compliance with the
          Securities Act and that the restrictions on transfer contained herein
          and in the Private Placement Legend are no longer required in order to
          maintain compliance with the Securities Act.

          (iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted
     Definitive Notes. If any Holder of a beneficial interest in an Unrestricted
     Global Note proposes to exchange such beneficial interest for a Definitive
     Note or to transfer such beneficial interest to a Person who takes delivery
     thereof in the form of a Definitive Note, then, upon satisfaction of the
     conditions set forth in Section 2.07(b)(ii) hereof, the Trustee shall cause
     the aggregate principal amount of the applicable Global Note to be reduced
     accordingly pursuant to Section 2.07(i) hereof, and the Company shall
     execute and the Trustee shall authenticate and deliver to the Person
     designated in the instructions a Definitive Note in the appropriate
     principal amount. Any Definitive Note issued in exchange for a beneficial
     interest pursuant to this Section 2.07(c)(iv) shall be registered in such
     name or names and in such authorized denomination or denominations as the
     Holder of such beneficial interest shall instruct the Registrar through
     instructions from the Depositary and the Participant or Indirect
     Participant. The Trustee shall deliver such Definitive Notes to the Persons
     in whose names such Notes are so registered. Any Definitive Note issued in
     exchange for a beneficial interest pursuant to this Section 2.07(c)(iv)
     shall not bear the Private Placement Legend.

          (d) Transfer and Exchange of Definitive Notes for Beneficial
     Interests.

          (i) Restricted Definitive Notes to Beneficial Interests in Restricted
     Global Notes. If any Holder of a Restricted Definitive Note proposes to
     exchange such Note for a beneficial interest in a Restricted Global Note or
     to transfer such Restricted Definitive


                                       35

     Notes to a Person who takes delivery thereof in the form of a beneficial
     interest in a Restricted Global Note, then, upon receipt by the Registrar
     of the following documentation:

               (A) if the Holder of such Restricted Definitive Note proposes to
          exchange such Note for a beneficial interest in a Restricted Global
          Note, a certificate from such Holder in the form of Exhibit C hereto,
          including the certifications in item (2)(b) thereof;

               (B) if such Restricted Definitive Note is being transferred to a
          QIB in accordance with Rule 144A under the Securities Act, a
          certificate to the effect set forth in Exhibit B hereto, including the
          certifications in item (1) thereof;

               (C) if such Restricted Definitive Note is being transferred to a
          Non-U.S. Person in an offshore transaction in accordance with Rule 903
          or Rule 904 under the Securities Act, a certificate to the effect set
          forth in Exhibit B hereto, including the certifications in item (2)
          thereof;

               (D) if such Restricted Definitive Note is being transferred
          pursuant to an exemption from the registration requirements of the
          Securities Act in accordance with Rule 144 under the Securities Act, a
          certificate to the effect set forth in Exhibit B hereto, including the
          certifications in item (3)(a) thereof;

               (E) if such Restricted Definitive Note is being transferred to an
          Institutional Accredited Investor in reliance on an exemption from the
          registration requirements of the Securities Act other than those
          listed in subparagraphs (B) through (D) above, a certificate to the
          effect set forth in Exhibit B hereto, including the certifications,
          certificates and Opinion of Counsel required by item (3) thereof, if
          applicable;

               (F) if such Restricted Definitive Note is being transferred to
          the Company or any of its Subsidiaries, a certificate to the effect
          set forth in Exhibit B hereto, including the certifications in item
          (3)(b) thereof; or

               (G) if such Restricted Definitive Note is being transferred
          pursuant to an effective registration statement under the Securities
          Act, a certificate to the effect set forth in Exhibit B hereto,
          including the certifications in item (3)(c) thereof,

     the Trustee shall cancel the Restricted Definitive Note, increase or cause
     to be increased the aggregate principal amount of, in the case of clause
     (A) above, the appropriate Restricted Global Note, in the case of clause
     (B) above, the 144A Global Note, and in the case of clause (C) above, the
     Regulation S Global Note and in all other cases the IAI Global Note.

          (ii) Restricted Definitive Notes to Beneficial Interests in
     Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
     exchange such Note for a beneficial interest in an Unrestricted Global Note
     or transfer such Restricted Definitive Note to a


                                       36

     Person who takes delivery thereof in the form of a beneficial interest in
     an Unrestricted Global Note only if:

               (A) such exchange or transfer is effected pursuant to the
          Exchange Offer in accordance with the Registration Rights Agreement
          and the Holder, in the case of an exchange, or the transferee, in the
          case of a transfer, certifies in the applicable Letter of Transmittal
          that it is not (1) a Broker-Dealer, (2) a Person participating in the
          distribution of the Exchange Notes or (3) a Person who is an affiliate
          (as defined in Rule 144) of the Company;

               (B) such transfer is effected pursuant to the Shelf Registration
          Statement in accordance with the Registration Rights Agreement;

               (C) such transfer is effected by a Broker-Dealer pursuant to the
          Exchange Offer Registration Statement in accordance with the
          Registration Rights Agreement; or

               (D) the Registrar receives the following:

                    (1) if the Holder of such Definitive Notes proposes to
               exchange such Notes for a beneficial interest in the Unrestricted
               Global Note, a certificate from such Holder in the form of
               Exhibit C hereto, including the certifications in item (1)(c)
               thereof; or

                    (2) if the Holder of such Definitive Notes proposes to
               transfer such Notes to a Person who shall take delivery thereof
               in the form of a beneficial interest in the Unrestricted Global
               Note, a certificate from such Holder in the form of Exhibit B
               hereto, including the certifications in item (4) thereof;

     and, in each such case set forth in this subparagraph (D), if the Registrar
     so requests or if the Applicable Procedures so require, an Opinion of
     Counsel in form reasonably acceptable to the Registrar to the effect that
     such exchange or transfer is in compliance with the Securities Act and that
     the restrictions on transfer contained herein and in the Private Placement
     Legend are no longer required in order to maintain compliance with the
     Securities Act.

          Upon satisfaction of the conditions of any of the subparagraphs in
     this Section 2.07(d)(ii), the Trustee shall cancel the Definitive Notes and
     increase or cause to be increased the aggregate principal amount of the
     Unrestricted Global Note.

          (iii) Unrestricted Definitive Notes to Beneficial Interests in
     Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
     exchange such Note for a beneficial interest in an Unrestricted Global Note
     or transfer such Definitive Notes to a Person who takes delivery thereof in
     the form of a beneficial interest in an Unrestricted Global Note at any
     time. Upon receipt of a request for such an exchange or transfer, the
     Trustee shall cancel the applicable Unrestricted Definitive Note and
     increase or cause to be increased the aggregate principal amount of one of
     the Unrestricted Global Notes.


                                       37

          If any such exchange or transfer from a Definitive Note to a
     beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
     or (iii) above at a time when an Unrestricted Global Note has not yet been
     issued, the Company shall issue and, upon receipt of an Authentication
     Order in accordance with Section 2.02 hereof, the Trustee shall
     authenticate one or more Unrestricted Global Notes in an aggregate
     principal amount equal to the principal amount of Definitive Notes so
     transferred.

          (e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.07(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.07(e).

          (i) Restricted Definitive Notes to Restricted Definitive Notes. Any
     Restricted Definitive Note may be transferred to and registered in the name
     of Persons who take delivery thereof in the form of a Restricted Definitive
     Note if the Registrar receives the following:

               (A) if the transfer shall be made pursuant to Rule 144A under the
          Securities Act, then the transferor must deliver a certificate in the
          form of Exhibit B hereto, including the certifications in item (1)
          thereof;

               (B) if the transfer shall be made pursuant to Rule 903 or Rule
          904, then the transferor must deliver a certificate in the form of
          Exhibit B hereto, including the certifications in item (2) thereof;
          and

               (C) if the transfer shall be made pursuant to any other exemption
          from the registration requirements of the Securities Act, then the
          transferor must deliver a certificate in the form of Exhibit B hereto,
          including the certifications, certificates and Opinion of Counsel
          required by item (3) thereof, if applicable.

          (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
     Restricted Definitive Note may be exchanged by the Holder thereof for an
     Unrestricted Definitive Note or transferred to a Person or Persons who take
     delivery thereof in the form of an Unrestricted Definitive Note if:

               (A) such exchange or transfer is effected pursuant to the
          Exchange Offer in accordance with the Registration Rights Agreement
          and the Holder, in the case of an exchange, or the transferee, in the
          case of a transfer, certifies in the applicable Letter of Transmittal
          that it is not (1) a Broker-Dealer, (2) a Person participating in the
          distribution of the Exchange Notes or (3) a Person who is an affiliate
          (as defined in Rule 144) of the Company;


                                       38

               (B) any such transfer is effected pursuant to the Shelf
          Registration Statement in accordance with the Registration Rights
          Agreement;

               (C) any such transfer is effected by a Broker-Dealer pursuant to
          the Exchange Offer Registration Statement in accordance with the
          Registration Rights Agreement; or

               (D) the Registrar receives the following:

                    (1) if the Holder of such Restricted Definitive Notes
               proposes to exchange such Notes for an Unrestricted Definitive
               Note, a certificate from such Holder in the form of Exhibit C
               hereto, including the certifications in item (1)(d) thereof; or

                    (2) if the Holder of such Restricted Definitive Notes
               proposes to transfer such Notes to a Person who shall take
               delivery thereof in the form of an Unrestricted Definitive Note,
               a certificate from such Holder in the form of Exhibit B hereto,
               including the certifications in item (4) thereof;

          and, in each such case set forth in this subparagraph (D), if the
          Registrar so requests, an Opinion of Counsel in form reasonably
          acceptable to the Company to the effect that such exchange or transfer
          is in compliance with the Securities Act and that the restrictions on
          transfer contained herein and in the Private Placement Legend are no
          longer required in order to maintain compliance with the Securities
          Act.

          (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
     A Holder of Unrestricted Definitive Notes may transfer such Notes to a
     Person who takes delivery thereof in the form of an Unrestricted Definitive
     Note. Upon receipt of a request to register such a transfer, the Registrar
     shall register the Unrestricted Definitive Notes pursuant to the
     instructions from the Holder thereof.

          (f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount. Any Notes


                                       39

that remain outstanding after the consummation of the Exchange Offer, and
Exchange Notes issued in connection with the Exchange Offer, shall be treated as
a single class of securities under this Indenture.

          (g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

          (i) Private Placement Legend. Except as permitted below, each Global
     Note and each Definitive Note (and all Notes issued in exchange therefor or
     substitution thereof) shall bear the legend in substantially the following
     form:

               THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
          "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE,
          THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION
          HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
          ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
          REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
          TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
          THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF
          AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
          THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
          HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
          COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON
          (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON)
          (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY,
          THE PARENT OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
          THE NOTES AND THE GUARANTEES ENDORSED THEREON ARE ELIGIBLE FOR RESALE
          PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
          PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
          DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
          ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
          THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
          TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
          STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR
          (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
          REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
          TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT
          TO CLAUSE (D) PRIOR TO


                                       40

          THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE
          MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE
          (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE
          DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
          INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
          FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
          APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
          THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER
          AFTER THE RESALE RESTRICTION TERMINATION DATE.

     Notwithstanding the foregoing, any Global Note or Definitive Note issued
     pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii),
     (e)(ii), (e)(iii) or (f) of this Section 2.07 (and all Notes issued in
     exchange therefor or substitution thereof) shall not bear the Private
     Placement Legend.

          (ii) Global Note Legend. Each Global Note shall bear a legend in
     substantially the following form:

          THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
          INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
          BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
          ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
          MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07
          OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
          NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (III) THIS
          GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
          TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
          TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
          OF THE COMPANY.

          (h) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following form:

          THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
          THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE
          NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
          THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
          GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.

          (i) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a


                                       41

particular Global Note has been redeemed, repurchased or canceled in whole and
not in part, each such Global Note shall be returned to or retained and canceled
by the Trustee in accordance with Section 2.12 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who shall take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

          (j) General Provisions Relating to Transfers and Exchanges.

          (i) To permit registrations of transfers and exchanges, the Company
     shall execute and the Trustee shall authenticate Global Notes and
     Definitive Notes upon the Company's order or at the Registrar's request.

          (ii) No service charge shall be made to a Holder of a beneficial
     interest in a Global Note or to a Holder of a Definitive Note for any
     registration of transfer or exchange, but the Company may require payment
     of a sum sufficient to cover any transfer tax or similar governmental
     charge payable in connection therewith (other than any such transfer taxes
     or similar governmental charge payable upon exchange or transfer pursuant
     to Sections 2.11, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

          (iii) The Registrar shall not be required to register the transfer of
     or exchange any Note selected for redemption in whole or in part, except
     the unredeemed portion of any Note being redeemed in part.

          (iv) All Global Notes and Definitive Notes issued upon any
     registration of transfer or exchange of Global Notes or Definitive Notes
     shall be the valid and legally binding obligations of the Company,
     evidencing the same debt, and entitled to the same benefits under this
     Indenture, as the Global Notes or Definitive Notes surrendered upon such
     registration of transfer or exchange.

          (v) The Company shall not be required (A) to issue, to register the
     transfer of or to exchange any Notes during a period beginning at the
     opening of business 15 days before the day of any selection of Notes for
     redemption under Section 3.02 hereof and ending at the close of business on
     the day of selection, (B) to register the transfer of or to exchange any
     Note so selected for redemption in whole or in part, except the unredeemed
     portion of any Note being redeemed in part or (C) to register the transfer
     of or to exchange a Note between a record date and the next succeeding
     interest payment date.

          (vi) Prior to due presentment for the registration of a transfer of
     any Note, the Trustee, any Agent and the Company may deem and treat the
     Person in whose name any Note is registered as the absolute owner of such
     Note for the purpose of receiving


                                       42

     payment of principal of and interest on such Notes and for all other
     purposes, and none of the Trustee, any Agent or the Company shall be
     affected by notice to the contrary.

          (vii) The Trustee shall authenticate Global Notes and Definitive Notes
     in accordance with the provisions of Section 2.02 hereof.

          (viii) All certifications, certificates and Opinions of Counsel
     required to be submitted to the Registrar pursuant to this Section 2.07 to
     effect a registration of transfer or exchange may be submitted by facsimile
     with the original to follow by first class mail.

Section 2.08 Replacement Notes.

          (a) If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon receipt of
an Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.

          (b) Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

Section 2.09 Outstanding Notes.

          (a) The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.10 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.

          (b) If a Note is replaced pursuant to Section 2.08 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.

          (c) If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.

          (d) If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any of the foregoing) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.


                                       43

Section 2.10 Treasury Notes.

          In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.

Section 2.11 Temporary Notes.

          (a) Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Notes in exchange for temporary Notes.

          (b) Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.

Section 2.12 Cancellation.

          The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). Certification of the disposition of
all canceled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.

Section 2.13 Defaulted Interest.

          If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.


                                       44

Section 2.14 CUSIP Numbers.

          The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" numbers.

                                  ARTICLE THREE
                           REDEMPTION AND PREPAYMENT;
                           SATISFACTION AND DISCHARGE

Section 3.01 Notices to Trustee.

          If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.

Section 3.02 Selection of Notes to Be Redeemed.

          (a) If less than all of the Notes are to be redeemed or purchased in
an offer to purchase at any time, the Trustee shall select the Notes to be
redeemed or purchased among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.

          (b) The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount at maturity thereof to be redeemed. No Notes in
amounts of $1,000 or less shall be redeemed in part. Notes and portions of Notes
selected shall be in amounts of $1,000 or whole multiples of $1,000; except that
if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.

Section 3.03 Notice of Redemption.

          (a) Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by


                                       45

first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.

          The notice shall identify the Notes to be redeemed and shall state:

          (i) the redemption date;

          (ii) the redemption price;

          (iii) if any Note is being redeemed in part, the portion of the
     principal amount at maturity of such Note to be redeemed and that, after
     the redemption date upon surrender of such Note, a new Note or Notes in
     principal amount equal to the unredeemed portion of the original Note shall
     be issued in the name of the Holder thereof upon cancellation of the
     original Note;

          (iv) the name and address of the Paying Agent;

          (v) that Notes called for redemption must be surrendered to the Paying
     Agent to collect the redemption price and become due on the date fixed for
     redemption;

          (vi) that, unless the Company defaults in making such redemption
     payment, interest, if any, on Notes called for redemption ceases to accrue
     on and after the redemption date;

          (vii) the paragraph of the Notes and/or Section of this Indenture
     pursuant to which the Notes called for redemption are being redeemed; and

          (viii) that no representation is made as to the correctness or
     accuracy of the CUSIP number, if any, listed in such notice or printed on
     the Notes.

          (b) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice, if mailed in the manner provided herein
shall be presumed to have been given, whether or not the Holder receives such
notice.

Section 3.04 Effect of Notice of Redemption.

          Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.

Section 3.05 Deposit of Redemption Price.

          (a) One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest and Liquidated Damages, if any, on all
Notes to be redeemed on that date. The


                                       46

Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.

          (b) If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Holder
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.

Section 3.06 Notes Redeemed in Part.

          Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered. No Notes in denominations of $1,000 or less shall be redeemed
in part.

Section 3.07 Optional Redemption.

          (a) The Company shall not have the option to redeem the Notes pursuant
to this Section 3.07 prior to November 1, 2006. Thereafter, the Company may
redeem all or a part of the Notes from time to time, upon not less than 30 days'
(or, if all of the Notes are then held by an Initial Purchaser and/or any of its
affiliates, 15 days) nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
November 1 of the years indicated below (subject to the right of Holders on the
relevant record date to receive interest due on the related interest payment
date):



YEAR                     PERCENTAGE
- ----                     ----------
                      
2006..................     103.00%
2007..................     101.50%
2008 and thereafter...     100.00%


          (b) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.


                                       47

Section 3.08 Mandatory Redemption.

          Except as set forth in Section 4.10 and 4.14 hereof, the Company is
not required to make mandatory redemption or sinking fund payments with respect
to the Notes.

Section 3.09 Repurchase Offers.

          In the event that, pursuant to Sections 4.10 and 4.14 hereof, the
Company shall be required to commence an offer to all Holders to purchase their
respective Notes (a "REPURCHASE OFFER"), it shall follow the procedures
specified below.

          The Repurchase Offer shall remain open for a period of not less than
30 and not more than 60 Business Days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
"OFFER PERIOD"). No later than five Business Days after the termination of the
Offer Period (the "PURCHASE DATE"), the Company shall purchase the principal
amount of Notes required to be purchased pursuant to Sections 4.10 and 4.14
hereof (the "OFFER AMOUNT") or, if less than the Offer Amount has been tendered,
all Notes tendered in response to the Repurchase Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.

          If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.

          Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:

          (i) that the Repurchase Offer is being made pursuant to Section 4.10
     or Section 4.14 hereof, and the length of time the Repurchase Offer shall
     remain open;

          (ii) the Offer Amount, the purchase price and the Purchase Date;

          (iii) that any Note not tendered or accepted for payment shall
     continue to accrete or accrue interest and Liquidated Damages, if any;

          (iv) that, unless the Company defaults in making such payment, any
     Note (or portion thereof) accepted for payment pursuant to the Repurchase
     Offer shall cease to accrete or accrue interest and Liquidated Damages, if
     any, after the Purchase Date;

          (v) that Holders electing to have a Note purchased pursuant to a
     Repurchase Offer may elect to have Notes purchased in integral multiples of
     $1,000 only;

          (vi) that Holders electing to have a Note purchased pursuant to any
     Repurchase Offer shall be required to surrender the Note, with the form
     entitled "Option


                                       48

     of Holder to Elect Purchase" on the reverse of the Note completed, or
     transfer by book-entry transfer, to the Company, a depositary, if appointed
     by the Company, or a Paying Agent at the address specified in the notice at
     least three days before the Purchase Date;

          (vii) that Holders shall be entitled to withdraw their election if the
     Company, the Depositary or the Paying Agent, as the case may be, receives,
     not later than the expiration of the Offer Period, a telegram, telex,
     facsimile transmission or letter setting forth the name of the Holder, the
     principal amount of the Note the Holder delivered for purchase and a
     statement that such Holder is withdrawing its election to have such Note
     purchased;

          (viii) that, if the aggregate amount of Notes surrendered by Holders
     exceeds the Offer Amount, the Trustee shall select the Notes to be
     purchased pursuant to the terms of Section 3.02 hereof (with such
     adjustments as may be deemed appropriate by the Trustee so that only Notes
     in denominations of $1,000, or integral multiples thereof, shall be
     purchased); and

          (ix) that Holders whose Notes were purchased only in part shall be
     issued new Notes equal in principal amount to the unpurchased portion of
     the Notes surrendered (or transferred by book-entry transfer).

          On the Purchase Date, the Company shall, to the extent lawful, accept
for payment on a pro rata basis to the extent necessary, the Offer Amount of
Notes (or portions thereof) tendered pursuant to the Repurchase Offer, or if
less than the Offer Amount has been tendered, all Notes tendered, and shall
deliver to the Trustee an Officers' Certificate stating that such Notes (or
portions thereof) were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the Depositary or the Paying Agent,
as the case may be, shall promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of Notes tendered by such Holder, as the case may
be, and accepted by the Company for purchase, and the Company shall promptly
issue a new Note. The Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount at maturity equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
respective Holder thereof. The Company shall publicly announce the results of
the Repurchase Offer on the Purchase Date.

          The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act, and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to an Excess Proceeds Offer.

          Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.


                                       49

Section 3.10 Application of Trust Money.

          All money deposited with the Trustee pursuant to Section 12.02 shall
be held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.

                                  ARTICLE FOUR
                                    COVENANTS

Section 4.01 Payment of Notes.

          (a) The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or one of its Subsidiaries, holds as of 1:00 p.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.

          (b) The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest, and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.

Section 4.02 Maintenance of Office or Agency.

          (a) The Company shall maintain in the Borough of Manhattan, The City
of New York, an office or agency (which may be an office of the Trustee or an
agent of the Trustee, Registrar or co-registrar) where Notes may be surrendered
for registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.

          (b) The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain


                                       50

an office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.

          (c) The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.04 of this Indenture.

Section 4.03 Reports.

          (a) Whether or not the Company is required to file reports with the
SEC, so long as any Notes are outstanding, the Company will file with the SEC,
within the time periods specified in the SEC's rules and regulations, all such
annual reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13(a) or 15(d) under the Exchange
Act. The Company will also be required (i) to supply to the Trustee and each
Holder, or supply to the Trustee for forwarding to each such Holder, without
cost to such Holder, copies of such reports and other documents within 15 days
after the date on which the Company files such reports and documents with the
SEC or the date on which the Company would be required to file such reports and
documents if the Company were so required and (ii) if filing such reports and
documents with the SEC is not accepted by the SEC or is prohibited under the
Exchange Act, to supply at the Company's cost copies of such reports and
documents to any prospective Holder promptly upon written request. In addition,
the Company has agreed that, for so long as any Notes remain outstanding, it
will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information specified in Rule 144A(d)(4)
under the Securities Act.

          (b) Notwithstanding subsection (a) above, so long as the Parent
guarantees the Notes, the reports, information and other documents required to
be filed and provided as described above may be those of the Parent, rather than
the Company, so long as such filings (i) would satisfy the requirements of the
Exchange Act and the regulations promulgated thereunder and (ii) disclose the
Company's results of operations and financial condition in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
section in at least such detail as would be required if the Company were filing
such report.

Section 4.04 Compliance Certificate.

          (a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge, the Company
has kept, observed, performed and fulfilled its obligations under this Indenture
and is not in default in the performance or observance of any of the material
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred and be continuing, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of his or her


                                       51

knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

          (b) If required under Section 314(a) of the Trust Indenture Act, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (which shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article Four or Article Five hereof or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.

          (c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.

Section 4.05 Taxes.

          The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, any material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.

Section 4.06 Stay, Extension and Usury Laws.

          The Company and each of the Guarantors covenant (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waive all benefit or advantage of any such law, and covenant that they
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.

Section 4.07 Restricted Payments.

          (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, take any of the following actions:

          (i) declare or pay any dividend on, or make any distribution to
     holders of, any shares of the Capital Stock of the Company or any
     Restricted Subsidiary, other than (i) dividends or distributions payable
     solely in Qualified Equity Interests or (ii) dividends or distributions by
     a Restricted Subsidiary payable to the Company or a Wholly Owned


                                       52

     Restricted Subsidiary or to all holders of Capital Stock of such Restricted
     Subsidiary on a pro rata basis;

          (ii) purchase, redeem or otherwise acquire or retire for value,
     directly or indirectly, any shares of Capital Stock, or any options,
     warrants or other rights to acquire such shares of Capital Stock, of the
     Company, any direct or indirect parent of the Company or any Subsidiary of
     the Company (other than a Wholly Owned Restricted Subsidiary);

          (iii) make any principal payment on, or repurchase, redeem, defease or
     otherwise acquire or retire for value, prior to any scheduled principal
     payment, sinking fund payment or maturity, any Subordinated Indebtedness;
     and

          (iv) make any Investment (other than a Permitted Investment) in any
     Person (such payments or other actions described in (but not excluded from)
     clauses (a) through (d) being referred to as "RESTRICTED PAYMENTS");

          unless at the time of, and immediately after giving effect to, the
proposed Restricted Payment:

          (i) no Default or Event of Default has occurred and is continuing;

          (ii) the Company would, at the time of such Restricted Payment and
          after giving pro forma effect thereto as if such Restricted Payment
          had been made at the beginning of the applicable four-quarter period,
          have been permitted to incur at least $1.00 of additional Indebtedness
          pursuant to the Fixed Charge Coverage Ratio test set forth in Section
          4.09(a); and

          (iii) the aggregate amount of all Restricted Payments made after the
          Reference Date does not exceed the sum of:

               (A) 50% of the aggregate Consolidated Net Income of the Company
          during the period (taken as one accounting period) from the first day
          of the Company's first fiscal quarter commencing after October 30,
          2001 to the last day of the Company's most recently ended fiscal
          quarter for which internal financial statements are available at the
          time of such proposed Restricted Payment (or, if such aggregate
          cumulative Consolidated Net Income is a loss, 100% of such amount);
          plus

               (B) 100% of the aggregate net cash proceeds received by the
          Company after the Reference Date as a capital contribution or from the
          issuance or sale (other than to a Subsidiary) of either (1) Qualified
          Equity Interests of the Company or (2) debt securities or Disqualified
          Stock that have been converted into or exchanged for Qualified Stock
          of the Company, together with the aggregate net cash proceeds received
          by the Company at the time of such conversion or exchange.


                                       53

          (b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may take the following actions, so long as no Default or Event of
Default has occurred and is continuing or would occur:

          (i) the payment of any dividend within 60 days after the date of
     declaration thereof, if at the declaration date such payment would not have
     been prohibited by the foregoing provisions;

          (ii) the repurchase, redemption or other acquisition or retirement for
     value of any shares of Capital Stock of the Company, in exchange for, or
     out of the net cash proceeds of a substantially concurrent issuance and
     sale (other than to a Subsidiary) of, Qualified Equity Interests of the
     Company or of the Parent, the proceeds of which are contributed to the
     Company as a capital contribution on a substantially concurrent basis;

          (iii) the purchase, redemption, defeasance or other acquisition or
     retirement for value of any Subordinated Indebtedness in exchange for, or
     out of the net cash proceeds of a substantially concurrent issuance and
     sale (other than to a Subsidiary) of, shares of Qualified Equity Interests
     of the Company or of the Parent, the proceeds of which are contributed to
     the Company as a capital contribution on a substantially concurrent basis;

          (iv) the purchase, redemption, defeasance or other acquisition or
     retirement for value of Subordinated Indebtedness in exchange for, or out
     of the net cash proceeds of a substantially concurrent issuance or sale
     (other than to a Subsidiary) of, Subordinated Indebtedness, so long as the
     Company or a Restricted Subsidiary would be permitted to refinance such
     original Subordinated Indebtedness with such new Subordinated Indebtedness
     pursuant to clause (iv) of the definition of Permitted Indebtedness;

          (v) the repurchase of any Subordinated Indebtedness at a purchase
     price not greater than 101% of the principal amount of such Subordinated
     Indebtedness in the event of a Change of Control in accordance with
     provisions similar to Section 4.14 hereof; provided that prior to or
     simultaneously with such repurchase, the Company has made the Change of
     Control Offer as provided in Section 4.14 hereof with respect to the Notes
     and has repurchased all Notes validly tendered for payment in connection
     with such Change of Control Offer;

          (vi) within 90 days after the completion of an Excess Proceeds Offer
     pursuant to Section 4.10 hereof (including the purchase of all Notes
     tendered), any purchase or redemption of Indebtedness of the Company that
     is subordinated in right of payment to the Notes and that is required to be
     repurchased or redeemed pursuant to the terms thereof as a result of the
     related Asset Sale, at a purchase price not greater than 100% of the
     outstanding principal amount thereof (plus accrued and unpaid interest);

          (vii) the purchase, redemption, acquisition, cancellation or other
     retirement for value of shares of Capital Stock of the Company, options on
     any such shares or related stock appreciation rights or similar securities,
     or any dividend, distribution or advance to the Parent for the purchase,
     redemption, acquisition, cancellation or other retirement for value of
     shares of Capital Stock of the Parent, options on any such shares or
     related stock


                                       54

     appreciation rights or similar securities, in each case held by officers,
     directors or employees or former officers, directors or employees (or their
     estates or beneficiaries under their estates) of the Company, the Parent or
     any Subsidiary of the Company, as applicable, or by any employee benefit
     plan of the Company, the Parent or any Subsidiary of the Company, as
     applicable, upon death, disability, retirement or termination of employment
     or pursuant to the terms of any employee benefit plan or any other
     agreement under which such shares of stock or related rights were issued;
     provided that the aggregate amount of cash applied by the Company for such
     purchase, redemption, acquisition, cancellation or other retirement of such
     shares of Capital Stock of the Company or the Parent after the Reference
     Date does not exceed $7.5 million in the aggregate (excluding for purposes
     of calculating such amount the aggregate amount received by any Person in
     connection with such purchase, redemption, acquisition, cancellation or
     other retirement of such shares that is concurrently used to repay loans
     made to such Person by the Company pursuant to clause (f) of the definition
     of "Permitted Investment");

          (viii) the payment of dividends or other distributions or the making
     of loans or advances to the Parent in amounts required for the Parent to
     pay franchise taxes and other fees required to maintain its existence and
     provide for all other customary operating costs of the Parent to the extent
     attributable to the ownership and operation of the Company and its
     Restricted Subsidiaries, including, without limitation, in respect of
     director fees and expenses, administrative, legal and accounting services
     provided by third parties and other customary costs and expenses including
     all costs and expenses with respect to filings with the SEC;

          (ix) the payment of dividends or other distributions by the Company to
     the Parent in amounts required to pay the tax obligations of the Parent
     attributable to the Company and its Subsidiaries, determined as if the
     Company and its Subsidiaries had filed a separate consolidated, combined or
     unitary return for the relevant taxing jurisdiction; provided that (x) the
     amount of dividends paid pursuant to this clause (viii) to enable the
     Parent to pay Federal and state income taxes (and franchise taxes based on
     income) at any time shall not exceed the amount of such Federal and state
     income taxes (and franchise taxes based on income) actually owing by the
     Parent at such time to the respective tax authorities for the respective
     period and (y) any refunds received by the Parent attributable to the
     Company or any of its Restricted Subsidiaries shall promptly be remitted by
     the Parent to the Company through a contribution or purchase of common
     stock (other than Disqualified Stock) of the Company;

          (x) the payment of dividends or other distributions or the making of
     loans or advances to the Parent in amounts required for the Parent to pay
     to the Equity Sponsors an annual amount not to exceed $500,000 for payment
     of management consulting or financial advisory services provided to the
     Company or any of the Subsidiaries;

          (xi) other Restricted Payments not to exceed $10 million at any one
     time outstanding;


                                       55

          (xii) repurchase or repurchases of Existing Notes; provided that (1)
     at the time of such repurchase or repurchases, no amount is outstanding
     under the Revolving Credit Agreement or any Indebtedness incurred to
     refinance or replace the Revolving Credit Agreement, (2) the aggregate
     amount of cash (or fair market value of any other assets) applied to such
     repurchase or repurchases under this clause (xii) does not exceed $25
     million and (3) the amount of cash and Cash Equivalents held by the Company
     and the Restricted Subsidiaries immediately after giving effect to such
     repurchase or repurchases shall not be less than $29 million; and

          (xiii) repurchase or repurchases of Existing Notes; provided that (1)
     such repurchase or repurchases occur on the Issue Date or within two
     Business Days from the Issue Date, (2) the aggregate amount of cash (or
     fair market value of any other assets) applied to such repurchase or
     repurchases under this clause (xiii) does not exceed $50 million and (3)
     the amount of cash and cash equivalent held by the Company and the
     Restricted Subsidiaries immediately after giving effect to such repurchase
     or repurchases shall not be less than $29 million.

          (c) The actions described in clauses (v), (vi), (vii), (viii), (ix),
(x) and (xi) of Section 4.07(b) will be Restricted Payments that will be
permitted to be taken in accordance with this Section 4.07 but will reduce the
amount that would otherwise be available for Restricted Payments under clause
(iv)(iii) of Section 4.07(a) hereof and the actions described in clauses (i),
(ii), (iii), (iv), (xii) and (xiii) of Section 4.07(b) will be Restricted
Payments that will be permitted to be taken in accordance with this Section 4.07
and will not reduce the amount that would otherwise be available for Restricted
Payments under clause (iv)(iii) of Section 4.07(a) hereof.

          For the purpose of making any calculations under this Indenture (i) if
a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company
will be deemed to have made an Investment in an amount equal to the greater of
the fair market value or net book value of the net assets of such Restricted
Subsidiary at the time of such designation as determined by the Board of the
Company, and (ii) any property transferred to or from an Unrestricted Subsidiary
will be valued at fair market value at the time of such transfer, as determined
by the Board of the Company. The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by the Company
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any non-cash Restricted Payment shall be
determined by the Board of the Company whose resolution with respect thereto
shall be delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if such fair market value exceeds $10 million. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required under
this Section 4.07 were computed, together with a copy of any fairness opinion or
appraisal required by this Indenture.

          If the aggregate amount of all Restricted Payments calculated under
the foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter


                                       56

becomes a Restricted Subsidiary, the aggregate amount of all Restricted Payments
calculated under the foregoing provision will be reduced by the lesser of (x)
the net asset value of such Subsidiary at the time it becomes a Restricted
Subsidiary and (y) the initial amount of such Investment.

          If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision will be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividends, loan repayment, transfer
of assets or otherwise, other than the redesignation of an Unrestricted
Subsidiary or other Person as a Restricted Subsidiary), to the extent such net
reduction is not included in the Company's Consolidated Net Income; provided
that the total amount by which the aggregate amount of all Restricted Payments
may be reduced may not exceed the lesser of (x) the cash proceeds received by
the Company and its Restricted Subsidiaries in connection with such net
reduction and (y) the initial amount of such Investment.

          In computing the Consolidated Net Income of the Company for purposes
of Section 4.07(a)(iv)(iii)(A) hereof, (i) the Company may use audited financial
statements for the portions of the relevant period for which audited financial
statements are available on the date of determination and unaudited financial
statements and other current financial data based on the books and records of
the Company for the remaining portion of such period and (ii) the Company will
be permitted to rely in good faith on the financial statements and other
financial data derived from its books and records that are available on the date
of determination. If the Company makes a Restricted Payment that, at the time of
the making of such Restricted Payment, would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment will be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.

Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

          (a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (i) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock, (ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary.

          (b) However, the preceding restrictions will not apply to encumbrances
or restrictions existing under or by reason of:

          (i) any agreement (including the Credit Agreement) in effect on the
     Issue Date;


                                       57

          (ii) customary non-assignment provisions of any lease, license or
     other contract entered into in the ordinary course of business by the
     Company or any Restricted Subsidiary;

          (iii) the refinancing or successive refinancing of Indebtedness
     incurred under the agreements (including the Credit Agreement) in effect on
     the Issue Date, so long as such encumbrances or restrictions are no more
     restrictive, taken as a whole, than those contained in such original
     agreement;

          (iv) any agreement or other instrument of a Person acquired by the
     Company or any Restricted Subsidiary in existence at the time of such
     acquisition (but not created in contemplation thereof), which encumbrance
     or restriction is not applicable to any Person, or the properties or assets
     of any Person, other than the Person, or the property or assets of the
     Person, so acquired;

          (v) purchase money obligations for acquired property permitted under
     Section 4.09 hereof that impose restrictions of the nature described in
     clause (iv) of Section 4.08(a) hereof on the property so acquired;

          (vi) any agreement for the sale of a Restricted Subsidiary or an asset
     that restricts distributions by that Restricted Subsidiary or transfers of
     such asset pending its sale;

          (vii) secured Indebtedness otherwise permitted to be incurred pursuant
     to Section 4.12 hereof that limits the right of the debtor to dispose of
     the assets securing such Indebtedness;

          (viii) restrictions on cash or other deposits or net worth imposed by
     leases entered into in the ordinary course of business;

          (ix) Non-Recourse Indebtedness of any Permitted Joint Venture
     permitted to be incurred under this Indenture;

          (x) applicable law or regulation;

          (xi) a Receivables Program with respect to a Receivables Subsidiary;
     and

          (xii) customary provisions in joint venture, limited liability company
     operating, partnership, shareholder and other similar agreements entered
     into in the ordinary course of business reasonably consistent with past
     practice by the Company or any Restricted Subsidiary.

Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Stock.

          (a) The Company will not, and will not permit any Restricted
Subsidiary to, create, issue, assume, guarantee or in any manner become directly
or indirectly liable for the payment of, or otherwise incur (collectively,
"INCUR"), any Indebtedness (including Acquired Indebtedness and the issuance of
Disqualified Stock), except that the Company and any


                                       58

Subsidiary Guarantors may incur Indebtedness if, at the time of such event, the
Fixed Charge Coverage Ratio for the immediately preceding four full fiscal
quarters for which internal financial statements are available, taken as one
accounting period, would have been equal to at least 2.0 to 1.0.

          (b) In making the foregoing calculation, pro forma effect will be
     given to:

          (i) the incurrence of such Indebtedness and (if applicable) the
     application of the net proceeds therefrom, including to refinance other
     Indebtedness, as if such Indebtedness was incurred and the application of
     such proceeds occurred at the beginning of such four-quarter period;

          (ii) the incurrence, repayment or retirement of any other Indebtedness
     by the Company or its Restricted Subsidiaries since the first day of such
     four-quarter period as if such Indebtedness was incurred, repaid or retired
     at the beginning of such four-quarter period; and

          (iii) the acquisition (whether by purchase, merger or otherwise) or
     disposition (whether by sale, merger or otherwise) of any company, entity
     or business acquired or disposed of by the Company or its Restricted
     Subsidiaries, as the case may be, since the first day of such four-quarter
     period, as if such acquisition or disposition occurred at the beginning of
     such four-quarter period. In making a computation under the foregoing
     clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit
     facility will be computed based on the average daily balance of such
     Indebtedness during such four-quarter period, (B) if such Indebtedness
     bears, at the option of the Company, a fixed or floating rate of interest,
     interest thereon will be computed by applying, at the option of the
     Company, either the fixed or floating rate, and (C) the amount of any
     Indebtedness that bears interest at a floating rate will be calculated as
     if the rate in effect on the date of determination had been the applicable
     rate for the entire period (taking into account any Hedging Obligations
     applicable to such Indebtedness if such Hedging Obligations have a
     remaining term at the date of determination in excess of 12 months).

          (c) Notwithstanding the foregoing, the Company may, and may permit its
Restricted Subsidiaries to, incur the following Indebtedness ("PERMITTED
INDEBTEDNESS"):

          (i) Indebtedness of the Company or any Subsidiary Guarantor under the
     Credit Agreement (and the incurrence by any Subsidiary Guarantor of
     guarantees thereof) in an aggregate principal amount at any one time
     outstanding not to exceed $125 million, less (A) any amounts applied to the
     permanent reduction of such credit facilities pursuant to the provisions of
     Section 4.10 hereof and (B) up to $50 million of cash (or the fair market
     value of any other assets) to the extent applied to repurchase Existing
     Notes on the Issue Date or within two Business Days from the Issue Date;

          (ii) Indebtedness represented by the Notes (other than the Additional
     Notes) and the related Guarantees;

          (iii) Existing Indebtedness;


                                       59

          (iv) the incurrence by the Company of Permitted Refinancing
     Indebtedness in exchange for, or the net cash proceeds of which are used to
     refund, refinance or replace, any Indebtedness that is permitted to be
     incurred under clause (ii) or (iii) above;

          (v) Indebtedness owed by the Company to any Restricted Subsidiary or
     owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary
     (provided that such Indebtedness is held by the Company or such Restricted
     Subsidiary); provided that:

               (A) any Indebtedness of the Company or any Subsidiary Guarantor
          owing to any such Restricted Subsidiary is unsecured and subordinated
          in right of payment from and after such time as the Notes shall become
          due and payable (whether at Stated Maturity, acceleration, or
          otherwise) to the payment and performance of the Company's obligations
          under the Notes or the Subsidiary Guarantor's obligations under its
          Guarantee, as the case may be; and

               (B) (x) any subsequent issuance or transfer of Equity Interests
          that results in any such Indebtedness being held by a Person other
          than the Company or a Restricted Subsidiary thereof and (y) any sale
          or other transfer of any such Indebtedness to a Person that is not
          either the Company or a Restricted Subsidiary thereof, shall be
          deemed, in each case, to constitute an incurrence of such Indebtedness
          by the Company or such Restricted Subsidiary, as the case may be, that
          was not permitted by this clause (v);

          (vi) Indebtedness of the Company or any Restricted Subsidiary under
     Hedging Obligations incurred in the ordinary course of business;

          (vii) Indebtedness of the Company or any Restricted Subsidiary
     consisting of guarantees, indemnities or obligations in respect of purchase
     price adjustments in connection with the acquisition or disposition of
     assets, including, without limitation, shares of Capital Stock;

          (viii) either (A) Capitalized Lease Obligations of the Company or any
     Restricted Subsidiary or (B) Indebtedness under purchase money mortgages or
     secured by purchase money security interests so long as (x) such
     Indebtedness is not secured by any property or assets of the Company or any
     Restricted Subsidiary other than the property and assets so acquired and
     (y) such Indebtedness is created within 90 days of the acquisition of the
     related property; provided that the aggregate amount of Indebtedness under
     clauses (A) and (B) does not exceed 15% of Consolidated Tangible Assets
     less the amount of any Indebtedness incurred under clause (xvi) below at
     any one time outstanding;

          (ix) Guarantees by any Restricted Subsidiary made in accordance with
     the provisions of Section 4.18 hereof;

          (x) Indebtedness arising from the honoring by a bank or other
     financial institution of a check, draft or similar instrument inadvertently
     (except in the case of daylight overdrafts) drawn against insufficient
     funds in the ordinary course of business; provided that such Indebtedness
     is extinguished within two business days of incurrence;


                                       60

          (xi) Indebtedness of the Company or any of its Restricted Subsidiaries
     represented by letters of credit for the account of the Company or such
     Restricted Subsidiary, as the case may be, in order to provide security for
     workers' compensation claims, payment obligations in connection with
     self-insurance or similar requirements in the ordinary course of business;

          (xii) the incurrence of Non-Recourse Indebtedness by Permitted Joint
     Ventures that are Restricted Subsidiaries;

          (xiii) Indebtedness incurred by a Receivables Subsidiary pursuant to a
     Receivables Program; provided that, after giving effect to any such
     incurrence of Indebtedness, the aggregate principal amount of all
     Indebtedness incurred under this clause (xiii) and then outstanding does
     not exceed $30 million;

          (xiv) Indebtedness of the Company, any Restricted Subsidiary or any
     Permitted Joint Venture not permitted by any other clause of this
     definition, in an aggregate principal amount not to exceed $30 million at
     any one time outstanding;

          (xv) Indebtedness represented by Attributable Debt related to a Sale
     and Leaseback transaction involving tractors existing on the Issue Date;
     provided that (i) the aggregate amount of such Indebtedness does not exceed
     $7 million and (ii) such Indebtedness is incurred within 12 months from the
     Issue Date; and

          (xvi) the incurrence of Indebtedness represented by Additional Notes
     and the related Guarantees, the net cash proceeds of which are used to
     satisfy, extinguish and retire the Company and/or any of the Restricted
     Subsidiaries' obligations under any Indebtedness incurred under clause
     (viii) above; provided that (A) any property or assets of the Company or
     any Restricted Subsidiary securing such Indebtedness, the obligations of
     which are being so satisfied, extinguished and retired, are fully released
     from such security and (B) such property or assets are expressly made
     subject to a first priority perfected Lien in favor of the Collateral
     Agent.

          (d) The Company will not incur any Indebtedness that is subordinate in
right of payment to any other Indebtedness of the Company unless it is
subordinate in right of payment to the Notes to the same extent. The Company
will not permit any Subsidiary Guarantor to incur any Indebtedness that is
subordinate in right of payment to any other Indebtedness of such Subsidiary
Guarantor unless it is subordinate in right of payment to such Subsidiary
Guarantor's Guarantee to the same extent. For purposes of the foregoing, no
Indebtedness will be deemed to be subordinated in right of payment to any other
Indebtedness of the Company or any Subsidiary Guarantor, as applicable, solely
by reason of any Liens or Guarantees arising or created in respect thereof or by
virtue of the fact that the holders of any secured Indebtedness have entered
into intercreditor agreements giving one or more of such holders priority over
the other holders in the collateral held by them.

          (e) For purposes of determining compliance with this Section 4.09, in
the event that any proposed Indebtedness meets the criteria of more than one of
the categories of Permitted Indebtedness described in clauses (i) through (xvi)
above, or is entitled to be incurred


                                       61

pursuant to Section 4.09(a) hereof, the Company will be permitted to classify
such item of Indebtedness on the date of its incurrence, or later reclassify all
or a portion of such item of Indebtedness, in any manner that complies with this
Section 4.09. Indebtedness under the Credit Agreement incurred on the Issue Date
shall be deemed to have been incurred on the Issue Date in reliance on the
exception provided by clause (i) of the definition of Permitted Indebtedness.

Section 4.10 Asset Sales.

          (a) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Sale unless:

          (i) the consideration received by the Company or such Restricted
     Subsidiary for such Asset Sale is not less than the fair market value of
     the assets sold evidenced by a resolution of the board of directors of such
     entity set forth in an Officers' Certificate delivered to the Trustee;

          (ii) the consideration received by the Company or the relevant
     Restricted Subsidiary in respect of such Asset Sale consists of at least
     75% cash or Cash Equivalents (for purposes of this clause (ii), cash and
     Cash Equivalents includes (1) if such Asset Sale does not involve
     Collateral, any liabilities (as reflected in the Company's consolidated
     balance sheet) of the Company or any Restricted Subsidiary (other than
     contingent liabilities and liabilities that are by their terms subordinated
     to the Notes or any Guarantee) that are assumed by any transferee of any
     such assets or other property in such Asset Sale, and where the Company or
     the relevant Restricted Subsidiary is released from any further liability
     in connection therewith with respect to such liabilities, (2) any
     securities, notes or other similar obligations received by the Company or
     any such Restricted Subsidiary from such transferee that are converted
     within 180 days of the consummation of the related Asset Sale by the
     Company or such Restricted Subsidiary into cash and Cash Equivalents (to
     the extent of the net cash proceeds or the Cash Equivalents (net of related
     costs) received upon such conversion), (3) any Designated Noncash
     Consideration received by the Company or any such Restricted Subsidiary in
     the Asset Sale having an aggregate fair market value, as determined by the
     Board of the Company, taken together with all other Designated Noncash
     Consideration received pursuant to this clause that is at that time
     outstanding, not to exceed the greater of:

               (A) $10 million; and

               (B) 15% of Consolidated Tangible Assets at the time of the
          receipt of such Designated Noncash Consideration (with the fair market
          value of each item of such Designated Noncash Consideration being
          measured at the time received and without giving effect to subsequent
          changes in value); and

          (iii) if such Asset Sale involves the transfer of Collateral,

               (1) all consideration received in such Asset Sale shall consist
     of assets that are not Excluded Assets; and


                                       62

               (2) all consideration (including cash and cash equivalents)
     received in such Asset Sale shall be expressly made subject to a first
     priority perfected Lien (subject to Permitted Liens) in favor of the
     Collateral Agent.

          (b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may, at its option, within 12 months after such Asset Sale (i)
apply all or a portion of the Net Cash Proceeds to repay or purchase Applicable
Indebtedness (and, in the case of revolving loans and other similar obligations,
permanently reduce the commitment thereunder), or (ii) invest (or enter into a
legally binding agreement to invest) all or a portion of such Net Cash Proceeds
in properties and assets to replace the properties and assets that were the
subject of the Asset Sale or in properties and assets that will be used in
businesses of the Company or its Restricted Subsidiaries, as the case may be,
existing on the Issue Date or in businesses the same, similar or reasonably
related thereto; provided, that, to the extent that such Net Cash Proceeds
represent proceeds of Collateral, (A) none of such properties and assets
obtained shall consist of Excluded Assets and (B) such properties and assets
obtained shall be expressly made subject to a first priority Lien (subject to
Permitted Liens) with respect to the Notes. If any such legally binding
agreement to invest such Net Cash Proceeds is terminated, the Company may,
within 90 days of such termination or within 12 months of such Asset Sale,
whichever is later, invest such Net Cash Proceeds as provided in clause (i) or
(ii) (without regard to the parenthetical contained in such clause (ii)) above.
Pending the final application of any such Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net Cash
Proceeds in a manner that is not prohibited by this Indenture. The amount of
such Net Cash Proceeds not so used as set forth above in this paragraph shall
constitute "EXCESS PROCEEDS".

          (c) When the aggregate amount of Excess Proceeds exceeds $10 million,
the Company will, within 30 days thereafter, make an offer to purchase (an
"EXCESS PROCEEDS OFFER") from all Holders of Notes on a pro rata basis, in
accordance with the procedures set forth in this Indenture, the maximum
principal amount (expressed as a multiple of $1,000) of Notes that may be
purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of
the principal amount thereof, plus accrued interest and Liquidated Damages, if
any, to the date such offer to purchase is consummated. To the extent that the
aggregate principal amount of Notes tendered pursuant to such offer to purchase
is less than the Excess Proceeds, the Company may use such deficiency for
general corporate purposes. If the aggregate principal amount of Notes validly
tendered and not withdrawn by holders thereof exceeds the Excess Proceeds, the
Notes to be purchased will be selected on a pro rata basis. Upon completion of
such offer to purchase, the amount of Excess Proceeds will be reset to zero.

Section 4.11 Transactions with Affiliates.

          (a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into or suffer to exist any
transaction with, or for the benefit of, any Affiliate of the Company
("Interested Persons"), unless (i) such transaction is on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those that could have been obtained in an arm's-length transaction with third
parties who are not Interested Persons and (ii) the Company delivers to the
Trustee (x) with respect to any transaction or series of related transactions
entered into after the Issue Date involving aggregate payments in excess of $5
million, a resolution of the Company's Board set forth in an officers'


                                       63

certificate certifying that such transaction or transactions complies with
clause (i) above and that such transaction or transactions have been approved by
the Board (including a majority of the Disinterested Directors) of the Company
and (y) with respect to a transaction or series of related transactions
involving aggregate payments equal to or greater than $10 million, a written
opinion as to the fairness to the Company or such Restricted Subsidiary of such
transaction or series of transactions from a financial point of view issued by
an accounting, appraisal or investment banking firm, in each case of national
standing.

          (b) The foregoing Section 4.11(a) will not restrict:

          (i) transactions among the Company and/or its Restricted Subsidiaries;

          (ii) the Company from paying reasonable and customary regular
     compensation, indemnification, reimbursement and fees to officers of the
     Company or any Restricted Subsidiary and to directors of the Company or any
     Restricted Subsidiary who are not employees of the Company or any
     Restricted Subsidiary;

          (iii) transactions permitted by Section 4.07;

          (iv) advances to employees for moving, entertainment and travel
     expenses and similar expenditures in the ordinary course of business and
     consistent with past practice;

          (v) any Receivables Program of the Company or a Restricted Subsidiary;

          (vi) the agreements listed on Schedule II to this Indenture, in each
     case as in effect as of the Issue Date or any amendment thereto (so long as
     the amended agreement is not more disadvantageous to the Holders of the
     Notes in any material respect than such agreement immediately prior to such
     amendment) or any transaction contemplated thereby; and

          (vii) issuance of Equity Interests (other than Disqualified Stock) of
     the Parent or the Company to Affiliates.

Section 4.12 Liens.

          The Parent shall not, and shall not permit any of its subsidiaries
(other than Unrestricted Subsidiaries) to, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind upon any of
their property or assets, whether now owned or hereafter acquired, or any income
or profits therefrom or any right to receive income therefrom, except Permitted
Liens. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind upon any of their property or assets,
whether now owned or hereafter acquired, or any income or profits therefrom or
any right to receive income therefrom, except Permitted Liens.


                                       64

Section 4.13 Corporate Existence.

          Subject to Article Five, the Parent and the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
the corporate existence, rights (charter and statutory) and franchises of the
Parent, the Company and each Subsidiary; provided that the Company shall not be
required to preserve any such right or franchise if the Board shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.

Section 4.14 Offer to Repurchase upon a Change of Control.

          (a) Upon the occurrence of a Change of Control, each Holder shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"CHANGE OF CONTROL PAYMENT"). Within 30 days following any Change of Control,
the Company shall notify the Trustee thereof and mail a notice, by first-class
mail, postage prepaid, to each Holder, describing the transaction or
transactions that constitute the Change of Control and stating (1) that the
Change of Control Offer is being made pursuant to this Section 4.14 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed or such later date as is necessary to comply
with the requirements under the Exchange Act (the "CHANGE OF CONTROL PAYMENT
DATE"); (3) that any Note not tendered will continue to accrue interest; (4)
that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date; (5)
that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing its election to have the Notes purchased; and (7) that Holders whose
Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral
multiple thereof. The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Indenture relating to such Change of Control Offer, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.


                                       65

          (b) By 2:00 p.m. Eastern Time on the Change of Control Payment Date,
the Company shall, to the extent lawful, (1) accept for payment all Notes or
portions thereof properly tendered pursuant to the Change of Control Offer, (2)
deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all Notes or portions thereof so tendered and (3) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof.

          (c) Notwithstanding anything to the contrary in this Section 4.14, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.14 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.

Section 4.15 Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries.

          The Company (a) will not permit any Restricted Subsidiary to issue any
Capital Stock unless after giving effect thereto the Company's percentage
interest (direct and indirect) in the Capital Stock of such Restricted
Subsidiary is at least equal to its percentage interest prior thereto, and (b)
will not, and will not permit any Restricted Subsidiary to, transfer, convey,
sell, lease or otherwise dispose of any Capital Stock of any Restricted
Subsidiary to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary); provided, however, that this Section 4.15 will not prohibit (i) the
sale or other disposition of all, but not less than all, of the issued and
outstanding Capital Stock of a Restricted Subsidiary owned by the Company and
its Restricted Subsidiaries in compliance with the other provisions of this
Indenture, (ii) the sale or other disposition of a portion of the issued and
outstanding Capital Stock of a Restricted Subsidiary (other than a Subsidiary
Guarantor) whether or not as a result of such sale or disposition such
Restricted Subsidiary continues or ceases to be a Restricted Subsidiary if (A)
at the time of such sale or disposition, the Company could make an Investment in
the remaining Capital Stock held by it or one of its Restricted Subsidiaries in
an amount equal to the amount of its remaining Investment in such Person
pursuant to Section 4.07 hereof and (B) such sale or disposition is permitted
under, and the Company or such Restricted Subsidiary applies the Net Cash
Proceeds of any such sale in accordance with, Section 4.10 hereof, or (iii) the
ownership by directors of director's qualifying shares or the ownership by
foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent
mandated by applicable law. The Company will not permit any Restricted
Subsidiary to issue any Preferred Stock other than to the Company or any
Subsidiary Guarantor.

Section 4.16 Designation of Restricted and Unrestricted Subsidiaries.

          (a) The Board of the Company may designate any Subsidiary (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
so long as (i) such


                                       66

Subsidiary has no Indebtedness other than Non-Recourse Indebtedness, (ii) no
default with respect to any Indebtedness of such Subsidiary would permit (upon
notice, lapse of time or otherwise) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity, (iii) any Investment in such Subsidiary made as a result of
designating such Subsidiary an Unrestricted Subsidiary will not violate the
provisions of Section 4.07 hereof, (iv) neither the Company nor any Restricted
Subsidiary has a contract, agreement, arrangement, understanding or obligation
of any kind, whether written or oral, with such Subsidiary other than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, (v) neither the Company nor any Restricted Subsidiary has any
obligation to subscribe for additional shares of Capital Stock or other equity
interests in such Subsidiary, or to maintain or preserve such Subsidiary's
financial condition or to cause such Subsidiary to achieve certain levels of
operating results, and (vi) such Unrestricted Subsidiary has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries. Notwithstanding the foregoing, the Company
may not designate any Subsidiary Guarantor (whether or not existing as of the
Issue Date) as an Unrestricted Subsidiary.

          (b) The Board of the Company may designate any Unrestricted Subsidiary
as a Restricted Subsidiary; provided that (i) no Default or Event of Default has
occurred and is continuing following such designation and (ii) the Company
could, at the time of making such designation and giving such pro forma effect
as if such designation had been made at the beginning of the applicable four
quarter period, incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09(a) (treating any
Indebtedness of such Unrestricted Subsidiary as the incurrence of Indebtedness
by a Restricted Subsidiary).

Section 4.17 Payments for Consent.

          Neither the Company nor any of its Restricted Subsidiaries will,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid or is paid to all
Holders that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.

Section 4.18 Limitations on Issuances of Guarantees of Indebtedness.

          (a) The Company will not permit any Restricted Subsidiary that is not
a Subsidiary Guarantor, directly or indirectly, to guarantee, assume or in any
other manner become liable for the payment of any Indebtedness of the Company or
any Indebtedness of any other Restricted Subsidiary, unless (i) such Restricted
Subsidiary simultaneously executes and delivers a supplemental indenture
providing for a guarantee of payment of the Notes by such Restricted Subsidiary
on a senior secured basis on the same terms as set forth in this Indenture and
(ii) with respect to any guarantee of Subordinated Indebtedness by a Restricted
Subsidiary, any such guarantee is subordinated to such Restricted Subsidiary's
guarantee with respect to the Notes at


                                       67

least to the same extent as such Subordinated Indebtedness is subordinated to
the Notes, provided that the foregoing provision will not be applicable to any
guarantee by any Restricted Subsidiary that existed at the time such Person
became a Restricted Subsidiary and was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary.

          (b) Any guarantee by a Restricted Subsidiary of the Notes pursuant to
Section 4.18(a) may provide by its terms that it will be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer
to any Person not an Affiliate of the Company of all of the Company's and the
Restricted Subsidiaries' Capital Stock in, or all or substantially all the
assets of, such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by this Indenture) or (ii) the release or discharge of the guarantee
that resulted in the creation of such guarantee of the Notes, except a discharge
or release by or as a result of payment under such guarantee.

Section 4.19 Additional Guarantees.

          The Company shall provide to the Trustee, on the date that any Person
(other than a Foreign Subsidiary) becomes a Wholly Owned Restricted Subsidiary,
a supplemental indenture to this Indenture, executed by such new Wholly Owned
Restricted Subsidiary, providing for a full and unconditional guarantee on a
senior secured basis by such new Wholly Owned Restricted Subsidiary of the
Company's obligations under the Notes and this Indenture to the same extent as
that set forth in this Indenture.

Section 4.20 Sale and Leaseback Transactions

          The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that
the Company or any Restricted Subsidiary may enter into a Sale and Leaseback
Transaction if:

          (a) the Company or such Restricted Subsidiary, as applicable, could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such Sale and Leaseback Transaction pursuant to Section 4.09 hereof
and (b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12
hereof;

          (b) the gross cash proceeds of that Sale and Leaseback Transaction are
at least equal to the fair market value of the property that is the subject of
that Sale and Leaseback Transaction; and

          (c) the transfer of assets in that Sale and Leaseback Transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 4.10 hereof.


                                       68

                                  ARTICLE FIVE
                                   SUCCESSORS

Section 5.01 Merger, Consolidation or Sale of Assets.

          (a) Neither the Parent nor the Company will, in a single transaction
or series of related transactions, consolidate or merge with or into (whether or
not the Parent or the Company, as the case may be, is the surviving
corporation), or directly and/or indirectly through its Subsidiaries, sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets (determined on a consolidated basis for the Parent
or the Company, as the case may be, and its Subsidiaries taken as a whole) in
one or more related transactions to, another corporation, Person or entity
unless:

          (i) either (i) the Company or the Parent, as the case may be, is the
     surviving corporation or (ii) the entity or the Person formed by or
     surviving any such consolidation or merger (if other than the Company) or
     to which such sale, assignment, transfer, lease, conveyance or other
     disposition shall have been made (the "SURVIVING ENTITY") is a corporation
     organized or existing under the laws of the United States, any state
     thereof or the District of Columbia and assumes all the obligations of the
     Company or the Parent, as the case may be, under the Notes, this Indenture,
     the Security Documents and the Registration Rights Agreement pursuant to
     agreements in form and substance reasonably satisfactory to the Trustee;

          (ii) immediately after giving effect to such transaction and treating
     any obligation of the Company in connection with or as a result of such
     transaction as having been incurred as of the time of such transaction, no
     Default or Event of Default has occurred and is continuing;

          (iii) if such transaction involves the Company, the Company (or the
     Surviving Entity if the Company is not the continuing obligor under this
     Indenture) could, at the time of such transaction and after giving pro
     forma effect thereto as if such transaction had occurred at the beginning
     of the applicable four-quarter period, incur at least $1.00 of additional
     Indebtedness (other than Permitted Indebtedness) pursuant Section 4.09(a);

          (iv) each Guarantor, unless it is the other party to the transaction
     described above, has by supplemental indenture confirmed that its Guarantee
     applies to the Surviving Entity's obligations under this Indenture and the
     Notes;

          (v) if any of the property or assets of the Company or any of its
     Restricted Subsidiaries would thereupon become subject to any Lien, the
     provisions of Section 4.12 hereof are complied with; and

          (vi) the Company or the Parent, as the case may be, delivers or causes
     to be delivered, to the Trustee, in form and substance reasonably
     satisfactory to the Trustee, an Officers' Certificate and an Opinion of
     Counsel, each stating that such transaction complies with the requirements
     of this Indenture.


                                       69

          (b) No Subsidiary Guarantor shall consolidate with or merge with or
into any other Person or convey, sell, assign, transfer, lease or otherwise
dispose of its properties and assets substantially as an entirety to any other
Person (other than the Company or another Subsidiary Guarantor) unless:

          (i) subject to the provisions of the last paragraph of this Section
     5.01(b), the Person formed by or surviving such consolidation or merger (if
     other than such Subsidiary Guarantor) or to which such properties and
     assets are transferred assumes all of the obligations of such Subsidiary
     Guarantor under this Indenture, its Guarantee, the Security Documents and
     the Registration Rights Agreement, pursuant to agreements in form and
     substance reasonably satisfactory to the Trustee;

          (ii) immediately after giving effect to such transaction, no Default
     or Event of Default has occurred and is continuing; and

          (iii) the Subsidiary Guarantor delivers, or causes to be delivered, to
     the Trustee, in form and substance reasonably satisfactory to the Trustee,
     an Officers' Certificate and an Opinion of Counsel, each stating that such
     transaction complies with the requirements of this Indenture.

          For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

          (c) In the event of any transaction described in and complying with
the provisions of Section 5.01(a) in which the Company is not the continuing
obligor under this Indenture, the Surviving Entity will succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture, and thereafter the Company will, except in the case of a lease,
be discharged from all of its obligations under this Indenture and the Notes.

                                   ARTICLE SIX
                              DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

          "EVENT OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

          (i) default in the payment of any interest on any Note when it becomes
     due and payable, and continuance of such default for a period of 30 days;

          (ii) default in the payment of the principal of (or premium, if any,
     on) any Note when due;


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          (iii) failure to perform or comply with the provisions of Sections
     4.07, 4.09, 4.10, 4.14 or 5.01;

          (iv) default in the performance, or breach, of any covenant or
     agreement of the Company or any Guarantor contained in this Indenture or in
     any Guarantee (other than a default in the performance, or breach, of a
     covenant or agreement that is specifically dealt with elsewhere herein),
     and continuance of such default or breach for a period of 60 days after
     written notice has been given to the Company by the Trustee or to the
     Company and the Trustee by the Holders of at least 25% in aggregate
     principal amount of the Notes then outstanding;

          (v) (x) an event of default has occurred under any mortgage, bond,
     indenture, loan agreement or other document evidencing an issue of
     Indebtedness of the Company, the Parent or any Restricted Subsidiary, which
     issue individually or in the aggregate has an aggregate outstanding
     principal amount of not less than $10 million, and such default has
     resulted in such Indebtedness becoming, whether by declaration or
     otherwise, due and payable prior to the date on which it would otherwise
     become due and payable or (y) a default (a "PAYMENT DEFAULT") in any
     payment when due at final maturity of any such Indebtedness;

          (vi) failure by the Company, the Parent or any of its Restricted
     Subsidiaries to pay one or more final judgments the uninsured portion of
     which exceeds in the aggregate $10 million, which judgment or judgments are
     not paid, discharged or stayed for a period of 60 days;

          (vii) any Guarantee ceases to be in full force and effect or is
     declared null and void or any such Guarantor denies that it has any further
     liability under any Guarantee, or gives notice to such effect (other than
     by reason of the termination of this Indenture or the release of any such
     Guarantee in accordance with this Indenture);

          (viii) the entry of a decree or order by a court having jurisdiction
     in the premises adjudging the Company, the Parent or any Significant
     Subsidiary a bankrupt or insolvent, or approving as properly filed a
     petition seeking reorganization, arrangement, adjustments or composition of
     or in respect of the Company, the Parent or any Significant Subsidiary
     under any Bankruptcy Law, or appointing a receiver, liquidator, assignee,
     trustee, sequestrator (or other similar official) of the Company, the
     Parent or any Significant Subsidiary or of any substantial part of its
     property, or ordering the winding up or liquidation of its affairs, and the
     continuance of any such decree or order unstayed and in effect for a period
     of 90 consecutive days;

          (ix) the institution by the Company, the Parent or any Significant
     Subsidiary of proceedings to be adjudicated a bankrupt or insolvent, or the
     consent by it to the institution of bankruptcy or insolvency proceedings
     against it, or the filing by it of a petition or answer or consent seeking
     reorganization or relief under any Bankruptcy Law, or the consent by it to
     the filing of any such petition or to the appointment of a receiver,
     liquidator, assignee, trustee, sequestrator (or other similar official) of
     the Company, the Parent or any Significant Subsidiary or of any substantial
     part of its property, or the


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     making by it of an assignment for the benefit of creditors, or the
     admission by it in writing of its inability to pay its debts generally as
     they become due; or

          (x) default by the Company or any Restricted Subsidiary in the
     performance of the Security Documents which adversely affects the
     enforceability, validity, perfection or priority of such Liens, the
     repudiation or disaffirmation by the Company or any Restricted Subsidiary
     of its material obligations under the Security Documents or the
     determination in a judicial proceeding that the Security Documents are
     unenforceable or invalid against the Company or any Restricted Subsidiary
     party thereto for any reason with respect to the Collateral (which default,
     repudiation, disaffirmation or determination is not rescinded, stayed, or
     waived by the Persons having such authority pursuant to the Security
     Documents or otherwise cured within 60 days after the Company receives
     written notice thereof specifying such occurrence from the Trustee or the
     Holders of at least 25% of the outstanding principal amount of the Notes
     and demanding that such default be remedied).

Section 6.02 Acceleration.

          (a) If an Event of Default (other than as specified in Section
6.01(viii) or (ix) hereof) occurs and is continuing, the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Note then outstanding
may, and the Trustee at the request of such Holders will, declare the principal
of, and accrued interest on, all of the outstanding Notes immediately due and
payable and, upon any such declaration, such principal and such interest will
become due and payable immediately. The Trustee shall promptly notify the
Company of any such acceleration of the Notes pursuant to this Section 6.02(a).

          If an Event of Default specified in Section 6.01(viii) or (ix) hereof
occurs and is continuing, then the principal of and accrued interest on all of
the outstanding Notes will ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

          (b) At any time after a declaration of acceleration under this
Indenture, but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the holders of a majority in aggregate principal amount
of the outstanding Notes, by written notice to the Company and the Trustee, may
rescind such declaration and its consequences if: (i) the Company has paid or
deposited with the Trustee a sum sufficient to pay (A) all overdue interest on,
and Liquidated Damages with respect to, all Notes, (B) all unpaid principal of
(and premium, if any, on) any outstanding Notes that has become due otherwise
than by such declaration of acceleration and interest thereon at the rate borne
by the Notes, (C) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate borne by the
Notes and (D) all sums paid or advanced by the Trustee under this Indenture and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and (ii) all Events of Default, other than the
non-payment of amounts of principal of (or premium, if any, on), or interest on
or Liquidated Damages with respect to, the Notes that have become due solely by
such declaration of acceleration, have been cured or waived. No such rescission
will affect any subsequent default or impair any right consequent thereon.


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          (c) Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Notes because an Event of Default
specified in Section 6.01(v) shall have occurred and be continuing and provided
no judgment or decree for payment of the money due has been obtained by the
Trustee, such declaration of acceleration shall be automatically annulled if the
Indebtedness that is the subject of such Event of Default has been discharged or
the holders thereof have rescinded their declaration of acceleration in respect
of such Indebtedness, and written notice of such discharge or rescission, as the
case may be, shall have been given to the Trustee by the Company and
countersigned by the holders of such Indebtedness or a trustee, fiduciary or
agent for such holders, within 30 days after such declaration of acceleration in
respect of the Notes, and no other Event of Default has occurred during such
30-day period which has not been cured or waived during such period.

Section 6.03 Other Remedies.

          (a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, interest, and Liquidated Damages, if any, with respect to, the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

          (b) The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon and during the continuance of an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04 Waiver of Past Defaults.

          Holders of a majority in principal amount of the then outstanding
Notes by notice to the Trustee, may on behalf of the Holders of all of the
Notes, waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages, if any, on, or the principal of, the Notes
(including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in principal amount of the then outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). The Company shall deliver to the
Trustee an Officers' Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such consents. In
case of any such waiver, the Company, the Trustee and the Holders shall be
restored to their former positions and rights hereunder and under the Notes,
respectively. This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Notes, as permitted by the TIA. Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.


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Section 6.05 Control by Majority.

          Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest or Liquidated
Damages, if any) if it determines that withholding notice is in their interest.

Section 6.06 Limitation on Suits.

          (a) A Holder may pursue a remedy with respect to this Indenture, or
the Notes or the Guarantees only if:

          (i) the Holder gives to the Trustee written notice of a continuing
     Event of Default;

          (ii) the Holders of at least 25% in aggregate principal amount of the
     then outstanding Notes make a written request to the Trustee to pursue the
     remedy;

          (iii) such Holder of a Note or Holders of Notes offer and, if
     requested, provide to the Trustee security and indemnity satisfactory to
     the Trustee against any loss, liability or expense that might be incurred
     by it in connection with the request or direction;

          (iv) the Trustee does not comply with the request within 60 days after
     receipt of the request and the offer and, if requested, the provision of
     indemnity; and

          (v) during such 60-day period the Holders of a majority in principal
     amount of the then outstanding Notes do not give the Trustee a direction
     inconsistent with the request.

          (b) A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.

Section 6.07 Rights of Holders of Notes to Receive Payment.

          Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, interest
on, and Liquidated Damages, if any, with respect to, the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.


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Section 6.08 Collection Suit by Trustee.

          If an Event of Default specified in Section 6.01(i) or (ii) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, interest, and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and premium, if
any, and, to the extent lawful, interest and Liquidated Damages, if any, and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

Section 6.09 Trustee May File Proofs of Claim.

          The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
or any Guarantor (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other securities or property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

Section 6.10 Priorities.

          (a) If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:

          First: to the Trustee, its agents and attorneys for amounts due under
     Section 7.07 hereof, including payment of all compensation, expense and
     liabilities incurred, and all advances made, by the Trustee and the costs
     and expenses of collection;

          Second: to Holders of Notes for amounts due and unpaid on the Notes
     for principal, premium, if any, interest and Liquidated Damages, if any,
     ratably, without


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     preference or priority of any kind, according to the amounts due and
     payable on the Notes for principal, premium, if any, interest, and
     Liquidated Damages, if any, respectively; and

          Third: to the Company or to such party as a court of competent
     jurisdiction shall direct.

          (b) The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.

Section 6.11 Undertaking for Costs.

          In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than ten
percent in principal amount of the then outstanding Notes.

                                  ARTICLE SEVEN
                                     TRUSTEE

Section 7.01 Duties of Trustee.

          (a) If an Event of Default has occurred and is continuing, and is
actually known to the Trustee, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

          (b) Except during the continuance of an Event of Default:

          (i) the duties of the Trustee shall be determined solely by the
     express provisions of this Indenture and the Trustee need perform only
     those duties that are specifically set forth in this Indenture and no
     others, and no implied covenants or obligations shall be read into this
     Indenture against the Trustee; and

          (ii) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture. However,
     the Trustee shall examine the certificates and opinions to determine
     whether or not they conform on their face to the requirements of this
     Indenture.

          (c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


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          (i) this paragraph does not limit the effect of paragraph (b) of this
     Section;

          (ii) the Trustee shall not be liable for any error of judgment made in
     good faith by a Responsible Officer, unless it is proved that the Trustee
     was negligent in ascertaining the pertinent facts; and

          (iii) the Trustee shall not be liable with respect to any action it
     takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 6.05 hereof.

          (d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.

          (e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities that might be incurred by it
in compliance with such request or direction.

          (f) Money held in trust by the Trustee need not be segregated from
other funds and need not be held in an interest-bearing account, in each case
except to the extent required by law or by any other provision of this
Indenture.

Section 7.02 Certain Rights of Trustee.

          (a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.

          (b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

          (c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.

          (d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

          (e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.


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          (f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.

          (g) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of such event is sent to the Trustee
in accordance with Section 13.02 hereof, and such notice references the Notes.

Section 7.03 Individual Rights of Trustee.

          The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may become a creditor of, or otherwise deal with,
the Company or any of its Affiliates with the same rights it would have if it
were not Trustee. However, in the event that the Trustee acquires any
conflicting interest as described in the Trust Indenture Act, it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04 Trustee's Disclaimer.

          The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, it shall not be accountable
for the Company's use of the proceeds from the Notes or any money paid to the
Company or upon the Company's direction under any provision of this Indenture,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.

Section 7.05 Notice of Defaults.

          If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium and
Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice to the Holders if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.

Section 7.06 Reports by Trustee to Holders of the Notes.

          (a) Within 60 days after each May 15 beginning with the May 15
following the date hereof, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).


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          (b) A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or any delisting thereof.

Section 7.07 Compensation and Indemnity.

          (a) The Company shall pay to the Trustee (in its capacity as Trustee,
and, to the extent it has been appointed as such, as Paying Agent and Registrar)
from time to time reasonable compensation for its acceptance of this Indenture
and services hereunder in accordance with a written schedule provided by the
Trustee to the Company. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable and customary
disbursements, advances and reasonable out-of-pocket expenses incurred or made
by it in addition to the compensation for its services. Such expenses shall
include the reasonable and customary compensation, disbursements and expenses of
the Trustee's agents and counsel.

          (b) The Company shall indemnify the Trustee against any and all
losses, liabilities or reasonable out-of-pocket expenses incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by either of the Company or any Holder or
any other person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to its negligence or bad faith. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable and customary fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.

          (c) The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.

          (d) To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.

          (e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(viii) or (ix) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.


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Section 7.08 Replacement of Trustee.

          (a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.

          (b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:

          (i) the Trustee fails to comply with Section 7.10 hereof;

          (ii) the Trustee is adjudged a bankrupt or an insolvent or an order
     for relief is entered with respect to the Trustee under any Bankruptcy Law;

          (iii) a custodian or public officer takes charge of the Trustee or its
     property; or

          (iv) the Trustee becomes incapable of acting.

          (c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

          (d) If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.

          (e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

          (f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.


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Section 7.09 Successor Trustee by Merger, Etc.

          If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another Person, the
successor Person without any further act shall be the successor Trustee.

Section 7.10 Eligibility; Disqualification.

          There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has (or its corporate parent shall have) a combined capital
and surplus of at least $100.0 million as set forth in its most recent published
annual report of condition.

          This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).

Section 7.11 Preferential Collection of Claims Against Company.

          The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The Trustee hereby waives any right to set-off any claim that it may have
against the Company in any capacity (other than as Trustee and Paying Agent)
against any of the assets of the Company held by the Trustee; provided, however,
that if the Trustee is or becomes a lender of any other Indebtedness permitted
hereunder to be pari passu with the Notes, then such waiver shall not apply to
the extent of such Indebtedness.

                                 ARTICLE EIGHT
                       DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.

          The Company may, at the option of the Board evidenced by a resolution
set forth in an Officers' Certificate, at any time, elect to have either Section
8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article Eight.

Section 8.02 Legal Defeasance and Discharge.

          Upon the Company's exercise under Section 8.02 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes and all
obligations of the Guarantors shall be deemed to have been discharged with
respect to their obligations under the Subsidiary Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Company and the Guarantors shall
be deemed to have paid and discharged the


                                       81

entire Indebtedness represented by the outstanding Notes and Subsidiary
Guarantees, respectively, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.05 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, interest and Liquidated Damages, if any, on
such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article Two and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.

Section 8.03 Covenant Defeasance.

          Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.18, 4.19, 4.20, 4.21 and 5.01 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the
Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(iii) through (vii) and Section 6.01(x) shall not constitute Events of
Default.

Section 8.04 Conditions to Legal or Covenant Defeasance.

          (a) The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:

          (i) the Company must irrevocably deposit or cause to be deposited with
     the Trustee, as trust funds in trust, specifically pledged as security for,
     and dedicated solely to, the benefit of the Holders, money in an amount, or
     U.S. Government Obligations that through the scheduled payment of principal
     and interest thereon will provide money in an


                                       82

     amount, or a combination thereof, sufficient, in the opinion of a
     nationally recognized firm of independent public accountants, to pay and
     discharge the principal of (and premium, if any, on) and interest and
     Liquidated Damages, if any, on the outstanding Notes at maturity (or upon
     redemption, if applicable) of such principal or installment of interest or
     Liquidated Damages;

          (ii) no Default or Event of Default has occurred and is continuing on
     the date of such deposit or, insofar as an event of bankruptcy under
     Section 6.01(viii) is concerned, at any time during the period ending on
     the 91st day after the date of such deposit;

          (iii) such Legal Defeasance or Covenant Defeasance may not result in a
     breach or violation of, or constitute a default under, this Indenture, the
     Security Documents, the Credit Agreement or any material agreement or
     instrument to which the Company or any Guarantor is a party or by which it
     is bound;

          (iv) in the case of Legal Defeasance, the Company must deliver to the
     Trustee an Opinion of Counsel stating that the Company has received from,
     or there has been published by, the Internal Revenue Service a ruling, or,
     since the Issue Date, there has been a change in applicable federal income
     tax law, to the effect, and based thereon such opinion must confirm, that
     the Holders of the outstanding Notes will not recognize income, gain or
     loss for federal income tax purposes as a result of such Legal Defeasance
     and will be subject to federal income tax on the same amounts, in the same
     manner and at the same times as would have been the case if such Legal
     Defeasance had not occurred;

          (v) in the case of Covenant Defeasance, the Company must have
     delivered to the Trustee an Opinion of Counsel to the effect that the
     Holders of the outstanding Notes will not recognize income, gain or loss
     for federal income tax purposes as a result of such Covenant Defeasance and
     will be subject to federal income tax on the same amounts, in the same
     manner and at the same times as would have been the case if such Covenant
     Defeasance had not occurred; and

          (vi) the Company must have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that all conditions
     precedent provided for relating to either the Legal Defeasance or the
     Covenant Defeasance, as the case may be, have been complied with.

Section 8.05 Deposited Money and U.S. Government Obligations to Be Held in
     Trust; Other Miscellaneous Provisions.

          (a) Subject to Section 8.06 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "TRUSTEE") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due


                                       83

thereon in respect of principal, premium and Liquidated Damages, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.

          (b) The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.

          (c) Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable U.S. Government Obligations
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.

Section 8.06 Repayment to the Company.

          Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.

Section 8.07 Reinstatement.

          If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable U.S. Government Obligations in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.


                                       84

                                  ARTICLE NINE
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Notes.

          (a) Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors, and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:

          (i) to evidence the succession of another Person to the Company and
     the assumption by any such successor of the covenants of the Company in
     this Indenture and in the Notes; or

          (ii) to add to the covenants of the Company for the benefit of the
     Holders, or to surrender any right or power herein conferred upon the
     Company; or

          (iii) to add additional Events of Defaults; or

          (iv) to provide for uncertificated Notes in addition to or in place of
     certificated Notes; or

          (v) to evidence and provide for the acceptance of appointment under
     this Indenture by a successor Trustee; or

          (vi) to secure the Notes; or

          (vii) to cure any ambiguity, to correct or supplement any provision in
     this Indenture that may be defective or inconsistent with any other
     provision in this Indenture, or to make any other provisions with respect
     to matters or questions arising under this Indenture, provided that such
     actions pursuant to this clause do not adversely affect the interests of
     the Holders in any material respect; or

          (viii) to comply with any requirements of the SEC in order to effect
     and maintain the qualification of this Indenture under the Trust Indenture
     Act; or

          (ix) to provide for the issuance of Additional Notes in accordance
     with the limitations set forth in this Indenture; or

          (x) to allow any Guarantor to execute a supplemental Indenture and a
     Guarantee with respect to the Notes; or

          (xi) to release Collateral from the Liens created by this Indenture or
     the Security Documents when permitted by this Indenture and the Security
     Documents.

          (b) Upon the request of the Company accompanied by a resolution of its
Board authorizing the execution of any such amended or supplemental Indenture,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of any amended
or supplemental Indenture authorized or


                                       85

permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02 With Consent of Holders of Notes.

          (a) Except as provided below in this Section 9.02, the Company the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes (including Additional Notes, if any) then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including Additional Notes, if any) (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes).

          (b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or its duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

          (c) Upon the request of the Company accompanied by a resolution of its
Board authorizing the execution of any such amended or supplemental Indenture,
and upon the filing with the Trustee of evidence reasonably satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.

          (d) It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.

          (e) After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the then outstanding
Notes (including


                                       86

Additional Notes, if any) may waive compliance in a particular instance by the
Company with any provision of this Indenture, or the Notes. However, without the
consent of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):

          (i) change the Stated Maturity of the principal of, or any installment
     of interest on, any Note, or reduce the principal amount thereof or the
     rate of interest or Liquidated Damages, if any, thereon or any premium
     payable upon the redemption thereof, or change the coin or currency in
     which any Note or any premium or the interest or any Liquidated Damages
     thereon are payable, or impair the right to institute suit for the
     enforcement of any such payment after the Stated Maturity thereof (or, in
     the case of redemption, on or after the redemption date);

          (ii) amend, change or modify the obligation of the Company to make and
     consummate an Excess Proceeds Offer with respect to any Asset Sale in
     accordance with Section 4.10 or the obligation of the Company to make and
     consummate a Change of Control Offer in the event of a Change of Control in
     accordance with Section 4.14, including, in each case, amending, changing
     or modifying any definition relating thereto;

          (iii) reduce the percentage in principal amount of outstanding Notes,
     the consent of whose Holders is required for any waiver of compliance with
     certain provisions of, or certain defaults and their consequences provided
     for under, this Indenture;

          (iv) waive a Default or Event of Default in the payment of principal
     of, or premium, if any, or interest or Liquidated Damages, if any, on the
     Notes or reduce the percentage or aggregate principal amount of outstanding
     Notes the consent of whose Holders is necessary for waiver of compliance
     with certain provisions of this Indenture or for waiver of certain Defaults
     or Events of Default;

          (v) modify the ranking or priority of the Notes or the Guarantee of
     any Guarantor;

          (vi) release any Guarantor from any of its obligations under its
     Guarantee or this Indenture other than in accordance with the terms of this
     Indenture; or

          (vii) make any change in the preceding amendment and waiver
     provisions.

Section 9.03 Compliance with Trust Indenture Act.

          Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.

Section 9.04 Revocation and Effect of Consents.

          Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if


                                       87

notation of the consent is not made on any Note. However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.

Section 9.05 Notation on or Exchange of Notes.

          (a) The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

          (b) Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06 Trustee to Sign Amendments, Etc.

          The Trustee shall sign any amended or supplemental indenture or Note
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture or Note until
its Board approves it. In executing any amended or supplemental indenture or
Note, the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.

                                  ARTICLE TEN
                                   COLLATERAL

Section 10.01 Security Documents.

          (a) The payment of all Note Obligations under this Indenture, the
Notes and the Guarantees, when due (whether on an interest payment date, at
Stated Maturity, upon repurchase, upon acceleration, redemption or otherwise)
shall be secured as provided in the Security Documents which the Company and the
Guarantors have entered into simultaneously with the execution of this Indenture
and shall be secured as provided in by all Security Documents hereafter
delivered as required by this Indenture.

          (b) Each Holder of Notes, by its acceptance of a Note, consents and
agrees to the terms of each Security Document, authorizes and directs the
Trustee to appoint U.S. Bank National Association as Collateral Agent on the
Issue Date and directs the Collateral Agent to enter into the Security
Documents, and authorizes and empowers each of the Trustee and the Collateral
Agent as set forth in the Security Documents and to perform its respective
obligations and exercise its respective rights and powers thereunder.


                                       88

Section 10.02 Opinions of Counsel.

          (a) The Company and the Guarantors acknowledge that all After-Acquired
Property shall be subject to the terms and conditions of the Security Documents.
The Company and the Guarantors shall comply with the provisions of the Security
Documents with respect to Liens on After-Acquired Property.

Section 10.03 Possession and Use of the Collateral.

          Subject to and in accordance with the provisions of the Security
Documents and this Indenture, so long as the Collateral Agent has not exercised
its rights with respect to the Collateral upon the occurrence and during the
continuance of an Event of Default, the Company and the Guarantors shall have
the right to remain in possession and retain exclusive control of the
Collateral, to operate the Collateral, to alter or repair the Collateral and to
collect, invest and dispose of any income therefrom.

Section 10.04 Suits to Protect the Collateral.

          Subject to the terms of the Security Documents, the Trustee shall have
power, but without the obligation to exercise such power, to institute in its
name and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of this Indenture or any of the Security Documents, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders of the Notes in the Collateral and in
the principal, interest, issues, profits, rents, revenues and other income
arising therefrom, including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid, if the enforcement of, or compliance with, such enactment,
rule or order would impair the security under any of the Security Documents, or
be prejudicial to the interests of the Holders of the Notes or the Trustee.

Section 10.05 Release of Collateral.

          (a) The release of any Collateral from the Lien granted under the
Security Documents or the release of, in whole or in part, the Liens granted by
any of the Security Documents, shall not be deemed to impair the security
interests in contravention of the provisions of this Indenture if and to the
extent the Collateral or Liens are released in accordance with the terms of this
Indenture or of the Security Documents.

          To the extent applicable and subject to Section 10.06 and paragraph
(c) of this Section 10.05, the Company and the Guarantors shall comply with
Section 314(d) of the TIA, relating to the release of property or securities
from the Lien and security interest of the Security Documents and relating to
the substitution therefor of any property or securities to be subjected to the
Lien and security interest of the Security Documents. Any certificate or opinion
required by Section 314(d) of the TIA may be made by an Officer of the Company
or the relevant Guarantor except in cases where Section 314(d) of the TIA
requires that such certificate or opinion be made by an independent Person,
which Person will be an independent engineer, appraiser or other expert selected
or approved by the Trustee in the exercise of reasonable care.


                                       89

Liens securing the Note Obligations under this Indenture, the Notes and the
Guarantees shall, upon compliance with the condition that the Company or the
Parent delivers to the Trustee all documents required by the Trust Indenture
Act, automatically and without the need for any further action by any Person be
released (so long as such release is in compliance with the Trust Indenture
Act):

          (1) in whole, as to all property subject to such Liens which has been
taken by eminent domain, condemnation or other similar circumstances;

          (2) in whole, as to all property subject to such Liens, upon:

          (i) payment in full of the principal of, accrued and unpaid interest
     and premium on the Notes; or

          (ii) satisfaction and discharge of this Indenture as set forth under
     Article Twelve hereof;

          (iii) Defeasance or Covenant Defeasance of this Indenture as set forth
     under Article Eight hereof; or

          (3) in part, as to any property that (a) is sold, transferred or
otherwise disposed of by the Parent, the Company, or one of their Subsidiaries
in a transaction not prohibited by this Indenture, at the time of such sale,
transfer or disposition, to the extent of the interest sold, transferred or
disposed of or (b) is owned or at any time acquired by a Guarantor that has been
released from its Guarantee, concurrently with the release of such Guarantee.

          (b) The Trustee shall cause the Collateral Agent to execute and
deliver to the Company and the Guarantors, at the Company's and Guarantors'
expense, all documents that such parties shall reasonably request to evidence
such release. Such documents shall be without recourse to or warranty by the
Trustee and the Collateral Agent.

          (c) Notwithstanding anything to the contrary herein, the Company will
not be required to comply with all or any portion of Section 314(d) of the Trust
Indenture Act if it determines, in good faith based on advice of counsel, that
under the terms of that section and/or any interpretation or guidance as to the
meaning thereof of the SEC and its staff, including "no action" letters or
exemptive orders, all or any portion of Section 314(d) of the Trust Indenture
Act is inapplicable to the released Collateral. Without limiting the generality
of the foregoing, certain no-action letters issued by the SEC have permitted an
indenture qualified under the Trust Indenture Act to contain provisions
permitting the release of collateral from liens under such indenture in the
ordinary course of the issuer's business without requiring the issuer to provide
certificates and other documents under Section 314(d) of the Trust Indenture
Act, as described below under Section 10.06 hereof.

          (d) If any Collateral is released in accordance with any of the
Security Documents and if the Company has delivered the certificates and
documents required by the Security Documents, the Trustee will determine whether
it has received all documentation required by Section 314(d) of the Trust
Indenture Act in connection with such release and, based


                                       90

on such determination and the opinion of counsel delivered pursuant to this
Indenture, will deliver a certificate to the Collateral Agent setting forth such
determination.

Section 10.06 Permitted Ordinary Course Activities with respect to Collateral.

          (a) So long as the Collateral Agent has not exercised its rights with
respect to the Collateral upon the occurrence and during the continuance of an
Event of Default and such transaction would not violate the Trust Indenture Act
or be prohibited by the Security Documents, the Company and the Guarantors may,
without any release or consent by the Trustee or the Collateral Agent, conduct
ordinary course activities with respect to Collateral, including, without
limitation,

          (i) selling or otherwise disposing of, in any transaction or series of
     related transactions, any property subject to the Lien of the Security
     Documents which has become worn out, defective or obsolete or not used or
     useful in the business;

          (ii) abandoning, terminating, canceling, releasing or making
     alterations in or substitutions of any leases or contracts subject to the
     Lien of this Indenture or any of the Security Documents;

          (iii) surrendering or modifying any franchise, license or permit
     subject to the Lien of this Indenture or any of the Security Documents
     which it may own or under which it may be operating;

          (iv) altering, repairing, replacing, changing the location or position
     of and adding to its structures, machinery, systems, equipment, fixtures
     and appurtenances;

          (v) granting a license of any intellectual property;

          (vi) selling, transferring or otherwise disposing of inventory in the
     ordinary course of business;

          (vii) making cash payments (including for the scheduled repayment of
     Indebtedness) from cash that is at any time part of the Collateral in the
     ordinary course of business that are not otherwise prohibited by this
     Indenture and this Security Documents; and

          (viii) abandoning any intellectual property which is no longer used or
     useful in the Company's business.

          (b) The Company and the Guarantors shall not be required to comply
with the requirement to deliver certificates pursuant to Section 10.05(a) in
respect of the release of Collateral or Liens as described in paragraph (a) of
this Section 10.06, provided that the Company and the Parent shall deliver to
the Collateral Agent, within 30 calendar days following the end of each
six-month period beginning on January 1 and July 1 of any year, an Officers'
Certificate to the effect that all releases and withdrawals during the preceding
six-month period (or since the Issue Date, in the case of the first such
certificate) in which no release or consent of the Collateral Agent was obtained
were in the ordinary course of the Company's and the


                                       91

Guarantors' business and were not prohibited by this Indenture or any of the
Security Documents.

Section 10.07 Actions by the Trustee.

          Subject to the provisions of the Security Documents and Article Six,
the Trustee may, but without any obligation to do so, in its sole discretion and
without the consent of the Holders take all actions it deems necessary or
appropriate in order to (i) enforce any of the terms of the Security Documents
and (ii) to collect and receive all amounts payable in respect of the
Obligations of the Company and any Guarantors under the Security Documents and
this Indenture. The Trustee shall have the power to institute and maintain such
suits and proceedings as it may deem expedient in order to prevent any
impairment of the Collateral by any act that may be unlawful or in violation of
this Indenture or the Security Documents, and such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and those of the
Holders in the Collateral. No duty beyond that set forth in Section 7.01 is
imposed on the Trustee pursuant to this Section 10.07. All items to be delivered
to the Trustee pursuant to this Article Ten shall also be delivered to the
Collateral Agent.

Section 10.08 Purchaser Protected.

          In no event shall any purchaser in good faith or other transferee of
any Collateral purported to be released hereunder be bound to ascertain the
authority (if any) of the Trustee to direct the Collateral Agent to execute the
release or to inquire as to the satisfaction of any conditions required by the
provisions hereof for the exercise of such authority or to see to the
application of any consideration given by such purchaser or other transferee;
nor shall any purchaser or other transferee of any Collateral permitted to be
sold, disposed of or transferred by this Article Ten, be under obligation to
ascertain or inquire into the authority of the Company or any Guarantor, as
applicable, to make any such sale or other transfer.

                                 ARTICLE ELEVEN
                                   GUARANTEES

Section 11.01 Guarantee.

          (a) Subject to this Article Eleven, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees on a senior secured basis to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that: (i) the principal of, premium, if any, interest
and Liquidated Damages, if any, on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes, if any, if lawful
(subject in all cases to any applicable grace period provided herein), and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity,


                                       92

by acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the Guarantors
shall be jointly and severally obligated to pay the same immediately. Each
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

          (b) The Guarantors hereby agree that their obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Subject to Section 6.06
hereof, each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.

          (c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.

          (d) Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of this Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Six hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guarantee.

Section 11.02 Limitation on Guarantor Liability.

          Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee of such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and
the Guarantors hereby irrevocably agree that the obligations of such Guarantor
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in


                                       93

respect of the obligations of such other Guarantor under this Article Eleven,
result in the obligations of such Guarantor under its Guarantee not constituting
a fraudulent transfer or conveyance.

Section 11.03 Execution and Delivery of Guarantee.

          (a) To evidence its Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guarantee substantially in the
form included in Exhibit E shall be endorsed by an Officer of such Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by any of its executive officers.

          (b) Each Guarantor hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.

          (c) If an Officer whose signature is on this Indenture or on the
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Guarantee is endorsed, the Guarantee shall be valid
nevertheless.

          (d) The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantors.

          (e) In the event that the Company creates or acquires any new Wholly
Owned Restricted Subsidiaries subsequent to the date of this Indenture, if
required by Section 4.19 hereof, the Company shall cause such Subsidiaries to
execute supplemental indentures to this Indenture and Guarantees in accordance
with Section 4.19 hereof and this Article Eleven, to the extent applicable.

Section 11.04 Releases of Guarantors.

          (a) A Subsidiary Guarantor will be deemed automatically and
unconditionally released and discharged from all of its obligations under its
Guarantee without any further action on the part of the Trustee or any Holder of
the Notes upon a sale or other disposition to a Person not an Affiliate of the
Company of all of the Capital Stock of, or all or substantially all of the
assets of, such Subsidiary Guarantor, by way of merger, consolidation or
otherwise, which transaction is carried out in accordance with Section 4.10
hereof; provided that any such termination shall occur (x) only to the extent
that all obligations of such Subsidiary Guarantor under all of its guarantees
of, and under all of its pledges of assets or other security interests which
secure any Indebtedness of the Company shall also terminate upon such sale,
disposition or release and (y) only if the Trustee is furnished with written
notice of such release together with an Officers' Certificate from such
Subsidiary Guarantor to the effect that all of the conditions to release in this
Section 11.04(a) have been satisfied.

          (b) Any Guarantor not released from its obligations under its
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article Eleven.


                                       94

                                 ARTICLE TWELVE
                           SATISFACTION AND DISCHARGE

Section 12.01 Satisfaction and Discharge.

          (a) This Indenture shall be discharged and shall cease to be of
further effect as to all Notes issued thereunder, when:

          (i) either:

               (A) all Notes that have been authenticated (except lost, stolen
          or destroyed Notes that have been replaced or paid and Notes for whose
          payment money has theretofore been deposited in trust and thereafter
          repaid to the Company) have been delivered to the Trustee for
          cancellation; or

               (B) all Notes that have not been delivered to the Trustee for
          cancellation have become due and payable by reason of the making of a
          notice of redemption or otherwise or will become due and payable
          within one year and the Company or any Guarantor has irrevocably
          deposited or caused to be deposited with the Trustee as trust funds in
          trust solely for the benefit of the Holders, cash in U.S. dollars,
          non-callable U.S. Government Obligations, or a combination thereof, in
          such amounts as will be sufficient without consideration of any
          reinvestment of interest, to pay and discharge the entire indebtedness
          on the Notes not delivered to the Trustee for cancellation for
          principal, premium and Liquidated Damages, if any, and accrued
          interest to the date of maturity or redemption;

          (ii) no Default or Event of Default shall have occurred and be
     continuing on the date of such deposit or shall occur as a result of such
     deposit and such deposit will not result in a breach or violation of, or
     constitute a default under, any other instrument to which the Company or
     any Guarantor is a party or by which the Company or any Guarantor is bound;

          (iii) the Company or any Guarantor has paid or caused to be paid all
     sums payable by it hereunder; and

          (iv) the Company has delivered irrevocable instructions to the Trustee
     hereunder to apply the deposited money toward the payment of the Notes at
     maturity or the redemption date, as the case may be.

          (b) In addition, the Company must deliver an Officers' Certificate and
an Opinion of Counsel (which opinion may be subject to customary assumptions and
exclusions) to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.

          (c) Notwithstanding the above, the Trustee shall pay to the Company
from time to time upon its request any cash or U.S. Government Obligations held
by it as provided in this section which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification delivered to the Trustee, are in excess of the


                                       95

amount thereof that would then be required to be deposited to effect a
satisfaction and discharge under this Article Twelve.

Section 12.02 Deposited Money and U.S. Government Obligations to Be Held in
     Trust; Other Miscellaneous Provisions.

          Subject to Section 12.03 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
12.02, the "TRUSTEE") pursuant to Section 12.01 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium and
Liquidated Damages, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.

Section 12.03 Repayment to the Company.

          Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, and premium, if any, or interest has become due
and payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times or The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.

                                ARTICLE THIRTEEN
                                  MISCELLANEOUS

Section 13.01 Trust Indenture Act Controls.

          If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by TIA Section 318(c), the
imposed duties shall control.

Section 13.02 Notices.

          (a) Any notice or communication by the Company or any Guarantor, on
the one hand, or the Trustee on the other hand, to the other is duly given if in
writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), facsimile or overnight air courier
guaranteeing next day delivery, to the others' address:


                                       96

          If to the Company or any Guarantor:

          InSight Health Services Corp.
          26250 Enterprise Court
          Suite 100
          Lake Forest, CA 92630
          Facsimile: 949-462-3703
          Attention: General Counsel

          with copies to:

          J.W. Childs Associates, L.P.
          111 Huntington Avenue
          Suite 2900
          Boston, MA 02199
          Facsimile: 617-753-1101
          Attention: Edward D. Yun

          and to:

          Halifax Capital Partners, L.P.
          1133 Connecticut Avenue N.W.
          Suite 700
          Washington, D.C. 20036
          Facsimile: 202-296-7133
          Attention: David W. Dupree

          and to:

          Kaye Scholer LLP
          245 Park Avenue
          New York, NY 10022
          Facsimile: 212-836-8689
          Attention: Stephen C. Koval, Esq.

          If to the Trustee:

          U.S. Bank National Association
          Corporate Trust Services
          100 Wall Street - Suite 1600
          New York, NY 10005
          Attention: Cheryl Clarke

          (b) The Company, the Guarantors or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.


                                       97

          (c) All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

          (d) Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.

          (e) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.

          (f) If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

Section 13.03 Communication by Holders of Notes with Other Holders of Notes.

          Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to its rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

Section 13.04 Certificate and Opinion as to Conditions Precedent.

          (a) Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:

          (i) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee (which shall include the statements set forth
     in Section 13.05 hereof) stating that, in the opinion of the signers, all
     conditions precedent and covenants, if any, provided for in this Indenture
     relating to the proposed action have been satisfied; and

          (ii) to the extent required under Section 314 of the Trust Indenture
     Act, an Opinion of Counsel in form and substance reasonably satisfactory to
     the Trustee (which shall include the statements set forth in Section 13.05
     hereof) stating that, in the opinion of such counsel, all such conditions
     precedent and covenants have been satisfied.

Section 13.05 Statements Required in Certificate or Opinion.

          (a) Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:

          (i) a statement that the Person making such certificate or opinion has
     read such covenant or condition;


                                       98

          (ii) a brief statement as to the nature and scope of the examination
     or investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (iii) a statement that, in the opinion of such Person, he or she has
     made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been satisfied; and

          (iv) a statement as to whether or not, in the opinion of such Person,
     such condition or covenant has been satisfied.

Section 13.06 Rules by Trustee and Agents.

          The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

Section 13.07 No Personal Liability of Directors, Officers, Employees and
     Stockholders.

          No director, officer, employee, incorporator or shareholder of the
Parent, the Company or any Subsidiary Guarantor, as such, shall have any
liability for any obligations of the Parent, the Company or the Subsidiary
Guarantors under the Notes, this Indenture, the Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
The waiver may not be effective to waive liabilities under the federal
securities laws.

Section 13.08 Governing Law.

          THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 13.09 Consent to Jurisdiction.

          Any legal suit, action or proceeding arising out of or based upon this
Indenture or the transactions contemplated hereby ("RELATED PROCEEDINGS") may be
instituted in the federal courts of the United States of America located in the
City of New York or the courts of the State of New York in each case located in
the City of New York (collectively, the "SPECIFIED COURTS"), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. Service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any such court. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any suit, action or other proceeding in the Specified
Courts


                                       99

and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that a Related Proceeding has been brought in an inconvenient forum.

Section 13.10 No Adverse Interpretation of Other Agreements.

          This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or any of its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

Section 13.11 Successors.

          All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors. All agreements of each Guarantor in this Indenture shall bind
its successors, except as otherwise provided in Section 5.01.

Section 13.12 Severability.

          In case any provision in this Indenture or the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

Section 13.13 Counterpart Originals.

          The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

Section 13.14 Acts of Holders.

          (1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by the
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section 13.14.

          (2) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority


                                      100

of the Person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.

          (3) Notwithstanding anything to the contrary contained in this Section
13.14, the principal amount and serial numbers of Notes held by any Holder, and
the date of holding the same, shall be proved by the register of the Notes
maintained by the Registrar as provided in Section 2.04 hereof.

          (4) If the Company shall solicit from the Holders of the Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a resolution of its Board, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such resolution, which shall be a date not earlier than the date 30 days prior
to the first solicitation of Holders generally in connection therewith or the
date of the most recent list of Holders forwarded to the Trustee prior to such
solicitation pursuant to Section 2.06 hereof and not later than the date such
solicitation is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of the then outstanding
Notes have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the then outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.

          (5) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration or
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.

          (6) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Note may do so itself
with regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.

Section 13.15 Benefit of Indenture.

          Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Registrar and its successors hereunder, and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.


                                      101

Section 13.16 Table of Contents, Headings, Etc.

          The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.

Section 13.17 Trustee Not Fiduciary for Holders of Senior Indebtedness.

          The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders or the Company
or to any other Person cash, property or securities to which any holders of
Senior Indebtedness shall be entitled by virtue of this Agreement or otherwise.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      102

                                   SIGNATURES

                                        INSIGHT HEALTH SERVICES HOLDINGS CORP.


                                        By: Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        INSIGHT HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      103

                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        PARKWAY IMAGING CENTER, LLC


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Manager


                                      104

                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        DIAGNOSTIC SOLUTIONS 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      105

                                        MAXUM HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President, General
                                               Counsel and Secretary


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      106

                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      107

                                        U.S. Bank National Association,
                                        as Trustee


                                        By: /s/ Jean Clarke
                                            ------------------------------------
                                        Name: Jean Clarke
                                        Title: Assistant Vice President


                                      108

                                                                      EXHIBIT A1

                                 [Face of Note]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

     THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

     THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE, THE GUARANTEES ENDORSED HEREON NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE
"RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY, THE PARENT OR
ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED


                                      A1-1

INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (I) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.


                                      A1-2

                                                                CUSIP [________]

No. ______________                                                  **$_______**

                          INSIGHT HEALTH SERVICES CORP.

                   Senior Secured Floating Rate Notes due 2011

Issue Date: September 22, 2005

          InSight Health Services Corp., a Delaware corporation (the "Company",
which term includes any successor under this Indenture hereinafter referred to),
for value received, promises to pay to CEDE & CO., or its registered assigns,
the principal sum of [Amount of Note] ($[________]) on November 1, 2011.

Interest Payment Dates: February 1, May 1, August 1 and November 1, commencing
February 1, 2006.

Record Dates: January 15, April 15, July 15 and October 15.

          Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.


                                      A1-3

          IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.

                                        INSIGHT HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

This is one of the Senior Secured Floating Rate Notes due 2011 described in the
within-mentioned Indenture.

Dated: September 22, 2005

U.S. Bank National Association,
as Trustee


By:
    ---------------------------------
           Authorized Signatory


                                      A1-4

                             [Reverse Side of Note]

                          INSIGHT HEALTH SERVICES CORP.

                   Senior Secured Floating Rate Notes due 2011

          Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

          1. Interest. (a) The Company promises to pay interest on the principal
amount of this Note at the rate per annum, reset quarterly, equal to LIBOR plus
5.25%, as determined by the calculation agent (the "Calculation Agent"), which
shall initially be the Trustee, from the date hereof until maturity and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, quarterly in arrears on February 1, May 1,
August 1 and November 1 of each year, or if any such day is not a Business Day,
on the next succeeding Business Day (each an "Interest Payment Date"). Interest
on the Notes shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance;
provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the first Interest
Payment Date shall be February 1, 2006. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful.

          (b) The amount of interest for each day that the Notes are outstanding
(the "Daily Interest Amount") will be calculated by dividing the interest rate
in effect for such day by 365 (or 366, in the case of a calculation made with
respect to a leap year) and multiplying the result by the principal amount of
the Notes. The amount of interest to be paid on the Notes for each Interest
Period will be calculated by adding the Daily Interest Amounts for each day in
the Interest Period. All percentages resulting from any of the above
calculations will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being
rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting
from such calculations will be rounded to the nearest cent (with one-half cent
being rounded upwards). The interest rate on the Notes will in no event be
higher than the maximum rate permitted by New York law. The Calculation Agent
will, upon the request of the Holder of any Note, provide the interest rate then
in effect with respect to the Notes. All calculations made by the Calculation
Agent in the absence of manifest error will be conclusive for all purposes and
binding on the Company, the Guarantors and the Holders of the Notes.


                                      A1-5

          2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the 15th day of the
month next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.13 of the Indenture with respect to defaulted interest.
The Notes shall be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose in The City of New York, or, at the option of the Company, payment of
interest and Liquidated Damages, if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided
that payment by wire transfer of immediately available funds shall be required
with respect to principal of and interest, premium and Liquidated Damages, if
any, on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

          3. Paying Agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

          4. Indenture. The Company issued the Notes under an Indenture dated as
of September 22, 2005 (the "Indenture") among the Company, the Parent, the
Subsidiary Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended. The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling.

          5. Optional Redemption. The Company shall not have the option to
redeem the Notes prior to November 1, 2006. Thereafter, the Company shall have
the option to redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days' prior notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on November 1 of the
years indicated below:



Year                     Percentage
- ----                     ----------
                      
2006..................     103.0%
2007..................     101.5%
2008 and thereafter...     100.0%


          6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.


                                      A1-6

          7. Repurchase at Option of Holder. (a) Upon the occurrence of a Change
of Control, each Holder of Notes will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company will notify the Trustee thereof and mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Notes on the date specified in such
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"),
pursuant to the procedures required by the Indenture and described in such
notice.

          (b) Within 365 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Company may, at its option, within 12 months after such Asset
Sale, (i) apply all or a portion of the Net Cash Proceeds to repay or purchase
Applicable Indebtedness (and, in the case of revolving loans and other similar
obligations, permanently reduce the commitment thereunder), or (ii) invest (or
enter into a legally binding agreement to invest) all or a portion of such Net
Cash Proceeds in properties and assets to replace the properties and assets that
were the subject of the Asset Sale or in properties and assets that will be used
in businesses of the Company or its Restricted Subsidiaries, as the case may be,
existing on the Issue Date or in businesses the same, similar or reasonably
related thereto; provided, that, to the extent that such Net Cash Proceeds
represent proceeds of Collateral, (A) none of such properties and assets
obtained shall consist of Excluded Assets and (B) such properties and assets
obtained shall be expressly made subject to a first priority Lien (subject to
Permitted Liens) with respect to the Notes. If any such legally binding
agreement to invest such Net Cash Proceeds is terminated, the Company may,
within 90 days of such termination or within 12 months of such Asset Sale,
whichever is later, invest such Net Cash Proceeds as provided in clause (i) or
(ii) (without regard to the parenthetical contained in such clause (ii)) above.
Pending the final application of any such Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net Cash
Proceeds in a manner that is not prohibited by the Indenture. The amount of such
Net Cash Proceeds not so used as set forth above in this paragraph shall
constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds
exceeds $10 million, the Company will, within 30 days thereafter, make an offer
to purchase (an "Excess Proceeds Offer") from all Holders of Notes on a pro rata
basis, in accordance with the procedures set forth in the Indenture, the maximum
principal amount (expressed as a multiple of $1,000) of Notes that may be
purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of
the principal amount thereof, plus accrued interest and Liquidated Damages, if
any, to the date such offer to purchase is consummated. To the extent that the
aggregate principal amount of Notes tendered pursuant to such offer is less than
the Excess Proceeds, the Company may use such deficiency for general corporate
purposes. If the aggregate principal amount of Notes validly tendered and not
withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to be
purchased will be selected on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds will be reset to zero.

          8. Selection and Notice of Redemption If less than all of the Notes
are to be redeemed or purchased in an offer to purchase at any time, the Trustee
shall select the Notes to be redeemed or purchased among the Holders of the
Notes in compliance with the requirements


                                      A1-7

of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption. Notices of redemption may not be
conditional. If any Note is to be redeemed in part only, the notice of
redemption that relates to that Note will state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion of the original Note will be issued in the name of the Holder
thereof upon cancellation of the original Note. Notes called for redemption
become due on the date fixed for redemption. On and after the redemption date,
interest and Liquidated Damages, if any, cease to accrue on Notes or portions of
them called for redemption.

          9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Note selected for redemption. Also, the Company is not required to transfer
or exchange any Note for a period of 15 days before a selection of Notes to be
redeemed.

          10. Persons Deemed Owners. The registered Holder of a Note will be
treated as its owner for all purposes.

          11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes and Additional Notes, if any, voting as a single class (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes), and any existing default or compliance with
any provision of the Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal of the then outstanding Notes and
Additional Notes, if any, voting as a single class (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes). Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency; to provide for uncertificated Notes in addition to or
in place of certificated Notes; to evidence the succession of another Person to
the Company and the assumption by any such successor of the covenants of the
Company; to add to the covenants of the Company for the benefit of the Holders
or to surrender any right or power herein conferred upon the Company; to add
additional Events of Default; to evidence and provide for the acceptance of
appointment under the Indenture by a successor Trustee; to secure the Notes; to
comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; to provide for the
issuance of Additional Notes in accordance with the limitations set forth in the
Indenture as of its date; to allow any Guarantor to execute a supplemental
Indenture and a Guarantee with respect to the Notes; or to release Collateral
from the Liens created by the Indenture or the Security Documents when permitted
by the Indenture and the Security Documents.


                                      A1-8

          12. Defaults and Remedies. In the case of an Event of Default arising
from certain events of bankruptcy or insolvency, with respect to the Parent, the
Company or any Restricted Subsidiary that is a Significant Subsidiary, all
outstanding Notes will become due and payable immediately without further action
or notice. If any other Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately by
notice in writing to the Company specifying the respective Event of Default. The
Trustee may withhold from Holders of the Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages, if any) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest or Liquidated
Damages, if any, on, or the principal of, the Notes.

          13. Security Interest. The Notes will be secured, to the extent and in
the manner provided in the Security Documents, by a first priority Lien on the
Collateral. Each Noteholder, by its acceptance of a Note, (i) consents and
agrees to the terms of each Security Document, (ii) authorizes and directs the
Trustee to appoint U.S. Bank National Association as Collateral Agent on the
Issue Date, (iii) directs the Collateral Agent to enter into the Security
Documents and (iv) authorizes and empowers each of the Trustee and the
Collateral Agent to bind the Holders of Notes as set forth in the Security
Documents and to perform its respective obligations and exercise its respective
rights and powers thereunder. In the event of any conflict between (a) the
Indenture and (b) the Security Documents, the provisions of the Security
Documents shall control unless such compliance would violate the TIA.

          14. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

          15. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Parent, the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Parent, the Company or the Subsidiary Guarantors under the Notes, the
Indenture, the Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.

          16. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.

          17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of September 22, 2005, between the Company, the


                                      A1-9

Guarantors and the parties named on the signature pages thereof or, in the case
of Additional Notes, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have the rights set forth in one or more registration
rights agreements, if any, between the Company, the Guarantors and the other
parties thereto, relating to rights given by the Company and the Guarantors to
the purchasers of Additional Notes (the "Registration Rights Agreement").

          18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

          The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

          InSight Health Services Corp.
          26250 Enterprise Court
          Suite 100
          Lake Forest, CA 92630
          Facsimile: 949-462-3703
          Attention: General Counsel


                                     A1-10

                                 ASSIGNMENT FORM

                  To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                                (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:
      -------------------

                                           Your Signature:


                                           -------------------------------------
                                           (Sign exactly as your name appears on
                                           the face of this Note)


Signature Guarantee*:
                      ------------------

*    Participant in a recognized Signature Guarantee Medallion Program (or other
     signature guarantor acceptable to the Trustee).


                                     A1-11

                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:

                        - Section 4.10 - Section 4.14

          If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:

                                  $____________

Date:
      -------------------

                                           Your Signature:


                                           -------------------------------------
                                           (Sign exactly as your name appears on
                                           the face of this Note)

                                           Tax Identification No.:
                                                                   -------------

Signature Guarantee*:
                      ------------------

*    Participant in a recognized Signature Guarantee Medallion Program (or other
     signature guarantor acceptable to the Trustee).


                                     A1-12

              SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

          The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:



                                                                     Principal Amount at
                   Amount of Decrease in   Amount of Increase in          Maturity             Signature of
                    Principal Amount at     Principal Amount at      of this Global Note    Authorized Officer
                          Maturity                Maturity             Following such          of Trustee or
Date of Exchange    of this Global Note     of this Global Note    Decrease (or Increase)     Note Custodian
- ----------------   ---------------------   ---------------------   ----------------------   ------------------
                                                                                




                                     A1-13

                                                                      EXHIBIT A2

                                 [Face of Note]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

     THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

     THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.

THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE, THE GUARANTEES ENDORSED HEREON NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE


                                      A2-1

GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
COMPANY, THE PARENT OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(I) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR
PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.


                                      A2-2

                                                             CUSIP [___________]

No.___________                                                **$_____________**

                          INSIGHT HEALTH SERVICES CORP.

                   Senior Secured Floating Rate Notes due 2011

Issue Date: September 22, 2005

          InSight Health Services Corp., a Delaware corporation (the "Company",
which term includes any successor under this Indenture hereinafter referred to),
for value received, promises to pay to CEDE & CO., or its registered assigns,
the principal sum of [Amount of Note] ($[_______]) on November 1, 2011.

Interest Payment Dates: February 1, May 1, August 1 and November 1, commencing
on February 1, 2006.

Record Dates: January 15, April 15, July 15 and October 15.

          Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.


                                      A2-3

          IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.

                                        INSIGHT HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

This is one of the Senior Secured Floating Rate Notes due 2011 described in the
within-mentioned Indenture.

Dated: September 22, 2005

U.S. Bank National Association, as Trustee


By:
    ---------------------------------
           Authorized Signatory


                                      A2-4

                             [Reverse Side of Note]

                          INSIGHT HEALTH SERVICES CORP.

                   Senior Secured Floating Rate Notes due 2011

          Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

          1. Interest. (a) The Company promises to pay interest on the principal
amount of this Note at the rate per annum, reset quarterly, equal to LIBOR plus
5.25%, as determined by the calculation agent (the "Calculation Agent"), which
shall initially be the Trustee, from the date hereof until maturity and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, quarterly in arrears on February 1, May 1,
August 1 and November 1 of each year, or if any such day is not a Business Day,
on the next succeeding Business Day (each an "Interest Payment Date"). Interest
on the Notes shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance;
provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the first Interest
Payment Date shall be February 1, 2006. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful.

          (b) The amount of interest for each day that the Notes are outstanding
(the "Daily Interest Amount") will be calculated by dividing the interest rate
in effect for such day by 365 (or 366, in the case of a calculation made with
respect to a leap year) and multiplying the result by the principal amount of
the Notes. The amount of interest to be paid on the Notes for each Interest
Period will be calculated by adding the Daily Interest Amounts for each day in
the Interest Period. All percentages resulting from any of the above
calculations will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being
rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting
from such calculations will be rounded to the nearest cent (with one-half cent
being rounded upwards). The interest rate on the Notes will in no event be
higher than the maximum rate permitted by New York law. The Calculation Agent
will, upon the request of the Holder of any Note, provide the interest rate then
in effect with respect to the Notes. All calculations made by the Calculation
Agent in the absence of manifest error will be conclusive for all purposes and
binding on the Company, the Guarantors and the Holders of the Notes.

          2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of


                                      A2-5

Notes at the close of business on the 15th day of the month next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.13
of the Indenture with respect to defaulted interest. The Notes shall be payable
as to principal, premium and Liquidated Damages, if any, and interest at the
office or agency of the Company maintained for such purpose in The City of New
York, or, at the option of the Company, payment of interest and Liquidated
Damages, if any, may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, and provided that payment by wire transfer
of immediately available funds shall be required with respect to principal of
and interest, premium and Liquidated Damages, if any, on, all Global Notes and
all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.

          3. Paying Agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

          4. Indenture. The Company issued the Notes under an Indenture dated as
of September 22, 2005 (the "Indenture") among the Company, the Parent, the
Subsidiary Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended. The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling.

          5. Optional Redemption. The Company shall not have the option to
redeem the Notes prior to November 1, 2006. Thereafter, the Company shall have
the option to redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days' prior notice to the Holders, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on
November 1 of the years indicated below:



Year                     Percentage
- ----                     ----------
                      
2006..................     103.0%
2007..................     101.5%
2008 and thereafter...     100.0%


          6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.

          7. Repurchase at Option of Holder. (a) Upon the occurrence of a Change
of Control, each Holder of Notes will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer


                                      A2-6

described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company will notify the Trustee thereof and mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes on the date specified in such notice, which
date shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed (the "Change of Control Payment Date"), pursuant to the
procedures required by the Indenture and described in such notice.

          (b) Within 365 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Company may, at its option, within 12 months after such Asset
Sale, (i) apply all or a portion of the Net Cash Proceeds to repay or purchase
Applicable Indebtedness (and, in the case of revolving loans and other similar
obligations, permanently reduce the commitment thereunder), or (ii) invest (or
enter into a legally binding agreement to invest) all or a portion of such Net
Cash Proceeds in properties and assets to replace the properties and assets that
were the subject of the Asset Sale or in properties and assets that will be used
in businesses of the Company or its Restricted Subsidiaries, as the case may be,
existing on the Issue Date or in businesses the same, similar or reasonably
related thereto; provided, that, to the extent that such Net Cash Proceeds
represent proceeds of Collateral, (A) none of such properties and assets
obtained shall consist of Excluded Assets and (B) such properties and assets
obtained shall be expressly made subject to a first priority Lien (subject to
Permitted Liens) with respect to the Notes. If any such legally binding
agreement to invest such Net Cash Proceeds is terminated, the Company may,
within 90 days of such termination or within 12 months of such Asset Sale,
whichever is later, invest such Net Cash Proceeds as provided in clause (i) or
(ii) (without regard to the parenthetical contained in such clause (ii)) above.
Pending the final application of any such Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net Cash
Proceeds in a manner that is not prohibited by the Indenture. The amount of such
Net Cash Proceeds not so used as set forth above in this paragraph shall
constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds
exceeds $10 million, the Company will, within 30 days thereafter, make an offer
to purchase (an "Excess Proceeds Offer") from all Holders of Notes on a pro rata
basis, in accordance with the procedures set forth in the Indenture, the maximum
principal amount (expressed as a multiple of $1,000) of Notes that may be
purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of
the principal amount thereof, plus accrued interest and Liquidated Damages, if
any, to the date such offer to purchase is consummated. To the extent that the
aggregate principal amount of Notes tendered pursuant to such offer is less than
the Excess Proceeds, the Company may use such deficiency for general corporate
purposes. If the aggregate principal amount of Notes validly tendered and not
withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to be
purchased will be selected on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds will be reset to zero.

          8. Selection and Notice of Redemption If less than all of the Notes
are to be redeemed or purchased in an offer to purchase at any time, the Trustee
shall select the Notes to be redeemed or purchased among the Holders of the
Notes in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee


                                      A2-7

considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
Notices of redemption may not be conditional. If any Note is to be redeemed in
part only, the notice of redemption that relates to that Note will state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion of the original Note will be issued in
the name of the Holder thereof upon cancellation of the original Note. Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest and Liquidated Damages, if any, cease to accrue on
Notes or portions of them called for redemption.

          9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Note selected for redemption. Also, the Company is not required to transfer
or exchange any Note for a period of 15 days before a selection of Notes to be
redeemed.

          10. Persons Deemed Owners. The registered Holder of a Note will be
treated as its owner for all purposes.

          11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes and Additional Notes, if any, voting as a single class (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes), and any existing default or compliance with
any provision of the Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal of the then outstanding Notes and
Additional Notes, if any, voting as a single class (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes). Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency; to provide for uncertificated Notes in addition to or
in place of certificated Notes; to evidence the succession of another Person to
the Company and the assumption by any such successor of the covenants of the
Company; to add to the covenants of the Company for the benefit of the Holders
or to surrender any right or power herein conferred upon the Company; to add
additional Events of Default; to evidence and provide for the acceptance of
appointment under the Indenture by a successor Trustee; to secure the Notes; to
comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; to provide for the
issuance of Additional Notes in accordance with the limitations set forth in the
Indenture as of its date; to allow any Guarantor to execute a supplemental
Indenture and a Guarantee with respect to the Notes; or to release Collateral
from the Liens created by the Indenture or the Security Documents when permitted
by the Indenture and the Security Documents.


                                      A2-8

          12. Defaults and Remedies. In the case of an Event of Default arising
from certain events of bankruptcy or insolvency, with respect to the Parent, the
Company or any Restricted Subsidiary that is a Significant Subsidiary, all
outstanding Notes will become due and payable immediately without further action
or notice. If any other Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately by
notice in writing to the Company specifying the respective Event of Default. The
Trustee may withhold from Holders of the Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages, if any) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest or Liquidated
Damages, if any, on, or the principal of, the Notes.

          13. Security Interest. The Notes will be secured, to the extent and in
the manner provided in the Security Documents, by a first priority Lien on the
Collateral. Each Noteholder, by its acceptance of a Note, (i) consents and
agrees to the terms of each Security Document, (ii) authorizes and directs the
Trustee to appoint U.S. Bank National Association as Collateral Agent on the
Issue Date, (iii) directs the Collateral Agent to enter into the Security
Documents and (iv) authorizes and empowers each of the Trustee and the
Collateral Agent to bind the Holders of Notes as set forth in the Security
Documents and to perform its respective obligations and exercise its respective
rights and powers thereunder. In the event of any conflict between (a) the
Indenture and (b) the Security Documents, the provisions of the Security
Documents shall control unless such compliance would violate the TIA.

          14. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

          15. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Parent, the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Parent, the Company or the Subsidiary Guarantors under the Notes, the
Indenture, the Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.

          16. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.

          17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of September 22, 2005, between the Company, the


                                      A2-9

Guarantors and the parties named on the signature pages thereof or, in the case
of Additional Notes, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have the rights set forth in one or more registration
rights agreements, if any, between the Company, the Guarantors and the other
parties thereto, relating to rights given by the Company and the Guarantors to
the purchasers of Additional Notes (the "Registration Rights Agreement").

          18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

          The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

          InSight Health Services Corp.
          26250 Enterprise Court
          Suite 100
          Lake Forest, CA 92630
          Facsimile: 949-462-3703
          Attention: General Counsel


                                      A2-10

                                 ASSIGNMENT FORM

                  To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                              ----------------------------------
                                                (Insert assignee's legal name)

- --------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------------------------

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:
      -------------------------------


                                        Your Signature:


                                       -----------------------------------------
                                       (Sign exactly as your name appears on the
                                       face of this Note)


Signature Guarantee*:
                      ---------------

*    Participant in a recognized Signature Guarantee Medallion Program (or other
     signature guarantor acceptable to the Trustee).


                                      A2-11

                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:

                        - Section 4.10     - Section 4.14

          If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:

                                   $
                                    ----------

Date:
      -------------------------------


                                        Your Signature:
                                                        ------------------------
                                                        (Sign exactly as your
                                                        name appears on the face
                                                        of this Note)

                                        Tax Identification No.:
                                                                ----------------

Signature Guarantee*:
                      ---------------

*    Participant in a recognized Signature Guarantee Medallion Program (or other
     signature guarantor acceptable to the Trustee).


                                      A2-12

           SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

          The following exchanges of a part of this Regulation S Temporary
Global Note for an interest in another Global Note or of other Restricted Global
Notes for an interest in this Regulation S Temporary Global Note, have been
made:



                                                                     Principal Amount at
                   Amount of Decrease in   Amount of Increase in          Maturity             Signature of
                    Principal Amount at     Principal Amount at      of this Global Note    Authorized Officer
                          Maturity                Maturity             Following such          of Trustee or
Date of Exchange    of this Global Note     of this Global Note    Decrease (or Increase)     Note Custodian
- ----------------   ---------------------   ---------------------   ----------------------   ------------------
                                                                                




                                      A2-13

                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

InSight Health Services Corp.
26250 Enterprise Court
Suite 100
Lake Forest, CA 92630
Facsimile: 949-462-3703
Attention: General Counsel

U.S. Bank National Association
Corporate Trust Services
100 Wall Street - Suite 1600
New York, NY 10005
Attention: Cheryl Clarke

          Re: Senior Secured Floating Rate Notes due 2011

          Reference is hereby made to the Indenture, dated as of September 22,
2005 (the "Indenture"), among InSight Health Services Corp., a Delaware
corporation (the "Company"), InSight Health Services Holdings Corp., a Delaware
corporation (the "Parent"), the Subsidiary Guarantors, and U.S. Bank National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

          ___________________ (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount at maturity of $___________ in such Note[s] or interests (the
"Transfer"), to ___________________________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:

                             [CHECK ALL THAT APPLY]

          1. Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.


                                      B-1

          2. Check if Transferee will take delivery of a beneficial interest in
the Regulation S Temporary Global Note, the Regulation S Permanent Global Note
or a Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Permanent Global Note,
the Regulation S Temporary Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

          3. Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):

          (a) such Transfer is being effected pursuant to and in accordance with
     Rule 144 under the Securities Act;

                                       or

          (b) such Transfer is being effected to the Company or a subsidiary
     thereof;

                                       or

          (c) such Transfer is being effected pursuant to an effective
     registration statement under the Securities Act and in compliance with the
     prospectus delivery requirements of the Securities Act;

                                       or

          (d) such Transfer is being effected to an Institutional Accredited
     Investor and pursuant to an exemption from the registration requirements of
     the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
     Transferor hereby


                                      B-2

     further certifies that it has not engaged in any general solicitation
     within the meaning of Regulation D under the Securities Act and the
     Transfer complies with the transfer restrictions applicable to beneficial
     interests in a Restricted Global Note or Restricted Definitive Notes and
     the requirements of the exemption claimed, which certification is supported
     by (1) a certificate executed by the Transferee in the form of Exhibit D to
     the Indenture and (2) an Opinion of Counsel provided by the Transferor or
     the Transferee (a copy of which the Transferor has attached to this
     certification), to the effect that such Transfer is in compliance with the
     Securities Act. Upon consummation of the proposed transfer in accordance
     with the terms of the Indenture, the transferred beneficial interest or
     Definitive Note will be subject to the restrictions on transfer enumerated
     in the Private Placement Legend printed on the IAI Global Note and/or the
     Definitive Notes and in the Indenture and the Securities Act.

          4. Check if Transferee will take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.

          (a) Check if Transfer is Pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

          (b) Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

          (c) Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.


                                      B-3

          This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                        ----------------------------------------
                                        [Insert Name of Transferor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

Dated:
       ------------------------------


                                      B-4

                       ANNEX A TO CERTIFICATE OF TRANSFER

1.   The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (A) OR (B)]

          (A)  a beneficial interest in the:

               (i)  144A Global Note (CUSIP __________); or

               (ii) Regulation S Global Note (CUSIP __________); or

               (iii) IAI Global Note (CUSIP __________); or

          (B)  a Restricted Definitive Note.

2.   After the Transfer the Transferee will hold:

                                   [CHECK ONE]

          (A)  a beneficial interest in the:

               (i)  144A Global Note (CUSIP __________); or

               (ii) Regulation S Global Note (CUSIP __________); or

               (iii) IAI Global Note (CUSIP __________); or

               (iv) Unrestricted Global Note (CUSIP __________); or

          (B)  a Restricted Definitive Note; or

          (C)  an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.


                                      B-5

                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

InSight Health Services Corp.
26250 Enterprise Court
Suite 100
Lake Forest, CA 92630
Facsimile: 949-462-3703
Attention: General Counsel

U.S. Bank National Association
Corporate Trust Services
100 Wall Street - Suite 1600
New York, NY 10005
Attention: Cheryl Clarke

          Re: Senior Secured Floating Rate Notes due 2011

          Reference is hereby made to the Indenture, dated as of September 22,
2005 (the "Indenture"), among InSight Health Services Corp., a Delaware
corporation (the "Company"), InSight Health Services Holdings Corp., a Delaware
corporation (the "Parent"), the Subsidiary Guarantors, and U.S. Bank National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

          __________________________ (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount at maturity of $____________ in such Note[s] or interests (the
"Exchange"). In connection with the Exchange, the Owner hereby certifies that:

          1. Exchange of Restricted Definitive Notes or Beneficial Interests in
a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note

          (1) Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount at maturity, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.


                                      C-1

          (2) Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

          (3) Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

          (4) Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

          2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes

          (a) Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount at maturity, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.


                                      C-2

          (b) Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
[ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an
equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.

          This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                        ----------------------------------------
                                        [Insert Name of Transferor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

Dated:
       -----------------------------


                                      C-3

                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

[________]

          Re: Senior Secured Floating Rate Notes due 2011

          Reference is hereby made to the Indenture, dated as of September 22,
2005 (the "Indenture"), among InSight Health Services Corp., a Delaware
corporation (the "Company") InSight Health Services Holdings Corp., a Delaware
corporation (the "Parent"), the Subsidiary Guarantors, and U.S. Bank National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

          In connection with our proposed purchase of $____________ aggregate
principal amount at maturity of:

          (a) [ ] beneficial interest in a Global Note, or

          (b) [ ] a Definitive Note,

          we confirm that:

          1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").

          2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.


                                      D-1

          3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

          4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

          5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.

          You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                        ----------------------------------------
                                        [Insert Name of Accredited Investor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

Dated:
       ------------------------------


                                      D-2

                                                                       EXHIBIT E

                          FORM OF NOTATION OF GUARANTEE

          For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed on a senior secured basis, to the extent set forth in the Indenture
and subject to the provisions in the Indenture dated as of September 22, 2005
(the "Indenture") among InSight Health Services Corp. (the "Company"), InSight
Health Services Holdings Corp., the Subsidiary Guarantors (as defined in the
Indenture), and U.S. Bank National Association, as trustee (the "Trustee"), (a)
the due and punctual payment of the principal of, premium, if any, and interest
on the Notes (as defined in the Indenture), whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal and premium, and, to the extent permitted by law, interest,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms of the Indenture and
(b) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. The obligations of the
Guarantors to the Holders of Notes and to the Trustee pursuant to the Guarantee
and the Indenture are (i) expressly set forth in Article Eleven of the Indenture
and (ii) are secured to the extent set forth in Article Ten of the Indenture,
and reference is hereby made to the Indenture for the precise terms of the
Guarantee. This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York.

                                        [Name of Guarantor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      E-1

                                                                       EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

          Supplemental Indenture (this "Supplemental Indenture"), dated as of
_____________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of InSight Health Services Corp. (or its permitted successor), a
Delaware corporation (the "Company"), InSight Health Services Holdings Corp.,
the Subsidiary Guarantors (as defined in the Indenture referred to herein) and
U.S. Bank National Association, as trustee under the Indenture referred to below
(the "Trustee").

                                   WITNESSETH

          WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of September 22, 2005 providing
for the issuance of an aggregate principal amount of $300.0 million of Senior
Secured Floating Rate Notes due 2011 (the "Notes");

          WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Guarantee"); and

          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

          NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

          1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

          2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees
as follows:

     (a) Along with all other Guarantors, to jointly and severally Guarantee to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that:

               (i) the principal of and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the

Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and

               (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately.

     (b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance that might otherwise constitute a legal or equitable discharge or
defense of a guarantor.

     (c) The following are hereby waived: diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.

     (d) This Guarantee shall not be discharged except by complete performance
of the obligations contained in the Notes and the Indenture.

     (e) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.

     (f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.

     (g) As between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six of the Indenture for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Six of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee.

          3. Execution and Delivery. Each Guaranteeing Subsidiary agrees that
the Guarantees shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.

          4. Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms.

          Except as otherwise provided in Section 5.01(b) of the Indenture, a
Subsidiary Guarantor may not consolidate with or merge with or into any other
Person or convey, sell, assign, transfer, lease or otherwise dispose of its
properties and assets substantially as an entirety to any other Person (other
than the Company or another Subsidiary Guarantor) unless:

          (i) subject to the provisions of the second to the last paragraph of
     this Section 4, the Person formed by or surviving such consolidation or
     merger (if other than such Subsidiary Guarantor) or to which such
     properties and assets are transferred assumes all of the obligations of
     such Subsidiary Guarantor under the Indenture, its Guarantee to Security
     Documents and the Registration Rights Agreement, pursuant to agreements in
     form and substance reasonably satisfactory to the Trustee;

          (ii) immediately after giving effect to such transaction, no Default
     or Event of Default has occurred and is continuing; and

          (iii) the Subsidiary Guarantor delivers, or causes to be delivered, to
     the Trustee, in form and substance reasonably satisfactory to the Trustee,
     an Officers' Certificate and an Opinion of Counsel, each stating that such
     transaction complies with the requirements of this Indenture.

          For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

          In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and reasonably satisfactory in form to the Trustee, of
the Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of the Indenture to be performed by a
Guarantor, such successor Person shall succeed to and be substituted for a
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Guarantees so issued shall in all respects have the same legal
rank and benefit under the Indenture as the Guarantees theretofore and
thereafter issued in accordance with the terms of the Indenture as though all of
such Guarantees had been issued at the date of the execution hereof.

          5. Releases.

          (a) A Subsidiary Guarantor will be deemed automatically and
unconditionally released and discharged from all of its obligations under its
Guarantee without any further action on the part of the Trustee or any Holder of
the Notes upon a sale or other disposition to a Person not an Affiliate of the
Company of all of the Capital Stock of, or all or substantially all of the
assets of, such Subsidiary Guarantor, by way of merger, consolidation or
otherwise, which

transaction is carried out in accordance with Section 4.10 hereof; provided that
any such termination shall occur (x) only to the extent that all obligations of
such Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure any Indebtedness of
the Company shall also terminate upon such sale, disposition or release and (y)
only if the Trustee is furnished with written notice of such release together
with an Officers' Certificate from such Subsidiary Guarantor to the effect that
all of the conditions to release in this Section 5 have been satisfied.

          (b) Any Guarantor not released from its obligations under its
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article Eleven of the Indenture.

          6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Parent, the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Parent, the Company or the Subsidiary Guarantors under the Notes, the
Indenture, the Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.

          7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

          8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

          9. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

          10. Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.

          IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

Dated:                 ,
       ----------------  ----

                                        [Guaranteeing Subsidiary]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        INSIGHT HEALTH SERVICES HOLDINGS CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        INSIGHT HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        WILKES-BARRE IMAGING, L.L.C.

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


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        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:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        PARKWAY IMAGING CENTER, LLC


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------

                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        DIAGNOSTIC SOLUTIONS 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:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        MAXUM HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        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:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        PHOENIX REGIONAL PET
                                        CENTER-THUNDERBIRD, LLC

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


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        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:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        U.S. Bank National Association,
                                        as Trustee


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

EX-4.7

                                                                     Exhibit 4.7

                                                               EXECUTION VERSION

                               SECURITY AGREEMENT

                         DATED AS OF SEPTEMBER 22, 2005

                                      AMONG

                 THE LOAN PARTIES FROM TIME TO TIME PARTY HERETO

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION,
                               AS COLLATERAL AGENT



                               TABLE OF CONTENTS*



                                                                            PAGE
                                                                            ----
                                                                         
                                    ARTICLE I
                                   DEFINITIONS
Section 1.01. Defined Terms..............................................     1
Section 1.02. Terms Defined in the UCC...................................     1
Section 1.03. Additional Definitions.....................................     2
Section 1.04. Terms Generally............................................    10

                                   ARTICLE II
                               SECURITY INTERESTS

Section 2.01. Grant of Security Interests................................    10
Section 2.02. Continuing Liability of Each Loan Party....................    12
Section 2.03. Security Interests Absolute................................    12
Section 2.04. Maintaining the Account Collateral.........................    14
Section 2.05. Collateral Agent Not Responsible...........................    14

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

Section 3.01. Title to Collateral........................................    14
Section 3.02. Validity, Perfection and Priority of Security Interests....    14
Section 3.03. No Consents................................................    15
Section 3.04. Insurance..................................................    15
Section 3.05. Intellectual Property......................................    15

                                   ARTICLE IV
                                    COVENANTS

Section 4.01. Delivery of Perfection Certificate; Initial Perfection and
              Delivery of Search Reports.................................    16
Section 4.02. Change of Name, Identity, Structure or Location; Subjection
              to Other Security Agreements...............................    16
Section 4.03. Further Actions............................................    17
Section 4.04. Delivery of Instruments, Etc...............................    17
Section 4.05. Certificates of Title......................................    18
Section 4.06. Insurance..................................................    18
Section 4.07. Information Regarding Collateral...........................    18
Section 4.08. Covenants Regarding Intellectual Property..................    18
Section 4.09. Deposit Accounts and Securities Accounts...................    20
Section 4.10. Claims.....................................................    20


- ----------
*    Table of Contents is not part of the Security Agreement.


                                        i



                                                                         
                                    ARTICLE V
                           GENERAL AUTHORITY; REMEDIES

Section 5.01. General Authority..........................................    20
Section 5.02. Remedies upon Event of Default.............................    22
Section 5.03. Limitation on Duty of Collateral Agent in Respect
              of Collateral..............................................    25
Section 5.04. Application of Proceeds....................................    25

                                   ARTICLE VI
                                COLLATERAL AGENT

Section 6.01. Concerning the Collateral Agent............................    26
Section 6.02. Appointment of Co-Collateral Agent.........................    26

                                   ARTICLE VII
                                  MISCELLANEOUS

Section 7.01. Notices....................................................    27
Section 7.02. No Waivers; Non-Exclusive Remedies.........................    27
Section 7.03. Compensation and Expenses of the Collateral Agent;
              Indemnification............................................    28
Section 7.04. Enforcement................................................    29
Section 7.05. Amendments and Waivers.....................................    30
Section 7.06. Successors and Assigns.....................................    30
Section 7.07. Governing Law..............................................    30
Section 7.08. Limitation of Law; Severability............................    30
Section 7.09. Counterparts; Effectiveness................................    30
Section 7.10. Additional Loan Parties....................................    31
Section 7.11. Termination; Release of Loan Parties.......................    31
Section 7.12. Entire Agreement...........................................    32




                                       ii



SCHEDULES:

Schedule 1.01A - Claims
Schedule 1.01B - Excluded Deposit Accounts
Schedule 3.03  - Consents
Schedule 4.01  - Filings to Perfect Security Interests

EXHIBITS:

Exhibit A-1    - Form of Grant of Security Interest in United States
                 Patents and Trademarks
Exhibit A-2    - Form of Grant of Security Interest in United States Copyrights
Exhibit B      - Form of Deposit Account Control Agreement
Exhibit C      - Form of Description of Collateral
Exhibit D      - Form of Perfection Certificate
Exhibit E      - Form of Accession Agreement

ANNEXES:

Annex I        - Schedule VI to Perfection Certificate


                                      iii



          SECURITY AGREEMENT dated as of September 22, 2005 (as amended,
modified or supplemented from time to time, this "AGREEMENT") among the LOAN
PARTIES from time to time party hereto, U.S. BANK NATIONAL ASSOCIATION, as
Collateral Agent for the benefit of the Finance Parties referred to herein
(together with its successor or successors in such capacity, the "COLLATERAL
AGENT").

          InSight Health Services Corp. ("INSIGHT") intends to issue Senior
Secured Floating Rate Notes due 2011 (together with any Additional Notes (as
defined in the Indenture) and any Exchange Notes (as defined in the Indenture),
and as amended, restated, supplemented or modified from time to time, the
"SENIOR SECURED NOTES") pursuant to an Indenture dated as of the date hereof (as
amended, restated, supplemented or modified from time to time and including any
agreement extending the maturity of, refinancing or otherwise restructuring all
or any portion of the obligations of InSight under such Indenture or any
successor agreement, the "INDENTURE") among InSight and U.S. Bank National
Association, as Trustee (together with its successor or successors in such
capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the
Senior Secured Notes will be guaranteed by InSight Health Services Holdings
Corp. ("HOLDINGS") each of the parties listed on the signature pages hereto as
"Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic
subsidiaries of Holdings that become a party hereto pursuant to Section 7.10
hereof (collectively, the "SUBSIDIARY GUARANTORS" and, together with Holdings,
"GUARANTORS"). Holdings, InSight and the Subsidiary Guarantors are herein
referred to individually as a "LOAN PARTY" and, collectively, as the "LOAN
PARTIES".

          The Indenture requires the Loan Parties to secure their obligations
under the Senior Secured Notes and their obligations under any guaranties
thereof through a grant of a first lien security interest over the Collateral
(as defined herein), subject to Permitted Liens. The Indenture further requires
that such security interests in the Collateral be granted pursuant to security
documents to a collateral agent acting for the benefit of the holders from time
to time of the Senior Secured Notes. Consequently the Trustee and the Collateral
Agent have entered into a Collateral Agency Agreement dated as of the date
hereof (as amended, modified or supplemented from time to time, the "COLLATERAL
AGENCY AGREEMENT") which, among other things, governs certain actions of the
Trustee and the Collateral Agent in connection with the Senior Secured Notes and
the Collateral, respectively.

          Accordingly, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

          Section 1.01. Defined Terms. Terms defined in the introductory section
hereof have the respective meanings set forth therein. Capitalized terms defined
in the Indenture and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.

          Section 1.02. Terms Defined in the UCC. Unless otherwise defined
herein or the context otherwise requires, the following terms, together with any
uncapitalized terms used herein which are defined in the UCC, have the
respective meanings provided in the UCC: (i) Accounts, (ii) As-Extracted
Collateral; (iii) Certificated Security; (iv) Chattel Paper;



(v) Documents; (vi) Financial Asset; (vii) Instruments; (viii) Inventory; (ix)
Investment Property; (x) Payment Intangibles; (xi) Proceeds; (xii) Securities
Account; (xiii) Securities Intermediary; (xiv) Security; (xv) Security
Certificate; (xvi) Security Entitlements; and (xvii) Uncertificated Security.

          Section 1.03. Additional Definitions. The following additional terms,
as used herein, have the following respective meanings:

          "ACCOUNT CONTROL AGREEMENT" means (i) with respect to a Deposit
Account, a deposit account control agreement, substantially in the form of
Exhibit B hereto (or in such other form as to which an opinion of counsel is
delivered to the Collateral Agent opining that such agreement is sufficient to
grant the Collateral Agent a perfected security interest under the UCC in such
Deposit Account), among one or more Loan Parties, the Collateral Agent and the
bank which maintains such Deposit Account and (ii) with respect to a Securities
Account, a securities account control agreement, substantially in the form of
Exhibit B to the Pledge Agreement (or in such other form as to which an opinion
of counsel is delivered to the Collateral Agent opining that such agreement is
sufficient to grant the Collateral Agent a perfected security interest under the
UCC in such Securities Account), among one or more Loan Parties, the Collateral
Agent and the Securities Intermediary which maintains such Securities Account,
in each case as the same may be amended, modified or supplemented from time to
time.

          "CAPITAL STOCK" has the meaning given to it in the Indenture.

          "CLAIMS" means all "commercial tort claims" (as defined in the UCC),
including, without limitation, each of the claims described on Schedule 1.01A
hereto, as such Schedule may be amended, modified or supplemented from time to
time.

          "COLLATERAL" has the meaning set forth in Section 2.01 of this
Agreement.

          "COLLATERAL ACCOUNTS" means one or more Securities Accounts or Deposit
Accounts established with or in the possession or under the control of the
Collateral Agent into which cash, Cash Equivalents and similar assets (other
than cash, Cash Equivalents and similar assets constituting Receivables or
Related Assets) or Proceeds (including Proceeds of insurance policies, awards of
condemnation or other compensation) of any Collateral are deposited from time to
time, collectively.

          "COLLATERAL AGENT" means U.S. Bank National Association, in its
capacity as collateral agent for the Finance Parties, and its successor or
successors in such capacity.

          "COMPUTER HARDWARE" means all computer and other electronic data
processing hardware of a Loan Party, whether now or hereafter owned, licensed or
leased by such Loan Party, including, without limitation, all integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related computer hardware, all
documentation, flowcharts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes associated with any of the foregoing and all
options, warranties, services contracts, program


                                        2



services, test rights, maintenance rights, support rights, renewal rights and
indemnifications relating to any of the foregoing.

          "COPYRIGHT" means any of the following, whether now existing or
hereafter arising, created or acquired:

          (i) the United States and foreign copyrights described on Schedule VI
     to any Loan Party's Perfection Certificate (as each such schedule may be
     amended, modified or supplemented from time to time) and any renewals
     thereof;

          (ii) all other common law and/or statutory rights in all copyrightable
     subject matter under the Laws of the United States or any other country
     (whether or not the underlying works of authorship have been published);

          (iii) all registrations and applications for registration of any such
     copyright in the United States or any other country, including
     registrations, recordings, supplemental, derivative or collective work
     registrations and pending applications for registrations in the United
     States Copyright Office or any other country;

          (iv) all tangible property embodying or incorporating any or all of
     the foregoing, whether in completed form or in some lesser state of
     completion, and all masters, duplicates, drafts, versions, variations and
     copies thereof, in all formats;

          (v) all claims for, and rights to sue for, past, present and future
     infringement of any of the foregoing;

          (vi) all income, royalties, damages and payments now or hereafter due
     or payable with respect to any of the foregoing, including, without
     limitation, damages and payments for past, present or future infringements
     thereof and payments and damages under all Copyright Licenses in connection
     therewith; and

          (vii) all rights in any of the foregoing, whether arising under the
     Laws of the United States or any foreign country or otherwise, to copy,
     record, synchronize, broadcast, transmit, perform and/or display any of the
     foregoing or any matter which is the subject of any of the foregoing in any
     manner and by any process now known or hereafter devised.

          "COPYRIGHT LICENSE" means any written agreement now or hereafter in
existence granting to any Loan Party any rights, whether exclusive or
non-exclusive, to use another Person's copyrights or copyright applications, or
pursuant to which any Loan Party has granted to any other Person, any right,
whether exclusive or non-exclusive, with respect to any Copyright, whether or
not registered, including, without limitation, the Copyright Licenses described
on Schedule VI to any Loan Party's Perfection Certificate (as each such schedule
may be amended, modified or supplemented from time to time).

          "DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.


                                       3



          "DEPOSIT ACCOUNTS" means all "deposit accounts" (as defined in the
UCC), whether or not evidenced by an Instrument, and all certificates and
Instruments, if any, from time to time representing, evidencing or deposited
into such deposit accounts.

          "EQUIPMENT" means all "equipment" (as defined in the UCC), including
all items of machinery, equipment, Computer Hardware, furnishings and fixtures
of every kind, whether or not affixed to real property, as well as all motor
vehicles, automobiles, trucks, trailers, railcars, barges and vehicles of every
description, handling and delivery equipment, all additions to, substitutions
for, replacements of or accessions to any of the foregoing, all attachments,
components, parts (including spare parts) and accessories whether installed
thereon or affixed thereto and all fuel for any thereof and all options,
warranties, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights and indemnifications relating to any
of the foregoing.

          "EVENT OF DEFAULT" means an "Event of Default" as defined in the
Indenture.

          "EXCLUDED DEPOSIT ACCOUNTS" means each of the Deposit Accounts that
are excluded from the requirements of Sections 4.01 and 4.12 only (including
accounts constituting Receivables and Related Assets), and, as of the Issue
Date, listed on Schedule 1.01B hereto.

          "EXCLUDED EQUIPMENT" means at any date any Equipment of a Loan Party
which is subject to, or secured by, a Capital Lease Obligation or Purchase Money
Indebtedness if and to the extent that (i) the express terms of a valid and
enforceable restriction in favor of a Person who is not a Group Company
contained in the agreements or documents granting or governing such Capital
Lease Obligation or Purchase Money Indebtedness prohibits, or requires any
consent or establishes any other conditions for, an assignment thereof, or a
grant of a security interest therein, by a Loan Party and (ii) such restriction
relates only to the asset or assets acquired by a Loan Party with the Proceeds
of such Capital Lease Obligation or Purchase Money Indebtedness and attachments
thereto or substitutions therefor; provided that all Proceeds paid or payable to
any Loan Party from any sale, transfer or assignment or other voluntary or
involuntary disposition of such Equipment and all rights to receive such
Proceeds shall be included in the Collateral to the extent not otherwise
required to be paid to the holder of the Capital Lease Obligation or Purchase
Money Indebtedness secured by such Equipment.

          "EXCLUDED SECURITIES ACCOUNTS" means each of the Securities Accounts
that are excluded from the requirements of Sections 4.01 and 4.12 only
(including accounts constituting Receivables and Related Assets), and, as of the
Issue Date, listed on Schedule 1.01B hereto.

          "EXEMPT DEPOSIT ACCOUNTS" means (i) Deposit Accounts the balance of
which consists exclusively of (A) withheld income taxes and federal, state or
local employment taxes in such amounts as are required in the reasonable
judgment of a Loan Party to be paid to the Internal Revenue Service or state or
local government agencies within the following two months with respect to
employees of any of the Loan Parties and (B) amounts required to be paid over to
an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or
for the benefit of employees of one or more Loan Parties, and (ii) all
segregated Deposit Accounts constituting (and the balance of which consists
solely of funds set aside in connection with) taxes accounts, payroll accounts
and trust accounts.


                                       4



          "FAIR MARKET VALUE" has the meaning given to it in the Indenture.

          "FINANCE PARTY" means each Noteholder, the Trustee, the Collateral
Agent, each Indemnitee and their respective successors and assigns, and "FINANCE
PARTIES" means any two or more of them, collectively.

          "GENERAL INTANGIBLES" means all "general intangibles" (as defined in
the UCC) and also means and includes (i) all Payment Intangibles and other
obligations and indebtedness owing to any Loan Party (other than any such
Payment Intangibles and other obligations and indebtedness comprising
Receivables and Related Assets), from whatever source arising, (ii) all Claims,
Judgments and/or Settlements, (iii) all rights or claims in respect of refunds
for taxes paid, (iv) all rights in respect of any pension plans or similar
arrangements maintained for employees of any Loan Party or any member of the
ERISA Group, (v) all interests in limited liability companies and/or
partnerships which interests do not constitute Securities and (vi) all
Supporting Obligations of any kind given by any Person with respect to all or
any of the foregoing.

          "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

          "GROUP COMPANY" means any of Holdings, InSight or their respective
Subsidiaries (regardless of whether or not consolidated with Holdings or InSight
for purposes of GAAP), and "GROUP COMPANIES" means all of them, collectively.

          "GUARANTEE" means the guarantee by any Guarantor of the Note
Obligations.

          "INDEBTEDNESS" has the meaning set forth in the Indenture.

          "INDEMNITEE" has the meaning set forth in Section 7.03(c) of this
Agreement.

          "INTELLECTUAL PROPERTY" means all Patents, Trademarks, Copyrights,
Software, Licenses, rights in intellectual property, goodwill, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how, domain names, mask works, customer lists, vendor lists, subscription
lists, data bases and related documentation, registrations, franchises and all
other intellectual or other similar property rights.

          "INTELLECTUAL PROPERTY SECURITY AGREEMENT" means a Grant of Security
Interest in United States Patents and Trademarks or a Grant of Security Interest
in United States Copyrights (as the context may require) substantially in the
form of Exhibit A-1 or A-2 to this Agreement, respectively, between one or more
Loan Parties and the Collateral Agent, as the same may be amended, modified or
supplemented from time to time.

          "ISSUE DATE" means September 22, 2005.


                                       5



          "JUDGMENTS" means all judgments, decrees, verdicts, decisions or
orders issued in resolution of or otherwise in connection with a Claim, whether
or not final or subject to appeal, and including all rights of enforcement
relating thereto and any and all Proceeds thereof.

          "LAW" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

          "LICENSE" means any Patent License, Trademark License, Copyright
License, Software License or other license or sublicense as to which any Loan
Party is a party (other than those license agreements constituting Excluded
Contracts; provided that rights to payments under any such license shall be
included in the Collateral to the extent permitted thereby or by Section 9-406
and 9-408 of the UCC).

          "LIQUID INVESTMENTS" has the meaning set forth in Section 2.05 of this
Agreement.

          "MATERIAL ADVERSE EFFECT" means (i) any material adverse effect upon
the business, assets, properties, liabilities, results of operations or
financial condition of Holdings, InSight and the Restricted Subsidiaries, taken
as a whole, (ii) a material adverse effect on the ability of a Loan Party to
consummate the transactions contemplated by the Note Documents to occur on the
Issue Date, (iii) a material adverse effect on the ability of any Loan Party to
perform any of its obligations under any Note Document to which it is a party or
(iv) a material adverse effect on the rights and benefits of the Finance Parties
under any Note Document.

          "MOODY'S" means Moody's Investors Service, Inc., and its successors.

          "NEGLIGIBLE ECONOMIC VALUE" shall mean the economic value of the
Intellectual Property, in the reasonable business judgment of the Loan Parties,
is such that the expense to maintain, defend, use, register, or prosecute the
Intellectual Property is less than, or approximately equivalent to, the economic
value received by the Loan Parties from the Intellectual Property.

          "NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the
Registration Rights Agreement related thereto and the Collateral Documents, in
each case including all exhibits and schedules thereto, and all other
agreements, documents and instruments relating to the Senior Secured Notes, in
each case as the same may be amended, modified or supplemented from time to time
in accordance with the provisions thereof.

          "NOTEHOLDERS" means the holders from time to time of the Senior
Secured Notes.

          "PATENT" means any of the following:


                                       6



          (i) the United States and foreign patents described on Schedule VI to
     any Loan Party's Perfection Certificate (as each such schedule may be
     amended, modified or supplemented from time to time) and any renewals
     thereof;

          (ii) all other letters patent and design letters patent of the United
     States or any other country;

          (iii) all applications filed or in preparation for filing for letters
     patent and design letters patent of the United States or any other country
     including, without limitation, applications in the United States Patent and
     Trademark Office or in any similar office or agency of the United States or
     any other country or political subdivision thereof;

          (iv) all reissues, divisions, continuations, continuations-in-part,
     revisions, renewals or extensions thereof;

          (v) all claims for, and rights to sue for, past, present or future
     infringement of any of the foregoing;

          (vi) all income, royalties, damages and payments now or hereafter due
     or payable with respect to any of the foregoing, including, without
     limitation, damages and payments for past, present or future infringements
     thereof and payments and damages under all Patent Licenses in connection
     therewith; and

          (vii) all rights corresponding to any of the foregoing whether arising
     under the Laws of the United States or any foreign country or otherwise.

          "PATENT LICENSE" means any written agreement now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, with respect to any Person's patent or any invention now or
hereafter in existence, whether or not patentable, or pursuant to which any Loan
Party has granted to any other Person, any right, whether exclusive or
non-exclusive, with respect to any Patent or any invention now or hereafter in
existence, whether or not patentable and whether or not a Patent or application
for Patent is in or hereafter comes into existence on such invention, including,
without limitation, the Patent Licenses described on Schedule VI to any Loan
Party's Perfection Certificate (as each such schedule may be amended, modified
or supplemented from time to time).

          "PERFECTION CERTIFICATE" means with respect to each Loan Party a
certificate, substantially in the form of Exhibit D hereto, completed and
supplemented with the schedules and attachments contemplated thereby to the
reasonable satisfaction of the Collateral Agent.

          "PERMITTED LIEN" means any Lien permitted under Section 1.01 the
Indenture.

          "PLEDGED ACCOUNT BANK" has the meaning set forth in Section 2.04(a).

          "PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed and whether tangible or intangible.


                                       7



          "PURCHASE MONEY INDEBTEDNESS" means Indebtedness of InSight or any of
its Restricted Subsidiaries incurred for the purpose of financing all or any
part of the purchase price of property, plant or equipment used in the business
of InSight or any Restricted Subsidiary or the cost of installation,
construction or improvement thereof, and the payment of any sales or other taxes
associated therewith.

          "RECORDABLE INTELLECTUAL PROPERTY" means Intellectual Property the
transfer of which is required to be recorded in the United States Patent and
Trademark Office or the United States Copyright Office in order to be effective
against subsequent third party transferees; provided that the following shall
not be considered "RECORDABLE INTELLECTUAL PROPERTY" hereunder: (i) unregistered
United States Copyrights, (ii) unregistered United States Trademarks and (iii)
non-exclusive Licenses.

          "RESTRICTED SUBSIDIARY" has the meaning set forth in the Indenture.

          "S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., and its successors.

          "SECURITY INTERESTS" means the security interests in the Collateral
granted under this Agreement securing the Note Obligations.

          "SETTLEMENTS" means all right, title and interest of a Loan Party in,
to and under any settlement agreement or other agreement executed in settlement
or compromise of any Claim, including all rights to enforce such agreements and
all payments thereunder or arising in connection therewith.

          "SOFTWARE" means all "software" (as defined in the UCC), and also
means and includes all software programs, whether now or hereafter owned,
licensed or leased by a Loan Party, designed for use on Computer Hardware,
including, without limitation, all operating system software, utilities and
application programs in whatever form and whether or not embedded in goods, all
source code and object code in magnetic tape, disk or hard copy format or any
other listings whatsoever, all firmware associated with any of the foregoing all
documentation, flowcharts, logic diagrams, web pages, manuals, specifications,
training materials, charts and pseudo codes associated with any of the
foregoing, and all options, warranties, services contracts, program services,
test rights, maintenance rights, support rights, renewal rights and
indemnifications relating to any of the foregoing.

          "SOFTWARE LICENSE" means any agreement (including any agreement
constituting a Copyright License, Patent License and/or Trademark License) now
or hereafter in existence granting to any Loan Party any right, whether
exclusive or non-exclusive, to use another Person's Software, or pursuant to
which any Loan Party has granted to any other Person, any right, whether
exclusive or non-exclusive, to use any Software, whether or not subject to any
registration.

          "SUPPORTING OBLIGATION" means a guarantee or other secondary
obligation supporting, or any Lien securing, the payment or performance of one
or more General Intangibles, Documents, Assigned Agreements or Investment
Property.


                                       8



          "TRADEMARK" means any of the following:

          (i) the United States and foreign trademarks described on Schedule VI
     to any Loan Party's Perfection Certificate (as each such schedule may be
     amended, modified or supplemented from time to time) and any renewals
     thereof;

          (ii) all other trademarks, trade names, corporate names, company
     names, business names, fictitious business names, trade styles, service
     marks, logos, slogans, certification marks, collective marks, brand names
     and trade dress which are or have been used in the United States or in any
     state, territory or possession thereof, or in any other place, nation or
     jurisdiction, along with all prints and labels on which any of the
     foregoing have appeared or appear, package and other designs, and any other
     source or business identifiers, and general intangibles of like nature, and
     the rights in any of the foregoing which arise under applicable Law;

          (iii) the goodwill of the business symbolized thereby or associated
     with each of the foregoing;

          (iv) all registrations and applications in connection therewith,
     including, without limitation, registrations and applications in the United
     States Patent and Trademark Office or in any similar office or agency of
     the United States, any state thereof or any other country or any political
     subdivision thereof, but excluding in all cases all intent-to-use United
     States trademark applications for which an amendment to allege use or
     statement of use has not been filed under 15 U.S.C. Section 1051(c) or 15
     U.S.C. Section 1051(d), respectively, or if filed, has not been deemed in
     conformance with 15 U.S.C. Section 1051(a) or examined and accepted,
     respectively, by the United States Patent and Trademark Office, provided
     that upon such filing and acceptance, such intent-to-use applications shall
     be included in the definition of Trademark;

          (v) all reissues, extensions and renewals thereof;

          (vi) all claims for, and rights to sue for, past, present or future
     infringements of any of the foregoing;

          (vii) all income, royalties, damages and payments now or hereafter due
     or payable with respect to any of the foregoing, including, without
     limitation, damages and payments for past, present or future infringements
     thereof and payments and damages under all Trademark Licenses in connection
     therewith; and

          (viii) all rights corresponding to any of the foregoing whether
     arising under the Laws of the United States or any foreign country or
     otherwise.

          "TRADEMARK LICENSE" means any written agreement now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, to use another Person's trademarks or trademark applications, or
pursuant to which any Loan Party has granted to any other Person, any right,
whether exclusive or non-exclusive, to use any Trademark, whether or not
registered, including, without limitation, the Trademark Licenses described on
Schedule VI to any Loan Party's Perfection Certificate (as each such schedule
may be amended,


                                       9



modified or supplemented from time to time) and the rights to prepare for sale,
sell and advertise for sale, all of the inventory now or hereafter owned by any
Loan Party and now or hereafter covered by such license agreements.

          "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
Law, the perfection, the effect of perfection or non-perfection or the priority
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.

          "US SUBSIDIARY" means with respect to any Person each Subsidiary of
such Person which, at the time of determination, is incorporated in or organized
under the Laws of the United States of America, any State thereof or the
District of Columbia, and "US SUBSIDIARIES" means all of them, collectively.

          Section 1.04. Terms Generally. Terms defined in the introductory
paragraphs hereof and the definitions in Section 1.03 shall apply equally to
both the singular and plural forms of the terms defined. Wherever the context
may require, any pronouns shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
otherwise stated herein or the context shall otherwise require. Unless otherwise
expressly provided herein, the word "day" means a calendar day.

                                   ARTICLE II
                               SECURITY INTERESTS

          Section 2.01. Grant of Security Interests. To secure the due and
punctual payment of all Note Obligations, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due, in accordance with the terms thereof and to
secure the performance of all of the obligations of each Loan Party hereunder
and the other Loan Parties hereunder and under the other Note Documents, each
Loan Party hereby grants to the Collateral Agent for the benefit of the Finance
Parties a security interest in, and each Loan Party hereby pledges and mortgages
to the Collateral Agent for the benefit of the Finance Parties, all of such Loan
Party's right, title and interest in, to and under the following, whether now
owned or existing or hereafter acquired, created or arising, whether tangible or
intangible, and regardless of where located (other than any item which on any
date constitutes an Excluded Contract or Excluded Equipment) (all of which are
herein collectively called the "COLLATERAL"):

          (i)  all Inventory;

          (ii) all General Intangibles;

          (iii) all Intellectual Property;


                                       10



          (iv) all Documents and all Supporting Obligations of any kind given by
     any Person with respect thereto;

          (v) all Chattel Paper;

          (vi) all Equipment;

          (vii) all Investment Property and all Supporting Obligations of any
     kind given by any Person with respect thereto;

          (viii) all Deposit Accounts (other than Excluded Deposit Accounts and
     Exempt Deposit Accounts);

          (ix) the Collateral Accounts, all cash and other property deposited
     therein or credited thereto from time to time, the Liquid Investments made
     pursuant to Section 2.07 and other monies and property of any kind of any
     Loan Party maintained with or in the possession of or under the control of
     the Collateral Agent;

          (x)  all Securities Accounts;

          (xi) all books and records (including, without limitation, customer
     lists, credit files, computer programs, printouts and other computer
     materials and records) of each Loan Party pertaining to any of the
     Collateral; and

          (xii) all Proceeds of all or any of the Collateral described in
     clauses (i) through (xii) hereof;

provided, however, that, the Collateral shall not include (i) any Voting Stock
that is issued by a Foreign Subsidiary (that is a corporation for United States
federal income tax purposes) and owned by any Loan Party, if and to the extent
that the inclusion of such Voting Stock in the Collateral would cause the
Collateral pledged by such Loan Party hereunder or under any other Note Document
to include in the aggregate more than 65% of the total combined voting power of
all classes of Voting Stock of such Foreign Subsidiary, (ii) assets securing
Purchase Money Indebtedness or Capital Lease Obligations permitted to be
incurred pursuant to the Indenture, (iii) Excluded Contracts, (iv) any Capital
Stock owned by any Loan Party and issued by an entity that is not a Wholly Owned
Subsidiary of such Loan Party to the extent (and only with respect to such
portion of such Capital Stock that would be prohibited as referred to below)
that any joint venture agreement, between or among any Loan Party and one or
more third parties with respect to a Permitted Joint Venture, by the express
terms of a valid and enforceable restriction in favor of such third parties
prohibits, or requires any consent for, the granting of a security interest in
such Capital Stock by such Loan Party, (v) any Capital Stock and other
securities of InSight, any of its Subsidiaries or any of Holdings' Subsidiaries
to the extent that the pledge of such Capital Stock or other securities to
secure the Note Obligations would cause InSight, such Subsidiary or such
Subsidiary of Holdings, as the case may be, to be required to file separate
financial statements with the Commission pursuant to Rule 3-16 of Regulation S-X
(as in effect from time to time), (vi) all Receivables and Related Assets and
(vii) any proceeds or products from any and all of the foregoing unless such
proceeds or products would otherwise constitute Collateral.


                                       11



          Notwithstanding the foregoing, if granting or perfecting any Lien to
secure the Note Obligations on any Collateral cannot be granted or perfected
under applicable law, none of InSight or the Guarantors will be required to
grant or perfect, as applicable, such Lien.

          Section 2.02. Continuing Liability of Each Loan Party. Anything herein
to the contrary notwithstanding, no Loan Party shall by virtue of this Agreement
be relieved of any obligation to observe and perform the terms and conditions to
be observed and performed by it under any contract, agreement, warranty or other
obligation with respect to the Collateral. Neither the Collateral Agent nor any
Finance Party shall have any obligation or liability under any such contract,
agreement, warranty or obligation by reason of or arising out of this Agreement
or the receipt by the Collateral Agent or any Finance Party of any payment
relating to any Collateral, nor shall the Collateral Agent or any Finance Party
be required to perform or fulfill any of the obligations of any Loan Party with
respect to any of the Collateral, to make any inquiry as to the nature or
sufficiency of any payment received by it or the sufficiency of the performance
of any party's obligations with respect to any Collateral. Furthermore, neither
the Collateral Agent nor any Finance Party shall be required to file any claim
or demand to collect any amount due or to enforce the performance of any party's
obligations with respect to the Collateral.

          Section 2.03. Security Interests Absolute. All rights of the
Collateral Agent, all security interests hereunder and all obligations of each
Loan Party hereunder are unconditional and absolute and independent and separate
from any other security for or guaranty of the Note Obligations, whether
executed by such Loan Party, any other Loan Party or any other Person. Without
limiting the generality of the foregoing, the obligations of each Loan Party
hereunder shall not be released, discharged or otherwise affected or impaired
by:

          (i) any extension, renewal, settlement, compromise, acceleration,
     waiver or release in respect of any Note Obligation under any other Note
     Document or any other agreement or instrument evidencing or securing any
     Note Obligation, by operation of Law or otherwise;

          (ii) any change in the manner, place, time or terms of payment of any
     Finance obligation or any other amendment, supplement or modification to
     any Note Document or any other agreement or instrument evidencing or
     securing any Note Obligation;

          (iii) any release, non-perfection or invalidity of any direct or
     indirect security for any Note Obligation, any sale, exchange, surrender,
     realization upon, offset against or other action in respect of any direct
     or indirect security for any Note Obligation or any release of any other
     obligor or Loan Parties in respect of any Note Obligation;

          (iv) any change in the existence, structure or ownership of any Loan
     Party, or any insolvency, bankruptcy, reorganization, arrangement,
     readjustment, composition, liquidation or other similar proceeding
     affecting a Loan Party or its assets or any resulting disallowance, release
     or discharge of all or any portion of any Note Obligation;

          (v) the existence of any claim, set-off or other right which any Loan
     Party may have at any time against any other Loan Party, any Finance Party
     or any other


                                       12



     Person, whether in connection herewith or any unrelated transaction;
     provided that nothing herein shall prevent the assertion of any such claim
     by separate suit or compulsory counterclaim;

          (vi) any invalidity or unenforceability relating to or against any
     Loan Party for any reason of any Note Document or any other agreement or
     instrument evidencing or securing any Note Obligation or any provision of
     applicable Law or regulation purporting to prohibit the payment by any Loan
     Party of any Note Obligation;

          (vii) any failure by any Finance Party: (A) to file or enforce a claim
     against any Loan Party or its estate (in a bankruptcy or other proceeding);
     (B) to give notice of the existence, creation or incurrence by any Loan
     Party of any new or additional indebtedness or obligation under or with
     respect to the Note Obligations; (C) to commence any action against any
     Loan Party; (D) to disclose to any Loan Party any facts which such Finance
     Party may now or hereafter know with regard to any Loan Party; or (E) to
     proceed with due diligence in the collection, protection or realization
     upon any collateral securing the Note Obligations;

          (viii) any direction as to application of payment by any Loan Party or
     any other Person;

          (ix) any subordination by any Finance Party of the payment of any Note
     Obligation to the payment of any other liability (whether matured or
     unmatured) of any Loan Party to its creditors;

          (x) any act or failure to act by the Collateral Agent or any other
     Finance Party under this Agreement or otherwise which may deprive any Loan
     Party of any right to subrogation, contribution or reimbursement against
     any other Loan Party or any right to recover full indemnity for any
     payments made by such Loan Party in respect of the Note Obligations; or

          (xi) any other act or omission to act or delay of any kind by any Loan
     Party or any Finance Party or any other Person or any other circumstance
     whatsoever which might, but for the provisions of this clause, constitute a
     legal or equitable discharge of any Loan Party's obligations hereunder
     (other than final payment in full of the Note Obligations).

          Each Loan Party has irrevocably and unconditionally delivered this
Agreement to the Collateral Agent, for the benefit of the Finance Parties, and
the failure by any other Person to sign this Agreement or a security agreement
similar to this Agreement or otherwise shall not discharge the obligations of
any Loan Party hereunder.

          This Agreement shall remain fully enforceable against each Loan Party
irrespective of any defenses that any other Loan Party may have or assert in
respect of the Note Obligations, including, without limitation, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, except that a Loan Party may
assert the defense of final payment in full of the Note Obligations.


                                       13



          Section 2.04. Maintaining the Account Collateral. (a) Each Loan Party
will maintain Deposit Accounts (other than Excluded Deposit Accounts and Exempt
Deposit Accounts) only with the financial institution acting as Collateral Agent
hereunder or with a financial institution (a "PLEDGED ACCOUNT BANK") that has
entered into an Account Control Agreement with such Loan Party and the
Collateral Agent.

          (b) Each Loan Party will maintain Securities Accounts (other than
Excluded Securities Accounts and Exempt Securities Accounts) only with the
financial institution acting as Collateral Agent hereunder or with a financial
institution that has entered into an Account Control Agreement with such Loan
Party and the Collateral Agent.

          Section 2.05. Collateral Agent Not Responsible. The Collateral Agent
shall not be responsible for proper application by any Loan Party of any amount
distributed to such Loan Party pursuant to this Article II.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          Each Loan Party represents and warrants that:

          Section 3.01. Title to Collateral. Such Loan Party has good and
marketable title to, or valid license or leasehold interests in, all of the
Collateral in which it has granted a security interest hereunder, free and clear
of any Liens other than (i) Permitted Liens, (ii) Liens in respect of motor
vehicles that will be terminated by the Loan Party after the Issue Date in
accordance with Section 4.07 hereof and (iii) Liens in respect of which such
Loan Party has delivered UCC-3 termination statements or partial release
financing statements on the Issue Date. No Collateral having a value
individually or collectively in excess of $250,000 (other than Inventory in
transit or Inventory in the possession of a carrier or similar bailee as to
which the provisions of Section 4.04 of this Agreement have been complied with)
is in the possession or control of any Person asserting any claim thereto or
security interest therein (other than financial institutions under an Account
Control Agreement), except that the Collateral Agent or its designee may have
possession and/or control of Collateral as contemplated hereby and by the other
Note Documents.

          Section 3.02. Validity, Perfection and Priority of Security Interests.

          (a) The Security Interests constitute valid security interests under
the UCC securing the Note Obligations.

          (b) When UCC-1 financing statements naming the Collateral Agent as
secured party and containing a description of the Collateral in the form
specified in Exhibit C hereto shall have been filed in the respective offices
specified in Schedule 4.01 hereto, the Security Interests will constitute
perfected security interests in all right, title and interest of each Loan Party
in the Collateral to the extent that a security interest therein may be
perfected by filing pursuant to the UCC, prior to all other Liens and rights of
others therein except for Permitted Liens.


                                       14



          (c) When each Intellectual Property Security Agreement has been filed
with the United States Patent and Trademark Office and/or with the United States
Copyright Office, the Security Interests will (assuming that the financing
statements referred to in paragraph (b) above have been filed in the appropriate
filing offices) constitute perfected security interests in all right, title and
interest of such Loan Party in the Recordable Intellectual Property therein
described to the extent that a security interest therein may be perfected by
filing in such office, prior to all other Liens and rights of others therein
except for Permitted Liens.

          (d) When each Account Control Agreement has been executed and
delivered to the Collateral Agent, the Security Interests will constitute
perfected security interests in all right, title and interest of the Loan
Parties in the Deposit Accounts and Securities Accounts, as applicable, subject
thereto, prior to all other Liens and rights of others therein and subject to no
adverse claims except for Permitted Liens.

          Section 3.03. No Consents. No consent of any other Person (including,
without limitation, any stockholder or creditor of such Loan Party or any of its
Subsidiaries) and no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
Governmental Authority is required to be obtained by the Loan Party in
connection with the execution, delivery or performance of this Agreement, or in
connection with the exercise of the rights and remedies of the Collateral Agent
pursuant to this Agreement, except (i) as may be required to perfect (as
described in Schedule 4.01 hereto) and maintain the perfection of the security
interests created hereby, (ii) with respect to vehicles represented by a
certificate of title, (iii) in connection with the disposition of the Collateral
by Laws affecting the offering and sale of securities generally or as described
in Schedule 3.03 hereto, (iv) certain remedial actions may be limited by
applicable Laws or (v) as contemplated by the definition of Excluded Contracts;
provided, however, that (i) the registration of Copyrights in the United States
Copyright office may be required to obtain a security interest therein that is
effective against subsequent transferees under United States Federal copyright
law and (ii) to the extent that recordation of the Security Interests in the
United States Patent and Trademark Office or the United States Copyright Office
is necessary to perfect the Security Interests or to render the Security
Interests effective against subsequent third parties, such recordations will not
have been made with respect to the items that are not Recordable Intellectual
Property.

          Section 3.04. Insurance. On the Issue Date, each Loan Party's
insurance complies with the provisions of Section 4.09.

          Section 3.05. Intellectual Property.

          (a) Schedule VI to the Loan Party's Perfection Certificate, attached
hereto as Annex I is a true, correct and complete list of all Copyrights and
Copyright Licenses owned by the Grantors as of the date hereof.

          (b) Schedule VI to the Loan Party's Perfection Certificate, attached
hereto as Annex I is a true, correct and complete list of all Patents and Patent
Licenses owned by the Grantors as of the date hereof.


                                       15



          (c) Schedule VI to the Loan Party's Perfection Certificate, attached
hereto as Annex I is a true, correct and complete list of all Trademarks and
Trademark Licenses owned by the Grantors as of the date hereof.

          (d) Except as set forth in Schedule VI to the Loan Party's Perfection
Certificate, attached hereto as Annex I, none of the Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which any
Grantor is the licensor or franchisor.

          (e) Each Loan Party is the exclusive owner of the entire right, title,
and interest in and to, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No claim has
been asserted or is pending by any Person challenging or questioning the use by
any Loan Party of any of the Intellectual Property owned by any Loan Party or
the validity, enforceability or effectiveness of any of the Intellectual
Property owned by any Loan Party or the Loan Party's rights to any Intellectual
Property, nor does any Loan Party know of any basis for any such claim, except
as otherwise set forth in the Indenture. The use by the Loan Parties of the
Intellectual Property does not infringe or misappropriate the Intellectual
Property rights of any Person in any respect, nor does any Loan Party know of
any basis for any such claim, except as otherwise set forth in the Indenture. No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or any Loan Party's
rights in, any Intellectual Property.

                                   ARTICLE IV
                                    COVENANTS

          Each Loan Party covenants and agrees that until the payment in full of
all Note Obligations, other than contingent indemnification obligations for
which no claim has been made, such Loan Party will comply with the following:

          Section 4.01. Delivery of Perfection Certificate; Initial Perfection
and Delivery of Search Reports. On or prior to the Issue Date, such Loan Party
shall (i) deliver its Perfection Certificate to the Collateral Agent, and (ii)
cause all filings and recordings specified in Schedule 4.01 hereto to be
delivered to the Collateral Agent for filing or recording, as applicable, within
the time periods specified in such schedule. The information set forth in the
Perfection Certificate shall be correct and complete in all material respects as
of the Issue Date. The Loan Parties represent and warrant that duly executed
Account Control Agreements with respect to each of the Loan Parties' Deposit
Accounts (other than Exempt Deposit Accounts and Excluded Deposit Accounts, with
respect to which no Account Control Agreements shall be required hereunder), if
any, and Securities Accounts (other than Excluded Securities Accounts), if any,
have been delivered to the Collateral Agent and are in full force and effect.

          Section 4.02. Change of Name, Identity, Structure or Location;
Subjection to Other Security Agreements. Such Loan Party will not change its
name, identity, structure or location (determined as provided in Section 9-307
of the UCC) in any manner, and shall not become bound, as provided in Section
9-203(d) of the UCC, by a security agreement entered into by another Person, in
each case, unless it shall have given the Collateral Agent not less than 10
days' prior notice thereof. Such Loan Party shall not in any event change the
location of its chief executive office or its name, identity, structure or
location (determined as provided in


                                       16



Section 9-307 of the UCC), or become bound, as provided in Section 9-203(d) of
the UCC, by a security agreement entered into by another Person, if such change
would cause the Security Interests in any Collateral to lapse or cease to be
perfected unless such Loan Party has taken on or before the date of lapse all
actions necessary to ensure that the Security Interests in the Collateral do not
lapse or cease to be perfected.

          Section 4.03. Further Actions. Each Loan Party will, from time to time
at its expense and in such manner and form as the Collateral Agent may
reasonably request, execute, deliver, file and record any financing statement,
instrument, document, agreement or other paper and take any other action
(including, without limitation, any filings of financing or continuation
statements under the UCC and any filings with the United States Patent and
Trademark Office and the United States Copyright Office) that from time to time
may be reasonably necessary or advisable under the UCC or with respect to
Recordable Intellectual Property, or that the Collateral Agent may reasonably
request, in order to create, preserve, perfect, confirm or validate the Security
Interests or to enable the Collateral Agent and the Finance Parties to obtain
the full benefit of this Agreement or to exercise and enforce any of its rights,
powers and remedies created hereunder or under applicable Law with respect to
any of the Collateral. To the extent permitted by applicable Law but without
limiting such Loan Party's obligations to itself comply with the first sentence
of this Section 4.03, such Loan Party hereby authorizes the Collateral Agent to
file, in the name of such Loan Party or otherwise and without the signature or
other separate authorization or authentication of such Loan Party appearing
thereon, such UCC financing statements or continuation statements as the
Collateral Agent may reasonably deem necessary or appropriate to further perfect
or maintain the perfection of the Security Interests. Such Loan Party agrees
that a carbon, photographic, photostatic or other reproduction of this Agreement
or of a financing statement is sufficient as a financing statement. The Loan
Parties shall pay the costs of, or incidental to, any recording or filing of any
financing or continuation statements or other assignment documents concerning
the Collateral.

          Section 4.04. Delivery of Instruments, Etc. Such Loan Party will
promptly deliver each Instrument and each Certificated Security (other than (i)
Cash Equivalents held in a Deposit Account or a Securities Account and subject
to an effective Account Control Agreement unless maintained with the Collateral
Agent or as otherwise required by Section 4.13 hereof, (ii) Instruments and
Certificated Securities not constituting Collateral, (iii) Instruments or
Certificated Securities received in connection with bankruptcy or reorganization
of suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers in the ordinary course of business
and (iv) Instruments and Certificated Securities having individually, a face
amount of less than $250,000) to the Collateral Agent, appropriately indorsed to
the Collateral Agent; provided that so long as no Event of Default shall have
occurred and be continuing, and except as required by any other Note Document,
such Loan Party may (unless otherwise provided in Section 2.04(b)) retain for
collection in the ordinary course of business any Instruments received by it in
the ordinary course of business, and the Collateral Agent shall, promptly upon
request of such Loan Party, make appropriate arrangements for making any other
Instrument or Certificated Security pledged by such Loan Party available to it
for purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate to the Collateral Agent, against a
trust receipt or like document).


                                       17



          Section 4.05. Certificates of Title. Within 90 days following the
Issue Date (or such later date as the Collateral Agent may agree in its sole
discretion), such Loan Party shall in the case of Equipment constituting one or
more titled vehicles deliver to the Collateral Agent any and all certificates of
title, applications for title or similar evidence of ownership of such Equipment
and shall cause the Collateral Agent to be named as sole lienholder on any such
certificate of title or other evidence of ownership.

          Section 4.06. Insurance. On or prior to the Issue Date, such Loan
Party will cause the Collateral Agent to be named as an insured party and loss
payee, effective at all times on and after the Issue Date, on each insurance
policy covering risks relating to any of its Inventory and Equipment. No such
insurance policy shall purport to include any liability on the part of the
Collateral Agent and the Finance Parties for insurance premiums and each such
insurance policy shall provide that the insurer shall provide at least 30 days
(10 days in the case of non-payment of premium) prior written notice to the
Collateral Agent of any proposed cancellation, termination or material
modification thereof. Such Loan Party hereby appoints the Collateral Agent as
its attorney in fact, effective during the continuance of an Event of Default,
to make proof of loss, claims for insurance and adjustments with insurers, and
to execute or endorse all documents, checks or drafts in connection with
payments made as a result of any such insurance policies.

          Such Loan Party assumes all liability and responsibility in connection
with the Collateral acquired by it and the liability of such Loan Party to pay
the Note Obligations shall in no way be affected or diminished by reason of the
fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Loan Party.

          Section 4.07. Information Regarding Collateral. Such Loan Party will,
promptly upon request, provide to the Collateral Agent all information and
evidence it may reasonably request concerning the Collateral to enable the
Collateral Agent to enforce the provisions of this Agreement.

          Section 4.08. Covenants Regarding Intellectual Property. Except in the
case of subparagraphs (a), (b), (c), (e) and (f) below where the failure to do
so could not reasonably be expected to have a Material Adverse Effect and
subject to the rights of Loan Parties to dispose of assets and property in
accordance with the Indenture:

          (a) Such Loan Party (either itself or through licensees) will, for
     each Patent, not do any act, or omit to do any act, whereby any Patent may
     become invalidated or dedicated to the public, and shall continue to mark
     any products covered by a Patent as required by the patent laws of all
     applicable jurisdictions.

          (b) Such Loan Party (either itself or, if permitted by Law, through
     its licensees or its sublicensees) will, for each Trademark, (i) maintain
     such Trademark in full force free from any claim of abandonment or
     invalidity from non-use, material alteration, naked licensing or
     genericide, (ii) display such Trademark with proper notice, including
     notice of federal registration to the extent permitted by applicable Law
     and consistent with past practice, (iii) not knowingly use or knowingly
     permit the use of such


                                       18



     Trademark in violation of any third party rights and (iv) not permit any
     assignment in gross of such Trademark.

          (c) Such Loan Party (either itself or through licensees) will, for
     each work covered by a Copyright, continue to publish, reproduce, display,
     adopt and distribute the work with appropriate copyright notice.

          (d) Such Loan Party shall promptly notify the Collateral Agent if it
     knows or has reason to know that any Patent, Trademark or Copyright (or any
     application or registration relating thereto) may become abandoned or
     dedicated to the public, or of any adverse determination or development
     (including, without limitation, the institution of, or any such
     determination or development in, any proceeding in the United States Patent
     and Trademark Office, the United States Copyright Office or any court,
     other than ordinary course United States Patent and Trademark Office
     actions) regarding such Loan Party's ownership of any Patent, Trademark,
     Copyright or Software, its right to register the same or to keep, use or
     maintain the same.

          (e) Such Loan Party will take all commercially reasonable steps at its
     sole cost, expense and risk to file, maintain and pursue each application
     relating to the Patents, Trademarks and/or Copyrights (and to obtain the
     relevant grant or registration) and to preserve and maintain all common law
     rights in any Trademarks and each registration of the Patents, Trademarks
     and Copyrights, including filing and paying fees for applications for
     renewal, reissues, divisions, extensions, revisions, continuations,
     continuations-in-part, affidavits of use, affidavits of incontestability
     and maintenance, and, unless such Loan Party shall reasonably determine
     that any such action would be of Negligible Economic Value, to initiate
     opposition, interference, reexamination and cancellation proceedings
     against third parties.

          (f) If any rights to any Patent, Trademark, Copyright, Software or
     License relating thereto is believed infringed, misappropriated, breached
     or diluted by a third party, such Loan Party shall notify the Collateral
     Agent promptly after it learns thereof and shall, unless such Loan Party
     shall reasonably determine that any such action would be of Negligible
     Economic Value, promptly take such action at its sole cost, expense and
     risk as is consistent with past practice of such Loan Party to enforce its
     rights and to recover any and all damages for such infringement,
     misappropriation or dilution, and take such other actions as such Loan
     Party shall reasonably deem appropriate under the circumstances to protect
     such Patent, Trademark, Copyright, Software or License. Such Loan Party
     will take all actions reasonably necessary to prevent any of the
     Intellectual Property from becoming forfeited, abandoned, dedicated to the
     public, invalidated or impaired in any way.

          (g) Within 45 days after the end of each fiscal quarter of InSight,
     each Loan Party will (i) inform the Collateral Agent of: (1) all
     applications for Patents, Trademarks or Copyrights filed during such fiscal
     quarter by such Loan Party or by any agent, employee, licensee or delegate
     on its behalf with the United States Patent and Trademark Office or the
     United States Copyright Office or any office or agency in any political
     subdivision of the United States or in any other country or any political
     subdivision


                                       19



     thereof and (2) any newly registered Intellectual Property acquired by such
     Loan Party during such fiscal quarter and (ii) upon request of the
     Collateral Agent, execute any and all agreements, instruments, documents
     and papers as the Collateral Agent may reasonably request to evidence the
     Security Interests in the foregoing described in clause (i) of this
     Section, including without limitation, such registrations, licenses,
     applications, any resulting Patent, Trademark or Copyright and the goodwill
     or accounts and general intangibles of such Loan Party relating thereto or
     represented thereby, and such Loan Party hereby appoints the Collateral
     Agent its attorney-in-fact to execute and file such writings for the
     foregoing purposes.

          (h) Prior to the Collateral Agent's giving of notice to the Loan
     Parties during the continuance of an Event of Default, the Loan Parties
     shall have the exclusive right to sue for past, present and future
     infringement of the Intellectual Property including the right to seek
     injunctions and/or money damages, in an effort by the Loan Parties to
     protect the Intellectual Property against encroachment by third parties,
     provided, however:

               (i) Any money damages awarded or received by the Loan Parties on
          account of such suit (or the threat of such suit) shall constitute
          Collateral.

               (ii) Following written notice given by the Collateral Agent to
          the Loan Parties during the continuance of any Event of Default, the
          Collateral Agent may terminate or limit the Loan Parties' rights under
          this Section 4.11(j).

          Section 4.09. Deposit Accounts and Securities Accounts. No Loan Party
shall establish after the date hereof or permit to exist any Deposit Account
(other than Exempt Deposit Accounts or Excluded Deposit Accounts) or any
Securities Account (other than Excluded Securities Accounts and except any such
account maintained with the Collateral Agent or constituting Collateral
Accounts) without promptly delivering to the Collateral Agent a fully executed
Account Control Agreement with respect to such account. Subject to Section
2.04(b) hereof and the rights of the Collateral Agent under Article V hereof,
each Loan Party shall cause all cash (other than cash constituting Receivables
or Related Assets) and cash Proceeds of Collateral hereunder to be deposited in
a Deposit Account maintained with the Collateral Agent or with respect to which
an effective Account Control Agreement has been delivered to the Collateral
Agent.

          Section 4.10. Claims. In the event any Claim constituting Collateral
in excess of $1,000,000 arises or otherwise becomes known after the date hereof,
the applicable Loan Party will deliver to the Collateral Agent a supplement to
Schedule 1.01A hereto describing such Claim and expressly subjecting such Claim,
all Judgments and/or Settlements with respect thereto and all Proceeds thereof
to the Security Interests hereunder.

                                    ARTICLE V
                           GENERAL AUTHORITY; REMEDIES

          Section 5.01. General Authority. Each Loan Party hereby irrevocably
appoints the Collateral Agent and any officer or agent thereof as its true and
lawful attorney-in-fact, with


                                       20



full power of substitution, in the name of such Loan Party, the Collateral
Agent, the Finance Parties or otherwise, for the sole use and benefit of the
Collateral Agent and the Finance Parties, but at such Loan Party's expense, to
the extent permitted by Law and subject to the Collateral Agency Agreement, to
exercise at any time and from time to time while an Event of Default has
occurred and is continuing all or any of the following powers with respect to
all or any of the Collateral, all acts of such attorney being hereby ratified
and confirmed; such power, being coupled with an interest, is irrevocable until
the Note Obligations (other than contingent indemnification obligations for
which no claim has been made) are paid in full:

          (i) to take any and all appropriate action and to execute any and all
     documents and instruments which may be necessary or desirable to carry out
     the terms of this Agreement;

          (ii) to receive, take, endorse, assign and deliver any and all checks,
     notes, drafts, acceptances, documents and other negotiable and
     non-negotiable Instruments taken or received by such Loan Party as, or in
     connection with, Collateral;

          (iii) to commence, settle, compromise, compound, prosecute, defend or
     adjust any Claim, suit, action or proceeding with respect to, or in
     connection with, the Collateral;

          (iv) to sell, transfer, assign or otherwise deal in or with the
     Collateral or the Proceeds or avails thereof, including, without
     limitation, for the implementation of any assignment, lease, License,
     sublicense, grant of option, sale or other disposition of any Patent,
     Trademark, Copyright or Software or any action related thereto, as fully
     and effectually as if the Collateral Agent were the absolute owner thereof;

          (v) to extend the time of payment of any or all of the Collateral and
     to make any allowance and other adjustments with respect thereto; and

          (vi) to do, at its option, but at the expense of such Loan Party, at
     any time or from time to time, all acts and things which the Collateral
     Agent deems necessary to protect or preserve the Collateral and to realize
     upon the Collateral.

          Section 5.02. Remedies upon Event of Default.

          (a) If any Event of Default has occurred and is continuing, the
Collateral Agent may, in addition to all other rights and remedies granted to it
in this Agreement and any other agreement securing, evidencing or relating to
the Note Obligations: (i) exercise on behalf of the Finance Parties all rights
and remedies of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, (ii) without
demand of performance or other demand or notice of any kind (except as herein
provided or as may be required by mandatory provisions of Law) to or upon any
Loan Party or any other Person (all of which demands and/or notices are hereby
waived by each Loan Party), (A) withdraw all cash and Liquid Investments in the
Collateral Accounts and apply such cash and Liquid Investments and other cash,
if any, then held by it as Collateral as specified in Section 5.04, (B) give
notice and take sole possession and control of all amounts on deposit in or
credited to any Deposit Account (other than an Excluded Deposit Account or an
Exempt Deposit Account) or Securities Account


                                       21



(other than an Excluded Securities Account) pursuant to the
related Account Control Agreement and apply all such funds as specified in
Section 5.04 hereof and (C) if there shall be no such cash, Liquid Investments
or other amounts or if such cash, Liquid Investments and other amounts shall be
insufficient to pay all the Note Obligations in full or cannot be so applied for
any reason or if the Collateral Agent determines to do so, collect, receive,
appropriate and realize upon the Collateral and/or sell, assign, give an option
or options to purchase or otherwise dispose of and deliver the Collateral (or
contract to do so) or any part thereof at public or private sale, at any office
of the Collateral Agent or elsewhere in such manner as is commercially
reasonable and as the Collateral Agent may deem best, for cash, on credit or for
future delivery, without assumption of any credit risk and at such price or
prices as the Collateral Agent may deem satisfactory.

          (b) The Collateral Agent shall give each Loan Party not less than 10
days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. Any such notice shall (i) in the case of a public sale, state
the time and place fixed for such sale, (ii) in the case of a private sale,
state the day after which such sale may be consummated, (iii) contain the
information specified in UCC Section 9-613, (iv) be authenticated and (v) be
sent to the parties required to be notified pursuant to Section 9-611(c) of the
UCC; provided that, if the Collateral Agent fails to comply with this sentence
in any respect, its liability for such failure shall be limited to the liability
(if any) imposed on it as a matter of law under the UCC. The Collateral Agent
and each Loan Party agree that such notice constitutes reasonable notification
within the meaning of Section 9-611 of the UCC. Except as otherwise provided
herein, each Loan Party hereby waives, to the extent permitted by applicable
Law, notice and judicial hearing in connection with the Collateral Agent's
taking possession or disposition of any of the Collateral.

          (c) The Collateral Agent or any Finance Party may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). Each Loan Party will execute and deliver such documents and take such
other action as the Collateral Agent deems necessary or advisable in order that
any such sale may be made in compliance with Law. Upon any such sale, the
Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
hold the Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix in the notice of such sale. At any such sale, the Collateral may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may
determine. The Collateral Agent shall not be obligated to make any such sale
pursuant to any such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned without further notice. In the case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Collateral Agent until the selling price is paid by the
purchaser thereof, but the Collateral Agent shall not incur any liability in the
case of the failure of such


                                       22



purchaser to take up and pay for the Collateral so sold and, in the case of any
such failure, such Collateral may again be sold upon like notice.

          (d) For the purpose of enforcing any and all rights and remedies under
this Agreement, the Collateral Agent may, if any Event of Default has occurred
and is continuing, (i) require each Loan Party to, and each Loan Party agrees
that it will, at its expense and upon the request of the Collateral Agent,
forthwith assemble, store and keep all or any part of the Collateral as directed
by the Collateral Agent and make it available at a place designated by the
Collateral Agent which is, in the Collateral Agent's opinion, reasonably
convenient to the Collateral Agent and such Loan Party, whether at the premises
of such Loan Party or otherwise, it being understood that such Loan Party's
obligation so to deliver the Collateral is of the essence of this Agreement and
that, accordingly, upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific
performance by such Loan Party of such obligation; (ii) to the extent permitted
by applicable Law, enter, with or without process of law and without breach of
the peace, any premise where any of the Collateral is or may be located, and
without charge or liability to any Loan Party, seize and remove such Collateral
from such premises; (iii) have access to and use such Loan Party's books and
records relating to the Collateral; and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by such Loan Party, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Collateral Agent deems appropriate and, in connection with such
preparation and disposition, use without charge any Intellectual Property or
technical process used by such Loan Party. The Collateral Agent may also render
any or all of the Collateral unusable at any Loan Party's premises and may
dispose of such Collateral on such premises without liability for rent or costs.

          (e) Without limiting the generality of the foregoing, if any Event of
Default has occurred and is continuing:

          (i) the Collateral Agent may (subject to the express terms of any
     valid and enforceable restriction in favor of a Person who is not a Group
     Company that prohibits, requires any consent, or establishes any other
     conditions for, a license thereof) license, or sublicense, whether general,
     special or otherwise, and whether on an exclusive (if consistent with past
     business practices) or non-exclusive basis, any Patents, Trademarks,
     Copyrights or Software included in the Collateral throughout the world for
     such term or terms, on such conditions and in such manner as the Collateral
     Agent shall in its sole and commercially reasonable discretion determine;

          (ii) the Collateral Agent may (without assuming any obligations or
     liability thereunder), at any time and from time to time, enforce (and
     shall have the exclusive right to enforce) against any licensor,
     sublicensor, licensee or sublicensee all rights and remedies of any Loan
     Party in, to and under any License and take or refrain from taking any
     action under any provision thereof, and each Loan Party hereby releases the
     Collateral Agent and each of the Finance Parties from, and agrees to hold
     the Collateral Agent and each of the Finance Parties free and harmless from
     and against any claims arising out of, any lawful action so taken or
     omitted to be taken with respect thereto;


                                       23



          (iii) upon request by the Collateral Agent, each Loan Party will use
     its commercially reasonable efforts to obtain all requisite consents or
     approvals by the licensor, sublicensor, licensee or sublicensee of each
     License to effect the assignment of all of such Loan Party's right, title
     and interest thereunder to the Collateral Agent or its designee and will
     execute and deliver to the Collateral Agent a power of attorney, in form
     and substance reasonably satisfactory to the Collateral Agent, for the
     implementation of any lease, assignment, License, sublicense, grant of
     option, sale or other disposition of a Patent, Trademark, Copyright or
     Software; and

          (iv) the Collateral Agent may direct each Loan Party to refrain, in
     which event each such Loan Party shall refrain, from using or practicing
     any Trademark, Patent, Copyright or Software in any manner whatsoever,
     directly or indirectly, and shall, if requested by the Collateral Agent,
     change such Loan Party's name to eliminate therefrom any use of any
     Trademark and will execute such other and further documents as the
     Collateral Agent may request to further confirm this change and transfer
     ownership of the Trademarks, Patents, Copyrights, Software and
     registrations and any pending applications therefor to the Collateral
     Agent.

          (f) In the event of any disposition following the occurrence and
during the continuance of any Event of Default of any Patent, Trademark,
Copyright or Software pursuant to this Article V, each Loan Party shall supply
its know-how and expertise relating to the manufacture and sale of the products
or services bearing Trademarks or the products, services or works made or
rendered in connection with or under Patents, Trademarks, Copyrights or
Software, and its customer lists and other records relating to such Patents,
Trademarks, Copyrights or Software and to the distribution of said products,
services or works, to the Collateral Agent.

          (g) If any Event of Default has occurred and is continuing, the
Collateral Agent, instead of exercising the power of sale conferred upon it
pursuant to this Section 5.02, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction, and may in addition institute and maintain such suits and
proceedings as the Collateral Agent may deem appropriate to protect and enforce
the rights vested in it by this Agreement.

          (h) If any Event of Default has occurred and is continuing, the
Collateral Agent shall, to the extent permitted by applicable Law, without
notice to any Loan Party or any party claiming through any Loan Party, without
regard to the solvency or insolvency at such time of any Person then liable for
the payment of any of the Note Obligations, without regard to the then value of
the Collateral and without requiring any bond from any complainant in such
proceedings, be entitled as a matter of right to the appointment of a receiver
or receivers (who may be the Collateral Agent) of the Collateral or any part
thereof, and of the profits, revenues and other income thereof, pending such
proceedings, with such powers as the court making such appointment shall confer,
and to the entry of an order directing that the profits, revenues and other
income of the property constituting the whole or any part of the Collateral be
segregated, sequestered and impounded for the benefit of the Collateral Agent
and the Finance Parties, and


                                       24



each Loan Party irrevocably consents to the appointment of such receiver or
receivers and to the entry of such order.

          (i) Each Loan Party agrees, to the extent it may lawfully do so, that
it will not at any time in any manner whatsoever claim or take the benefit or
advantage of, any appraisal, valuation, stay, extension, moratorium, turnover or
redemption law, or any Law permitting it to direct the order in which the
Collateral shall be sold, now or at any time hereafter in force which may delay,
prevent or otherwise affect the performance or enforcement of this Agreement,
and each Loan Party hereby waives all benefit or advantage of all such Laws.
Each Loan Party covenants that it will not hinder, delay or impede the execution
of any power granted to the Collateral Agent or any other Finance Party in any
Note Document.

          (j) Each Loan Party, to the extent it may lawfully do so, on behalf of
itself and all who claim through or under it, including, without limitation, any
and all subsequent creditors, vendees, assignees and lienors, waives and
releases all rights to demand or to have any marshalling of the Collateral upon
any sale, whether made under any power of sale granted herein or pursuant to
judicial proceedings or under any foreclosure or any enforcement of this
Agreement, and consents and agrees that all of the Collateral may at any such
sale be offered and sold as an entirety.

          (k) Each Loan Party waives, to the extent permitted by Law,
presentment, demand, protest and any notice of any kind (except the notices
expressly required hereunder or in the other Note Documents) in connection with
this Agreement and any action taken by the Collateral Agent with respect to the
Collateral.

          Section 5.03. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof,
neither the Collateral Agent nor the Finance Parties shall have any duty to
exercise any rights or take any steps to preserve the rights of any Loan Party
in the Collateral in its or their possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto, nor
shall the Collateral Agent or any Finance Party be liable to any Loan Party or
any other Person for failure to meet any obligation imposed by Section 9-207 of
the UCC or any successor provision. Each Loan Party agrees that the Collateral
Agent shall at no time be required to, nor shall the Collateral Agent be liable
to any Loan Party for any failure to, account separately to any Loan Party for
amounts received or applied by the Collateral Agent from time to time in respect
of the Collateral pursuant to the terms of this Agreement. Without limiting the
foregoing, the Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, and shall not be liable or
responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Collateral Agent in good faith.

          Section 5.04. Application of Proceeds.


                                       25



          (a) Priority of Distributions. The proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held in the
Collateral Accounts shall be applied as set forth in Section 4.06 of the
Collateral Agency Agreement. The Collateral Agent may make distributions
hereunder in cash or in kind or, on a ratable basis, in any combination thereof.

          (b) Deficiencies. It is understood that the Loan Parties shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral and the amount of the Note Obligations.

                                   ARTICLE VI
                                COLLATERAL AGENT

          Section 6.01. Concerning the Collateral Agent. The provisions of
Article VI of the Collateral Agency Agreement shall inure to the benefit of the
Collateral Agent in respect of this Agreement and shall be binding upon all Loan
Parties, all Finance Parties and upon the parties hereto in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Collateral Agent therein set forth:

          (i) The Collateral Agent is authorized to take all such action as is
     provided to be taken by it as Collateral Agent hereunder and all other
     action reasonably incidental thereto. As to any matters not expressly
     provided for herein or as to any matters which permit but do not require
     action by the Collateral Agent (including, without limitation, the timing
     and methods of realization upon the Collateral), the Collateral Agent shall
     act or refrain from acting in accordance with written instructions from the
     Directing Noteholders as contemplated by the Collateral Agency Agreement
     or, in the absence of such instructions or provisions, subject to the terms
     of the Collateral Agency Agreement, in accordance with its discretion.

          (ii) The Collateral Agent shall not be responsible for the existence,
     genuineness or value of any of the Collateral or for the validity,
     perfection, priority or enforceability of the Security Interests in any of
     the Collateral, whether impaired by operation of law or by reason of any
     action or omission to act on its part hereunder unless such action or
     omission constitutes gross negligence or willful misconduct. The Collateral
     Agent shall have no duty to ascertain or inquire as to the performance or
     observance of any of the terms of this Agreement or any Note Document by
     any Loan Party.

          (iii) Any use by the Collateral Agent of the Intellectual Property, as
     authorized hereunder in connection with the exercise of the Collateral
     Agent's rights and remedies under this Agreement and under the Indenture
     shall be coextensive with the Loan Parties' rights thereunder and with
     respect thereto and without any liability for royalties or other related
     charges.

          Section 6.02. Appointment of Co-Collateral Agent. At any time or
times, in order to comply with any legal requirement in any jurisdiction, the
Collateral Agent may in consultation with InSight and, unless an Event of
Default shall have occurred and be continuing,


                                       26



with its consent (not to be unreasonably withheld or delayed) appoint another
bank or trust company or one or more other persons, either to act as co-agent or
co-agents, jointly with the Collateral Agent, or to act as separate agent or
agents on behalf of the Finance Parties with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Collateral Agent, include provisions for the protection of such co-agent or
separate agent similar to the provisions of Section 6.01). Notwithstanding any
such appointment but only to the extent not inconsistent with such legal
requirements or, in the reasonable judgment of the Collateral Agent, not unduly
burdensome to it or any such co-agent, such Loan Party shall be entitled to deal
solely and directly with the Collateral Agent rather than any such co-agent in
connection with the Collateral Agent's rights and obligations under this
Agreement.

                                   ARTICLE VII
                                  MISCELLANEOUS

          Section 7.01. Notices.

          (a) Unless otherwise specified herein, all notices, requests or other
communications to any party hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered to the address or
facsimile number: (i) in the case of Holdings, InSight, any Subsidiary Guarantor
or any Noteholder or the Trustee, as set forth in Section 13.02 of the
Indenture, (ii) in the case of the Collateral Agent, as set forth on the
signature pages hereof or (iii) in the case of any party, to such other address,
facsimile number or electronic mail address as such party shall hereafter
specify for the purpose of communications hereunder by notice to the other
parties hereto. Each such notice, request or other communication shall be
effective upon the earlier to occur of (i) actual receipt by the intended
recipient and (ii) (A) if delivered by hand or by courier, when signed for by or
on behalf of the intended recipient, (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid and (C) if delivered by
facsimile, when sent and receipt has been confirmed electronically. Rejection or
refusal to accept, or the inability to deliver because of a changed address of
which no notice was given shall not affect the validity of notice given in
accordance with this section.

          (b) This Agreement may be transmitted and/or signed by facsimile and,
if so transmitted or signed shall, subject to requirements of Law, have the same
force and effect as a manually-signed original and shall be binding on all Loan
Parties and the Finance Parties. The Collateral Agent may also require that this
Agreement be confirmed by a manually-signed original hereof; provided, however,
that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

          Section 7.02. No Waivers; Non-Exclusive Remedies. No failure or delay
on the part of any Finance Party to exercise, no course of dealing with respect
to, and no delay in exercising, any right, power or privilege under this
Agreement or any other Note Document or any other document or agreement
contemplated hereby or thereby and no course of dealing between any Finance
Party and any of the Loan Parties shall operate as a waiver thereof nor shall
any single or partial exercise of any such right, power or privilege hereunder
or under any Note Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein and in the other


                                       27



Note Documents are cumulative and are not exclusive of any other remedies
provided by Law. Without limiting the foregoing, nothing in this Agreement shall
impair the right of any Finance Party to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of any Loan Party other than its indebtedness under the
Note Documents. Each Loan Party agrees, to the fullest extent it may effectively
do so under applicable Law, that any holder of a participation in a Note
Obligation, whether or not acquired pursuant to the terms of any applicable Note
Document, may exercise rights of set-off or counterclaim or other rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of the Loan Party in the amount of such participation.

          Section 7.03. Compensation and Expenses of the Collateral Agent;
Indemnification.

          (a) Expenses. The Loan Parties, jointly and severally, agree to pay
(i) all reasonable out-of-pocket expenses of the Collateral Agent, including
fees and disbursements of special and local counsel for the Collateral Agent, in
connection with the preparation and administration of this Agreement or any
document or agreement contemplated hereby, any waiver or consent hereunder or
any amendment hereof or any Default or Event of Default or alleged Default or
Event of Default and (ii) all taxes which the Collateral Agent or any other
Finance Party may be required to pay by reason of the security interests granted
in the Collateral (including any applicable transfer taxes) or to free any of
the Collateral from the lien thereof.

          (b) Protection of Collateral. If any Loan Party fails to comply with
the provisions of any Note Document, such that the value of any material portion
of Collateral or the validity, perfection, rank or value of any Security
Interest is thereby materially diminished or potentially materially diminished,
after notice to such Loan Party (unless in the reasonable judgment of the
Collateral Agent, the giving of such notice would be impractical) the Collateral
Agent may, but shall not be required to, effect such compliance on behalf of
such Loan Party, and the Loan Parties shall reimburse the Collateral Agent for
the costs thereof within 30 days of receipt of a reasonably detailed written
invoice therefor. All insurance expenses and all expenses of protecting,
storing, warehousing, appraising, handling, maintaining and shipping the
Collateral, or in respect of the sale or other disposition thereof, including
any and all excise, property, sales and use taxes imposed by any state, federal
or local authority on any of the Collateral, or in respect of periodic
appraisals and inspections of the Collateral, shall be borne and paid by the
Loan Parties. If any Loan Party fails to promptly pay any portion thereof when
due, the Collateral Agent may, at its option, but shall not be required to,
after notice to such Loan Party (unless in the reasonable judgment of the
Collateral Agent, the giving of such notice would be impractical) pay the same
and charge the Loan Parties' account therefor, and the Loan Parties agree to
reimburse the Collateral Agent therefor on demand. All sums so paid or incurred
by the Collateral Agent for any of the foregoing and any and all other sums for
which any Loan Party may become liable hereunder and all costs and expenses
(including attorneys' fees, legal expenses and court costs) reasonably incurred
by the Collateral Agent or any Finance Party in enforcing or protecting the
Security Interests or any of their rights or remedies under this Agreement,
shall, together with interest thereon from demand and until paid at the rate
applicable to interest at the highest rate applicable under the Note Documents
in respect of overdue obligations, be additional Note Obligations hereunder.


                                       28



          (c) Indemnification. Each Loan Party agrees to indemnify the
Collateral Agent, each other Finance Party and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact and their
respective successors and assigns (each, an "INDEMNITEE" and, collectively,
"INDEMNITEES") and hold each Indemnitee harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
suits, judgments, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by,
imposed on or asserted against such Indemnitee in connection with any
investigation or administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any other Collateral Document or in any
other way connected with the enforcement of any of the terms of, or the
preservation of any rights under, this Agreement or any other Collateral
Document or in any way relating to or arising out of the manufacture, ownership,
ordering, purchasing, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), the violation of the Laws of any country, state or other
Governmental Authority, or any tort (including, without limitation, any claims,
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage) or contract claim; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct or that of its affiliates, directors, trustees, agents or employees
as determined by a court of competent jurisdiction in a final, non-appealable
judgment or order. Each Loan Party agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, loss, damage,
penalty, claim, demand, action, judgment or suit, such Loan Party shall assume
full responsibility for the defense thereof. Each Indemnitee agrees to use its
best efforts to notify the Loan Parties of any such assertion of which such
Indemnitee has knowledge.

          (d) Contribution. If and to the extent that the obligations of any
Loan Party under this Section 7.03 are unenforceable for any reason, each Loan
Party hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable Law.

          (e) Obligations; Survival. Any amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute Note
Obligations. The indemnity obligations of the Loan Parties contained in this
Section 7.03 shall continue in full force and effect notwithstanding the full
payment of all Note Obligations and notwithstanding the discharge thereof.

          Section 7.04. Enforcement. The Finance Parties agree that this
Agreement may be enforced only by the action of the Collateral Agent, acting
upon the instructions of the Directing Noteholders, if so required under the
Collateral Agency Agreement, and that no other Finance Party shall have any
right individually to seek to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such rights
and remedies may be exercised by the Collateral Agent for the benefit of the
Finance Parties upon the terms of this Agreement and the Collateral Agency
Agreement.


                                       29



          Section 7.05. Amendments and Waivers. Any provision of this Agreement
may be amended, changed, discharged, terminated or waived if, but only if, such
amendment or waiver is in writing and is signed by each Loan Party affected by
such amendment, change, discharge, termination or waiver (it being understood
that the addition or release of any Loan Party hereunder shall not constitute an
amendment, change, discharge, termination or waiver affecting any Loan Party
other than the Loan Party so added or released and it being further understood
and agreed that any supplement to Schedule 1.01 delivered pursuant to Section
4.15 hereof shall not require the consent of any Loan Party) and by the
Collateral Agent (with the consent of the Directing Noteholders or the Trustee,
as the case may be, to the extent required by the Collateral Agency Agreement).

          Section 7.06. Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and inure to the benefit of the Collateral Agent
and the Finance Parties and their respective successors and assigns. In the
event of an assignment of all or any of the Note Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. No Loan Party shall assign or delegate any
of its rights and duties hereunder without the prior written consent of all of
the Finance Parties.

          Section 7.07. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          Section 7.08. Limitation of Law; Severability.

          (a) All rights, remedies and powers provided in this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of Law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of Law which may
be controlling and be limited to the extent necessary so that they will not
render this Agreement invalid, unenforceable in whole or in part, or not
entitled to be recorded, registered or filed under the provisions of any
applicable Law.

          (b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by Law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Finance Parties in order to carry
out the intentions of the parties hereto as nearly as may be possible; and (ii)
the invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provisions in any other
jurisdiction.

          Section 7.09. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective with respect to each Loan
Party when the Collateral Agent shall receive counterparts hereof executed by
itself and such Loan Party.


                                       30



          Section 7.10. Additional Loan Parties. It is understood and agreed
that any Subsidiary of InSight that is required by any Note Document to execute
a counterpart of this Agreement after the date hereof shall automatically become
a Loan Party hereunder with the same force and effect as if originally named as
a Loan Party hereunder by executing an instrument of accession or joinder
substantially in the form of Exhibit E hereto and delivering the same to the
Collateral Agent. Concurrently with the execution and delivery of such
instrument of accession or joinder, such Subsidiary shall take all such actions
and deliver to the Collateral Agent all such documents and agreements as such
Subsidiary would have been required to deliver to the Collateral Agent on or
prior to the date of this Agreement had such Subsidiary been a party hereto on
the date of this Agreement. Such additional materials shall include, among other
things, an opinion of counsel to the extent required under the Indenture and
supplements to Schedules 1.01A and B, 3.04, 3.05 and 4.01 hereto (which
Schedules shall thereupon automatically be amended and supplemented to include
all information contained in such supplements) such that, after giving effect to
the joinder of such Subsidiary, each of Schedules 1.01A and B, 3.04, 3.05 and
4.01 hereto is true, complete and correct in all material respects with respect
to such Subsidiary as of the effective date of such accession or joinder. The
execution and delivery of any such instrument of accession or joinder, and the
amendment and supplementation of the Schedules hereto as provided in the
immediately preceding sentence, shall not require the consent of any other Loan
Party or Finance Party hereunder. The rights and obligations of each Loan Party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Loan Party as a party to this Agreement.

          Section 7.11. Termination; Release of Loan Parties.

          (a) Termination. Upon the full payment and performance of all Note
Obligations (other than contingent indemnification obligations), the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Loan Parties. In addition, at any time and from time to time prior to such
termination of the Security Interests, the Collateral Agent may release any of
the Collateral or subordinate its Security Interests therein to Liens in favor
of certain third parties with the prior written consent of the Directing
Noteholders or as provided in Article V of the Collateral Agency Agreement. Upon
any such termination of the Security Interests or release of Collateral, the
Collateral Agent will, upon request by and at the expense of any Loan Party
(and, in the case of a release of Collateral, upon receipt of a written
certification of a Responsible Officer of InSight that the Trustee has received
all documents, if any, required by the Trust Indenture Act and the Indenture)
execute and deliver to such Loan Party such documents as such Loan Party shall
reasonably request to evidence the termination of the Security Interests or the
release of such Collateral, as the case may be. Any such documents shall be
without recourse to or warranty by the Collateral Agent or the other Finance
Parties. The Collateral Agent shall have no liability whatsoever to any other
Finance Party as a result of any release of Collateral by it as permitted by
this Section 7.11. Upon any release of Collateral pursuant to this Section 7.11,
none of the Finance Parties shall have any continuing right or interest in such
Collateral or the Proceeds thereof. Upon satisfaction and discharge of the
Indenture as provided in Article 12 of the Indenture, or legal defeasance or
covenant defeasance of the Indenture as provided in Article 8 of the Indenture
and the Note Obligations under the Note Documents, as applicable, shall be
deemed to be paid in full for purposes of Sections 7.04, 7.05 and this Section
7.11(a).


                                       31



          (b) Release of Loan Parties. If any part of the Collateral (x) is
taken by eminent domain, condemnation or other similar circumstances, or (y) is
sold, transferred, otherwise disposed of or liquidated in compliance with the
requirements of the Note Documents (or such sale, transfer, other disposition or
liquidation has been approved in writing by the Directing Noteholders), then in
each such case, such Collateral shall be automatically released from the
Security Interests created hereby and the Collateral Agent, at the request and
expense of such Loan Party, will (upon receipt of a written certification of a
Responsible Officer of InSight that the Trustee has received all documents, if
any, required by the Trust Indenture Act and the Indenture) assign, transfer and
deliver to such Loan Party (without recourse and without representation or
warranty) such of the Collateral as is then being (or has been) so taken, sold,
transferred, disposed of or liquidated as may be in the possession or control of
the Collateral Agent and has not theretofore been released pursuant to this
Agreement and deliver to the applicable Loan Party all documents and other
releases reasonably requested by such Loan Party (including UCC termination
statements) to evidence the release of such Collateral from the Security
Interests. Further, upon the release of a Guarantor from its obligations under
all guaranties of the Note Obligations in accordance with the provisions thereof
and the other Note Documents, such Guarantor (and the Collateral assigned by
such Guarantor pursuant hereto) shall be automatically released from this
Agreement and the Collateral Agent will, upon request by and at the expense of
such Guarantor, execute and deliver to such Guarantor such documents as such
Guarantor shall reasonably request to evidence the release of such Guarantor and
such Collateral.

          (c) Other Releases. If property that constitutes either (A) all or
substantially all of the Collateral securing Note Obligations or (B) less than
all or substantially all of the Collateral securing Note Obligations is released
with the consent of the Directing Noteholders in accordance with the Collateral
Agency Agreement, then in each such case, the Collateral Agent, at the request
and expense of the relevant Loan Party, will (upon receipt of a written
certification of a Responsible Officer of InSight that the Trustee has received
all documents, if any, required by the Trust Indenture Act and the Indenture)
duly release from the security interest created hereby and assign, transfer and
deliver to such Loan Party (without recourse and without representation or
warranty) such of the Collateral as is then being (or has been) so released as
maybe in the possession or control of the Collateral Agent and has not
theretofore been released pursuant to this Agreement, and execute and deliver to
such Loan Party such documents and instruments (including UCC termination
statements) as such Loan Party may reasonably request to evidence the release of
such Collateral. In addition, if any Capital Stock or other securities shall,
after the Issue Date, meet the criteria of any of clauses (ii), (iv) or (v) of
the proviso of Section 2.01, such Capital Stock or other securities shall
automatically be deemed to be released from the Collateral and the Lien of this
Agreement and the Collateral Agent shall promptly after receipt of an Officer's
Certificate deliver such Capital Stock or other securities then in its
possession to the applicable Loan Party together with such releases and other
documents as may be reasonably requested by such Loan Party.

          Section 7.12. Entire Agreement. This Agreement and the other
Collateral Documents constitute the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, and any contemporaneous oral agreements and understandings
relating to the subject matter hereof and thereof.


                                       32



                            [Signature Pages Follow]


                                       33



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first written above.

LOAN PARTIES:                           INSIGHT HEALTH SERVICES HOLDINGS CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        INSIGHT HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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


                                       S-1




                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                       S-2



                                        PARKWAY IMAGING CENTER, LLC


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNivenYoung
                                        Title: Manager


                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        MAXUM HEALTH SERVICES CORP.
                                        DIAGNOSTIC SOLUTIONS 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      S-3


                                        MAXUM HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      S-4



COLLATERAL AGENT:                       U.S. BANK NATIONAL ASSOCIATION,
                                        as Collateral Agent


                                        By: /s/ Jean Clarke
                                            ------------------------------------
                                        Name: Jean Clarke
                                        Title: Assistant Vice President

                                        Attention:
                                        Telephone: 212-361-6173
                                        Telecopier: 212-361-6153


                                      S-5



                                                                     EXHIBIT A-1
                                                                              to
                                                              SECURITY AGREEMENT

                       FORM OF GRANT OF SECURITY INTEREST
                     IN UNITED STATES PATENTS AND TRADEMARKS

          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Loan Party Name], [Loan Party Description] (the
"GRANTOR"), having its chief executive office at [Loan Party Notice Address],
hereby grants to [Collateral Agent Name], as Collateral Agent, (the "GRANTEE"),
with offices at [Collateral Agent Notice Address], a security interest in and
mortgages all of the Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "PATENT AND TRADEMARK COLLATERAL"), whether
presently existing or hereafter arising or acquired:

     (i) each United States patent and patent application, including each Patent
and patent application referred to on Schedule A hereto;

     (ii) each Patent License, including each Patent License listed on Schedule
A hereto;

     (iii) each United States trademark, trademark registration and trademark
application, and all of the goodwill of the business connected with the use of,
and symbolized by, each trademark, trademark registration and trademark
application, including each Trademark, Trademark registration and Trademark
application referred to in Schedule B hereto;

     (iv) each Trademark License, whether registered or not, including each
Trademark License referred to in Schedule B hereto, and all of the goodwill of
the business connected with the use of, and symbolized by, each Trademark; and

     (v) all products and proceeds of the foregoing, including any claim by the
Assignor against third parties for past, present or future infringement of any
Patent, or past, present or future infringement or dilution of any Trademark or
Trademark registration, including any Patent, Trademark or Trademark
registration listed on Schedule A or B hereto, or under any Patent, Trademark or
Trademark registration licensed under any Patent License or Trademark License,
including any such license listed on Schedule A or B hereto, or for injury to
the goodwill associated with any Trademark, Trademark registration or Trademark
License.

          THIS GRANT OF SECURITY INTEREST is granted in conjunction with the
security interests granted to the Grantee pursuant to the Security Agreement
among the Grantor, the Grantee and certain other parties dated as of September
22, 2005, as amended, modified or supplemented from time to time (the "SECURITY
AGREEMENT").

          THIS GRANT OF SECURITY INTEREST has been granted in conjunction with
the security interest granted to the Grantee under the Security Agreement. The
rights and remedies of the Grantee with respect to the security interest granted
herein are without prejudice to, and are in addition to those set forth in the
Security Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Grant of



Security Interest are deemed to conflict with the Security Agreement, the
provisions of the Security Agreement shall govern.

          THIS GRANT OF SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          IN WITNESS WHEREOF, the undersigned have executed this Grant of
Security Interest as of the _______ day of ____________, 200__.

                                        [LOAN PARTY NAME], as Grantor


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        [COLLATERAL AGENT NAME],
                                        as Collateral Agent, as Grantee


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

STATE OF ___________________)
                            )
____________ OF ____________)

          The foregoing instrument was acknowledged before me this _______ day
of ____________, 20__ by ____________ as ____________ of [LOAN PARTY NAME],
[LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME].


                                        ----------------------------------------
                                                      Notary Public

                                        My commission expires:
                                                               -----------------

Notarial Seal


                                      A-2



                   Schedule A to Patent and Trademark Grant of Security Interest

                         PATENTS AND PATENT APPLICATIONS



Serial No. or
Patent No.      Date   Issue   Title   Inventor   Country   Patent Holder
- -------------   ----   -----   -----   --------   -------   -------------
                                          



                                 PATENT LICENSES



Licensor   Licensee   Patent Number(s)   Date
- --------   --------   ----------------   ----
                                




                                      A-3



                   Schedule B to Patent and Trademark Grant of Security Interest

                                   TRADEMARKS



Registration No.   Country   Issue Date   Mark
- ----------------   -------   ----------   ----
                                 




                             TRADEMARK APPLICATIONS



Serial No.   Country   Filing Date   Mark
- ----------   -------   -----------   ----
                            



                               TRADEMARK LICENSES



              Serial or                  Issue or
Grantor   Registration No.   Country   Filing Date   Mark
- -------   ----------------   -------   -----------   ----
                                         




                                      A-4



                                                                     EXHIBIT B-2
                                                                              to
                                                              SECURITY AGREEMENT

                       FORM OF GRANT OF SECURITY INTEREST
                           IN UNITED STATES COPYRIGHTS

          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Loan Party Name], [Loan Party Description] (the
"GRANTOR"), having its chief executive office at [Loan Party Notice Address],
hereby grants to [Collateral Agent Name], as Collateral Agent (the "GRANTEE"),
with offices at [Collateral Agent Notice Address], a security interest in
mortgages all of the Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "COPYRIGHT COLLATERAL"), whether presently
existing or hereafter arising or acquired:

          (i) each United States copyright and any renewals thereof, including
     each Copyright listed on Schedule A hereto;

          (ii) each Copyright License, including each Copyright License listed
     on Schedule A hereto;

          (iii) all registrations and applications for registration of any such
     copyright in the United States, including registrations, recordings,
     supplemental, derivative or collective work registrations and pending
     applications for registrations in the United States Copyright Office,
     including each Copyright registration and Copyright application listed on
     Schedule A hereto;

          (iv) all computer programs, web pages, computer data bases and
     computer program flow diagrams, including all source codes and object codes
     related to any or all of the foregoing;

          (v) all tangible property embodying or incorporating any or all of the
     foregoing; and

          (vi) all products, proceeds and related accounts of the foregoing,
     including any claim by the Assignor against third parties for past, present
     or future infringement of any Copyright including any Copyright listed on
     Schedule A hereto, or under any Copyright licensed under any Copyright
     License, including any such license listed on Schedule A hereto, whether
     registered or not.

          THIS GRANT OF SECURITY INTEREST is granted in conjunction with the
security interests granted to the Grantee pursuant to the Security Agreement
among the Grantor, the Grantee and certain other parties dated as of September
22, 2005, as amended, modified or supplemented from time to time (the "SECURITY
AGREEMENT").

          THIS GRANT OF SECURITY INTEREST has been granted in conjunction with
the security interest granted to the Grantee under the Security Agreement. The
rights and



remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to, those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Grant of Security Interest
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.

          THIS GRANT OF SECURITY INTEREST SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          IN WITNESS WHEREOF, the undersigned have executed this Grant of
Security Interest as of the _______ day of ____________, 200__.

                                        [LOAN PARTY NAME], as Grantor


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        [COLLATERAL AGENT NAME],
                                        as Collateral Agent, as Grantee


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

STATE OF ___________________ )
                             )
____________ OF ____________ )

          The foregoing instrument was acknowledged before me this _______ day
of ____________, 20__ by ____________ as ____________ of [LOAN PARTY NAME],
[LOAN PARTY DESCRIPTION], on behalf of [LOAN PARTY NAME].


                                        ----------------------------------------
                                        My commission expires:

Notarial Seal

Notary Public


                                       B-2



                              Schedule A to Copyright Grant of Security Interest

                      COPYRIGHTS AND COPYRIGHT APPLICATIONS



Serial No. or Registration No.   Country   Issue or Filing Date   Description
- ------------------------------   -------   --------------------   -----------
                                                         




                                       B-3



                                                                    EXHIBIT B to
                                                              SECURITY AGREEMENT

                    FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT

          [Bank Name] (together with it successors and assigns, the "BANK") has
established and maintains for [Loan Party Name], [Loan Party Description]
(together with its successors and permitted assigns, the "LOAN PARTY"), for the
use of the Loan Party the deposit account listed on Schedule I hereto (the
"ACCOUNT").

          The Loan Party and [Collateral Agent Name] (together with its
successor or successors in such capacity, the "COLLATERAL AGENT") entered into a
Security Agreement dated as of September 22, 2005 (as the same may be amended,
supplemented or modified from time to time, the "SECURITY AGREEMENT"), under
which the Loan Party has granted a security interest in favor of the Collateral
Agent in all right, title and interest of the Loan Party in, to and under: (i)
the Accounts; (ii) all checks, money orders, drafts, instruments, electronic
funds transfers and other items and forms of remittance and all funds and other
amounts at any time paid, deposited or credited (whether for collection,
provisionally or otherwise), held or otherwise in the possession or under the
control of, or in transit to, the Bank or any agent or custodian thereof for
credit to or to be deposited in the Account; (iii) all funds and cash balances
or other amounts in or attributable to the Account; and (iv) any and all
proceeds of any of the foregoing (the Account and all of such other items of
collateral being herein referred to collectively as the "DEPOSIT ACCOUNT
COLLATERAL") to secure the payment and performance of the Note Obligations (as
defined in the Security Agreement). Capitalized terms defined or used in the
Security Agreement and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.

          The Loan Party desires that the Bank enter into this Deposit Account
Control Agreement (as amended, supplemented or modified from time to time, this
"AGREEMENT") to perfect the security interest of the Collateral Agent in the
Deposit Account Collateral, to vest in the Collateral Agent control of the
Account and to provide for the rights of the parties under this Agreement.

          Accordingly, the parties hereto agree as follows:

          Section 1. Control by the Collateral Agent. (a) Notwithstanding any
other term or provision of this Agreement or any other agreement between the
Bank and the Loan Party or otherwise, the Bank is hereby authorized and directed
by the Loan Party to, and the Bank agrees that the Bank will comply with
instructions (within the meaning of Section 8-102(a)(12) of the UCC) originated
by the Collateral Agent directing the disposition of funds from time to time in
the Account or as to any other matters relating to the Account or any of the
other Deposit Account Collateral without further consent by the Loan Party
(which instructions may include the giving of stop payment orders for any items
being presented to the Account for payment). The Bank is hereby irrevocably
authorized by the Loan Party to change the designation of the customer on the
Account to the Collateral Agent upon the request of the Collateral Agent, and
the Bank shall so change the customer designation promptly upon such request by
the Collateral Agent.



          (b) In addition, effective upon the receipt by the Bank of written
     notice from the Collateral Agent that the Collateral Agent is exercising
     exclusive control over the Account (such notice being referred to as a
     "NOTICE OF EXCLUSIVE CONTROL"), the Bank shall not permit the Loan Party or
     any of its Affiliates to withdraw any amounts from, to draw upon or to
     otherwise exercise any authority or powers with respect to the Account and
     all Deposit Account Collateral related thereto, and the Bank shall not at
     any such time honor any instructions of the Loan Party or any of its
     Affiliates with respect to the Account, other than those approved in
     writing by the Collateral Agent or a court of competent jurisdiction. Until
     the receipt by the Bank of a Notice of Exclusive Control, the Loan Party
     shall be entitled to present items drawn on and otherwise to withdraw or
     direct the disposition of funds from the Account.

          Section 2. Maintenance of Account. In addition to, and not in lieu of,
the obligations of the Bank to honor instructions of the Collateral Agent, etc.
as agreed in Section 1 hereof, the Bank agrees to maintain the Account as
follows:

          (a) Maintenance of Account Generally. The Bank shall follow its usual
     operational procedures for the handling of any checks, money orders,
     drafts, instruments, electronic funds transfers or other forms of
     remittance and all funds of the Loan Party received in or for credit or
     deposit to the Account and shall maintain a record of all such Deposit
     Account Collateral.

          (b) Interest. Until such time as the Bank receives a Notice of
     Exclusive Control delivered by the Collateral Agent in accordance with
     Section 1(b) above, the Loan Party may direct the Bank with respect to the
     retention and/or distribution of interest and other payments on Deposit
     Account Collateral deposited in or credited to the Account. All interest
     and other payments on Deposit Account Collateral deposited in or credited
     to the Account shall be deposited and retained in the Account or otherwise
     distributed as instructed by the Collateral Agent.

          (c) Statements and Confirmations. At such time or times as the
     Collateral Agent may request, the Bank will promptly report to the
     Collateral Agent the amounts received in the Account. Copies of all
     statements of account, reports, deposit tickets, deposited items, debit and
     credit advices and records and communications concerning the Account and/or
     any Deposit Account Collateral deposited therein or credited thereto shall
     be sent by the Bank to each of the Loan Party and the Collateral Agent at
     their respective addresses referred to in Section 6 below.

          (d) Tax Reporting. All items of income, gain, expense and loss
     recognized in the Account shall be reported to the Internal Revenue Service
     and all state and local taxation authorities under the name and taxpayer
     identification number of the Loan Party.

          (e) Notices of Adverse Claims. Upon receipt of notice of any lien,
     charge or other adverse claim against any Deposit Account Collateral
     (including any writ, garnishment, judgment, warrant of attachment,
     execution or similar process), the Bank will promptly notify the Collateral
     Agent and the Loan Party thereof.


                                       C-2



          Section 3. No Liability of Bank. This Agreement shall not subject the
Bank to any obligation or liability except as expressly set forth herein. In
particular, the Bank shall have no duty to investigate whether the obligations
of the Loan Party to the Collateral Agent or any other Finance Party are in
default or whether the Collateral Agent is entitled under the Security Agreement
or otherwise to give any instructions or Notice of Exclusive Control. The Bank
is fully entitled to rely upon such instructions as it believes in good faith to
have originated from the Collateral Agent (even if such instructions are
contrary to or inconsistent with any instructions or demands given by the Loan
Party).

          Section 4. Subordination of Lien; Waiver of Set-Off. If the Bank has
or subsequently obtains by agreement, operation of law or otherwise a security
interest or other Lien in the Account or any Deposit Account Collateral
deposited therein or credited thereto, the Bank hereby agrees that such security
interest or other Lien shall be subordinate to the security interest of the
Collateral Agent. The Deposit Account Collateral will not be subject to
deduction, set-off, banker's lien or any other right in favor of any other
Person other than the Collateral Agent, except that the Bank may set off (i) all
amounts due to the Bank in respect of its customary fees and expenses for the
Account, (ii) the amount of any checks, automated clearinghouse transfers or
other forms of remittance that have been credited to the Account and
subsequently returned unpaid and (iii) any overdrafts arising as a result
thereof.

          Section 5. Representations, Warranties and Covenants of the Bank. The
Bank hereby represents, warrants and covenants that:

          (a) The Bank has established the Account in the name of the Loan
     Party. [Except as provided in the foregoing sentence, the] [The] Bank shall
     not change the name or account number of the Account without the prior
     written consent of the Collateral Agent.

          (b) The Account is a "deposit account" as defined in the UCC.

          (c) Except for the claims and interest of the Collateral Agent and of
     the Loan Party in the Deposit Account Collateral, the Bank does not know of
     any claim to, interest in or adverse claim to, the Account or any Deposit
     Account Collateral deposited therein or credited thereto.

          (d) There are no other agreements entered into between the Bank and
     the Loan Party with respect to the Account or any Deposit Account
     Collateral deposited therein or credited thereto, and the Bank has not
     entered into, and until the termination of this Agreement will not enter
     into, any agreement with any other Person relating to the Account and/or
     any Deposit Account Collateral deposited therein or credited thereto
     pursuant to which it has agreed or will agree to comply with instructions
     originated by such other Person as to the disposition of funds in or from
     the Account or with respect to any other dealings with any of the Deposit
     Account Collateral.

          (e) The Bank will not agree that any Person other than the Loan Party
     or the Collateral Agent is the Bank's customer with respect to the Account.


                                       C-3



          (f) This Agreement constitutes a valid and binding agreement of the
     Bank, enforceable against the Bank in accordance with its terms.

          (g) The Bank acknowledges that it holds and will hold possession of
     the Deposit Account Collateral consisting of instruments and money as
     bailee for the Collateral Agent and for the benefit of the Collateral Agent
     and the Finance Parties.

          Section 6. Notices. All notices, requests or other communications to
any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party:

          (i) in the case of the Collateral Agent, at: [Collateral Agent Notice
     Address];

          (ii) in the case of the Loan Party, at: [Loan Party Notice Address];
     and

          (iii) in the case of the Bank, at: [Bank Notice Address].

Each such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number specified in
this paragraph and electronic confirmation of receipt is received, (ii) if given
by mail, 48 hours after such communication is deposited, certified mail, return
receipt requested, in the mails with appropriate first class postage prepaid,
addressed as aforesaid, or (iii) if given by other means, when delivered at the
address specified in this paragraph. Rejection or refusal to accept, or the
inability to deliver because of a changed address of which no notice was given
shall not affect the validity of notice given in accordance with this paragraph.

          Section 7. Indemnification of the Bank. The Loan Party agrees that (i)
the Bank is released from any and all liabilities to the Loan Party arising from
the terms of this Agreement and the compliance by the Bank with the terms
hereof, except to the extent that such liabilities arise from the Bank's bad
faith, willful misconduct or gross negligence, (ii) neither the Bank nor the
Collateral Agent shall have any liability to the Loan Party for wrongful
dishonor of any items as a result of any instructions of the Collateral Agent
and (iii) the Loan Party, its successors and permitted assigns shall at all
times indemnify the Bank, its affiliates and the respective directors, officers,
trustees, agents and employees of the foregoing (each an "INDEMNITEE") and hold
each Indemnitee harmless from and against any and all liabilities, obligations,
losses, damages, penalties, claims, demands, actions, suits, judgments, costs
and expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by, imposed on or asserted
against such Indemnitee in connection with any investigation or administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or in any other way connected with the enforcement of any of the terms
hereof, or the preservation of any rights hereunder, or in any way relating to
or arising out of the maintenance, delivery, control, acceptance, possession,
return or other disposition of the Account or any Deposit Account Collateral on
deposit therein or credited thereto, the violation of the Laws of any country,
state or other governmental body or unit, or any tort or contract claim;
provided that no Indemnitee shall have the right to be indemnified hereunder for
such


                                      C-4



Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction in a final, non-appealable judgment or order.

          Section 8. Conflicts with Other Agreements. In the event of any
conflict between this Agreement (or any portion hereof) and any other agreement
(including any other agreement between the Bank and the Loan Party with respect
to the Account) now existing or hereafter entered into, the terms of this
Agreement shall control.

          Section 9. Amendments and Waivers. Any provision of this Agreement may
be amended, modified or waived if, but only if, such amendment or waiver is in
writing and is signed by the Loan Party, the Collateral Agent and the Bank.

          Section 10. Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and inure to the benefit of the Collateral Agent
and the Finance Parties and their respective successors and permitted assigns.
In the event of an assignment of all or any of the Note Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness.

          Section 11. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York, except as
otherwise required by mandatory provisions of Law. Notwithstanding any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Bank's "jurisdiction" within the meaning of Section 9-304 of the UCC.

          Section 12. Severability. (a) All rights, remedies and powers provided
in this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of Law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
Law which may be controlling and be limited to the extent necessary so that they
will not render this Agreement invalid, unenforceable in whole or in part, or
not entitled to be recorded, registered or filed under the provisions of any
applicable Law.

          (b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by Law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Collateral Agent and the other
Finance Parties in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provisions in any other jurisdiction.

          Section 13. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Collateral Agent shall receive
counterparts hereof executed by itself, the Bank and the Loan Party. Delivery of
an executed counterpart of this Agreement by facsimile shall have the same force
and effect as delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by facsimile
shall also deliver an


                                       C-5



original executed counterpart, but failure to do so shall not affect the
validity, enforceability or binding effect of this Agreement.

          Section 14. Termination. Except as hereinafter set forth, the
obligations of the Bank to the Collateral Agent pursuant to this Agreement shall
continue in effect until the Security Interests of the Collateral Agent in the
Deposit Accounts have been terminated pursuant to the terms of the Security
Agreement and the Collateral Agent has notified the Bank of such termination in
writing. The Collateral Agent agrees to provide such notice of termination upon
the request of the Loan Party on or after the termination of the Collateral
Agent's Security Interest in the Account pursuant to the terms of the Security
Agreement. The Bank may terminate this Agreement only upon 30 days' notice to
the Collateral Agent, by canceling the Account and transferring all funds, if
any, deposited in or credited to the Account to another deposit account with
another bank to be designated by the Collateral Agent or otherwise to the order
of the Collateral Agent. After any such termination, the Bank shall nonetheless
be obligated promptly to transfer to such other bank anything from time to time
received in or for credit to the Account. The termination of this Agreement
shall not terminate the Account or alter the obligations of the Bank to the Loan
Party pursuant to any other agreement with respect to the Account.

                            [Signature Pages Follow]


                                       C-6



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first written above.

LOAN PARTY:                             [LOAN PARTY NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        [Address]
                                                  ------------------------------

                                                  ------------------------------
                                        Attention:
                                                   -----------------------------
                                        Telephone:
                                                   -----------------------------
                                        Telecopier:
                                                    ----------------------------


COLLATERAL AGENT:                       [COLLATERAL AGENT NAME], as Collateral
                                        Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        [Address]
                                                  ------------------------------

                                                  ------------------------------
                                        Attention:
                                                   -----------------------------
                                        Telephone:
                                                   -----------------------------
                                        Telecopier:
                                                    ----------------------------


DEPOSITARY BANK:                        [DEPOSITARY BANK NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        [Address]
                                                  ------------------------------

                                                  ------------------------------
                                        Attention:
                                                   -----------------------------
                                        Telephone:
                                                   -----------------------------
                                        Telecopier:
                                                    ----------------------------


                                                                       EXHIBIT C
                                                                              to
                                                              SECURITY AGREEMENT

                        FORM OF DESCRIPTION OF COLLATERAL

DESCRIPTION FOR FACE OF UCC-1:

[To Follow]


                                       D-1



                                                                       EXHIBIT D
                                                                              to
                                                              SECURITY AGREEMENT

                             PERFECTION CERTIFICATE

          This Perfection Certificate, dated as of September 22, 2005, is
delivered in connection with the Security Agreement (as amended, restated or
otherwise modified, the "SECURITY AGREEMENT") dated as of September 22, 2005
among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (the "ISSUER"), the
other Grantors identified therein, and U.S. BANK NATIONAL ASSOCIATION, as
Trustee (together with any successor(s) thereto in such capacity, the
"COLLATERAL AGENT" for each of the Finance Parties). All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided for
such terms in the Security Agreement.

          The following information is true and complete as of the date hereof,
and is being provided by InSight Health Services Corp. on behalf of the Issuer
and each of the Issuer's wholly-owned U.S. Subsidiaries.

                                    ARTICLE I
                                      NAMES

          Section 1.01. The exact corporate names of the Issuer, and each of the
Issuer's U.S. Subsidiaries, directly or indirectly owned (as indicated below),
as such names appear in their respective certificates of incorporation of
formation, as applicable, are as follows:

          Section 1.02. Set forth below is each other corporate name, that the
Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries has had in the
last five years, together with the date of the relevant change:

          Section 1.03. Except as set forth in Schedule 1 hereto, neither the
Issuer nor any of the Issuer's wholly-owned U.S. Subsidiaries has changed its
identity or corporate structure in any way within the past five years.

          Section 1.04. The following is a list of all other names (including
trade names or similar appellations) used by the Issuer or any of the Issuer's
wholly-owned U.S. Subsidiaries or any of their divisions or other business units
at any time during the past five years:

                                   ARTICLE II
                         TAXPAYER IDENTIFICATION NUMBERS

          Section 2.01. The exact corporate taxpayer identification numbers of
the Issuer and each of the Issuer's wholly-owned U.S. Subsidiaries are as
follows:

          Section 2.02. Set forth below is each other corporate taxpayer
identification number the Issuer and each of the Issuer's wholly-owned U.S.
Subsidiaries has had since its organization together with the date of the
relevant change:


                                       E-1



          Section 2.03. The following is a list of all other taxpayer
identification numbers used by the Issuer or any of the Issuer's wholly-owned
U.S. Subsidiaries or any of their divisions or other business units at any time
during the past five years:

          Section 2.04. The chief executive offices of the Issuer and each of
the Issuer's wholly-owned U.S. Subsidiaries are located at the following
addresses:



Name   Mailing Address   County   State
- ----   ---------------   ------   -----
                         



          Section 2.05. The following are all locations where the Issuer and
each of the Issuer's wholly-owned U.S. Subsidiaries maintain any books and
records relating to any of the Collateral consisting of accounts, contract
rights, chattel paper, general intangibles or mobile goods:



Name   Mailing Address   County   State
- ----   ---------------   ------   -----
                         



          Section 2.06. The following are all the locations where the Issuer and
each of the Issuer's wholly-owned U.S. Subsidiaries maintain any equipment not
identified above:



Name   Mailing Address   County   State
- ----   ---------------   ------   -----
                         



          Section 2.07. The following are the names and addresses of all persons
other than the Issuer and the Issuer's wholly-owned U.S. Subsidiaries which have
possession of any of the Issuer's or any of the Issuer's U.S. Subsidiaries'
equipment:



Name   Mailing Address   County   State
- ----   ---------------   ------   -----
                         



          Section 2.08. The following are all the locations where the Issuer and
each of the Issuer's wholly-owned U.S. Subsidiaries maintain any inventory not
identified above (identify whether locations are owned by the Issuer or a
Subsidiary, leased by the Issuer or a subsidiary or are public warehouses):



Name   Mailing Address   County   State
- ----   ---------------   ------   -----
                         



          Section 2.09. The following are the names and addresses of all persons
or entities other than the Company, such as lessees, consignees, warehousemen or
purchasers of chattel paper, which have possession or are intended to have
possession of any of the Collateral:


                                       E-2





Name   Mailing Address   County   State
- ----   ---------------   ------   -----
                         



Of the persons and entities listed above in this clause (h):

          (a) The following persons and entities are warehouses which issue
warehouse receipts:

          (b) The following persons and entities process or finish inventory or
other goods for the Company:

          (c) The following persons and entities hold inventory or other goods
on consignment for the Company:

          (d) The following persons and entities have possession of assets of
the Company for the purposes indicated:

                                   ARTICLE III
                               CONSIGNED INVENTORY

          Approximate dollar amount of Inventory of the Issuer and the Issuer's
U.S. Subsidiaries consigned to third parties at any time. $________.

                                   ARTICLE IV
                        INVENTORY LOCATED OUTSIDE OF U.S.

          Approximate dollar amount of inventory of the Issuer and the Issuer's
U.S. Subsidiaries located outside of the United States of America at any time.
$__________.

                                    ARTICLE V
                              UNUSUAL TRANSACTIONS

          Except for those purchases, acquisitions and other transactions
described below, all of the Collateral has been originated by the Issuer and its
wholly-owned U.S. Subsidiaries in the ordinary course of the Company's business
or consists of goods which have been acquired by the Company in the ordinary
course from a person in the business of selling goods of that kind.



                              Date of       Description of
Description of Collateral   Acquisition   Transaction Seller
- -------------------------   -----------   ------------------
                                    




                                       E-3



                                   ARTICLE VI
                              INTELLECTUAL PROPERTY

          The following is a complete list of all patents, copyrights,
trademarks, trade names and servicemarks registered in the name of the Issuer
and its wholly-owned U.S. Subsidiaries:

                                         
     UNITED STATES:

     a.   Patents                                 Registration No.

     b.   Copyrights                              Registration No.

     c.   Trademarks, Trade Name
          and Service Marks                       Registration No.

     FOREIGN JURISDICTIONS:

     a.   Patents                  County of
                                   Registration   Registration No.

     b.   Copyrights               County of
                                   Registration   Registration No.

     c.   Trademarks, Trade Name   County of
          and Service Marks        Registration   Registration No.



                                   ARTICLE VII
                           SECURITIES AND INSTRUMENTS

          The following is a complete list of all stock, bonds, debentures,
notes and other securities owned by the Issuer and each of its wholly-owned U.S.
Subsidiaries (provide name of issuer, a description of security and value):



Issuer   Description of Security   Value
- ------   -----------------------   -----
                             



                                  ARTICLE VIII
                         REPRESENTATIONS AND WARRANTIES

          The Issuer hereby represents and warrants to each Finance Party that
as of the date hereof, (a) the representations, warranties and statements
contained in Article III of the Security Agreement (together with any schedules
or attachments referred to therein and annexed thereto) are true and correct in
all respects and (b) the Issuer is in compliance with the covenants


                                       E-4



contained in Article IV of the Security Agreement (together with any schedules
or attachments referred to therein and annexed thereto).


                                       E-5



          IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
September, 2005.

                                        INSIGHT HEALTH SERVICES CORPORATION


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       E-6



                                   SCHEDULE 1

                   CHANGES IN IDENTITY OR CORPORATE STRUCTURE


                                       E-7



                                                                       EXHIBIT E
                                                                              to
                                                              SECURITY AGREEMENT

                     FORM OF LOAN PARTY ACCESSION AGREEMENT

          LOAN PARTY ACCESSION AGREEMENT dated as of ____________ among the NEW
LOAN PARTY referred to herein, and U.S. BANK NATIONAL ASSOCIATION, as Collateral
Agent.

          InSight Health Services Corp., a Delaware corporation (together with
its successors and permitted assigns, "INSIGHT"), has issued Senior Secured
Floating Rate Notes due 2011 (together with any Additional Notes referred to
below, the "SENIOR SECURED NOTES") pursuant to an Indenture dated as of
September 22, 2005 (as amended, restated, supplemented or modified from time to
time and including any agreement extending the maturity of, refinancing or
otherwise restructuring all or any portion of the obligations of InSight under
such Indenture or any successor agreement, the "INDENTURE") among InSight, the
guarantors named therein and U.S. Bank National Association, as Trustee
(together with its successor or successors in such capacity, the "TRUSTEE").

          The obligations of InSight under and in respect of the Senior Secured
Notes have been guaranteed by InSight Health Services Holdings Corp., a
California corporation (together with its successors and permitted assigns,
"HOLDINGS"), [_______________], and all other direct and indirect wholly-owned
domestic subsidiaries of Holdings pursuant to the Indenture and the Guaranties
and have been secured pursuant to (i) the Security Agreement, dated as of
September 22, 2005 among the Loan Parties (as defined below) and U.S. Bank
National Association, as Collateral Agent (the "SECURITY AGREEMENT"), and (ii)
the Pledge Agreement, dated as of September 22, 2005, among the Loan Parties and
U.S. Bank National Association, as Collateral Agent (the "PLEDGE AGREEMENT").
Each of Holdings, InSight, [__________] and [__________] are referred to in the
Security Agreement and the Pledge Agreement individually as a "LOAN PARTY" and,
collectively, as the "LOAN PARTIES"). Capitalized terms defined in the Security
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for them therein.

          [New Loan Party Name], [New Loan Party Description] (the "NEW LOAN
PARTY"), was [formed] [acquired] by [InSight] [Guarantor].

          Section 4.12 of the Indenture requires InSight to cause each
Wholly-Owned Restricted Subsidiary (as such term is defined in the Indenture)
that is a Domestic Subsidiary formed or acquired after the Issue Date to become
a party to the Security Agreement as an additional "LOAN PARTY" and to become a
party to the Pledge Agreement as an additional "LOAN PARTY". The Security
Agreement and the Pledge Agreement specify that such additional Subsidiaries may
become "LOAN PARTIES" under each of the Security Agreement and the Pledge
Agreement by execution and delivery of a counterpart of each such Document. To
induce the Noteholders under the Indenture, the New Loan Party has agreed to
execute and deliver this Loan Party Accession Agreement (as the same may be
amended, supplemented or modified from time to time, this "AGREEMENT") in order
to evidence its agreement to become a "LOAN PARTY"


                                       F-1



under each of the Security Agreement and the Pledge Agreement. Accordingly, the
parties hereto agree as follows:

          Section 1. Security Agreement. In accordance with Section 7.10 of the
Security Agreement, the New Loan Party hereby (i) agrees that, by execution and
delivery of a counterpart signature page to the Security Agreement in the form
attached hereto as Exhibit A, the New Loan Party shall become a "LOAN PARTY"
under the Security Agreement with the same force and effect as if originally
named therein as a Loan Party (as defined in the Security Agreement), (ii)
acknowledges receipt of a copy of and agrees to be obligated and bound as a
"LOAN PARTY" by all of the terms and provisions of the Security Agreement, (iii)
grants to the Collateral Agent for the benefit of the Finance Parties a
continuing security interest in the Collateral of the New Loan Party (as defined
in the Security Agreement), in each case to secure the full and punctual payment
of the Note Obligations (as defined in the Security Agreement) in accordance
with the terms thereof and to secure the performance of all of the obligations
of each Loan Party under the Indenture and the other Note Documents, (iv)
represents and warrants that each of Schedules 1.01, 3.06 and 4.01 to the
Security Agreement, as amended, supplemented and modified as set forth on
Schedules 1.01, 3.06 and 4.01 hereto, is complete and accurate with respect to
the New Loan Party as of the date hereof after giving effect to the New Loan
Party's accession to the Security Agreement as an additional Loan Party
thereunder and (v) acknowledges and agrees that, from and after the date hereof,
each reference in the Security Agreement to a "LOAN PARTY" or the "LOAN PARTIES"
shall be deemed to include the New Loan Party.

          Section 2. Pledge Agreement. In accordance with Section 8.10 of the
Pledge Agreement, the New Loan Party hereby (i) agrees that, by execution and
delivery of a counterpart signature page to the Pledge Agreement in the form
attached hereto as Exhibit B, the New Loan Party shall become a "LOAN PARTY"
under the Pledge Agreement with the same force and effect as if originally named
therein as a Loan Party (as defined in the Pledge Agreement), (ii) acknowledges
receipt of a copy of and agrees to be obligated and bound as a "LOAN PARTY" by
all of the terms and provisions of the Pledge Agreement, (iii) grants to the
Collateral Agent for the benefit of the Finance Parties a continuing security
interest in the Collateral (as defined in the Pledge Agreement) of the New Loan
Party, in each case to secure the full and punctual payment of the Note
Obligations (as defined in the Pledge Agreement) in accordance with the terms
thereof and to secure the performance of all of the obligations of each Loan
Party under the Indenture and the other Note Documents, (iv) represents and
warrants that each of Schedules I, II, III, IV, and V to the Pledge Agreement,
as amended, supplemented and modified as set forth on Schedules I, II, III, IV,
and V hereto, is complete and accurate in all material respects with respect to
the New Loan Party as of the date hereof after giving effect to the New Loan
Party's accession to the Pledge Agreement as an additional Loan Party thereunder
and (v) acknowledges and agrees that, from and after the date hereof, each
reference in the Pledge Agreement to a "LOAN PARTY" or the "LOAN PARTIES" shall
be deemed to include the New Loan Party.

          Section 3. Representations and Warranties. The New Loan Party hereby
represents and warrants that:


                                       F-2



          (a) This Agreement has been duly authorized, executed and delivered by
     the New Loan Party, and each of this Agreement and the Security Agreement
     and the Pledge Agreement, as acceded to hereby by the New Loan Party,
     constitutes a valid and binding agreement of the New Loan Party,
     enforceable against the New Loan Party in accordance with its terms, except
     in each case as such enforceability may be limited by bankruptcy,
     insolvency, reorganization, moratorium or similar laws affecting the
     enforceability of creditors' rights generally and by equitable principles
     of general applicability (regardless of whether such enforceability is
     considered in a proceeding in equity or at law).

          (b) Each of the representations and warranties contained in the
     Indenture, the Security Agreement, the Pledge Agreement and each of the
     other Note Documents applicable to the New Loan Party is true and correct
     in all material respects as of the date hereof, with the same effect as
     though such representations and warranties had been made on and as of the
     date hereof after giving effect to the accession of the New Loan Party as
     an additional "LOAN PARTY" under each of the Security Agreement and the
     Pledge Agreement.

          (c) Attached hereto as Exhibit D is a correct and complete Perfection
     Certificate relating to the New Loan Party and its Collateral.

          Section 4. Effectiveness. This Agreement and the accession of the New
Loan Party to the Security Agreement and the Pledge Agreement as provided herein
shall become effective with respect to the New Loan Party when (i) the
Collateral Agent shall have received a counterpart of this Agreement duly
executed by such New Loan Party and (ii) the Collateral Agent, as applicable,
shall have received duly executed counterpart signature pages to each of the
Security Agreement and the Pledge Agreement as contemplated hereby.

          Section 5. Integration; Confirmation. On and after the date hereof,
each of the Security Agreement and the Pledge Agreement and the respective
Schedules thereto shall be supplemented as expressly set forth herein; all other
terms and provisions of each of the Security Agreement, the Pledge Agreement,
the other Note Documents and the respective Schedules thereto shall continue in
full force and effect and unchanged and are hereby confirmed in all respects.

          Section 6. Expenses. The New Loan Party agrees to pay (i) all
reasonable out-of-pocket expenses of the Collateral Agent, including reasonable
fees and disbursements of special and local counsel for the Collateral Agent, in
connection with the preparation, execution and delivery of this Agreement and
any document or agreement contemplated hereby and (ii) all taxes which the
Collateral Agent or any Finance Party may be required to pay by reason of the
security interests granted in the Collateral (including any applicable transfer
taxes).

          Section 7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


                                       F-3



          Section 8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may
be transmitted and/or signed by facsimile and if so transmitted or signed,
shall, subject to requirements of law, have the same force and effect as a
manually signed original and shall be binding on the New Loan Party, the
Collateral Agent and the other Finance Parties. The Collateral Agent may also
require that this Agreement be confirmed by a manually signed original hereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.

                            [Signature Page Follows]


                                       F-4



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

                                        INSIGHT HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        [NEW LOAN PARTY NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Collateral Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                                                       EXHIBIT A

                        COUNTERPART TO SECURITY AGREEMENT

          The undersigned hereby executes this counterpart to the Security
Agreement dated as of September 22, 2005 by the Loan Parties party thereto from
time to time in favor of U.S. Bank National Association, as Collateral Agent,
and, as of the date hereof, assumes all of the rights and obligations of a "LOAN
PARTY" thereunder.

Date:                                   [NEW LOAN PARTY NAME]
      ----------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                                                       EXHIBIT B

                         COUNTERPART TO PLEDGE AGREEMENT

          The undersigned hereby executes this counterpart to the Amended and
Restated Pledge Agreement dated as of September 22, 2005 by Loan Parties party
thereto from time to time in favor of U.S. Bank National Association, as
Collateral Agent, and, as of the date hereof, assumes all of the rights and
obligations of a "LOAN PARTY" thereunder.

Date:                                   [NEW LOAN PARTY NAME]
      ----------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                                                       EXHIBIT C

                             PERFECTION CERTIFICATE

EX-4.8

                                                                     Exhibit 4.8

                                                               EXECUTION VERSION

                                PLEDGE AGREEMENT

                         DATED AS OF SEPTEMBER 22, 2005

                                      AMONG

                 THE LOAN PARTIES FROM TIME TO TIME PARTY HERETO

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION,

                               AS COLLATERAL AGENT

                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.01 Defined Terms...............................................     1

SECTION 1.02 Defined in the UCC..........................................     1

SECTION 1.03 Additional Definitions......................................     2

SECTION 1.04 Terms Generally.............................................     8

                                   ARTICLE II
                             THE SECURITY INTERESTS

SECTION 2.01 Grant of Security Interests.................................     8

SECTION 2.02 Security Interests Absolute.................................     9

SECTION 2.03 Continuing Liability of the Loan Parties....................    11

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

SECTION 3.01 Title to Collateral.........................................    11

SECTION 3.02 Validity, Perfection and Priority of Security Interests.....    11

SECTION 3.03 Collateral..................................................    12

SECTION 3.04 No Consents.................................................    12

                                   ARTICLE IV
                                    COVENANTS

SECTION 4.01 Delivery of Collateral......................................    13

SECTION 4.02 Delivery of Perfection Certificate; Filing of Financing
   Statements and Delivery of Search Reports.............................    13

SECTION 4.03 Further Assurances..........................................    13

SECTION 4.04 Additional Collateral.......................................    14

SECTION 4.05 Information Regarding Collateral............................    14



                                       ii

                                                                          
                                    ARTICLE V
                       DISTRIBUTIONS ON COLLATERAL; VOTING

SECTION 5.01 Right to Receive Distributions on Collateral; Voting........    14

                                   ARTICLE VI
                           GENERAL AUTHORITY; REMEDIES

SECTION 6.01 General Authority...........................................    17

SECTION 6.02 Remedies upon Event of Default..............................    18

SECTION 6.03 Securities Act..............................................    19

SECTION 6.04 Other Rights of the Collateral Agent........................    19

SECTION 6.05 Limitation on Duty of Collateral Agent in Respect of
   Collateral............................................................    20

SECTION 6.06 Waiver and Estoppel.........................................    20

SECTION 6.07 Application of Proceeds.....................................    20

                                   ARTICLE VII
                              THE COLLATERAL AGENT

SECTION 7.01 Concerning the Collateral Agent.............................    21

SECTION 7.02 Appointment of Co-Collateral Agent..........................    21

SECTION 7.03 Appointment of Sub-Agents...................................    22

                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.01 Notices.....................................................    22

SECTION 8.02 No Waivers; Non-Exclusive Remedies..........................    22

SECTION 8.03 Compensation and Expenses of the Collateral Agent;
   Indemnification.......................................................    23

SECTION 8.04 Enforcement.................................................    24

SECTION 8.05 Amendments and Waivers......................................    24

SECTION 8.06 Successors and Assigns......................................    25

SECTION 8.07 Governing Law...............................................    25




                                      iii

                                                                          
SECTION 8.08 Limitation of Law; Severability.............................    25

SECTION 8.09 Counterparts; Effectiveness.................................    25

SECTION 8.10 Additional Loan Parties.....................................    25

SECTION 8.11 Termination; Release of Loan Parties........................    26

SECTION 8.12 Entire Agreement............................................    27



SCHEDULES:

Schedule I    - List of Pledged Shares
Schedule II   - List of Pledged Notes
Schedule III  - List of Pledged LLC Interests
Schedule IV   - List of Pledged Partnership Interests
Schedule 3.04 - Consents

EXHIBITS:

Exhibit A - Form of Issuer Control Agreement
Exhibit B - Form of Securities Account Control Agreement


                                       iv

          PLEDGE AGREEMENT dated as of September 22, 2005 (as amended, modified
or supplemented from time to time, this "AGREEMENT") among the LOAN PARTIES from
time to time party hereto and U.S. BANK NATIONAL ASSOCIATION, as Collateral
Agent for the benefit of the Finance Parties referred to herein (together with
its successor or successors in such capacity, the "COLLATERAL AGENT").

          InSight Health Services Corp. ("INSIGHT") intends to issue Senior
Secured Floating Rate Notes due 2011 (together with any Additional Notes (as
defined in the Indenture) and any Exchange Notes (as defined in the Indenture),
and as amended, restated, supplemented or modified from time to time, the
"SENIOR SECURED NOTES") pursuant to an Indenture dated as of the date hereof (as
amended, restated, supplemented or modified from time to time and including any
agreement extending the maturity of, refinancing or otherwise restructuring all
or any portion of the obligations of InSight under such Indenture or any
successor agreement, the "INDENTURE") among InSight and U.S. Bank National
Association, as Trustee (together with its successor or successors in such
capacity, the "TRUSTEE"). The obligations of InSight under and in respect of the
Senior Secured Notes will be guaranteed by InSight Health Services Holdings
Corp. ("HOLDINGS"), each of the parties listed on the signature pages hereto as
"Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic
subsidiaries of Holdings that become a party hereto pursuant to Section 8.10
hereof (collectively, the "SUBSIDIARY GUARANTORS" and, together with Holdings,
"GUARANTORS"). Holdings, InSight and the Subsidiary Guarantors are herein
referred to individually as a "LOAN PARTY" and, collectively, as the "LOAN
PARTIES".

          The Indenture requires the Loan Parties to secure their obligations
under the Senior Secured Notes and their obligations under any guaranties
thereof through the grant of a first lien security interest over the Collateral
(as defined below). The Indenture further requires that such security interests
in the Collateral be granted pursuant to security documents to a collateral
agent acting for the benefit of the holders from time to time of the Senior
Secured Notes. Consequently, the Trustee and the Collateral Agent have entered
into a Collateral Agency Agreement dated as of the date hereof (as amended,
modified or supplemented from time to time, the "COLLATERAL AGENCY AGREEMENT")
which, among other things, governs certain actions of the Trustee and the
Collateral Agent in connection with the Senior Secured Notes and the Collateral,
respectively.

          Accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.01 Defined Terms. Terms defined in the introductory section
hereof have the respective meanings set forth therein. Capitalized terms defined
in the Indenture and not otherwise defined herein have, as used herein, the
respective meanings provided for therein.

          SECTION 1.02 Defined in the UCC. Unless otherwise defined herein or
the context otherwise requires, the following terms, together with any
uncapitalized terms used


                                       1

herein which are defined in the UCC have the respective meanings provided for in
the UCC: (i) Certificated Security; (ii) Financial Asset; (iii) Investment
Property; (iv) Payment Intangibles; (v) Proceeds; (vi) Securities Account; (vii)
Securities Intermediary; (viii) Security; (ix) Security Certificate; and (x)
Uncertificated Security.

          SECTION 1.03 Additional Definitions. The following additional terms,
as used herein, have the following respective meanings:

          "CAPITAL STOCK" has the meaning given to it in the Indenture.

          "COLLATERAL" has the meaning set forth in Section 2.01.

          "COLLATERAL AGENT" means U.S. Bank National Association, in its
capacity as collateral agent for the Finance Parties, and its successor or
successors in such capacity.

          "DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

          "DELIVERY" when used with respect to Collateral means:

          (i) in the case of Collateral constituting Certificated Securities,
transfer thereof to the Collateral Agent or its nominee or custodian by physical
delivery to the Collateral Agent or its nominee or custodian, such Collateral to
be in suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank;

          (ii) in the case of Collateral constituting Uncertificated Securities,
(A) registration thereof on the books and records of the issuer thereof in the
name of the Collateral Agent or its nominee or custodian (who may not be a
Securities Intermediary) or (B) the execution and delivery by the issuer thereof
of an effective agreement, substantially in the form of Exhibit A hereto,
pursuant to which such issuer agrees that it will comply with instructions
originated by the Collateral Agent or such nominee or custodian without further
consent of the registered owner of such Collateral or any other Person;

          (iii) in the case of Collateral constituting Security Entitlements or
other Financial Assets deposited in or credited to a Securities Account, (A)
completion of all actions necessary to constitute the Collateral Agent or its
nominee or custodian the entitlement holder with respect to each such Security
Entitlement or (B) the execution and delivery by the relevant Securities
Intermediary of an effective agreement, substantially in the form of Exhibit B
hereto, pursuant to which such Securities Intermediary agrees to comply with all
entitlement orders originated by the Collateral Agent or such nominee or
custodian without further consent by the relevant entitlement holder or any
other Person;

          (iv) in the case of LLC Interests and Partnership Interests issued by
one or more Loan Parties which do not constitute Securities, (A) compliance with
the provisions of clause (i) above for each such item of Collateral which is
represented by a certificate and (B) compliance with the provisions of clause
(ii) above for each such item of Collateral which is not evidenced by a
certificate;


                                        2

          (v) in the case of Collateral which constitute Instruments, transfer
thereof to the Collateral Agent or its nominee or custodian by physical delivery
to the Collateral Agent or its nominee or custodian indorsed to, or registered
in the name of, the Collateral Agent or its nominee or custodian or indorsed in
blank;

          (vi) in the case of cash, transfer thereof to the Collateral Agent or
its nominee or custodian by physical delivery to the Collateral Agent or its
nominee or custodian; and

          (vii) in each case such additional or alternative procedures as may
hereafter become appropriate to grant control of, or otherwise perfect a
security interest in, any Collateral in favor of the Collateral Agent or its
nominee or custodian, consistent with changes in applicable law or regulations
or the interpretation thereof.

          "EVENT OF DEFAULT" means an "Event of Default" as defined in the
Indenture.

          "FAIR MARKET VALUE" has the meaning given to it in the Indenture.

          "FEDERAL SECURITIES LAWS" has the meaning set forth in Section 6.03(a)
of this Agreement.

          "FINANCE PARTY" means each Noteholder, the Trustee, the Collateral
Agent, each Indemnitee and their respective successors and assigns, and "Finance
Parties" means any two or more of them, collectively.

          "GENERAL INTANGIBLES" means all "general intangibles" (as defined in
the UCC), including, without limitation, (i) all Payment Intangibles and other
obligations and indebtedness owing to any Loan Party in respect of Collateral
and (ii) all interests in limited liability companies and/or partnerships which
interests do not constitute Securities.

          "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

          "GUARANTEE" means the guarantee by any Guarantor of the Note
Obligations.

          "INDEMNITEE" has the meaning set forth in Section 8.03(c) of this
Agreement.

          "INSTRUMENTS" means:

          (i) the promissory notes described on Schedule II hereto, as such
Schedule may be amended, supplemented or modified from time to time (the
"PLEDGED NOTES"), and all interest, distributions, cash, instruments and other
property, income, profits and proceeds from time to time received or receivable
or otherwise made upon or distributed in respect of or in exchange for any or
all of the Pledged Notes;

          (ii) all additional or substitute promissory notes from time to time
issued to or otherwise acquired by any Loan Party in any manner in respect of
Pledged Notes, and all


                                        3

interest, distributions, cash, instruments and other property, income, profits
and proceeds from time to time received or receivable or otherwise made upon or
distributed in respect of such additional or substitute notes;

          (iii) all promissory notes, bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations constituting
"instruments" within the meaning of the UCC; and

          (iv) to the extent not otherwise included in the foregoing, all cash
and non-cash Proceeds thereof.

          "ISSUE DATE" means September 22, 2005.

          "LAW" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority.

          "LLC INTERESTS" means:

          (i) the limited liability company membership interests described on
Schedule III hereto, as such Schedule may be amended, supplemented or modified
from time to time (the "PLEDGED LLC INTERESTS"), and all dividends,
distributions, cash, instruments and other property, income, profits and
proceeds from time to time received or receivable or otherwise made upon or
distributed in respect of or in exchange for any or all of the Pledged LLC
Interests;

          (ii) all additional or substitute limited liability company membership
interests from time to time issued to or otherwise acquired by any Loan Party in
any manner in respect of Pledged LLC Interests, and all dividends,
distributions, cash, instruments and other property, income, profits and
proceeds from time to time received or receivable or otherwise made upon or
distributed in respect of such additional or substitute membership interests;

          (iii) all right, title and interest of any Loan Party in each limited
liability company to which any Pledged LLC Interest relates, including, without
limitation:

               (A) all interests of such Loan Party in the capital of such
     limited liability company and in all profits, losses and assets, whether
     tangible or intangible and whether real, personal or mixed, of such limited
     liability company, and all other distributions to which such Loan Party
     shall at any time be entitled in respect of such Pledged LLC Interests;

               (B) all other payments due or to become due to such Loan Party in
     respect of Pledged LLC Interests, whether under any limited liability
     company agreement or operating agreement or otherwise and whether as
     contractual obligations, damages, insurance proceeds or otherwise;


                                        4

               (C) all of such Loan Party's claims, rights, powers, privileges,
     authority, options, security interests, liens and remedies, if any, under
     any limited liability company agreement or operating agreement, or at law
     or otherwise in respect of such Pledged LLC Interests;

               (D) all present and future claims, if any, of such Loan Party
     against any such limited liability company for moneys loaned or advanced,
     for services rendered or otherwise (exclusive of claims for salary and
     other employee compensation); and

               (E) all of such Loan Party's rights under any limited liability
     company agreement or operating agreement or at law to exercise and enforce
     every right, power, remedy, authority, option and privilege of such Loan
     Party relating to such Pledged LLC Interests, including any power to
     terminate, cancel or modify any limited liability company agreement or
     operating agreement, to execute any instruments and to take any and all
     other action on behalf of and in the name of such Loan Party in respect of
     such Pledged LLC Interests and any such limited liability company, to make
     determinations, to exercise any election (including, without limitation,
     election of remedies) or option to give or receive any notice, consent,
     amendment, waiver or approval, together with full power and authority to
     demand, receive, enforce, collect or give receipt for any of the foregoing
     or for any assets of any such limited liability company, to enforce or
     execute any checks or other instruments or orders, to file any claims and
     to take any other action in connection with any of the foregoing; and

          (iv) to the extent not otherwise included in the foregoing, all cash
and non-cash Proceeds thereof.

          "NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the
Registration Rights Agreement related thereto and the Collateral Documents, in
each case including all exhibits and schedules thereto, and all other
agreements, documents and instruments relating to the Senior Secured Notes, in
each case as the same may be amended, modified or supplemented from time to time
in accordance with the provisions thereof.

          "NOTEHOLDERS" means the holders from time to time of the Senior
Secured Notes.

          "PARTNERSHIP INTERESTS" means:

          (i) the partnership interests described on Schedule IV hereto, as such
Schedule may be amended, supplemented or modified from time to time (the
"PLEDGED PARTNERSHIP INTERESTS"), and all dividends, distributions, cash,
instruments and other property, income, profits and proceeds from time to time
received or receivable or otherwise made upon or distributed in respect of or in
exchange for any or all of the Pledged Partnership Interests;

          (ii) all additional or substitute partnership interests from time to
time issued to or otherwise acquired by any Loan Party in any manner in respect
of Pledged Partnership Interests, and all dividends, distributions, cash,
instruments and other property, income, profits and proceeds from time to time
received or receivable or otherwise made upon or distributed in respect of such
additional or substitute partnership interests;


                                       5

          (iii) all right, title and interest of any Loan Party in each
partnership to which any Pledged Partnership Interest relates, including,
without limitation:

               (A) all interests of such Loan Party in the capital of such
     partnership and in all profits, losses and assets, whether tangible or
     intangible and whether real, personal or mixed, of such partnership, and
     all other distributions to which such Loan Party shall at any time be
     entitled in respect of such Pledged Partnership Interests;

               (B) all other payments due or to become due to such Loan Party in
     respect of Pledged Partnership Interests, whether under any partnership
     agreement or otherwise and whether as contractual obligations, damages,
     insurance proceeds or otherwise;

               (C) all of such Loan Party's claims, rights, powers, privileges,
     authority, options, security interests, liens and remedies, if any, under
     any partnership agreement, or at law or otherwise in respect of such
     Pledged Partnership Interests;

               (D) all present and future claims, if any, of such Loan Party
     against any such partnership for moneys loaned or advanced, for services
     rendered or otherwise (exclusive of claims for salary and other employee
     compensation); and

               (E) all of such Loan Party's rights under any partnership
     agreement or at law to exercise and enforce every right, power, remedy,
     authority, option and privilege of such Loan Party relating to such Pledged
     Partnership Interests, including any power to terminate, cancel or modify
     any partnership agreement, to execute any instruments and to take any and
     all other action on behalf of and in the name of such Loan Party in respect
     of such Pledged Partnership Interests and any such partnership, to make
     determinations, to exercise any election (including, without limitation,
     election of remedies) or option to give or receive any notice, consent,
     amendment, waiver or approval, together with full power and authority to
     demand, receive, enforce, collect or give receipt for any of the foregoing
     or for any assets of any such partnership, to enforce or execute any checks
     or other instruments or orders, to file any claims and to take any other
     action in connection with any of the foregoing; and

          (iv) to the extent not otherwise included in the foregoing, all cash
and non-cash Proceeds thereof.

          "PERFECTION CERTIFICATE" means with respect to each Loan Party a
certificate, substantially in the form of Exhibit E to the Security Agreement,
completed and supplemented with the schedules and attachments contemplated
thereby.

          "PLEDGE AGREEMENT" means this Agreement, as the same may be amended,
supplemented or modified from time to time.

          "PLEDGED LLC INTERESTS" has the meaning set forth in clause (i) of the
definition of "LLC Interests".


                                        6

          "PLEDGED NOTES" has the meaning set forth in clause (i) of the
definition of "Instruments".

          "PLEDGED PARTNERSHIP INTERESTS" has the meaning set forth in clause
(i) of the definition of "Partnership Interests".

          "PLEDGED SHARES" has the meaning set forth in clause (i) of the
definition of "Stock".

          "PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed and whether tangible or intangible.

          "SECURITY ENTITLEMENTS" means all "security entitlements" (as defined
in the UCC), including all rights and property interests with respect to
Financial Assets deposited in or credited to Securities Accounts.

          "SECURITY INTERESTS" means the security interests in the Collateral
granted under this Agreement securing the Note Obligations.

          "STOCK" means:

          (i) the shares of stock and other Securities described on Schedule I
     hereto, as such Schedule may be amended, supplemented or modified from time
     to time (the "PLEDGED SHARES"), and all dividends, interest, distributions,
     cash, instruments and other property, income, profits and proceeds from
     time to time received, receivable or otherwise made upon or distributed in
     respect of or in exchange for any or all of the Pledged Shares;

          (ii) all additional or substitute shares of capital stock or other
     equity interests of any class of any issuer from time to time issued to or
     otherwise acquired by any Loan Party in any manner in respect of Pledged
     Shares, the certificates representing such additional or substitute shares,
     and all dividends, interest, distributions, cash, instruments and other
     property, income, profits and proceeds from time to time received,
     receivable or otherwise made upon or distributed in respect of or in
     exchange for any or all of such additional or substitute shares; and

          (iii) to the extent not otherwise included in the foregoing, all cash
     and non-cash proceeds thereof.

          "SUBSIDIARY GUARANTORS" has the meaning set forth in the introductory
paragraphs hereto.

          "SUPPORTING OBLIGATION" means a guaranty or other secondary obligation
supporting, or any Lien securing, the payment or performance of one or more
Instruments, Investment Property or other item of Collateral.

          "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
law, the perfection, the


                                        7

effect of perfection or non-perfection or the priority of the Security Interests
in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection or non-perfection or priority.

          "US SUBSIDIARY" means with respect to any Person each Subsidiary of
such Person which, at the time of determination, is incorporated in or organized
under the law of the United States of America, any State thereof or the District
of Columbia, and "US SUBSIDIARIES" means all of them, collectively.

          "US SUBSIDIARY GUARANTOR" means each Subsidiary Guarantor which, at
the time of determination, is incorporated in or organized under the laws of the
United States of America, any State thereof or the District of Columbia, and "US
SUBSIDIARY GUARANTORS" means all of them, collectively.

          SECTION 1.04 Terms Generally. Terms defined in the introductory
paragraphs hereof and the definitions in Section 1.03 shall apply equally to
both the singular and plural forms of the terms defined. Wherever the context
may require, any pronouns shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
otherwise stated herein or the context shall otherwise require. Unless otherwise
expressly provided herein, the word "day" means a calendar day.

                                   ARTICLE II

                             THE SECURITY INTERESTS

          SECTION 2.01 Grant of Security Interests. To secure the due and
punctual payment of all Note Obligations, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due, in accordance with the terms thereof and to
secure the performance of all of the obligations of each Loan Party and the
other Loan Parties hereunder and under the other Note Documents, each Loan Party
hereby grants to the Collateral Agent for the benefit of the Finance Parties a
security interest in, and each Loan Party hereby pledges and collaterally
assigns to the Collateral Agent for the benefit of the Finance Parties, all of
such Loan Party's right, title and interest in, to and under the following,
whether now owned or existing or hereafter acquired, created or arising, whether
tangible or intangible, and regardless of where located (all of which are herein
collectively called the "COLLATERAL"):

          (i) Stock;

          (ii) Instruments;

          (iii) LLC Interests;


                                        8

          (iv) Partnership Interests;

          (v) Investment Property (other than Investment Property maintained in
     any Excluded Securities Account (as defined in the Security Agreement);

          (vi) Financial Assets (other than Financial Assets maintained in any
     Excluded Securities Account (as defined in the Security Agreement); and

          (vii) all Proceeds of all or any of the Collateral described in
     clauses (i) through (vi) hereof;

provided, however, that the Collateral shall not include (v) cash or other
distributions in respect of federal, state and/or local income taxes payable by
any Loan Party or any direct or indirect equity holder of any Loan Party in
respect of the income and profits of any limited liability company, partnership
or other entity which is not a corporation for United States federal income tax
purposes, (w) any Voting Stock owned by any Loan Party which constitutes Voting
Stock issued by a Foreign Subsidiary of such Loan Party that is a corporation
for United States Federal Income tax purposes, in each case if and to the extent
that the inclusion of such Voting Stock in the Collateral would cause the
Collateral pledged by such Loan Party hereunder or under any other Note Document
to include in the aggregate more than 65% of the total combined voting power of
all classes of Voting Stock of such Foreign Subsidiary, (x) Excluded Contracts,
(y) any Capital Stock owned by any Loan Party and issued by an entity that is
not a Wholly Owned Subsidiary of such Loan Party to the extent (and only with
respect to such portion of such Capital Stock that would be prohibited as
referred to below) that any joint venture agreement, between or among any Loan
Party and one or more third parties with respect to a Permitted Joint Venture,
by the express terms of a valid and enforceable restriction in favor of such
third parties prohibits, or requires any consent for, the granting of a security
interest in such Capital Stock by such Loan Party, (z) any Capital Stock and
other securities of InSight, any of its Subsidiaries or any of Holdings'
Subsidiaries to the extent that the pledge of such Capital Stock or other
securities to secure the Note Obligations would cause Holdings, such Subsidiary,
or such Subsidiary of Holdings, as the case may be, to be required to file
separate financial statements with the Securities and Exchange Commission
pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time) of the
Securities and Exchange Commission, (aa) any Receivables and Related Assets and
(bb) any proceeds or products from any and all of the foregoing.

          Notwithstanding the foregoing, if granting or perfecting any Lien to
secure the Note Obligations on any Collateral cannot be granted or perfected
under applicable law, none of InSight or the Guarantors will be required to
grant or perfect, as applicable, such Lien.

          SECTION 2.02 Security Interests Absolute. All rights of the Collateral
Agent, all security interests hereunder and all obligations of each Loan Party
hereunder are unconditional and absolute and independent and separate from any
other security for or guaranty of the Note Obligations, whether executed by such
Loan Party, any other Loan Party or any other Person. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall
not be released, discharged or otherwise affected or impaired by:


                                        9

          (i) any extension, renewal, settlement, compromise, acceleration,
     waiver or release in respect of any obligation of any Loan Party under any
     Note Document or any other agreement or instrument evidencing or securing
     any Note Obligation, by operation of law or otherwise;

          (ii) any change in the manner, place, time or terms of payment of any
     Note Obligation or any other amendment, supplement or modification to any
     Note Document or any other agreement or instrument evidencing or securing
     any Note Obligation;

          (iii) any release, non-perfection or invalidity of any direct or
     indirect security for any Note Obligation, any sale, exchange, surrender,
     realization upon, offset against or other action in respect of any direct
     or indirect security for any Note Obligation or any release of any other
     obligor in respect of any Note Obligation;

          (iv) any change in the existence, structure or ownership of any Loan
     Party, or any insolvency, bankruptcy, reorganization, arrangement,
     readjustment, composition, liquidation or other similar proceeding
     affecting any Loan Party or its assets or any resulting disallowance,
     release or discharge of all or any portion of any Note Obligation;

          (v) the existence of any claim, set-off or other right which any Loan
     Party may have at any time against any other Loan Party or any Finance
     Party or any other Person, whether in connection herewith or any unrelated
     transaction; provided that nothing herein shall prevent the assertion of
     any such claim by separate suit or compulsory counterclaim;

          (vi) any invalidity or unenforceability relating to or against any
     Loan Party for any reason of any Note Document or any other agreement or
     instrument evidencing or securing any Note Obligation or any provision of
     applicable law or regulation purporting to prohibit the payment by any Loan
     Party of any Note Obligation;

          (vii) any failure by any Finance Party: (A) to file or enforce a claim
     against any Loan Party or its estate (in a bankruptcy or other proceeding);
     (B) to give notice of the existence, creation or incurrence by any Loan
     Party of any new or additional indebtedness or obligation under or with
     respect to the Note Obligations; (C) to commence any action against any
     Loan Party; (D) to disclose to any Loan Party any facts which such Finance
     Party may now or hereafter know with regard to any Loan Party; or (E) to
     proceed with due diligence in the collection, protection or realization
     upon any collateral securing the Note Obligations;

          (viii) any direction as to application of payment by any Loan Party or
     any other Person;

          (ix) any subordination by any Finance Party of the payment of any Note
     Obligation to the payment of any other liability (whether matured or
     unmatured) of any Loan Party to its creditors;

          (x) any act or failure to act by the Collateral Agent or any other
     Finance Party under this Agreement or otherwise which may deprive any Loan
     Party of any right to


                                       10

     subrogation, contribution or reimbursement against any other Loan Party or
     any right to recover full indemnity for any payments made by such Loan
     Party in respect of the Note Obligations; or

          (xi) any other act or omission to act or delay of any kind by any Loan
     Party or any Finance Party or any other Person or any other circumstance
     whatsoever which might, but for the provisions of this clause, constitute a
     legal or equitable discharge of any Loan Party's obligations hereunder
     (other than final payment in full of the Note Obligations).

          Each Loan Party has irrevocably and unconditionally delivered this
Agreement to the Collateral Agent, for the benefit of the Finance Parties, and
the failure by any other Person to sign this Agreement or a pledge agreement
similar to this Agreement or otherwise shall not discharge the obligations of
any Loan Party hereunder.

          This Agreement shall remain fully enforceable against each Loan Party
irrespective of any defenses that any other Loan Party may have or assert in
respect of the Note Obligations, including, without limitation, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, except that a Loan Party may
assert the defense of final payment in full of the Note Obligations.

          SECTION 2.03 Continuing Liability of the Loan Parties. The Security
Interests are granted as security only and shall not subject the Collateral
Agent or any Finance Party to, or transfer or in any way affect or modify, any
obligation or liability of any Loan Party with respect to any of the Collateral
or any transaction in connection therewith.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

          Each Loan Party represents and warrants that:

          SECTION 3.01 Title to Collateral. Such Loan Party is the legal, record
and beneficial owner of, and has good and marketable title to, all of the
Collateral pledged by it hereunder, free and clear of any Liens other than (i)
Permitted Liens and (ii) Liens in respect of which such Loan Party has delivered
UCC-3 termination statements or partial release financing statements to the
Collateral Agent on the Issue Date. No Collateral is in the possession or
control of any Person asserting any claim thereto or security interest therein,
except that the Collateral Agent or its nominee, custodian or a Securities
Intermediary acting on its behalf may have possession and/or control of
Collateral as contemplated hereby and by the other Note Documents.

          SECTION 3.02 Validity, Perfection and Priority of Security Interests.
The Security Interests constitute valid security interests under the UCC
securing the Note Obligations. Upon Delivery of all Collateral to the Collateral
Agent in accordance with the provisions hereof and when UCC-1 financing
statements naming the Collateral Agent as secured party and containing a
description of the Collateral in the form specified in Exhibit E to the


                                       11

Security Agreement shall have been filed in the respective offices specified in
Schedule 4.01 to the Security Agreement, the Security Interests shall constitute
perfected security interests in all right, title and interest of such Loan Party
in the Collateral (subject to the requirements of Section 9-315 of the UCC with
respect to any proceeds of Collateral and to the further requirement that
additional steps may be necessary to perfect the Security Interests in dividends
or other distributions in kind), in each case prior to all other Liens and
rights of others therein except for Permitted Liens, and, to the extent control
of such Collateral may be obtained pursuant to Article 8 and/or 9 of the UCC,
the Collateral Agent will have control of the Collateral subject to no adverse
claims of any other Person.

          SECTION 3.03 Collateral.

          (a) Schedules I, II, III and IV hereto (as such schedules may be
amended, supplemented or modified from time to time by delivery of such amended,
supplemented or modified Schedules to the Collateral Agent in compliance with
this Agreement) set forth (i) the name and jurisdiction of organization of, and
the ownership interest (including percentage owned and number of shares, units
or other equity interests) of such Loan Party in the Stock, LLC Interests and
Partnership Interests issued by each of such Loan Party's direct Subsidiaries
which are required to be included in the Collateral and pledged hereunder, (ii)
all other Stock, LLC Interests and Partnership Interests directly owned by such
Loan Party that are required to be included in the Collateral and pledged
hereunder and (iii) the issuer, date and amount of all notes having a face value
in excess of $500,000 directly owned or held by such Loan Party that are
required to be included in the Collateral and pledged hereunder. Such Loan Party
holds all such Collateral directly unless otherwise indicated on such Schedule
(i.e., not through a Subsidiary, Securities Intermediary or any other Person).

          (b) All Collateral consisting of Pledged Shares, Pledged LLC Interests
and Pledged Partnership Interests has been duly authorized and validly issued,
is fully paid and non-assessable and is subject to no options to purchase or
similar rights of any Person. Except as set forth on Schedules I, III and IV
hereto, and, in the case of clause (i) below, except as excluded from the
Collateral by the proviso to Section 2.01, (i) such Collateral constitutes 100%
of the issued and outstanding shares of capital stock or other equity interests
of the respective issuers thereof owned by the relevant Loan Party, (ii) no
issuer of Collateral other than any Permitted Joint Venture has outstanding any
security convertible into or exchangeable for any shares of its capital stock or
other equity interests or any warrant, option, convertible security, instrument
or other interest entitling the holder thereof to acquire any such shares or any
security convertible into or exchangeable for such shares and (iii) there are no
voting trusts, stockholder agreements, proxies or other agreements in effect
with respect to the voting or transfer of such shares of its capital stock
(other than in respect of any Permitted Joint Venture). Except as otherwise
permitted by the Note Documents, no Loan Party is now and or will become a party
to or otherwise bound by any agreement, other than this Agreement and the Note
Documents which restricts in any manner the rights of the Collateral Agent or
any other present or future holder of any Collateral to transfer or otherwise
dispose of Pledged Shares.

          SECTION 3.04 No Consents. No consent of any other Person (including,
without limitation, any stockholder or creditor of such Loan Party or any of its
Subsidiaries) and no order, consent, approval, license, authorization or
validation of, or filing, recording or


                                       12

registration with, or exemption by any Governmental Authority is required to be
obtained by the Loan Party in connection with the execution, delivery or
performance of this Agreement, or in connection with the exercise of the rights
and remedies of the Collateral Agent pursuant to this Agreement, except as may
be required under the Collateral Agency Agreement or in connection with the
disposition of the Collateral by laws affecting the offering and sale of
securities generally or as described in Schedule 3.04 hereto.

                                   ARTICLE IV

                                    COVENANTS

          Each Loan Party covenants and agrees that until the payment in full of
all Note Obligations (other than contingent indemnification obligations for
which a claim has not been made), such Loan Party will comply with the
following:

          SECTION 4.01 Delivery of Collateral. All Collateral shall be Delivered
to and held by or on behalf of the Collateral Agent pursuant hereto; provided
that so long as no Event of Default shall have occurred and be continuing, and
except as required by any other Note Document, each Loan Party may retain any
Collateral (i) consisting of Instruments (other than Pledged Notes and any
additional or substitute promissory notes issued to or otherwise acquired by
such Loan Party in respect of Pledged Notes) received by it in the ordinary
course of business or (ii) which it is otherwise entitled to receive and retain
pursuant to Section 5.01 hereof, and the Collateral Agent shall, promptly upon
request of any Loan Party, make appropriate arrangements for making any
Collateral consisting of an Instrument or a Certificated Security pledged by
such Loan Party available to it for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed appropriate
to the Collateral Agent, against a trust receipt or like document). All
Collateral Delivered hereunder and shall be accompanied by any required transfer
tax stamps. The Collateral Agent shall have the right at any time upon the
request of the Directing Noteholders made during the continuance of and Event of
Default, and upon notice to any Loan Party, to cause any or all of the
Collateral to be transferred of record into the name of the Collateral Agent or
its nominee.

          SECTION 4.02 Delivery of Perfection Certificate; Filing of Financing
Statements and Delivery of Search Reports. On or prior to the Issue Date, such
Loan Party shall deliver its Perfection Certificate to the Collateral Agent and
shall cause all filings to have been delivered to the Collateral Agent for
filing and recordings and other actions specified in Schedule 4.01 to the
Security Agreement to have been completed as required by the Security Agreement.
The information set forth in the Perfection Certificate is correct and complete
in all material respects.

          SECTION 4.03 Further Assurances. Such Loan Party will, from time to
time at its expense at the request of the Collateral Agent and in such manner
and form as the Collateral Agent may require, execute, deliver, file and record
any financing statement, specific assignment, instrument, document, agreement or
other paper and take any other action (including, without limitation, any
filings of financing or continuation statements under the UCC) that from time to
time may be reasonably necessary or desirable, or that the Collateral Agent may
reasonably request, in order to create, preserve, perfect, confirm or validate
the


                                       13

Security Interests or to enable the Collateral Agent and the Finance Parties to
obtain the full benefit of this Agreement or to exercise and enforce any of its
rights, powers and remedies created hereunder or under applicable law with
respect to any of the Collateral. To the extent permitted by applicable law but
without limiting such Loan Party's obligations to itself comply with the first
sentence of this Section 4.04, such Loan Party hereby authorizes the Collateral
Agent to execute and file, in the name of such Loan Party or otherwise and
without the signature or other separate authorization or authentication of such
Loan Party appearing thereon, such UCC financing statements or continuation
statements as the Collateral Agent in its reasonably discretion may deem
necessary or appropriate to further perfect or maintain the perfection of the
Security Interests. Such Loan Party agrees that a carbon, photographic,
photostatic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. The Loan Parties shall pay the costs of,
or incidental to, any recording or filing of any financing or continuation
statements concerning the Collateral.

          SECTION 4.04 Additional Collateral. Except as otherwise not prohibited
by any other Note Document, such Loan Party will cause each issuer of the
Collateral that is a Subsidiary of such Loan Party not to issue any stock, other
securities, limited liability company membership interests, partnership
interests, promissory notes or other instruments in addition to or in
substitution for the Pledged Shares, Pledged LLC Interests, Pledged Partnership
Interests and Pledged Notes issued by such issuer, except to a Loan Party, and,
in the event that any issuer of Collateral at any time issues any additional or
substitute stock, other securities, limited liability company membership
interests, partnership interests, promissory notes or other instruments to a
Loan Party, such Loan Party will (subject to the proviso to Section 2.01)
immediately Deliver all such items to the Collateral Agent to hold as Collateral
hereunder and will promptly thereafter deliver to the Collateral Agent such
supplements to Schedules I through IV hereto as are necessary to cause such
Schedules to be complete and accurate at such time and certifying that such
Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and/or
Pledged Notes have been duly pledged with the Collateral Agent hereunder.

          SECTION 4.05 Information Regarding Collateral. Such Loan Party will,
promptly upon request, provide to the Collateral Agent all information and
evidence it may reasonably request concerning the Collateral to enable the
Collateral Agent to enforce the provisions of this Agreement.

                                    ARTICLE V

                       DISTRIBUTIONS ON COLLATERAL; VOTING

          SECTION 5.01 Right to Receive Distributions on Collateral; Voting.

          (a) Unless and until an Event of Default shall have occurred and be
continuing and the Collateral Agent has delivered a written notice to InSight
stating its intent to exercise remedies under clauses (b) and (c) of this
Section 5.1:

               (i) Each Loan Party shall be entitled to exercise any and all
     voting, management, administration and other consensual rights pertaining
     to the Collateral or any part thereof for any purpose not inconsistent with
     the terms of this Agreement and


                                       14

     the other Note Documents; provided, however, that no Loan Party shall
     exercise or refrain from exercising any such right if such action would
     violate or be inconsistent with any of the terms of this Agreement or any
     other Note Document, or would have the effect of impairing the position or
     interests of the Collateral Agent or any other Finance Party hereunder or
     thereunder.

               (ii) Each Loan Party shall be entitled to receive and retain any
     and all dividends, interest, distributions, cash, instruments and other
     payments and distributions made upon or in respect of the Collateral;
     provided, however, that (other than, for the avoidance of doubt, any
     dividends, interest, distributions, cash, instruments and other payments
     and distributions made upon, consisting of or in respect of Receivables or
     Related Assets) any and all:

                    (A) dividends, interest and other payments and distributions
          paid or payable other than in cash in respect of, and instruments and
          other property other than in cash received, receivable or otherwise
          distributed in respect of, or in exchange for, any Collateral;

                    (B) dividends and other payments and distributions paid or
          payable in cash in respect of any Collateral in connection with a
          partial or total liquidation or dissolution or in connection with a
          reduction of capital, capital surplus or paid-in-surplus;

                    (C) additional stock, other securities, limited liability
          company membership interests, partnership interests, promissory notes
          or other instruments or property paid or distributed in respect of any
          Pledged Shares, Pledged LLC Interests or Pledged Partnership Interests
          by way of share-split, spin-off, split-up, reclassification,
          combination of shares or similar rearrangement;

                    (D) all other or additional stock, other securities, limited
          liability company membership interests, partnership interests,
          promissory notes or other instruments or property which may be paid in
          respect of the Collateral by reason of any consolidation, merger,
          exchange of shares, conveyance of assets, liquidation or similar
          reorganization; and

                    (E) cash paid, payable or otherwise distributed in respect
          of principal of, in redemption of, or in exchange for, any Collateral;

shall be forthwith (i) Delivered to the Collateral Agent or its nominee or
custodian to hold as Collateral hereunder or (ii) in the case of any amount
referred to in the proviso of this Section 5.01(a)(ii) paid or distributed in
cash, forthwith deposited in a Deposit Account maintained with the Collateral
Agent or with respect to which an effective Account Control Agreement as
contemplated by Section 4.13 of the Security Agreement has been delivered to the
Collateral Agent and shall, if received by any Loan Party, be received in trust
for the benefit of the Collateral Agent and the Finance Parties, be segregated
from the other property or funds of such Loan Party and be forthwith Delivered,
in the same form as so received, to the Collateral Agent


                                       15

or its nominee or custodian to hold as Collateral or deposited in a Deposit
Account as contemplated by clause (ii) above.

               (iii) The Collateral Agent shall, upon receiving a written
     request from any Loan Party accompanied by a certificate signed by an
     authorized officer of such Loan Party stating that no Event of Default has
     occurred and is continuing, execute and deliver (or cause to be executed
     and delivered) to such Loan Party or as specified in such request all
     proxies, powers of attorney, consents, ratifications and waivers and other
     instruments as such Loan Party may reasonably request for the purpose of
     enabling such Loan Party to exercise the voting and other rights which it
     is entitled to exercise pursuant to paragraph (i) above and to receive the
     dividends, interest, distributions, cash, instruments or other payments or
     distributions which it is authorized to receive and retain pursuant to
     paragraph (ii) above in respect of any of the Collateral which is
     registered in the name of the Collateral Agent or its nominee.

          (b) Upon the occurrence and during the continuance of an Event of
Default and following written notice from the Collateral Agent to InSight
stating its intent to exercise remedies under clauses (b) and (c) of this
Section 5.01:

               (i) All rights of each Loan Party to receive the dividends,
     interest, distributions, cash, instruments and other payments and
     distributions which it would otherwise be authorized to receive and retain
     pursuant to Section 5.01(a)(ii) above shall cease (other than, for the
     avoidance of doubt, the rights of each Loan Party to receive any dividends,
     interest, distributions, cash, instruments and other payments and
     distributions made upon, consisting of or relating to Receivables or
     Related Assets), and all such rights shall thereupon become vested in the
     Collateral Agent, which shall thereupon have the sole right to receive and
     hold as Collateral such dividends, interest, distributions, cash,
     instruments and other payments and distributions; provided that all cash
     dividends and other cash distributions in respect of federal, state and/or
     local income taxes payable by any Loan Party or any direct or indirect
     equity holder of any Loan Party in respect of income and profits of any
     limited liability company, partnership or other entity which is not a
     corporation for United States federal income tax purposes shall be paid to
     the respective Loan Party free and clear of any Liens created hereby
     regardless of whether an Event of Default shall have occurred and be
     continuing.

               (ii) All dividends, interest, distributions, cash, instruments
     and other payments and distributions which are received by any Loan Party
     contrary to the provisions of paragraph (i) of this Section 5.01(b) shall
     be received in trust for the benefit of the Collateral Agent and the
     Finance Parties, shall be segregated from other property or funds of such
     Loan Party and shall be forthwith Delivered, in the same form as so
     received to the Collateral Agent or its nominee or custodian to hold as
     Collateral.

          (c) Upon the occurrence and during the continuance of an Event of
Default and following written notice from the Collateral Agent to InSight
stating its intent to exercise remedies under clauses (b) and (c) of this
Section 5.01, all rights of such Loan Party to exercise the voting, management,
administration and other consensual rights which it would otherwise be entitled
to exercise pursuant to Section 5.01(a)(i) above shall cease, all such rights
shall thereupon become vested in the Collateral Agent, who shall thereupon have
the sole right to


                                       16

exercise such voting and other consensual rights, and such Loan Party shall take
all actions as may be necessary or appropriate to effect such right of the
Collateral Agent.

                                   ARTICLE VI

                           GENERAL AUTHORITY; REMEDIES

          SECTION 6.01 General Authority. Each Loan Party hereby irrevocably
appoints the Collateral Agent and any officer or agent thereof as its true and
lawful attorney-in-fact, with full power of substitution, in the name of such
Loan Party, the Collateral Agent, the Finance Parties or otherwise, for the sole
use and benefit of the Collateral Agent and the Finance Parties, but at such
Loan Party's expense, to the extent permitted by law, to exercise at any time
and from time to time while an Event of Default has occurred and is continuing,
all or any of the following powers with respect to all or any of the Collateral,
all acts of such attorney being hereby ratified and confirmed; such power, being
coupled with an interest, is irrevocable until the Note Obligations (excluding
contingent indemnification obligations) are paid in full:

          (i) to take any and all appropriate action and to execute any and all
     documents and instruments which may be necessary or desirable to carry out
     the terms of this Agreement;

          (ii) to receive, take, endorse, assign and deliver any and all checks,
     notes, drafts, acceptances, documents and other negotiable and
     non-negotiable instruments taken or received by such Loan Party as, or in
     connection with, the Collateral;

          (iii) to accelerate any Pledged Note which may be accelerated in
     accordance with its terms, and to otherwise demand, sue for, collect,
     receive and give acquittance for any and all monies due on or by virtue of
     any Collateral;

          (iv) to commence, settle, compromise, compound, prosecute, defend or
     adjust any claim, suit, action or proceeding with respect to, or in
     connection with, the Collateral;

          (v) to sell, transfer, assign or otherwise deal in or with the
     Collateral or the proceeds or avails thereof, as fully and effectually as
     if the Collateral Agent were the absolute owner thereof;

          (vi) to extend the time of payment of any or all of the Collateral and
     to make any allowance and other adjustments with respect thereto;

          (vii) subject to the giving of notice to the relevant Loan Party in
     accordance with Section 5.01(a) hereof, to vote all or any part of the
     Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and/or
     Pledged Notes (whether or not transferred into the name of the Collateral
     Agent) and give all consents, waivers and ratifications in respect of the
     Collateral; and

          (viii) to do, at its option, but at the expense of such Loan Party, at
     any time or from time to time, all acts and things which the Collateral
     Agent deems necessary to protect or preserve the Collateral and to realize
     upon the Collateral.


                                       17

          SECTION 6.02 Remedies upon Event of Default.

          (a) If an Event of Default shall have occurred and be continuing, the
Collateral Agent may, in addition to all other rights and remedies granted to it
in this Agreement and in any other agreement securing, evidencing or relating to
the Note Obligations: (i) exercise on behalf of the Finance Parties all rights
and remedies of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, (ii) without
demand of performance or other demand or notice of any kind (except as herein
provided or as may be required by mandatory provisions of law) to or upon any
Loan Party or any other Person (all of which demands and/or notices are hereby
waived by each Loan Party), (A) apply all cash, if any, then held by it as
Collateral as specified in Section 6.07 hereof and (B) if there shall be no such
cash or if such cash shall be insufficient to pay all the Note Obligations in
full or cannot be so applied for any reason or if the Collateral Agent
determines to do so, collect, receive, appropriate and realize upon the
Collateral and/or sell, assign, give an option or options to purchase or
otherwise dispose of and deliver the Collateral (or contract to do so) or any
part thereof in one or more parcels (which need not be in round lots) at public
or private sale or at broker's board or on any securities exchange, at any
office of the Collateral Agent or elsewhere in such manner as is commercially
reasonable and as the Collateral Agent may deem best, for cash, on credit or for
future delivery without assumption of any credit risk and at such price or
prices as the Collateral Agent may deem satisfactory.

          (b) The Collateral Agent shall give each Loan Party not less than 10
days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which threatens to
decline speedily in value or is of a type customarily sold on a recognized
market. Any such notice shall (i) in the case of a public sale, state the time
and place fixed for such sale, (ii) in the case of a sale at a broker's board or
on a securities exchange, state the board or exchange at which such sale is to
be made and the day on which the Collateral, or the portion thereof being sold,
will first be offered for sale, (iii) in the case of a private sale, state the
day after which such sale may be consummated, (iv) contain the information
specified in Section 9-613 of the UCC, (v) be authenticated and (vi) be sent to
the parties required to be notified pursuant to Section 9-611(c) of the UCC;
provided that, if the Collateral Agent fails to comply with this sentence in any
respect, its liability for such failure shall be limited to the liability (if
any) imposed on it as a matter of law under the UCC. The Collateral Agent and
each Loan Party agree that such notice constitutes reasonable notification
within the meaning of Section 9-611 of the UCC. Except as otherwise provided
herein, each Loan Party hereby waives, to the extent permitted by applicable
law, notice and judicial hearing in connection with the Collateral Agent's
taking possession or disposition of any of the Collateral.

          (c) The Collateral Agent or any Finance Party may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). Each Loan Party will execute and deliver such documents and take such
other action as the Collateral Agent reasonably deems necessary or advisable in
order that any such sale may be made in compliance with law. Upon any such sale,
the Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
hold the Collateral so sold to it absolutely and free


                                       18

from any claim or right of whatsoever kind. Any such public sale shall be held
at such time or times within ordinary bankers hours and at such place or places
as the Collateral Agent may fix in the notice of such sale. At any such sale,
the Collateral may be sold in one lot as an entirety or in such parcels, as the
Collateral Agent may determine. The Collateral Agent shall not be obligated to
make any such sale pursuant to any such notice. The Collateral Agent may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned without further notice. In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, but the Collateral Agent shall not incur any liability
in case of the failure of such purchaser to take up and pay for the Collateral
so sold and, in the case of such failure, such Collateral may again be sold upon
like notice.

          SECTION 6.03 Securities Act. In view of the position of the Loan
Parties in relation to the Collateral, or because of other present or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being herein called the "FEDERAL SECURITIES LAWS") with respect to any
disposition of the Collateral permitted hereunder. Each Loan Party understands
that compliance with the Federal Securities Laws might very strictly limit the
course of conduct of the Collateral Agent if the Collateral Agent were to
attempt to dispose of all or any part of the Collateral, and might also limit
the extent to which or the manner in which any subsequent transferee of any
Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Collateral Agent in any attempt to
dispose of all or part of the Collateral under applicable Blue Sky or other
state securities laws or similar laws analogous in purpose or effect. Without
limiting the generality of the foregoing, the provisions of this Section 6.03
would apply if, for example, the Collateral Agent were to place all or any part
of the Collateral for private placement by an investment banking firm, or if
such investment banking firm purchased all or any part of the Collateral for its
own account, or if the Collateral Agent placed all or any part of the Collateral
privately with a purchaser or purchasers.

          SECTION 6.04 Other Rights of the Collateral Agent.

          (a) The Collateral Agent, instead of exercising the power of sale
conferred upon it pursuant to Section 6.02, may proceed by a suit or suits at
law or in equity to foreclose the Security Interests and sell the Collateral, or
any portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction, and may in addition institute and maintain such suits
and proceedings as the Collateral Agent may deem appropriate to protect and
enforce the rights vested in the Collateral Agent by this Agreement.

          (b) The Collateral Agent shall, to the extent permitted by applicable
law, without notice to any Loan Party or any party claiming through any Loan
Party, without regard to the solvency or insolvency at such time of any Person
then liable for the payment of any of the Note Obligations, without regard to
the then value of the Collateral and without requiring any bond from any
complainant in such proceedings, be entitled as a matter of right to the
appointment of a receiver or receivers (who may be the Collateral Agent) of the
Collateral or any


                                       19

part thereof, and of the profits, revenues and other income thereof, pending
such proceedings, with such powers as the court making such appointment shall
confer, and to the entry of an order directing that the profits, revenues and
other income of the property constituting the whole or any part of the
Collateral be segregated, sequestered and impounded for the benefit of the
Collateral Agent and the Finance Parties, and each Loan Party irrevocably
consents to the appointment of such receiver or receivers and to the entry of
such order.

          SECTION 6.05 Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof,
neither the Collateral Agent nor any Finance Party shall have any duty to
exercise any rights or take any steps to preserve the rights of any Loan Party
in the Collateral in its or their possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto. Each
Loan Party agrees that the Collateral Agent shall at no time be required to, nor
shall the Collateral Agent be liable to any Loan Party for any failure to,
account separately to any Loan Party for amounts received or applied by the
Collateral Agent from time to time in respect of the Collateral pursuant to the
terms of this Agreement. Without limiting the foregoing, the Collateral Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall be (and in so doing shall be deemed to have exercised reasonable care in
respect thereof) to accord the Collateral treatment substantially equal to that
which the Collateral Agent accords its own property, and (i) shall not be liable
or responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any agent
or bailee selected by the Collateral Agent in good faith or (ii) shall not have
any duty or responsibility for ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters.

          SECTION 6.06 Waiver and Estoppel.

          (a) Each Loan Party, to the extent it may lawfully do so, on behalf of
itself and all who claim through or under it, including without limitation any
and all subsequent creditors, vendees, assignees and lienors, waives and
releases all rights to demand or to have any marshalling of the Collateral upon
any sale, whether made under any power of sale granted herein or pursuant to
judicial proceedings or under any foreclosure or any enforcement of this
Agreement, and consents and agrees that all of the Collateral may at any such
sale be offered and sold as an entirety.

          (b) Each Loan Party waives, to the extent permitted by law,
presentment, demand, protest and any notice of any kind (except the notices
expressly required hereunder) in connection with this Agreement and any action
taken by the Collateral Agent with respect to the Collateral.

          SECTION 6.07 Application of Proceeds.

          (a) Priority of Distributions. The proceeds of any sale of, or other
realization upon, all or any part of the Collateral (including any proceeds
received and held pursuant to Section 5.01) and any cash held by the Collateral
Agent or its nominee or custodian hereunder


                                       20

shall be applied as provided in Section 4.06 of the Collateral Agency Agreement.
The Collateral Agent may make distributions hereunder in cash or in kind or, on
a ratable basis, in any combination thereof.

          (b) Deficiencies. It is understood that the Loan Parties shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral and the amount of the Note Obligations.

                                   ARTICLE VII

                              THE COLLATERAL AGENT

          SECTION 7.01 Concerning the Collateral Agent. The provisions of
Article VI of the Collateral Agency Agreement shall inure to the benefit of the
Collateral Agent in respect of this Agreement and shall be binding upon all Loan
Parties and all Finance Parties and upon the parties hereto in such respect. In
furtherance and not in derogation of the rights, privileges and immunities of
the Collateral Agent therein set forth:

               (i) The Collateral Agent is authorized to take all such actions
     as are provided to be taken by it as Collateral Agent hereunder and all
     other action reasonably incidental thereto. As to any matters not expressly
     provided for herein or as to any matters which permit but do not require
     action by the Collateral Agent (including, without limitation, the timing
     and methods of realization upon the Collateral) the Collateral Agent shall
     act or refrain from acting in accordance with written instructions from the
     Directing Noteholders as contemplated by the Collateral Agency Agreement
     or, in the absence of such instructions, subject to the terms of the
     Collateral Agency Agreement, in accordance with its discretion.

               (ii) The Collateral Agent shall not be responsible for the
     existence, genuineness or value of any of the Collateral or for the
     validity, perfection, priority or enforceability of the Security Interests
     in any of the Collateral, whether impaired by operation of law or by reason
     of any action or omission to act on its part hereunder unless such action
     or omission constitutes gross negligence or willful misconduct. The
     Collateral Agent shall have no duty to ascertain or inquire as to the
     performance or observance of any of the terms of this Agreement or any Note
     Document by any Loan Party.

          SECTION 7.02 Appointment of Co-Collateral Agent. At any time or times,
in order to comply with any legal requirement in any jurisdiction, the
Collateral Agent may, in consultation with InSight and, unless an Event of
Default shall have occurred and be continuing, with its consent (not to be
unreasonably withheld or delayed), appoint another bank or trust company or one
or more other persons, either to act as co-agent or co-agents, jointly with the
Collateral Agent, or to act as separate agent or agents on behalf of the Finance
Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in the instrument of
appointment (which may, in the discretion of the Collateral Agent, include
provisions for the protection of such co-agent or separate agent similar to the
provisions of Section 7.01 above). Notwithstanding any such appointment but only
to the extent


                                       21

not inconsistent with such legal requirements or, in the reasonable judgment of
the Collateral Agent, not unduly burdensome to it or any such co-agent, each
Loan Party shall be entitled to deal solely and directly with the Collateral
Agent rather than any such co-agent in connection with the Collateral Agent's
rights and obligations under this Agreement.

          SECTION 7.03 Appointment of Sub-Agents. The Collateral Agent shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Shares, Pledged LLC Interests, Pledged
Partnership Interests and Pledged Notes, which may be held (in the discretion of
the Collateral Agent) in the name of the relevant Loan Party, endorsed or
assigned in blank or in favor of the Collateral Agent or any nominee or
custodian of the Collateral Agent or a sub-agent appointed by the Collateral
Agent.

                                  ARTICLE VIII

                                  MISCELLANEOUS

          SECTION 8.01 Notices.

          (a) Unless otherwise specified herein, all notices, requests or other
communications to any party hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered to the address or
facsimile number: (i) in the case of Holdings, InSight, any Subsidiary Guarantor
or any Noteholder or the Trustee, as set forth in Section 13.02 of the
Indenture, (ii) in the case of the Collateral Agent, as set forth on the
signature pages hereof, or (iii) in the case of any party, to such other
address, facsimile number or electronic mail address as such party shall
hereafter specify for the purpose of communications hereunder by notice to the
other parties hereto. Each such notice, request or other communication shall be
effective upon the earlier to occur of (i) actual receipt by the intended
recipient and (ii) (A) if delivered by hand or by courier, when signed for by or
on behalf of the intended recipient, (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid and (C) if delivered by
facsimile, when sent and receipt has been confirmed electronically. Rejection or
refusal to accept, or the inability to deliver because of a changed address of
which no notice was given shall not affect the validity of notice given in
accordance with this Section.

          (b) This Agreement may be transmitted and/or signed by facsimile and,
if so transmitted or signed shall, subject to requirements of Law, have the same
force and effect as a manually-signed original and shall be binding on all Loan
Parties, the Collateral Agent and the Finance Parties. The Collateral Agent may
also require that this Agreement be confirmed by a manually-signed original
hereof; provided, however, that the failure to request or deliver the same shall
not limit the effectiveness of any facsimile document or signature.

          SECTION 8.02 No Waivers; Non-Exclusive Remedies. No failure or delay
on the part of the Collateral Agent or any Finance Party to exercise, no course
of dealing with respect to, and no delay in exercising, any right, power or
privilege under this Agreement or any other Note Document or any other document
or agreement contemplated hereby or thereby shall operate as a waiver thereof
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein and in the
other Note Documents are


                                       22

cumulative and are not exclusive of any other remedies provided by law. Without
limiting the foregoing, nothing in this Agreement shall impair the right of any
Finance Party to exercise any right of set-off or counterclaim it may have and
to apply the amount subject to such exercise to the payment of indebtedness of
any Loan Party other than its indebtedness under the Note Documents. Each Loan
Party agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note Obligation, whether or not
acquired pursuant to the terms of any applicable Note Document, may exercise
rights of set-off or counterclaim or other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Loan Party in the amount of such participation.

          SECTION 8.03 Compensation and Expenses of the Collateral Agent;
Indemnification.

          (a) Expenses. The Loan Parties, jointly and severally, agree to pay
(i) all reasonable out-of-pocket expenses of the Collateral Agent, including
fees and disbursements of special and local counsel for the Collateral Agent, in
connection with the preparation and administration of this Agreement or any
document or agreement contemplated hereby, any waiver or consent hereunder or
any amendment hereof or any Default or Event of Default or alleged Default or
Event of Default, and (ii) all taxes which the Collateral Agent or any other
Finance Party may be required to pay by reason of the security interests granted
in the Collateral (including any applicable transfer taxes) or to free any of
the Collateral from the lien thereof.

          (b) Protection of Collateral. If any Loan Party fails to comply with
the provisions of any Note Document, such that the value of any material portion
of Collateral or the validity, perfection, rank or value of any Security
Interest is thereby materially diminished or potentially materially diminished,
after notice to such Loan Party (unless in the reasonable judgment of the
Collateral Agent, notice is impractical) the Collateral Agent if requested by
the Directing Noteholders may, but shall not be required to, effect such
compliance on behalf of such Loan Party, and the Loan Parties shall reimburse
the Collateral Agent for the costs thereof on demand. Any and all excise,
property, sales and use taxes imposed by any state, federal or local authority
on any of the Collateral, or in respect of periodic appraisals of the
Collateral, or in respect of the sale or other disposition thereof shall be
borne and paid by the Loan Parties. If any Loan Party fails to promptly pay any
portion thereof when due, the Collateral Agent may, at its option, but shall not
be required to, pay the same and charge the Loan Parties' account therefor, and
the Loan Parties agree to reimburse the Collateral Agent therefor on demand. All
sums so paid or incurred by the Collateral Agent for any of the foregoing and
any and all other sums for which any Loan Party may become liable hereunder and
all costs and expenses (including attorneys' fees, legal expenses and court
costs) reasonably incurred by the Collateral Agent or any Noteholder in
enforcing or protecting the Security Interests or any of their rights or
remedies under this Agreement, shall, together with interest thereon from demand
and until paid at the rate applicable to interest at the highest rate applicable
under the Note Documents in respect of overdue obligations, be additional Note
Obligations hereunder.

          (c) Indemnification. Each Loan Party agrees to indemnify the
Collateral Agent, each other Finance Party and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact and their
respective successors and assigns (each, an "INDEMNITEE" and, collectively,
"INDEMNITEES") and hold each Indemnitee harmless from and


                                       23

against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, suits, judgments, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of counsel,
which may be incurred by, imposed on or asserted against such Indemnitee in
connection with any investigation or administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any other Collateral
Document or in any other way connected with the enforcement of any of the terms
of, or the preservation of any rights hereunder, or in any way relating to or
arising out of the ownership, purchasing, delivery, control, acceptance,
financing, possession, sale, return or other disposition of the Collateral, the
violation of the laws of any country, state or other governmental body or unit,
or any tort or contract claim; provided that no Indemnitee shall have the right
to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a
final, non-appealable judgment or order. Each Loan Party agrees that upon
written notice by any Indemnitee of the assertion of such a liability,
obligation, loss, damage, penalty, claim, demand, action, judgment or suit, such
Loan Party shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to notify the Loan Parties of any such
assertion of which such Indemnitee has knowledge.

          (d) Contribution. If and to the extent that the obligations of any
Loan Party under this Section 8.03 are unenforceable for any reason, each Loan
Party hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.

          (e) Obligations; Survival. Any amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute Note
Obligations. The indemnity obligations of the Loan Parties contained in this
Section 8.03 shall continue in full force and effect notwithstanding the full
payment of all Note Obligations and notwithstanding the discharge thereof.

          SECTION 8.04 Enforcement. The Finance Parties agree that this
Agreement may be enforced only by the action of the Collateral Agent, acting
upon the instructions of the Directing Noteholders, if so required under the
Collateral Agency Agreement, and that no other Finance Party shall have any
right individually to seek to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such rights
and remedies may be exercised by the Collateral Agent for the benefit of the
Finance Parties upon the terms of this Agreement and the Collateral Agency
Agreement.

          SECTION 8.05 Amendments and Waivers. Any provision of this Agreement
may be amended, changed, discharged, terminated or waived if, but only if, such
amendment or waiver is in writing and is signed by each Loan Party affected by
such amendment, change, discharge, termination or waiver (it being understood
that the addition or release of any Loan Party hereunder shall not constitute an
amendment, change, discharge, termination or waiver affecting any Loan Party
other than the Loan Party so added or released and it being further understood
and agreed that any supplement to Schedules I, II, III and IV hereto shall not
require the consent of any Loan Party) and by the Collateral Agent (with the
consent of the Directing Noteholders or the Trustee, as the case may be, to the
extent required by the Collateral Agency Agreement).


                                       24

          SECTION 8.06 Successors and Assigns. This Agreement shall be binding
upon each of the parties hereto and inure to the benefit of the Collateral Agent
and the Finance Parties and their respective successors and assigns. In the
event of an assignment of all or any of the Note Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. No Loan Party shall assign or delegate any
of its rights and duties hereunder without the prior written consent of all of
the Finance Parties.

          SECTION 8.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT
AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT
THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTIONS OTHER THAN NEW YORK ARE
GOVERNED BY THE LAWS OF SUCH JURISDICTIONS.

          SECTION 8.08 Limitation of Law; Severability.

          (a) All rights, remedies and powers provided in this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and be limited to the extent necessary so that they will not
render this Agreement invalid, unenforceable in whole or in part, or not
entitled to be recorded, registered or filed under the provisions of any
applicable law.

          (b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Collateral Agent and the Finance
Parties in order to carry out the intentions of the parties hereto as nearly as
may be possible and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provisions in any other jurisdiction.

          SECTION 8.09 Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective with respect to each Loan Party when the
Collateral Agent shall receive counterparts hereof executed by itself and such
Loan Party.

          SECTION 8.10 Additional Loan Parties. It is understood and agreed that
any Subsidiary of InSight that is required by any Note Document to execute a
counterpart of this Agreement after the date hereof shall automatically become a
Loan Party hereunder with the same force and effect as if originally named as a
Loan Party hereunder by executing an instrument of accession or joinder
substantially in the form of Exhibit F to the Security Agreement and delivering
the same to the Collateral Agent. Concurrently with the execution and delivery
of such instrument of accession or joinder, such Subsidiary shall take all such
actions and deliver to the Collateral Agent all such documents and agreements as
such Subsidiary would


                                       25

have been required to deliver to the Collateral Agent on or prior to the date of
this Agreement had such Subsidiary been a party hereto on the date of this
Agreement. Such additional materials shall include, among other things, an
opinion of counsel to the extent required under the Indenture and supplements to
Schedules I, II, III and IV hereto and to Schedule 4.01 of the Security
Agreement (which Schedules shall thereupon automatically be amended and
supplemented to include all information contained in such supplements) such
that, after giving effect to the accession or joinder of such Subsidiary, each
of Schedules I, II, III and IV hereto and Schedule 4.01 to the Security
Agreement is true, complete and correct in all material respects with respect to
such Subsidiary as of the effective date of such accession or joinder. The
execution and delivery of any such instrument of accession or joinder, and the
amendment and supplementation of the Schedules hereto as provided in the
immediately preceding sentence, shall not require the consent of any other Loan
Party hereunder. The rights and obligations of each Loan Party hereunder shall
remain in full force and effect notwithstanding the addition of any new Loan
Party as a party to this Agreement.

          SECTION 8.11 Termination; Release of Loan Parties.

          (a) Termination. Upon the full payment and performance of all Note
Obligations (other than contingent indemnification obligations), the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Loan Parties. In addition, at any time and from time to time prior to such
termination of the Security Interests, the Collateral Agent may release any of
the Collateral or subordinate its Security Interests therein to Liens in favor
of certain third parties with the prior written consent of the Directing
Noteholders or as provided in Article V of the Collateral Agency Agreement. Upon
any such termination of the Security Interests or release of Collateral, the
Collateral Agent will, upon request by and at the expense of any Loan Party
(and, in the case of a release of Collateral, upon receipt of a written
certification of a Responsible Officer of InSight that the Trustee has received
all documents, if any, required by the Trust Indenture Act and the Indenture)
execute and deliver to such Loan Party such documents as such Loan Party shall
reasonably request to evidence the termination of the Security Interests or the
release of such Collateral, as the case may be. Any such documents shall be
without recourse to or warranty by the Collateral Agent or the other Finance
Parties. The Collateral Agent shall have no liability whatsoever to any other
Finance Party as a result of any release of Collateral by it as permitted by
this Section 8.11. Upon any release of Collateral pursuant to this Section 8.11,
none of the Finance Parties shall have any continuing right or interest in such
Collateral or the Proceeds thereof. Upon satisfaction and discharge of the
Indenture as provided in Article 12 of the Indenture, or legal defeasance or
covenant defeasance of the Indenture as provided in Article 8 of the Indenture,
the Note Obligations under the Note Documents shall be deemed to be paid in full
for purposes of Section 8.04, 8.05 and this Section 8.11(a).

          (b) Release of Loan Parties. If any part of the Collateral (x) is
taken by eminent domain, condemnation or other similar circumstances or (y) is
sold, transferred, otherwise disposed of or liquidated in compliance with the
requirements of the Note Documents (or such sale, transfer, other disposition or
liquidation has been approved in writing by the Directing Noteholders), then in
each such case, such Collateral shall be automatically released from the
Security Interests created hereby and the Collateral Agent, at the request and
expense of the relevant Loan Party, will (upon receipt of a written
certification of a Responsible Officer of


                                       26

InSight that the Trustee has received all documents, if any, required by the
Trust Indenture Act and the Indenture) assign, transfer and deliver to such Loan
Party (without recourse and without representation or warranty) such of the
Collateral as is then being (or has been) so taken, sold, transferred, disposed
of or liquidated as may be in the possession or control of the Collateral Agent
and has not theretofore been released pursuant to this Agreement and deliver to
the applicable Loan Party all documents and other releases reasonably requested
by such Loan Party (including UCC termination statements) to evidence the
release of such Collateral from the Security Interests. Further, upon the
release of a Guarantor from its obligations under all guaranties of the Note
Obligations in accordance with the provisions thereof and the other Note
Documents, such Guarantor (and the Collateral assigned by such Guarantor
pursuant hereto) shall be automatically released from this Agreement and the
Collateral Agent will, upon request by and at the expense of such Guarantor,
execute and deliver to such Guarantor such documents as such Guarantor shall
reasonably request to evidence the release of such Guarantor and such
Collateral.

          (c) Other Releases. If property that constitutes either (A) all or
substantially all of the Collateral securing Note Obligations or (B) less than
all or substantially all of the Collateral securing Note Obligations is released
with the consent of the Directing Noteholders in accordance with the Collateral
Agency Agreement, then in each such case, the Collateral Agent, at the request
and expense of such Loan Party, will (upon receipt of a written certification of
a Responsible Officer of InSight that the Trustee has received all documents, if
any, required by the Trust Indenture Act and the Indenture) duly release from
the security interest created hereby and assign, transfer and deliver to such
Loan Party (without recourse and without representation or warranty) such of the
Collateral as is then being (or has been) so released as may be in the
possession or control of the Collateral Agent and has not theretofore been
released pursuant to this Agreement, and execute and deliver to such Loan Party
such documents and instruments (including UCC termination statements) as such
Loan Party may reasonably request to evidence the release of such Collateral. In
addition, if any Capital Stock or other securities shall, after the Issue Date,
meet the criteria of any of clauses (w), (x) or (y) of the proviso of Section 2.
01, such Capital Stock or other securities shall automatically be deemed to be
released from the Collateral and the Lien of this Agreement and the Collateral
Agent shall promptly after receipt of an Officer's Certificate deliver such
Capital Stock or other securities then in its possession to the applicable Loan
Party together with such releases and other documents as may be reasonably
requested by such Loan Party.

          SECTION 8.12 Entire Agreement. This Agreement and the other Collateral
Documents constitute the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, and any contemporaneous oral agreements and understandings relating to
the subject matter hereof and thereof.

                            [Signature Pages Follow]


                                       27

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

LOAN PARTIES:                           INSIGHT HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        INSIGHT HEALTH SERVICES HOLDINGS CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                               SIGNATURE PAGE - 1

                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        PARKWAY IMAGING CENTER, LLC


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Manager


                               SIGNATURE PAGE - 2

                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        MAXUM HEALTH SERVICES CORP.
                                        DIAGNOSTIC SOLUTIONS 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                               SIGNATURE PAGE - 3

                                        MAXUM HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                               SIGNATURE PAGE - 4

COLLATERAL AGENT:                       U.S. BANK NATIONAL ASSOCIATION,
                                           as Collateral Agent


                                        By: /s/ Jean Clarke
                                            ------------------------------------
                                        Name: Jean Clarke
                                        Title: Assistant Vice President

                                        Attention:
                                                   -----------------------------
                                        Telephone: 212-361-6173
                                        Telecopier: 212-361-6153


                               SIGNATURE PAGE - 5

                                                                       EXHIBIT A
                                                                              to
                                                                PLEDGE AGREEMENT

                        FORM OF ISSUER CONTROL AGREEMENT

          CONTROL AGREEMENT dated as of [As of DATE] among [LOAN PARTY NAME],
[COLLATERAL AGENT NAME], as Collateral Agent, and [ISSUER NAME].

          [Loan Party Name], [Loan Party Description] (together with its
successors and permitted assigns, the "LOAN PARTY"), and [Collateral Agent
Name], as Collateral Agent (together with its successor or successors in such
capacity, the "COLLATERAL AGENT"), propose to enter into a Pledge Agreement
dated as of September 22, 2005 (as the same may be amended, supplemented or
modified from time to time, the "PLEDGE AGREEMENT"), under which the Loan Party
will pledge to the Collateral Agent, and will grant a security interest in favor
of the Collateral Agent in, all right, title and interest of the Loan Party in,
to and under any and all (i) Uncertificated Securities (as defined in the Pledge
Agreement), (ii) Partnership Interests (as defined in the Pledge Agreement) and
(iii) LLC Interests (as defined in the Pledge Agreement), in each case issued
from time to time by [Issuer Name], [Issuer Description] (together with its
successors, the "ISSUER"), whether now existing or hereafter from time to time
acquired by the Loan Party (all of such Uncertificated Securities, Partnership
Interests and LLC Interests being herein collectively referred to as the
"PLEDGED INTERESTS") to secure the payment and performance of the Note
Obligations (as defined in the Pledge Agreement). Capitalized terms defined or
otherwise used in the Pledge Agreement and not otherwise defined herein have, as
used herein, the respective meanings provided for therein.

          The Loan Party desires that the Issuer enter into this Agreement to
perfect the security interest of the Collateral Agent in the Pledged Interests,
to vest in the Collateral Agent control of the Pledged Interests and to provide
for the rights of the parties under this Control Agreement.

          Accordingly, the parties hereto agree as follows:

          1. Control by the Collateral Agent. The Loan Party hereby irrevocably
agrees that, for so long as this Control Agreement remains in effect, the
Collateral Agent shall have exclusive control of the Pledged Interests. In
furtherance of such agreement, the Loan Party hereby irrevocably authorizes and
directs the Issuer, and the Issuer hereby agrees, (i) to comply with any and all
instructions (within the meaning of Section 8-102(a)(12) of the UCC) originated
by the Collateral Agent regarding any or all of the Pledged Interests without
further consent by the Loan Party or any other Person, and (ii) subject to the
provisions of Section 2 of this Control Agreement, (A) not to comply with any
instructions regarding any or all of the Pledged Interests originated by any
Person other than the Collateral Agent or a court of competent jurisdiction and
(B) to distribute as instructed by the Collateral Agent all interest,
redemptions, distributions, dividends and other payments from time to time paid
with respect to any Pledged Interests (other than, for the avoidance of doubt,
any interest, redemptions, distributions, dividends and other payments made on,
consisting of or relating to Receivables or

Related Assets). In the case of any conflict between any instruction originated
by the Collateral Agent and any instruction originated by any other Person, the
Issuer shall comply only with the instruction originated by the Collateral
Agent.

          2. Maintenance of Pledged Interests. In addition to, and not in lieu
of, the obligation of the Issuer to honor instructions and entitlement orders as
agreed in Section 1 hereof, the Issuer agrees follows:

               (a) Subject to the rights of the Loan Party described herein, the
Issuer agrees that, from and after the date hereof, the Pledged Interests shall
be under the exclusive dominion and control of the Collateral Agent.

               (b) Upon notice by the Collateral Agent during the continuance of
an Event of Default, the Issuer shall notify the Loan Party that the Pledged
Interests are subject to the sole control of the Collateral Agent and,
thereafter, the Issuer will not accept any direction or instructions with
respect to the Pledged Interests from any Person other than the Collateral
Agent, unless otherwise ordered by a court of competent jurisdiction.

               (c) Until such time as the Issuer receives a notice of sole
control delivered by the Collateral Agent in accordance with Section 2(b) above,
the Loan Party may exercise all voting and other rights pertaining to the
Pledged Interests.

               (d) Until such time as the Issuer receives a notice of sole
control delivered by the Collateral Agent in accordance with Section 2(b) above,
the Loan Party may direct the Issuer with respect to the distribution of
interest, redemptions, distributions, dividends and other payments on Pledged
Interests.

               (e) To the extent requested by the Collateral Agent, all material
notices, statements of accounts, reports, prospectuses, financial statements and
other communications to be sent to the Loan Party by the Issuer in respect of
the Issuer will also be sent to the Collateral Agent at the following address:

                        [COLLATERAL AGENT NOTICE ADDRESS]

          3. No Liability of Issuer. This Control Agreement shall not subject
the Issuer to any obligation or liability except as expressly set forth herein.
In particular, the Issuer need not investigate whether the Collateral Agent is
entitled under the Pledge Agreement or otherwise to give an instruction or
notice of sole control.

          4. Representations and Warranties of the Issuer. The Issuer hereby
represents and warrants that:

               (a) Except for the claims and interests of the Collateral Agent
and the Loan Party in the Pledged Interests, the Issuer does not know of any
claim to, or interest in, any Pledged Interests. If any Person asserts any Lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process) other than a Permitted Lien against
any Pledged Interest, the Issuer will promptly following its knowledge thereof
notify the Collateral Agent and the Loan Party thereof.

               (b) There are no other agreements entered into between the Issuer
and the Loan Party with respect to the Pledged Interests, and the Issuer has not
entered into, and until the termination of this Control Agreement will not enter
into, any agreement with any other Person relating to the Pledged Interests, in
each case pursuant to which it has agreed or will agree to comply with
instructions originated by such other Person.

               (c) This Control Agreement constitutes a valid and binding
agreement of the Issuer, enforceable against the Issuer in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally.

               (d) The pledge by the Loan Party of, and the granting by the Loan
Party of a security interest in, the Pledged Interests to the Collateral Agent
does not violate the charter, by-laws, partnership agreement, operating
agreement or any other agreement governing the Issuer or the Pledged Interests.

               (e) The Pledged Interests are fully-paid and nonassessable.

          5. Notices. All notices, requests or other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party:

          (i) in the case of the Collateral Agent, at:

                    [Collateral Agent Notice Address];

          (ii) in the case of the Loan Party, at:

                    [Loan Party Notice Address]; and

          (iii) in the case of the Issuer, at:

                    [Issuer Notice Address].

Each such notice, request or other communication shall be effective (i) if given
by telex, when such telex is transmitted to the telex number specified in this
paragraph and the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
paragraph and confirmation of receipt is received, (iii) if given by mail, 48
hours after such communication is deposited, certified mail, return receipt
requested, in the mails with appropriate first class postage prepaid, addressed
as aforesaid or (iv) if given by other means, when delivered at the address
specified in this paragraph. Rejection or refusal to accept, or the inability to
deliver because of a changed address of which no notice was given shall not
affect the validity of notice given in accordance with this paragraph.

          6. Conflict with Other Agreements. In the event of any conflict
between this Control Agreement (or any portion hereof) and any other agreement
now existing or hereafter entered into, the terms of this Control Agreement
shall prevail.

          7. Amendments and Waivers. Any provision of this Control Agreement may
be amended, changed, discharged, terminated or waived if, but only if, such
amendment, change, discharge, termination or waiver is in writing and is signed
by the Collateral Agent, the Issuer and the Loan Party.

          8. Successors and Assigns. This Control Agreement shall be binding
upon each of the parties hereto and inure to the benefit of the Collateral Agent
and the other Finance Parties and their respective successors and assigns. In
the event of an assignment of all or any of the Note Obligations, the rights
hereunder, to the extent applicable to the Indebtedness so assigned, may be
transferred with such indebtedness.

          9. Governing Law. This Control Agreement shall be governed by and
construed in accordance with the Laws of the State of New York.

          10. Severability.

               (a) All rights, remedies and powers provided in this Control
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions of this Control
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and be limited to the extent necessary so that they
will not render this Control Agreement invalid, unenforceable in whole or in
part, or not entitled to be recorded, registered or filed under the provisions
of any applicable law.

               (b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Collateral Agent and the Finance
Parties in order to carry out the intentions of the parties hereto as nearly as
may be possible; and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provisions in any other jurisdiction.

          11. Counterparts; Effectiveness. This Control Agreement may be
executed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Control Agreement shall become effective when the Collateral
Agent shall have received counterparts hereof executed by itself, the Issuer and
the Loan Parties.

                            [Signature Pages Follow]

          IN WITNESS WHEREOF, the parties hereto have caused this Control
Agreement to be duly executed by their respective authorized officers as of the
day and year first written above.

LOAN PARTY:                             [LOAN PARTY NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


ISSUER:                                 [ISSUER NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        [COLLATERAL AGENT NAME],
                                        as Collateral Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                                                       EXHIBIT B
                                                                              to
                                                                PLEDGE AGREEMENT

                            ACCOUNT CONTROL AGREEMENT

          ACCOUNT CONTROL AGREEMENT dated as of [As of Date] among [LOAN PARTY
NAME], [COLLATERAL AGENT NAME], as Collateral Agent, and [SECURITIES
INTERMEDIARY NAME].

          [Loan Party Name], [Loan Party Description] (together with its
successors and permitted assigns, the "LOAN PARTY"), and [Collateral Agent
Name], as Collateral Agent (together with its successor or successors in such
capacity, the "COLLATERAL AGENT"), propose to enter into a Pledge Agreement
dated as of September 22, 2005 (as the same may be amended, supplemented or
modified from time to time, the "PLEDGE AGREEMENT"), under which the Loan Party
will pledge to the Collateral Agent, and will grant a security interest in favor
of the Collateral Agent in, all right, title and interest of the Loan Party in,
to and under (i) securities account number [Account Number] (the "ACCOUNT")
maintained by [Securities Intermediary Name], [Securities Intermediary
Description] (together with its successors and assigns, the "SECURITIES
INTERMEDIARY"), for the Loan Party, together with (ii) any and all (A) Security
Entitlements (as defined in the Pledge Agreement), (B) Investment Property (as
defined in the Pledge Agreement) and (C) other Financial Assets (as defined in
the Pledge Agreement), in each case from time to time deposited in or credited
to the Account (the Account and all of such Security Entitlements, Investment
Property and Financial Assets being herein collectively referred to as the
"PLEDGED INTERESTS") to secure the payment and performance of the Note
Obligations (as defined in the Pledge Agreement). Capitalized terms defined or
otherwise used in the Pledge Agreement and not otherwise defined herein have, as
used herein, the respective meanings provided for therein.

          The Loan Party desires that the Securities Intermediary enter into
this Account Control Agreement to perfect the security interest of the
Collateral Agent in the Pledged Interests, to vest in the Collateral Agent
control of the Pledged Interests and to provide for the rights of the parties
under this Account Control Agreement.

          Accordingly, the parties hereto agree as follows:

          1. Control by the Collateral Agent. The Loan Party hereby irrevocably
agrees that, for so long as this Account Control Agreement remains in effect,
the Collateral Agent shall have control of the Account and all Pledged Interests
deposited therein or credited thereto. In furtherance of such agreement, the
Loan Party hereby irrevocably authorizes and directs the Securities
Intermediary, and the Securities Intermediary hereby agrees, (i) to comply with
any and all instructions (within the meaning of Section 8-102(a)(12) of the UCC)
and entitlement orders (within the meaning of Section 8-102(a)(8) of the UCC)
originated by the Collateral Agent regarding any or all of the Pledged Interests
without further consent by the Loan Party or any other Person, and (ii) subject
to the provisions of Section 2 of this Account Control Agreement, (A) not to
comply with any instructions or entitlement orders regarding any

or all of the Pledged Interests originated by any Person other than the Loan
Party, Collateral Agent or a court of competent jurisdiction and (B) to deposit
or retain in the Account, or to distribute as otherwise instructed by the
Collateral Agent, all interest, redemptions, distributions, dividends and other
payments from time to time received or paid with respect to any Pledged
Interests deposited in or credited to the Account. In the case of any conflict
between any instruction or entitlement order originated by the Collateral Agent
and any instruction or entitlement order originated by any other Person, the
Securities Intermediary shall comply only with the instruction or entitlement
order originated by the Collateral Agent.

          2. Maintenance of Account. In addition to, and not in lieu of, the
obligation of the Securities Intermediary to honor instructions and entitlement
orders as agreed in Section 1 hereof, the Securities Intermediary agrees to
maintain the Account as follows:

               (a) Maintenance of Account Generally. Subject to the rights of
the Loan Party described herein, the Securities Intermediary agrees that, from
and after the date hereof, the Account shall be under the dominion and control
of the Collateral Agent and all Financial Assets of the Loan Party, whether or
not deposited in or credited to the Account, shall be held by the Securities
Intermediary solely for the benefit of the Collateral Agent. The Securities
Intermediary shall follow its usual operational procedures for the handling of
any Financial Assets or other property of the Loan Party received in the Account
and shall maintain a record of all Financial Assets or other property received
in the Account.

               (b) Notice of Sole Control. Upon notice by the Collateral Agent,
the Securities Intermediary shall notify the Loan Party that the Account is
subject to the sole control of the Collateral Agent and, thereafter, the
Securities Intermediary will not accept any direction, instructions or
entitlement orders with respect to the Account or the Pledged Interests on
deposit therein or credited thereto from any Person other than the Collateral
Agent, unless otherwise ordered by a court of competent jurisdiction.

               (c) Registration of Securities, Etc. All Securities or other
property underlying any Financial Assets deposited in or credited to the Account
shall be registered in the name of the Securities Intermediary, endorsed to the
Securities Intermediary or in blank or credited to another Securities Account or
Securities Accounts maintained in the name of the Securities Intermediary, and
in no case will any Financial Asset deposited in or credited to the Account be
registered in the name of the Loan Party, payable to the order of the Loan Party
or specially indorsed to the Loan Party, except to the extent the foregoing have
been specially indorsed by the Loan Party to the Securities Intermediary or in
blank.

               (d) Voting Rights. Until such time as the Securities Intermediary
receives a notice of sole control delivered by the Collateral Agent in
accordance with Section 2(b) above, the Loan Party may direct the Securities
Intermediary with respect to the voting of any Pledged Interests deposited in or
credited to the Account.

               (e) Permitted Investments. Until such time as the Securities
Intermediary receives a notice of sole control delivered by the Collateral Agent
in accordance with Section 2(b) above, the Loan Party may direct the Securities
Intermediary with respect to the selection of Investments to be made in the
Account.

               (f) Interest and Dividends. Until such time as the Securities
Intermediary receives a notice of sole control delivered by the Collateral Agent
in accordance with Section 2(b) above, the Loan Party may direct the Securities
Intermediary with respect to the retention and/or distribution of interest,
redemptions, distributions, dividends and other payments on Pledged Interests
deposited in or credited to the Account.

               (g) Statements and Confirmations. Copies of all notices,
statements of accounts, reports, confirmations, prospectuses, financial
statements and other communications concerning the Account and/or any Pledged
Interests deposited therein or credited thereto shall be sent by the Securities
Intermediary to each of the Loan Party and the Collateral Agent at their
respective addresses referred to in Section 7 below.

               (h) Tax Reporting. All items of income, gain, expense and loss
recognized in the Account shall be reported to the Internal Revenue Service and
all state and local taxation authorities under the name and taxpayer
identification number of the Loan Party.

          3. Financial Assets Election. The Securities Intermediary and each
other party hereto hereby agrees that each item of property (whether Investment
Property, Financial Asset, Security, Instrument or cash) deposited in or
credited to the Account shall constitute a "financial asset" within the meaning
of Section 8-102(a)(9) of the UCC.

          4. No Liability of Securities Intermediary. This Account Control
Agreement shall not subject the Securities Intermediary to any obligation or
liability except as expressly set forth herein. In particular, the Securities
Intermediary need not investigate whether the Collateral Agent is entitled under
the Pledge Agreement or otherwise to give an entitlement order, instructions or
notice of sole control.

          5. Subordination of Lien; Waiver of Set-Off. If the Securities
Intermediary has or subsequently obtains by agreement, operation of law or
otherwise a security interest in the Account or any Pledged Interest deposited
therein or credited thereto, the Securities Intermediary hereby agrees that such
security interest shall be subordinate to the Security Interest of the
Collateral Agent. The Pledged Interests and other items deposited in or credited
to the Account will not be subject to deduction, set-off, banker's lien or any
other right in favor of any other Person other than the Collateral Agent (except
that the Securities Intermediary may set off (i) all amounts due to the
Securities Intermediary in respect of customary fees and expenses for the
routine maintenance and operation of the Account, (ii) the face amount of any
checks which have been credited to the Account but are subsequently returned
unpaid because of uncollected or insufficient funds and (iii) the purchase price
of any property purchased for the Account).

          6. Representations and Warranties of the Securities Intermediary. The
Securities Intermediary hereby represents and warrants that:

               (a) The Securities Intermediary has established the Account in
the name of "[Collateral Agent Name], as Collateral Agent", and the Securities
Intermediary shall not change the name or account number of the Account without
the prior written consent of the Collateral Agent.

               (b) The Account is a "securities account" as defined in Section
8-501(a) of the UCC, and the Securities Intermediary is a "securities
intermediary" as defined in Section 8-102(a)(14) of the UCC and is acting in
such capacity in connection with the Account and this Account Control Agreement.

               (c) Except for the claims and interest of the Collateral Agent
and of the Loan Party in the Pledged Interests, the Securities Intermediary does
not know of any claim to, or interest in, the Account or in any Pledged Interest
deposited therein or credited thereto. If any Person asserts any Lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process) against the Account or any Pledged
Interest deposited therein or credited thereto, the Securities Intermediary will
promptly notify the Collateral Agent and the Loan Party thereof.

               (d) There are no other agreements entered into between the
Securities Intermediary and the Loan Party with respect to the Account or any
Pledged Interest deposited therein or credited thereto, and the Securities
Intermediary has not entered into, and until the termination of this Account
Control Agreement will not enter into, any agreement with any other Person
relating to the Account and/or any Pledged Interests deposited therein or
credited thereto pursuant to which it has agreed or will agree to comply with
instructions or entitlement orders originated by such other Person.

               (e) This Account Control Agreement constitutes a valid and
binding agreement of the Securities Intermediary, enforceable against the
Securities Intermediary in accordance with its terms.

          7. Notices. All notices, requests or other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party:

          (i) in the case of the Collateral Agent, at:

                    [Collateral Agent Notice Address];

          (ii) in the case of the Loan Party, at:

                    [Loan Party Notice Address]; and

          (iii) in the case of the Securities Intermediary, at:

                    [Securities Intermediary Notice Address].

          Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this paragraph and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this paragraph and confirmation of receipt is received, (iii) if
given by mail, 48 hours after such communication is deposited, certified mail,
return receipt requested, in the mails with appropriate first class postage
prepaid, addressed as aforesaid or (iv) if given by other means, when delivered
at the address specified in this paragraph. Rejection or

refusal to accept, or the inability to deliver because of a changed address of
which no notice was given shall not affect the validity of notice given in
accordance with this paragraph.

          8. Indemnification of Securities Intermediary. The Loan Party agrees
that (i) the Securities Intermediary is released from any and all liabilities to
the Loan Party arising from the terms of this Account Control Agreement and the
compliance by the Securities Intermediary with the terms hereof, except to the
extent that such liabilities arise from the Securities Intermediary's bad faith,
willful misconduct or gross negligence and (ii) the Loan Party, its successors
and permitted assigns shall at all times indemnify the Securities Intermediary,
its affiliates and the respective directors, officers, trustees, agents and
employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, suits, judgments, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by, imposed on or asserted against such
Indemnitee in connection with any investigation or administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of this Account Control
Agreement or in any other way connected with the enforcement of any of the terms
of, or the preservation of any rights hereunder, or in any way relating to or
arising out of the maintenance, delivery, control, acceptance, possession,
return or other disposition of the Account or any Pledged Interests on deposit
therein or credited thereto, the violation of the laws of any country, state or
other governmental body or unit, or any tort or contract claim; provided that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a court
of competent jurisdiction in a final, non-appealable judgment or order. In
performing its duties hereunder, the Securities Intermediary shall be entitled
to rely upon notices and other communications it believes in good faith to have
been originated by the appropriate party.

          9. Conflicts with Other Agreements. In the event of any conflict
between this Account Control Agreement (or any portion hereof) and any other
agreement now existing or hereafter entered into, the terms of this Account
Control Agreement shall prevail.

          10. Amendments and Waivers. Any provision of this Account Control
Agreement may be amended, modified or waived if, but only if, such amendment or
waiver is in writing and is signed by the Loan Party, the Collateral Agent and
the Securities Intermediary.

          11. Successors and Assigns. This Account Control Agreement shall be
binding upon each of the parties hereto and inure to the benefit of the
Collateral Agent and the Finance Parties and their respective successors and
permitted assigns. In the event of an assignment of all or any of the
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness.

          12. Governing Law. This Account Control Agreement shall be governed by
and construed in accordance with the laws of the State of New York, except as
otherwise required by mandatory provisions of law. Notwithstanding any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Securities Intermediary's jurisdiction and the Account (as well as the
Security Entitlements related thereto) shall be governed by the laws of the
State of New York.

          13. Severability.

               (a) All rights, remedies and powers provided in this Account
Control Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Account Control Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling and be limited to the extent
necessary so that they will not render this Account Control Agreement invalid,
unenforceable in whole or in part, or not entitled to be recorded, registered or
filed under the provisions of any applicable law.

               (b) If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Collateral Agent and the Finance
Parties in order to carry out the intentions of the parties hereto as nearly as
may be possible; and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provisions in any other jurisdiction.

          14. Counterparts; Effectiveness. This Account Control Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Account Control Agreement shall become effective when the
Collateral Agent shall receive counterparts hereof executed by itself, the
Securities Intermediary and the Loan Party.

          15. Termination. Except as hereinafter set forth, the obligations of
the Securities Intermediary to the Collateral Agent pursuant to this Account
Control Agreement shall continue in effect until the Security Interests of the
Collateral Agent in the Account have been terminated pursuant to the terms of
the Pledge Agreement and the Collateral Agent has notified the Securities
intermediary of such termination in writing. The Collateral Agent agrees to
provide such notice of termination upon the request of the Loan Party on or
after the termination of the Collateral Agent's Security Interest in the Account
pursuant to the terms of the Pledge Agreement. The Securities Intermediary may
terminate this Account Control Agreement only upon 30 days' notice to the
Collateral Agent, by canceling the Account and transferring all funds, if any,
deposited in or credited to the Account to another Securities Account with
another securities intermediary to be designated by the Collateral Agent. After
any such termination, the Securities Intermediary shall nonetheless be obligated
promptly to transfer to such other securities intermediary anything from time to
time received in the Account. The termination of this Account Control Agreement
shall not terminate the Account or alter the obligations of the Securities
Intermediary to the Loan Party pursuant to any other agreement with respect to
the Account.

                            [Signature Pages Follow]

          IN WITNESS WHEREOF, the parties hereto have caused this Control
Agreement to be duly executed by their respective authorized officers as of the
day and year first written above.

LOAN PARTY:                             [LOAN PARTY NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


SECURITIES INTERMEDIARY:                [SECURITIES INTERMEDIARY NAME]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


COLLATERAL AGENT;                       [COLLATERAL AGENT NAME],
                                           as Collateral Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

EX-4.9

                                                                     Exhibit 4.9

                                                               EXECUTION VERSION



                           COLLATERAL AGENCY AGREEMENT

                         DATED AS OF SEPTEMBER 22, 2005

                                      AMONG

                         INSIGHT HEALTH SERVICES CORP.,
                     INSIGHT HEALTH SERVICES HOLDINGS CORP.
                                       AND
                        THE SUBSIDIARY GUARANTORS LISTED
                          ON THE SIGNATURE PAGES HEREOF

                         U.S. BANK NATIONAL ASSOCIATION
                              AS INDENTURE TRUSTEE

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION,
                               AS COLLATERAL AGENT

                               TABLE OF CONTENTS*

                                                                           
                                    ARTICLE I
                                   DEFINITIONS

Section 1.01. Definitions..................................................   1
Section 1.02. Rules of Interpretation......................................   4

                                   ARTICLE II
                 OBLIGATIONS AND POWERS OF THE COLLATERAL AGENT

Section 2.01. Appointment of the Collateral Agent..........................   4
Section 2.02. Actions under Collateral Documents...........................   4
Section 2.03. Instructions of Directing Noteholders........................   5
Section 2.04. Certain Actions under the Collateral Documents...............   5
Section 2.05. Other Actions by the Collateral Agent........................   6
Section 2.06. Nature of Duties.............................................   6
Section 2.07. No Obligations Imposed.......................................   6
Section 2.08. Inspection...................................................   7

                                   ARTICLE III
                         ACTIONS BY NOTEHOLDERS; VOTING

Section 3.01. Directing Noteholders Defined................................   7
Section 3.02. Exceptional Decisions........................................   7
Section 3.03. Certificates of the Trustee..................................   8
Section 3.04. Calculations Binding.........................................   8

                                   ARTICLE IV
            EXERCISE OF REMEDIES; APPLICATION OF COLLATERAL PROCEEDS

Section 4.01. General Limitation on Exercise of Remedies...................   8
Section 4.02. Notices of Events of Default.................................   8
Section 4.03. Notices of Acceleration......................................   8



- ----------
*    The Table of Contents is not a part of the Collateral Agency Agreement.


                                        i

                                                                           
Section 4.04. Remedies.....................................................   8
Section 4.05. No Inconsistent Actions......................................   8
Section 4.06. Application of Proceeds......................................   8
Section 4.07. Credit Bid Rights............................................   9

                                    ARTICLE V
               CERTAIN OBLIGATIONS ENFORCEABLE BY THE LOAN PARTIES

Section 5.01. Release of Liens.............................................   10
Section 5.02. Delivery of Copies to the Trustee............................   10
Section 5.03. Collateral Agent Not required to Make Filings or
                 Recordations..............................................   10
Section 5.04. No Actions to Address Exceptions.............................   11

                                   ARTICLE VI
                              THE COLLATERAL AGENT

Section 6.01. No Implied Duty..............................................   11
Section 6.02. Appointment of Co-Agents and Sub-Agents......................   11
Section 6.03. Other Agreements.............................................   11
Section 6.04. Solicitation of Instructions.................................   11
Section 6.05. Limitation of Liability......................................   11
Section 6.06. Documents in Satisfactory Form...............................   12
Section 6.07. Entitled to Rely.............................................   12
Section 6.08. Events of Default............................................   12
Section 6.09. Actions by Collateral Agent..................................   12
Section 6.10. Security or Indemnity in Favor of the Collateral Agent.......   12
Section 6.11. Resignation or Removal of the Collateral Agent...............   13
Section 6.12. Appointment of Successor Collateral Agent....................   13
Section 6.13. Succession...................................................   13




                                       ii

                                                                           
                                   ARTICLE VII
                                  MISCELLANEOUS

Section 7.01. Amendment....................................................   13
Section 7.02. Further Assurances...........................................   14
Section 7.03. Successors and Assigns.......................................   14
Section 7.04. Delay and Waiver.............................................   15
Section 7.05. Notices......................................................   15
Section 7.06. Entire Agreement.............................................   16
Section 7.07. Compensation and Expenses....................................   16
Section 7.08. Indemnity....................................................   17
Section 7.09. Obligations Secured..........................................   18
Section 7.10. Severability.................................................   18
Section 7.11. Governing Law; Submission to Jurisdiction....................   18
Section 7.12. Waiver of Right to Trial by Jury.............................   19
Section 7.13. Section Titles...............................................   19
Section 7.14. Counterparts; Effectiveness..................................   19




                                       iii

SCHEDULES:

Schedule 2.02 - Issue Date Collateral Documents

EXHIBITS:

Exhibit A - Form of Security Agreement
Exhibit B - Form of Pledge Agreement


                                       iv

          This Collateral Agency Agreement (this "AGREEMENT") is entered into as
of September 22, 2005 among INSIGHT HEALTH SERVICES HOLDINGS CORP., a Delaware
corporation ("HOLDINGS"), INSIGHT HEALTH SERVICES CORP. ("INSIGHT"), the other
Guarantors party hereto, U.S. BANK NATIONAL ASSOCIATION, as Trustee for the
Noteholders under the Indenture (as defined below) (together with its successor
or successors in such capacity, the "TRUSTEE"), and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent (together with its successor or successors in
such capacity, the "COLLATERAL AGENT").

          InSight intends to issue Senior Secured Floating Rate Notes due 2011
(together with any Additional Notes (as defined in the Indenture) and any
Exchange Notes (as defined in the Indenture), and as amended, restated,
supplemented or modified from time to time, the "SENIOR SECURED NOTES") pursuant
to an Indenture dated as of the date hereof (as amended, restated, supplemented
or modified from time to time and including any agreement extending the maturity
of, refinancing or otherwise restructuring all or any portion of the obligations
of InSight under such Indenture or any successor agreement, the "INDENTURE")
among InSight and U.S. Bank National Association, as Trustee (together with its
successor or successors in such capacity, the "TRUSTEE"). The obligations of
InSight under and in respect of the Senior Secured Notes will be guaranteed by
Holdings, each of the parties listed on the signature pages hereto as
"Subsidiary Guarantors" and all other direct and indirect wholly-owned domestic
subsidiaries of Holdings (collectively, the "SUBSIDIARY GUARANTORS") and
together with Holdings, "GUARANTORS"). Holdings, InSight, and the Subsidiary
Guarantors are herein referred to individually as a "LOAN PARTY" and,
collectively, as the "LOAN PARTIES."

          The Indenture requires the Loan Parties to secure their obligations
under the Senior Secured Notes through the grant of a first lien security
interest in the Collateral (subject to Permitted Liens). The Indenture further
requires that such security interests in the Collateral be granted pursuant to
security documents to a collateral agent acting for the benefit of the holders
from time to time of the Senior Secured Notes.

          The Loan Parties and the Collateral Agent will enter into a Security
Agreement, a Pledge Agreement and certain other Collateral Documents referred to
therein securing the Senior Secured Notes and all related obligations. This
Agreement sets forth the terms on which the Collateral Agent has undertaken to
accept, hold and enforce such security interests and all related rights,
interests and powers as agent for, and for the benefit exclusively of, the
present and future holders of the Senior Secured Notes.

          Accordingly, in consideration of the mutual agreements set forth
herein, the Trustee and the Collateral Agent hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

          Section 1.01. Definitions. Capitalized terms defined in the
introductory paragraphs hereof have the respective meanings provided for
therein. Unless otherwise defined herein, capitalized terms shall have the
meaning set forth in the Indenture. In addition, as used in this Agreement, the
following terms have the following meanings:

          "ACCOUNT CONTROL AGREEMENT" has the meaning set forth in the Security
     Agreement.

          "AFFILIATE" means, with respect to any Person, another Person that
     directly, or indirectly through one or more intermediaries, Controls or is
     Controlled by or is under common Control with the Person specified.

          "AGREEMENT" means this Collateral Agency Agreement, as amended,
     modified or supplemented from time to time.

          "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
     which banking institutions in New York, New York or San Francisco,
     California or at a place of payment are authorized by law, regulation or
     executive order to remain closed.

          "COLLATERAL" means all of the property which is subject or is
     purported to be subject to the Liens granted by the Collateral Documents.

          "COLLATERAL AGENT" means U.S. Bank National Association, as collateral
     agent, and its successor or successors in such capacity.

          "COLLATERAL DOCUMENTS" means, collectively, this Agreement, the
     Security Agreement, the Pledge Agreement, the Account Control Agreements,
     each Perfection Certificate (as defined in the Security Agreement) and all
     other pledges, agreements, financing statements, filings or other documents
     that grant or evidence the Lien in the Collateral in favor of the
     Collateral Agent for the benefit of the Finance Parties, as they may be
     amended from time to time.

          "CONTROL" means the possession, directly or indirectly, of the power
     to direct or cause the direction of the management and policies of such
     Person, whether through the ability to exercise voting power, by contract
     or otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative
     thereto.

          "DEBTOR RELIEF LAWS" means Title 11, United States Bankruptcy Code of
     1978, as amended, or any similar United States federal or state law or
     foreign law relating to bankruptcy, insolvency, receivership, winding up,
     liquidation, reorganization or relief of debtors or any amendment to,
     succession to or change in any such law.

          "DIRECTING NOTEHOLDERS" means at any time Noteholders holding more
     than 50% of the then aggregate outstanding principal amount of the Senior
     Secured Notes (including, without limitation, Noteholders providing
     consents obtained in connection with a tender offer or exchange offer for,
     or purchase of, Senior Secured Notes).

          "EVENT OF DEFAULT" means an "EVENT OF DEFAULT" as defined in the
     Indenture.

          "EXCEPTIONAL DECISIONS" has the meaning set forth in Section 3.02.


                                        2

          "FINANCE PARTY" means any of the Collateral Agent, the Trustee, any
     Noteholder, and any Indemnitee (as defined in the Security Agreement) and
     "FINANCE PARTIES" means two or more of them collectively.

          "INSOLVENCY PROCEEDING" means (i) any voluntary or involuntary case or
     proceeding under any Debtor Relief Law with respect to any Loan Party, (ii)
     any other voluntary or involuntary insolvency, reorganization or bankruptcy
     case or proceeding, or any receivership, liquidation, reorganization or
     other similar case or proceeding, with respect to any Loan Party or with
     respect to any of their respective assets, (iii) any liquidation,
     dissolution, reorganization or winding up of any Loan Party, whether
     voluntary or involuntary and whether or not involving insolvency or
     bankruptcy and (iv) any assignment for the benefit of Noteholders or any
     other marshaling of assets and liabilities of any Loan Party.

          "NOTE DOCUMENTS" means the Indenture, the Senior Secured Notes and the
     Registration Rights Agreement related thereto and the Collateral Documents,
     in each case including all exhibits and schedules thereto, and all other
     agreements, documents and instruments relating to the Senior Secured Notes,
     in each case as the same may be amended, modified or supplemented from time
     to time in accordance with the provisions thereof.

          "NOTEHOLDERS" means the holders from time to time of the Senior
     Secured Notes.

          "OFFICER'S CERTIFICATE" has the meaning set forth in Section 5.01.

          "PLEDGE AGREEMENT" means the Pledge Agreement, substantially in the
     form of Exhibit B hereto, dated as of the date hereof among the Loan
     Parties and the Collateral Agent, as the same may be amended, modified or
     supplemented from time to time.

          "PROCEEDS" has the meaning specified for such term in the Uniform
     Commercial Code as in effect from time to time in the State of New York.

          "RESPONSIBLE OFFICER" means the chief executive officer, president,
     chief financial officer, treasurer or assistant treasurer or secretary or
     assistant secretary of a Loan Party. Any document delivered hereunder that
     is signed by a Responsible Officer of a Loan Party shall be conclusively
     presumed to have been authorized by all necessary corporate, partnership
     and/or other action on the part of such Loan Party and such Responsible
     Officer shall be conclusively presumed to have acted on behalf of such Loan
     Party.

          "SECURITY AGREEMENT" means the Security Agreement, substantially in
     the form of Exhibit A hereto, dated as of the date hereof among the Loan
     Parties and the Collateral Agent, as the same may be amended, modified or
     supplemented from time to time.

          "SUBSIDIARY" has the meaning set forth in the Indenture.

          "TRUST INDENTURE ACT" means Trust Indenture Act of 1939, as amended,
     and rules and regulations promulgated thereunder and interpretations
     thereof.


                                        3

          "UNIFORM COMMERCIAL CODE" or "UCC" has the meaning specified in the
     Security Agreement.

          Section 1.02. Rules of Interpretation. Terms defined in the
introductory paragraphs hereof and the definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Wherever the
context may require, any pronouns shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless otherwise stated herein or the context shall otherwise require. Unless
otherwise expressly provided herein, the word "day" means a calendar day.

                                   ARTICLE II
                 OBLIGATIONS AND POWERS OF THE COLLATERAL AGENT

          Section 2.01. Appointment of the Collateral Agent. The Collateral
Agent is hereby appointed by the Trustee as collateral agent hereunder, and the
Collateral Agent hereby agrees to act as Collateral Agent pursuant to the terms
of this Agreement. The Trustee on behalf of itself and on behalf of the
Noteholders directs the Collateral Agent to enter into the Collateral Documents
listed on Schedule 2.02.

          Section 2.02. Actions under Collateral Documents. The Collateral Agent
hereby irrevocably undertakes and agrees, on the terms and conditions set forth
in this Agreement, to act as agent for the benefit exclusively of the present
and future Noteholders and any other holders from time to time of the Note
Obligations and in such capacity to accept, hold, administer and enforce all
collateral security at any time delivered to it by any Loan Party as security
for the Note Obligations and all rights, interests and powers at any time
granted or enforceable in respect of such collateral security under the
Collateral Documents listed on Schedule 2.02 and, subject to Section 7.01(b),
all other Collateral Documents, or applicable law. Without limiting the
generality of the foregoing, the Collateral Agent agrees that it will, as agent
for the benefit exclusively of the present and future Noteholders and the other
holders from time to time of the Note Obligations, but subject to the terms and
conditions hereof:

          (i) enter into the Collateral Documents, receive, hold, administer and
     enforce the security interests granted to it thereunder, perform its
     obligations thereunder and protect, exercise and enforce the interests,
     rights, powers and remedies granted or available to it thereunder or
     pursuant thereto or in connection therewith;

          (ii) take all lawful and commercially reasonable actions that it may
     deem necessary or advisable to protect or preserve its interest in the
     Collateral;

          (iii) maintain control over the Collateral Accounts, if any,
     established by any of the Loan Parties, pursuant to the Account Control
     Agreements related thereto;

          (iv) deliver and receive notices pursuant to the Collateral Documents;


                                        4

          (v) sell, assign, collect, assemble, foreclose on, institute legal
     proceedings with respect to, or otherwise exercise or enforce the rights
     and remedies of a secured party (including an insurance beneficiary or a
     loss payee) with respect to the Collateral and its other interests, rights,
     powers and remedies;

          (vi) remit to the Trustee, as required by Section 4.07 all cash
     proceeds received by the Collateral Agent from the collection, foreclosure
     or enforcement of its interest in the Collateral or any of its other
     interests, rights, powers or remedies;

          (vii) subject to Section 3.02 and Section 7.01(b), amend the
     Collateral Documents as from time to time authorized and directed by the
     Directing Noteholders, and amend the Collateral Documents as required by
     Section 3.02(d); and

          (viii) release any Lien granted to it by any Collateral Document upon
     any Collateral if and as required by Section 2.04 and Section 5.01.

          The Collateral Agent is irrevocably authorized and empowered to enter
into and perform its obligations under, and to protect, perfect, exercise and
enforce its interest, rights, powers and remedies, in each case under and
pursuant to the Collateral Documents and applicable law and to act as set forth
in this Article II or as requested in any lawful directions given to it from
time to time in respect of any matter by the Directing Noteholders.

          The Loan Parties acknowledge and consent to the undertakings of the
Collateral Agent set forth in this Article II, and agree to each of the other
provisions of this Agreement applicable to them.

          Section 2.03. Instructions of Directing Noteholders. Subject to the
terms and conditions of this Agreement, the Collateral Agent shall follow the
instructions of the Directing Noteholders from time to time conveyed to it by
the Trustee, subject to and consistent with the Collateral Agent's rights and
obligations expressed in the Collateral Documents and in accordance with
applicable law. No direction given to the Collateral Agent (whether given by the
Directing Noteholders through the Trustee, by the Trustee, or otherwise by any
Person) which imposes, or purports to impose, upon the Collateral Agent any
obligation not set forth in this Agreement or any other Collateral Document
shall be binding upon the Collateral Agent unless the Collateral Agent elects,
at its sole option, to accept direction (i) pursuant to the instructions of the
Directing Noteholders or (ii) from the Trustee. No instruction of the Directing
Noteholders shall be effective to impose any obligation or liability upon the
Trustee, unless it is a signatory party thereto.

          Section 2.04. Certain Actions under the Collateral Documents. Without
limiting the provisions of Section 2.02, the Collateral Agent is hereby
authorized and directed, and agrees for the benefit of the Loan Parties, without
notice to or consent from any Noteholder: (i) to release (upon receipt of a
written certification of a responsible officer of InSight that the Trustee has
received all documents, if any, required by the Trust Indenture Act and the
Indenture) one or more Loan Parties from their obligations under, and the Liens
of, the Collateral Documents, and to release the Collateral or any portion
thereof, as required by Section 7.11 of the Security Agreement, Section 8.11 of
the Pledge Agreement or any other pertinent provision of any Note


                                        5

Document; (ii) to receive or execute perfection certificates, control agreements
and other Loan Party deliverables as contemplated by the Collateral Documents;
(iii) to release funds deposited in the Collateral Accounts established and
maintained under the Security Agreement as required by Section 2.06 of the
Security Agreement; (iv) to make available to each Loan Party any Instrument or
Certificated Security pledged by such Loan Party for the purposes set forth in,
and as required by, Section 4.01 of the Pledge Agreement; and (v) to deliver
such instruments as may be required from time to time to enable each Loan Party
to exercise the voting and other rights which it is entitled to exercise under
Section 5.01(a)(i) of the Pledge Agreement.

          Section 2.05. Other Actions by the Collateral Agent. The Collateral
Agent shall provide the Trustee with a copy of all notices received from the
Loan Parties under the Collateral Documents. The Collateral Agent shall timely
file Uniform Commercial Code continuation statements to continue the perfection
of the security interests under the Collateral Documents. During any period when
the Collateral Agent is exercising remedies against any Loan Party or the
Collateral, the Collateral Agent shall furnish the Trustee with reports of its
activities in connection therewith upon the occurrence of significant events and
upon the request of the Trustee.

          Section 2.06. Nature of Duties. Except to the extent otherwise
provided in Section 2.05, the duties of the Collateral Agent hereunder and under
the Collateral Documents shall be ministerial and administrative in nature. The
Collateral Agent shall not have by reason of this Agreement or the Collateral
Documents a fiduciary or trust relationship with respect to the Trustee, any
Noteholder or any other holder from time to time of Note Obligations, and
nothing in this Agreement, expressed or implied, is intended to or shall be so
construed as to imply such obligations or impose, upon the Collateral Agent, any
obligations whatsoever arising under this Agreement, the Indenture or any
Collateral Document, except as expressly set forth herein or in the Collateral
Documents. For the limited purpose of holding and distributing or applying
Proceeds of Collateral and Cash Equivalents, the Collateral Agent shall hold
such Proceeds and Cash Equivalents in trust for the benefit of the Trustee in
accordance with its rights provided for herein.

          Section 2.07. No Obligations Imposed. None of the Trustee, any
Noteholder or any other holder of Note Obligations shall have: (i) except in
connection with the instructions of the Directing Noteholders to which it is a
signatory party, any responsibility or duty whatsoever in respect of the
Collateral or the Collateral Documents or any other interest, right, power or
remedy granted to or enforceable by the Collateral Agent, it being understood
and agreed by the Collateral Agent and by each Loan Party that, except in
connection with the instructions of the Directing Noteholders to which it is a
signatory party, only the Collateral Agent shall be bound by, or liable for
breach of, the obligations of the Collateral Agent set forth in or arising under
the Collateral Documents, including all obligations imposed by law upon a
secured party relating the protection, maintenance, release or enforcement of
any security interest in any Collateral or any other interest, right, power or
remedy of the Collateral Agent; or (ii) except in connection with the
instructions of the Directing Noteholders to which it is a signatory party, any
liability whatsoever for any act or omission of the Collateral Agent, whether or
not constituting a breach of its undertaking and obligations under this
Agreement or otherwise constituting wrongful conduct.


                                        6

          Section 2.08. Inspection. The Collateral Agent will permit the Trustee
or any Noteholder at any time or from time to time, during normal business
hours, to inspect and copy any and all Collateral Documents and other documents,
notices, certificates, instructions or communications received by the Collateral
Agent in its capacity as such.

                                   ARTICLE III
                         ACTIONS BY NOTEHOLDERS; VOTING

          Section 3.01. Directing Noteholders Defined. Except with respect to
Exceptional Decisions as defined in Section 3.02, all instructions to the
Collateral Agent (including, without limitation, delivery of a notice of
foreclosure, foreclosure and appointment of a receiver) shall be given by the
Directing Noteholders to the Collateral Agent through the Trustee.

          Section 3.02. Exceptional Decisions. Certain circumstances set forth
in Section 3.02(b) and (c) shall call for "EXCEPTIONAL DECISIONS", as such term
is used herein, and instruction to the Collateral Agent in connection with such
circumstances shall be effected as provided below:

          (a) Amendment of Collateral Documents. The Collateral Agent shall not
     agree to any amendment of the Collateral Documents except upon instructions
     given by the Directing Noteholders in accordance with Section 3.01;
     provided that no agreement of any Noteholder shall be required for (A) any
     amendment, modification or supplement to the Collateral Documents (1) to
     cure any ambiguity, typographical error, defect or inconsistency if such
     amendment, modification or supplement does not adversely affect the rights
     of the Noteholders or (2) pursuant to Section 9.01 of the Indenture or (B)
     such amendments to financing statements or other Collateral Documents as
     stated in the opinion provided in Section 2.02(iii); and provided, further,
     that any amendment to the provisions of the Collateral Documents that
     releases any Collateral shall be governed by Section 3.02(c).

          (b) Amendment of this Agreement. The Collateral Agent shall not agree
     to any amendment of this Agreement except upon instructions given by the
     Directing Noteholders in accordance with Section 3.01; provided that no
     agreement of any Noteholder shall be required for any amendment,
     modification or supplement to this Agreement (x) to cure any ambiguity,
     typographical error, defect or inconsistency if such amendment,
     modification or supplement does not adversely affect the rights of the
     Noteholders or (y) pursuant to Section 9.01 of the Indenture; and provided,
     further, that any amendment to the definition of "DIRECTING NOTEHOLDERS"
     and any amendment to Sections 3.01, 3.02, 4.06, 4.07 and 7.01 will require
     notice to the Collateral Agent by the Trustee of the concurrence of all of
     the Noteholders.

          (c) Release of All or Substantially All Collateral. The Collateral
     Agent shall not release all or substantially all Collateral from the lien
     and security interests created by the Collateral Documents except as
     expressly provided therein (including, without limitation, Section 7.11 of
     the Security Agreement and Section 8.11 of the Pledge Agreement) or in
     Article V hereof or except upon notice to the Collateral Agent by the
     Trustee of the concurrence of all of the Noteholders.


                                        7

          (d) Amendments to Other Collateral Documents. Subject to Section
     7.01(b), The Collateral Agent agrees for the benefit of the Loan Parties
     that it shall execute any amendment, modification or supplement to any
     Collateral Document approved in accordance with Article IX of the
     Indenture.

          Section 3.03. Certificates of the Trustee. Concurrently with any
calculation of Directing Noteholders, the Trustee shall certify to the
Collateral Agent the votes cast by the Noteholders.

          Section 3.04. Calculations Binding. All calculations regarding
satisfaction of compliance with the definition of the Directing Noteholders
shall be made by the Collateral Agent upon receipt of and in exclusive reliance
upon the certificates described in Section 3.03, and shall be binding upon the
Noteholders.

                                   ARTICLE IV
            EXERCISE OF REMEDIES; APPLICATION OF COLLATERAL PROCEEDS

          Section 4.01. General Limitation on Exercise of Remedies. The Trustee
shall not be entitled to exercise any remedies directly under the Collateral
Documents, but only by providing instructions to the Collateral Agent in
accordance with this Agreement.

          Section 4.02. Notices of Events of Default. The Trustee shall notify
the Collateral Agent if an Event of Default has occurred under (and as defined
in) the Indenture of which it has actual knowledge and of the forbearance,
waiver or other termination, if any, of such Event of Default.

          Section 4.03. Notices of Acceleration. If any Note Obligations are
accelerated, the Trustee shall notify the Collateral Agent of such acceleration,
certifying: (i) that such acceleration has occurred and (ii) the principal,
interest, fees and other amounts owed by the Loan Parties (such certification
being herein referred to as a "NOTICE OF ACCELERATION").

          Section 4.04. Remedies. Upon receipt by the Collateral Agent of a
Notice of Acceleration from the Trustee or upon receipt by the Collateral Agent
of notice of the commencement by or against one or more Loan Parties of an
Insolvency Proceeding and subject to the provisions of this Agreement, including
Section 6.10, the Collateral Agent shall retain legal counsel acceptable to the
Trustee and shall exercise such remedies under the Collateral Documents as it
shall be instructed by the Directing Noteholders.

          Section 4.05. No Inconsistent Actions. The Trustee agrees to take no
action in an Insolvency Proceeding with respect to any Loan Party or the
Collateral which is inconsistent with the terms of this Agreement.

          Section 4.06. Application of Proceeds. In the event of the realization
of Proceeds of any collection or disposition of Collateral pursuant to the
exercise of remedies under the Collateral Documents, the Collateral Agent shall
distribute such Proceeds to the specified Persons in the following order of
priority:


                                        8

          FIRST, to the payment of advances made and liabilities incurred by the
     Collateral Agent in order to protect the Liens granted by the Collateral
     Documents or the Collateral, with interest thereon at the rate that would
     then be applicable to the Senior Secured Notes, and the payment of all
     reasonable costs and expenses incurred by the Collateral Agent or Trustee
     in connection with the preservation, collection, foreclosure or enforcement
     of the Liens granted by the Collateral Documents or any interest, right,
     power or remedy of the Collateral Agent or in connection with the
     collection or enforcement of any of the Loan Obligations in any Insolvency
     Proceeding, including all reasonable fees and disbursements of attorneys,
     accountants, consultants, appraisers and other professionals engaged by the
     Collateral Agent or the Trustee and reasonable compensation of the
     Collateral Agent or the Trustee for services rendered in connection
     therewith;

          SECOND, to the payment of accrued and unpaid interest on the Senior
     Secured Notes;

          THIRD, to the payment of any due and unpaid premium, if any, in
     respect of the prepayment or payment of the Senior Secured Notes;

          FOURTH, to the payment of the due and unpaid principal of the Senior
     Secured Notes;

          FIFTH, to any remaining unpaid amounts of the Note Obligations; and

          SIXTH, to other Persons as their interests may appear or as instructed
     by a court of competent jurisdiction.

          No party hereto shall be entitled to a distribution on any lower
priority pursuant to clauses FIRST through SIXTH above unless and until all
higher priorities have been paid in full.

          Section 4.07. Credit Bid Rights.

          (a) If, during the continuance of an Event of Default, the Collateral
Agent forecloses any of its Liens upon any Collateral, whether by public sale or
private sale or judicial foreclosure or otherwise, and if directed by the
Directing Noteholders to exercise its credit bid rights as provided in this
Section 4.07, the Collateral Agent, acting for and on behalf of the holders of
Note Obligations, shall be entitled (to the fullest extent it may lawfully do
so) to use and apply then due and payable Note Obligations as a credit on
account of the purchase price payable by the Collateral Agent for any Collateral
sold to the Collateral Agent at the corresponding foreclosure sale for all
purposes related to bidding and making settlement or payment of the purchase
price at such foreclosure sale.

          (b) If, in connection with or, during the continuance of an Event of
Default, in anticipation of any foreclosure of any of the Collateral Agent's
Liens upon any Collateral, Senior Secured Notes representing at least a majority
in outstanding principal amount of Senior Secured Notes then outstanding are
transferred to and registered in the name of a single transferee for purposes of
facilitating or executing a bid for such Collateral at the corresponding
foreclosure sale, such transferee shall be entitled (to the fullest extent it
may lawfully do so) to use and apply


                                        9

all then due and payable Note Obligations outstanding to such transferee as a
credit on account of the purchase price payable by such transferee for any
Collateral sold to such transferee at such foreclosure sale, for all purposes
related to bidding and making settlement or payment of the purchase price at
such foreclosure sale, but only if all Noteholders consent thereto or if each
Noteholder has been offered the opportunity to transfer to such transferee any
or all of the Senior Secured Notes outstanding held by such Noteholder on terms
equivalent to the most favorable terms offered by such transferee to any
Noteholder for or in connection with any transfer of Senior Secured Notes to
such transferee.

          (c) Each of the Loan Parties hereby grants, confirms and agrees to
cooperate with and permit the exercise and enforcement of the rights set forth
in this Section 4.07.

                                    ARTICLE V
               CERTAIN OBLIGATIONS ENFORCEABLE BY THE LOAN PARTIES

          Section 5.01. Release of Liens.

          (a) The Collateral Agent agrees for the benefit of the Loan Parties
that if the Collateral Agent at any time receives a written certification signed
by a Responsible Officer (an "OFFICER'S CERTIFICATE") stating that the
Collateral Agent is permitted or required (x) by the Indenture, (y) by Section
7.11 of the Security Agreement or Section 8.11 of the Pledge Agreement or (z)
pursuant to the instructions of the Directing Noteholders, to release any
property of any Loan Party described in such Officer's Certificate from any Lien
granted by a Collateral Document specified in such Officer's Certificate,
accompanied by the proposed document or instrument releasing such Lien as to
such property, then, subject to Article VI, the Collateral Agent will (upon
receipt of a written certification of a Responsible Officer of InSight that the
Trustee has received all documents, if any, required by the Trust Indenture Act
and the Indenture) within three Business Days thereafter, release such Lien upon
such property by executing (and if necessary acknowledging in recordable form)
such proposed document or instrument reasonably requested by the Loan Parties
and delivering it to the applicable Loan Party requesting the same. Any such
document shall be without recourse to or warranty by the Collateral Agent or the
other Finance Parties.

          (b) Any Collateral that is released automatically pursuant to Section
7.11 of the Security Agreement, Section 8.11 of the Pledge Agreement or any
other Collateral Document shall be deemed to be automatically released under
this Agreement without any action on the part of the Collateral Agent.

          Section 5.02. Delivery of Copies to the Trustee. The applicable Loan
Party shall deliver to the Trustee requesting the same a copy of each Officer's
Certificate delivered to the Collateral Agent pursuant to Section 5.01, together
with copies of all documents delivered to the Collateral Agent with such
Officer's Certificate. The Trustee shall not be obligated to take notice thereof
or to act thereon.

          Section 5.03. Collateral Agent Not required to Make Filings or
Recordations. The Collateral Agent is not required to file, register or record
any instrument releasing or subordinating its security interest in any
Collateral.


                                       10

          Section 5.04. No Actions to Address Exceptions. Each Noteholder
acknowledges that actions will not be taken to address the exceptions noted in
Section 3.04 of the Security Agreement and that the Collateral Agent may not
have a perfected security interest with respect to the matters specified
therein.

                                   ARTICLE VI
                              THE COLLATERAL AGENT

          Section 6.01. No Implied Duty. The Collateral Agent shall not have any
duties or responsibilities except those expressly assumed by it in this
Agreement and the other Collateral Documents and shall not be required to take
any action which is contrary to applicable law or any provision of this
Agreement or the other Collateral Documents. Where the Collateral Agent is
permitted but not required to take any action pursuant to any Collateral
Document, the Collateral Agent may take any such action but shall have no
obligation to take any such action without the direction of the Directing
Noteholders and the Collateral Agent shall not be liable to any party for not
taking such action if the Directing Noteholders have not directed the Collateral
Agent to take such action. The Collateral Agent makes no representation as to
the existence, validity, value, genuineness, perfection, priority or the
collectibility of any security or other document or other instrument held by or
delivered to the Collateral Agent. The Collateral Agent shall not be called upon
to advise any party as to the wisdom in taking or refraining to take any action
with respect to the Collateral.

          Section 6.02. Appointment of Co-Agents and Sub-Agents. The Collateral
Agent may employ agents and appoint sub-agents or co-collateral agents as it
determines appropriate in the performance of its duties hereunder. The
Collateral Agent will exercise reasonable care in selecting any such agent,
sub-agent or co-collateral agent but shall not otherwise be responsible or
liable for any act or omission of any such agent, sub-agent or co-collateral
agent.

          Section 6.03. Other Agreements. The Collateral Agent has accepted and
is bound by the Collateral Documents delivered to it as of the date of this
Agreement and listed on Schedule 2.02 and, subject to Section 7.01(b) and this
Article VI, shall accept and be bound by all Collateral Documents delivered to
it at any time after the date of this Agreement. The Collateral Agent shall not
otherwise be bound by, or obligated to take cognizance of the provisions of, any
agreement to which it is not a party, including the Indenture. The Collateral
Agent shall not be responsible for compliance with the terms of any Note
Document by any Loan Party and shall have no duty to monitor any such
compliance.

          Section 6.04. Solicitation of Instructions. The Collateral Agent may
at any time solicit confirmatory instructions, including from the Directing
Noteholders or an order of a court of competent jurisdiction, as to any action
which it may be requested or required to take, or which it may propose to take,
in the performance of any of its obligations under this Agreement.

          Section 6.05. Limitation of Liability. The Collateral Agent shall not
be responsible or liable for any action taken or omitted to be taken by it
hereunder or under any Collateral Document, except for its own gross negligence
or willful misconduct.


                                       11

          Section 6.06. Documents in Satisfactory Form. The Collateral Agent
shall be entitled to require that all agreements, certificates, opinions,
instruments and other documents at any time submitted to it, including those
expressly provided for in this Agreement, be delivered to it in a form and upon
substantive provisions reasonably satisfactory to it.

          Section 6.07. Entitled to Rely. The Collateral Agent may rely
conclusively upon any certificate, notice or other document (including any
electronic transmission) reasonably believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person or Persons and
need not investigate any fact or matter stated in any such document. The
Collateral Agent may seek and rely upon any judicial order or judgment, upon any
advice, opinion or statement of legal counsel, independent consultants and other
experts selected by it in good faith and upon any certification, instruction,
notice or other writing delivered to it by any Loan Party in compliance with the
provisions of this Agreement or delivered to it by the Trustee as to the
Noteholders whose action or consent is required for an instruction of Directing
Noteholders, without being required to determine the authenticity thereof or the
correctness of any fact stated therein or the propriety or validity of service
thereof. The Collateral Agent may act in reliance upon any instrument comporting
with the provisions of this Agreement or any signature reasonably believed by it
to be genuine and may assume that any Person purporting to give notice or
receipt or advice or make any statement or execute any document in connection
with the provisions hereof has been duly authorized to do so. To the extent an
officers' certificate or an opinion of counsel is required or permitted under
this Agreement to be delivered to the Collateral Agent in respect of any matter,
the Collateral Agent may rely conclusively on such officers' certificate or
opinion of counsel as to such matter. The Collateral Agent may request an
opinion of counsel, a certificate of a Responsible Officer, or both, at any time
when it is required or requested to take any action (other than pursuant to
Sections 2.04, 3,02, 5.01, and 6.03 hereof or any similar provision of any
Collateral Document) hereunder or under any Collateral Document stating that
such action is permitted or authorized pursuant to the terms hereof and of the
Note Documents and that all conditions precedent to the taking of such action
have been complied with and the Collateral Agent may rely conclusively on such
officer's certificate or opinion of counsel with respect thereto.

          Section 6.08. Events of Default. The Collateral Agent shall not be
required to inquire as to the occurrence or absence of any Event of Default
under the Indenture or any other Note Document and shall not be affected by or
required to act upon any notice or knowledge as to the occurrence of any Event
of Default unless and until it receives a notice pursuant to Section 4.02.

          Section 6.09. Actions by Collateral Agent. As to any matter not
expressly provided for by this Agreement, the Collateral Agent shall act or
refrain from acting as directed by the Directing Noteholders and shall be fully
protected in doing so.

          Section 6.10. Security or Indemnity in Favor of the Collateral Agent.
The Collateral Agent shall not be required to advance or expend any funds or
otherwise incur any financial liability in the performance of its duties or the
exercise of its powers or rights hereunder unless it has been provided with
security or indemnity which it, in its discretion, deems sufficient against any
and all liability or expense which may be incurred by it by reason of taking or
continuing to take such action. The Loan Parties hereby jointly and severally
agree to provide


                                       12

such security or indemnity to the Collateral Agent promptly upon request by the
Collateral Agent therefor.

          Section 6.11. Resignation or Removal of the Collateral Agent. Subject
to the appointment of a successor Collateral Agent as provided in Section 6.12
and the acceptance of such appointment by the successor Collateral Agent, (i)
the Collateral Agent may resign at any time by giving not less than 45 days'
notice of resignation to the Trustee and InSight, and (ii) the Collateral Agent
may be removed at any time, with or without cause, pursuant to the instructions
of the Directing Noteholders.

          Section 6.12. Appointment of Successor Collateral Agent. Upon any such
resignation or removal, a successor Collateral Agent may be appointed by the
Trustee or by the instructions of the Directing Noteholders with the consent of
InSight. If no successor Collateral Agent shall have been so appointed and shall
have accepted such appointment within 45 days after the predecessor Collateral
Agent gave notice of resignation or was removed, the retiring Collateral Agent
may appoint a successor Collateral Agent, or petition a court of competent
jurisdiction for appointment of a successor Collateral Agent, which shall be a
bank or trust company (i) authorized to exercise corporate trust powers, (ii)
acceptable to the Trustee, (iii) having a combined capital and surplus of at
least $50,000,000 and (iv) maintaining an office in New York, New York.

          Section 6.13. Succession. When the Person so appointed as successor
Collateral Agent accepts such appointment:

          (i) such Person shall succeed to and become vested with all the
     rights, powers, privileges and duties of the predecessor Collateral Agent,
     and the predecessor Collateral Agent shall be discharged from its duties
     and obligations hereunder, and

          (ii) the predecessor Collateral Agent, upon payment of all amounts
     owed to it, shall promptly transfer all Collateral within its possession or
     control to the possession or control of the successor Collateral Agent and
     shall execute and deliver such notices, instructions and assignments as may
     be necessary or desirable or reasonably requested by the successor
     Collateral Agent to transfer to the successor Collateral Agent all Liens,
     interests, rights, powers and remedies of the predecessor Collateral Agent
     in respect of the Collateral or under the Collateral Documents. Thereafter
     the predecessor Collateral Agent shall remain entitled to enforce the
     immunities granted to it in this Article VI.

                                   ARTICLE VII
                                  MISCELLANEOUS

          Section 7.01. Amendment.

          (a) This Agreement may be amended or supplemented from time to time by
the written agreement of the Loan Parties and the Collateral Agent, acting
pursuant to the instructions of the Directing Noteholders if so required
pursuant to Article III and in compliance with Section 3.02.


                                       13

          (b) Notwithstanding anything contained herein or in any Collateral
Document, any (x) Collateral Document entered into after the Issue Date that is
not in the form attached to any Collateral Document entered into on the Issue
Date or (y) amendment or supplement to any Collateral Document that, in each
case, imposes any obligation upon the Collateral Agent not contemplated by this
Agreement or the other Collateral Documents in effect on the Issue Date or
adversely affects the rights of the Collateral Agent in its individual capacity
will become effective only with the consent of the Collateral Agent in its
individual capacity. The Collateral Agent shall promptly receive copies of all
Collateral Documents executed after the Issue Date.

          Section 7.02. Further Assurances.

          (a) At any time or from time to time, each Loan Party will, at its
expense, promptly execute, acknowledge and deliver such further documents and do
such other acts and things as may be necessary or appropriate, and such other
instruments, acts or things as the Collateral Agent may reasonably request, in
order to assure and confirm that each Subsidiary required by the Indenture to
guarantee payment of the Note Obligations has duly guaranteed payment of all the
Note Obligations and that the Collateral Agent holds, for the exclusive benefit
of all present and future holders of Note Obligations, duly created, enforceable
and perfected first priority Liens (subject only to Permitted Liens (as defined
in the Security Agreement)) upon all interests in Collateral at any time owned
or acquired by the Loan Parties or any of such Subsidiary or as the Collateral
Agent or the Trustee otherwise may reasonably request in order to carry out and
give full effect to the intents and purposes of the Note Documents.

          (b) Upon request of the Collateral Agent at any time and from time to
time, each of the Loan Parties will, and will cause each of its Subsidiaries to,
promptly execute, acknowledge and deliver such security documents, instruments,
certificates, notices and other documents and take such other actions as shall
be required or which the Collateral Agent may reasonably request to create,
perfect, protect, assure or enforce the Liens and benefits intended to be
conferred, as contemplated by the Indenture and the Collateral Documents, upon
the Collateral Agent for the exclusive benefit of the holders of the Note
Obligations. If any Loan Party or such Subsidiary fails to do so, the Collateral
Agent is hereby irrevocably authorized and empowered, with full power of
substitution, to execute, acknowledge and deliver such security documents,
instruments, certificates, notices and other documents and, subject to the
provisions of the Collateral Documents, take such other actions in the name,
place and stead of the Loan Parties or such Subsidiary, but the Collateral Agent
will have no obligation to do so and no liability for any action taken or
omitted by it in good faith in connection therewith.

          Section 7.03. Successors and Assigns.

          (a) This Agreement is legally binding upon and enforceable against the
Collateral Agent. Except as provided in Section 6.02 or in any Collateral
Document, the Person acting as Collateral Agent may not, in its individual
capacity, delegate any of its duties or assign any of its rights hereunder, and
any attempted delegation or assignment of any such duties or rights shall be
void. All obligations of the Collateral Agent hereunder shall inure to the
benefit of, and be enforceable by, the Trustee and each present and future
holder of Note Obligations, each of whom shall be entitled to enforce this
Agreement as a third party beneficiary hereof, and all of their respective
successors and assigns.


                                       14

          (b) This Agreement is further binding upon each of the Loan Parties
and their respective successors. No Loan Party may delegate any of its duties or
assign any of its rights hereunder, and any attempted delegation or assignment
of any such duties or rights shall be void.

          (c) The obligations of the Collateral Agent set forth in Sections 5.01
and 5.02 of this Agreement shall also be enforceable by the Loan Parties
directly affected by any breach thereof and their respective successors and
assigns.

          Section 7.04. Delay and Waiver. No failure to exercise, no course of
dealing with respect to the exercise of, and no delay in exercising, any right,
power or remedy arising under this Agreement or any of the other Collateral
Documents shall impair any such right, power or remedy or operate as a waiver
thereof. No single or partial exercise of any such right, power or remedy shall
preclude any other or future exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not exclusive
of any remedies provided by law.

          Section 7.05. Notices. Any communications, including notices and
instructions, between the parties hereto or notices provided herein to be given
may be given to the following addresses:

          If to the Collateral Agent:

          If to the Trustee:

          If to any Loan Party:

          Each notice hereunder shall be in writing and may be personally served
or sent by facsimile or United States mail or courier service and shall be
deemed to have been given when


                                       15

delivered in person or by courier service and signed for against receipt
thereof, upon receipt of facsimile, or three Business Days after depositing it
in the United States mail with postage prepaid and properly addressed; provided,
no notice to the Collateral Agent or the Trustee shall be effective unless and
until received by its officer responsible for the administration of the
transaction contemplated hereby. Each party may change its address for notice
hereunder to any other location within the continental United States by giving
written notice thereof to the other parties as set forth in this Section 7.05.

          Section 7.06. Entire Agreement. This Agreement states the complete
agreement of the parties relating to the undertaking of the Collateral Agent set
forth herein and supersedes all oral negotiations and prior writings in respect
of such undertaking.

          Section 7.07. Compensation and Expenses. Each of the Loan Parties
jointly and severally agrees to pay, promptly within 30 days following demand:

          (i) all reasonable out-of-pocket costs and expenses incurred in the
     preparation, execution, delivery, filing, recordation, administration or
     enforcement of this Agreement or any other Collateral Document or any
     consent, amendment, waiver or other modification relating thereto;

          (ii) all reasonable out-of-pocket fees, expenses and disbursements of
     legal counsel and any auditors, accountants, consultants or appraisers or
     other professional advisors and agents engaged by the Collateral Agent in
     connection with the negotiation, preparation, closing, administration,
     performance or enforcement of this Agreement and the other Collateral
     Documents or any consent, amendment waiver or other modification relating
     thereto and any other document or matter requested by one or more Loan
     Parties;

          (iii) all reasonable out-of-pocket costs and expenses of creating,
     perfecting, or releasing the Collateral Agent's security interests in the
     Collateral, including filing and recording fees, expenses and taxes, stamp
     or documentary taxes, search fees, title insurance premiums;

          (iv) all reasonable out-of-pocket costs of any opinion of counsel
     required hereby to be delivered to the Collateral Agent or requested by the
     Collateral Agent in connection herewith;

          (v) all other reasonable out-of-pocket costs and expenses incurred by
     the Collateral Agent in connection with the negotiation, preparation and
     execution of the Collateral Documents and any consents, amendments, waivers
     or other modifications thereto and the transactions contemplated thereby or
     the exercise of its rights or performance of its obligations by the
     Collateral Agent thereunder; and

          (vi) all costs and expenses incurred by the Collateral Agent in
     connection with the preservation, collection, foreclosure or enforcement of
     the Liens granted by the Collateral Documents or any interest, right, power
     or remedy of the Collateral Agent or in connection with the collection or
     enforcement of any of the Note Obligations or the proof, protection,
     administration or resolution of any claim based upon the Note Obligations
     in any Insolvency Proceeding, including all fees and disbursements of


                                       16

     attorneys, accountants, auditors, consultants, appraisers and other
     professionals engaged by the Collateral Agent or the Trustee.

          The agreements in this Section 7.07 shall survive repayment of the
Senior Secured Notes.

          Section 7.08. Indemnity.

          (a) In addition to the payment of costs and expenses pursuant to
Section 7.07, whether or not the transactions contemplated hereby shall be
consummated, each of the Loan Parties jointly and severally agrees to defend
(subject to the Indemnitees' selection of counsel), indemnify, pay and hold
harmless, the Collateral Agent and the Trustee and each of their respective
Affiliates and each and all of the directors, officers, partners, trustees,
employees, attorneys and agents, and in each case their respective heirs,
representatives, successors and assigns (each of the foregoing, an "INDEMNITEE")
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, suits, judgments, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by, imposed on or asserted against such
Indemnitee in connection with any investigation or administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of this Agreement or in any
other way connected with the enforcement of any of the terms of, or the
preservation of any rights hereunder ("INDEMNIFIED LIABILITIES"); provided, no
Indemnitee shall be entitled to indemnification hereunder with respect to any
Indemnified Liability to the extent such Indemnified Liability is found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee.

          (b) All amounts due under Section 7.08(a) shall be payable not later
than 10 days after written demand therefor.

          (c) To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in Section 7.08(a) may be unenforceable in whole or in
part because they are violative of any law or public policy, each of the Loan
Parties shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.

          (d) No Loan Party shall ever assert any claim against any Indemnitee,
on any theory of liability, for any lost profits or special, indirect or
consequential damages or (to the fullest extent lawful) any punitive damages
arising out of, in connection with, or as a result of, this Agreement or any
other Note Document or any agreement or instrument or transaction contemplated
hereby or relating in any respect to any Indemnified Liability, and each Loan
Party hereby forever waives, releases and agrees not to sue upon any claim for
any such lost profits or special, indirect, consequential or (to the fullest
extent lawful) punitive damages, whether or not accrued and whether or not known
or suspected to exist in its favor.

          (e) No Finance Party shall ever assert any claim against the
Collateral Agent each of its Affiliates and each and all of the directors,
officers, partners, trustees, employees,


                                       17

attorneys and agents, and in each case their respective heirs, representatives,
successors and assigns, on any theory of liability, for any lost profits or
special, indirect or consequential damages or (to the fullest extent lawful) any
punitive damages arising out of, in connection with, or as a result of, this
Agreement or any other Note Document or any agreement or instrument or
transaction contemplated hereby or relating in any respect to any Indemnified
Liability, and each Finance Party hereby forever waives, releases and agrees not
to sue upon any claim for any such lost profits or special, indirect,
consequential or (to the fullest extent lawful) punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

          (f) The agreements in this Section 7.08 shall survive repayment of the
Senior Secured Notes and all other amounts payable hereunder.

          Section 7.09. Obligations Secured. All obligations of the Loan Parties
set forth in or arising under this Agreement shall be Note Obligations and are
secured by all Liens granted by the Collateral Documents.

          Section 7.10. Severability. If any provision of this Agreement is
invalid, illegal or unenforceable in any respect or in any jurisdiction, the
validity, legality and enforceability of such provision in all other respects
and of all remaining provisions, and of such provision in all other
jurisdictions, shall not in any way be affected or impaired thereby.

          Section 7.11. Governing Law; Submission to Jurisdiction.

          (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          (b) Any legal action or proceeding with respect to this Agreement or
any other Collateral Document may be brought in the courts of the State of New
York in New York County, or of the United States for the Southern District of
New York, and, by execution and delivery of this Agreement, each Loan Party
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. Each Loan
Party irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such court and any claim that any such proceeding brought
in any such court has been brought in an inconvenient forum.

          (c) Each Loan Party hereby consents to process being served in any
such suit, action or proceeding by the mailing of a copy thereof by registered
or certified mail, postage prepaid, return receipt requested, to Holdings' or
such Loan Party's address referred to in Section 7.05, as the case may be. Each
Loan Party agrees that such service (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by law, be taken and held to be
valid personal service upon and personal delivery to it. Nothing in this Section
7.11 shall affect the right of the Collateral Agent


                                       18

or the Trustee to serve process in any manner permitted by law or limit the
right of any of them to bring proceedings against one or more Loan Parties in
the courts of any jurisdiction or jurisdictions.

          Section 7.12. Waiver of Right to Trial by Jury. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY TERM LOAN DOCUMENT OR ANY
NOTE DOCUMENT IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY NOTE DOCUMENT OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

          Section 7.13. Section Titles. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Agreement, except when used to reference
such sections.

          Section 7.14. Counterparts; Effectiveness. This Agreement may be
executed in one or more counterparts, each of which shall be an original and all
of which shall together constitute one and the same document. Signature pages
may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached to the same document.
Delivery of an executed signature page of this Agreement by facsimile or other
electronic transmission shall be as effective as delivery of a manually executed
counterpart thereof. This Agreement shall become effective upon the execution of
a counterpart hereof by each of the parties hereto and receipt by each party of
written or telephonic notification of such execution and authorization of
delivery thereof.

                            [Signature Pages Follow]


                                       19

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

                                        INSIGHT HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        INSIGHT HEALTH SERVICES HOLDINGS CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        PARKWAY IMAGING CENTER, LLC


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Manager


                                       S-2

                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        MAXUM HEALTH SERVICES CORP.
                                        DIAGNOSTIC SOLUTIONS 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                      S-3

                                        MAXUM HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: 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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        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
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                       S-4

                                        U.S. BANK NATIONAL ASSOCIATION, as
                                        Trustee


                                        By: /s/ Jean Clarke
                                            ------------------------------------
                                        Name: Jean Clarke
                                        Title: Assistant Vice President


                                        U.S. BANK NATIONAL ASSOCIATION, as
                                        Collateral Agent


                                        By: /s/ Jean Clarke
                                            ------------------------------------
                                        Name: Jean Clarke
                                        Title: Assistant Vice President


                                      S-5

                                                                       EXHIBIT A

                           FORM OF SECURITY AGREEMENT

                                                                       EXHIBIT B

                            FORM OF PLEDGE AGREEMENT

EX-4.10

                                                                    Exhibit 4.10


                                                                  EXECUTION COPY



                                  $300,000,000

                   SENIOR SECURED FLOATING RATE NOTES DUE 2011

                          REGISTRATION RIGHTS AGREEMENT

                         DATED AS OF SEPTEMBER 22, 2005
                                  BY AND AMONG

                         INSIGHT HEALTH SERVICES CORP.,

                     INSIGHT HEALTH SERVICES HOLDINGS CORP.,

              THE SUBSIDIARY GUARANTORS LISTED IN SCHEDULE A HERETO

                                      -AND-

                         BANC OF AMERICA SECURITIES LLC,

                            CIBC WORLD MARKETS CORP.

          This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of September 22, 2005, by and among InSight Health Services
Corp., a Delaware corporation (the "COMPANY"), InSight Health Services Holdings
Corp., a Delaware corporation ("HOLDINGS"), the subsidiaries of the Company
listed in Schedule A herein (the "SUBSIDIARY GUARANTORS," and, together with
Holdings, the "GUARANTORS") and Banc of America Securities LLC and CIBC World
Markets Corp. (the "PURCHASERS"). The Company is offering and selling to the
Purchasers the Company's Senior Secured Floating Rate Notes due 2011 (the
"NOTES") pursuant to the Purchase Agreement, dated September 16, 2005 (the
"PURCHASE AGREEMENT"), by and among the Company, the Guarantors and the
Purchasers.

          Capitalized terms used herein and not otherwise defined herein shall
have the meaning assigned to them under the indenture dated the date hereof (the
"INDENTURE") among the Company, the Guarantors named therein and U.S. Bank
National Association, as trustee (the "Trustee") relating to the Notes and the
Exchange Notes (as defined below).

          The parties hereby agree as follows:

          Section 1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:

          ACT: The Securities Act of 1933, as amended.

          AFFILIATE: As defined in Rule 144 under the Act.

          BROKER-DEALER: Any broker or dealer registered under the Exchange Act.

          CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.

          CLOSING DATE: The date hereof.

          COMMISSION: The Securities and Exchange Commission.

          CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Notes tendered by Holders
thereof pursuant to the Exchange Offer.

          CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.

          EFFECTIVENESS DEADLINE: As defined in Section 3(a) hereof.

          EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.


                                       2

          EXCHANGE NOTES: The Company's Senior Secured Floating Rate Notes due
2011 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.

          EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Notes that are tendered by such Holders in connection with such exchange and
issuance.

          EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

          EXEMPT RESALES: The transactions in which the Purchasers propose to
sell the Notes to certain "qualified institutional buyers," as such term is
defined in Rule 144A under the Act and pursuant to Regulation S under the Act.

          FILING DEADLINE: As defined in Section 3(a) hereof.

          HOLDERS: As defined in Section 2 hereof.

          PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such prospectus.

          RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.

          REGISTRATION DEFAULT: As defined in Section 5 hereof.

          REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

          REGULATION S: Regulation S promulgated under the Act.

          RULE 144: Rule 144 promulgated under the Act.

          SHELF EFFECTIVENESS DEADLINE: As defined in Section 4(a) hereof.

          SHELF FILING DEADLINE: As defined in Section 4(a) hereof.

          SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.

          SUSPENSION NOTICE: As defined in Section 6(d) hereof.

          TIA: The Trust Indenture Act of 1939 as in effect on the date of the
Indenture.


                                       3

          TRANSFER RESTRICTED SECURITIES: Each (A) Note, until the earliest to
occur of (i) the date on which such Note is exchanged in the Exchange Offer for
an Exchange Note which is entitled to be resold to the public by the Holder
thereof without complying with the prospectus delivery requirements of the Act,
(ii) the date on which such Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued Exchange
Notes) or (iii) the date on which such Note is distributed to the public
pursuant to Rule 144 under the Act or is saleable pursuant to Rule 144(k) under
the Act (or similar provisions then in effect) and (B) Exchange Note held by a
Broker-Dealer until the date on which such Exchange Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
contained therein).

          Section 2. Holders. A Person is deemed to be a holder of Transfer
Restricted Securities (each, a "Holder") whenever such Person owns Transfer
Restricted Securities.

          Section 3. Registered Exchange Offer. (a) Unless the Exchange Offer
shall not be permitted by applicable federal law (after the procedures set forth
in Section 6(a)(i) below have been complied with), the Company and the
Guarantors shall (i) cause the Exchange Offer Registration Statement to be filed
with the Commission as soon as practicable after the Closing Date, but in no
event later than 120 days after the Closing Date (such 120th day being the
"FILING DEADLINE"), (ii) use its best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but in
no event later than 180 days after the Closing Date (such 180th day being the
"EFFECTIVENESS DEADLINE") and (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause it to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting (i) registration of the Exchange Notes to be offered in exchange
for the Notes that are Transfer Restricted Securities and (ii) resales of
Exchange Notes by any Broker-Dealer that tendered Notes into the Exchange Offer
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Notes acquired
directly from the Company or any of their respective Affiliates) as contemplated
by Section 3(c) below.

          (b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 30 days. The Company and the Guarantors
shall cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their respective reasonable best efforts to cause the Exchange Offer
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no


                                       4

event later than 45 days thereafter, and in no event shall such Exchange Offer
be Consummated later than 210 days after the Closing Date (such 210th day being
the "CONSUMMATION DEADLINE").

          (c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Company or any of their respective Affiliates), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement. See the Shearman & Sterling no-action letter (available
July 2, 1993).

          Because any such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement through the Consummation Deadline and thereafter as
provided in the remainder of this paragraph. To the extent necessary to ensure
that the prospectus contained in the Exchange Offer Registration Statement is
available for sales of Exchange Notes by any Broker-Dealer that acquired
Exchange Notes as a result of market-making or similar activities such that the
Broker-Dealer would be required to deliver a prospectus under the Act upon a
subsequent sale or other disposition of the Exchange Notes, then the Company and
the Guarantors agree to use their respective reasonable best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented,
amended and current as required by and subject to the provisions of Section 6(a)
and (c) hereof and in conformity with the requirements of this Agreement, the
Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period of 180 days (as extended pursuant to Section 6(d)(i))
from the Consummation Deadline or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration Statement have been
sold pursuant thereto if any such Broker-Dealer desiring such action shall
notify the Company in writing that such Broker-Dealer acquired Exchange Notes as
a result of market-making or other similar activities such that the
Broker-Dealer would be required to deliver a prospectus under the Act upon a
subsequent sale or other disposition of the Exchange Notes. The Company and the
Guarantors shall provide copies of the latest version of such Prospectus to such
Broker-Dealers, in such number as such Broker-Dealers may reasonably request
promptly upon such request, and in no event later than two Business Days after
the date of such request, at any time during such period.

          Section 4. Shelf Registration. (a) If (i) the Exchange Offer is not
permitted by applicable law (after the Company and the Guarantors have complied
with the procedures set forth in Section 6(a)(i) below) or (ii) any Holder of
Transfer Restricted Securities shall notify the


                                       5

Company in writing within 30 days following the Consummation Deadline that (A)
such Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange Notes acquired by
it in the Exchange Offer to the public without delivering a prospectus and the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Notes acquired directly from the Company or any of their
Affiliates, or (iii) the Exchange Offer has not been Consummated on or prior to
the Consummation Deadline, then the Company and the Guarantors shall: (x) cause
to be filed, on or prior to 45 days after the earliest of (i) the date on which
the Company determines that the Exchange Offer Registration Statement cannot be
filed as a result of clause (a)(i) above, (ii) the date on which the Company
receives the notice specified in clause (a)(ii) above, or (iii) if the Exchange
Offer has not been consummated on or prior to the Consummation Deadline, the
Consummation Deadline (such earliest date, the "SHELF FILING DEADLINE"), a shelf
registration statement pursuant to Rule 415 under the Act (which may be an
amendment to the Exchange Offer Registration Statement (the "SHELF REGISTRATION
STATEMENT")), relating to all Transfer Restricted Securities, and (y) shall use
their respective best efforts to cause such Shelf Registration Statement to
become effective on or prior to 90 days after the Shelf Filing Deadline for the
Shelf Registration Statement (such 90th day the "SHELF EFFECTIVENESS DEADLINE").

          If, after the Company and the Guarantors filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company and
the Guarantors shall remain obligated to use best efforts to meet the Shelf
Effectiveness Deadline set forth in clause (y) above.

          To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their respective best efforts
to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(b) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the Closing
Date, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto.

          (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be


                                       6

entitled to liquidated damages pursuant to Section 5 hereof unless and until
such Holder shall have provided all such information. Each selling Holder agrees
to promptly furnish additional information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading. The Company shall not be obligated to supplement such
Shelf Registration Statement after it has been declared effective by the
Commission more than one time per quarterly period solely to reflect additional
Holders.

          Section 5. Liquidated Damages. If (i) the Exchange Offer Registration
Statement required by this Agreement is not filed with the Commission on or
prior to the Filing Deadline, (ii) such Exchange Offer Registration Statement
has not been declared effective by the Commission on or prior to the
Effectiveness Deadline or the Exchange Offer has not been Consummated on or
prior to the Consummation Deadline or (iii) a Shelf Registration Statement has
not been declared effective on or prior to the Shelf Effectiveness Deadline
(each such event referred to in clauses (i) through (iii), a "REGISTRATION
DEFAULT"), then the Company will pay to each Holder of Transfer Restricted
Securities affected thereby liquidated damages in an amount equal to $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities held by
such Holder for each week or portion thereof that the Registration Default
continues for the first 30-day period immediately following the occurrence of a
Registration Default referred to in clause (i) above or for the first 90-day
period following the occurrence of a Registration Default referred to in clauses
(ii) and (iii) above. The amount of the liquidated damages shall increase by an
additional $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities with respect to each subsequent 30-day period in the case of clause
(i) above or 90-day period in the case of clauses (ii) or (iii) above until all
Registration Defaults have been cured, up to a maximum amount of liquidated
damages of $.30 per week per $1,000 in principal amount of Transfer Restricted
Securities. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement, in the case of (i) above,
(2) upon the effectiveness of the Exchange Offer Registration Statement and the
Consummation of the Exchange Offer, in the case of (ii) above or (3) upon
effectiveness of the Shelf Registration Statement, in the case of (iii) above,
as applicable, the liquidated damages payable with respect to the Transfer
Restricted Securities as a result of such clause (i), (ii) or (iii), as
applicable, shall cease to accrue.

          All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay accrued liquidated damages with respect to
such securities shall survive until such time as such obligations with respect
to such securities shall have been satisfied in full.

          Section 6. Registration Procedures.

          (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective reasonable
best efforts to effect such exchange and to permit the resale of Exchange Notes
by any Broker-Dealer that tendered in the Exchange Offer Notes that such
Broker-Dealer acquired for its own account as a result of its market making


                                       7

activities or other trading activities (other than Notes acquired directly from
the Company or any of their Affiliates) being sold in accordance with the
intended method or methods of distribution thereof, and (z) comply with all of
the following provisions:

          (i) If, following the date hereof there has been announced a change in
     Commission policy with respect to exchange offers such as the Exchange
     Offer, that in the reasonable opinion of counsel to the Company raises a
     substantial question as to whether the Exchange Offer is permitted by
     applicable federal law, the Company and the Guarantors hereby agree to seek
     a no-action letter or other favorable decision from the Commission allowing
     the Company and the Guarantors to Consummate an Exchange Offer for such
     Transfer Restricted Securities. The Company and the Guarantors hereby agree
     to pursue the issuance of such a decision to the Commission staff level,
     but shall not be required to take commercially unreasonable action to
     effect a change of Commission policy. In connection with the foregoing, the
     Company and the Guarantors hereby agree to take all such other actions as
     may be requested by the Commission or otherwise reasonably required in
     connection with the issuance of such decision, including without limitation
     (A) participating in telephonic conferences with the Commission, (B)
     delivering to the Commission staff an analysis prepared by counsel to the
     Company setting forth the legal bases, if any, upon which such counsel has
     concluded that such an Exchange Offer should be permitted and (C)
     diligently pursuing a resolution (which need not be favorable) by the
     Commission staff.

          (ii) As a condition to its participation in the Exchange Offer, each
     Holder of Transfer Restricted Securities (including, without limitation,
     any Holder who is a Broker-Dealer) shall furnish, upon the request of the
     Company, prior to the Consummation of the Exchange Offer, a written
     representation to the Company and the Guarantors (which may be contained in
     the letter of transmittal contemplated by the Exchange Offer Registration
     Statement) to the effect that (A) it is not an Affiliate of the Company,
     (B) it is not engaged in, and does not intend to engage in, and has no
     arrangement or understanding with any person to participate in, a
     distribution of the Exchange Notes to be issued in the Exchange Offer and
     (C) it is acquiring the Exchange Notes in its ordinary course of business.
     As a condition to its participation in the Exchange Offer each Holder using
     the Exchange Offer to participate in a distribution of the Exchange Notes
     shall acknowledge and agree that if the resales are of Exchange Notes
     obtained by such Holder in exchange for Notes acquired directly from the
     Company or an Affiliate thereof, it (1) could not, under Commission policy
     as in effect on the date of this Agreement, rely on the position of the
     Commission enunciated in Morgan Stanley and Co., Inc. (available June 5,
     1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as
     interpreted in the Commission's letter to Shearman & Sterling dated July 2,
     1993, and similar no-action letters (including, if applicable, any
     no-action letter obtained pursuant to clause (i) above), and (2) must
     comply with the registration and prospectus delivery requirements of the
     Act in connection with a secondary resale transaction and that such a
     secondary resale transaction must be covered by an effective registration
     statement containing the selling security holder information required by
     Item 507 or 508, as applicable, of Regulation S-K.


                                       8

          (iii) Prior to effectiveness of the Exchange Offer Registration
     Statement, the Company and the Guarantors shall provide a supplemental
     letter to the Commission (A) stating that the Company and the Guarantors
     are registering the Exchange Offer in reliance on the position of the
     Commission enunciated in Exxon Capital Holdings Corporation (available May
     13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
     interpreted in the Commission's letter to Shearman & Sterling dated July 2,
     1993, and, if applicable, any no-action letter obtained pursuant to clause
     (i) above, (B) including a representation that neither the Company nor any
     Guarantor has entered into any arrangement or understanding with any Person
     to distribute the Exchange Notes to be received in the Exchange Offer and
     that, to the best of the Company's and each Guarantor's information and
     belief, each Holder participating in the Exchange Offer is acquiring the
     Exchange Notes in its ordinary course of business and has no arrangement or
     understanding with any Person to participate in the distribution of the
     Exchange Notes received in the Exchange Offer and (C) any other undertaking
     or representation required by the Commission as set forth in any no-action
     letter obtained pursuant to clause (i) above, if applicable.

          (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:

          (i) comply with all the provisions of Section 6(c) below and use their
     respective reasonable best efforts to effect such registration to permit
     the sale of the Transfer Restricted Securities being sold in accordance
     with the intended method or methods of distribution thereof (as indicated
     in the information furnished to the Company pursuant to Section 4(b)
     hereof), and pursuant thereto the Company and the Guarantors will prepare
     and file with the Commission a Registration Statement relating to the
     registration on any appropriate form under the Act, which form shall be
     available for the sale of the Transfer Restricted Securities in accordance
     with the intended method or methods of distribution thereof within the time
     periods and otherwise in accordance with the provisions hereof, and

          (ii) issue, upon the request of any Holder or purchaser of Notes
     covered by any Shelf Registration Statement contemplated by this Agreement,
     Exchange Notes having an aggregate principal amount equal to the aggregate
     principal amount of Notes sold pursuant to the Shelf Registration Statement
     and surrendered to the Company for cancellation; the Company shall register
     Exchange Notes on the Shelf Registration Statement for this purpose and
     issue the Exchange Notes to the purchaser(s) of securities subject to the
     Shelf Registration Statement in the names as such purchaser(s) shall
     designate.

          (c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:

          (i) use their respective reasonable best efforts to keep such
     Registration Statement continuously effective and provide all requisite
     financial statements for the period specified in Section 3 or 4 of this
     Agreement, as applicable. Upon the occurrence of any event that would cause
     any such Registration Statement or the Prospectus


                                       9

     contained therein (A) to contain an untrue statement of material fact or
     omit to state any material fact necessary to make the statements therein
     (in light of the circumstances under which they were made) not misleading
     or (B) not to be effective and usable for resale of Transfer Restricted
     Securities during the period required by this Agreement, the Company and
     the Guarantors shall file promptly an appropriate amendment to such
     Registration Statement curing such defect, and, if Commission review is
     required, use their respective reasonable best efforts to cause such
     amendment to be declared effective as soon as practicable.

          (ii) prepare and file with the Commission such amendments and
     post-effective amendments to the applicable Registration Statement as may
     be necessary to keep such Registration Statement effective for the
     applicable period set forth in Section 3 or 4 hereof, as the case may be;
     cause the Prospectus to be supplemented by any required Prospectus
     supplement, and as so supplemented to be filed pursuant to Rule 424 under
     the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
     under the Act in a timely manner; and comply with the provisions of the Act
     with respect to the disposition of all securities covered by such
     Registration Statement during the applicable period in accordance with the
     intended method or methods of distribution by the sellers thereof set forth
     in such Registration Statement or supplement to the Prospectus;

          (iii) with respect to a Shelf Registration Statement, advise each
     selling Holder promptly and, if requested by such selling Holder, confirm
     such advice in writing, (A) when the Prospectus or any Prospectus
     supplement or post-effective amendment has been filed, and, with respect to
     any applicable Registration Statement or any post-effective amendment
     thereto, when the same has become effective, (B) of any request by the
     Commission for amendments to the Registration Statement or amendments or
     supplements to the Prospectus or for additional information relating
     thereto, (C) of the issuance by the Commission of any stop order suspending
     the effectiveness of the Registration Statement under the Act or of the
     suspension by any state securities commission of the qualification of the
     Transfer Restricted Securities for offering or sale in any jurisdiction, or
     the initiation of any proceeding for any of the preceding purposes, (D) of
     the existence of any fact or the happening of any event that makes any
     statement of a material fact made in the Registration Statement, the
     Prospectus, any amendment or supplement thereto or any document
     incorporated by reference therein untrue, or that requires the making of
     any additions to or changes in the Registration Statement in order to make
     the statements therein not misleading, or that requires the making of any
     additions to or changes in the Prospectus in order to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading. If at any time the Commission shall issue any stop order
     suspending the effectiveness of the Registration Statement, or any state
     securities commission or other regulatory authority shall issue an order
     suspending the qualification or exemption from qualification of the
     Transfer Restricted Securities under state securities or Blue Sky laws, the
     Company and the Guarantors shall use their respective reasonable best
     efforts to obtain the withdrawal or lifting of such order at the earliest
     possible time;

          (iv) subject to Section 6(c)(i), if any fact or event contemplated by
     Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
     supplement or post-effective


                                       10

     amendment to the Registration Statement or related Prospectus or any
     document incorporated therein by reference or file any other required
     document so that, as thereafter delivered to the purchasers of Transfer
     Restricted Securities, the Prospectus will not contain an untrue statement
     of a material fact or omit to state any material fact necessary to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading;

          (v) furnish to the Purchasers and, with respect to a Shelf
     Registration Statement, each selling Holder named in any Registration
     Statement or Prospectus in connection with such exchange or sale, if any,
     before filing with the Commission, copies of any Registration Statement or
     any Prospectus included therein or any amendments or supplements to any
     such Registration Statement or Prospectus (including all documents
     incorporated by reference after the initial filing of such Registration
     Statement), which documents will be subject to the review and comment of
     such Holders in connection with such sale, if any, for a period of at least
     five Business Days, and the Company will not file any such Registration
     Statement or Prospectus or any amendment or supplement to any such
     Registration Statement or Prospectus (including all such documents
     incorporated by reference) to which such Holders shall reasonably object
     within five Business Days after the receipt thereof. A Holder shall be
     deemed to have reasonably objected to such filing if such Registration
     Statement, amendment, Prospectus or supplement, as applicable, as proposed
     to be filed, contains an untrue statement of a material fact or omits to
     state any material fact necessary to make the statements therein (in light
     of the circumstances under which they were made) not misleading or fails to
     comply with the applicable requirements of the Act;

          (vi) with respect to a Shelf Registration Statement, promptly prior to
     the filing of any document that is to be incorporated by reference into a
     Registration Statement or Prospectus, provide copies of such document to
     each selling Holder, upon such selling Holder's reasonable request, in
     connection with such exchange or sale, if any;

          (vii) with respect to a Shelf Registration Statement, subject to
     appropriate confidentiality agreements being entered into, make available,
     at reasonable times, for inspection by each selling Holder and any attorney
     or accountant retained by such Holders, all financial and other records,
     pertinent corporate documents of the Company and the Guarantors and cause
     at reasonable times the Company's and the Guarantors' officers, directors
     and employees to supply all information reasonably requested by any such
     Holder, attorney or accountant at reasonable times in connection with such
     Registration Statement or any post-effective amendment thereto subsequent
     to the filing thereof and prior to its effectiveness;

          (viii) with respect to a Shelf Registration Statement, if requested by
     any selling Holders in connection with such sale, promptly include in any
     Registration Statement or Prospectus, pursuant to a supplement or
     post-effective amendment if necessary, such information as such Holders may
     reasonably request to have included therein, including, without limitation,
     information relating to the "Plan of Distribution" of the Transfer
     Restricted Securities; and make all required filings of such Prospectus
     supplement or


                                       11

     post-effective amendment as soon as reasonably practicable after the
     Company is notified of the matters to be included in such Prospectus
     supplement or post-effective amendment;

          (ix) with respect to a Shelf Registration Statement, furnish to each
     selling Holder in connection with such exchange or sale, without charge, at
     least one copy of the Registration Statement, as first filed with the
     Commission, and of each amendment thereto, including all documents
     incorporated by reference therein and all exhibits (including exhibits
     incorporated therein by reference);

          (x) with respect to a Shelf Registration Statement, deliver to each
     Holder, without charge, as many copies of the Prospectus (including each
     preliminary prospectus) and any amendment or supplement thereto as such
     Holder reasonably may request; the Company and the Guarantors hereby
     consent to the use (in accordance with law, rules, regulations and orders)
     of the Prospectus and any amendment or supplement thereto by each selling
     Holder in connection with the public offering and the sale of the Transfer
     Restricted Securities covered by the Prospectus or any amendment or
     supplement thereto;

          (xi) upon the request of any Holders who collectively hold an
     aggregate principal amount of Notes in excess of 20% of the outstanding
     Transfer Restricted Securities (the "REQUESTING HOLDERS") enter into an
     underwriting agreement and make such representations and warranties and
     take all such other actions in connection therewith as may be reasonable
     and customary in underwritten offerings in order to expedite or facilitate
     the disposition of the Transfer Restricted Securities pursuant to any
     applicable Registration Statement contemplated by this Agreement as may be
     reasonably requested by any Requesting Holder in connection with any sale
     or resale pursuant to any applicable Registration Statement. In such
     connection, the Company and the Guarantors shall:

               (A) upon request of any Requesting Holder furnish (or in the case
          of paragraphs (2) and (3) below, use their best efforts to cause to be
          furnished) to each Requesting Holder, upon Consummation of the
          Exchange Offer or upon the effectiveness of the Shelf Registration
          Statement, as the case may be:

                    (1) a certificate, dated such date, signed on behalf of the
               Company and each Guarantor by (x) the President or any Vice
               President and (y) a principal financial or accounting officer of
               the Company, and such Guarantor, confirming, as of the date
               thereof, the matters set forth in Section 5(e) of the Purchase
               Agreement and such other similar matters as such Holders may
               reasonably request;

                    (2) an opinion, dated the date of Consummation of the
               Exchange Offer or the date of effectiveness of the Shelf
               Registration Statement, as the case may be, of counsel for the
               Company, covering matters similar to those set forth in
               paragraphs (b), (c) and (d) of Section 5 of the Purchase
               Agreement and Exhibits A, B and C thereto, subject to the same
               conditions with respect thereto and to the delivery thereof and
               such other matter as such Requesting Holder may reasonably
               request which are


                                       12

               customarily covered in Company counsel opinions to underwriters
               in underwritten public offerings, and in any event including a
               statement to the effect that such counsel has participated in
               conferences with officers and other representatives of the
               Company and the Guarantors, representatives of the independent
               public accountants for the Company and the Guarantors and have
               considered the matters required to be stated therein and the
               statements contained therein, although such counsel has not
               independently verified the accuracy, completeness or fairness of
               such statements; and that such counsel advises that, on the basis
               of the foregoing (relying as to materiality to the extent such
               counsel deems appropriate upon the statements of officers and
               other representatives of the Company and the Guarantors) and
               without independent check or verification), no facts came to such
               counsel's attention that caused such counsel to believe that the
               applicable Registration Statement, at the time such Registration
               Statement or any post-effective amendment thereto became
               effective and, in the case of the Exchange Offer Registration
               Statement, as of the date of Consummation of the Exchange Offer,
               contained an untrue statement of a material fact or omitted to
               state a material fact required to be stated therein or necessary
               to make the statements therein not misleading, or that the
               Prospectus contained in such Registration Statement as of its
               date and, in the case of the opinion dated the date of
               Consummation of the Exchange Offer, as of the date of
               Consummation, contained an untrue statement of a material fact or
               omitted to state a material fact necessary in order to make the
               statements therein, in the light of the circumstances under which
               they were made, not misleading. Without limiting the foregoing,
               such counsel may state further that such counsel assumes no
               responsibility for, and has not independently verified, the
               accuracy, completeness or fairness of the financial statements,
               notes and schedules and other financial data and statistical data
               included in any Registration Statement contemplated by this
               Agreement or the related Prospectus; and

                    (3) customary comfort letter or letters, as the case may be,
               as of the date of effectiveness of the Shelf Registration
               Statement from the Company's independent accountants and from any
               other accountants which have audited or reviewed the financial
               statements of any other entity or entities included or
               incorporated by reference in the Registration Statement, in each
               case, in the customary form and covering matters of the type
               customarily covered in comfort letters to underwriters in
               connection with underwritten public offerings, delivered
               according to Statement of Auditing Standards Nos. 71, 72, 76 and
               100 (or any successor bulletins), with respect to the audited and
               unaudited financial statements and other financial information
               included or incorporated by reference in the Registration
               Statement; and

               (B) deliver such other documents and certificates as may be
          reasonably requested by the selling Holders to evidence compliance
          with the matters covered


                                       13

          in clause (A) above and with any customary conditions contained in the
          any agreement entered into by the Company and the Guarantors pursuant
          to this clause (xi);

          (xii) prior to any public offering of Transfer Restricted Securities,
     cooperate with the selling Holders and their counsel in connection with the
     registration and qualification of the Transfer Restricted Securities under
     the securities or Blue Sky laws of such jurisdictions as the selling
     Holders may reasonably request and do any and all other acts or things
     necessary or advisable to enable the disposition in such jurisdictions of
     the Transfer Restricted Securities covered by the applicable Registration
     Statement; provided, however, that neither the Company nor any Guarantor
     shall be required to register or qualify as a foreign corporation where it
     is not now so qualified or to take any action that would subject it to the
     service of process in suits or to taxation, other than as to matters and
     transactions relating to the Registration Statement, in any jurisdiction
     where it is not now so subject;

          (xiii) in connection with any sale of Transfer Restricted Securities
     that will result in such securities no longer being Transfer Restricted
     Securities, cooperate with the Holders to facilitate the timely preparation
     and delivery of certificates representing Transfer Restricted Securities to
     be sold and not bearing any restrictive legends; and to register such
     Transfer Restricted Securities in such denominations and such names as the
     selling Holders may request at least two Business Days prior to any sale of
     such Transfer Restricted Securities;

          (xiv) use their respective best efforts to cause the disposition of
     the Transfer Restricted Securities covered by the Registration Statement to
     be registered with or approved by such other governmental agencies or
     authorities as may be necessary to enable the seller or sellers thereof to
     consummate the disposition of such Transfer Restricted Securities, subject
     to the proviso contained in clause (xii) above;

          (xv) provide a CUSIP number for all Transfer Restricted Securities not
     later than the effective date of a Registration Statement covering such
     Transfer Restricted Securities and provide the Trustee under the Indenture
     with certificates for the Transfer Restricted Securities which are in a
     form eligible for deposit with The Depository Trust Company;

          (xvi) otherwise use their respective reasonable best efforts to comply
     with all applicable rules and regulations of the Commission, and make
     generally available to its security holders with regard to any applicable
     Registration Statement, as soon as practicable, a consolidated earnings
     statement meeting the requirements of Rule 158 (which need not be audited)
     covering a twelve-month period beginning after the effective date of the
     Registration Statement (as such term is defined in paragraph (c) of Rule
     158 under the Act);

          (xvii) cause the Indenture to be qualified under the TIA not later
     than the effective date of the first Registration Statement required by
     this Agreement and, in connection therewith, cooperate with the Trustee to
     effect such changes to the Indenture


                                       14

     as may be required for such Indenture to be so qualified in accordance with
     the terms of the TIA; and execute and use its best efforts to cause the
     Trustee to execute, all documents that may be required to effect such
     changes and all other forms and documents required to be filed with the
     Commission to enable such Indenture to be so qualified in a timely manner;

          (xviii) provide promptly to each Holder, upon request, each document
     filed with the Commission pursuant to the requirements of Section 13 or
     Section 15(d) of the Exchange Act if not obtainable from the Commission;
     and

          (xix) the Company and the Guarantors will be deemed not to have used
     their reasonable best efforts to cause the Exchange Offer Registration
     Statement or the Shelf Registration Statement, as the case may be, to
     become, or to remain, effective during the requisite period if the Company
     or any of the Guarantors voluntarily and knowingly takes any action that
     would, or omits to take any action which omission would, result in any such
     Registration Statement not being declared effective or in the Holders of
     Registrable Securities covered thereby not being able to exchange or offer
     and sell such Registrable Securities during that period as and to the
     extent contemplated hereby, unless (i) such action is required by
     applicable law or (ii) such action is taken by the Company and the
     Guarantors in good faith and for valid business reasons (but not including
     avoidance of the Company's or the Guarantors', as applicable, obligations
     hereunder), including a material corporate transaction, so long as the
     Company and the Guarantors promptly comply with the requirements of Section
     6(c)(iv) thereof, if applicable.

          (d) Restrictions on Selling Holders. With respect to a Shelf
Registration Statement, each selling Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of the notice referred to in Section
6(c)(iii)(C) or any notice from the Company of the existence of any fact or the
happening of any event of the kind described in Section 6(c)(iii)(D) hereof, or
upon receipt of a notice from the Company pending the announcement of a material
corporate transaction that the Shelf Registration Statement is unusable (in each
case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until (i) such selling Holder has received copies of the supplemented
or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such
selling Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Holder's possession which have been replaced
by the Company with more recently dated Prospectuses or (ii) deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice. The time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the date of delivery of the
Recommencement Date.


                                       15

          Section 7. Registration Expenses. (a) All expenses incident to the
Company's and the Guarantors' performance of or compliance with this Agreement
will be borne, jointly and severally, by the Company and the Guarantors,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors and, subject to
Section 7(b) below, one counsel for the Holders of Transfer Restricted
Securities chosen by the Holders of a majority of the outstanding Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the Exchange Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).

          The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

          (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Purchasers and the Holders of Transfer Restricted Securities
who are tendering Notes into the Exchange Offer and/or selling or reselling
Notes or Exchange Notes pursuant to the "Plan of Distribution" contained in the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than one
counsel, who shall be Shearman & Sterling LLP unless another firm shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.

          Section 8. Indemnification. (a) The Company and the Guarantors agree,
jointly and severally, to indemnify and hold harmless each Holder, its
directors, officers, any underwriter in any underwritten public offering of
Transfer Restricted Securities pursuant to a Shelf Registration Statement and
each Person, if any, who controls such Holder or underwriter (within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act), from and against
(i) any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment or
supplement thereto) pursuant to which Transfer Restricted Securities are
registered under the Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not


                                       16

misleading; (ii) any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, provided that (subject to Section 8(d) below) any such
settlement is effected with the written consent of the Company and the
Guarantors; and (iii) any and all expenses whatsoever, as incurred (including
the fees and disbursements of counsel chosen by any indemnified party, subject
to the limitations in Section 8(c) below), reasonably incurred in investigating,
preparing or defending against any litigation or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above; provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company and the Guarantors by any Purchaser, such
Holder or such underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto);
provided, further, that the Company will not be liable to any Purchaser, Holder
(in its capacity as Holder) or underwriter (or any person who controls such
party within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act) with respect to any such untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary Prospectus to the extent
that the Company shall sustain the burden of proving that any such loss,
liability, claim, damage or expense resulted from the fact that such Purchaser,
Holder (in its capacity as Holder) or underwriter, as the case may be, sold
Transfer Restricted Securities to a Person to whom such Purchaser, Holder (in
its capacity as Holder) or underwriter, as the case may be, failed to send or
give, at or prior to the written confirmation of the sale of such Transfer
Restricted Securities a copy of the final Prospectus (as amended or
supplemented) if the Company has previously furnished copies thereof
(sufficiently in advance of the closing of such sale to allow for distribution
of the final Prospectus in a timely manner) to such Purchaser, Holder (in its
capacity as Holder) or underwriter, as the case may be, and the loss, liability,
claim, damage or expense of such Purchaser, Holder (in its capacity as Holder)
or underwriter, as the case may be, resulted solely from an untrue statement or
omission or alleged untrue statement or omission of a material fact contained in
or omitted from such preliminary Prospectus which was corrected in the final
Prospectus.

          (b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the Guarantors,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, or the Guarantors to the same extent as the foregoing
indemnity from the Company and the Guarantors set forth in section (a) above,
but only with reference to information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any Person
who controls such Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors,
officers or any Person who controls such Holder has


                                       17

otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

          (c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party within a reasonable period of time after notification by the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed
promptly following receipt of invoice therefor as they are incurred. Such firm
shall be designated in writing by a majority of the Holders, in the case of the
parties indemnified pursuant to Section 8(a), and by the Company and Guarantors,
in the case of parties indemnified pursuant to Section 8(b). The indemnifying
party under this Section 8 shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final non-appealable judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by Section 8(c) hereof, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the final terms of such proposed settlement as soon as practicable prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have


                                       18

been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.

          (d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor, on the one hand, or by
the Holder, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in the third sentence of Section
8(c), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.

          The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are


                                       19

several in proportion to the respective principal amount of Transfer Restricted
Securities held by each Holder hereunder and not joint.

          Section 9. Rule 144A and Rule 144. The Company and each Guarantor
agree with each Holder, for so long as any Transfer Restricted Securities remain
outstanding and during any period in which the Company (i) is not subject to
Section 13 or 15(d) of the Exchange Act, to make available, upon written request
of any Holder, to such Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

          Section 10. Miscellaneous. (a) Remedies. The Company and the
Guarantors acknowledge and agree that any failure by the Company and/or the
Guarantors to comply with their respective obligations under Sections 3 and 4
hereof may result in material irreparable injury to the Purchasers or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, any Purchaser or any Holder may obtain such relief as may
be required to specifically enforce the Company's and the Guarantors'
obligations under Sections 3 and 4 hereof. The Company and the Guarantors
further agree to waive the defense in any action for specific performance that a
remedy at law would be adequate.

          (b) No Inconsistent Agreements. None of the Company or the Guarantors
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
None of the Company or the Guarantors has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's or
the Guarantors' securities under any agreement in effect on the date hereof.

          (c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.


                                       20

          (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Purchasers, on the other hand, and shall
have the right to enforce such agreements directly to the extent they may deem
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.

          (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), facsimile, or air courier
guaranteeing overnight delivery:

          (1) if to a Holder, at the address set forth on the records of the
     Registrar under the Indenture, with a copy to the Registrar under the
     Indenture; and

          (2) (i) If to the Company or any Guarantor:

                  InSight Health Services Corp.
                  26250 Enterprise Court
                  Suite 100
                  Lake Forest, CA 92630
                  Facsimile: 949-462-3703
                  Attention: General Counsel

                  with copies to:

                  J.W. Childs Associates, L.P.
                  111 Huntington Avenue
                  Suite 2900
                  Boston, MA 02199
                  Facsimile: 617-753-1101
                  Attention: Edward D. Yun

                  and to:

                  The Halifax Group, L.L.C.
                  1133 Connecticut Avenue N.W.
                  Suite 700
                  Washington, D.C. 20036
                  Facsimile: 202-296-7133
                  Attention: David W. Dupree

                  and to:

                  Kaye Scholer LLP
                  425 Park Avenue
                  New York, NY 10022
                  Facsimile: 212-836-8689
                  Attention: Stephen C. Koval, Esq.


                                       21

          All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if by facsimile; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

          Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

          (f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.

          (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

          (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

          (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.


                                       22

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

                                        INSIGHT HEALTH SERVICES HOLDINGS CORP.


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        INSIGHT HEALTH SERVICES CORP.


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        WILKES-BARRE IMAGING, L.L.C.

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


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary

                                        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/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        PARKWAY IMAGING CENTER, LLC


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Manager

                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        MAXUM HEALTH SERVICES CORP.
                                        DIAGNOSTIC SOLUTIONS 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/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary

                                        MAXUM HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                        Name: Mitch C. Hill
                                        Title: Executive Vice President and
                                               Chief Financial Officer


                                        By: /s/ Marilyn U. MacNiven-Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        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/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        PHOENIX REGIONAL PET CENTER-THUNDERBIRD,
                                        LLC

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


                                        By: /s/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary


                                        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/ Marilyn U. MacNiven Young
                                            ------------------------------------
                                        Name: Marilyn U. MacNiven-Young
                                        Title: Executive Vice President,
                                               General Counsel and Secretary

     This foregoing Agreement is hereby confirmed and accepted by the Purchasers
as of the date first written above.

BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS CORP.

By: Banc of America Securities LLC


By: /s/ R. Sean Snipes
    ---------------------------------
Name: R. Sean Snipes
Title: Managing Director

                                                                      SCHEDULE A

                              SUBSIDIARY GUARANTORS



Subsidiary Guarantor                                  Jurisdiction of Organization
- --------------------                                  ----------------------------
                                                   
InSight Health Corp.                                          Delaware

Signal Medical Services, Inc.                                 Delaware

Open MRI, Inc.                                                Delaware

Maxum Health Corp.                                            Delaware

Radiosurgery Centers, Inc.                                    Delaware

Maxum Health Services Corp.                                   Delaware

Maxum Health Services of North Texas, Inc.                    Texas

Maxum Health Services of Dallas, Inc.                         Texas

NDDC, Inc.                                                    Texas

Diagnostic Solutions Corp.                                    Delaware

InSight Imaging Services Corp.                                Delaware

Valencia MRI, LLC                                             California

San Fernando Valley Regional PET Center, LLC                  California

Parkway Imaging Center, LLC                                   Nevada

Wilkes-Barre Imaging, LLC                                     Pennsylvania

Comprehensive Medical Imaging, Inc.                           Delaware

Comprehensive Medical Imaging Centers, Inc.                   Delaware

Comprehensive Open MRI - Garland, Inc.                        Delaware

Comprehensive Medical Imaging - Biltmore, Inc.                Delaware

Comprehensive Medical Imaging - San Francisco, Inc.           Delaware

Comprehensive Medical Imaging - Fremont, Inc.                 Delaware

TME Arizona, Inc.                                             Texas


                                                           
Comprehensive Open MRI-East Mesa, Inc.                        Delaware

IMI of Arlington, Inc.                                        Delaware

Comprehensive Medical Imaging - Fairfax, Inc.                 Delaware

IMI of Kansas City, Inc.                                      Delaware

Comprehensive Medical Imaging - Bakersfield, Inc.             Delaware

Phoenix Regional PET Center - Thunderbird LLC                 Arizona

Woodbridge MRI                                                Texas

Jefferson MRI - Bala                                          Texas

Jefferson MRI                                                 Texas

Mountain View MRI                                             Texas

Los Gatos Imaging Center                                      Texas

Mesa MRI                                                      Texas

Syncor Diagnostics Bakersfield, LLC                           California

Syncor Diagnostics Sacramento, LLC                            California

Comprehensive Open MRI-Carmichael/Folsom, LLC                 California

MRI Associates, L.P.                                          Indiana

Orange County Regional PET Center - Irvine, LLC               California

EX-5.1

                                                                     Exhibit 5.1

KAYE SCHOLER LLP

                                                       425 Park Avenue New York,
                                                       New York 10022-3598
                                                       212 836-8000
                                                       Fax 212 836-8689
                                                       www.kayescholer.com

                                October 28, 2005

InSight Health Services Corp.
26250 Enterprise Court
Suite 100
Lake Forest, California 92630

Ladies and Gentlemen:

      We are acting as counsel to InSight Health Services Corp., a Delaware
corporation (the "Company") and the parties identified on Schedule A hereto (the
"Guarantors") in connection with the registration under the Securities Act of
1933, as amended (the "Securities Act"), of up to $300 million of the Company's
Senior Secured Floating Rate Notes due 2011 (the "Exchange Notes") to be offered
in exchange for its outstanding Senior Secured Floating Rate Notes due 2011 (the
"Original Notes") that were issued pursuant to the Indenture, dated as of
September 22, 2005 (the "Indenture"), among the Company, the Guarantors and U.S.
Bank National Association, as trustee (the "Trustee"). This opinion is being
delivered to you for filing as an exhibit to the Registration Statement on Form
S-4 (the "Registration Statement") being filed by the Company and the Guarantors
with the Securities and Exchange Commission (the "Commission") on the date
hereof.

      In connection herewith, we have examined the (i) Registration Statement,
(ii) Indenture, (iii) Original Notes, (iv) Exchange Notes (and the related
Guarantees of the Guarantors (the "Guarantees")) (the Indenture, the Exchange
Notes and the Guarantees are collectively referred to herein as the "Documents")
and (v) such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.

      On the basis of the foregoing and subject to the qualifications and
assumptions set forth herein, we are of the opinion that:

      1. When (A) the Registration Statement has been declared effective, (B)
the Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "TIA"), and (C) the Exchange Notes have been duly executed by the
Company and authenticated by the Trustee in accordance with the terms of the
Indenture and duly issued and delivered against exchange of the Original Notes
as described in the Registration Statement, the Exchange Notes will constitute
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization and similar laws affecting creditors'
rights generally and general principles of equity (regardless of whether such
principles are considered in a proceeding in equity or at law).

KAYE SCHOLER LLP

                                        2

      2. When (A) the Registration Statement has been declared effective, (B)
the Indenture has been duly qualified under the TIA, and (C) the Exchange Notes
have been duly executed by the Company and authenticated by the Trustee in
accordance with the terms of the Indenture and duly issued and delivered against
exchange of the Original Notes as described in the Registration Statement, each
Guarantee of the Exchange Notes by a Guarantor will constitute a valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization and similar laws affecting creditors'
rights generally and general principles of equity (regardless of whether such
principles are considered in a proceeding in equity or at law).

      3. Assuming that the Indenture has been duly authorized, executed and
delivered by the Trustee, the Indenture constitutes a valid and binding
obligation of the Company and the Guarantors, enforceable against the Company
and the Guarantors in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization and similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether such principles are considered in a proceeding in equity
or at law).

      The foregoing opinions are limited to the laws of the State of New York
and we do not express any opinion on the law of any other jurisdiction.

      We consent to the filing of this opinion with the Commission as an exhibit
to the Registration Statement and to the use of our name under the caption
"Legal Matters" in the prospectus included therein. Our opinion is rendered
solely for your information in connection with the foregoing, and may not be
relied upon by any other person or for any other purpose without our prior
written consent. In giving this opinion, we do not thereby admit that we are
within the category of persons whose consent is required by the Securities Act
or the rules and regulations of the Commission.

                                          Very truly yours,

                                          /s/ Kaye Scholer LLP
                                          --------------------

New York  Chicago  Los Angeles  Washington, D.C.  West Palm Beach  Frankfurt
                         Hong Kong   London   Shanghai

                                                                      SCHEDULE A

InSight Health Services Holdings Corp.
InSight Health Corp.
Signal Medical Services, Inc.
Open MRI, Inc.
Maxum Health Corp.
Radiosurgery Centers, Inc.
Maxum Health Services Corp.
MRI Associates, L.P.
Maxum Health Services of North Texas, Inc.
Maxum Health Services of Dallas, Inc.
NDDC, Inc.
Diagnostic Solutions Corp.
Wilkes-Barre Imaging, L.L.C.
Orange County Regional PET Center -- Irvine, LLC
San Fernando Valley Regional PET Center, LLC
Valencia MRI, LLC
Parkway Imaging Center, LLC
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.

Comprehensive OPEN MRI -- Carmichael/Folsom, LLC
Syncor Diagnostics Sacramento, LLC
Syncor Diagnostics Bakersfield, LLC
Phoenix Regional PET Center -- Thunderbird, LLC
Mesa MRI
Mountain View MRI
Los Gatos Imaging Center
Woodbridge MRI
Jefferson MRI -- Bala
Jefferson MRI

New York  Chicago  Los Angeles  Washington, D.C.  West Palm Beach  Frankfurt
                         Hong Kong   London   Shanghai

EX-10.1

                                                                    Exhibit 10.1

                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made on September
22, 2005, by and among INSIGHT HEALTH SERVICES CORP. (individually and, in its
capacity as the representative of the other Borrowers pursuant to SECTION 4.4,
"INSIGHT HEALTH"), a Delaware corporation, 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 various financial
institutions listed on the signature pages hereof (together with their
respective successors and permitted assigns, the "Lenders"); and BANK OF
AMERICA, N.A., a national bank, in its capacity as collateral and administrative
agent for the Lenders pursuant to Section 13 (together with its successors in
such capacity "Administrative Agent"). Capitalized terms used in this Agreement
have the meanings assigned to them in SECTION 1.

                                    RECITALS:

     InSight Health, as the Borrower, Subsidiary Guarantors (as defined in the
below defined Existing Loan Agreement), Parent, the financial institutions party
thereto from time to time, Bank of America, N.A., as Administrative Agent,
Wachovia Bank, National Association, as Syndication Agent, and The CIT
Group/Business Credit, Inc., as Documentation Agent, entered into that certain
Credit Agreement dated as of October 17, 2001 (as at any time amended, modified,
supplemented or restated, the "Existing Credit Agreement").

     InSight Health, as the Borrower, Parent, Subsidiary Guarantors, and Bank of
America, N.A., as Administrative Agent, also entered into that certain Security
Agreement dated as of October 17, 2001 (as at any time amended, modified,
supplemented or restated, the "Existing Security Agreement").

     Borrowers have requested that the Existing Credit Agreement and the
Existing Security Agreement be amended and restated to make available an amended
and restated credit facility in accordance with the terms and conditions
contained herein.

     Each Borrower has requested that Lenders make available a revolving credit
and letter of credit facility to Borrowers, which shall be used by Borrowers to
finance their mutual and collective enterprise of the provision of diagnostic
imaging services through an integrated network of fixed-site centers and mobile
facilities. In order to utilize the financial powers of each Borrower in the
most efficient and economical manner, and in order to facilitate the financing
of each Borrower's needs, Lenders will, at the request of any Borrower, make
loans to all Borrowers under the revolving credit facility on a combined basis
and in accordance with the provisions hereinafter set forth. Borrowers' business
is a mutual and collective enterprise and Borrowers believe that the
consolidation of all revolving credit loans under this Agreement will enhance
the aggregate borrowing powers of each Borrower and ease the administration of
their revolving credit loan relationship with Lenders, all to the mutual
advantage of Borrowers. Lenders' willingness to extend credit to Borrowers and
to administer each Borrower's collateral security therefor, on a combined basis
as more fully set forth in this Agreement, is done solely as an accommodation to
Borrowers and at Borrowers' request in furtherance of Borrowers' mutual and
collective enterprise.

     Each Borrower has agreed to be jointly and severally liable for loans and
all outstanding other obligations under this Agreement and to guarantee the
obligations of each of the other Borrowers under this Agreement and each of the
other Loan Documents.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and to induce the Administrative Agent and the
Lenders to amend and restate the Existing Credit Agreement and the Existing
Security Agreement and to extend credit to Borrowers hereunder, for Ten Dollars
($10.00) and other good and valuable consideration, the parties hereto,
intending to be bound hereby, agree as follows:

SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION

     1.1. DEFINITIONS.

          As used in this Agreement, the following terms shall have the meanings
ascribed to them (terms used in the singular to have the same meaning when used
in the plural, and vice versa):

          Account - shall have the meaning given to the term "account" in the
     UCC and shall include any and all rights of a Borrower to payment for goods
     sold or leased or for services rendered that are not evidenced by an
     Instrument or Chattel Paper, whether or not they have been earned by
     performance. For the avoidance of doubt, when used in reference to a
     Borrower the term shall include each Health-Care-Insurance Receivable of
     such Borrower.

          Account Debtor - a Person who is or becomes obligated under or on
     account of an Account, Chattel Paper or General Intangible.

          Accounts Formula Amount - on any date of determination thereof, (i) if
     there are no Revolver Loans outstanding on such date and the LC Obligations
     that have not been Cash Collateralized do not exceed $2,000,000 on such
     date, an amount equal to the sum of 85% of the net amount of Eligible
     Retail Receivables on such date plus 85% of the net amount of Eligible
     Wholesale Receivables on such date or (ii) if Revolver Loans are
     outstanding on such date or the LC Obligations that have not been Cash
     Collateralized exceed $2,000,000 on such date, an amount equal to the
     lesser of (a) 85% of the net amount of Eligible Retail Receivables on such
     date plus 85% of the net amount of Eligible Wholesale Receivables on such
     date or (b) the Cash Collection Limit as of such date. As used herein, the
     phrase "net amount of Eligible Wholesale Receivables" or "net amount of
     Eligible Retail Receivables" shall mean the face amount of such Accounts on
     any date less any and all returns, rebates, discounts (which may, at
     Administrative Agent's option, be calculated on shortest terms), credits,
     allowances or Taxes (including sales, excise or other taxes) at any time
     issued, owing, claimed by Account Debtors, granted, outstanding or payable
     in connection with, or any interest accrued on the amount of, such Accounts
     at such date.

          Acquisition Agreement - with respect to each Acquisition Transaction,
     each stock purchase agreement or asset purchase agreement, as the context
     may require, to be executed and delivered by and among a Borrower or an
     Acquisition Subsidiary, as purchaser, and each owner, as seller, of the
     Equity Interests or assets to be sold to such Borrower or Acquisition
     Subsidiary, together with any and all permitted amendments, modifications
     and supplements thereto, restatements thereof and substitutes therefor.

          Acquisition Consideration - shall mean the consideration given and to
     be given by a Borrower or any Acquisition Subsidiary for or in an
     Acquisition Transaction (other than Equity


                                       -2-

     Interests of Parent and contributions made by any Equity Investor to the
     capital of Parent that are contributed by Parent to InSight Health),
     including the fair market value of any Cash, Property, Equity Interests
     (other than Equity Interests of Parent and contributions made by any Equity
     Investor to the capital of Parent that are contributed by Parent to InSight
     Health), and the amount of any Acquisition Funded Debt assumed or incurred
     by such Borrower or Acquisition Subsidiary in connection with such
     Acquisition Transaction.

          Acquisition Documents - individually and collectively, as the context
     may require, each Acquisition Agreement and any and all other agreements,
     documents or instruments at any time executed and delivered by a Borrower
     or an Acquisition Subsidiary, in connection with an Acquisition
     Transaction.

          Acquisition Funded Debt - with respect to any Acquisition Target, the
     sum of (a) the aggregate principal amount of Debt for borrowed money which
     would, in accordance with GAAP, be classified as long-term Debt, together
     with the current maturities thereof and the face amount of all outstanding
     letters of credit plus (b) all Debt outstanding under any revolving credit,
     line of credit or renewals thereof, notwithstanding that any such Debt is
     created within one year of the expiration of such agreement plus (c) all
     Capitalized Lease Obligations, in each case that remain outstanding
     following consummation of an Acquisition Transaction.

          Acquisition Subsidiary - a Subsidiary formed by a Borrower after the
     Restatement Effective Date to purchase all of the issued and outstanding
     Equity Interests, or all or substantially all of the assets of an
     Acquisition Target or a division or separate line of business of an
     Acquisition Target, subject to the satisfaction of each of the following
     conditions : (i) no Default or Event of Default exists at the time or would
     result therefrom; (ii) Borrowers deliver to Administrative Agent any and
     all documents, agreements, financial statements, projections and
     instruments requested by Administrative Agent, in form and substance
     reasonably satisfactory to Administrative Agent in all respects, in
     connection with such formation, including (a) such documents and
     instruments as may be necessary to grant or confirm to Administrative
     Agent, for the benefit of Secured Parties, a first priority perfected Lien
     (subject to Permitted Liens) on all of the assets of the Subsidiary,
     including the Equity Interests in such Subsidiary, and (b) a Joinder
     Agreement executed by such Subsidiary, together with other collateral
     documents and opinions of counsel as may be reasonably requested by
     Administrative Agent, each in form and substance reasonably satisfactory to
     Administrative Agent; and (iii) Borrowers shall give Administrative Agent
     at least 5 days prior written notice before forming such Subsidiary and
     provide copies of all organizational documents of such Subsidiary to
     Administrative Agent.

          Acquisition Target - a Person whose Equity Interests or assets are to
     be purchased pursuant to an Acquisition Transaction.

          Acquisition Transaction - a transaction pursuant to an Acquisition
     Agreement for the purchase of all of the issued and outstanding Equity
     Interests, or all or substantially all of the assets, of an Acquisition
     Target, or for the purchase of all or substantially all of the assets of a
     division or separate line of business of an Acquisition Target.

          Adjusted EBITDA - for any fiscal period of Borrowers and their
     Subsidiaries, the sum for such period of (i) Adjusted Net Earnings, plus
     (ii) any provision for taxes based on income, to the extent deducted in the
     calculation of Adjusted Net Earnings, plus (iii) interest expense, to the
     extent deducted in the calculation of Adjusted Net Earnings, plus (iv)
     depreciation and amortization, to the extent deducted in the calculation of
     Adjusted Net Earnings, plus (v) income from minority interests, plus (vi)
     transaction costs and expenses relating to the effectiveness of


                                       -3-

     this Agreement and the issuance and sale of the Senior Notes and, without
     duplication of clause (iv) of this definition of Adjusted EBITDA,
     unamortized loan costs with respect to the Senior Subordinated Notes and
     the Existing Credit Agreement, plus (vii) management fees and expenses paid
     to the Sponsors or any of their respective Affiliates in accordance with
     SECTION 10.2.4, plus (viii) any extraordinary, unusual or non-recurring
     expenses or losses not requiring the expenditure of cash in the current or
     any future period, plus (ix) purchase accounting adjustments not requiring
     the expenditure of cash in the current or any future period required or
     permitted by GAAP in connection with any Permitted Acquisition

          Adjusted LIBOR Rate - for any Interest Period, with respect to LIBOR
     Loans, the rate of interest per annum determined pursuant to the following
     formula:

                                     Offshore Base Rate
               Adjusted LIBOR Rate = ------------------
                                     1.00 - Eurodollar Reserve Percentage

               Where,

               "Offshore Base Rate" means the rate per annum appearing on
          Telerate Page 3750 (or any successor page) as the London interbank
          offered rate for deposits in Dollars at approximately 11:00 a.m.
          (London time) 2 Business Days prior to the first day of such Interest
          Period for a term comparable to such Interest Period. If for any
          reason such rate is not available, the Offshore Base Rate shall be,
          for any Interest Period, the rate per annum appearing on Reuters
          Screen LIBO Page as the London interbank offered rate for deposits in
          Dollars at approximately 11:00 a.m. (London time) 2 Business Days
          prior to the first day of such Interest Period for a term comparable
          to such Interest Period; provided, however, if more than one rate is
          specified on Reuters Screen LIBO Page, the applicable rate shall be
          the arithmetic mean of all such rates. If for any reason none of the
          foregoing rates is available, the Offshore Base Rate shall be, for any
          Interest Period, the rate per annum determined by Administrative Agent
          as the rate of interest at which Dollar deposits in the approximate
          amount of the applicable LIBOR Loan would be offered by BofA's London
          Branch to major banks in the offshore Dollar market at their request
          at or about 11:00 a.m. (London time) 2 Business Days prior to the
          first day of such Interest Period for a term comparable to such
          Interest Period.

               "Eurodollar Reserve Percentage" means for any day during any
          Interest Period, the reserve percentage (expressed as a decimal,
          rounded upward to the next 1/100th of 1%) in effect on such day
          applicable to member banks under regulations issued from time to time
          by the Board of Governors for determining the maximum reserve
          requirement (including any emergency, supplemental or other marginal
          reserve requirement) with respect to Eurocurrency funding (currently
          referred to as "Eurocurrency liabilities"). The Offshore Rate for each
          outstanding LIBOR Loan shall be adjusted automatically as of the
          effective date of any change in the Eurodollar Reserve Percentage.

          Adjusted Net Earnings - with respect to any fiscal period, the net
     earnings (or loss) for such fiscal period of Borrowers and their
     Subsidiaries, all as reflected on the financial statement of Borrowers and
     their Subsidiaries supplied to Administrative Agent and Lenders pursuant to
     SECTION 10.1.3, but excluding: (i) any gain or loss arising from the sale
     of capital assets; (ii) any gain arising from any write-up of assets; (iii)
     net earnings of any entity (other than a Subsidiary of a Borrower) in which
     a Borrower has an ownership interest unless such net earnings have actually
     been received by a Borrower in the form of cash Distributions; (iv) any
     portion of the net earnings of any Subsidiary which for any reason is
     unavailable for payment of Distributions to a


                                       -4-

     Borrower; (v) the earnings of any Person to which any assets of a Borrower
     shall have been sold, transferred or disposed of, or into which a Borrower
     shall have merged, or been a party to any consolidation or other form of
     reorganization, prior to the date of such transaction; and (vi) any gain or
     loss arising from extraordinary items, all as determined in accordance with
     GAAP on a Consolidated basis.

          Administrative Agent Indemnitees - Administrative Agent, its
     Affiliates and all of their present and future officers, directors,
     employees, agents and attorneys.

          Administrative Agent Professionals - attorneys, accountants,
     appraisers, business valuation experts, environmental engineers or
     consultants, turnaround consultants and other professionals or experts
     retained by Administrative Agent.

          Affiliate - a Person (i) who directly or indirectly through one or
     more intermediaries controls, or is controlled by, or is under common
     control with, another Person; (ii) who beneficially owns or holds 10% or
     more of any class of the Equity Interests of another Person; or (iii) 10%
     or more of the Equity Interests with power to vote of which is beneficially
     owned or held by another Person or a Subsidiary of another Person. For
     purposes hereof, "control" means the possession, directly or indirectly, of
     the power to direct or cause the direction of the management and policies
     of a Person, whether through the ownership of any Equity Interest, by
     contract or otherwise.

          Agreement - this Loan and Security Agreement and all Exhibits and
     Schedules thereto.

          Anti-Kickback Statutes - Section 1128B(b) of the Social Security Act
     and any other similar law, rule or regulation adopted by any Governmental
     Authority.

          Anti-Terrorism Laws - any laws relating to terrorism or money
     laundering, including Executive Order No. 13224 and the USA Patriot Act.

          Applicable Law - all laws, rules and regulations applicable to the
     Person, conduct, transaction, covenant, Loan Document or Material Contract
     in question, including all applicable common law and equitable principles;
     all provisions of applicable state, federal and foreign constitutions,
     statutes, rules, regulations and orders of Governmental Authorities; and
     all orders, judgments and decrees of all courts and arbitrators.

          Applicable Margin - a percentage equal to 0% with respect to Revolver
     Loans that are Base Rate Loans, 2.50% with respect to Revolver Loans that
     are LIBOR Loans and .50% with respect to the Unused Line Fee.

          Approved Credit Enhancement - in Administrative Agent's reasonable
     discretion and at its option, either (i) an irrevocable letter of credit
     that is in form and substance reasonably acceptable to Administrative
     Agent, issued or confirmed by a bank reasonably acceptable to
     Administrative Agent, and payable in Dollars at a place of payment within
     the United States that is reasonably acceptable to Administrative Agent,
     which letter of credit is assigned to Administrative Agent for the benefit
     of Secured Parties (with such assignment acknowledged by the issuing or
     confirming bank) or, if so requested by Administrative Agent, duly
     transferred to Administrative Agent for the benefit of Secured Parties
     (together with sufficient documentation to permit direct draws under any
     such letter of credit by Administrative Agent for the benefit of Secured
     Parties) or (ii) credit insurance that is issued by a credit insurance
     company reasonably acceptable to Administrative Agent and is in form and
     substance reasonably acceptable to


                                       -5-

     Administrative Agent (which credit insurance shall be payable to
     Administrative Agent for the benefit of Secured Parties in Dollars).

          Asset Disposition - a sale, lease, license, consignment or other
     transfer or disposition of Property of an Obligor, including a termination
     of rights of any Obligor under any lease, license agreement or other
     contract or a disposition of Property in connection with a sale-leaseback
     transaction or synthetic lease.

          Assignment and Acceptance - an assignment and acceptance entered into
     by a Lender and an Eligible Assignee and accepted by Administrative Agent,
     in the form of EXHIBIT G.

          Availability - on any date, the amount that Borrowers are entitled to
     borrow as Revolver Loans on such date, such amount being the difference
     derived when the sum of the principal amount of Revolver Loans then
     outstanding (including any outstanding Swingline Loans) is subtracted from
     the Borrowing Base on such date. If the amount of Revolver Loans
     outstanding on any date is equal to or greater than the Borrowing Base,
     then Availability on such date shall be zero or a negative number, as
     applicable.

          Availability Reserve - on any date of determination thereof, an amount
     equal to the sum of the following (without duplication): (i) any amounts
     which any Obligor is obligated to pay to Administrative Agent, Lenders or
     other Persons pursuant to the provisions of any of the Loan Documents that
     Administrative Agent or any Lender elects to pay for the account of such
     Obligor in accordance with authority contained in any of the Loan
     Documents; (ii) the LC Reserve; (iii) the aggregate amount of reserves
     established by Administrative Agent from time to time in its discretion in
     respect of Banking Relationship Debt; (iv) the aggregate amount of all
     liabilities and obligations that are secured by Liens upon any of the
     Collateral that are senior in priority to Administrative Agent's Liens if
     such Liens are not Permitted Liens (provided that the imposition of a
     reserve hereunder on account of such Liens shall not be deemed a waiver of
     the Event of Default that arises from the existence of such Liens) or are
     Permitted Liens under SECTION 10.2.5(II); (v) the Professional Fees
     Reserve; and (vi) such additional reserves, in such amounts as
     Administrative Agent in its reasonable discretion, exercised in a manner
     consistent with its customary practices or otherwise in good faith, may
     elect to impose from time to time. The burden of establishing lack of good
     faith shall be on Borrowers.

          Average Liquidity - for any period, an amount equal to the sum of the
     amount of Liquidity on each day during such period divided by the number of
     days in such period.

          Average Revolver Loan Balance - for any period, the amount obtained by
     adding the unpaid balance of Revolver Loans and LC Obligations at the end
     of each day for the period in question and by dividing such sum by the
     number of days in such period.

          Bank Products - any one or more of the following types of products,
     services or facilities extended to any Obligor by BofA or any Affiliate of
     BofA: (i) commercial credit cards; (ii) merchant card services; (iii)
     products or services under Cash Management Agreements; (iv) products under
     Hedging Agreements; (v) interstate depository network services; and (vi)
     such other banking products or services provided by BofA or any Affiliate
     of BofA as may be requested by any Obligor, other than Letters of Credit.

          Banking Relationship Debt - Debt or other liabilities or obligations
     of an Obligor to BofA (or any Affiliate of BofA) arising out of or relating
     to Bank Products.


                                       -6-

          Bankruptcy Code - title 11 of the United States Code.

          Base Rate - the rate of interest announced or quoted by BofA from time
     to time as its prime rate. The prime rate announced by BofA is a reference
     rate and does not necessarily represent the lowest or best rate charged by
     BofA. BofA from time to time makes loans or other extensions of credit at,
     above or below its announced prime rate. If the prime rate is discontinued
     by BofA as a standard, a comparable reference rate designated by BofA as a
     substitute therefor shall be the Base Rate.

          Base Rate Loan - a Loan, or portion thereof, during any period in
     which it bears interest at a rate based upon the Base Rate.

          Black Diamond - Black Diamond Management and any and all of its
     Affiliates.

          Blocked Person - as defined in SECTION 9.1.27(II).

          Board of Governors - the Board of Governors of the Federal Reserve
     System.

          BofA - Bank of America, N.A. a national bank, and its successors and
     assigns.

          BofA Indemnitees - BofA, its Affiliates and all of their present and
     future officers, directors, employees, agents and attorneys.

          Borrower Agent - as defined in SECTION 4.4.

          Borrowing - a borrowing consisting of Loans of one Type made on the
     same day by Lenders (or by BofA in the case of a Borrowing funded by
     Swingline Loans) or a conversion of a Loan or Loans of one Type from
     Lenders on the same day.

          Borrowing Base - on any date of determination thereof, an amount equal
     to the lesser of: (a) the aggregate amount of the Revolver Commitments on
     such date minus the LC Reserve on such date, or (b) an amount equal to (i)
     the Accounts Formula Amount on such date minus (ii) the Availability
     Reserve on such date.

          Borrowing Base Certificate - a certificate, in the form set forth on
     EXHIBIT K, by which Borrowers shall certify to Administrative Agent and
     Lenders the amount of the Borrowing Base as of the date of the certificate
     and the calculation of such amount.

          Business Day - any day excluding Saturday, Sunday and any other day
     that is a legal holiday under the laws of the State of New York or is a day
     on which banking institutions located in such state are closed; provided,
     however, that when used with reference to a LIBOR Loan (including the
     making, continuing, prepaying or repaying of any LIBOR Loan), the term
     "Business Day" shall also exclude any day on which banks are not open for
     dealings in Dollar deposits on the London interbank market.

          Capital Adequacy Regulation - any guideline, request or directive of
     any central bank or other Governmental Authority, or any other law, rule or
     regulation, whether or not having the force of law, in each case regarding
     capital adequacy of any bank or of any corporation controlling a bank.


                                       -7-

          Capital Expenditures - expenditures made or liabilities incurred by a
     Borrower for the acquisition of any fixed assets or improvements,
     replacements, substitutions or additions thereto, including the total
     principal portion of Capitalized Lease Obligations.

          Capitalized Lease Obligation - any Debt represented by obligations
     under a lease that is required to be capitalized for financial reporting
     purposes in accordance with GAAP.

          Cash - money, currency or a credit balance in a Deposit Account.

          Cash Collateral - cash, and any interest or other income earned
     thereon, that is deposited with Administrative Agent in accordance with
     this Agreement for the Pro Rata benefit of Lenders to Cash Collateralize
     any LC Obligations or other Obligations.

          Cash Collateral Account - a demand deposit, money market or other
     account established by Administrative Agent at such financial institution
     as Administrative Agent may select in its discretion, which account shall
     be in Administrative Agent's name and subject to Administrative Agent's
     Liens for the benefit of Secured Parties.

          Cash Collateralize - with respect to LC Obligations arising from
     Letters of Credit outstanding on any date or Obligations arising under
     Hedging Agreements on such date, the deposit with Administrative Agent of
     immediately available funds into the Cash Collateral Account in an amount
     equal to 104% of the aggregate Undrawn Amount of such Letters of Credit and
     other LC Obligations, plus (ii) all Obligations existing under such Hedging
     Agreements.

          Cash Collection Limit - on any date of determination thereof, an
     amount equal to the Monthly Cash Collections for the most recent month
     ending prior to such date divided by the actual number of days in such
     month multiplied by 35.

          Cash Equivalents - (i) United States dollars (including such dollars
     as are held in overnight deposits and demand deposits with U.S. banks);
     (ii) marketable direct obligations issued or unconditionally guaranteed by
     the United States government and backed by the full faith and credit of the
     United States government having maturities of not more than 12 months from
     the date of acquisition; (iii) marketable direct obligations issued by any
     State of the United States of America or any political subdivision of any
     such State or any public instrumentality thereof maturing within 1 year
     from the date of acquisition thereof and, at the time of acquisition,
     having a rating of at least A-2 from S&P or at least P-2 of Moody's; (iv)
     certificates of deposit demand deposits, Eurodollar time deposits, time
     deposit accounts, term deposit accounts and time deposits having maturities
     of not more than 12 months from the date of acquisition, bankers'
     acceptances having maturities of not more than 12 months from the date of
     acquisition and overnight bank deposits, in each case issued by any
     commercial bank organized under the laws of the United States, any state
     thereof or the District of Columbia, which at the time of acquisition have
     capital and assets of not less than $100 million; (v) repurchase
     obligations with a term of not more than 90 days for underlying securities
     of the types described in clauses (i), (ii), (iii) and (iv) entered into
     with any financial institution meeting the qualifications specified in
     clause (iv) above; (vi) commercial paper having at the time of investment
     therein or a contractual commitment to invest therein a rating of A-2 (or
     better) by S&P or P-2 (or better) by Moody's, and having a maturity within
     12 months after the date of acquisition thereof; and (vii) shares of any
     money market fund that (a) has substantially all of its assets invested
     continuously in the types of investments referred to in clauses (i) - (vi),
     (b) has net assets not less than $500,000,000 and (c) has at least the
     second highest rating obtainable from either Moody's or S&P.


                                       -8-

          Cash Management Agreements - any agreement entered into from time to
     time between any Borrower or any of its Subsidiaries, on the one hand, and
     BofA or any of its Affiliates, on the other, in connection with cash
     management services for operating, collections, payroll and trust accounts
     of such Borrower or its Subsidiaries including automatic clearinghouse
     services, controlled disbursement services, electronic funds transfer
     services, information reporting services, lockbox services, stop payment
     services and wire transfer services.

          Cash Taxes Paid - for any period, the provision by Borrowers and their
     Subsidiaries for income taxes as shown on the profit and loss statement of
     Borrowers for such period minus any increase (or plus any decrease) in the
     provision for deferred taxes of Borrowers and their Subsidiaries,
     determined on a Consolidated basis in accordance with GAAP.

          CERCLA - the Comprehensive Environmental Response Compensation and
     Liability Act (42 U.S.C. Section 9601 et seq.)

          Change of Control - the occurrence of any of the following: (i)
     Sponsors and Sponsor Related Parties cease to own and control, beneficially
     and of record, 51% of the Equity Interests in Parent; (ii) Parent ceases to
     own and control, beneficially and of record, all of the Equity Interests in
     InSight Health; (iii) except in the case of any Permitted Asset
     Disposition, InSight Health ceases to own and control, beneficially and of
     record, all of the Equity Interests in each of the other Borrowers; (iv)
     all or substantially all of InSight Health's assets are sold as an entirety
     to any Person or related group of Persons; (v) InSight Health is merged
     with or into another Person, other than a Borrower; (vi) any Person or
     related group of Persons acquires by way of a purchase, merger,
     consolidation or other business combination a majority of the Equity
     Interests entitled to vote in the election of directors of InSight Health;
     or (vii) a change in the majority of the board of directors of InSight
     Health unless approved by the then majority of the board of directors of
     InSight Health or by Sponsors and Sponsor Related Parties.

          Chattel Paper - shall have the meaning given to the term "chattel
     paper" in the UCC.

          Claims - all liabilities, obligations, losses, damages, penalties,
     actions, judgments, suits, awards, costs (including remedial response
     costs), charges, expenses and disbursements of any kind or nature
     (including reasonable attorneys', accountants', consultants', or
     paralegals' fees and expenses) which may at any time (including at any time
     following Full Payment of the Obligations or termination of the
     Commitments, resignation or replacement of Administrative Agent or
     replacement of any Lender), be imposed on, incurred by, or asserted against
     any Indemnitee in any way relating to or arising out of (i) the
     administration or enforcement of or performance under any of the Loan
     Documents or consummation of any of the transactions described herein, (ii)
     any action taken or omitted to be taken by any Indemnitee under or in
     connection with any of the Loan Documents or Applicable Law, (iii) the
     existence, perfection or realization upon Administrative Agent's Liens upon
     any Collateral, (iv) the exercise by Administrative Agent or any Lender of
     any of its rights or remedies under any of the Loan Documents or Applicable
     Law, or (v) the failure of any Obligor to observe, perform or discharge any
     of such Obligor's covenants or duties under any of the Loan Documents or
     the inaccuracy or incompleteness of any representation or warranty of any
     Borrower in any of the Loan Documents, in each case including any
     reasonable out-of-pocket costs or expenses incurred by any Indemnitee in
     connection with any investigation, litigation, arbitration or other
     judicial or non-judicial proceeding (including any Insolvency Proceeding or
     appellate proceedings) whether or not such Indemnitee is a party thereto.
     This definition of Claims is subject to the provisions of SECTION 15.3.


                                       -9-

          CMS - Centers for Medicare and Medicaid Services and any successor
     thereto.

          Collateral - all of the Property and interests in Property described
     in SECTION 7; all Property described in any of the Security Documents as
     security for the payment or performance of any of the Obligations; and all
     other Property and interests in Property that now or hereafter secure the
     payment and performance of any of the Obligations.

          Collection Accounts - collectively, the Retail Collection Accounts and
     the Wholesale Collection Accounts.

          Commercial Payor - any Third Party Payor which is (i) a commercial
     medical insurance company that is organized under the laws of any
     jurisdiction of the United States and has its principal office in the
     United States, (ii) a Blue Cross/Blue Shield Plan or (iii) a health
     maintenance organization or other managed care organization, preferred
     provider organization or other institutional obligor that is organized
     under the laws of any jurisdiction of the United States and has its
     principal office in the United States.

          Commitment - at any date for any Lender, the amount of such Lender's
     Revolver Commitment on such date, and "Commitments" means the aggregate
     amount of all Revolver Commitments on such date.

          Commitment Termination Date - the date that is the soonest to occur of
     (i) the last day of the Term; (ii) the date on which either Borrowers or
     Administrative Agent terminates the Revolver Commitments pursuant to
     SECTION 6.2; or (iii) the date on which the Revolver Commitments are
     automatically terminated pursuant to SECTION 12.2.

          Compliance Certificate - a Compliance Certificate to be provided by
     Borrowers to Administrative Agent in accordance with, and in the form
     annexed as EXHIBIT E to, this Agreement and the supporting schedules to be
     annexed thereto.

          Concentration Account - shall have the meaning ascribed to it in
     SECTION 8.2.5(I) hereof.

          Consolidated - the consolidation in accordance with GAAP of the
     accounts or other items as to which such term applies.

          Contingent Obligation - with respect to any Person, any obligation of
     such Person arising from any guaranty, indemnity or other assurance of
     payment or performance of any Debt, lease, dividend or other obligation
     ("primary obligations") of any other Person (the "primary obligor") in any
     manner, whether directly or indirectly, including (i) the direct or
     indirect guaranty, endorsement (other than for collection or deposit in the
     Ordinary Course of Business), co-making, discounting with recourse or sale
     with recourse by such Person of the obligation of a primary obligor, (ii)
     the obligation to make take-or-pay or similar payments, if required,
     regardless of nonperformance by any other party or parties to an agreement,
     (iii) any obligation of such Person, whether or not contingent, (A) to
     purchase any such primary obligation or any Property constituting direct or
     indirect security therefor, (B) to advance or supply funds (1) for the
     purchase or payment of any such primary obligations or (2) to maintain
     working capital or equity capital of the primary obligor or otherwise to
     maintain the net worth or solvency of the primary obligor, (C) to purchase
     Property or services primarily for the purpose of assuring the owner of any
     such primary obligation of the ability of the primary obligor to make
     payment of such primary obligation or (D) otherwise to assure or hold
     harmless the holder of such primary obligation against loss in respect
     thereof. The amount of any Contingent Obligation shall be


                                      -10-

     deemed to be an amount equal to the stated or determinable amount of the
     primary obligation with respect to which such Contingent Obligation is made
     (or, if less, the maximum amount of such primary obligation for which such
     Person may be liable pursuant to the terms of the instrument evidencing
     such Contingent Obligation) or, if not stated or determinable, the maximum
     reasonably anticipated liability with respect thereto (assuming such Person
     is required to perform thereunder), as determined by such Person in good
     faith.

          Contractual Adjustment Allowance - on any date, an amount determined
     by Borrowers, but acceptable to Administrative Agent in its Credit
     Judgment, intended to represent the amount of Retail Receivables as of such
     date that Borrowers do not expect to be paid in Cash, such reserve to be
     computed in accordance with Borrowers' historical practices.

          Control Agreements - the control agreements to be executed by certain
     depository and other institutions of a Borrower in favor of Administrative
     Agent with respect to certain Deposit Accounts and other accounts of
     Borrowers, including the Concentration Account, the Investment Accounts and
     each Wholesale Collection Account, for the benefit of Secured Parties, as
     security for the Obligations.

          Controlled Disbursement Account - a demand deposit account maintained
     by Borrowers at BofA or any of its Affiliates and to which proceeds of
     Loans may be transferred from time to time.

          Credit Judgment - Administrative Agent's judgment exercised in a
     manner consistent with its customary practices or otherwise in good faith,
     based upon its consideration of any factor that it believes (i) will or
     could reasonably be expected to affect adversely the quantity, quality, mix
     or value of any Collateral, the enforceability or priority of
     Administrative Agent's Liens or the amount that Administrative Agent and
     Lenders would be likely to receive (after taking into account delays in the
     payment and estimated costs of enforcement) in the collection of the
     Accounts or liquidation of any of the Collateral; (ii) suggests that any
     collateral report or financial information delivered to Administrative
     Agent by any Person on behalf of any Obligor is incomplete, inaccurate or
     misleading in any material respect; (iii) materially increases the
     likelihood of any Insolvency Proceeding involving any Obligor; or (iv)
     creates or reasonably could be expected to create or result in a Default or
     Event of Default. In exercising such judgment, Administrative Agent may
     consider such factors already included in or tested by the definition of
     Eligible Accounts, as well as any of the following: (a) the financial and
     business climate of Borrowers' industry; (b) changes in collection history
     and dilution with respect to the Accounts; (c) material changes in any
     concentration risks with respect to Accounts; and (d) any of the factors
     that could materially increase the credit risk of lending to any of
     Borrowers on the security of the Collateral. The burden of establishing
     lack of good faith shall be on Borrowers.

          Current Asset - on any date, any asset that would be properly
     classified as a current asset in accordance with GAAP on such date.

          CWA - the Clean Water Act (33 U.S.C. Sections 1251 et seq.).

          Debt - as applied to a Person means, without duplication: (i) all
     obligations of such Person for Money Borrowed and all obligations of such
     Person evidenced by bonds, notes or similar instruments; (ii) all
     obligations of such Person for the deferred purchase price of Property or
     services (excluding accounts payable and other accrued liabilities incurred
     in the Ordinary Course of Business; (iii) all Contingent Obligations of
     such Person in respect of items that would constitute Debt under clause (i)
     or (ii) of this definition; (iii) all reimbursement obligations in


                                      -11-

     connection with letters of credit or letter of credit guaranties issued for
     the account of such Person; and (iv) in the case of a Borrower (without
     duplication), the Obligations. The Debt of a Person shall include any
     recourse Debt of any partnership or joint venture in which such Person is a
     general partner or joint venturer.

          Default - an event or condition the occurrence of which would, with
     the lapse of time or the giving of notice, or both, become an Event of
     Default.

          Default Rate - on any date, a rate per annum that is equal to (i) in
     the case of each Revolver Loan outstanding on such date, 2% in excess of
     the rate otherwise applicable to such Loans on such date, and (ii) in the
     case of any of the other Obligations outstanding on such date, 2% plus the
     highest Applicable Margin for Base Rate Loans.

          Deposit Account - shall have the meaning given to the term "deposit
     account" in the UCC.

          Deposit Accounts Collateral - all Deposit Accounts of Borrowers in
     existence on the Restatement Effective Date and identified on SCHEDULE 8.3
     and each Deposit Account established by a Borrower after the Restatement
     Effective Date for the purpose of depositing collections on Accounts or
     other proceeds of Collateral therein.

          Distribution - in respect of any entity, (i) any payment of dividends
     or other distributions on Equity Interests of the entity (except
     distributions in Equity Interests) and (ii) any purchase, redemption or
     other acquisition or retirement for value of Equity Interests of the entity
     or any Subsidiary of the entity unless made contemporaneously from the net
     proceeds of the sale of Equity Interests, including Upstream Payments of
     the type described in clause (c) of the definition of such term.

          Document - shall have the meaning given to the term "document" in the
     UCC.

          Dollars and the sign $ - lawful money of the United States of America.

          Dominion Account - a Deposit Account established by Borrowers at BofA
     or at another bank selected by Borrowers, but acceptable to Administrative
     Agent in its reasonable discretion, and over which, upon written notice
     from Administrative Agent of the existence of a Restrictive Trigger Event,
     Administrative Agent shall have exclusive access and dominion for
     withdrawal purposes.

          Electronic Chattel Paper - shall have the meaning given to the term
     "electronic chattel paper" in the UCC.

          Eligible Account - an Eligible Retail Receivable or Eligible Wholesale
     Receivable, or both of them, as the context requires.

          Eligible Assignee - a Person that is a Lender, a U.S. based Affiliate
     of a Lender or an Approved Fund (as defined below); a commercial bank,
     finance company, or other financial institution, in each case that is
     organized under the laws of the United States or any state, has total
     assets in excess of $10 billion, extends asset-based lending facilities of
     the type contemplated herein in the Ordinary Course of Business and whose
     becoming an assignee would not constitute a prohibited transaction under
     Section 4975 of ERISA or any other Applicable Law, is acceptable to
     Administrative Agent and, unless an Event of Default exists, Borrowers
     (such approval by


                                      -12-

     Borrowers, when required, not to be unreasonably withheld or delayed and to
     be deemed given by Borrowers if no objection is received by the assigning
     Lender and Administrative Agent from Borrowers within 7 Business Days after
     notice of such proposed assignment has been provided by the assigning
     Lender as set forth in SECTION 14.3 ); and, at any time that an Event of
     Default exists, any other Person acceptable to Administrative Agent in its
     discretion. In no event and under no circumstances shall Black Diamond be
     an Eligible Assignee. The term "Approved Fund" means any Person (other than
     a natural person) that is engaged in making, purchasing, holding or
     investing in bank loans and similar extensions of credit in the Ordinary
     Course of Business of such Person and that is administered or managed by
     (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
     Affiliate of an entity that administers or manages a Lender.

          Eligible Cash - Cash or Cash Equivalents on deposit in the
     Concentration Account, the Investment Accounts or any other Deposit Account
     that is at all times subject to a Lien in favor of Administrative Agent,
     and, at all times after October 28, 2005, with respect to which
     Administrative Agent has "control" under (and as defined in) the UCC.

          Eligible Retail Receivable - a Retail Receivable which arises in the
     Ordinary Course of Business of a Borrower from the rendition or performance
     of services, is payable in Dollars, is subject to Administrative Agent's
     duly perfected Lien and is deemed by Administrative Agent, in its Credit
     Judgment, to be an Eligible Retail Receivable. Without limiting the
     generality of the foregoing, no Retail Receivable shall be an Eligible
     Retail Receivable if: (i) the Third Party Payor is an Affiliate of a
     Borrower, a Person controlled by an Affiliate of a Borrower or a Blocked
     Person; (ii) the Retail Receivable is unbilled; (iii) it is outstanding
     more than 120 days after the billing date, but only to the extent of 50% of
     such Retail Receivable; (iv) the total unpaid Retail Receivables of the
     Third Party Payor exceed 25% of the aggregate amount of all Accounts, to
     the extent of such excess; (v) any covenant, representation or warranty
     contained in the Agreement with respect to such Retail Receivable has been
     breached in any material respect; (vi) the Third Party Payor is also such
     Borrower's creditor or supplier, or the Third Party Payor has disputed
     liability with respect to such Retail Receivable, or the Third Party Payor
     has made any claim with respect to any other Retail Receivable due from
     such Third Party Payor to such Borrower, or the Retail Receivable otherwise
     is or may reasonably be expected to become subject to any right of setoff
     (to the extent not waived in writing by such Third Party Payor),
     counterclaim (to the extent not waived in writing by such Third Party
     Payor), recoupment (to the extent not waived in writing by such Third Party
     Payor), reserve or chargeback, provided that the Retail Receivables of such
     Third Party Payor shall be ineligible only to the extent of such offset,
     counterclaim, recoupment, disputed amount, reserve or chargeback; (vii) an
     Insolvency Proceeding has been commenced by or against the Third Party
     Payor or the Third Party Payor has failed, suspended business or ceased to
     be Solvent; (viii) the Third Party Payor is located in a state in which
     such Borrower is deemed to be doing business under the laws of such state
     and which denies creditors access to its courts in the absence of
     qualification to transact business in such state or of the filing of any
     reports with such state, unless such Borrower has qualified as a foreign
     entity authorized to transact business in such state or has filed all
     required reports; (ix) the Retail Receivable is subject to a Lien other
     than a Permitted Lien; (x) the Retail Receivable is evidenced by Chattel
     Paper or an Instrument of any kind, or has been reduced to judgment; (xi)
     the Retail Receivable represents a progress billing or a retainage; (xii)
     such Borrower has made any agreement with the Third Party Payor for any
     deduction therefrom, except for discounts, adjustments or allowances which
     are made in the Ordinary Course of Business and which discounts or
     allowances are reflected in the calculation of the net amount of such
     Retail Receivable; (xiii) the Retail Receivable represents, in whole or in
     part, a billing for interest, fees or late charges; (xiv) the total
     Eligible Retail Receivables due from Account Debtors other than Third Party
     Payors exceeds $588,000, to the extent of such excess; (xv) it is not
     evidenced by an


                                      -13-

     invoice, statement or other electronic or documentary evidence satisfactory
     to Administrative Agent; (xvi) to the extent it constitutes a credit
     balance that is more than 120 days old; (xvii) it arises under or in
     connection with an agreement in respect of which Borrowers have posted a
     performance, surety or similar bond; (xviii) it has been turned over or
     submitted to a third party for collection; or (xix) the Account Debtor on
     such Retail Receivable has been characterized by Borrowers as falling into
     an "unknown financial class." In addition to the foregoing, on any date the
     balance of Eligible Retail Receivables on such date shall be reduced by the
     aggregate of the Contractual Adjustment Allowance on such date and the
     Professional Fees Allowance on such date.

          Eligible Wholesale Receivable - a Wholesale Receivable that arises in
     the Ordinary Course of Business of a Borrower from the rendition of
     services, is payable in Dollars, is subject to Administrative Agent's duly
     perfected Lien, and is deemed by Administrative Agent, in its Credit
     Judgment, to be an Eligible Wholesale Receivable. Without limiting the
     generality of the foregoing, no Account shall be an Eligible Wholesale
     Receivable if: (i) it arises out of a sale made by a Borrower to an
     Affiliate of a Borrower, a Person controlled by an Affiliate of a Borrower
     or a Blocked Person; (ii) it is unpaid more than 90 days after the original
     invoice date; (iii) 50% or more of the Accounts from the Account Debtor are
     not deemed Eligible Accounts hereunder; (iv) the total unpaid Accounts of
     the Account Debtor exceed 25% of the aggregate amount of all Accounts or
     exceed a credit limit established by Administrative Agent, in its Credit
     Judgment, for such Account Debtor, in each case to the extent of such
     excess; (v) any covenant, representation or warranty contained in this
     Agreement with respect to such Account has been breached in any material
     respect; (vi) the Account Debtor is also such Borrower's creditor or
     supplier, or has disputed liability with respect to such Account or has
     made any claim with respect to any other Account due from such Account
     Debtor to such Borrower, or the Account otherwise is or may reasonably be
     expected to become subject to any right of setoff (to the extent not waived
     in writing by such Account Debtor), counterclaim (to the extent not waived
     in writing by such Account Debtor), recoupment (to the extent not waived in
     writing by such Account Debtor), reserve, defense or chargeback, provided
     that the Accounts of such Account Debtor shall be ineligible only to the
     extent of such dispute or right of offset, counterclaim, recoupment,
     reserve, defense or chargeback; (vii) an Insolvency Proceeding has been
     commenced by or against the Account Debtor or the Account Debtor has
     failed, suspended or ceased doing business; (viii) the Account Debtor is
     not Solvent; (ix) it arises from a sale to an Account Debtor organized
     under the laws of any jurisdiction outside of the United States or that has
     its principal office, assets or place of business outside the United States
     except to the extent that the sale is supported or secured by an Approved
     Credit Enhancement; (x) the Account Debtor is located in a jurisdiction in
     which such Borrower is deemed to be doing business under the laws of such
     jurisdiction and which denies creditors access to its courts in the absence
     of qualification to transact business in such jurisdiction or of the filing
     of any reports with such jurisdiction, unless such Borrower has qualified
     as a foreign entity authorized to transact business in such jurisdiction or
     has filed all required reports; (xi) the Account is subject to a Lien other
     than a Permitted Lien; (xii) the Account is evidenced by Chattel Paper or
     an Instrument of any kind, or has been reduced to judgment; (xiii) the
     Account represents a progress billing or a retainage; (xiv) such Borrower
     has made any agreement with the Account Debtor for any deduction therefrom,
     except for discounts or allowances which are made in the Ordinary Course of
     Business and which discounts or allowances are reflected in the calculation
     of the face value of each invoice related to such Account; (xv) the Account
     represents, in whole or in part, a billing for interest, fees or late
     charges; (xvi) the Account Debtor has made a partial payment with respect
     to such Account; (xvii) to the extent it constitutes a credit balance that
     is more than 90 days old; or (xviii) it arises under or in connection with
     an agreement in respect of which Borrowers have posted a performance,
     surety or similar bond.


                                      -14-

          Enforcement Action - action taken or to be taken by Administrative
     Agent, during any period that an Event of Default exists, to enforce
     collection of the Obligations or to realize upon the Collateral (whether by
     judicial action, under power of sale, by self-help repossession, by
     notification to Account Debtors, or by exercise of rights of setoff or
     recoupment).

          Environmental Laws - all federal, state, local and foreign laws,
     rules, regulations, codes, ordinances, orders and consent decrees (together
     with all programs, permits and guidance documents promulgated by regulatory
     agencies, to the extent having the force of law), now or hereafter in
     effect, that relate to public health (but excluding occupational safety and
     health, to the extent regulated by OSHA) or the protection or pollution of
     the environment, whether new or hereafter in effect, including CERCLA, RCRA
     and CWA.

          Environmental Release - a release as defined in CERCLA or under any
     other applicable Environmental Laws.

          Equity Interest - the interest of (i) a shareholder in a corporation,
     (ii) a partner (whether general or limited) in a partnership (whether
     general, limited or limited liability), (iii) a member in a limited
     liability company, or (iv) any other Person having any other form of equity
     security or ownership interest, together, in each case, with any and all
     warrants, rights or options to purchase or other arrangements or rights to
     acquire any of the foregoing (but excluding any debt security that is
     exchangeable for or convertible into such Equity Interests).

          Equity Investors - collectively, Sponsors and their respective
     Affiliates, and officers, employees and directors of Parent or any of its
     Subsidiaries.

          ERISA - the Employee Retirement Income Security Act of 1974.

          Event of Default - as defined in SECTION 12.

          Excluded Taxes - any (A) income, branch profits or franchise taxes
     imposed on (or measured by) net income or gross receipts (other than any
     such taxes imposed solely as a result of Borrower's activities in a
     jurisdiction) (B) any tax that is imposed on amounts payable to the Lender
     at the time the Lender becomes a party to this Agreement (or designates a
     new lending office) and (C) any taxes attributable to Lender's failure to
     comply with SECTION 5.9.3 of this Agreement.

          Executive Order No. 13224 - Executive Order No. 13224 on Terrorist
     Financing, effective September 24, 2001.

          Existing Credit Agreement - as defined in the Recitals hereto.

          Extraordinary Expenses - all reasonable out-of-pocket costs, expenses,
     fees (including fees incurred to Administrative Agent Professionals) or
     advances that Administrative Agent or any Lender may suffer or incur during
     any period that an Event of Default exists, or during the pendency of an
     Insolvency Proceeding of an Obligor, on account of or in connection with
     (i) the audit, inspection, repossession, storage, repair, appraisal,
     insuring, completion of the manufacture of, preparing for sale, advertising
     for sale, selling, collecting or otherwise preserving or realizing upon any
     Collateral; (ii) any action, suit, litigation, arbitration, contest or
     other judicial or non-judicial proceeding (whether instituted by or against
     Administrative Agent, any Lender, any Obligor, any representative of
     creditors of any Obligor or any other Person) in any way arising out of or
     relating to any of the Collateral (or the validity, perfection, priority or
     avoidability of


                                      -15-

     Administrative Agent's Liens with respect to any of the Collateral), any of
     the Loan Documents or the validity, allowance or amount of any of the
     Obligations, including any lender liability or other Claims asserted
     against Administrative Agent or any Lender; (iii) the exercise, protection
     or enforcement of any rights or remedies of Administrative Agent in, or the
     monitoring of, any Insolvency Proceeding; (iv) the settlement or
     satisfaction of any Liens upon any Collateral (whether or not such Liens
     are Permitted Liens); (v) the collection or enforcement of any of the
     Obligations, whether by Enforcement Action or otherwise; (vi) the
     negotiation, documentation, and closing of any amendment, waiver,
     restructuring or forbearance agreement with respect to the Loan Documents
     or Obligations; (vi) amounts advanced by Administrative Agent pursuant to
     SECTIONS 8.1.3 OR 15.10; or (viii) the enforcement of any of the provisions
     of any of the Loan Documents. Such costs, expenses and advances may include
     transfer fees, taxes, storage fees, insurance costs, permit fees, utility
     reservation and standby fees, legal fees, appraisal fees, brokers' fees and
     commissions, auctioneers' fees and commissions, accountants' fees,
     environmental study fees, wages and salaries paid to employees of any
     Borrower or independent contractors in liquidating any Collateral, travel
     expenses, all other fees and expenses payable or reimbursable by Borrowers
     or any other Obligor under any of the Loan Documents, and all other fees
     and expenses associated with the enforcement of rights or remedies under
     any of the Loan Documents, but excluding compensation paid to employees
     (including inside legal counsel who are employees) of Administrative Agent
     or any Lender.

          Fee Letter - the fee letter agreement between Administrative Agent and
     Borrower Agent.

          FEIN - with respect to any Person, the Federal Employer Identification
     Number of such Person.

          Financial Covenant Trigger Amount - on any date of determination,
     shall mean an amount equal to $15,000,000.

          Fiscal Quarter - each quarter of Borrowers and their Subsidiaries for
     accounting and tax purposes, ending on September 30, December 31, March 31
     and June 30 of each year.

          Fiscal Year - the fiscal year of Borrowers and their Subsidiaries for
     accounting and tax purposes, which ends on June 30 of each year and when
     preceded by the designation of a calendar year (e.g., 2005 Fiscal Year)
     means the fiscal year of Borrowers and their Subsidiaries ended on June 30
     of such designated calendar year.

          Fixed Charge Coverage Ratio - for any period, the ratio of (a)
     Adjusted EBITDA for such period minus Capital Expenditures (excluding
     Capital Expenditures financed with Funded Debt other than Revolver Loans)
     for such period minus Distributions for such period (other than
     Distributions to a Borrower), net of any contributions of equity capital
     paid in Cash to a Borrower from (1) repayments of loans made by a Borrower
     to an officer, director or employee of a Borrower or any other Obligor
     pursuant to clause (xii)(a) of the definition of Restricted Investment from
     whom Parent's Equity Interests are repurchased and (2) proceeds from
     resales of Parent's Equity Interests so repurchased, minus Cash Taxes Paid
     for such period minus the amount of investments permitted pursuant to
     clause (xvi) of the definition of Restricted Investment during such period,
     to (b) the sum of all Fixed Charges for such period, all calculated for
     Borrowers and their Subsidiaries on a Consolidated basis.

          Fixed Charges - for any fiscal period, the sum of (i) Interest Expense
     for such period plus (ii) scheduled principal payments on Funded Debt
     (including scheduled principal payments on Capitalized Lease Obligations
     but excluding the Revolver Loans).


                                      -16-

          FLSA - the Fair Labor Standards Act of 1938.

          Foreign Lender - any Lender that is organized under the laws of a
     jurisdiction other than the laws of the United States, any state thereof or
     the District of Columbia.

          Full Payment - with respect to any of the Obligations, the full and
     final payment in full, in cash (or immediately available funds) and in
     Dollars, of such Obligations, including all interest, fees and other
     charges payable in connection therewith under any of the Loan Documents,
     whether such interest, fees or other charges accrue or are incurred prior
     to or during the pendency of an Insolvency Proceeding and whether or not
     any of the same are allowed or recoverable in any Bankruptcy Case pursuant
     to Section 506 of the Bankruptcy Code or otherwise; with respect to any LC
     Obligations represented by undrawn Letters of Credit and Banking
     Relationship Debt (including Debt arising under Hedging Agreements), the
     depositing of cash with Administrative Agent or delivery to Administrative
     Agent of a Supporting LC, as security for the payment of such Obligations,
     not to exceed 104% of the aggregate undrawn amount of such Letters of
     Credit and 100% of Administrative Agent's good faith estimate of the amount
     of Banking Relationship Debt due and to become due after termination of
     such Bank Products; and with respect to any Obligations that are contingent
     in nature (other than Obligations consisting of LC Obligations or Banking
     Relationship Debt), such as a right of Administrative Agent or a Lender to
     indemnification by any Obligor, the depositing of cash with Administrative
     Agent, or delivery to Administrative Agent of a Supporting LC, in an amount
     equal to 100% of such Obligations or, if such Obligations are unliquidated
     in amount and represent a claim which has been overtly asserted against
     Administrative Agent or a Lender and for which an indemnity has been
     provided by Borrowers in any of the Loan Documents, in an amount that is
     equal to such claim or Administrative Agent's good faith estimate of such
     claim. None of the Loans shall be deemed to have been paid in full until
     all Commitments related to such Loans have expired or been terminated.

          Funded Debt - with respect to Borrowers and their Subsidiaries, the
     sum, without duplication, of (i) the aggregate amount of Debt of Borrowers
     and their Subsidiaries consisting of or relating to (a) the borrowing of
     money or the obtaining of credit (other than trade payables incurred in the
     Ordinary Course of Business), including the Obligations, Debt under the
     Senior Notes and the Senior Subordinated Notes, and any other notes or
     bonds, (b) the deferred purchase price of assets (other than trade payables
     incurred in the Ordinary Course of Business), or (c) Capitalized Lease
     Obligations, plus (ii) Debt of the type referred to in clause (i) of
     another Person guaranteed by a Borrower or Subsidiary, in each case as
     determined on a Consolidated basis.

          GAAP - generally accepted accounting principles in the United States
     of America in effect from time to time.

          General Intangibles - shall have the meaning given to the term
     "general intangibles" in the UCC and shall include each Borrower's choses
     in action, causes of action, company or other business records, inventions,
     blueprints, designs, patents, patent applications, trademarks, trademark
     applications, trade names, trade secrets, service marks, goodwill, brand
     names, copyrights, registrations, licenses, franchises, customer lists,
     permits, tax refund claims, computer programs, operational manuals,
     internet addresses and domain names, insurance refunds and premium rebates,
     all rights to indemnification and all other intangible property of such
     Borrower of every kind and nature (other than Accounts).

          Goods - shall have the meaning given to the term "goods" in the UCC.


                                      -17-

          Government Payor - any Third Party Payor which is (i) the United
     States of America acting under the Medicaid or Medicare programs
     established pursuant to the Social Security Act, or under the TRICARE
     program, (ii) any state or the District of Columbia acting pursuant to a
     health plan adopted pursuant to Title XIX of the Social Security Act (or
     any successor legislation), (iii) any other Governmental Authority or (iv)
     an agent, carrier, administrator or intermediary for any of the foregoing.

          Governmental Approvals - all authorizations, consents, approvals,
     licenses and exemptions of, registrations and filings with, and reports to,
     all Governmental Authorities.

          Governmental Authority - any federal, state, municipal, national,
     foreign or other governmental department, commission, board, bureau, court,
     agency or instrumentality or political subdivision thereof or any entity or
     officer exercising executive, legislative, judicial, regulatory or
     administrative functions of or pertaining to any government or any court,
     in each case whether associated with a state of the United States, the
     District of Columbia or a foreign entity or government.

          Governmental Receivable - a Retail Receivable in respect of which the
     Third Party Payor is a Government Payor.

          Guarantors - Parent and each Person who hereafter guarantees payment
     or performance of the whole or any part of the Obligations.

          Guaranty - each guaranty agreement now or hereafter executed by a
     Guarantor in favor of Administrative Agent with respect to any of the
     Obligations.

          Health-Care-Insurance Receivable - shall have the meaning given to the
     term "health-care-insurance receivable" in the UCC.

          Healthcare Laws - Medicaid Regulations, Medicare Regulations,
     Anti-Kickback Statutes, TRICARE (10 U.S.C. Sections 1071-1106), and all
     other applicable current and future laws, rules, regulations, codes,
     ordinances, orders, decrees, judgments, injunctions or binding agreements
     issued, promulgated or entered into by the Food and Drug Administration,
     CMS, HHS, the Office of Inspector General of HHS, the Drug Enforcement
     Administration or any other Governmental Authority, including any state or
     local professional licensing laws, certificate of need laws and state
     reimbursement laws, relating in any way to the conduct of the business of
     any Borrower or any of the Subsidiaries or the provision of healthcare
     services generally.

          Healthcare Purchaser - a health maintenance organization, prepaid
     health clinic, managed care plan, preferred provider organization or other
     institutional, governmental or commercial purchaser of healthcare services,
     which has engaged any Borrower or any of the Subsidiaries to provide
     diagnostic imaging services to Members of health plans offered by such
     purchaser pursuant to a Private Provider Agreement.

          Hedging Agreement - any interest rate protection agreement, foreign
     currency exchange agreement, forward contract, currency swap agreement,
     commodity price protection agreement or other interest or currency exchange
     rate or commodity price hedging arrangement.

          HHS - the Department of Health and Human Services.


                                      -18-

          Hostile Acquisition - any investment in a Person, resulting in control
     of such Person, involving a tender offer or proxy contest that has not been
     recommended or approved by the board of directors or similar body of such
     Person that is the subject of the investment prior to the first public
     announcement or disclosure relating to such investment.

          Impermissible Qualification - any qualification or exception to the
     opinion or certification of any independent public accountant as to any
     financial statement of Borrowers which (i) is of a "going concern" or
     similar nature or (ii) relates to the limited scope of examination of
     matters relevant to such financial statements.

          Indemnitees - the Administrative Agent Indemnitees, the Lender
     Indemnitees, Issuing Bank Indemnitees, and the BofA Indemnitees.

          Indentures - collectively, the Senior Note Indenture and the Senior
     Subordinated Note Indenture.

          Initial Lender - BofA, in its capacity as a "Lender" under this
     Agreement on the Restatement Effective Date.

          Insolvency Proceeding - any action, case or proceeding commenced by or
     against a Person under any state, federal or foreign law, or any agreement
     of such Person for (i) the entry of an order for relief under any chapter
     of the Bankruptcy Code or other insolvency or debt adjustment law (whether
     state, federal or foreign), (ii) the appointment of a receiver (or
     administrative receiver), trustee, liquidator, administrator, conservator
     or other custodian for such Person or any part of its Property, (iii) an
     assignment or trust mortgage for the benefit of creditors of such Person,
     or (iv) the liquidation, dissolution or winding up of the affairs of such
     Person.

          Instrument - shall have the meaning given to the term "instrument" in
     the UCC.

          Intellectual Property - all intellectual and similar Property of a
     Person of every kind and description, including inventions, designs,
     patents, patent applications, copyrights, trademarks, service marks, trade
     names, mask works, trade secrets, proprietary information, know-how,
     software and databases and all embodiments or fixations thereof and related
     documentation, registrations and franchises, all books and records
     describing or used in connection with the foregoing and all licenses, or
     other rights to use any of the foregoing.

          Interest Expense - for any period, interest expense (other than
     interest payable-in-kind) for such period minus interest income for such
     period.

          Interest Period - shall have the meaning ascribed to it in SECTION
     3.1.3.

          Investment Accounts - InSight Health Services Corp. account no. 881586
     maintained with BofA and InSight Health Corp. investment sweep account no.
     211500418005 maintained with Banc of America Securities, LLC, and any
     replacement of either of the foregoing.

          Investment Property - shall have the meaning given to the term
     "investment property" in the UCC and shall include all Securities (whether
     certificated or uncertificated), security entitlements, securities
     accounts, commodity contracts and commodity accounts.

          Issuing Bank - BofA or an Affiliate of BofA.


                                      -19-

          Issuing Bank Indemnitees - Issuing Bank and all of its present and
     future officers, directors, employees, agents and attorneys.

          LC Application - an application by any or all Borrowers to Issuing
     Bank, pursuant to a form approved by Issuing Bank, for the issuance of a
     Letter of Credit, that is submitted to Issuing Bank at least 3 Business
     Days prior to the requested issuance of such Letter of Credit.

          LC Conditions - the following conditions, the satisfaction of each of
     which is required before Issuing Bank shall be obligated to issue a Letter
     of Credit: (i) each of the conditions set forth in SECTION 11.2 has been
     and continues to be satisfied, including the absence of any Default or
     Event of Default; (ii) after giving effect to the issuance of the requested
     Letter of Credit and all other unissued Letters of Credit for which an LC
     Application has been signed by a Borrower and approved by Administrative
     Agent and Issuing Bank, the LC Obligations would not exceed $10,000,000 and
     no Out-of-Formula Condition would exist, and, if no Revolver Loans are
     outstanding, the LC Obligations do not, and would not upon the issuance of
     the requested Letter of Credit, exceed the Borrowing Base; (iii) such
     Letter of Credit has an expiration date that is no more than 1 year from
     the date of issuance; (iv) the currency in which payment is to be made
     under the Letter of Credit is Dollars; and (v) the form of the proposed
     Letter of Credit is satisfactory to Administrative Agent and Issuing Bank
     in their reasonable discretion, provides for sight drafts only and does not
     contain any language that automatically increases the amount available to
     be drawn under the Letter of Credit.

          LC Documents - any and all agreements, instruments and documents
     (including an LC Application) required by Issuing Bank to be executed by
     Borrowers or any other Person and delivered to Issuing Bank for the
     issuance, amendment or renewal of a Letter of Credit.

          LC Facility - the subfacility for Letters of Credit established as
     part of the Revolver Commitments pursuant to Section 2.3.

          LC Obligations - on any date, an amount (in Dollars) equal to the sum
     of (without duplication) (i) all amounts then due and payable by any
     Obligor on such date by reason of any payment that is made by Issuing Bank
     under a Letter of Credit that has not been repaid to Issuing Bank, plus
     (ii) the aggregate undrawn amount of all Letters of Credit which are then
     outstanding or for which an LC Application has been delivered to and
     accepted by Issuing Bank, plus (iii) all fees and other amounts due or to
     become due in respect of Letters of Credit outstanding on such date.

          LC Request - a Letter of Credit Request from Borrowers to Issuing Bank
     in the form of EXHIBIT I annexed hereto.

          LC Reserve - at any date, the aggregate of all LC Obligations on such
     date, other than (i) LC Obligations that Borrowers shall Cash Collateralize
     on or prior to such date and (ii) the portion of LC Obligations described
     in clause (iii) of the definition thereof.

          Lender Indemnitees - Lenders and all of their respective present and
     future officers, directors, employees, agents and attorneys.

          Lenders - shall have the meaning given to it in the preamble to this
     Agreement and shall include BofA (whether in its capacity as a provider of
     Loans under SECTION 2 or as the provider of Swingline Loans under SECTION
     4.1.3 ) and any other Person who may from time to time become a "Lender"
     under this Agreement.


                                      -20-

          Letter of Credit - any standby letter of credit issued by Issuing Bank
     for the account of any Borrower.

          Letter-of-Credit Right - shall have the meaning given to the term
     "letter-of-credit-right" in the UCC.

          LIBOR Lending Office - with respect to a Lender, the office designated
     as a LIBOR Lending Office for such Lender on the signature page hereof (or
     on any Assignment and Acceptance, in the case of an assignee) and such
     other office of such Lender or any of its Affiliates that is hereafter
     designated by written notice to Administrative Agent.

          LIBOR Loan - a Loan, or portion thereof, during any period in which it
     bears interest at a rate based upon the applicable Adjusted LIBOR Rate.

          Lien - any mortgage, pledge, hypothecation, collateral assignment,
     deposit arrangement, encumbrance, lien (statutory or other), charge or
     other security interest or preferential arrangement in the nature of a
     security interest of any kind or nature whatsoever (including any
     conditional sale or other title retention agreement, any easement, right of
     way or other encumbrance on title to real property). For the purpose of
     this Agreement, a Borrower shall be deemed to be the owner of any Property
     which it has acquired or holds subject to a conditional sale agreement or
     other arrangement pursuant to which title to the Property has been retained
     by or vested in some other Person for security purposes.

          Lien Waiver - an agreement duly executed in favor of Administrative
     Agent, in form and content acceptable to Administrative Agent, by which for
     locations leased by an Obligor, an owner or mortgagee of premises upon
     which any Property of an Obligor is located agrees to waive or subordinate
     any Lien it may have with respect to such Property in favor of
     Administrative Agent's Lien therein and to permit Administrative Agent to
     enter upon such premises and remove such Property or to use such premises
     to store or dispose of such Property.

          Liquidity - on any date, an amount equal to the sum of (i)
     Availability on such date plus (ii) the amount of Eligible Cash on such
     date.

          Loan - a Revolver Loan (and each Base Rate Loan and LIBOR Loan
     comprising such Loan).

          Loan Account - the loan account established by each Lender on its
     books pursuant to SECTION 5.8.

          Loan Documents - this Agreement, the Other Agreements and the Security
     Documents.

          Loan Year - a period commencing each calendar year on the same month
     and day as the date of this Agreement and ending on the same month and day
     in the immediately succeeding calendar year, with the first such period
     (i.e. the first Loan Year) to commence on the date of this Agreement.

          Management Agreement - that certain management agreement dated as of
     October 17, 2001, among J.W. Childs Advisors II, L.P., Halifax Genpar,
     L.P., Parent and InSight Health, as the same may be amended, modified,
     restated or supplemented from time to time to the extent not adverse in any
     material respect to Administrative Agent or Lenders.


                                      -21-

          Margin Stock - shall have the meaning ascribed to it in Regulation U
     and of the Board of Governors.

          Material Adverse Effect - the effect of any event, condition, action,
     omission or circumstance, which, alone or when taken together with other
     events, conditions, actions, omissions or circumstances occurring or
     existing concurrently therewith, (i) has any material adverse effect upon
     the business, operations, Properties or financial condition of any Obligor;
     (ii) has or could be reasonably expected to have any material adverse
     effect whatsoever upon the validity or enforceability of this Agreement or
     any of the other Loan Documents; (iii) has any adverse effect upon the
     Liens of Administrative Agent with respect to the Collateral or the
     priority of any such Liens; (iv) has any material adverse effect upon the
     ability of any Obligor to perform its obligations under this Agreement or
     any of the other Loan Documents, including repayment of any of the
     Obligations when due; or (v) has any material adverse effect upon the
     ability of Administrative Agent or any Lender to enforce or collect the
     Obligations or realize upon any of the Collateral in accordance with the
     Loan Documents and Applicable Law.

          Material Contract - an agreement to which an Obligor is a party (other
     than the Loan Documents) for which breach, termination, cancellation,
     nonperformance or failure to renew could reasonably be expected to have a
     Material Adverse Effect.

          Maximum Rate - the maximum non-usurious rate of interest permitted by
     Applicable Law that at any time, or from time to time, may be contracted
     for, taken, reserved, charged or received on the Debt in question or, to
     the extent that at any time Applicable Law may thereafter permit a higher
     maximum non-usurious rate of interest, then such higher rate.
     Notwithstanding any other provision hereof, the Maximum Rate shall be
     calculated on a daily basis (computed on the actual number of days elapsed
     over a year of 365 or 366 days, as the case may be).

          Medicaid Certification - certification by CMS or a state agency or
     entity under contract with CMS that health maintenance, management or care
     operations are in material compliance with all of the conditions of
     participation set forth in the Medicaid Regulations.

          Medicaid Provider Agreement - an agreement entered into between a
     state agency or other such entity administering the Medicaid program and a
     health maintenance management or care operation under which the health
     maintenance, management or care operation agrees to provide services for
     Medicaid patients in accordance with the terms of the agreement and
     Medicaid Regulations.

          Medicaid Regulations - collectively, (i) all federal statutes (whether
     set forth in Title XIX of the Social Security Act or elsewhere) affecting
     the medical assistance program established by Title XIX of the Social
     Security Act and any statute succeeding thereto); (ii) all applicable
     provisions of all federal rules, regulations, manuals and orders of all
     Governmental Authorities promulgated pursuant to or in connection with the
     statutes described in clause (i) above and all federal administrative,
     reimbursement and other guidelines of all Governmental Authorities having
     the force of law promulgated pursuant to or in connection with the statutes
     described in clause (i) above; (iii) all state statutes and plans for
     medical assistance enacted in connection with the statutes and provisions
     described in clauses (i) and (ii) above; and (iv) all applicable provisions
     of all rules, regulations, manuals and orders of all Governmental
     Authorities promulgated pursuant to or in connection with the statutes
     described in clause (iii) above and all stated administrative,
     reimbursement and other guidelines of all Governmental Authorities having
     the force of law promulgated pursuant to or in connection with the statutes
     described in clause (ii) above.


                                      -22-

          Medicare Certification - certification by CMS or a state agency or
     entity under contract with CMS that the health maintenance, management or
     care operation is in material compliance with all of the conditions of
     participation set forth in the Medicare Regulations.

          Medicare Provider Agreement - an agreement entered into between a
     state agency or other such entity administering the Medicare program and a
     health maintenance, management or care operation under which the health
     maintenance, management or care operation agrees to provide services for
     Medicare patients in accordance with the terms of the agreement and
     Medicare Regulations.

          Medicare Regulations - collectively, all federal statutes (whether set
     forth in Title XVIII of the Social Security Act or elsewhere) affecting the
     health insurance program for the aged and disabled established by Title
     XVIII of the Social Security Act and any statute succeeding thereto,
     together with applicable provisions of all rules, regulations, manuals and
     orders and administrative, reimbursement and other guidelines having the
     force of law of Governmental Authorities (including HHS, CMS, the Office of
     the Inspector General for HHS or any Persons succeeding to the functions of
     any of the foregoing) promulgated pursuant to or in connection with any of
     the foregoing having the force of law.

          Member - an individual who is a member, subscriber or enrollee, or any
     dependent of any member subscriber or enrollee, under any health plan
     offered by a Healthcare Purchaser.

          Money Borrowed - as applied to any Obligor, without duplication, (i)
     Debt arising from the lending of money by any other Person to such Obligor;
     (ii) Debt, whether or not in any such case arising from the lending of
     money by another Person to such Obligor, (A) which is represented by notes
     payable or drafts accepted that evidence extensions of credit, or (B) which
     constitutes obligations evidenced by bonds, debentures, notes or similar
     instruments, (iii) Debt that constitutes a Capitalized Lease Obligation;
     (iv) reimbursement obligations with respect to letters of credit or
     guaranties of letters of credit; and (v) Debt of such Obligor under any
     guaranty of obligations that would constitute Debt for Money Borrowed under
     clauses (i) through (iii) hereof, if owed directly by such Obligor.

          Monthly Cash Collections - for any month, an amount equal to (i) Cash
     collections by Borrowers on account of Wholesale Receivables for such month
     plus (ii) Cash collections by Borrowers on account of Retail Receivables
     for such month plus (iii) Cash reimbursements to Borrowers from
     Subsidiaries that are not Borrowers for such month minus Cash refunds made
     by Borrowers during such month.

          Moody's - Moody's Investors Services, Inc.

          Multiemployer Plan - has the meaning set forth in Section 4001(a)(3)
     of ERISA.

          Notes - each Revolver Note and any other promissory note executed by
     Borrowers at Administrative Agent's request to evidence any of the
     Obligations.

          Notice of Borrowing - as defined in SECTION 4.1.1(I).

          Notice of Conversion/Continuation - as defined in SECTION 3.1.2(II).


                                      -23-

          Obligations - in each case, whether now in existence or hereafter
     arising, (i) the principal of, and interest and premium, if any, on the
     Loans, (ii) all LC Obligations and all other obligations of any Obligor to
     Administrative Agent or Issuing Bank arising in connection with the
     issuance of any Letter of Credit, (iii) all liabilities and obligations of
     Borrowers under any indemnity for Claims, (iv) all Extraordinary Expenses,
     and (v) all other Debts, liabilities, covenants, duties and obligations
     (including Contingent Obligations) now or at any time or times hereafter
     owing by any Obligor to Administrative Agent or any Lender under or
     pursuant to this Agreement or any of the other Loan Documents, or owing by
     any Obligor to Administrative Agent or BofA (or any Affiliate of BofA) with
     respect to Banking Relationship Debt, in each case, whether evidenced by
     any note or other writing, whether arising from any extension of credit,
     opening of a letter of credit, acceptance, loan, guaranty, indemnification
     or otherwise and whether direct or indirect, absolute or contingent, due or
     to become due, primary or secondary, or joint or several, including all
     interest, charges, expenses, fees or other sums chargeable to any or all
     Obligors under any of the Loan Documents.

          Obligor - each Borrower and each Guarantor, and any other Person that
     is at any time liable for the payment of the whole or any part of the
     Obligations or that has granted in favor of Administrative Agent a Lien
     upon any of such Person's assets to secure payment of any of the
     Obligations.

          Ordinary Course of Business - with respect to any transaction
     involving any Person, the ordinary course of such Person's business, as
     undertaken by such Person in good faith and not for the purpose of evading
     any covenant or restriction in any Loan Document.

          Organic Documents - with respect to any Person, its charter,
     certificate or articles of incorporation, bylaws, articles of organization,
     limited liability agreement, operating agreement, members agreement,
     partnership agreement, certificate of partnership, certificate of formation
     or similar agreement or instrument governing the formation or operation of
     such Person.

          OSHA - the Occupational Safety and Hazard Act of 1970.

          Other Agreements - the Notes, the Fee Letter, the Lien Waiver, each
     Cash Management Agreement, Hedging Agreement or other document, instrument
     or agreement relating to Bank Products to which an Obligor is party with
     BofA or any of its Affiliates, and any and all other agreements,
     instruments and documents (other than this Agreement and the Security
     Documents), heretofore, now or hereafter executed by any Borrower, any
     other Obligor or any other Person and delivered to Administrative Agent or
     any Lender, or otherwise executed by Administrative Agent or any Lender in
     favor of any Person on behalf or for the account of an Obligor, in each
     case in respect of the transactions contemplated by this Agreement or other
     Loan Documents.

          Out-of-Formula Condition - as defined in SECTION 2.1.2.

          Out-of-Formula Loan - a Revolver Loan made or existing when an
     Out-of-Formula Condition exists or the amount of any Revolver Loan which,
     when funded, results in an Out-of-Formula Condition.

          Parent - InSight Health Services Holdings Corp., a Delaware
     corporation.

          Participant - as defined in SECTION 14.2.1.

          Participating Lender - as defined in SECTION 2.3.2(I).


                                      -24-

          Payment Account - an account maintained by Administrative Agent to
     which all monies from time to time deposited to a Dominion Account shall be
     transferred during a Restrictive Trigger Event and all other collections on
     Accounts shall be sent in immediately available federal funds.

          Payment Intangible - shall have the meaning given to the term "payment
     intangible" in the UCC.

          Payment Item - each check, draft, or other item of payment payable to
     a Borrower, including those evidencing or constituting proceeds of any of
     the Collateral.

          Pending Revolver Loans - at any date, the aggregate principal amount
     of all Revolver Loans which have been requested in any Notice of Borrowing
     received by Administrative Agent but which have not theretofore been
     advanced by Administrative Agent or Lenders.

          Permitted Acquisition - (i) if at the time of and after giving pro
     forma effect to such Acquisition Transaction, there are no Revolver Loans
     outstanding and the LC Obligations that have not been Cash Collateralized
     do not exceed $2,000,000, any Acquisition Transaction, provided that such
     Acquisition Transaction is not a Hostile Acquisition; and (ii) if at the
     time of or after giving pro forma effect to such Acquisition Transaction,
     there are Revolver Loans outstanding or the LC Obligations that have not
     been Cash Collateralized exceed $2,000,000, any Acquisition Transaction,
     provided that:

          (a) the Acquisition Target's business is in a Permitted Business
     Field;

          (b) Administrative Agent shall have received copies of (i) with
     respect to any Acquisition Transaction involving Acquisition Consideration
     of more than $3,000,000, the Acquisition Documents, (ii) with respect to
     any Acquisition Transaction involving Acquisition Consideration of more
     than $3,000,000, historical financial statements, if available, or other
     financial information of the Acquisition Target in form and substance
     reasonably acceptable to Administrative Agent and (iii) all other financial
     information, lien search results and other documents and information with
     respect to the Acquisition Target as Administrative Agent may reasonably
     request, all of which shall be reasonably acceptable to Administrative
     Agent;

          (c) if the acquired assets are to be included in the Borrowing Base
     simultaneously with the consummation of the Permitted Acquisition,
     Administrative Agent's examiners shall have completed a field exam of the
     Acquisition Target, in scope and with results reasonably acceptable to
     Administrative Agent, or if such field exam is not conducted, then the
     assets of such Acquisition Target shall not be included in the Borrowing
     Base and shall be ineligible for borrowing purposes until such exam is
     conducted in scope and with results reasonably acceptable to Administrative
     Agent;

          (d) no Default or Event of Default shall exist at the time of the
     Acquisition Transaction or after giving pro forma effect thereto;

          (e) Borrowers shall have delivered to Administrative Agent a
     certificate executed by the chief financial officer of Borrowers which
     demonstrates to the reasonable satisfaction of Administrative Agent that
     (i) at the time of and after giving pro forma effect to such Acquisition
     Transaction Borrowers shall have Liquidity of not less than $22,500,000 and
     for the 30-day period preceding the date of such Acquisition, Average
     Liquidity shall not be less than $22,500,000, and (ii) at the time of such
     Acquisition Transaction and after giving effect thereto,


                                      -25-

     Borrowers shall maintain, on a pro forma basis for the 12-month period
     ending on the Restatement Effective Date a Fixed Charge Coverage Ratio of
     1.10 to 1.0;

          (f) any Debt incurred to any or all of the sellers in connection with
     such Acquisition Transaction shall be unsecured;

          (g) the Acquisition Transaction is not a Hostile Acquisition;

          (h) Borrower shall have notified Administrative Agent in writing of
     the Acquisition Transaction (and provided to Administrative Agent an
     information package with respect to the Acquisition Transaction) at least
     14 days prior to the scheduled closing date of the Acquisition Transaction;

          (i) if the Acquisition Transaction involves Acquisition Consideration
     greater than $3,000,000, Administrative Agent contemporaneously with the
     closing of such Acquisition Transaction shall have received (i) such
     documents and instruments as may be necessary to grant or confirm to
     Administrative Agent a first priority perfected Lien on assets of the
     Acquisition Target so acquired that are consistent with the "Collateral"
     hereunder and (ii) if the Acquisition Target acquired is not merged into a
     Borrower or an Acquisition Subsidiary that already is a "Borrower" under
     the Agreement and, after giving effect to the Acquisition Transaction, the
     Acquisition Target is a wholly-owned Subsidiary of a Borrower or
     Acquisition Subsidiary, Administrative Agent shall have received a Joinder
     Agreement executed by such Acquisition Target, together with such other
     collateral documents and opinions of counsel as may be reasonably requested
     by Administrative Agent, each in form and substance reasonably satisfactory
     to Administrative Agent; and

          (j) Pro forma EBITDA of the Acquisition Target for the 12-month period
     ending on the last day of the most recent month for which Administrative
     Agent has received financial statements shall be equal to or greater than
     $0.

          Permitted Asset Disposition - (i) if at the time of and after giving
     pro forma effect to such Asset Disposition there are no Revolver Loans
     outstanding and the LC Obligations that have not been Cash Collateralized
     do not exceed $2,000,000, any Asset Disposition; and (ii) if at the time of
     or after giving pro forma effect to such Asset disposition there are
     Revolver Loans outstanding or the LC Obligations that have not been Cash
     Collateralized exceed $2,000,000, any Asset Disposition that consists of
     any of the following:

          (a) the disposition of damaged, obsolete or worn out Property in the
     Ordinary Course of Business;

          (b) the sale of inventory in the Ordinary Course of Business;

          (c) dispositions permitted by SECTION 10.2.1;

          (d) the sale of Equity Interests of any Subsidiary of InSight Health
     to a Borrower or a Guarantor;

          (e) any disposition of real Property to a Governmental Authority as a
     result of a condemnation of such real Property;


                                      -26-

          (f) the abandonment or cancellation of Intellectual Property that is
     not material or is no longer used or useful in any material respect in the
     business of Borrowers and their Subsidiaries, taken as a whole;

          (g) licenses, leases and subleases of real or personal Property in the
     Ordinary Course of Business;

          (h) dispositions of Property to any Borrower, Guarantor or Subsidiary
     thereof, provided that if the transferor is a Borrower or a Guarantor then
     the transferee must be a Borrower or Guarantor;

          (i) sales of Cash Equivalents in the Ordinary Course of Business on
     ordinary business terms;

          (j) non-exclusive licenses and sublicenses of Intellectual Property in
     the Ordinary Course of Business;

          (k) sales or forgiveness of Accounts in the Ordinary Course of
     Business in connection with the collection or compromise thereof, including
     sales of Accounts which arise from or constitute a workers' compensation
     claim or a personal injury claim; and

          (l) the disposition of Property (other than Collateral) having a fair
     market value not to exceed $10,000,000 in the aggregate for any Fiscal
     Year.

          Permitted Business Field - the business engaged in by Borrowers on the
     Restatement Effective Date or a business substantially similar or
     reasonably related, complementary or incidental to the business engaged in
     by Borrowers on the Restatement Effective Date and reasonable extensions
     thereof.

          Permitted Contingent Obligations - Contingent Obligations arising from
     endorsements of items of payment for collection or deposit in the Ordinary
     Course of Business; Contingent Obligations arising from Hedging Agreements
     entered into in the Ordinary Course of Business; Contingent Obligations of
     any Borrower and its Subsidiaries existing as of the Restatement Effective
     Date, including extensions and renewals thereof that do not increase the
     amount of such Contingent Obligations as of the date of such extension or
     renewal; Contingent Obligations arising under indemnity agreements to title
     insurers to cause such title insurers to issue to Administrative Agent
     title insurance policies; Contingent Obligations with respect to customary
     indemnification obligations in contracts entered into in the Ordinary
     Course of Business and in favor of sellers in connection with Permitted
     Acquisitions; Contingent Obligations consisting of reimbursement
     obligations from time to time owing by any Borrower to Issuing Bank with
     respect to Letters of Credit (but in no event to include reimbursement
     obligations at any time owing by a Borrower to any other Person that may
     issue letters of credit for the account of Borrowers); Contingent
     Obligations of an Obligor in respect of Debt of another Obligor; Contingent
     Obligations of an Obligor or any Subsidiary thereof on an unsecured basis
     that do not constitute Debt of such Obligor; Contingent Obligations of a
     Subsidiary that is not an Obligor in respect of obligations (including
     Debt) of another Subsidiary that is not an Obligor; and other Contingent
     Obligations not to exceed $25,000,000 in the aggregate at any time.

          Permitted Lien - a Lien of a kind specified in SECTION 10.2.5.


                                      -27-

          Permitted Purchase Money Debt - Purchase Money Debt of Borrowers and
     their Subsidiaries that is unsecured or is secured only by a Purchase Money
     Lien. For the purposes of this definition, the principal amount of any
     Purchase Money Debt consisting of capitalized leases shall be computed as a
     Capitalized Lease Obligation.

          Permitted Restrictive Agreement - an agreement of a Borrower or a
     Subsidiary which is a Restrictive Agreement by virtue of the following:

          (a) conditions imposed by Applicable Law or by any Loan Document;

          (b) in the case of clause (b) of the definition of Restrictive
     Agreement, an agreement that applies to assets encumbered by Permitted
     Liens as long as such restriction applies only to the asset encumbered by
     such Permitted Lien;

          (c) restrictions and conditions contained in such agreement existing
     on the Restatement Effective Date (but shall not apply to any amendment or
     modification expanding the scope of any such restriction or condition);

          (d) restrictions in such agreement in effect at the time any Person
     becomes a Subsidiary of a Borrower, provided that such agreement was not
     entered into in contemplation of such Person becoming a Subsidiary of a
     Borrower;

          (e) customary restrictions and conditions contained in agreements
     relating to the sale of a Subsidiary of a Borrower (or the assets of a
     Subsidiary of a Borrower) pending such sale, provided such restrictions and
     conditions apply only to the Subsidiary of such Borrower that is to be sold
     (or whose assets are to be sold) and such sale is permitted hereunder;

          (f) in the case of clause (b) of the definition of Restrictive
     Agreement, customary provisions in leases and contracts in the Ordinary
     Course of Business between a Borrower or any of its Subsidiaries and its
     customers and other contracts restricting the assignment thereof;

          (g) restrictions in the Senior Note Documents and the Senior
     Subordinated Note Documents;

          (h) restrictions in agreements governing Debt listed in SCHEDULE
     10.2.3 and Refinancing Debt thereof and that are no more restrictive, taken
     as a whole, with respect to such restrictions than those contained in such
     agreements on the Restatement Effective Date;

          (i) customary provisions with respect to the disposition or
     distribution of assets or Property, and provisions restricting the
     incurrence of the Obligations, in joint venture agreements, limited
     liability company operating agreements, partnership agreements and
     stockholders agreements for Affiliates that are not Borrowers; and

          (j) customary provisions with respect to the disposition or
     distribution of assets or Property in asset sale agreements, agreements in
     respect of sales of Equity Interests and other similar agreements entered
     into in connection with transactions not prohibited under this Agreement,
     provided that such encumbrance or restriction shall only be effective
     against the assets or Property that are the subject of such agreements.

          Permitted Senior Subordinated Note Repurchase - the repurchase or
     redemption of Senior Subordinated Notes (i) on or within 2 Business Days
     after the Restatement Effective Date for an


                                      -28-

     amount equal to $50,000,000 and (ii) any subsequent repurchase or
     redemption of Senior Subordinated Notes so long as the following conditions
     are satisfied, as determined by Administrative Agent:

          (a) if there are any Revolver Loans outstanding at the time of or if
     Revolver Loans are employed for such repurchase or redemption, the Fixed
     Charge Coverage Ratio for the 12-month period ending as of the last day of
     the most recent month for which financial statements have been received by
     Administrative Agent in accordance with SECTION 10.1.3(A) preceding the
     date of repurchase or redemption is at least 1.1 to 1.0 on a pro forma
     basis after giving effect to such repurchase or redemption;

          (b) Liquidity at the time of such repurchase and after giving pro
     forma effect thereto is at least $22,500,000;

          (c) no Event of Default exists or would result therefrom;

          (d) Borrower Agent shall have given Administrative Agent at least 5
     Business Days prior written notice of such Permitted Senior Subordinated
     Notes Repurchase;

          (e) simultaneously with any Permitted Senior Subordinated Notes
     Repurchase, the acquired Senior Subordinated Notes shall be cancelled;

          (f) both before and after giving pro forma effect to any Permitted
     Senior Subordinated Notes Repurchase, each Borrower and each of its
     Subsidiaries is Solvent; and

          (g) on or immediately before the effective date of any Permitted
     Senior Subordinated Notes Repurchase, Borrower Agent shall have furnished
     to Administrative Agent a certificate setting forth, in reasonable detail,
     Borrower Agent's calculation of the amounts to be paid in Cash in respect
     of principal of Senior Subordinated Notes to be repurchased and the accrued
     and unpaid interest, premium, fees, expenses and commissions payable in
     connection with closing such Permitted Senior Subordinated Notes
     Repurchase, together with the calculations required to determine compliance
     with this definition of Permitted Senior Subordinated Note Repurchase.

          Person - an individual, partnership, corporation, limited liability
     company, limited liability partnership, joint stock company, land trust,
     business trust, or unincorporated organization, or a Governmental
     Authority.

          Plan - an employee pension benefit plan that is covered by Title IV of
     ERISA or subject to the minimum funding standards under Section 412 of the
     Internal Revenue Code and that is either (i) maintained by Borrower for
     employees or (ii) maintained pursuant to a collective bargaining agreement
     or any other arrangement under which more than one employer makes
     contributions and to which Borrower is then making or accruing an
     obligation to make contributions or has within the preceding 5 years made
     or accrued such contributions.

          Private Provider Agreement - an agreement entered into between any
     Borrower and a Healthcare Purchaser under which such Borrower agrees to
     provide services for Members of a health plan offered by such Healthcare
     Purchaser.

          Professional Fees Allowance - on any date, an amount equal to that
     portion of aggregate uncollected Retail Receivables that, upon collection,
     will be payable to physicians as fees and other amounts due from Borrowers
     under all PSAs.


                                      -29-

          Professional Fees Reserve - on any date, an amount equal to that
     portion of Accounts that have been collected by Borrowers as of such date
     that is due from Borrowers to physicians as fees and other amounts due from
     Borrowers under all PSAs, as adjusted to deduct amounts attributable to and
     owing by Subsidiaries that are not Borrowers to the extent that such
     Subsidiaries have sufficient Cash on hand to pay such amounts as are due
     and payable as of such date.

          Pro Rata - with respect to any Lender on any date, a percentage (
     expressed as a decimal rounded to the ninth decimal place) arrived at by
     dividing the amount of the Total Commitments of such Lender on such date by
     the aggregate amount of the Commitments of all Lenders on such date.

          Projections - (i) prior to the Restatement Effective Date and
     thereafter until Administrative Agent and Lenders receive new projections
     pursuant to SECTION 10.1.5, the projections of Borrowers' financial
     condition, results of operations, and cash flow for the Fiscal Year ending
     June 30, 2006; and (ii) thereafter, the projections most recently received
     by Administrative Agent and Lenders pursuant to and as required by SECTION
     10.1.5.

          Properly Contested - in the case of any Debt or Tax of an Obligor that
     is not paid as and when due or payable by reason of such Obligor's bona
     fide dispute concerning its liability to pay same or concerning the amount
     thereof, (i) such Debt or Tax is being properly contested in good faith by
     appropriate proceedings promptly instituted and diligently conducted; (ii)
     such Obligor has established appropriate reserves as shall be required in
     conformity with GAAP; (iii) the non-payment of such Debt or Tax will not
     reasonably be expected to have a Material Adverse Effect and will not
     result in a forfeiture or sale of any Collateral; (iv) no Lien is imposed
     upon any Collateral with respect to such Debt or Tax unless such Lien is at
     all times junior and subordinate in priority to the Liens in favor of
     Administrative Agent (except only with respect to property taxes that have
     priority as a matter of Applicable Law) and enforcement of such Lien is
     stayed during the period prior to the final resolution or disposition of
     such dispute; and (v) if the Debt or Tax results from, or is determined by
     the entry, rendition or issuance against an Obligor of a judgment, writ,
     order or decree, enforcement of such judgment, writ, order or decree is
     stayed pending a timely appeal or other judicial review.

          Property - any interest in any kind of property or asset, whether
     real, personal or mixed and whether tangible or intangible.

          Provider Agreement - the Medicaid Provider Agreement, the Medicare
     provider Agreement, any Private Provider Agreement or any other agreement
     by which a Third Party Payor is obligated to pay for services rendered to
     patients of any Borrower, or all of them, as the context requires.

          PSA - each Professional Services Agreement entered into by a Borrower
     and a physician or group of physicians in connection with the provision of
     diagnostic imaging services.

          Purchase Money Debt - means and includes (i) Debt (other than the
     Obligations) for the payment of all or any part of the purchase price of
     any fixed asset, (ii) any Debt (other than the Obligations) incurred at the
     time of or within 90 days prior to or after the acquisition of any fixed
     asset for the purpose of financing all or any part of the purchase price
     thereof, and (iii) any renewals, extensions or refinancings (but not any
     increases in the principal amounts) thereof outstanding at the time.


                                      -30-

          Purchase Money Lien - a Lien upon fixed assets which secures Purchase
     Money Debt, but only if such Lien shall at all times be confined solely to
     the fixed assets acquired through the incurrence of the Purchase Money Debt
     secured by such Lien.

          RCRA - the Resource Conservation and Recovery Act (42 U.S.C. Sections
     6991-6991i).

          Refinancing Conditions - the following conditions, each of which must
     be satisfied before Refinancing Debt shall be permitted under SECTION
     10.2.3: (i) the Refinancing Debt is in an aggregate principal amount that
     does not exceed the aggregate principal amount of the Debt being extended,
     renewed or refinanced (except by an amount equal to accrued interest
     thereon and the amount of all reasonable costs, expenses and premiums
     incurred in connection with such extension, renewal or refinancing), (ii)
     the Refinancing Debt has a later or equal final maturity and a longer or
     equal weighted average life than the Debt being extended, renewed or
     refinanced, (iii) the Refinancing Debt does not bear a rate of interest
     that exceeds, as of the date of such extension, renewal or refinancing, a
     market rate (as determined in good faith by a Senior Officer) for Debt of
     such type issued by an entity similar to the Borrower that is liable on the
     Debt being extended, renewed or refinanced, (iv) if the Debt being
     extended, renewed or refinanced is subordinate to the Obligations, the
     Refinancing Debt is subordinated to the same extent (except in the case of
     Permitted Senior Subordinated Note Repurchases with the proceeds of Senior
     Notes or Revolver Loans hereunder), (v) the covenants contained in any
     instrument or agreement relating to the Refinancing Debt, taken as a whole,
     are not materially less favorable to Borrowers than those relating to the
     Debt being extended, renewed or refinanced, (vi) at the time of and after
     giving effect to such extension, renewal or refinancing, no Default or
     Event of Default shall exist, (vii) no additional Lien is granted to secure
     the repayment of the Refinancing Debt (except in the case of Permitted
     Senior Subordinated Note Repurchases with the proceeds of Senior Notes or
     Revolver Loans hereunder), and (viii) no additional Obligor is or may
     become obligated on the Refinancing Debt.

          Refinancing Debt - Debt for Money Borrowed that is permitted by
     SECTION 10.2.3 and that is the subject or the result of an extension,
     renewal or refinancing.

          Register - the register maintained by Administrative Agent in
     accordance with SECTION 5.8.2.

          Regulation D - Regulation D of the Board of Governors.

          Reimbursement Date - as defined in SECTION 2.3.1(III).

          Rentals - all payments which a lessee is required to make under the
     terms of any lease.

          Report - as defined in SECTION 13.1.5.

          Reportable Event - any of the events set forth in Section 4043(c) of
     ERISA.

          Required Lenders - at any date of determination thereof, Lenders
     having Commitments representing at least 51% of the aggregate Commitments
     at such time; provided, however, that if any Lender shall be in breach of
     any of its obligations hereunder to Borrowers or Administrative Agent,
     including any breach resulting from its failure to honor its Commitment in
     accordance with the terms of this Agreement, then, for so long as such
     breach continues, the term "Required Lenders" shall mean Lenders (excluding
     each Lender that is in breach of its obligations under this Agreement)
     having Commitments representing at least 51% of the aggregate


                                      -31-

     Commitments (excluding the Commitments of each Lender that is in breach of
     its obligations under this Agreement) at such time; provided further, that
     if all of the Commitments have been terminated, the term "Required Lenders"
     shall mean Lenders (excluding each Lender that is in breach of its
     obligations under this Agreement) holding Loans (including Swingline Loans)
     representing at least 51% of the aggregate principal amount of Loans
     (including Swingline Loans) outstanding at such time.

          Restatement Effective Date - September 22, 2005.

          Restricted Investment - any acquisition of Property by a Borrower or
     any of its Subsidiaries in exchange for cash or other Property, whether in
     the form of an acquisition of Equity Interests or Debt, or the purchase or
     acquisition by such Borrower or any Subsidiary of any other Property, or a
     loan, advance or capital contribution, except the following: (i)
     acquisitions of fixed assets to be used in the Ordinary Course of Business
     of such Borrower or any of its Subsidiaries; (ii) acquisitions of goods to
     be used in the provision of services by such Borrower or any of its
     Subsidiaries in the Ordinary Course of Business; (iii) acquisitions of
     Current Assets in the Ordinary Course of Business of such Borrower or any
     of its Subsidiaries; (iv) investments to the extent existing on the
     Restatement Effective Date; (v) Cash Equivalents; (vi) loans and other
     advances of money to the extent not prohibited by SECTION 10.2.2; (vii)
     Permitted Acquisitions; (viii) Permitted Senior Subordinated Note
     Repurchases; (vii) Hedging Agreements entered into in the Ordinary Course
     of Business and not for speculative purposes; (ix) Debt permitted pursuant
     to Section 10.2.3; (x) Distributions to the extent permitted under this
     Agreement; (xi) extensions of trade credit in the Ordinary Course of
     Business; (xii) Permitted Contingent Obligations; (xii) loans and advances
     to employees, officers and directors of any Borrower or Guarantor or
     Subsidiary thereof (a) to the extent the proceeds thereof are used to
     acquire Equity Interests of Parent so long as any cash proceeds received by
     Parent are contemporaneously remitted to InSight Health and (b) in the
     Ordinary Course of Business (including for travel, entertainment and
     relocation expenses) in an aggregate amount for all such loans and advances
     permitted by this clause (b) not to exceed $500,000 at any one time
     outstanding; (xiii) investments consisting of Equity Interests,
     obligations, securities or other Property received by any Guarantor,
     Borrower or Subsidiary thereof in settlement of Accounts (created in the
     Ordinary Course of Business); (xiv) intercompany investments (a) by any
     Subsidiary of InSight Health in InSight Health or another Borrower or
     Guarantor, and (b) by any Subsidiary of InSight Health that is not a
     Borrower or Guarantor in any Person that is not a Borrower or Guarantor;
     (xv) investments in prepaid expenses, negotiable instruments held for
     collection and lease, utility and workers compensation, performance and
     similar deposits entered into as a result of the operations of the business
     in the Ordinary Course of Business; and (xvi) expenditures of Cash to
     purchase Equity Interests of or funding of loans to joint ventures or other
     business organizations that are Affiliates but not Obligors.

          Restrictive Agreement - an agreement that, if and for so long as an
     Obligor or any Subsidiary of such Obligor is a party thereto, would
     prohibit, condition or restrict such Obligor's or Subsidiary's right to:
     (a) incur or repay any of the Obligations; (b) grant Liens upon any of such
     Obligor's or Subsidiary's assets (including Liens granted in favor of
     Administrative Agent pursuant to the Loan Documents); or (c) declare or
     make Distributions; amend, modify, extend or renew any of the Loan
     Documents;

          Restrictive Trigger Event - for purposes of Section 8.2.5(ii), if
     Liquidity is less than $15,000,000 and there are any Revolver Loans
     outstanding.

          Retail Collection Account - shall have the meaning ascribed to it in
     SECTION 8.2.5(I).


                                      -32-

          Retail Receivable - an Account arising from (i) the provision of
     diagnostic imaging services or (ii) the provision of management of services
     by InSight Health to any Subsidiary that is not a Borrower.

          Retained Rights - with respect to any Governmental Receivable, the
     rights of any Obligor or any Subsidiary thereof granted by Applicable Law
     with respect to such Governmental Receivable, including, and as applicable,
     the collection thereof and discretion over the transfer thereof to any
     Person (including Administrative Agent) and to enforce the claim giving
     rise to such Governmental Receivable against the applicable Governmental
     Authority, in the absence of a court order in the manner expressly
     contemplated by Applicable Law.

          Revolver Commitment - at any date for any Lender, the obligation of
     such Lender to make Revolver Loans and to purchase participations in LC
     Obligations pursuant to the terms and conditions of this Agreement, which
     shall not exceed the principal amount set forth opposite such Lender's name
     under the heading "Revolver Commitment" on the signature pages of this
     Agreement or the principal amount set forth in the Assignment and
     Acceptance by which it became a Lender, as modified from time to time
     pursuant to the terms of this Agreement or to give effect to any applicable
     Assignment and Acceptance; and "Revolver Commitments" means the aggregate
     principal amount of the Revolver Commitments of all Lenders, the maximum
     amount of which on any date shall be $30,000,000, as reduced from time to
     time pursuant to SECTION 2.1.5.

          Revolver Loan - a loan made by Lenders as provided in SECTION 2.1
     (including any Out-of-Formula Loan) or a Swingline Loan funded solely by
     BofA.

          Revolver Note - a Revolver Note to be executed by Borrowers in favor
     of each Lender in the form of EXHIBIT A attached hereto, which shall be in
     the face amount of such Lender's Revolver Commitment and which shall
     evidence all Revolver Loans (other than Swingline Loans) made by such
     Lender to Borrowers pursuant to this Agreement.

          S&P - Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.

          Schedule of Accounts - as defined in SECTION 8.2.1.

          SEC - Securities and Exchange Commission.

          Secured Parties - Administrative Agent, Issuing Bank, Lenders
     (including BofA as the provider of Swingline Loans) and BofA (and any
     Affiliate of BofA) as the provider of any Bank Products.

          Security - shall have the same meaning as in Section 2(1) of the
     Securities Act of 1933.

          Security Agreement - the Security Agreement executed and delivered by
     Parent on or before the Restatement Effective Date to secure its Debt under
     its Guaranty.

          Security Documents - each Guaranty, the Control Agreements, the
     Security Agreement and all other instruments and agreements now or at any
     time hereafter securing the whole or any part of the Obligations.

          Senior Note Documents - the Senior Notes, the Senior Notes Indenture
     and any and all other agreements, instruments and documents executed in
     connection therewith or related thereto.


                                      -33-

          Senior Note Indenture - the indenture to be entered into by InSight
     Health and Guarantors in connection with the issuance of the Senior Notes.

          Senior Notes - the $300,000,000 Senior Secured Floating Rate Notes of
     InSight Health due 2011 that shall be issued under the Senior Notes
     Indenture (and any Senior Secured Floating Rate Notes of InSight Health due
     2011 issued in exchange therefor in an exchange offer) (plus any principal
     amounts issued in lieu of Cash interest).

          Senior Notes Trustee - U.S. Bank National Association, and any of its
     successors and assigns.

          Senior Officer - the chairman of the board of directors, the president
     or the chief financial officer of a Borrower.

          Senior Subordinated Notes - the 9-7/8% Senior Subordinated Notes due
     2001 issued by InSight Health, in the aggregate original principal amount
     of $250,000,000.

          Senior Subordinated Note Documents - the Senior Subordinated Notes,
     the Senior Subordinated Notes Indenture and any and all other agreements,
     instruments and documents executed in connection therewith or related
     thereto.

          Senior Subordinated Notes Indenture - the Indenture dated October 31,
     2001, among U.S. Bank National Association, as Trustee, and InSight Health
     and Guarantors, pursuant to which InSight Health issued the Senior
     Subordinated Notes.

          Settlement Report - a report delivered by Administrative Agent to
     Lenders summarizing the amount of the outstanding Revolver Loans as of the
     Settlement Date and the calculation of the Borrowing Base as of such
     Settlement Date.

          Social Security Act - the Social Security Act as codified at 42 U.S.C.
     Section 1395 et seq.

          Software - shall have the meaning given to the term "software" in the
     UCC.

          Solvent - as to any Person, such Person (i) owns Property whose fair
     salable value is greater than the amount required to pay all of such
     Person's debts (including contingent, subordinated, unmatured and
     unliquidated liabilities), (ii) owns Property whose present fair salable
     value (as defined below) is greater than the probable total liabilities
     (including contingent, subordinated, unmatured and unliquidated
     liabilities), of such Person as they become absolute and matured, (iii) is
     able to pay all of its debts as such debts mature, (iv) has capital that is
     not unreasonably small for its business and is sufficient to carry on its
     business and transactions and all business and transactions in which it is
     about to engage, (v) is not "insolvent" within the meaning of Section
     101(32) of the Bankruptcy Code, and (vi) has not incurred (by way of
     assumption or otherwise) any obligations or liabilities (contingent or
     otherwise) under any of the Loan Documents, or made any conveyance pursuant
     to or in connection therewith, with actual intent to hinder, delay or
     defraud either present or future creditors of such Person or any of its
     Subsidiaries. As used herein, the term "fair salable value" of a Person's
     assets means the amount that may be realized within a reasonable time,
     either through collection or sale of such assets at the regular market
     value, based upon the amount that could be obtained for such assets within
     such period by a capable and diligent seller from an interested buyer who
     is willing (but is under no compulsion) to purchase under ordinary selling
     conditions.


                                      -34-

          Sponsor Related Party - (i) any controlling stockholder, partner,
     member, 80% (or more) owned Subsidiary, or immediate family member (in the
     case of an individual) of any Sponsor or (ii) any trust, corporation,
     partnership or other entity, the beneficiaries, stockholders, partners,
     owners or Persons beneficially holding an 80% or more controlling interest
     of which consist of any one or more of the Sponsors and/or such other
     Persons referred to in the immediately preceding clause (i).

          Sponsors - means J.W. Childs Associates, L.P., J.W. Childs Equity
     Partners II, L.P., The Halifax Group, L.L.C, Halifax Capital Partners, L.P.
     and their respective Affiliates

          Statutory Reserves - on any date, the percentage (expressed as a
     decimal) established by the Board of Governors which is the then stated
     maximum rate for all reserves (including all basic, emergency, supplemental
     or other marginal reserve requirements and taking into account any
     transitional adjustments or other scheduled in reserve requirements)
     applicable to any member bank of the Federal Reserve System in respect to
     Eurocurrency Liabilities (or any successor category of liabilities under
     Regulation D). Such reserve percentage shall include those imposed pursuant
     to said Regulation D. The Statutory Reserve shall be adjusted automatically
     on and as of the effective date of any change in such percentage.

          Subordinated Debt - Debt incurred by a Borrower that is expressly
     subordinated and made junior in right of payment to the Full Payment of the
     Obligations and, to the extent that such Debt is incurred on or after the
     Restatement Effective Date, such Debt is payable on terms and conditions
     (including terms relating to interest, fees, repayment and subordination)
     that are reasonably satisfactory to Administrative Agent.

          Subsidiary - any Person in which more than 50% of its outstanding
     Voting Securities is owned directly or indirectly by a Borrower, by one or
     more other Subsidiaries of such Borrower or by a Borrower and one or more
     other Subsidiaries.

          Supporting LC - an irrevocable letter of credit that is in form and
     substance reasonably acceptable to Administrative Agent, issued or
     confirmed by a bank reasonably acceptable to Administrative Agent, and
     payable in Dollars at a place of payment within the United States that is
     reasonably acceptable to Administrative Agent, which letter of credit names
     Administrative Agent as the beneficiary thereof.

          Supporting Obligation - shall have the meaning given to the term
     "supporting obligation" in the UCC.

          Swingline Loan - as defined in SECTION 4.1.3 (II).

          Taxes - any present or future taxes, levies, imposts, duties, fees,
     assessments, deductions, withholdings or other charges of whatever nature,
     including income, receipts, excise, property, sales, use, transfer,
     license, payroll, withholding, social security and franchise taxes now or
     hereafter imposed or levied by the United States or any other Governmental
     Authority and all interest, penalties, additions to tax and similar
     liabilities with respect thereto, but excluding Excluded Taxes.

          Term - as defined in SECTION 6.1.

          Third Party Payor - any Person (other than the customer or patient)
     that is responsible for payment of all or any portion of an Account,
     including any commercial or non-profit insurer, any


                                      -35-

     Healthcare Purchaser and any Governmental Authority making payment pursuant
     to any Healthcare Law. For the avoidance of doubt, the term "Third Party
     Payors" shall include all Government Payors and all Commercial Payors.

          Transferee - as defined in SECTION 14.3.3.

          Type - any type of a Loan determined with respect to the interest
     option applicable thereto, which shall be either a LIBOR Loan or a Base
     Rate Loan.

          UCC - the Uniform Commercial Code (or any successor statute) as
     adopted and in force in the State of New York or, when the laws of any
     other state govern the method or manner of the perfection or enforcement of
     any security interest in any of the Collateral, the Uniform Commercial Code
     (or any successor statute) of such state.

          Undrawn Amount - on any date with respect to a particular Letter of
     Credit, the total amount then available to be drawn under such Letter of
     Credit in Dollars.

          Unused Line Fee - as defined in SECTION 3.2.2.

          Upstream Payment - collectively:

          (a) Distributions by a Subsidiary to a Borrower or any Obligor (other
     than Parent);

          (b) Distributions by a Subsidiary of a Borrower that is not
     wholly-owned by such Borrower to the holders of its Equity Interests,
     provided that such Distributions are made pro rata to all holders of its
     Equity Interests, taking into account the relative preferences, if any, on
     the various classes of Equity Interests of such non-wholly owned
     Subsidiary;

          (c) so long as no Default or Event of Default shall have occurred and
     be continuing, Distributions by InSight Health to Parent to permit Parent
     to purchase, redeem or otherwise acquire or retire for value Parent's
     Equity Interests from present or former officers, directors or employees of
     any Obligor or Subsidiary thereof (or permitted transferees, assigns,
     estates or heirs of the foregoing) upon the death, disability or
     termination of employment of such officer, director or employee, provided,
     that the aggregate amount of payments under this paragraph (c) after the
     Restatement Effective Date (net of (i) repayment of loans related to Equity
     Interests made by an Obligor or Subsidiary thereof pursuant to clause
     (xii)(a) of the definition of Restricted Investment and repaid in
     connection with such purchase, redemption or other acquisition for value of
     such Equity Interests and (ii) any proceeds received by Parent and
     contributed to InSight Health after the date hereof in connection with
     resales of any Equity Interests so purchased) shall not exceed $7,500,000
     in the aggregate;

          (d) Distributions to Parent for its proportionate share (as determined
     based upon pre-tax income) of the tax liability of the affiliated group of
     corporations that file consolidated federal income tax returns (or that
     file state or local income tax returns on a consolidated basis), provided
     that any refunds received by Parent attributable to InSight Health or any
     of its Subsidiaries shall promptly be returned by Parent to InSight Health
     through a contribution or purchase of common Equity Interests of InSight
     Health from InSight Health;

          (e) Distributions to Parent in amounts required for the Parent to pay
     franchise taxes and other fees required to maintain its existence and
     provide for all other customary operating costs of Parent to the extent
     attributable to the ownership and operation of InSight Health and its


                                      -36-

     Subsidiaries, including in respect of director fees and expenses,
     administrative, legal and accounting services provided by third parties and
     other customary costs and expenses including all costs and expenses with
     respect to filings with the SEC;

          (f) Distributions to Parent to the extent necessary to enable the
     payment of management fees permitted under SECTION 10.2.4; and

          (g) cashless exercises of options or warrants.

          USA Patriot Act - the Uniting and Strengthening America by Providing
     Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
     Pub. L. No. 107-56, 115 Stat. 272 (2001).

          Voting Securities - Equity Interests of any class or classes of a
     corporation or other entity the holders of which are ordinarily, in the
     absence of contingencies, entitled to elect a majority of the corporate
     directors or individuals performing similar functions.

          Wholesale Collection Account - shall have the meaning ascribed to it
     in SECTION 8.2.5(I).

          Wholesale Receivable - an Account that is not a Retail Receivable.

     1.2. ACCOUNTING TERMS. Unless otherwise specified herein, all terms of an
accounting character used in this Agreement shall be interpreted, all accounting
determinations under this Agreement shall be made, and all financial statements
required to be delivered under this Agreement shall be prepared in accordance
with GAAP, applied on a basis consistent with the most recent audited
Consolidated financial statements of Borrowers and their Subsidiaries heretofore
delivered to Administrative Agent and Lenders, except for any change required by
GAAP.

     1.3. OTHER TERMS. All other terms contained in this Agreement shall have,
when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.

     1.4. CERTAIN MATTERS OF CONSTRUCTION. The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. In the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding." The
section titles, table of contents and list of exhibits appear as a matter of
convenience only and shall not affect the interpretation of this Agreement. All
references to statutes shall include all related rules and implementing
regulations and any amendments of same and any successor statutes, rules and
regulations; to any agreement, instrument or other documents (including any of
the Loan Documents) shall include any and all modifications and supplements
thereto and any and all restatements, extensions or renewals thereof to the
extent such modifications, supplements, restatements, extensions or renewals of
any such documents are permitted by the terms thereof; to any Person (including,
Administrative Agent, a Borrower, a Lender or BofA) shall mean and include the
successors and permitted assigns of such Person; to "including" and "include"
shall be understood to mean "including, without limitation" (and, for purposes
of each Loan Document, the parties agree that the rule of ejusdem generis shall
not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters to matters similar to the
matters specifically mentioned); to the time of day shall mean the time of day
on the day in question in New York, New York, unless otherwise expressly
provided in this Agreement; or to the "discretion" of Administrative Agent or a
Lender shall mean the reasonable discretion of such Person. A Default or an
Event of Default shall be deemed to exist at all times during the period
commencing on the date that such


                                      -37-

Default or Event of Default occurs to the date on which such Default or Event of
Default is waived in writing by Administrative Agent (acting with the consent or
at the direction of the Lenders or the Required Lenders, as applicable) pursuant
to this Agreement or, in the case of a Default, is cured within any period of
cure expressly provided in this Agreement; and an Event of Default shall
"continue" or be "continuing" until such Event of Default has been waived in
writing by Administrative Agent (acting with the consent or at the direction of
the Lenders or the Required Lenders, as applicable). All calculations of Value
shall be in Dollars, all Loans shall be funded in Dollars and all Obligations
shall be repaid in Dollars. Whenever the phrase "to the best of Borrowers'
knowledge" or words of similar import relating to the knowledge or the awareness
of a Borrower are used in this Agreement or other Loan Documents, such phrase
shall mean and refer to the actual knowledge of a Senior Officer of any
Borrower.

SECTION 2. CREDIT FACILITY

     Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders severally agree to the extent and in the manner hereinafter
set forth to make their respective shares of the Commitments available to
Borrowers in an aggregate amount up to $30,000,000, as set forth hereinbelow:

     2.1. COMMITMENT.

          2.1.1. Revolver Loans. Each Lender agrees, severally to the extent of
its Revolver Commitment and not jointly with the other Lenders, upon the terms
and subject to the conditions set forth herein, to make Revolver Loans to
Borrowers on any Business Day during the period from the Restatement Effective
Date through the Business Day before the last day of the Term, not to exceed in
aggregate principal amount outstanding at any time such Lender's Revolver
Commitment at such time, which Revolver Loans may be repaid and reborrowed in
accordance with the provisions of this Agreement; provided, however, that
Lenders shall have no obligation to Borrowers whatsoever to honor any request
for a Revolver Loan on or after the Commitment Termination Date or if at the
time of the proposed funding thereof the aggregate principal amount of all of
the Revolver Loans then outstanding (including Swingline Loans) and Pending
Revolver Loans exceeds, or would exceed after the funding of such Revolver Loan,
the Borrowing Base. Each Borrowing of Revolver Loans shall be funded by Lenders
on a Pro Rata basis in accordance with their respective Revolver Commitments
(except for BofA with respect to Swingline Loans). The Revolver Loans shall bear
interest as set forth in SECTION 3.1. Each Revolver Loan shall, at the option of
Borrowers, be made or continued as, or converted into, part of one or more
Borrowings that, unless specifically provided herein, shall consist entirely of
Base Rate Loans or LIBOR Loans.

          2.1.2. Out-of-Formula Loans. If the unpaid balance of Revolver Loans
outstanding at any time should exceed the Borrowing Base at such time (an
"Out-of-Formula Condition"), such Revolver Loans shall nevertheless constitute
Obligations that are secured by the Collateral and entitled to all of the
benefits of the Loan Documents. In the event that Lenders are willing in their
discretion to make Out-of-Formula Loans or are required to do so by SECTION
13.9.4, such Out-of-Formula Loans shall be payable within 2 Business Days of
demand and shall bear interest as provided in SECTION 3.1.5 or as otherwise
agreed among Administrative Agent, Borrowers and Lenders.

          2.1.3. Use of Proceeds. The proceeds of the Revolver Loans shall be
used by Borrowers solely for one or more of the following purposes: (i) to pay
any of the Obligations in accordance with this Agreement; and (ii) to make
expenditures for other lawful corporate purposes of Borrowers to the extent such
expenditures are not prohibited by this Agreement or Applicable Law. In no event
may any Revolver Loan proceeds be used by any Borrower (iii) to purchase or to
carry, or to reduce, retire or refinance any Debt incurred to purchase or carry,
any Margin Stock or for any related


                                      -38-

purpose that violates the provisions of Regulations T, U or X of the Board of
Governors, or (iv) to fund any operations or finance any investments or
activities in, or to make payments to, a Blocked Person.

          2.1.4. Revolver Notes. The Revolver Loans made by each Lender and
interest accruing thereon shall be evidenced by the records of Administrative
Agent and such Lender and by the Revolver Note payable to such Lender (or the
assignee of such Lender), which shall be executed by Borrowers, completed in
conformity with this Agreement and delivered to such Lender. All outstanding
principal amounts and accrued interest under the Revolver Notes shall be due and
payable as set forth in SECTION 5.2.

          2.1.5. Voluntary Reductions of Revolver Commitments. Borrowers shall
have the right to permanently reduce the amount of the Revolver Commitments, on
a Pro Rata basis for each Lender, at any time and from time to time upon written
notice to Administrative Agent of such reduction, which notice shall specify the
amount of such reduction, shall be irrevocable once given, shall be given at
least 5 Business Days prior to the requested reduction. Administrative Agent
shall promptly transmit such notice to each Lender. If on the effective date of
any such reduction in the Revolver Commitments and after giving effect thereto
an Out-of-Formula Condition exists, then the provisions of SECTION 5.2.1(III)
shall apply, except that such repayment shall be due immediately upon such
effective date without further notice to or demand upon Borrowers. If the
Commitments are reduced to zero, then such reduction shall be deemed a
termination of the Commitments by Borrowers pursuant to SECTION 6.2.2. The
Revolver Commitments, once reduced, may not be reinstated without the written
consent of all Lenders.

     2.2. RESERVED.

     2.3. LC FACILITY.

          2.3.1. Issuance of Letters of Credit. Subject to all of the terms and
conditions hereof, Issuing Bank agrees to establish the LC Facility pursuant to
which, during the period from the date hereof to the last day of the Term,
Issuing Bank shall issue one or more Letters of Credit on Administrative Agent's
request therefor from time to time, subject to the following terms and
conditions:

               (i) Each Borrower acknowledges that Issuing Bank's willingness to
     issue any Letter of Credit is conditioned upon Issuing Bank's receipt of
     (A) an LC Application with respect to the requested Letter of Credit and
     (B) such other instruments and agreements as Issuing Bank may customarily
     require for the issuance of a letter of credit of equivalent type and
     amount as the requested Letter of Credit. Issuing Bank shall have no
     obligation to issue any Letter of Credit unless (x) Issuing Bank receives
     an LC Request and LC Application at least 3 Business Days prior to the date
     of issuance of a Letter of Credit, and (y) each of the LC Conditions is
     satisfied on the date of Issuing Bank's receipt of the LC Request and at
     the time of the requested issuance of a Letter of Credit.

               (ii) Letters of Credit may be requested by a Borrower only if
     they are to be used (a) to support obligations of such Borrower incurred in
     the Ordinary Course of Business of such Borrower, on a standby basis, or
     (b) for such other purposes as Administrative Agent and Lenders may approve
     from time to time in writing.

               (iii) Borrowers shall comply with all of the terms and conditions
     imposed on Borrowers by Issuing Bank that are contained in any LC
     Application or in any other agreement customarily or reasonably required by
     Issuing Bank in connection with the issuance of any Letter of Credit. If
     Issuing Bank shall honor any request for payment under a Letter of Credit,


                                      -39-

     Borrowers shall be jointly and severally obligated to pay to Issuing Bank,
     in Dollars on the same day as the date on which payment was made by Issuing
     Bank (the "Reimbursement Date"), an amount equal to the amount paid by
     Issuing Bank under such Letter of Credit (or, if payment thereunder was
     made by Issuing Bank in a currency other than Dollars, an amount equal to
     the Dollar equivalent of such currency, as determined by Issuing Bank, as
     of the time of Issuing Bank's payment under such Letter of Credit, in each
     case), together with interest from and after the Reimbursement Date until
     Full Payment is made by Borrowers at the Default Rate for Revolver Loans
     constituting Base Rate Loans. Until Issuing Bank has received payment from
     Borrowers in accordance with the foregoing provisions of this clause (iii),
     Issuing Bank, in addition to all of its other rights and remedies under
     this Agreement and any LC Application, shall be fully subrogated to the
     rights and remedies of each beneficiary under such Letter of Credit whose
     claims against Borrowers have been discharged with the proceeds of such
     Letter of Credit. Whether or not a Borrower submits any Notice of Borrowing
     to Administrative Agent, Borrowers shall be deemed to have requested from
     Lenders a Borrowing of Base Rate Loans in an amount necessary to pay to
     Issuing Bank all amounts due Issuing Bank on any Reimbursement Date and
     each Lender agrees to fund its Pro Rata share of such Borrowing whether or
     not any Default or Event of Default has occurred or exists, the Commitments
     have been terminated, the funding of the Borrowing would result in (or
     increase the amount of) any Out-of-Formula Condition, or any of the
     conditions set forth in Section 11 are not satisfied.

               (iv) Borrowers assume all risks of the acts, omissions or misuses
     of any Letter of Credit by the beneficiary thereof. The obligation of
     Borrowers to reimburse Issuing Bank for any payment made by Issuing Bank
     under a Letter of Credit shall be absolute, unconditional, irrevocable and
     joint and several and shall be paid without regard to any lack of validity
     or enforceability of any Letter of Credit or the existence of any claim,
     setoff, defense or other right which Borrowers may have at any time against
     a beneficiary of any Letter of Credit. The rights, remedies, powers and
     privileges of Issuing Bank under this Agreement with respect to Letters of
     Credit shall be in addition to, and cumulative with, all rights, remedies,
     powers and privileges of Issuing Bank under any of the LC Documents.
     Nothing herein shall be deemed to release Issuing Bank from any liability
     or obligation that it may have in respect to any Letter of Credit arising
     out of and directly resulting from its own gross negligence or willful
     misconduct.

               (v) No Letter of Credit shall be extended or amended in any
     respect that is not solely ministerial, unless all of the LC Conditions are
     met as though a new Letter of Credit were being requested and issued.

               (vi) Unless otherwise provided in any of the LC Documents, each
     LC Application and each standby Letter of Credit shall be subject to the
     Uniform Customs and Practice for Documentary Credits (1993 Revision),
     International Chamber of Commerce No. 500, and any amendments or revisions
     thereto.


                                      -40-

          2.3.2. Participations.

               (i) Immediately upon the issuance of any Letter of Credit, each
     Lender shall be deemed to have irrevocably and unconditionally purchased
     and received from Issuing Bank, without recourse or warranty, an undivided
     interest and participation equal to the Pro Rata share of such Lender (a
     "Participating Lender") in all LC Obligations arising in connection with
     such Letter of Credit, but in no event greater than an amount which, when
     added to such Lender's Pro Rata share of all Revolver Loans and LC
     Obligations then outstanding, exceeds such Lender's Revolver Commitment;
     provided, however, that if Issuing Bank shall have received written notice
     from a Lender on or before the Business Day immediately prior to the date
     of Issuing Bank's issuance of a Letter of Credit that one or more of the
     conditions set forth in Section 11 or Section 2.3.1 has not been satisfied,
     Issuing Bank shall have no obligation to issue the requested Letter of
     Credit or any other Letter of Credit until such notice is withdrawn in
     writing by that Lender or until the Required Lenders shall have effectively
     waived such condition in accordance with this Agreement. In no event shall
     Issuing Bank be deemed to have notice or knowledge of any existence of any
     Default or Event of Default or the failure of any conditions in Sections 11
     or 2.3.1 to be satisfied prior to its receipt of such notice from a Lender.

               (ii) If Issuing Bank makes any payment under a Letter of Credit
     and Borrowers do not repay or cause to be repaid the amount of such payment
     on the Reimbursement Date, Issuing Bank shall promptly notify
     Administrative Agent, which shall promptly notify each Participating
     Lender, of such payment and each Participating Lender shall promptly (and
     in any event within 1 Business Day after its receipt of notice from
     Administrative Agent) and unconditionally pay to Administrative Agent, for
     the account of Issuing Bank, in immediately available funds, the amount of
     such Participating Lender's Pro Rata share of such payment, and
     Administrative Agent shall promptly pay such amounts to Issuing Bank. If a
     Participating Lender does not make its Pro Rata share of the amount of such
     payment available to Administrative Agent on a timely basis as herein
     provided, such Participating Lender agrees to pay to Administrative Agent
     for the account of Issuing Bank, forthwith on demand, such amount together
     with interest thereon at the Federal Funds Rate until paid. The failure of
     any Participating Lender to make available to Administrative Agent for the
     account of Issuing Bank such Participating Lender's Pro Rata share of the
     LC Obligations shall not relieve any other Participating Lender of its
     obligation hereunder to make available to Administrative Agent its Pro Rata
     share of the LC Obligations. No Participating Lender shall be responsible
     for the failure of any other Participating Lender to make available to
     Administrative Agent its Pro Rata share of the LC Obligations on the date
     such payment is to be made.

               (iii) Whenever Issuing Bank receives a payment on account of the
     LC Obligations, including any interest thereon, as to which Administrative
     Agent has previously received payments from any Participating Lender for
     the account of Issuing Bank, Issuing Bank shall promptly pay to each
     Participating Lender which has funded its participating interest therein,
     in immediately available funds, an amount equal to such Participating
     Lender's Pro Rata share thereof.

               (iv) The obligation of each Participating Lender to make payments
     to Administrative Agent for the account of Issuing Bank in connection with
     Issuing Bank's payment under a Letter of Credit shall be absolute,
     unconditional and irrevocable, not subject to any counterclaim, setoff,
     qualification or exception whatsoever, and shall be made in accordance with
     the terms and conditions of this Agreement under all circumstances and
     irrespective of whether or not Borrowers may assert or have any claim for
     any lack of validity or unenforceability of this Agreement or any of the
     other Loan Documents; the existence of any Default or Event of Default;


                                      -41-

     any draft, certificate or other document presented under a Letter of Credit
     having been determined to be forged, fraudulent, invalid or insufficient in
     any respect or any statement therein being untrue or inaccurate in any
     respect; the existence of any setoff or defense any Obligor may have with
     respect to any of the Obligations; or the termination of the Commitments.

               (v) Neither Issuing Bank nor any of its officers, directors,
     employees or agents shall be liable to any Participating Lender for any
     action taken or omitted to be taken under or in connection with any of the
     LC Documents except as a result of actual gross negligence or willful
     misconduct on the part of Issuing Bank. Issuing Bank does not assume any
     responsibility for any failure or delay in performance or breach by a
     Borrower or any other Person of its obligations under any of the LC
     Documents. Issuing Bank does not make to Participating Lenders any express
     or implied warranty, representation or guaranty with respect to the
     Collateral, the LC Documents, or any Obligor. Issuing Bank shall not be
     responsible to any Participating Lender for any recitals, statements,
     information, representations or warranties contained in, or for the
     execution, validity, genuineness, effectiveness or enforceability of or any
     of the LC Documents; the validity, genuineness, enforceability,
     collectibility, value or sufficiency of any of the Collateral or the
     perfection of any Lien therein; or the assets, liabilities, financial
     condition, results of operations, business, creditworthiness or legal
     status of any Obligor or any Account Debtor. In connection with its
     administration of and enforcement of rights or remedies under any of the LC
     Documents, Issuing Bank shall be entitled to act, and shall be fully
     protected in acting upon, any certification, notice or other communication
     in whatever form believed by Issuing Bank, in good faith, to be genuine and
     correct and to have been signed, sent or made by a proper Person. Issuing
     Bank may consult with and employ legal counsel, accountants and other
     experts and to advise it concerning its rights, powers and privileges under
     the LC Documents and shall be entitled to act upon, and shall be fully
     protected in any action taken in good faith reliance upon, any advice given
     by such experts. Issuing Bank may employ agents and attorneys-in-fact in
     connection with any matter relating to the LC Documents and shall not be
     liable for the negligence, default or misconduct of any such agents or
     attorneys-in-fact selected by Issuing Bank with reasonable care. Issuing
     Bank shall not have any liability to any Participating Lender by reason of
     Issuing Bank's refraining to take any action under any of the LC Documents
     without having first received written instructions from the Required
     Lenders to take such action.

               (vi) Upon the request of any Participating Lender, Issuing Bank
     shall furnish to such Participating Lender copies (to the extent then
     available to Issuing Bank) of each outstanding Letter of Credit and related
     LC Documents as may be in the possession of Issuing Bank and reasonably
     requested from time to time by such Participating Lender.

          2.3.3. Cash Collateral Account. If any LC Obligations, whether or not
then due or payable, shall for any reason be outstanding (i) at any time that an
Event of Default exists, (ii) on any date that Availability is less than zero or
(iii) on or at any time after the Commitment Termination Date, then Borrowers
shall, on Issuing Bank's or Administrative Agent's request, forthwith pay to
Issuing Bank the amount of any LC Obligations that are then due and payable and
shall, upon the occurrence of any of the events described in clauses (i) and
(iii) hereinabove, Cash Collateralize all outstanding Letters of Credit or
deliver to Administrative Agent a Supporting LC in a face amount equal to 104%
of the aggregate Undrawn Amounts of such Letters of Credit. If notwithstanding
the occurrence of one or more of the events described in clauses (i) and (iii)
in the immediately preceding sentence Borrowers fail to Cash Collateralize, or
provide a Supporting LC as provided hereinabove with respect to, any outstanding
Letters of Credit on the first Business Day following Administrative Agent's or
Issuing Bank's demand therefor, Lenders may (and shall upon direction of
Administrative Agent) advance such amount as Revolver Loans (whether or not the
Commitment Termination Date has occurred or an Out-of-Formula Condition is
created thereby). Such cash (together with any interest accrued thereon) shall
be held by


                                      -42-

Administrative Agent in the Cash Collateral Account and may be invested, in
Administrative Agent's discretion, in Cash Equivalents. Each Borrower hereby
pledges to Administrative Agent and grants to Administrative Agent a security
interest in, for the benefit of Administrative Agent in such capacity and for
the Pro Rata Benefit of Lenders, all Cash Collateral held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all Obligations (including LC Obligations), whether or not then due or
payable. From time to time after cash is deposited in the Cash Collateral
Account, Administrative Agent may apply Cash Collateral then held in the Cash
Collateral Account to the payment of any amounts, in such order as
Administrative Agent may elect, as shall be or shall become due and payable by
Borrowers to Issuing Bank, Administrative Agent or any Lender with respect to
the LC Obligations. Neither Borrowers nor any other Person claiming by, through
or under or on behalf of Borrowers shall have any right to withdraw any of the
Cash Collateral held in the Cash Collateral Account, including any accrued
interest, provided that upon termination or expiration of all Letters of Credit
and the payment and satisfaction of all of the LC Obligations, any Cash
Collateral remaining in the Cash Collateral Account (plus accrued interest
thereon, if any)shall be returned to Borrowers unless an Event of Default then
exists (in which event Administrative Agent may apply such Cash Collateral to
the payment of any other Obligations outstanding and, to the extent so applied,
such Cash Collateral shall be applied in accordance with the provisions of
SECTION 5.6, with any surplus to be turned over to Borrowers).

          2.3.4. Indemnifications

               (i) In addition to and without limiting any other indemnity which
     Borrowers may have to any Indemnitees under any of the Loan Documents, each
     Borrower hereby agrees to indemnify and defend each of the Indemnitees and
     to hold each of the Indemnitees harmless from and against any and all
     Claims which any Indemnitee may suffer, incur or be subject to as a
     consequence, directly or indirectly, of (a) the issuance of, payment or
     failure to pay or any performance or failure to perform under any Letter of
     Credit, (b) any suit, investigation or proceeding as to which
     Administrative Agent or any Lender is or may become a party to as a
     consequence, directly or indirectly, of the issuance of any Letter of
     Credit or the payment or failure to pay thereunder or (c) Issuing Bank
     following any instructions of a Borrower with respect to any Letter of
     Credit or any Document received by Issuing Bank with reference to any
     Letter of Credit. The foregoing indemnity obligations of Borrowers are
     subject to the provisions of SECTION 15.3 hereof.

               (ii) Each Participating Lender agrees to indemnify and defend
     each of the Issuing Bank Indemnitees (to the extent the Issuing Bank
     Indemnitees are not reimbursed by Borrowers or any other Obligor, but
     without limiting the indemnification obligations of Borrowers under this
     Agreement), to the extent of such Lender's Pro Rata share of the Revolver
     Commitments, from and against any and all Claims which may be imposed on,
     incurred by or asserted against any of the Issuing Bank Indemnitees in any
     way related to or arising out of Issuing Bank's administration or
     enforcement of rights or remedies under any of the LC Documents or any of
     the transactions contemplated thereby (including costs and expenses which
     Borrowers are obligated to pay under SECTION 15.2).

     2.4. BANK PRODUCTS. Borrowers may request BofA to provide, or to arrange
for one or more of its Affiliates to provide, Bank Products, but BofA shall have
no obligation whatsoever to provide, or to arrange for the provision of, any
Bank Products. If Bank Products are provided by an Affiliate of BofA under any
of the Loan Documents, Borrowers agree to indemnify and hold Administrative
Agent, BofA and Lenders harmless from and against any and all Claims at any time
incurred by Administrative Agent, BofA or any Lenders that arise from any
indemnity given to such Affiliates that relate to such Bank Products. Borrowers
acknowledge that obtaining Bank Products from BofA or BofA's Affiliates


                                      -43-

hereunder is in the discretion of BofA or BofA's Affiliates and is subject to
all rules and regulations of BofA or BofA's Affiliates that are applicable to
such Bank Products.

SECTION 3. INTEREST, FEES AND CHARGES

     3.1. INTEREST.

          3.1.1. Rates of Interest. Borrowers agree to pay interest in respect
of all unpaid principal amounts of the Revolver Loans from the respective dates
such principal amounts are advanced until paid (whether at stated maturity, on
acceleration or otherwise) at a rate per annum equal to the applicable rate
indicated below:

               (i) for Revolver Loans made or outstanding as Base Rate Loans,
     the Applicable Margin plus the Base Rate in effect from time to time; or

               (ii) for Revolver Loans made or outstanding as LIBOR Loans, the
     Applicable Margin plus the Adjusted LIBOR Rate for the applicable Interest
     Period selected by Borrowers in conformity with this Agreement.

          Upon determining the Adjusted LIBOR Rate for any Interest Period
requested by Borrowers, Administrative Agent shall promptly notify Borrowers
thereof by telephone and, if so requested by Borrowers, confirm the same in
writing. Such determination shall, absent manifest error, be final, conclusive
and binding on all parties and for all purposes. The applicable rate of interest
for all Loans (or portions thereof) bearing interest based upon the Base Rate
shall be increased or decreased, as the case may be, by an amount equal to any
increase or decrease in the Base Rate, with such adjustments to be effective as
of the opening of business on the day that any such change in the Base Rate
becomes effective. Interest on each Loan shall accrue from and including the
date on which such Loan is made, converted to a Loan of another Type or
continued as a LIBOR Loan to (but excluding) the date of any repayment thereof;
provided, however, that, if a Loan is repaid on the same day made, one day's
interest shall be paid on such Loan.

          3.1.2. Conversions and Continuations.

               (i) Borrowers may on any Business Day, subject to the giving of a
     proper Notice of Conversion/Continuation as hereinafter described, elect
     (A) to continue all or any part of a LIBOR Loan by selecting a new Interest
     Period therefor, to commence on the last day of the immediately preceding
     Interest Period, or (B) to convert all or any part of a Loan of one Type
     into a Loan of another Type; provided, however, during the period that any
     Event of Default exists, Administrative Agent may (and shall at the
     direction of the Required Lenders) declare that no Loan may be made or
     continued as or converted into a LIBOR Loan. Any conversion of a LIBOR Loan
     into a Base Rate Loan shall be made on the last day of the Interest Period
     for such LIBOR Loan. Any conversion or continuation made with respect to
     less than the entire outstanding balance of the Loans must be allocated
     among Lenders on a Pro Rata basis and the Interest Period for Loans
     converted into or continued as LIBOR Loans shall be coterminous for each
     Lender.

               (ii) Whenever Borrowers desire to convert or continue Loans under
     SECTION 3.1.2(I), Borrower Agent shall give Administrative Agent written
     notice (or telephonic notice promptly confirmed in writing) substantially
     in the form of EXHIBIT C (a "Notice of Conversion/Continuation"), signed by
     an authorized officer of Borrower Agent, at least 1 Business Day before the
     requested conversion date, in the case of a conversion into Base Rate


                                      -44-

     Loans, and at least 3 Business Days before the requested conversion or
     continuation date, in the case of a conversion into or continuation of
     LIBOR Loans. Promptly after receipt of a Notice of Conversion/Continuation,
     Administrative Agent shall notify each Lender in writing of the proposed
     conversion or continuation. Each such Notice of Conversion/Continuation
     shall be irrevocable and shall specify the aggregate principal amount of
     the Loans to be converted or continued, the date of such conversion or
     continuation (which shall be a Business Day) and whether the Loans are
     being converted into or continued as LIBOR Loans (and, if so, the duration
     of the Interest Period to be applicable thereto and, in the absence of any
     specification by Borrowers of the Interest Period, an Interest Period of
     one month will be deemed to be specified) or Base Rate Loans. If, upon the
     expiration of any Interest Period in respect of any LIBOR Loans, Borrowers
     shall have failed to deliver the Notice of Conversion/Continuation,
     Borrowers shall be deemed to have elected to convert such LIBOR Loans to
     Base Rate Loans.

          3.1.3. Interest Periods. In connection with the making or continuation
of, or conversion into, each Borrowing of LIBOR Loans, Borrowers shall select an
interest period (each an "Interest Period") to be applicable to such LIBOR Loan,
which interest period shall commence on the date such LIBOR Loan is made and
shall end on a numerically corresponding day in the first, second, third or
sixth month thereafter; provided, however, that:

               (i) the initial Interest Period for a LIBOR Loan shall commence
     on the date of such Borrowing (including the date of any conversion from a
     Loan of another Type) and each Interest Period occurring thereafter in
     respect of such Revolver Loan shall commence on the date on which the next
     preceding Interest Period expires;

               (ii) if any Interest Period would otherwise expire on a day that
     is not a Business Day, such Interest Period shall expire on the next
     succeeding Business Day, provided that, if any Interest Period in respect
     of LIBOR Loans would otherwise expire on a day that is not a Business Day
     but is a day of the month after which no further Business Day occurs in
     such month, such Interest Period shall expire on the immediately preceding
     Business Day;

               (iii) any Interest Period that begins on a day for which there is
     no numerically corresponding day in the calendar month at the end of such
     Interest Period shall expire on the last Business Day of such calendar
     month; and

               (iv) no Interest Period shall extend beyond the last day of the
     Term.

          3.1.4. Interest Rate Not Ascertainable. If Administrative Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or any
Lender's position in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBOR Rate, then, and in any such event, Administrative
Agent shall forthwith give notice (by telephone promptly confirmed in writing)
to Borrowers of such determination. Until Administrative Agent notifies
Borrowers that the circumstances giving rise to the suspension described herein
no longer exist (which Administrative Agent agrees to do promptly after such
circumstance no longer exists, the obligation of Lenders to make LIBOR Loans
shall be suspended, and such affected Loans then outstanding shall, at the end
of the then applicable Interest Period or at such earlier time as may be
required by Applicable Law, bear the same interest as Base Rate Loans.

          3.1.5. Default Rate of Interest. Borrowers shall pay interest at a
rate per annum equal to the Default Rate (i) with respect to any portion of the
principal amount of the Obligations (and, to the


                                      -45-

extent permitted by Applicable Law, all past due interest) that is not paid on
the due date thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise) until Full Payment thereof; (ii) with respect to the
principal amount of all of the Obligations (and, to the extent permitted by
Applicable Law, all past due interest) upon the earlier to occur of (x) Borrower
Agent's receipt of notice from Administrative Agent of the Required Lenders'
election to charge the Default Rate based upon the existence of any Event of
Default under SECTION 10.3 (which notice Administrative Agent shall send only
with the consent or at the direction of the Required Lenders), whether or not
acceleration or demand for payment of the Obligations has been made, or (y) the
commencement by or against any Borrower of an Insolvency Proceeding whether or
not under the circumstances described in clauses (i) or (ii) hereof Lenders
elect to accelerate the maturity or demand payment of any of the Obligations;
and (iii) with respect to the principal amount of any Out-of-Formula Loans
(unless otherwise agreed in writing by the Required Lenders), whether or not
demand for payment thereof has been made by Administrative Agent. To the fullest
extent permitted by Applicable Law, the Default Rate shall apply and accrue on
any judgment entered with respect to any of the Obligations and to the unpaid
principal amount of the Obligations during any Insolvency Proceeding of a
Borrower. Each Borrower acknowledges that the cost and expense to Administrative
Agent and each Lender attendant upon the occurrence of an Event of Default are
difficult to ascertain or estimate and that the Default Rate is a fair and
reasonable estimate to compensate Administrative Agent and Lenders for such
added cost and expense. Interest accrued at the Default Rate shall be due and
payable ON DEMAND.

     3.2. FEES. In consideration of Lenders' establishment of the Commitments in
favor of Borrowers, and Administrative Agent's agreement to serve as collateral
and administrative agent hereunder, Borrowers jointly and severally agree to pay
the following fees:

          3.2.1. Closing Fee. Borrowers shall be jointly and severally obligated
to pay to Administrative Agent, for the Pro Rata Benefit of the Initial Lender,
a closing fee in the amount set forth in the Fee Letter, which shall be paid on
the Restatement Effective Date.

          3.2.2. Unused Line Fee. Borrowers shall be jointly and severally
obligated to pay to Administrative Agent for the Pro Rata benefit of Lenders a
fee (the "Unused Line Fee") equal to the Applicable Margin for the Unused Line
Fee divided by 360 days and multiplied by the number of days in the Fiscal
Quarter and then multiplied by the amount by which the Average Revolver Loan
Balance for any Fiscal Quarter (or portion thereof that the Commitments are in
effect) is less than the aggregate amount of the Revolver Commitments, such fee
to be paid quarterly, in arrears, on the first day of each Fiscal Quarter; but
if the Commitments are terminated on a day other than the first day of a Fiscal
Quarter, then any such Unused Line Fee payable for the Fiscal Quarter in which
termination shall occur shall be paid on the effective date of such termination.

          3.2.3. LC Facility Fees. Borrowers shall be jointly and severally
obligated to pay: (a)(i) to Administrative Agent for the Pro Rata account of
each Lender for all Letters of Credit, the Applicable Margin in effect for
Revolver Loans that are LIBOR Loans on a per annum basis based on the average
amount available to be drawn under Letters of Credit outstanding and all Letters
of Credit that are paid or expire during the period of measurement, payable
monthly, in arrears, on the first Business Day of the following month; (ii) to
Issuing Bank for its own account a Letter of Credit fronting fee of .125% per
annum based upon the face amount of each Letter of Credit issued during the
period of measurement, payable monthly, in arrears, on the first Business Day of
the following month; and (iii) to Issuing Bank for its own account all customary
charges associated with the issuance, amending, negotiating, payment, processing
and administration of all Letters of Credit. All Letter of Credit fees that are
expressed as a percentage shall be increased to a percentage that is 2% greater
than the percentage that would otherwise be applicable to Revolver Loans when
the Default Rate is in effect.


                                      -46-

          3.2.4. Audit and Appraisal Fees and Expenses. Borrowers shall
reimburse Administrative Agent for all reasonable out-of-pocket costs and
expenses incurred by Administrative Agent in connection with examinations and
reviews of any Obligor's books and records up to 2 times per Loan Year unless an
Event of Default exists (in which event, there shall be no limit on the number
of examinations and reviews for which Borrowers shall be obligated to reimburse
Administrative Agent) and, in each case, shall pay to Administrative Agent the
standard amount charged by Administrative Agent per day ($850 per day as of the
Restatement Effective Date) for each day that an employee or agent of
Administrative Agent shall be engaged in an examination or review of any
Obligor's books and records. The foregoing shall not be construed to limit
Administrative Agent's right to conduct audits as provided in SECTION 10.1.1.

          3.2.5. Agency Fee. In consideration of BofA's service as
Administrative Agent hereunder, Borrowers shall be jointly and severally
obligated to pay to Administrative Agent, an agency fee in the amount set forth
in the Fee Letter, which shall be paid on the Restatement Effective Date and
thereafter on each anniversary of the Restatement Effective Date.

          3.2.6. General Provisions. All fees shall be fully earned by the
identified recipient thereof pursuant to the foregoing provisions of this
Agreement on the due date thereof (and, in the case of Letters of Credit, upon
each issuance, renewal or extension of such Letter of Credit) and, except as
otherwise set forth herein or required by Applicable Law, shall not be subject
to rebate, refund or proration. All fees provided for in SECTION 3.2 are and
shall be deemed to be compensation for services and are not, and shall not be
deemed to be, interest or any other charge for the use, forbearance or detention
of money.

     3.3. COMPUTATION OF INTEREST AND FEES. All fees and other charges provided
for in this Agreement that are calculated as a per annum percentage of any
amount and all interest shall be calculated daily and shall be computed on the
actual number of days elapsed over a year of 360 days. For purposes of computing
interest and other charges hereunder, each Payment Item and other form of
payment received by Administrative Agent (with the date of such receipt to be
governed by SECTION 5.7) shall be deemed applied by Administrative Agent and
Lenders on account of the Obligations (subject to final payment of such items)
on the Business Day on which Administrative Agent receives collected funds in
the Payment Account, and Administrative Agent shall be deemed to have received
such Payment Item on the date specified in SECTION 5.7. Each determination by
Administrative Agent of interest and fees hereunder shall be presumptive
evidence of the correctness of such interest and fees.

     3.4. REIMBURSEMENT OBLIGATIONS.

          3.4.1. Borrowers shall reimburse Administrative Agent and Lenders for
any Extraordinary Expenses incurred by Administrative Agent or any Lender, on
the sooner to occur of Administrative Agent's demand therefor or Administrative
Agent's receipt of any proceeds of Collateral in connection with any Enforcement
Action (subject to the provisions of SECTION 5.6 with respect to the application
of any proceeds of Collateral). Borrowers shall also reimburse Administrative
Agent for all legal, accounting, appraisal, consulting and other fees and
expenses suffered or incurred by Administrative Agent in connection with: (i)
the negotiation and preparation (and internal legal review) of any of the Loan
Documents, any amendment or modification thereto; (ii) the administration of the
Loan Documents and the transactions contemplated thereby; (iii) action taken to
perfect or maintain the perfection or priority of any of Administrative Agent's
Liens with respect to any of the Collateral; (iv) any inspection of or audits
conducted by Administrative Agent with respect to any Obligor's books and
records in accordance with SECTION 3.2.4; (v) any effort by Administrative Agent
to verify or appraise any of the Collateral. All amounts chargeable to or
reimbursable by Borrowers under this SECTION 3.4 shall constitute Obligations
that are secured by all of the Collateral and shall be payable ON DEMAND to
Administrative Agent. Borrowers shall also reimburse


                                      -47-

Administrative Agent for reasonable out-of-pocket expenses incurred by
Administrative Agent in its administration of any of the Collateral to the
extent and in the manner provided in SECTION 8 or in any of the other Loan
Documents. The foregoing shall be in addition to, and shall not be construed to
limit, any other provision of any of the Loan Documents regarding the
indemnification or reimbursement by Borrowers of Claims suffered or incurred by
Administrative Agent or any Lender.

          3.4.2. If at any time Lender shall agree to indemnify any Person
against losses or damages that such Person may suffer or incur in its dealings
or transactions with Borrowers, or shall guarantee or otherwise assure payment
of any liability or obligation of Borrowers to such Person, or otherwise shall
provide assurances of Borrowers' payment or performance under any agreement with
such Person, including indemnities, guaranties or other assurances of payment or
performance given by Lender with respect to Banking Relationship Debt, then the
Contingent Obligation of Lender providing any such indemnity, guaranty or other
assurance of payment or performance, together with any payment made or liability
incurred by Lender in connection therewith, shall constitute Obligations that
are secured by the Collateral and Borrowers shall repay, on demand, any amount
so paid or any liability incurred by Lender in connection with any such
indemnity, guaranty, or assurance. Nothing herein shall be construed to impose
upon Lender any obligation to provide any such indemnity, guaranty or assurance.
The foregoing agreement of Borrowers shall apply whether or not such indemnity,
guaranty or assurance is in writing or oral, provided that Administrative Agent
provides Borrower's with notice of the existence thereof, shall survive
termination of the Commitment and Full Payment of the Obligations and any other
provisions of the Loan Documents regarding reimbursement or indemnification by
Borrowers of Claims suffered or incurred by Lender.

     3.5. BANK CHARGES. Borrowers shall pay to Administrative Agent, ON DEMAND,
any and all fees, costs or expenses which Administrative Agent pays to a bank or
other similar institution (including any fees paid by Administrative Agent or
any Lender to any Participant) arising out of or in connection with (i) the
forwarding to a Borrower or any other Person on behalf of Borrower by
Administrative Agent of proceeds of Loans made by Lenders to a Borrower pursuant
to this Agreement and (ii) the depositing for collection by Administrative Agent
of any Payment Item received or delivered to Administrative Agent on account of
the Obligations. Each Borrower acknowledges and agrees that Administrative Agent
may charge such costs, fees and expenses to Borrowers based upon Administrative
Agent's good faith estimate of such costs, fees and expenses as they are
incurred by Administrative Agent.

     3.6. ILLEGALITY. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (i) any change after the date hereof in any law
or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof shall make it unlawful for a Lender to
make or maintain a LIBOR Loan or to give effect to its obligations as
contemplated hereby with respect to a LIBOR Loan or (ii) at any time such Lender
determines that the making or continuance of any LIBOR Loan has become
impracticable as a result of a contingency occurring after the date hereof which
adversely affects the London interbank market or the position of such Lender in
such market, then such Lender shall give after such determination Administrative
Agent and Borrowers notice thereof and may thereafter (1) declare that LIBOR
Loans will not thereafter be made by such Lender, whereupon any request by a
Borrower for a LIBOR Loan from such Lender shall be deemed a request for a Base
Rate Loan unless such Lender's declaration shall be subsequently withdrawn
(which declaration shall be withdrawn promptly after the cessation of the
circumstances described in clause (i) or (ii) above); and (2) require that all
outstanding LIBOR Loans made by such Lender be converted to Base Rate Loans,
under the circumstances of clause (i) or (ii) of this SECTION 3.6 insofar as
such Lender determines the continuance of LIBOR Loans to be impracticable, in
which event all such LIBOR Loans of such Lender shall be converted automatically
to Base Rate Loans as of the date of any Borrower's receipt of the aforesaid
notice from such Lender.


                                      -48-

     3.7. INCREASED COSTS. If, by reason of (a) the introduction after the date
hereof or any change after the date hereof (including any change by way of
imposition or increase of Statutory Reserves or other reserve requirements) in
or in the interpretation of any law or regulation, or (b) the compliance after
the date hereof with any guideline or request from any central bank or other
Governmental Authority or quasi-Governmental Authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):

               (i) any Lender shall be subject after the date hereof to any Tax,
     duty or other charge with respect to any LIBOR Loan or Letter of Credit or
     its obligation to make LIBOR Loans or to issue Letters of Credit or to
     participate in the LC Obligations arising from the issuance of Letters of
     Credit, or a change shall result in the basis of taxation of payment to
     Lender of the principal of or interest on its LIBOR Loans or its obligation
     to make LIBOR Loan, issue Letters of Credit or participate in the LC
     Obligations arising from the issuance of Letters of Credit (except for
     Excluded Taxes); or

               (ii) any reserve (including any imposed by the Board of
     Governors), special deposits or similar requirement against assets of,
     deposits with or for the account of, or credit extended by, any Lender
     shall be imposed or deemed applicable or any other condition affecting its
     LIBOR Loans or Letters of Credit or its obligation to make LIBOR Loans or
     to issue Letters of Credit or participate in the LC Obligations arising
     form the issuance of Letters of Credit shall be imposed on such Lender or
     the London interbank market;

and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans or issuing
Letters of Credit (except to the extent already included in the determination of
the applicable Adjusted LIBOR Rate for LIBOR Loans), or there shall be a
reduction in the amount received or receivable by such Lender, then such Lender
shall, promptly after determining the existence or amount of any such increased
costs for which such Lender seeks payment hereunder, give any Borrower notice
thereof and Borrowers shall from time to time, upon written notice from and
demand by such Lender (with a copy of such notice and demand to Administrative
Agent), pay to Administrative Agent for the account of such Lender, within 5
Business Days after the date specified in such notice and demand, an additional
amount sufficient to indemnify such Lender against such increased costs. A
certificate as to the amount of such increased costs (and setting forth the
calculation thereof in reasonable detail), submitted to Borrowers by such
Lender, shall be final, conclusive and binding for all purposes, absent manifest
error.

     If any Lender shall advise Administrative Agent at any time that, because
of the circumstances described hereinabove in this SECTION 3.7 or any other
circumstances arising after the date of this Agreement affecting such Lender or
the London interbank market or such Lender's position in such market, the
Adjusted LIBOR Rate, as determined by Administrative Agent, will not adequately
and fairly reflect the cost to such Lender of funding LIBOR Loans or issuing
Letters of Credit, then, and in any such event:

               (i) Administrative Agent shall forthwith give notice (by
     telephone confirmed promptly in writing) to Borrowers and Lenders of such
     event;

               (ii) Borrowers' right to request and such Lender's obligation to
     make LIBOR Loans or to issue Letters of Credit or participate in the LC
     Obligations arising from the issuance of Letters of Credit shall be
     immediately suspended and Borrowers' right to continue a LIBOR Loan as such
     beyond the then applicable Interest Period or to request a Letter of Credit
     shall also be suspended, until each condition giving rise to such
     suspension no longer exists; and


                                      -49-

               (iii) such Lender shall make a Base Rate Loan as part of the
     requested Borrowing of LIBOR Loans, which Base Rate Loan shall, for all
     purposes, be considered part of such Borrowing.

     For purposes of this SECTION 3.7, all references to a Lender shall be
deemed to include any bank holding company or bank parent of such Lender. If any
Lender provides notice that, due to the circumstances described in this SECTION
3.7, the Adjusted LIBOR Rate will not adequately and fairly reflect the cost to
such Lender of funding LIBOR Loans or participating in the LC Obligations
arising from the issuance of Letters of Credit, then such Lender may be replaced
pursuant to the provisions of SECTION 13.17.

     3.8. CAPITAL ADEQUACY. If any Lender determines that (i) the introduction
after the date hereof of any Capital Adequacy Regulation, (ii) any change after
the date hereof in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy Regulation by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance after the date hereof by such Lender
or any corporation or other entity controlling such Lender with any Capital
Adequacy Regulation, affects the amount of capital required or expected to be
maintained by such Lender or any Person controlling such Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then: (a)
Administrative Agent shall promptly, after its receipt of a certificate from
such Lender setting forth such Lender's determination of such occurrence, give
notice thereof to Borrowers and Lenders; and (b) Borrowers shall pay to
Administrative Agent, for the account of such Lender, as an additional fee from
time to time, ON DEMAND, such amount as such Lender certifies to be the amount
reasonably calculated to compensate such Lender for such reduction. A
certificate of such Lender claiming entitlement to compensation as set forth
above will be conclusive in the absence of manifest error. Such certificate will
set forth the nature of the occurrence giving rise to such compensation, the
additional amount or amounts to be paid to such Lender (including the basis for
Lender's determination of such amount), and the method by which such amounts
were determined. In determining such amount, such Lender may use any reasonable
averaging and attribution method. For purposes of this SECTION 3.8 all
references to a Lender shall be deemed to include any bank holding company or
bank parent of such Lender.

     3.9. MITIGATION. Each Lender agrees that, with reasonable promptness after
such Lender becomes aware that such Lender is entitled to receive payments under
SECTIONS 3.6, 3.7 OR 3.8, or is or has become subject to U.S. withholding taxes
payable by any Borrower in respect of its Loans, it will, to the extent not
inconsistent with any internal policy of such Lender or any applicable legal or
regulatory restriction, (i) use all reasonable efforts to make, fund or maintain
the Commitment of such Lender or the Loans of such Lender through another
lending office of such Lender or (ii) take such other reasonable measures, if,
as a result thereof, the circumstances which would relieve Borrowers from their
obligations to pay such additional amounts (or reduce the amount of such
payments), or such withholding taxes would be reduced, and if the making,
funding or maintaining of such Commitment or Loans through such other lending
office or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Commitment or Loans or the interests of such
Lender.

     3.10. FUNDING LOSSES. If for any reason (other than due to a default by
Lender or as a result of a Lender's refusal to honor a LIBOR Loan request due to
circumstances described in this Agreement) a Borrowing of, or conversion to or
continuation of, LIBOR Loans does not occur on the date specified therefor in a
Notice of Borrowing or Notice of Conversion/Continuation (whether or not
withdrawn), or if any repayment (including any conversions pursuant to SECTION
3.1.2) of any of its LIBOR Loans occurs


                                      -50-

on a date that is not the last day of an Interest Period applicable thereto, or
if for any reason Borrowers default in their obligation to repay LIBOR Loans
when required by the terms of this Agreement, then Borrowers shall be jointly
and severally obligated to pay to Administrative Agent an administrative fee of
$150 and to each Lender an amount equal to all losses and expenses (other than
loss of profit) which such Lender may sustain or incur as a consequence thereof,
including any such loss or expense arising from the liquidation or redeployment
of funds obtained by it to maintain its LIBOR Loans or from fees payable to
terminate the deposits from which such funds were obtained. Borrowers shall pay
all such amounts due to any Lender upon presentation by such Lender of a
statement setting forth the amount and such Lender's calculation thereof, which
statement shall be deemed true and correct absent manifest error. For purposes
of this SECTION 3.10, all references to a Lender shall be deemed to include any
bank holding company or bank parent of such Lender.

     3.11. MAXIMUM INTEREST. Regardless of any provision contained in any of the
Loan Documents, in no contingency or event whatsoever shall the aggregate of all
amounts that are contracted for, charged or received by Administrative Agent and
Lenders pursuant to the terms of this Agreement or any of the other Loan
Documents and that are deemed interest under Applicable Law exceed the highest
rate permissible under any Applicable Law. No agreements, conditions, provisions
or stipulations contained in this Agreement or any of the other Loan Documents
or the exercise by Administrative Agent of the right to accelerate the payment
or the maturity of all or any portion of the Obligations, or the exercise of any
option whatsoever contained in any of the Loan Documents, or the prepayment by
Borrowers of any of the Obligations, or the occurrence of any contingency
whatsoever, shall entitle Administrative Agent or any Lender to charge or
receive in any event, interest or any charges, amounts, premiums or fees deemed
interest by Applicable Law (such interest, charges, amounts, premiums and fees
referred to herein collectively as "Interest") in excess of the Maximum Rate,
and in no event shall Borrowers be obligated to pay Interest exceeding such
Maximum Rate, and all agreements, conditions or stipulations, if any, which may
in any event or contingency whatsoever operate to bind, obligate or compel
Borrowers to pay Interest exceeding the Maximum Rate shall be without binding
force or effect, at law or in equity, to the extent only of the excess of
Interest over such Maximum Rate. If any Interest is charged or received with
respect to the Obligations in excess of the Maximum Rate ("Excess"), Borrowers
stipulate that any such charge or receipt shall be the result of an accident and
bona fide error, and such Excess, to the extent received, shall be applied first
to reduce the principal of such Obligations and the balance, if any, returned to
Borrowers, it being the intent of the parties hereto not to enter into a
usurious or otherwise illegal relationship. Each Borrower recognizes that, with
fluctuations in the rates of interest set forth in SECTION 3.1.1, and the
Maximum Rate, such an unintentional result could inadvertently occur. All monies
paid to Administrative Agent or any Lender hereunder or under any of the other
Loan Documents, whether at maturity or by prepayment, shall be subject to any
rebate of unearned Interest as and to the extent required by Applicable Law. By
the execution of this Agreement, each Borrower covenants that (i) the credit or
return of any Excess shall constitute the acceptance by such Borrower of such
Excess, and (ii) such Borrower shall not seek or pursue any other remedy, legal
or equitable, against Administrative Agent or any Lender, based in whole or in
part upon contracting for, charging or receiving any Interest in excess of the
Maximum Rate. For the purpose of determining whether or not any Excess has been
contracted for, charged or received by Administrative Agent or any Lender, all
Interest at any time contracted for, charged or received from Borrowers in
connection with any of the Loan Documents shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. Borrowers, Administrative Agent and
Lenders shall, to the maximum extent permitted under Applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as Interest and (ii) exclude voluntary prepayments and the effects thereof. The
provisions of this SECTION 3.11 shall be deemed to be incorporated into every
Loan Document (whether or not any provision of this Section is referred to
therein). All such Loan Documents and communications relating to any Interest
owed by Borrowers and all figures set forth therein shall, for the sole purpose
of computing the extent of


                                      -51-

Obligations, be automatically recomputed by Borrowers, and by any court
considering the same, to give effect to the adjustments or credits required by
this SECTION 3.11.

SECTION 4. LOAN ADMINISTRATION

     4.1. MANNER OF BORROWING AND FUNDING REVOLVER LOANS. Borrowings under the
Commitments established pursuant TO SECTION 2.1 shall be made and funded as
follows:

          4.1.1. Notice of Borrowing.

               (i) Whenever Borrowers desire to make a Borrowing under SECTION
     2.1 (other than a Borrowing resulting from a conversion or continuation
     pursuant to SECTION 3.1.2), Borrowers shall give Administrative Agent prior
     written notice (or telephonic notice promptly confirmed in writing) of such
     Borrowing request (a "Notice of Borrowing"), which shall be in the form of
     EXHIBIT D annexed hereto and signed by an authorized officer of Borrower
     Agent. Such Notice of Borrowing shall be given by Borrower Agent no later
     than 2:00 p.m. at the office designated by Administrative Agent from time
     to time (a) on the Business Day of the requested funding date of such
     Borrowing, in the case of Base Rate Loans, and (b) at least 2 Business Days
     prior to the requested funding date of such Borrowing, in the case of LIBOR
     Loans. Notices received after 2:00 p.m. shall be deemed received on the
     next Business Day. Any Revolver Loans made by each Lender on the
     Restatement Effective Date shall be made as Base Rate Loans and thereafter
     may be made or continued as or converted into Base Rate Loans or LIBOR
     Loans. Each Notice of Borrowing (or telephonic notice thereof) shall be
     irrevocable and shall specify (a) the principal amount of the Borrowing,
     (b) the date of Borrowing (which shall be a Business Day), (c) whether the
     Borrowing is to consist of Base Rate Loans or LIBOR Loans, (d) in the case
     of LIBOR Loans, the duration of the Interest Period to be applicable
     thereto, and (e) the account of Borrowers to which the proceeds of such
     Borrowing are to be disbursed.

               (ii) Unless payment is otherwise timely made by Borrowers, the
     becoming due of any amount required to be paid with respect to any of the
     Obligations (whether as principal, accrued interest, fees or other charges,
     including Extraordinary Expenses and LC Obligations, and any amounts owed
     to BofA or any Affiliate of BofA for Banking Relationship Debt) shall be
     deemed irrevocably to be a request (without any requirement for the
     submission of a Notice of Borrowing) for Revolver Loans on the due date of,
     and in an aggregate amount required to pay, such Obligations, and the
     proceeds of such Revolver Loans may be disbursed by way of direct payment
     of the relevant Obligation and shall bear interest as Base Rate Loans.

               (iii) If Borrowers elect to establish a Controlled Disbursement
     Account with BofA or any Affiliate of BofA, then the presentation for
     payment by BofA of any check or other item of payment drawn on the
     Controlled Disbursement Account at a time when there are insufficient funds
     in such account to cover such check shall be deemed irrevocably to be a
     request (without any requirement for the submission of a Notice of
     Borrowing) for Revolver Loans on the date of such presentation and in an
     amount equal to the aggregate amount of the items presented for payment,
     and the proceeds of such Revolver Loans may be disbursed to the Controlled
     Disbursement Account and shall bear interest as Base Rate Loans.

               (iv) Neither Administrative Agent nor any Lender shall have any
     obligation to honor any deemed request for a Revolver Loan on or after the
     Commitment Termination Date or when an Out-of-Formula Condition exists or
     would result therefrom or when any condition precedent in SECTION 11 is not
     satisfied, but may do so in the discretion of Administrative Agent (or at
     the direction of the Required Lenders) and without regard to the existence
     of, and without


                                      -52-

     being deemed to have waived, any Default or Event of Default and regardless
     of whether such Revolver Loan is funded after the Commitment Termination
     Date.

          4.1.2. Fundings by Lenders. Subject to its receipt of notice from
Administrative Agent of a Notice of Borrowing as provided in SECTION 4.1.1(I)
(except in the case of a deemed request by Borrower Agent for a Revolver Loan as
provided in SECTION 4.1.1(II) or (III) or SECTION 4.1.3(II), in which event no
Notice of Borrowing need be submitted), each Lender shall timely honor its
Revolver Commitment by funding its Pro Rata share of each Borrowing of Revolver
Loans that is properly requested and that Borrowers are entitled to receive
under the Loan Agreement. Administrative Agent shall endeavor to notify Lenders
of each Notice of Borrowing (or deemed request for a Borrowing pursuant to
SECTION 4.1.1(II) or (III)), by 2:00 p.m. on the proposed funding date (in the
case of Base Rate Loans) or by 2:00 p.m. at least 2 Business Days before the
proposed funding date (in the case of LIBOR Loans). Each Lender shall deposit
with Administrative Agent an amount equal to its Pro Rata share of the Borrowing
requested or deemed requested by Borrowers at Administrative Agent's designated
bank in immediately available funds not later than 2:00 p.m. on the date of
funding of such Borrowing, unless Administrative Agent's notice to Lenders is
received after 2:00 p.m. on the proposed funding date of a Base Rate Loan, in
which event Lenders shall deposit with Administrative Agent their respective Pro
Rata shares of the requested Borrowing on or before 11:00 a.m. of the next
Business Day. Subject to its receipt of such amounts from Lenders,
Administrative Agent shall make the proceeds of the Revolver Loans received by
it available to Borrowers by disbursing such proceeds in accordance with
Borrower Agent's disbursement instructions set forth in the applicable Notice of
Borrowing. Neither Administrative Agent nor any Lender shall have any liability
on account of any delay by any bank or other depository institution in treating
the proceeds of any Revolver Loan as collected funds or any delay in receipt, or
any loss, of funds that constitute a Revolver Loan, the wire transfer of which
was initiated by Administrative Agent in accordance with wiring instructions
provided to Administrative Agent. Unless Administrative Agent shall have been
notified in writing by a Lender prior to the proposed time of funding that such
Lender does not intend to deposit with Administrative Agent an amount equal to
such Lender's Pro Rata share of the requested Borrowing (or deemed request for a
Borrowing pursuant to clauses (ii) or (iii) of SECTION 4.1.1), Administrative
Agent may assume that such Lender has deposited or promptly will deposit its
share with Administrative Agent and Administrative Agent may in its discretion
disburse a corresponding amount to Borrowers on the applicable funding date. If
a Lender's Pro Rata share of such Borrowing is not in fact deposited with
Administrative Agent, then, if Administrative Agent has disbursed to Borrowers
an amount corresponding to such share, then such Lender agrees to pay, and in
addition Borrowers agree to repay, to Administrative Agent forthwith on demand
such corresponding amount, together with interest thereon, for each day from the
date such amount is disbursed by Administrative Agent to or for the benefit of
Borrowers until the date such amount is paid or repaid to Administrative Agent,
(a) in the case of Borrowers, at the interest rate applicable to such Borrowing
and (b) in the case of such Lender, at the Federal Funds Rate. If such Lender
repays to Administrative Agent such corresponding amount, such amount so repaid
shall constitute a Revolver Loan, and if both such Lender and Borrowers shall
have repaid such corresponding amount, Administrative Agent shall promptly
return to Borrowers such corresponding amount in same day funds. A notice from
Administrative Agent submitted to any Lender with respect to amounts owing under
this SECTION 4.1.2 shall be conclusive, absent manifest error.

          4.1.3. Settlement and Swingline Loans.

               (i) In order to facilitate the administration of the Revolver
     Loans under this Agreement, Lenders and Administrative Agent agree (which
     agreement shall be solely between Lenders and Administrative Agent and
     shall not be for the benefit of or enforceable by any Borrower) that
     settlement among them with respect to the Revolver Loans may take place on
     a periodic basis on dates determined from time to time by Administrative
     Agent (each a


                                      -53-

     "Settlement Date"), which may occur before or after the occurrence or
     during the continuance of a Default or Event of Default and whether or not
     all of the conditions set forth in SECTION 11 have been met. On each
     Settlement Date, payment shall be made by or to each Lender in the manner
     provided herein and in accordance with the Settlement Report delivered by
     Administrative Agent to Lenders with respect to such Settlement Date so
     that, as of each Settlement Date and after giving effect to the transaction
     to take place on such Settlement Date, each Lender shall hold its Pro Rata
     share of all Revolver Loans and participations in LC Obligations.
     Administrative Agent shall request settlement with the Lenders on a basis
     not less frequently than once every 5 Business Days.

               (ii) Between Settlement Dates, Administrative Agent may request
     BofA to advance, and BofA may, but shall in no event be obligated to,
     advance to Borrowers out of BofA's own funds the entire principal amount of
     any Borrowing of Revolver Loans that are Base Rate Loans requested or
     deemed requested pursuant to this Agreement (any such Revolver Loan funded
     exclusively by BofA being referred to as a "Swingline Loan"). Each
     Swingline Loan shall constitute a Revolver Loan hereunder and shall be
     subject to all of the terms, conditions and security applicable to other
     Revolver Loans, except that all payments thereon shall be payable to BofA
     solely for its own account. The obligation of Borrowers to repay such
     Swingline Loans to BofA shall be evidenced by the records of BofA and need
     not be evidenced by any promissory note. Unless a funding is required by
     all Lenders pursuant to SECTION 13.9.4, Administrative Agent may but shall
     not be required to request BofA to make any Swingline Loan if (A)
     Administrative Agent shall have received written notice from any Lender
     that one or more of the applicable conditions precedent set forth in
     SECTION 11 will not be satisfied on the requested funding date for the
     applicable Borrowing and Administrative Agent has made a determination
     (without any liability to any Person) that such condition precedent will
     not be satisfied, (B) the requested Borrowing would exceed the amount of
     Availability on the funding date or (C) the aggregate amount of Swingline
     Loans outstanding exceeds (or with the funding of the requested Swingline
     Loan, would exceed) $5,000,000. BofA shall not be required to determine
     whether the applicable conditions precedent set forth in SECTION 11 have
     been satisfied or the requested Borrowing would exceed the amount of
     Availability on the funding date applicable thereto prior to making, in its
     discretion, any Swingline Loan. On each Settlement Date, or, if earlier, on
     demand by Administrative Agent for payment thereof, the then outstanding
     Swingline Loans shall be immediately due and payable. As provided in
     SECTION 4.1.1(II), Borrowers shall be deemed to have requested (without the
     necessity of submitting any Notice of Borrowing) Revolver Loans to be made
     on each Settlement Date in the amount of all outstanding Swingline Loans
     and to have Administrative Agent cause the proceeds of such Revolver Loans
     to be applied to the repayment of such Swingline Loans and interest accrued
     thereon. Administrative Agent shall notify the Lenders of the outstanding
     balance of Revolver Loans prior to 11:00 a.m. on each Settlement Date and
     each Lender (other than BofA) shall deposit with Administrative Agent an
     amount equal to its Pro Rata share of the amount of Revolver Loans deemed
     requested in immediately available funds not later than 2:00 p.m. on such
     Settlement Date. Each Lender's obligation to make such deposit with
     Administrative Agent shall be absolute and unconditional, without defense,
     offset, counterclaim or other defense, and without regard to whether any of
     the conditions precedent set forth in SECTION 11 are satisfied, any
     Out-of-Formula Condition exists or the Commitment Termination Date has
     occurred. If, as the result of the commencement by or against Borrowers of
     any Insolvency Proceeding or otherwise, any Swingline Loan may not be
     repaid by the funding by Lenders of Revolver Loans, then each Lender (other
     than BofA) shall be deemed to have purchased a participating interest in
     any unpaid Swingline Loan in an amount equal to such Lender's Pro Rata
     share of such Swingline Loan and shall transfer to BofA, in immediately
     available funds not later than the second Business Day after BofA's request
     therefor, the amount of such Lender's participation. The proceeds of
     Swingline Loans may be used solely


                                      -54-

     for purposes for which Revolver Loans generally may be used in accordance
     with SECTION 2.1.3. If any amounts received by BofA in respect of any
     Swingline Loans are later required to be returned or repaid by BofA to
     Borrowers or any other Obligor or their respective representatives or
     successors-in-interest, whether by court order, settlement or otherwise,
     the other Lenders shall, on demand by BofA with notice to Administrative
     Agent, pay to Administrative Agent for the account of BofA, an amount equal
     to each other Lender's Pro Rata share of all such amounts required to be
     returned or repaid.

          4.1.4. Disbursement Authorization. Each Borrower hereby irrevocably
authorizes Administrative Agent to disburse the proceeds of each Revolver Loan
requested by any Borrower, or deemed to be requested pursuant to SECTION 4.1.1
or SECTION 4.1.3(II) as follows: (i) the proceeds of each Revolver Loan
requested under SECTION 4.1.1(I) shall be disbursed by Administrative Agent in
accordance with the terms of the written disbursement letter from Borrowers in
the case of the initial Borrowing, and, in the case of each subsequent
Borrowing, by transfer to such bank account of Borrowers as may be directed by
Borrowers from time to time or elsewhere if pursuant to a written direction from
any Borrower; and (ii) the proceeds of each Revolver Loan requested under
SECTION 4.1.1(II) or SECTION 4.1.3(II) shall be disbursed by Administrative
Agent by way of direct payment of the relevant interest or other Obligation. Any
Loan proceeds received by any Borrower or in payment of any of the Obligations
shall be deemed to have been received by all Borrowers.

          4.1.5. Telephonic Notices. Each Borrower authorizes Administrative
Agent and Lenders to extend, convert or continue Loans, effect selections of
Types of Loans and transfer funds to or on behalf of Borrowers based on
telephonic notices or instructions from any individual whom Administrative Agent
or any Lender in good faith believes to be acting on behalf of any Borrower. If
requested by Administrative Agent, Borrowers shall confirm each such telephonic
request for a Borrowing or conversion or continuation of Loans by prompt
delivery to Administrative Agent of the required Notice of Borrowing or Notice
of Conversion/Continuation, as applicable, duly executed by an authorized
officer of Borrower Agent. If the written confirmation differs in any material
respect from the action taken by Administrative Agent or Lenders, the records of
Administrative Agent and Lenders shall govern. Neither Administrative Agent nor
any Lender shall have any liability for any loss suffered by any Borrower as a
result of Administrative Agent's or any Lender's acting upon its understanding
of telephonic instructions or requests from a person believed in good faith by
Administrative Agent or any Lender to be a person authorized by a Borrower to
give such instructions or to make such requests on Borrowers' behalf.

     4.2. DEFAULTING LENDER. If any Lender shall, at any time, fail to make any
payment to Administrative Agent or BofA that is required hereunder,
Administrative Agent may, but shall not be required to, retain payments that
would otherwise be made to such defaulting Lender hereunder and apply such
payments to such defaulting Lender's defaulted obligations hereunder, at such
time, and in such order, as Administrative Agent may elect in its discretion.
With respect to the payment of any funds from Administrative Agent to a Lender
or from a Lender to Administrative Agent, the party failing to make the full
payment when due pursuant to the terms hereof shall, on demand by the other
party, pay such amount together with interest on such amount at the Federal
Funds Rate. The failure of any Lender to fund its portion of any Loan or payment
in respect of an LC Obligation shall not relieve any other Lender of its
obligation, if any, to fund its portion of the Revolver Loan or payment in
respect of an LC Obligation on the date of Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make any Loan or payment in
respect of an LC Obligation. Solely as among the Lenders and solely for purposes
of (i) voting upon or consenting to amendments, waivers, actions or inactions
under any of the Loan Documents, or with respect to the Collateral or any
Obligations, and (ii) determining a defaulting Lender's share of payments and
proceeds of Collateral pending such defaulting Lender's cure of its defaults
hereunder, a defaulting Lender shall not be deemed to be a "Lender" and such
Lender's Commitment shall


                                      -55-

be deemed to be zero (0). The provisions of this Section 4.2 shall be solely for
the benefit of Administrative Agent and Lenders and may not be enforced by
Borrowers.

     4.3. SPECIAL PROVISIONS GOVERNING LIBOR LOANS.

          4.3.1. Number of LIBOR Loans. In no event may the number of LIBOR
Loans outstanding at any time to any Lender exceed 4.

          4.3.2. Minimum Amounts. Each Borrowing of LIBOR Loans pursuant to
SECTION 4.1.1(I), and each continuation of or conversion to LIBOR Loans pursuant
to SECTION 3.1.2, shall be in a minimum amount of $1,000,000 and integral
multiples of $50,000 in excess of that amount.

          4.3.3. LIBOR Lending Office. Each Lender's initial LIBOR Lending
Office is set forth opposite its name on the signature pages hereof. Each Lender
shall have the right at any time and from time to time to designate a different
office of itself or of any Affiliate as such Lender's LIBOR Lending Office, and
to transfer any outstanding LIBOR Loans to such LIBOR Lending Office. No such
designation or transfer shall result in any liability on the part of Borrowers
for increased costs or expenses resulting solely from such designation or
transfer. Increased costs for expenses resulting from a change in Applicable Law
occurring subsequent to any such designation or transfer shall be deemed not to
result solely from such designation or transfer.

          4.3.4. Funding of LIBOR Loans. Each Lender may, if it so elects,
fulfill its obligation to make, continue or convert LIBOR Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such LIBOR Loans; provided,
however, that such LIBOR Loans shall nonetheless be deemed to have been made and
to be held by such Lender, and the obligation of Borrowers to repay such LIBOR
Loans shall nevertheless be to such Lender for the account of such foreign
branch, Affiliate or international banking facility and provided Borrowers bear
no increased costs as a result of Lenders funding through a foreign branch or
Affiliate. The calculation of all amounts payable to Lender under SECTIONS 3.7
and 3.10 shall be made as if each Lender had actually funded or committed to
fund its LIBOR Loan through the purchase of an underlying deposit in an amount
equal to the amount of such LIBOR Loan and having a maturity comparable to the
relevant Interest Period for such LIBOR Loans; provided, however, each Lender
may fund its LIBOR Loans in any manner it deems fit and the foregoing
presumption shall be utilized only for the calculation of amounts payable under
SECTIONS 3.7 and 3.10.

     4.4. BORROWER AGENT. Each Borrower hereby irrevocably appoints InSight
Health, and InSight Health agrees to act under this Agreement, as the agent and
representative of itself and each other Borrower for all purposes under this
Agreement (in such capacity, "Borrower Agent"), including requesting Borrowings,
selecting whether any Loan or portion thereof is to bear interest as a Base Rate
Loan or a LIBOR Loan, and receiving account statements and other notices and
communications to Borrowers (or any of them) from Administrative Agent.
Administrative Agent may rely, and shall be fully protected in relying, on any
Notice of Borrowing, Notice of Conversion/Continuation, disbursement
instructions, reports, information, Borrowing Base Certificate or any other
notice or communication made or given by Borrower Agent, whether in its own
name, on behalf of any Borrower or on behalf of "the Borrowers," and
Administrative Agent shall have no obligation to make any inquiry or request any
confirmation from or on behalf of any other Borrower as to the binding effect on
such Borrower of any such Notice of Borrowing, Notice of Conversion
Continuation, instruction, report, information, Borrowing Base Certificate or
other notice or communication, nor shall the joint and several character of
Borrowers' liability for the Obligations be affected, provided that the
provisions of this SECTION 4.3 shall not be construed so as to preclude any
Borrower from directly requesting Borrowings or taking other actions permitted
to be taken by "a Borrower" hereunder. Administrative Agent may maintain a
single


                                      -56-

Loan Account in the name of "InSight Health Services Corp." hereunder, and each
Borrower expressly agrees to such arrangement and confirms that such arrangement
shall have no effect on the joint and several character of such Borrower's
liability for the Obligations.

     4.5. ALL LOANS TO CONSTITUTE ONE OBLIGATION. The Loans and LC Obligations
shall constitute one general obligation of Borrowers and (unless otherwise
expressly provided in any Security Document) shall be secured by Administrative
Agent's Lien upon all of the Collateral; provided, however, that Administrative
Agent and each Lender shall be deemed to be a creditor of each Borrower and the
holder of a separate claim against each Borrower to the extent of any
Obligations jointly and severally owed by Borrowers to Administrative Agent or
such Lender.

SECTION 5. PAYMENTS

     5.1. GENERAL PAYMENT PROVISIONS. All payments (including all prepayments)
of principal of and interest on the Loans, LC Obligations and other Obligations
that are payable to Administrative Agent or any Lender shall be made to
Administrative Agent in Dollars without any offset or counterclaim and free and
clear of (and without deduction for) any present or future Taxes other than
Excluded Taxes, as required by Applicable Law, and, with respect to payments
made other than by application of balances in the Payment Account, in
immediately available funds not later than 2:00 p.m. on the due date (and
payment made after such time on the due date to be deemed to have been made on
the next succeeding Business Day). Borrowers shall, at the time Borrowers make
any payment under this Agreement, specify to Administrative Agent the
Obligations to which such payment is to be applied and, if Borrowers fail so to
specify or if the application specified by Borrowers would be inconsistent with
the terms of this Agreement or if an Event of Default exists, Administrative
Agent shall distribute such payment to Lenders for application to the
Obligations in such manner as Administrative Agent, subject to the provisions of
this Agreement, may determine to be appropriate. All payments received by
Administrative Agent shall be subject to the rights of offset that
Administrative Agent may have as to amounts otherwise to be remitted to a
particular Lender by reason of amounts due Administrative Agent from such Lender
under any of the Loan Documents, without prejudice to the rights of Borrowers.

     5.2. REPAYMENT OF REVOLVER LOANS.

          5.2.1. Payment of Principal. The outstanding principal amounts with
respect to the Revolver Loans shall be repaid as follows:

               (i) Any portion of the Revolver Loans consisting of the principal
     amount of Base Rate Loans shall be paid by Borrowers to Administrative
     Agent, for the Pro Rata benefit of Lenders (or, in the case of Swingline
     Loans, for the sole benefit of BofA) unless timely converted to a LIBOR
     Loan in accordance with this Agreement, (a) if a Restrictive Trigger Event
     has occurred and is continuing, upon each receipt by Administrative Agent
     or any Lender of any proceeds of Accounts (other than that portion thereof
     payable to physicians pursuant to PSAs), or within 7 Business Days of each
     receipt by Borrowers of any such proceeds, in each case to the extent of
     such proceeds, (b) the Commitment Termination Date, and (c) in the case of
     Swingline Loans, if a Restrictive Trigger Event has occurred and is
     continuing, the earlier of BofA's demand for payment or on each Settlement
     Date with respect to all Swingline Loans outstanding on such date.

               (ii) Any portion of the Revolver Loans consisting of the
     principal amount of LIBOR Loans shall be paid by Borrowers to
     Administrative Agent, for the Pro Rata benefit of Lenders, unless continued
     as a LIBOR Loan in accordance with the terms of this Agreement, immediately
     upon (a) the last day of the Interest Period applicable thereto and (b) the


                                      -57-

     Commitment Termination Date. In no event shall Borrowers be authorized to
     make a voluntary prepayment with respect to any Revolver Loan outstanding
     as a LIBOR Loan prior to the last day of the Interest Period applicable
     thereto unless (x) otherwise agreed in writing by Administrative Agent or
     Borrowers are otherwise expressly authorized or required by any other
     provision of this Agreement to pay any LIBOR Loan outstanding on a date
     other than the last day of the Interest Period applicable thereto, and (y)
     Borrowers pay to Administrative Agent, for the Pro Rata benefit of Lenders,
     concurrently with any prepayment of a LIBOR Loan, any amount due
     Administrative Agent and Lenders under SECTION 3.10 as a consequence of
     such prepayment. Notwithstanding the foregoing provisions of this SECTION
     5.2.1(II), if, on any date that Administrative Agent receives proceeds of
     Accounts or other Collateral, there are no Revolver Loans outstanding as
     Base Rate Loans, Administrative Agent may either hold such proceeds as cash
     security for the timely payment of the Obligations or apply such proceeds
     to any outstanding Revolver Loans bearing interest as LIBOR Loans as the
     same become due and payable (whether at the end of the applicable Interest
     Periods or on the Commitment Termination Date).

               (iii) Notwithstanding anything to the contrary contained
     elsewhere in this Agreement, if an Out-of-Formula Condition shall exist,
     Borrowers shall, on the sooner to occur of 2 Business Days after
     Administrative Agent's demand or 2 Business Days after any Borrower has
     obtained knowledge of such Out-of-Formula Condition, repay the outstanding
     Revolver Loans that are Base Rate Loans in an amount sufficient to reduce
     the aggregate unpaid principal amount of all Revolver Loans by an amount
     equal to such excess; and, if such payment of Base Rate Loans is not
     sufficient to eliminate the Out-of-Formula Condition, then Borrowers shall
     immediately deposit with Administrative Agent, for the Pro Rata benefit of
     Lenders, for application to any outstanding Revolver Loans bearing interest
     as LIBOR Loans as the same become due and payable (whether at the end of
     the applicable Interest Periods or on the Commitment Termination Date) cash
     in an amount sufficient to eliminate such Out-of-Formula Condition, and
     Administrative Agent may (a) hold such deposit as cash security pending
     disbursement of same for application to the Obligations, or (b) if an Event
     of Default exists, immediately apply such proceeds to the payment of the
     Obligations, including the Revolver Loans outstanding as LIBOR Loans (in
     which event Borrowers shall also pay to Administrative Agent for the
     benefit of Lenders any amounts required by SECTION 3.10 to be paid by
     reason of the prepayment of a LIBOR Loan prior to the last day of the
     Interest Period applicable thereto).

          5.2.2. Payment of Interest. Interest accrued on the Revolver Loans
shall be due and payable on (i) the first day of each month (for the immediately
preceding month), computed through the last day of the preceding month, with
respect to any Revolver Loan that is a Base Rate Loan and (ii) the last day of
the applicable Interest Period in the case of a LIBOR Loan. Accrued interest
shall also be paid by Borrowers on the Commitment Termination Date. With respect
to any Base Rate Loan converted into a LIBOR Loan pursuant to SECTION 3.1.2 on a
day when interest would not otherwise have been payable with respect to such
Base Rate Loan, accrued interest to the date of such conversion on the amount of
such Base Rate Loan so converted shall be paid on the conversion date.

     5.3. RESERVED.

     5.4. PAYMENT OF OTHER OBLIGATIONS. The balance of the Obligations requiring
the payment of money, including LC Obligations and Extraordinary Expenses
incurred by Administrative Agent or any Lender, shall be repaid by Borrowers to
Administrative Agent for allocation among Administrative Agent and Lenders as
provided in the Loan Documents, or, if no date of payment is otherwise specified
in the Loan Documents, ON DEMAND.


                                      -58-

     5.5. MARSHALING; PAYMENTS SET ASIDE. None of Administrative Agent or
Lenders shall be under any obligation to marshal any assets in favor of
Borrowers or any other Obligor or against or in payment of any or all of the
Obligations. To the extent that Borrowers make a payment to Administrative Agent
or Lenders or Administrative Agent or any Lender receives payment from the
proceeds of any Collateral or exercises its right of setoff, and such payment or
the proceeds of such Collateral or setoff (or any part thereof) are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other Person, then to the extent of any
loss by Administrative Agent or Lenders, the Obligations or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment or proceeds had not been made or received and any such enforcement or
setoff had not occurred. The provisions of the immediately preceding sentence of
this SECTION 5.5 shall survive any termination of the Commitments and Full
Payment of the Obligations.

     5.6. ALLOCATION OF PAYMENTS.

          5.6.1. Allocation. At any time that an Event of Default exists or
Administrative Agent receives a payment or Collateral proceeds in an amount that
is insufficient to pay all amounts then due and payable to Administrative Agent
and Lenders, all monies to be applied to the Obligations, whether such monies
represent voluntary or mandatory payments or prepayments by one or more Obligors
or are received pursuant to demand for payment or realized from any disposition
of Collateral and irrespective of any designation by Borrowers of the
Obligations that are intended to be satisfied, shall be allocated among
Administrative Agent and such of the Lenders as are entitled thereto (and, with
respect to monies allocated to Lenders, on a Pro Rata basis unless otherwise
provided herein): (i) first, to Administrative Agent to pay the amount of
Extraordinary Expenses that have not been reimbursed to Administrative Agent by
Borrowers or Lenders, together with interest accrued thereon at the rate
applicable to Revolver Loans that are Base Rate Loans, until Full Payment of all
such Obligations; (ii) second, to Administrative Agent to pay principal and
accrued interest on any portion of the Revolver Loans which Administrative Agent
may have advanced on behalf of any Lender and for which Administrative Agent has
not been reimbursed by such Lender or Borrowers, until Full Payment of all such
Obligations; (iii) third, to BofA to pay the principal and accrued interest on
any portion of the Swingline Loans outstanding, to be shared with Lenders that
have acquired and paid for a participating interest in such Swingline Loans,
until Full Payment of all such Obligations; (iv) fourth, to the extent that
Issuing Bank has not received from any Participating Lender a payment as
required by SECTION 2.3.2, to Issuing Bank to pay all such required payments
from each Participating Lender, until Full Payment of all such Obligations; (v)
fifth, to Administrative Agent to pay any Claims that have not been paid
pursuant to any indemnity of Administrative Agent Indemnitees by any Obligor, or
to pay amounts owing by Lenders to Administrative Agent Indemnitees pursuant to
SECTION 13.6, in each case together with interest accrued thereon at the rate
applicable to Revolver Loans that are Base Rate Loans, until Full Payment of all
such Obligations; (vi) sixth, to Administrative Agent to pay any fees due and
payable to Administrative Agent, until Full Payment of all such Obligations;
(vii) seventh, to each Lender, ratably, for any Claims that such Lender has paid
to Administrative Agent Indemnitees pursuant to its indemnity of Administrative
Agent Indemnitees and any Extraordinary Expenses that such Lender has reimbursed
to Administrative Agent or such Lender has incurred, to the extent that such
Lender has not been reimbursed by Obligors therefor, until Full Payment of all
such Obligations; (viii) eighth, to Issuing Bank to pay principal and interest
with respect to LC Obligations (or to the extent any of the LC Obligations are
contingent and an Event of Default then exists, deposited in the Cash Collateral
Account to Cash Collateralize the LC Obligations), which payment shall be shared
with the Participating Lenders in accordance with SECTION 2.3.2(III), until Full
Payment of all such Obligations; (ix) ninth, to Lenders in payment of the unpaid
principal and accrued interest in respect of the Loans and other Obligations
(excluding Banking Relationship Debt) then outstanding, in such order of
application as shall be designated by Administrative Agent (acting at the
direction or with the consent of the Required Lenders), until Full Payment of
all such Obligations; (x)


                                      -59-

tenth, to BofA or any Affiliate of BofA in payment of any Banking Relationship
Debt owed to such Person and secured by the Collateral hereunder, until Full
Payment of all such Obligations; and (xi) eleventh, to Borrowers as provided in
SECTION 5.7. The allocations set forth in this SECTION 5.6 are solely to
determine the rights and priorities of Administrative Agent and Lenders as among
themselves and may be changed by Administrative Agent and Lenders without notice
to or the consent or approval of any Borrower or any other Person.

          5.6.2. Erroneous Allocation. Administrative Agent shall not be liable
for any allocation or distribution of payments made by it in good faith and, if
any such allocation or distribution is subsequently determined to have been made
in error, the sole recourse of any Lender to which payment was due but not made
shall be to recover from the other Lenders any payment in excess of the amount
to which such other Lenders are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).

     5.7. APPLICATION OF PAYMENTS AND COLLATERAL PROCEEDS. All Payment Items
received by Administrative Agent by 2:00 p.m., on any Business Day shall be
deemed received on that Business Day. All Payment Items received by
Administrative Agent after 2:00 p.m., on any Business Day shall be deemed
received on the following Business Day. Each Borrower irrevocably waives the
right to direct the application of any and all payments and Collateral proceeds
at any time or times hereafter received by Administrative Agent or any Lender
from or on behalf of Borrowers, and each Borrower does hereby irrevocably agree
that Administrative Agent shall have the continuing exclusive right to apply and
reapply any and all such payments and Collateral proceeds received at any time
or times hereafter by Administrative Agent or its agent against the Obligations,
in such manner as Administrative Agent may deem advisable, notwithstanding any
entry by Administrative Agent upon any of its books and records; provided,
however, that any payments or proceeds of Collateral received by Administrative
Agent on any date that an Event of Default does not exist shall be applied in
accordance with any provisions of this Agreement that govern the application of
such payment or proceeds. If, as the result of Administrative Agent's collection
of proceeds of Accounts and other Collateral as authorized by SECTION 8.2.6 a
credit balance exists, such credit balance shall not accrue interest in favor of
Borrowers, but shall be remitted to Borrowers unless (x) there exists an Event
of Default and (y) there are LC Obligations outstanding that have not been Cash
Collateralized. Administrative Agent may apply such credit balance against any
of the Obligations upon and after the occurrence of an Event of Default, and to
the extent so applied, such credit balance shall be applied in the manner
specified in SECTION 5.6.1.

     5.8. LOAN ACCOUNTS; ACCOUNT STATED.

          5.8.1. Loan Accounts. Each Lender shall maintain in accordance with
its usual and customary practices an account or accounts (a "Loan Account")
evidencing the Debt of Borrowers to such Lender resulting from each Loan owing
to Lender from time to time, including the amount of principal and interest
payable to such Lender from time to time hereunder and under each Note payable
to such Lender. Any failure of a Lender to record in the Loan Account, or any
error in doing so, shall not limit or otherwise affect the obligation of
Borrowers hereunder (or under any Note) to pay any amount owing hereunder to
such Lender.

          5.8.2. The Register. Administrative Agent shall maintain a register
(the "Register"), which shall include a master account and a subsidiary account
for each Lender and in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of each Loan
comprising such Borrowing and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto, (iii) the amount of any principal or
interest due and payable or to become due and payable from Borrowers to each
Lender hereunder or under the Notes, and (iv) the amount of any sum received by


                                      -60-

Administrative Agent from Borrowers or any other Obligor and each Lender's Pro
Rata share thereof. The Register shall be available for inspection by Borrowers
or any Lender at the offices of Administrative Agent at any reasonable time and
from time to time upon reasonable prior notice. Any failure of Administrative
Agent to record in the Register, or any error in doing so, shall not limit or
otherwise affect the obligation of Borrowers hereunder (or under any Note) to
pay any amount owing with respect to the Loans or provide the basis for any
claim against Administrative Agent. The Obligations and Letters of Credit are
registered obligations and the right, title and interest of any Lender and their
assignees in and to such Obligations and Letters of Credit as the case may be,
shall be transferable only upon notation of such transfer in the Register.
Solely for purposes of this SECTION 5.8.2 and for tax purposes only,
Administrative Agent shall be Borrowers' agent for purposes of maintaining the
Register (but Administrative Agent shall have no liability whatsoever to any
Borrower or any other Person on account of any inaccuracies contained in the
Register). This SECTION 5.8.2 shall be construed so that the Obligations and
Letters of Credit are at all times maintained in "registered form" within the
meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code
of 1986, as amended, and any related regulations (and any other relevant or
successor provisions of the Internal Revenue Code of 1986, as amended, or such
regulations).

          5.8.3. Entries Binding. The entries made in the Register and each Loan
Account shall constitute rebuttably presumptive evidence of the information
contained therein; provided, however, that if a copy of information contained in
the Register or any Loan Account is provided to any Person, or any Person
inspects the Register or any Loan Account, at any time or from time to time,
then the information contained in the Register or the Loan Account, as
applicable, shall be conclusive and binding on such Person for all purposes
absent manifest error, unless such Person notifies Administrative Agent in
writing within 30 days after such Person's receipt of such copy or such Person's
inspection of the Register or Loan Account of its intention to dispute the
information contained therein.

     5.9. TAXES.

          5.9.1. Gross Up. If Borrowers shall be required by Applicable Law to
withhold or deduct any Taxes (other than Excluded Taxes) from or in respect of
any sum payable under this Agreement or any of the other Loan Documents, (a) the
sum payable to Administrative Agent or such Lender shall be increased as may be
necessary so that, after making all required withholding or deductions,
Administrative Agent or such Lender (as the case may be) receives an amount
equal to the sum it would have received had no such withholding or deductions
been made, (b) Borrowers shall make such withholding or deductions, and (c)
Borrowers shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with Applicable Law.

          5.9.2. Refund. If Administrative Agent or any Lender receives a
refund, credit, or other reduction of taxes in respect of any Taxes paid by
Borrowers pursuant to this SECTION 5.9, such Person shall, within 30 days from
the date of actual receipt of such refund or the filing of the tax return in
which such credit or other reduction results in a lower tax payment, pay over
such refund or the amount of such tax reduction to Borrowers (but only to the
extent of Taxes paid by Borrowers pursuant to this SECTION 5.9), net of all
out-of-pocket expenses of such Person, and without interest (other than interest
paid by the relevant Governmental Authority with respect to such refund).

          5.9.3. Foreign Lenders. Each Foreign Lender, on or prior to the date
of its execution and delivery of this Agreement, on or prior to the date on
which it designates a new lending office, and on or prior to the date on which
it becomes a Lender, in the case of an assignee, and from time to time
thereafter if requested in writing by Borrowers, shall provide Borrowers with
duplicate executed originals of (A) Internal Revenue Service Form W-8 BEN, or
any successor form, certifying that such Lender is entitled to benefits under
any income tax treaty to which the United States is a party which reduces to


                                      -61-

zero the rate of withholding tax on payments of interest, or (B) Internal
Revenue Service Form W-8ECI, or any successor form, certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States; or (C) with respect to any Lender
that is not a bank and is eligible for exemption from tax under SECTION 881(C)
or 871(H) of the Internal Revenue Code of 1986, as amended, Internal Revenue
Service Form W-8 BEN, or any successor form, and a certificate substantially in
the form of Exhibit J hereto. Each Foreign Lender who does not deliver a Form
W-8ECI represents that all services performed hereunder with respect to any fees
received or to be received will have been, and will be, performed outside of the
United States.

          5.9.4. Remedy. In the event that Borrowers are required to pay
additional amounts pursuant to SECTION 3.7 or SECTION 5.9.1 hereof, Borrowers
may, upon notice to such Lender, either prepay in whole or in part the
outstanding balance on any Loan held by such Lender or require such Lender to
assign and delegate, without recourse all of its interests, rights and
obligations under this Agreement to an assignee selected by Borrowers that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment).

     5.10. NATURE AND EXTENT OF EACH BORROWER'S LIABILITY.

          5.10.1. Joint and Several Liability. Each Borrower shall be liable
for, on a joint and several basis, and hereby guarantees the timely payment by
all other Borrowers of, all of the Loans and other Obligations, regardless of
which Borrower actually may have received the proceeds of any Loans or other
extensions of credit hereunder or the amount of such Loans received or the
manner in which Administrative Agent or any Lender accounts for such Loans or
other extensions of credit on its books and records, it being acknowledged and
agreed that Loans to any Borrower inure to the mutual benefit of all Borrowers
and that Administrative Agent and Lenders are relying on the joint and several
liability of Borrowers in extending the Loans and other financial accommodations
hereunder. Each Borrower hereby unconditionally and irrevocably agrees that upon
default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest owed on, any of the Loans or other
Obligations, such Borrower shall forthwith pay the same, without notice or
demand.

          5.10.2. Unconditional Nature of Liability. Each Borrower's joint and
several liability hereunder with respect to, and guaranty of, the Loans and
other Obligations shall, to the fullest extent permitted by Applicable Law, be
unconditional irrespective of (i) the validity, enforceability, avoidance or
subordination of any of the Obligations or of any promissory note or other
document evidencing all or any part of the Obligations, (ii) the absence of any
attempt to collect any of the Obligations from any other Obligor or any
Collateral or other security therefor, or the absence of any other action to
enforce the same, (iii) the waiver, consent, extension, forbearance or granting
of any indulgence by Administrative Agent or any Lender with respect to any
provision of any instrument evidencing or securing the payment of any of the
Obligations, or any other agreement now or hereafter executed by any other
Borrower and delivered to Administrative Agent or any Lender, (iv) the failure
by Administrative Agent to take any steps to perfect or maintain the perfected
status of its security interest in or Lien upon, or to preserve its rights to,
any of the Collateral or other security for the payment or performance of any of
the Obligations or Administrative Agent's release of any Collateral or of its
Liens upon any Collateral, (v) Administrative Agent's or Lenders' election, in
any proceeding instituted under the Bankruptcy Code, for the application of
Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a
security interest by any other Borrower, as debtor-in-possession under Section
364 of the Bankruptcy Code, (vii) the release or compromise, in whole or in
part, of the liability of any Obligor for the payment of any of the Obligations,
(viii) any amendment or modification of any of the Loan Documents or any waiver
of a Default or Event of Default, (ix) any increase in the amount of the
Obligations beyond any limits imposed herein or in the amount of any interest,
fees or other charges payable in connection therewith, or any decrease in the
same, (x) the disallowance of all or any portion of Administrative Agent's or
any Lender's claims against


                                      -62-

any other Obligor for the repayment of any of the Obligations under Section 502
of the Bankruptcy Code, or (xi) any other circumstance that might constitute a
legal or equitable discharge or defense of any Obligor (other than prior
payment). After the occurrence and during the continuance of any Event of
Default, Administrative Agent may proceed directly and at once, without notice
to any Obligor, against any or all of Obligors to collect and recover all or any
part of the Obligations, without first proceeding against any other Obligor or
against any Collateral or other security for the payment or performance of any
of the Obligations, and each Borrower waives any provision under Applicable Law
that might otherwise require Administrative Agent to pursue or exhaust its
remedies against any Collateral or Obligor before pursuing another Obligor. Each
Borrower consents and agrees that Administrative Agent shall be under no
obligation to marshal any assets in favor of any Obligor or against or in
payment of any or all of the Obligations.

          5.10.3. No Reduction in Liability for Obligations. No payment or
payments made by an Obligor or received or collected by Administrative Agent
from a Borrower or any other Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Borrower under this Agreement,
each of whom shall remain jointly and severally liable for the payment and
performance of all Loans and other Obligations until Full Payment of the
Obligations.

          5.10.4. Contribution. Each Borrower is unconditionally obligated to
repay the Obligations as a joint and several obligor under this Agreement. If,
as of any date, the aggregate amount of payments made by a Borrower on account
of the Obligations and proceeds of such Borrower's Collateral that are applied
to the Obligations exceeds the aggregate amount of Loan proceeds actually used
by such Borrower in its business (such excess amount being referred to as an
"Accommodation Payment"), then each of the other Borrowers (each such Borrower
being referred to as a "Contributing Borrower") shall be obligated to make
contribution to such Borrower (the "Paying Borrower") in an amount equal to (A)
the product derived by multiplying the sum of each Accommodation Payment of each
Borrower by the Allocable Percentage of the Borrower from whom contribution is
sought less (B) the amount, if any, of the then outstanding Accommodation
Payment of such Contributing Borrower (such last mentioned amount which is to be
subtracted from the aforesaid product to be increased by any amounts theretofore
paid by such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore received by such Contributing Borrower by
way of contribution hereunder); provided, however, that a Paying Borrower's
recovery of contribution hereunder from the other Borrowers shall be limited to
that amount paid by the Paying Borrower in excess of its Allocable Percentage of
all Accommodation Payments then outstanding of all Borrowers. As used herein,
the term "Allocable Percentage" shall mean, on any date of determination
thereof, a fraction the denominator of which shall be equal to the number of
Borrowers who are parties to this Agreement on such date and the numerator of
which shall be 1; provided, however, that such percentages shall be modified in
the event that contribution from a Borrower is not possible by reason of
insolvency, bankruptcy or otherwise by reducing such Borrower's Allocable
Percentage equitably and by adjusting the Allocable Percentage of the other
Borrowers proportionately so that the Allocable Percentages of all Borrowers at
all times equals 100%.

          5.10.5. Subordination. Each Borrower hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it
may have from or against any other Obligor, and any successor or assign of any
other Obligor, including any trustee, receiver or debtor-in-possession,
howsoever arising, due or owing or whether heretofore, now or hereafter
existing, to the Full Payment of all of the Obligations (other than contingent
indemnification obligations for which no claim has been made).


                                      -63-

SECTION 6. TERM AND TERMINATION OF COMMITMENT

     6.1. TERM OF COMMITMENTS. Subject to each Lender's right to cease making
Loans and other extensions of credit to Borrowers when any Default or Event of
Default exists or upon termination of the Commitments as provided in SECTION
6.2, the Commitments shall be in effect for a period (the "Term") commencing on
the date hereof and continuing until the close of business on September 22,
2010, unless sooner terminated as provided in SECTION 6.2.

     6.2. TERMINATION.

          6.2.1. Termination by Administrative Agent. Administrative Agent may
(and upon the direction of the Required Lenders, shall) terminate the Commitment
without notice at any time that an Event of Default exists; provided, however,
that the Commitment shall automatically terminate as provided in SECTION 12.2.

          6.2.2. Termination by Borrowers. Upon at least 30 days prior written
notice to Administrative Agent, Borrowers may, at their option, terminate the
Commitments; provided, however, no such termination by Borrowers shall be
effective until Full Payment of the Obligations (other than contingent
indemnification obligations for which no claim has been made). Any notice of
termination given by Borrowers shall be irrevocable unless Administrative Agent
otherwise agrees in writing. Borrowers may elect to terminate the Commitments in
their entirety only, provided that nothing contained herein shall affect
Borrowers' right to voluntarily reduce the Revolver Commitments as provided in
SECTION 2.1.5. No section of this Agreement, Type of Loan available hereunder or
Commitment may be terminated by Borrowers singly.

          6.2.3. Reserved.

          6.2.4. Effect of Termination. On the effective date of termination of
the Commitments by Administrative Agent or by Borrowers, all of the Obligations
(other than contingent indemnification obligations for which no claim has been
made) shall be immediately due and payable; Lenders shall have no obligation to
make any Loans; Issuing Bank shall have no obligation to issue any Letters of
Credit, and BofA may terminate any Bank Products (including any services or
products under Cash Management Agreements). All undertakings, agreements,
covenants, warranties and representations of Borrowers contained in the Loan
Documents shall survive any such termination, and Administrative Agent shall
retain its Liens in the Collateral and all of its rights and remedies under the
Loan Documents notwithstanding such termination until Full Payment of the
Obligations (other than contingent indemnification obligations for which no
claim has been made). Notwithstanding the Full Payment of the Obligations (other
than contingent indemnification obligations for which no claim has been made),
Administrative Agent shall not be required to terminate its Liens in any of the
Collateral unless, with respect to any loss or damage Administrative Agent may
incur as a result of the dishonor or return of any Payment Items applied to the
Obligations, Administrative Agent shall have received either (i) a written
agreement, executed by Borrowers and any Person deemed financially responsible
by Administrative Agent whose loans or other advances to Borrowers are used in
whole or in part to satisfy the Obligations, indemnifying Administrative Agent
and Lenders from any such loss or damage; or (ii) such monetary reserves and
Liens on the Collateral for such period of time as Administrative Agent, in its
reasonable discretion, may deem necessary to protect Administrative Agent from
any such loss or damage. The provisions of SECTIONS 3.4, 5.5, 5.9 and this
SECTION 6.2.4 and all obligations of Borrowers to indemnify Administrative Agent
or any Lender pursuant to this Agreement or any of the other Loan Documents,
shall in all events survive any termination of the Commitment and Full Payment
of the Obligations.

SECTION 7. COLLATERAL


                                      -64-

     7.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and
performance of all of the Obligations, each Borrower hereby grants to
Administrative Agent, for the benefit of Secured Parties, a continuing security
interest in and Lien upon all of the following Property and interests in
Property of such Borrower, whether now owned or existing or hereafter created,
acquired or arising and wheresoever located: (i) all Accounts; (ii) all
Instruments, Chattel Paper (including Electronic Chattel Paper), Documents,
Letter-of-Credit Rights and Supporting Obligations, in each case to the extent
arising out of, relating to, or given in exchange or settlement for or to
evidence the obligation to pay any Account; (iii) all General Intangibles that
arise out of or are related to any Account or from which any Account arises;
(iv) all of the Deposit Accounts Collateral; (v) all monies now or at any time
or times hereafter in the possession or under the control of Administrative
Agent or a bailee of Administrative Agent, including any Cash Collateral in any
Cash Collateral Account; (vi) all products and cash and non-cash proceeds of the
foregoing, including proceeds of insurance in respect of any of the foregoing;
(vii) all books and records (including customer lists, files, correspondence,
tapes, computer programs, print-outs and other computer materials and records)
of such Borrower pertaining to any of the foregoing.

     7.2. RESERVED.

     7.3. RESERVED.

     7.4. CERTAIN AFTER-ACQUIRED COLLATERAL. Borrowers shall promptly notify
Administrative Agent in writing upon any Borrower's obtaining any Collateral
after the Restatement Effective Date consisting of Deposit Accounts (other than
Deposit Accounts into which payments with respect to Governmental Receivables
are directly deposited or transferred), Letter-of-Credit Rights or Chattel
Paper, to the extent such Deposit Accounts, Letter-of-Credit Rights or Chattel
Paper arise out of, relate to or are given in exchange or settlement for or to
evidence the obligation to pay any Account, and, upon Administrative Agent's
request, shall promptly execute such documents and do such other acts or things
reasonably deemed appropriate by Administrative Agent to confer upon
Administrative Agent a duly perfected first priority Lien (subject to Permitted
Liens), upon and (to the extent applicable for the perfection of a Lien) control
with respect to such Collateral; and promptly notify Administrative Agent in
writing upon any Borrower's obtaining any Collateral after the Restatement
Effective Date consisting of Documents or Instruments to the extent they arise
out of, relate to or are given in exchange or settlement for or to evidence the
obligation to pay any Account, and, upon Administrative Agent's request, shall
promptly execute such documents and do such other acts or things reasonably
deemed appropriate by Administrative Agent to deliver to it possession of such
Documents as are negotiable and such Instruments, to the extent they arise out
of, relate to or are given in exchange or settlement for or to evidence the
obligation to pay any Account.

     7.5. NO ASSUMPTION OF LIABILITY. The security interest granted pursuant to
this Agreement is granted as security only and shall not subject Administrative
Agent or any Lender to, or in any way alter or modify, any obligation or
liability of Borrowers with respect to or arising out of the Collateral.

     7.6. LIEN PERFECTION; FURTHER ASSURANCES. Promptly after Administrative
Agent's request therefor, Borrowers shall execute or cause to be executed and
deliver to Administrative Agent such instruments, assignments or other documents
as are necessary under the UCC or other Applicable Law to perfect (or continue
the perfection of) Administrative Agent's Lien upon the Collateral and shall
take such other action as may be requested by Administrative Agent to give
effect to or carry out the intent and purposes of this Agreement. Unless
prohibited by Applicable Law, each Borrower hereby irrevocably authorizes
Administrative Agent to execute and file in any jurisdiction any financing
statement or amendment thereto on such Borrower's behalf, including financing
statements that indicate the Collateral as set forth in this SECTION 7. Each
Borrower also hereby ratifies its authorization for Administrative Agent to have
filed in any jurisdiction any like financing statement or amendment thereto if
filed prior to


                                      -65-

the date hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement and
may be filed in any appropriate office in lieu thereof.

SECTION 8. COLLATERAL ADMINISTRATION

     8.1. GENERAL PROVISIONS.

          8.1.1. Location of Collateral. Collateral shall at all times be kept
by Borrowers at one or more of the business locations of Borrowers set forth in
SCHEDULE 9.1.6 hereto and shall not be moved therefrom, without the prior
written approval of Administrative Agent, except that in the absence of an Event
of Default and acceleration of the maturity of the Obligations in consequence
thereof, Borrowers may move any record relating to any Collateral to a location
in the United States other than those shown on SCHEDULE 9.1.6 hereto so long as
Borrowers have given Administrative Agent at least 5 days prior written notice
of such new location and prior to moving to such location there have been filed
any UCC-1 financing statements or other appropriate documentation necessary to
perfect or continue perfection of Administrative Agent's first priority Liens
subject to Permitted Liens with respect to such Collateral.

          8.1.2. Insurance of Collateral; Condemnation Proceeds. Borrowers
shall, upon request by Administrative Agent, deliver the originals or certified
copies of all insurance policies to Administrative Agent with certificates of
insurance reasonably satisfactory to Administrative Agent naming Administrative
Agent as an additional insured with respect to Borrowers' general liability
insurance. If any Borrower fails to provide and pay for such insurance,
Administrative Agent may, at its option, but shall not be required to, procure
the same and charge Borrowers therefor. Each Borrower agrees to deliver to
Administrative Agent, promptly as rendered, true copies of all reports made in
any reporting forms to insurance companies (other than reports with respect to
professional liability insurance).

          8.1.3. Protection of Collateral. All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes imposed under any Applicable Law on any of the Collateral or in respect of
the sale thereof, and all other payments required to be made by Administrative
Agent to any Person to realize upon any Collateral shall be borne and paid by
Borrowers. Administrative Agent shall not be liable or responsible in any way
for the safekeeping of any of the Collateral or for any loss or damage thereto
(except for reasonable care in the custody thereof while any Collateral is in
Administrative Agent's actual possession) or for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency, or other Person whomsoever, but the same shall be at Borrowers' sole
risk.

          8.1.4. Defense of Title to Collateral. Each Borrower shall at all
times defend such Borrower's title to the Collateral and Administrative Agent's
Liens therein against all Persons and all claims and demands whatsoever other
than Permitted Liens and Permitted Asset Dispositions.

     8.2. ADMINISTRATION OF ACCOUNTS.

          8.2.1. Records and Schedules of Accounts. Each Borrower shall keep
accurate and complete records of its Accounts and all payments and collections
thereon. Each Borrower shall also provide to Administrative Agent on or before
the 25th day of each month, a detailed aged trial balance of all Accounts
existing as of the last day of the preceding month, specifying the names, face
value, dates of invoices and due dates for each Account Debtor obligated on an
Account so listed ("Schedule of Accounts"), and, upon Administrative Agent's
request therefor, copies of all documents, including repayment histories and
present status reports relating to the Accounts so scheduled and such other
matters and information relating to the status of then existing Accounts as
Administrative Agent


                                      -66-

shall reasonably request. In addition, at any time that there are Revolver Loans
outstanding or LC Obligations that have not been Cash Collateralized exceed
$2,000,000, if an Account in the face amount in excess of $1,000,000 ceases to
be an Eligible Account in whole or in part, Borrowers shall notify
Administrative Agent of such occurrence promptly (and in any event within 7
Business Days) after any Borrower's having obtained knowledge of such occurrence
and the Borrowing Base shall thereupon be adjusted to reflect such occurrence.
To the extent permitted by Applicable Law, each Borrower shall deliver to
Administrative Agent copies of invoices or invoice registers related to all of
its Accounts.

          8.2.2. Discounts, Disputes and Returns. At any time that there are
Revolver Loans outstanding or LC Obligations that have not been Cash
Collateralized exceed $2,000,000, if any Borrower grants any discounts,
allowances or credits on an Eligible Account in excess of 5% of the amount of
such Account that are not shown on the face of the invoice for the Eligible
Account involved, such Borrower shall report such discounts, allowances or
credits, as the case may be, to Administrative Agent as part of the next
required Schedule of Accounts. At any time that there are Revolver Loans
outstanding or LC Obligations that have not been Cash Collateralized exceed
$2,000,000, if any amounts due and owing in excess of $750,000 are in dispute
between any Borrower and any Account Debtor, such Borrower shall provide
Administrative Agent with written notice thereof at the time of submission of
the next Schedule of Accounts.

          8.2.3. Taxes. If an Account of any Borrower includes a charge for any
Taxes payable to any Governmental Authority, Administrative Agent is authorized,
in its discretion, to pay the amount thereof to the proper taxing authority for
the account of such Borrower and to charge Borrowers therefor; provided,
however, that neither Administrative Agent nor Lenders shall be liable for any
Taxes that may be due by Borrowers.

          8.2.4. Account Verification. Whether or not a Default or an Event of
Default exists, Administrative Agent shall have the right at any time, in the
name of Administrative Agent, any designee of Administrative Agent or any
Borrower to verify the validity, amount or any other matter relating to any
Wholesale Receivable of such Borrower by mail, telephone, telegraph or
otherwise. Borrowers shall cooperate fully with Administrative Agent in an
effort to facilitate and promptly conclude any such verification process.

          8.2.5. MAINTENANCE OF DOMINION ACCOUNT.

               (i) Borrowers shall establish and maintain a system of cash
     management that is acceptable to Agent with BofA or such other bank or
     banks as may be selected by Borrowers and be reasonably acceptable to
     Administrative Agent. Such system of cash management shall include (i) a
     lockbox (or lockboxes), and related Deposit Account (or Deposit Accounts),
     for remittance and deposit (including by way of electronic funds transfer)
     of collections or payments with respect to Wholesale Receivables (each a
     "Wholesale Collection Account"), (ii) a Deposit Account (or Deposit
     Accounts) into which collections and payments with respect to Retail
     Receivables (including Governmental Receivables) are deposited or remitted
     by electronic funds transfer or otherwise (each a "Retail Collection
     Account"), (iii) a Deposit Account that constitutes a "concentration
     account" (the "Concentration Account") into which collected funds from the
     Collection Accounts (other than amounts payable to physicians pursuant to
     PSAs) shall be transferred within 7 Business Days of receipt thereof and
     (iv) such other Deposit Accounts and/or lockboxes as Borrowers shall deem
     to be necessary or appropriate to conduct their business operations.
     Borrowers shall have access to the funds that are deposited in the
     foregoing Deposit Accounts, provided that (a) Borrowers shall not deposit
     proceeds of Property constituting collateral security for the Senior Notes
     therein, (b) Borrowers shall not deposit the proceeds of any Collateral
     into any Deposit Account maintained for or in connection


                                      -67-

     with the Senior Notes or into which the proceeds of collateral security for
     the Senior Notes are, or are intended to be, deposited and (c) the
     provisions of SECTION 8.2.5(II) shall control after the occurrence of a
     Restrictive Trigger Event.

               (ii) If a Restrictive Trigger Event occurs at any time, then all
     monies in the Concentration Account and in each Wholesale Collection
     Account shall be deposited each day in the Payment Account and applied to
     the Obligations as determined by Administrative Agent in accordance with
     this Agreement. If thereafter, a Restrictive Trigger Event does not exist
     during any period of 90 consecutive days, then as soon as practicable, but
     in any event within 5 Business Days, Administrative Agent will permit
     Borrowers to access the monies in the Concentration Account and in each
     Wholesale Collection Account for use as provided in SECTIONS 2.1.3 and
     8.2.5(I) hereof.

          8.2.6. Collection of Accounts and Proceeds of Collateral. To expedite
collection of Accounts, each Borrower shall endeavor in the first instance to
make collection of such Borrower's Accounts for Administrative Agent and Lenders
and, in connection therewith, shall use commercially reasonable efforts to keep
in full force and effect any Supporting Obligation or collateral security
relating to each such Account. All Payment Items received by any Borrower in
respect of its Accounts, together with the proceeds of any other Collateral,
shall be held by such Borrower as trustee of an express trust for Administrative
Agent's and Lenders' benefit; Borrowers shall promptly, and in any event no
later than the seventh Business Day after the date of receipt thereof, deposit
the same in kind in the Collection Accounts; and Administrative Agent may remit
such proceeds to Lenders for application to the Obligations in the manner
authorized by this Agreement. Administrative Agent retains the right at all
times that an Event of Default exists to notify Account Debtors on Wholesale
Receivables of any Borrower that Wholesale Receivables have been assigned to
Administrative Agent, to collect Wholesale Receivables directly in its own name
(and, in connection therewith, and to charge to Borrowers the collection costs
and expenses incurred by Administrative Agent, including reasonable attorneys'
fees). At any time an Event of Default exists, Administrative Agent shall have
the right to settle or adjust all disputes and claims directly with the Account
Debtor on Wholesale Receivables and to compromise the amount or extend the time
for payment of any Wholesale Receivables upon such terms and conditions as
Administrative Agent may deem advisable, and to charge the deficiencies, costs
and expenses thereof, including attorneys' fees, to Borrowers.

     8.3. ADMINISTRATION OF DEPOSIT ACCOUNTS. Each Borrower represents that, as
of the Restatement Effective Date, SCHEDULE 8.3 (as the same may be amended or
supplemented from time to time) sets forth all of the Deposit Accounts
maintained by each Borrower that arise out or relate to the Accounts, including
Deposit Accounts into which all Payment Items relating to any Collateral are
deposited; a Borrower is the sole account holder of each such Deposit Account
and is not aware of any Person (other than Administrative Agent) having either
dominion or control (within the meaning of Section 9-104 of the UCC) over any
such Deposit Account or any property deposited therein (other than any such
control that has been released or terminated on or before the Restatement
Effective Date and control arising by operation of law in favor the depository
bank in which such Deposit Account is maintained); and each Borrower has taken
all actions required to establish Administrative Agent's "control" (within the
meaning of Section 9-104 of the UCC) over the Concentration Account, the
Investment Accounts and any other Deposit Account that relates to the Accounts
(other than any Deposit Account specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of such Borrower's employees or into which payments with respect to Governmental
Receivables are directly deposited or transferred). Each Borrower shall promptly
notify Administrative Agent of any additional Deposit Account of the type
described above in this SECTION 8.3 opened and any Deposit Account of the type
described above in SECTION 8.3 that is closed, and will amend SCHEDULE 8.3 to
reflect such addition or deletion.


                                      -68-

     8.4. BORROWING BASE CERTIFICATES. Borrowers shall deliver to Administrative
Agent (and Administrative Agent shall, on request from a Lender, promptly
deliver to such Lender) a Borrowing Base Certificate: (a) on the Restatement
Effective Date; (b) if there are no Revolver Loans outstanding and the LC
Obligations that have not been Cash Collateralized do not exceed $2,000,000, on
the 25th day of the month following the end of each Fiscal Quarter, prepared as
of the last day of such Fiscal Quarter, or if there are Revolver Loans
outstanding or LC Obligations that have not been Cash Collateralized exceed
$2,000,000, on the Business Day that the initial Revolver Loan is requested, or
deemed requested by Borrower or the LC Obligations that are not Cash
Collateralized initially exceed $2,000,000, and on the 25th day of each month
thereafter, prepared as of the last day of the previous month; (c) if there are
Revolver Loans outstanding or the LC Obligations that have not been Cash
Collateralized exceed $2,000,000, on any Business Day on which Borrowers shall
dispose of any Eligible Accounts having a face amount in excess of $250,000 to
the extent permitted pursuant to clause (ii)(k) of the definition of Permitted
Asset Disposition; (d) during the continuance of an Event of Default, at such
other times as Administrative Agent may request, provided that Borrowers may
deliver Borrowing Base Certificates more frequently at their option. All
calculations of Availability in connection with any Borrowing Base Certificate
shall originally be made by Borrowers and certified by an authorized officer to
Administrative Agent, provided that Administrative Agent shall have the right to
review and adjust, in the exercise of its Credit Judgment, any such calculation
to the extent that such calculation is not in accordance with this Agreement or
does not accurately reflect the amount of the Availability Reserve. In no event
shall the Borrowing Base on any date be deemed to exceed the amount of the
Borrowing Base shown on the Borrowing Base Certificate most recently received by
Administrative Agent, as the calculation in such Borrowing Base Certificate may
be adjusted from time to time by Administrative Agent as herein authorized.

SECTION 9. REPRESENTATIONS AND WARRANTIES

     9.1. GENERAL REPRESENTATIONS AND WARRANTIES. To induce Administrative Agent
and Lenders to enter into this Agreement and to make available the Commitments,
each Borrower warrants and represents to Administrative Agent and Lenders that:

          9.1.1. Organization and Qualification. Each Borrower and each of its
Subsidiaries is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization. Each Borrower and each
of its Subsidiaries is duly qualified and is authorized to do business and is in
good standing as a foreign corporation in all states and jurisdictions in which
the failure of such Borrower or Subsidiary, as the case may be, to be so
qualified would reasonably be expected to have a Material Adverse Effect.

          9.1.2. Power and Authority. Each Borrower and each Guarantor is duly
authorized and empowered to enter into, execute, deliver and perform each of the
Loan Documents to which it is a party. The execution, delivery and performance
of this Agreement and each of the other Loan Documents have been duly authorized
by all necessary action and do not and will not (i) require any consent or
approval of any of the holders of the Equity Interests of any Borrower or any of
its Subsidiary other than those obtained on or prior to the date hereof; (ii)
contravene the Organic Documents of any Borrower or any of its Subsidiaries;
(iii) violate, or cause any Borrower or any of its Subsidiaries to be in default
under, any provision of any Applicable Law, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to any Borrower or
any of its Subsidiaries; (iv) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or any of its Subsidiaries is a party or by
which it or its Properties may be bound or affected; or (v) result in, or
require, the creation or imposition of any Lien (other than Permitted Liens)
upon or with respect to any of the Properties now owned or hereafter acquired by
any


                                      -69-

Borrower or any of its Subsidiaries, except in the case of clauses (iii), (iv)
or (v) of this SECTION 9.1.2 as would not reasonably be expected to have a
Material Adverse Effect.

          9.1.3. Legally Enforceable Agreement. The Loan Documents when
delivered will be, legal, valid and binding obligations of each Borrower and
each of its Subsidiaries signatories thereto enforceable against them in
accordance with the respective terms of such Loan Documents, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws of general application affecting the enforcement of creditors' rights.

          9.1.4. Capital Structure. As of the date hereof, SCHEDULE 9.1.4 hereto
states (i) the correct name of each Borrower, its jurisdiction of incorporation
and the percentage of its Equity Interests having voting powers owned by each
Person. Each Borrower has good title to all of the shares it purports to own of
the Equity Interests of each of its Subsidiaries, free and clear in each case of
any Lien other than Permitted Liens. All such Equity Interests have been duly
issued and are fully paid and non-assessable.

          9.1.5. Corporate Names. To the best of its knowledge, during the
5-year period preceding the date of this Agreement, no Borrower nor any of its
Subsidiaries has been known as or used any corporate, fictitious or trade names
except those listed on SCHEDULE 9.1.5 hereto. To the best of its knowledge,
except as set forth on SCHEDULE 9.1.5, no Borrower nor any of its Subsidiaries
has been the surviving corporation of a merger or consolidation or acquired all
or substantially all of the assets of any Person.

          9.1.6. Business Locations; Agent for Process. As of the date hereof,
the chief executive office and other places of business of each Borrower and its
Subsidiaries are as listed on SCHEDULE 9.1.6 hereto.

          9.1.7. Title to Properties; Priority of Liens. Each Borrower and each
of its Subsidiaries has good title to all of its personal Property, including
all Property reflected in the financial statements referred to in SECTION 9.1.9
or delivered pursuant to SECTION 10.1.3, except as could not be reasonably be
expected to have a Material Adverse Effect, in each case free and clear of all
Liens except Permitted Liens. Each Borrower has paid or discharged, and has
caused each of its Subsidiaries to pay and discharge, all material lawful claims
which, if unpaid, might become a Lien against any Properties of such Borrower or
any such Subsidiary that is not a Permitted Lien. The Liens granted to
Administrative Agent pursuant to this Agreement and the other Security Documents
are duly perfected, first priority Liens, subject only to those Permitted Liens
that are expressly permitted by the terms of this Agreement to have priority
over the Liens of Administrative Agent.

          9.1.8. Wholesale Receivables and Retail Receivables.

               (i) Wholesale Receivables. Administrative Agent may rely, in
     determining which Wholesale Receivables are Eligible Wholesale Receivables,
     on all statements and representations made by Borrowers with respect to any
     Account. With respect to each Eligible Wholesale Receivable, each Borrower
     warrants that:

               (a) it is genuine and in all respects what it purports to be, and
          it is not evidenced by a judgment;

               (b) it arises out of a completed, bona fide sale and delivery of
          goods or rendition of services by a Borrower in the Ordinary Course of
          Business and substantially in accordance with the terms and conditions
          of all purchase orders, contracts


                                      -70-

          or other documents relating thereto and forming a part of the contract
          between a Borrower and the Account Debtor;

               (c) it is for a sum certain maturing as stated in the duplicate
          invoice covering such sale or rendition of services, a copy of which
          has been furnished or is available to Administrative Agent on request;

               (d) such Account, and Administrative Agent's security interest
          therein, is not, subject to any offset, Lien, deduction, defense,
          dispute, counterclaim or any other adverse condition except for
          disputes and except for offsets or deductions contemplated by the
          invoice evidencing an Account or arising in the Ordinary Course of
          Business and disclosed to Administrative Agent, each such Account is
          absolutely owing to a Borrower and is not contingent in any respect or
          for any reason;

               (e) the contract under which such Account arose does not
          condition or restrict a Borrower's right to assign to Administrative
          Agent the right to payment thereunder unless such Borrower has
          obtained the Account Debtor's consent to such collateral assignment or
          complied with any conditions to such assignment (regardless of whether
          under the UCC or other Applicable Law any such restrictions are
          ineffective to prevent the grant of a Lien upon such Account in favor
          of Administrative Agent);

               (f) such Borrower has not made any agreement with any Account
          Debtor thereunder for any extension, compromise, settlement or
          modification of any such Account or any deduction therefrom, except
          discounts or allowances which are granted by a Borrower in the
          Ordinary Course of Business and which are reflected in the calculation
          of the net amount of each respective invoice related thereto and are
          reflected in the Schedules of Accounts submitted to Administrative
          Agent pursuant to SECTION 8.2.1;

               (g) to the best of such Borrower's knowledge, there are no facts,
          events or occurrences which are reasonably likely to impair the
          validity or enforceability of such Account or reduce the amount
          payable thereunder from the face amount of the invoice and statements
          delivered to Administrative Agent with respect thereto;

               (h) to the best of such Borrower's knowledge, the Account Debtor
          thereunder (1) had the capacity to contract at the time any contract
          or other document giving rise to the Account was executed and (2) is
          Solvent; and

               (i) to the best of such Borrower's knowledge, there are no
          proceedings or actions which are threatened or pending against any
          Account Debtor thereunder and which are reasonably likely to result in
          any material adverse change in such Account Debtor's financial
          condition or the collectibility of such Account.

               (ii) Retail Receivables. Administrative Agent may rely, in
     determining which Retail Receivables are Eligible Retail Receivables, on
     all statements and representations made by Borrowers with respect to any
     Retail Receivable. With respect to each Eligible Retail Receivable, each
     Borrower warrants that:

               (a) all information relating to such Retail Receivable that has
          been delivered to Administrative Agent is true and correct in all
          material respects. With respect to each such Retail Receivable, such
          Retail Receivable has been billed after the date the services


                                      -71-

          or goods giving rise to such Retail Receivable were rendered or
          provided, as applicable, all information set forth in the bill and
          supporting claim documents is true, complete and correct in all
          material respects and each bill contains an express direction
          requiring the Third Party Payor to remit payments as set forth in
          SECTION 8.2.6;

               (b) such Retail Receivable is payable in an amount not less than
          its Net Realizable Value by the Third Party Payor identified by
          Borrowers as the payor thereon and is recognized as such by such Third
          Party Payor. There is no payor on such Retail Receivable other than
          the Third Party Payor identified by Borrower as the payor primarily
          liable on such Retail Receivable;

               (c) no such Retail Receivable (1) requires the approval of any
          Person for the grant of a Lien in such Retail Receivable to
          Administrative Agent hereunder or (2) is past the statutory limit for
          collection applicable to the Third Party Payor;

               (d) the patient received the services constituting the basis of
          such Retail Receivable in the Ordinary Course of Business;

               (e) the fees and charges charged by such Borrower for the
          services constituting the basis for such Account were when rendered
          consistent with (1) the usual, customary and reasonable fees charged
          by such Borrower or (2) negotiated fee contracts with, or imposed fee
          schedules from, the applicable Third Party Payor;

               (f) the Third Party Payor with respect to such Retail Receivable
          is, to such Borrower's actual knowledge but without inquiry, located
          in the United States and is (1) a Person which in the Ordinary Course
          of Business agrees to pay for healthcare services received by
          individuals, including commercial insurance companies and non-profit
          insurance companies issuing health or other types of insurance,
          employers or unions, self-insured healthcare organizations, preferred
          provider organizations and health insured, prepaid maintenance
          organizations, (2) a state, an agency or instrumentality of a state or
          a political subdivision of a state or (3) the United States or an
          agency or instrumentality of the United States;

               (g) if requested by Administrative Agent, a copy of each related
          Provider Agreement to which a Borrower is a party has been delivered
          to Administrative Agent unless any such delivery is prohibited by the
          terms of the Provider Agreement or by Applicable Law; and

               (h) neither such Retail Receivable nor the related Provider
          Agreement contravenes any material Applicable Laws applicable thereto
          and no Borrower is in violation of any such Applicable Law.

          9.1.9. Financial Statements; Fiscal Year. The Consolidated balance
sheet of Borrowers and such other Persons described therein as of March 31,
2005, and the related statements of income, changes in stockholder's equity, and
changes in financial position for the periods ended on such dates, have been
prepared in accordance with GAAP, and present fairly in all material respects
the Consolidated financial positions of Borrowers and such Persons at such dates
and the results of Borrowers' operations for such periods. Since March 31, 2005,
there has been no material adverse change in the Consolidated financial
condition of Borrowers and such other Persons as shown on the Consolidated
balance sheet as of such date, except as set forth in the form 8-K filed
September 1, 2005 and the form 8-K filed September 16, 2005 filed by Parent with
the SEC.


                                      -72-

          9.1.10. Full Disclosure. The financial statements referred to in
SECTION 9.1.9 do not contain any untrue statement of a material fact and neither
this Agreement nor any other written statement, when taken together, contains or
omits any material fact necessary to make the statements contained herein or
therein not materially misleading. There is no fact or circumstance in existence
on the date hereof which any Borrower has failed to disclose to Administrative
Agent in writing that would reasonably be expected to have a Material Adverse
Effect.

          9.1.11. Solvent Financial Condition. Each Borrower and its
Subsidiaries is now Solvent and, after giving effect to the Loans to be made
hereunder, the LC Obligations to be incurred in connection herewith and the
consummation of the other transactions described in the Loan Documents, will be
Solvent.

          9.1.12. Surety Obligations. As of the date hereof, no Borrower nor any
of its Subsidiaries is obligated as surety or indemnitor under any surety,
performance or similar bond issued to assure payment, performance or completion
of performance of any undertaking or obligation of any Person.

          9.1.13. Taxes. The FEIN of each of each Borrower and each of its
Subsidiaries is as shown on SCHEDULE 9.1.13. Each Borrower and each of its
Subsidiaries has filed all material federal, state and local tax returns and
other material reports it is required by law to file and has paid, or made
provision for the payment of, all material Taxes upon it, its income and
Properties as and when such Taxes are due and payable, except to the extent
being Properly Contested. The provision for Taxes on the books of each Borrower
and each of its Subsidiaries are adequate in accordance with GAAP or all years
not closed by applicable statutes, and for its current Fiscal Year.

          9.1.14. Intellectual Property. Each Borrower and each of its
Subsidiaries owns or has the lawful right to use all Intellectual Property
necessary for the present and planned future conduct of its business without any
conflict with the rights of others, except in each case as could not reasonably
be expected to have an Material Adverse Effect.

          9.1.15. Governmental Approvals. Each Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all Governmental
Approvals necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it, except in each case as could not reasonably be
expected to have a Material Adverse Effect.

          9.1.16. Compliance with Laws. Each Borrower and each of its
Subsidiaries has duly complied with, and its Properties, business operations and
leaseholds are in compliance in all material respects with, the provisions of
all Applicable Law, including all Healthcare Laws (except to the extent that any
such noncompliance with Applicable Law could not reasonably be expected to have
a Material Adverse Effect). Without limiting the generality of the foregoing,
except to the extent that any failure of Borrower or any of its Subsidiaries to
comply with an Applicable Law could not reasonably be expected to have a
Material Adverse Effect:

               (i) neither any Borrower nor any of the Subsidiaries is engaged
     in or has engaged in any course of conduct that could subject any of their
     respective Properties to any Lien, seizure or other forfeiture under any
     criminal law, racketeer-influenced and corrupt organizations law, civil or
     criminal, or other similar laws; and

               (ii) neither any Borrower nor any of the Subsidiaries has engaged
     in any activities that are prohibited under any Medicaid Regulations or
     Medicare Regulations, or


                                      -73-

     any related state or local statutes or regulations, or which are prohibited
     by binding rules of professional conduct, including the following: (a)
     knowingly and willfully making or causing to be made a false statement or
     representation of a material fact in any application for any benefit or
     payment; (b) knowingly and willfully making or causing to be made a false
     statement or representation of a material fact for use in determining
     rights to any benefit or payment; (c) failing to disclose knowledge by a
     claimant of the occurrence of any event affecting the initial or continued
     right to any benefit or payment on its own behalf or on behalf of another
     Person, with intent to secure such benefit or payment fraudulently; (d)
     knowingly and willfully soliciting or receiving any remuneration (including
     any kickback, bribe or rebate), directly or indirectly, overtly or
     covertly, in cash or in kind, or offering to pay such remuneration (1) in
     return for referring an individual to a Person for the furnishing or
     arranging for the furnishing of any item or service for which payment may
     be made in whole or in part by or pursuant to any Medicare Regulations, any
     Medicaid Regulations or any other Applicable Law (including any
     Anti-Kickback Statutes) relating to Third Party Payors or (2) in return for
     purchasing, leasing or ordering or arranging for or recommending the
     purchasing, leasing or ordering of any good, facility, service or item for
     which payment may be made in whole or in part by or pursuant to any
     Medicare Regulations, Medicaid Regulations or other Applicable Law relating
     to Third Party Payors.

          9.1.17. Burdensome Contracts. No Borrower nor any of its Subsidiaries
is a party or subject to any contract, agreement, or charter or other corporate
restriction, which has or could be reasonably expected to have a Material
Adverse Effect.

          9.1.18. Litigation. Except as set forth on SCHEDULE 9.1.18, there are
no actions, suits, proceedings or investigations pending or, to the knowledge of
any Borrower, threatened on the date hereof against or affecting any Borrower or
any of its Subsidiaries, or the business, operations, Properties, prospects,
profits or condition of any Borrower or any of its Subsidiaries, (i) which
relate to any of the Loan Documents or any of the transactions contemplated
thereby or (ii) which could reasonably be expected to have a Material Adverse
Effect. To the knowledge of each Borrower, no Borrower nor any of its
Subsidiaries is in default on the date hereof with respect to any order, writ,
injunction, judgment, decree or rule of any court, Governmental Authority or
arbitration board or tribunal that could reasonably be expected to have a
Material Adverse Effect..

          9.1.19. No Defaults. No event has occurred and no condition exists
which would, upon or immediately after the execution and delivery of this
Agreement or any Borrower's performance hereunder, constitute a Default or an
Event of Default.

          9.1.20. Reserved.

          9.1.21. ERISA. Except as disclosed on SCHEDULE 9.1.21, no Borrower nor
any of its Subsidiaries has any Plan on the date hereof. Each Borrower and each
of its Subsidiaries is in material compliance with the requirements of ERISA and
the regulations promulgated thereunder with respect to each Plan. No fact or
situation that is reasonably likely to result in a Material Adverse Effect
exists in connection with any Plan. No Borrower nor any of its Subsidiaries has
any withdrawal liability in connection with a Multiemployer Plan.

          9.1.22. Labor Relations. Except as described on SCHEDULE 9.1.22, no
Borrower nor any of its Subsidiaries is on the date hereof a party to or bound
by any collective bargaining agreement. On the date hereof, there are no
material grievances, disputes or controversies with any union or any other
organization of any Borrower's or any Subsidiary's employees, or, to any
Borrower's knowledge, any


                                      -74-

threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization.

          9.1.23. Not a Regulated Entity. No Obligor is (i) an "investment
company" or a "person directly or indirectly controlled by or acting on behalf
of an investment company" within the meaning of the Investment Company Act of
1940; (ii) a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935; or (iii) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.

          9.1.24. Margin Stock. No Borrower nor any of its Subsidiaries is
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.

          9.1.25. Anti-Terrorism Laws.

               (i) General. No Borrower nor any of its Affiliates is in
     violation of any Anti-Terrorism Law or engages in or conspires to engage in
     any transaction that evades or avoids, or has the purpose of evading or
     avoiding, or attempts to violate, any of the prohibitions set forth in any
     Anti-Terrorism Law.

               (ii) Executive Order No. 13224.

                    (a) No Borrower nor, to the best of its knowledge, any of
          its Affiliates is any of the following (each a "Blocked Person"): (1)
          a Person that is listed in the annex to, or is otherwise subject to
          the provisions of, Executive Order No. 13224; (2) a Person owned or
          controlled by, or acting for or on behalf of, any Person that is
          listed in the annex to, or is otherwise subject to the provisions of,
          Executive Order No. 13224; (3) a Person or entity with which any bank
          or other financial institution is prohibited from dealing or otherwise
          engaging in any transaction by any Anti-Terrorism Law; (4) a Person or
          entity that commits, threatens or conspires to commit or supports
          "terrorism" as defined in Executive Order No. 13224; (5) a Person or
          entity that is named as a "specially designated national" on the most
          current list published by the U.S. Treasury Department Office of
          Foreign Asset Control ("OFAC") at its official website or any
          replacement website or other replacement official publication of such
          list; (6) a Person or entity who is affiliated with a Person or entity
          listed above; or (7) an agency of the government of, an organization
          directly or indirectly controlled by, or a Person resident in, a
          country on any official list maintained by OFAC.

                    (b) No Borrower nor, to the best of its knowledge, any of
          its Affiliates (1) conducts any business or engages in making or
          receiving any contribution of funds, goods or services to or for the
          benefit of any Blocked Person, (2) has any of its assets in a Blocked
          Person, (3) deals in, or otherwise engages in any transaction relating
          to, any Property or interests in Property blocked pursuant to
          Executive Order No. 13224, or (4) derives any of its operating income
          from investments in or transactions with a Blocked Person.

          9.1.26. Payable Practices. No Borrower nor any of its Subsidiaries has
made any material change in its historical accounts payable practices from those
in effect immediately prior to the Restatement Effective Date.


                                      -75-

          9.1.27. Not the Holder of Plan Assets. No Borrower is an entity deemed
to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of an
"employee benefit plan" (as defined in Section 3(3) of ERISA) that is subject to
Title I of ERISA or any "plan" (within the meaning of Section 4975 of the
Internal Revenue Code), and neither the execution of this Agreement nor the
funding of any Loans gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

          9.1.28. Reimbursement from Third Party Payors. The Accounts, after
giving effect to the Contractual Adjustment Allowance in effect from time to
time, have been and will continue to be adjusted to reflect reimbursement
policies of Third Party Payors. In particular, Accounts relating to such Third
Party Payors do not and will not exceed amounts any obligee is entitled to
receive under any capitation arrangement, fee schedule, discount formula,
cost-based reimbursement or other adjustment or limitation to its usual charges.

          9.1.29. Licensing, Accreditation and Other Governmental Approvals.
Except to the extent that the failure to have or maintain the same is not
reasonably likely to have a Material Adverse Effect, each Borrower and each of
the Subsidiaries has, and is in good standing with respect to, all Governmental
Approvals necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it. Except to the extent that the same is not reasonably
likely to have a Material Adverse Effect, each Borrower and each of the
Subsidiaries has, to the extent applicable: (i) obtained (or been duly assigned)
all required certificates of need or determinations of need as required by the
relevant Governmental Authority for the acquisition, construction, expansion of,
investment in or operation of its businesses as currently operated; (ii)
obtained and maintains in good standing all required licenses; (iii) to the
extent prudent and customary in the industry in which such Person is engaged,
obtained and maintains accreditation from all generally recognized accrediting
agencies; (iv) obtained and maintains Medicaid Certification and Medicare
Certification; and (v) entered into and maintains in good standing such Person's
Medicare Provider Agreement and Medicaid Provider Agreement.

     9.2. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each representation
and warranty contained in this Agreement and the other Loan Documents shall be
deemed to be made on the Restatement Effective Date and reaffirmed by each
Borrower on each day that Borrowers request or are deemed to have requested any
Loan, Letter of Credit or other extension of credit hereunder, except for
changes in the nature of a Borrower's or, if applicable, any Subsidiary's
business or operations that may occur after the date hereof in the Ordinary
Course of Business so long as Administrative Agent has consented to such changes
or such changes are not violative of any provision of this Agreement.
Notwithstanding the foregoing, representations and warranties which by their
terms are applicable only as of a specific date shall be deemed made only at and
as of such date.

     9.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Borrowers contained in this Agreement or any of the other Loan
Documents shall survive the execution, delivery and acceptance thereof by
Administrative Agent, Lenders and the parties thereto and the closing of the
transactions described therein or related thereto.

SECTION 10. COVENANTS AND CONTINUING AGREEMENTS

     10.1. AFFIRMATIVE COVENANTS. For so long as there are any Commitments
outstanding and thereafter until Full Payment of the Obligations (other than
contingent indemnification obligations for which no claim has been made), each
Borrower covenants that it shall and shall cause each Subsidiary to:


                                      -76-

          10.1.1. Visits and Inspections. Permit representatives of
Administrative Agent, up to 2 times per Loan Year unless an Event of Default
exists, but only during normal business hours and (except when an Event of
Default exists) upon reasonable prior notice to a Borrower, to visit the
Properties of such Borrower and each of its Subsidiaries to inspect, audit and
make extracts from such Borrower's and each Subsidiary's books and records, and
discuss with its officers, its employees and its independent accountants, such
Borrower's and each Subsidiary's business, financial condition, business
prospects and results of operations. If an Event of Default exists, there shall
be no limit on the number of such visits Administrative Agent and/or Lenders
shall be permitted to undertake. Representatives of each Lender shall be
authorized to accompany Administrative Agent on each such visit and inspection
and to participate with Administrative Agent therein, but at their own expense,
unless an Event of Default exists. Neither Administrative Agent nor any Lender
shall have any duty to make any such inspection and shall not incur any
liability by reason of its failure to conduct or delay in conducting any such
inspection. Administrative Agent and Lenders shall comply with all applicable
privacy laws in connection with such investigations and/or audits.

          10.1.2. Notices. Notify Administrative Agent and Lenders in writing,
promptly after a Borrower's obtaining knowledge thereof, of: (i) of the
commencement of any litigation affecting any Obligor, whether or not the claims
asserted in such litigation are considered by Borrowers to be covered by
insurance, and of the institution of any administrative proceeding, in each case
to the extent that such litigation or proceeding could reasonably be expected to
have a Material Adverse Effect, provided that notice shall not be required to be
given to the extent prohibited by Applicable Law; (ii) any material labor
dispute to which any Obligor may become a party, any pending or threatened
strikes or walkouts relating to any of its plants or other facilities, and the
expiration of any labor contract to which it is a party or by which it is bound;
(iii) any material default by any Obligor under, or termination of, any note,
indenture, loan agreement, mortgage, lease, deed, guaranty or other similar
agreement relating to any Debt of such Obligor exceeding $1,000,000; (iv) the
existence of any Default or Event of Default; (v) any judgment against any
Obligor in an amount exceeding $1,000,000; (vi) any violation or asserted
violation by any Borrower of any Applicable Law (including Healthcare Laws,
ERISA, OSHA, FLSA, or any Environmental Laws) which could reasonably be expected
to have a Material Adverse Effect; (vii) any Environmental Release by an Obligor
or on any Property owned or occupied by an Obligor; (viii) the discharge of
Borrowers' independent accountants or any withdrawal of resignation by such
independent accountants from their acting in such capacity; (ix) any
investigation of any Obligor by any Governmental Authority (including the SEC or
the U.S. Department of Justice); (x) any notice received by an Obligor from HHS,
CMS or any other federal or state agency relating to the suspension or
termination of an Obligor's participation in the Medicare or Medicaid program or
of payments to such Obligor thereunder; and (xi) the incurrence of Debt of the
type permitted pursuant to SECTION 10.2.3(X).

          10.1.3. Financial and Other Information. Keep adequate records and
books of account with respect to its business activities in which proper entries
are made reflecting all material financial transactions that are necessary to
permit preparation of financial statements in accordance with GAAP; and cause to
be prepared and furnished to Administrative Agent and Lenders the following (all
to be prepared in accordance with GAAP applied on a consistent basis, unless
Borrowers' certified public accountants concur in any change therein, such
change is disclosed to Administrative Agent and is consistent with GAAP
(provided, that for purposes of determining compliance with the covenant
contained in SECTION 10.3, all accounting terms employed herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect on the Restatement Effective Date and applied
on a basis consistent with the application used in the financial statements
referred to in Section 9.1.9):

               (i) as soon as available, and in any event within 120 days after
     the close of each Fiscal Year audited balance sheets of Borrowers and their
     respective Subsidiaries as of the


                                      -77-

     end of such Fiscal Year and the related statements of income, shareholders'
     equity and cash flow, on a Consolidated basis, certified without an
     Impermissible Qualification by a firm of independent certified public
     accountants of recognized national standing selected by Borrowers but
     reasonably acceptable to Administrative Agent and setting forth in each
     case in comparative form the corresponding Consolidated figures for the
     preceding Fiscal Year;

               (ii) as soon as available, and in any event within 30 days after
     the end of each month hereafter (but within 60 days after the last month in
     a Fiscal Year), unaudited balance sheets of Borrowers and its Subsidiaries
     as of the end of such month and the related unaudited statements of income
     and cash flow for such month and for the portion of Borrowers' Fiscal Year
     then elapsed, on a Consolidated basis, setting forth in each case in
     comparative form the corresponding figures for the preceding Fiscal Year
     and certified by the principal financial officer of Borrowers as prepared
     in accordance with GAAP and fairly presenting in all material respects the
     Consolidated financial position and results of operations of Borrowers and
     their Subsidiaries for such month and year-to-date period subject only to
     changes from audit and year-end adjustments and except that such statements
     need not contain notes;

               (iii) promptly after the sending or filing thereof, as the case
     may be, copies of any proxy statements, financial statements or reports
     which any Borrower has made generally available to its shareholders; copies
     of any regular, periodic and special reports or registration statements or
     prospectuses which any Borrower files with the SEC or any Governmental
     Authority which may be substituted therefor, or any national securities
     exchange; and copies of any press releases or other statements made
     available by a Borrower to the public concerning material changes to or
     developments in the business of such Borrower;

               (iv) promptly after the sending or filing thereof, copies of any
     annual report to be filed in accordance with ERISA in connection with each
     Plan; and

               (v) such other data and information (financial or otherwise) as
     Administrative Agent, from time to time, may reasonably request, bearing
     upon or related to the Collateral or any Borrower's or Subsidiary's
     financial condition or results of operations.

     The timely delivery by Borrowers to Administrative Agent of the annual
report on form 10-K for Parent and its Consolidated Subsidiaries shall satisfy
Borrowers' obligations under SECTION 10.1.3(I) above, provided that such form
10-K satisfies all of the requirements of SECTION 10.1.3(I). Concurrently with
the delivery of the financial statements described in clause (i) of this SECTION
10.1.3, Borrowers shall deliver to Administrative Agent a copy of the
accountants' letter to Borrowers' management that is prepared in connection with
such financial statements. Concurrently with the delivery of the financial
statements described in clauses (i) and (ii) of this SECTION 10.1.3, Borrowers
shall cause to be prepared and furnished to Administrative Agent a Compliance
Certificate executed by the chief financial officer of Borrowers.

          10.1.4. Off-Site Data Storage. Store duplicate or back-up copies of
Borrowers' billing records, updated daily, at an off-site facility.

          10.1.5. Projections. No later than 60 days after the end of each
Fiscal Year of Borrowers, deliver to Administrative Agent the Projections of
Borrowers for the forthcoming Fiscal Year, prepared on a month by month basis.


                                      -78-

          10.1.6. Taxes. Pay and discharge all material Taxes prior to the date
on which such Taxes become delinquent or penalties attach thereto, except and to
the extent only that such Taxes are being Properly Contested.

          10.1.7. Compliance with Laws. Comply with all Applicable Law,
including ERISA, all Healthcare Laws, all Environmental Laws, FLSA, OSHA,
Anti-Terrorism Laws and all laws, statutes, regulations and ordinances regarding
the collection, payment and deposit of Taxes, and obtain and keep in force any
and all Governmental Approvals necessary to the ownership of its Properties or
to the conduct of its business, in each case to the extent that any such failure
to comply, obtain or keep in force could be reasonably expected to have a
Material Adverse Effect. Without limiting the generality of the foregoing, if
any Environmental Release shall occur at or on any of the owned real Property of
any Borrower or any of its Subsidiaries, Borrowers shall, or shall cause the
applicable Subsidiary to, act promptly and diligently to investigate the extent
of, and to make appropriate remedial action to eliminate, such Environmental
Release, whether or not ordered or otherwise directed to do so by any
Governmental Authority.

          10.1.8. Insurance. Maintain with its current insurers or with other
financially sound and reputable insurers having a rating of at least A or better
by Best's Ratings, a publication of A.M. Best Company, (i) insurance with
respect to its Properties and business against such casualties and contingencies
of such type (including product liability, workers' compensation, larceny,
embezzlement, or other criminal misappropriation insurance) and in such amounts
and with such coverages, limits and deductibles as is customary in the business
of such Borrower or such Subsidiary and (ii) business interruption insurance in
an amount not less than $25,000,000.

          10.1.9. Post-Closing Obligations.

               (i) On or before October 28, 2005, Administrative Agent shall
     have received a fully executed Control Agreement with respect to the
     Concentration Account, the Wholesale Collection Accounts and the Investment
     Accounts, each of which shall be in form and substance reasonably
     acceptable to Administrative Agent.

               (ii) On or before November 30, 2005, Borrowers shall have
     terminated, or shall have caused to be terminated, UCC financing statement
     no. 0411460354 naming Syncor Diagnostics Sacramento LLC as debtor and US
     Bank Trust NA as Custodian or Trustee filed April 12, 2004 with the
     California Secretary of State

     10.2. NEGATIVE COVENANTS. For so long as there are any Commitments
outstanding and thereafter until Full Payment of the Obligations (other than
contingent indemnification obligations for which no claim has been made), each
Borrower covenants that it shall not and shall not permit any of its
Subsidiaries to:

          10.2.1. Fundamental Changes. (a) Merge, reorganize, consolidate or
amalgamate with any Person, or liquidate, wind up its affairs or dissolve
itself, in each case whether in a single transaction or in a series of related
transactions, except that (i) a Borrower may be merged or consolidated with or
into any of its Subsidiaries provided that such Borrower shall be the continuing
or surviving Person, (ii) any Obligor other than the Parent may be merged or
consolidated with or into any other Obligor other than the Parent, (iii) any
Subsidiary of an Obligor which is not an Obligor may be merged or consolidated
with or into any Obligor provided that such Obligor shall be the continuing or
surviving corporation, (iv) any Subsidiary which is not an Obligor may be merged
or consolidated with or into any other Subsidiary that is not an Obligor, (v)
any Obligor or Subsidiary thereof may be merged or consolidated with or into any
Person in connection with a Permitted Asset Disposition, (vi) any Obligor or
Subsidiary thereof may be merged or


                                      -79-

consolidated with or into any Person in connection with a Permitted Acquisition,
provided that, if such transaction involves a Borrower, such Borrower shall be
the continuing or surviving Person and (vii) any Subsidiary that is not an
Obligor may dissolve, liquidate or wind up its affairs at any time provided that
such dissolution, liquidation or winding up, as applicable, could not reasonably
be expected to have a Material Adverse Effect; or (b) without providing 10 days
prior written notice to Lender, (i) change a Borrower's name or conduct business
under any new fictitious name or (ii) change a Borrower's FEIN, organizational
identification number or state of organization.

          10.2.2. Reserved.

          10.2.3. Permitted Debt. Create, incur, assume, guarantee or suffer to
exist any Debt, except:

               (i) the Obligations;

               (ii) Debt existing on the Restatement Effective Date;

               (iii) Permitted Purchase Money Debt;

               (iv) Permitted Contingent Obligations;

               (v) Debt of any Person that is in existence at the time that it
     becomes or is consolidated into or merged with a Subsidiary of such
     Borrower or that is secured by any asset acquired by any Borrower or any
     Subsidiary at the time of any such acquisition, provided that such Debt is
     not incurred in contemplation of such Person becoming a Subsidiary or such
     acquisition of such asset by any Borrower or any of its Subsidiaries, as
     the case may be;

               (vi) Debt of an Obligor to any other Obligor or a Subsidiary that
     is not an Obligor;

               (vii) Debt of a Subsidiary that is not an Obligor to another
     Subsidiary that is not an Obligor;

               (viii) Debt arising from the honoring by a bank or other
     financial institution of a check, draft or similar instrument drawn against
     insufficient funds in the Ordinary Course of Business, provided that such
     Debt is extinguished within 5 Business Days of its incurrence;

               (ix) Hedging Agreements entered into in the Ordinary Course of
     Business and not for speculative purposes;

               (x) Debt of a Borrower and its Subsidiaries in respect of
     performance bonds, bid bonds, appeal bonds, surety bonds, bankers'
     acceptances and similar obligations and trade-related letters of credit, in
     each case provided that such Debt is incurred in the Ordinary Course of
     Business and not in connection with Debt for Money Borrowed, including
     those incurred to secure health, safety and environmental obligations in
     the Ordinary Course of Business;

               (xi) Debt arising from agreements of a Borrower or any Subsidiary
     of a Borrower providing for indemnification, adjustment of purchase price,
     earn-outs or similar obligations, in each case, incurred or assumed in
     connection with the acquisition of any business, assets or a Subsidiary of
     a Borrower, other than guarantees of Debt incurred by any Person


                                      -80-

     acquiring all or any portion of such business, assets or a Subsidiary of a
     Borrower for the purpose of financing such acquisition;

               (xii) Debt incurred by a Subsidiary that is not an Obligor which
     is non-recourse to the Obligors;

               (xiii) Debt incurred by a Borrower or any Subsidiary thereof to
     finance the payment of insurance premiums;

               (xv) Non-cash pay Debt owed to Sponsors, provided that such Debt
     shall be subordinated to the Obligations on terms reasonably satisfactory
     to Administrative Agent;

               (xvi) Debt of InSight Health under the Senior Notes up to an
     aggregate principal amount of $300,000,000;

               (xvii) Debt that is not included in any of the preceding
     paragraphs of this SECTION 10.2.3, is not secured by a Lien and does not
     exceed at any time, in the aggregate, the sum of $30,000,000 as to all
     Borrowers and all of their Subsidiaries; and

               (xviii) Refinancing Debt so long as each of the Refinancing
     Conditions is met with respect thereto.

None of the provisions of this SECTION 10.2.3 that authorize any Obligor to
incur any Debt shall be deemed to override, modify or waive any of the
provisions of SECTION 10.3, which shall constitute an independent and separate
covenant and obligation of each Borrower.

          10.2.4. Affiliate Transactions. Enter into, or be a party to any
transaction with any Affiliate, except: (i) the transactions contemplated by the
Loan Documents; (ii) payment of reasonable compensation to officers and
employees for services actually rendered to Parent, Borrowers or their
respective Subsidiaries; (iii) payment of customary directors' fees and
indemnities and reimbursements paid to directors of Parent and its Subsidiaries;
(iv) so long as no Event of Default under SECTION 12.1.1 or 12.1.10 is in
existence, the payment of fees of the Sponsors contemplated by the Management
Agreement in an aggregate amount not to exceed $500,000 during any Fiscal Year,
(v) the issuance or sale of Equity Interests of Parent (and the exercise of any
warrants, options or other rights to acquire Equity Interests of Parent), to the
extent not prohibited in this Agreement, (vi) transactions between Borrowers,
between or among any Borrower and any Guarantor (other than Parent) or between
and among Obligors (other than Parent), (vii) transactions existing prior to the
date hereof (and renewals or replacements thereof on terms, in each case taken
as a whole, not more disadvantageous to the applicable Obligor or Subsidiary);
(viii) transactions expressly permitted under this Agreement; and (ix)
transactions with Affiliates in the Ordinary Course of Business and pursuant to
the reasonable requirements of such Borrower's or such Subsidiary's business and
upon fair and reasonable terms that are fully disclosed to Administrative Agent
and are no less favorable to such Borrower or such Subsidiary than such Borrower
or such Subsidiary would obtain in a comparable arm's length transaction with a
Person not an Affiliate or stockholder of such Borrower or such Subsidiary.


                                      -81-

          10.2.5. Limitation on Liens. Create or suffer to exist any Lien upon
any of its Property, income or profits, whether now owned or hereafter acquired,
except the following (collectively, "Permitted Liens"):

               (i) Liens at any time granted to secure the Obligations;

               (ii) Liens for Taxes (excluding any Lien imposed pursuant to any
     of the provisions of ERISA) not yet due or delinquent or being Properly
     Contested;

               (iii) statutory Liens of landlords, carriers, warehousemen,
     mechanics, materialmen and suppliers and other Liens imposed by Applicable
     Law (excluding any Lien for Taxes but including any Lien imposed pursuant
     to any of the provisions of ERISA) arising in the Ordinary Course of
     Business of a Borrower or a Subsidiary, but only if and for so long as (x)
     payment in respect of any such Lien is not overdue for a period of more
     than 30 days or the obligations secured by any such Liens are being
     Properly Contested and (y) such Liens do not materially detract from the
     value of the Property of such Borrower or such Subsidiary, taken as a
     whole, and do not materially impair the use thereof in the operation of
     Borrowers' and their Subsidiaries' business, taken as a whole;

               (iv) Purchase Money Liens securing Permitted Purchase Money Debt;

               (v) Liens securing Debt of a Subsidiary of a Borrower to another
     Borrower or to another such Subsidiary;

               (vi) Liens arising by virtue of the rendition, entry or issuance
     against such Borrower or any of its Subsidiaries, or any Property of such
     Borrower or any of its Subsidiaries, of any judgment, writ, order, or
     decree for an amount that exceeds, individually or in the aggregate,
     $25,000 for so long as each Lien (a) is in existence for less than 30
     consecutive days after it first arises or is being Properly Contested and
     (b) is at all times junior in priority to any Liens in favor of Lender;

               (vii) Liens incurred or deposits made in the Ordinary Course of
     Business to secure the performance of tenders, bids, leases, contracts
     (other than for the repayment of Money Borrowed), statutory obligations,
     performance and return of money bonds and other similar obligations or
     arising as a result of progress payments under government contracts,
     provided that, to the extent any such Liens attach to any of the
     Collateral, such Liens are at all times subordinate and junior to the Liens
     upon the Collateral in favor of Administrative Agent;

               (viii) easements, rights-of-way, restrictions, covenants or other
     agreements of record and other similar charges or encumbrances on real
     Property of such Borrower or a any of its Subsidiaries that do not secure
     any monetary obligation and do not interfere with the ordinary conduct of
     the business of the Borrowers and their Subsidiaries, taken as a whole;

               (ix) normal and customary rights of setoff upon deposits of cash
     in favor of banks and other depository institutions and Liens of a
     collecting bank arising under the UCC on checks and other items of payment
     in the course of collection;

               (x) Liens to secure the Senior Notes on Property of Borrowers
     other than the Collateral that secure the Senior Notes;


                                      -82-

               (xi) such other Liens as appear on SCHEDULE 10.2.5, to the extent
     provided therein (and renewals, replacements, refinancings and extensions
     thereof to the extent not prohibited under this Agreement), provided that
     no such Lien shall at any time be extended to or cover any Property other
     than the Property subject thereto on the Restatement Effective Date.; and

               (xii) pledges or deposits in the Ordinary Course of Business in
     connection with workers' compensation, unemployment insurance and other
     social security legislation, other than any Lien imposed by ERISA;

               (xiii) Liens on Property of a Person existing at the time such
     Person is acquired or merged with or into or consolidated with an Obligor
     or Subsidiary thereof to the extent permitted hereunder (and not created in
     anticipation or contemplation thereof), provided that such Liens do not
     extend to Property not subject to such Liens at the time of acquisition
     (other than improvements thereon) and are no more favorable to the
     lienholders than such existing Lien;

               (xiv) any interest or title of a lessor under any lease entered
     into by a Borrower or any Subsidiary thereof in the Ordinary Course of
     Business;

               (xv) Liens solely on any cash earnest money deposits made by a
     Borrower or any Subsidiary thereof in connection with any letter of intent
     or purchase agreement permitted hereunder;

               (xvi) Liens in favor of customs and revenue authorities arising
     as a matter of Applicable Law to secure payment of customs duties in
     connection with the importation of Goods;

               (xvii) Liens of sellers of Goods to a Borrower and any of its
     Subsidiaries arising under Article 2 of the Uniform Commercial Code or
     similar provisions of Applicable Law in the Ordinary Course of Business,
     covering only the Goods sold and securing only the unpaid purchase price
     for such Goods and related expenses;

               (xviii) Liens deemed to exist in connection with Investments in
     repurchase agreements permitted under SECTION 10.2.13;

               (xix) to the extent constituting a Lien, Retained Rights;

               (xx) Liens on insurance policies and the proceeds thereof
     securing the financing of the premiums with respect thereto to the extent
     permitted hereunder; and

               (xxi) Liens on Property other than the Collateral not otherwise
     permitted by this Section so long as the aggregate outstanding principal
     amount of Debt secured thereby does not exceed $3,000,000 at any time.

The foregoing negative pledge shall not apply to any Margin Stock to the extent
that the application of such negative pledge to such Margin Stock would require
filings or other actions by any Lender under Regulation U or other regulations
of the Board of Governors, or otherwise result in a violation of any such
regulations.

          10.2.6. Restrictions on Payment of Certain Debt. Make any payments
with respect to any Subordinated Debt other than (a) payment of regularly
scheduled installments of principal and


                                      -83-

interest and fees and other charges when required to be paid by any instrument
or agreement evidencing such Subordinated Debt, but in each case only to the
extent that payment thereof is not violative of any subordination agreement
relating to such Subordinated Debt and (b) Permitted Senior Subordinated Note
Repurchases.

          10.2.7. Distributions. Declare or make any Distributions, except for
Upstream Payments.

          10.2.8. Disposition of Assets. Make any Asset Disposition other than a
Permitted Asset Disposition.

          10.2.9. Restricted Investments. Make or have any Restricted
Investment.

          10.2.10. Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than Parent or any
Subsidiary or any Subsidiary of Parent.

          10.2.11. Accounting Changes. Establish a fiscal year different from
the Fiscal Year.

          10.2.12. Organic Documents. Amend, modify or otherwise change any of
the terms or provisions in any of its Organic Documents as in effect on the date
hereof, except for changes that do not affect in any way (i) such Borrower's or
any of its Subsidiaries' right and authority to enter into and perform the Loan
Documents to which it is a party, (ii) the perfection of Administrative Agent's
Liens in any Collateral, or (iii) the authority or obligation of an Obligor to
pay or perform any of the Obligations.

          10.2.13. Restrictive Agreements. Enter into or become a party to any
Restrictive Agreement, other than a Permitted Restrictive Agreement.

          10.2.14. Hedging Agreements. Enter into any Hedging Agreement, other
than Hedging Agreements entered into in the Ordinary Course of Business to hedge
or mitigate risks to which any Borrower or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities and not for any
speculative purpose.

          10.2.15. Anti-Terrorism Laws. Conduct any business or engage in any
transaction or dealing with any Blocked Person (as defined in SECTION
9.1.27(II)), including making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person; deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224; or engage in on conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in
Executive Order No. 13224 or the USA Patriot Act. Borrowers shall deliver to
Administrative Agent and Lenders any certification or other evidence requested
from time to time by Administrative Agent or any Lender, in its discretion,
confirming each Borrower's compliance with this SECTION 10.2.21.

          10.2.16. Conduct of Business. Engage in any business other than the
business engaged in by it on the Restatement Effective Date and any business or
activities which are substantially similar, related or incidental thereto and
reasonable extensions thereof.

          10.2.17. Multiemployer Plans. Become, or permit any Subsidiary to
become a party to a Multiemployer Plan.

          10.2.18. Amendments to Indentures Amend, modify or supplement, or
permit any Subsidiary to amend, modify or supplement (or consent to any
amendment, modification or supplement


                                      -84-

of) any of the Senior Note Documents or Senior Subordinated Note Documents, if
such amendment, modification or supplement provides for any of the following or
has any of the following effects:

               (i) increases the overall principal amount of any Debt evidenced
     by any of the Senior Notes or Senior Subordinated Notes or increases the
     amount of any single scheduled installment of principal or interest in
     excess of amounts otherwise permitted under this Agreement;

               (ii) shortens or accelerates the date upon which any installment
     of principal or interest becomes due under the Senior Notes or Senior
     Subordinated Notes or adds any additional redemption or pre-payment
     provisions;

               (iii) shortens the final maturity date of such Debt or otherwise
     accelerates the amortization schedule with respect to such Debt;

               (iv) increases the rate of interest accruing in respect of the
     principal amount of such Debt;

               (v) provides for the payment of additional fees or increases the
     amount of existing fees with respect to such Debt;

               (vi) amends or modifies any financial or negative covenant (or a
     covenant that prohibits or restricts a Borrower or any of its Subsidiaries
     from taking certain actions) in a manner which is more onerous or more
     restrictive in any material respect to such Borrower or such Subsidiary or
     that is otherwise materially adverse to such Borrower, or its Subsidiaries
     and/or Lenders, or, in the case of adding covenants, that places material
     additional restriction on such Borrower or such Subsidiary or that requires
     such Borrower or such Subsidiary to comply with more restrictive financial
     ratios or requires such Borrower to better its financial performance from
     that set forth in the existing financial covenants (taking into account,
     the aggregate adjustments, if any, to the thresholds and exceptions
     applicable thereto on a covenant-by-covenant basis);

               (vii) results in any of the Loan Documents not constituting a
     "Credit Agreement" under the Senior Note Documents and Senior Subordinated
     Note Documents; or

               (viii) amends, modifies or adds any affirmative covenant in a
     manner which, when taken as a whole, is materially adverse to a Borrower or
     its Subsidiaries and/or Lenders.

     10.3. Financial Covenant.

          10.3.1. Financial Covenant Test Levels. Subject to SECTION 10.3.2
hereof, for so long as there are any Commitments outstanding and thereafter
until Full Payment of the Obligations (other than contingent indemnification
obligations for which no claim has been made), Borrowers covenant that they
shall:

               (i) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
     Ratio of at least 1.10 to 1.0 measured as of the last day of each Fiscal
     Quarter for the 4 Fiscal Quarters then ended.

          10.3.2. Applicability of Financial Covenant. The financial covenant
set forth in SECTION 10.3.1 shall be effective only if, on any Business Day, (a)
there are (i) any Revolver Loans


                                      -85-

outstanding hereunder or (ii) the LC Obligations that have not been Cash
Collateralized exceed $2,500,000 on such Business Day, and (b) Liquidity is, at
the close of business on such Business Day, less than the Financial Covenant
Trigger Amount. From and after such date, the provisions of SECTION 10.3.1 shall
be effective at all times unless and until (i) Liquidity shall exceed the
Financial Covenant Trigger Amount for a period of 90 consecutive days and (ii)
any Event of Default then existing is waived by Administrative Agent. Within 10
Business Days after the date on which the provisions of SECTION 10.3.1(I) are
activated as set forth above in this SECTION 10.3.2, Borrowers shall deliver to
Administrative Agent a Compliance Certificate which reflects Borrowers'
compliance or non-compliance with the provisions of SECTION 10.3.1 as of the
last day of the most recent Fiscal Quarter then ended.

SECTION 11. CONDITIONS PRECEDENT

     11.1. CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSIONS. Initial Lender
shall not be required to fund any requested Loan on the Restatement Effective
Date or otherwise extend credit to Borrowers on the Restatement Effective Date
and Issuing Bank shall have no obligation to issue any Letter of Credit on the
Restatement Effective Date, each of the following conditions has been satisfied:

          11.1.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered to Administrative Agent by each of the signatories
thereto (and, with the exception of the Notes, in sufficient counterparts for
each Initial Lender) and no Default or Event of Default shall exist.

          11.1.2. Minimum Liquidity. Administrative Agent shall have determined,
and Initial Lender shall be satisfied, that, immediately after Borrowers have
paid (or made provision for payment of) all fees and closing costs incurred in
connection with the Commitments, and after increasing the Availability Reserve
in the amount of any payables of Borrowers that are stretched beyond Borrowers'
customary payment practices, Liquidity is not less than $22,500,000.

          11.1.3. Evidence of Perfection and Priority of Liens. Administrative
Agent shall have received each document (including any Uniform Commercial Code
financing statement) necessary to perfect the Liens of Administrative Agent in
the Collateral and evidence in form reasonably satisfactory to Administrative
Agent and Initial Lender that such Liens constitute valid and perfected Liens,
and that there are no other Liens upon any Collateral except for Permitted
Liens.

          11.1.4. Organic Documents. Administrative Agent shall have received
copies of the Organic Documents of each Obligor, and all amendments thereto,
certified by the Secretary of State or other appropriate official of the
jurisdiction of each Obligor's organization.

          11.1.5. Good Standing Certificates. Administrative Agent shall have
received good standing certificates for each Obligor, issued by the Secretary of
State or other appropriate official of such Obligor's jurisdiction of
organization and each other jurisdiction where the failure of such Obligor to be
qualified could reasonably be expected to have a Material Adverse Effect.

          11.1.6. Opinion Letters. Administrative Agent and Initial Lender shall
have received a favorable, written opinion of Kaye Scholer LLP.

          11.1.7. Insurance. Administrative Agent shall have received
certificates of insurance with respect to Borrowers' property and liability
insurance policies, in form reasonably acceptable to Administrative Agent,
together with an endorsement naming Administrative Agent as an additional
insured with respect to Borrowers' liability insurance policies, all as required
by the Loan Documents.


                                      -86-

          11.1.8. Payment of Fees. Borrowers shall have paid, or made provision
for the payment on the Restatement Effective Date of, all fees and expenses to
be paid hereunder to Administrative Agent and Lenders on the Restatement
Effective Date.

          11.1.9. LC Conditions. With respect to the issuance of any Letter of
Credit on the Restatement Effective Date, each of the LC Conditions is
satisfied.

          11.1.10. Senior Notes. InSight Health shall have received a gross
principal amount of at least $300,000,000 from the issuance of the Senior Notes.

          11.1.11. Financial Statements; Projections. Administrative Agent shall
have received, reviewed and found acceptable all historical and pro forma
financial statements and Projections of Borrowers and their Subsidiaries as
Administrative Agent shall reasonably require.

          11.1.12. Senior Note Documents and Senior Subordinated Note Documents.
Administrative Agent shall have received and reviewed the Senior Note Documents
and Senior Subordinated Note Documents and determined that the transactions
contemplated by this Agreement and the other Loan Documents do not and would not
violate or constitute a default or event of default thereunder and that the
Senior Note Documents and Senior Subordinated Note Documents do not otherwise
restrict the transactions contemplated by this Agreement and the other Loan
Documents in a manner that is not acceptable to Administrative Agent.

          11.1.13. Initial Borrowing Base Certificate. Administrative Agent
shall have received the initial Borrowing Base Certificate from Borrowers.

     11.2. CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Lenders shall not be
required to fund any Loans or otherwise extend any credit to or for the benefit
of Borrowers and Issuing Bank shall have no obligation to issue any Letter of
Credit, unless and until each of the following conditions has been and continues
to be satisfied:

          11.2.1. No Defaults. No Default or Event of Default exists at the
time, or would result from the funding, of any Loan or other extension of
credit.

          11.2.2. Representations and Warranties. Each of the representations
and warranties by an Obligor in any of the Loan Documents (including any
representations and warranties in any certificate furnished at any time in
connection herewith) are true and correct in all material respects on and as of
the date of each extension of credit hereunder (except for those representations
or warranties which expressly relate to an earlier date).

          11.2.3. No Litigation. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of, this Agreement or any of the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby.

          11.2.4. No Material Adverse Effect. No event shall have occurred and
no condition shall exist which has or could be reasonably expected to have a
Material Adverse Effect.

          11.2.5. Borrowing Base Certificate. Administrative Agent shall have
received each Borrowing Base Certificate then required by the terms of this
Agreement.


                                      -87-

          11.2.6. LC Conditions. With respect to the issuance of any Letter of
Credit after the Restatement Effective Date, each of the LC Conditions is
satisfied.

     11.3. LIMITED WAIVER OF CONDITIONS PRECEDENT. If Lenders shall make any
Loan or otherwise extend any credit to Borrowers under this Agreement at a time
when any of the foregoing conditions precedent are not satisfied (regardless of
whether the failure of satisfaction of any such conditions precedent was known
or unknown to Administrative Agent or Lenders), the funding of such Loan or
other extension of credit shall not operate as a waiver of the right of
Administrative Agent and Lenders to insist upon the satisfaction of all
conditions precedent with respect to each subsequent Borrowing requested by
Borrowers or a waiver of any Event of Default as a consequence of the failure of
any such conditions to be satisfied, unless Administrative Agent, with the prior
consent of the Required Lenders, in writing waives the satisfaction of any
condition precedent, in which event such waiver shall only be applicable for the
specific instance given and only to the extent and for the period of time
expressly stated in such written waiver.

SECTION 12. EVENTS OF DEFAULT; REMEDIES ON DEFAULT

     12.1. EVENTS OF DEFAULT. The occurrence or existence of any one or more of
the following events or conditions shall constitute an "Event of Default" (each
of which Events of Default shall be deemed to exist unless and until waived by
Administrative Agent and Lenders in accordance with the provisions of SECTION
13.9:

          12.1.1. Payment of Obligations. Borrowers shall fail to pay (a) when
due the principal of any Revolver Loans or any reimbursement obligations arising
from drawings under Letters of Credit, or (b) when due any interest on Loans or
on reimbursement obligations arising from drawings under Letters of Credit, or
of fees or other amounts owing hereunder, under any other Loan Documents or in
connection herewith or therewith and, in each case in this clause (b), such
failure shall continue for 5 or more Business Days.

          12.1.2. Misrepresentations. Any representation, warranty or other
written statement to Administrative Agent or any Lender by or on behalf of any
Obligor, whether made in or furnished in compliance with or in reference to any
of the Loan Documents (including any representation made in any Borrowing Base
Certificate), proves to have been false or misleading in any material respect
when made or furnished or when reaffirmed pursuant to SECTION 9.2.

          12.1.3. Breach of Specific Covenants. Any Borrower shall fail or
neglect to perform, keep or observe any covenant contained in SECTIONS 7.6,
8.2.5, 8.2.6, 10.1.1, 10.1.6, 10.2 or 10.3 on the date that such Borrower is
required to perform, keep or observe such covenant.

          12.1.4. Breach of Other Covenants. Any Obligor shall fail or neglect
to perform, keep or observe any covenant contained in this Agreement (other than
a covenant which is dealt with specifically elsewhere in SECTION 12.1) or any
other Loan Document and the breach of such other covenant is not cured within 30
days after the sooner to occur of any Senior Officer's receipt of notice of such
breach from Administrative Agent or the date on which such failure or neglect
first becomes known to any Senior Officer.

          12.1.5. Other Defaults. There shall occur any default or event of
default on the part of any Borrower or any Subsidiary under: (i) the Senior
Notes; (ii) the Senior Subordinated Notes; or (iii) any other agreement,
document or instrument to which such Borrower or such Subsidiary is a party or
by which such Borrower or such Subsidiary or any of their respective Properties
is bound, creating or relating to any Debt for Money Borrowed or Capitalized
Lease Obligations (other than the Obligations,


                                      -88-

the Senior Notes or the Senior Subordinated Notes) in excess of $1,000,000 if
the payment or maturity of such Money Borrowed or Capitalized Lease Obligations
may be accelerated in consequence of such default or event of default or demand
for payment of such Debt for Money Borrowed or Capital Lease Obligations may be
made.

          12.1.6. Reserved.

          12.1.7. Solvency. Any Obligor shall cease to be Solvent.

          12.1.8. Insolvency Proceedings. Any Insolvency Proceeding shall be
commenced by any Obligor; an Insolvency Proceeding is commenced against any
Obligor and any of the following events occur: such Obligor consents to the
institution of the Insolvency Proceeding against it, the petition commencing the
Insolvency Proceeding is not timely controverted by such Obligor, the petition
commencing the Insolvency Proceeding is not dismissed within 60 days after the
date of the filing thereof (provided that, in any event, during the pendency of
any such period, Lenders shall be relieved from their obligation to make Loans
or otherwise extend credit to or for the benefit of Borrowers hereunder), an
interim trustee is appointed to take possession all or a substantial portion of
the Properties of such Obligor or to operate all or any substantial portion of
the business of such Obligor or an order for relief shall have been issued or
entered in connection with such Insolvency Proceeding; or any Obligor shall make
an offer of settlement extension or composition to its unsecured creditors
generally.

          12.1.9. Business Disruption. There shall occur a cessation of a
substantial part of the business of any Obligor for a period which could be
reasonably expected to have a Material Adverse Effect; or any Obligor shall
suffer the loss or revocation of any license or permit now held or hereafter
acquired by such Obligor which could reasonably be expected to have a Material
Adverse Effect; or any Obligor shall be enjoined, restrained or in any way
prevented by court, governmental or administrative order from conducting all or
any material part of its business affairs which could reasonably be expected to
have a Material Adverse Effect.

          12.1.10. ERISA. A Reportable Event shall occur which Administrative
Agent, in its reasonable discretion, shall determine constitutes grounds for the
termination by the Pension Benefit Guaranty Corporation of any Plan or for the
appointment by the appropriate United States district court of a trustee for any
Plan, or if any Plan shall be terminated or any such trustee shall be requested
or appointed, or if any Borrower, any Subsidiary or any Obligor is in "default"
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Plan
resulting from such Borrower's, such Subsidiary's or such Obligor's complete or
partial withdrawal from such Plan, in each case to the extent such occurrence
could reasonably be expected to have a Material Adverse Effect.

          12.1.11. Challenge to or Insufficiency of Loan Documents. Any Obligor
or any of its Affiliates shall challenge or contest (or support the challenge or
contest of others) in any action, suit or proceeding the validity or
enforceability of any of the Loan Documents, the legality or enforceability of
any of the Obligations or the perfection or priority of any Lien granted to
Administrative Agent, or any of the Loan Documents ceases to be in full force or
effect for any reason other than a full or partial waiver or release by
Administrative Agent and Lenders in accordance with the terms thereof.

          12.1.12. Judgment. One or more judgments or orders for the payment of
money in an amount that exceeds, individually or in the aggregate, $1,000,000
(other than amounts covered by (x) insurance for which the insurer thereof has
been notified of such claim and has not challenged such coverage or (y) valid
third party indemnifications for which the indemnifying party thereof has been
notified of such claim and has not challenged such indemnification) shall be
entered against any Borrower or any other Obligor and (i) enforcement
proceedings shall have been commenced by any creditor upon


                                      -89-

such judgment or order, (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect or (iii) results in the
creation or imposition of a Lien upon any of the Collateral that is not a
Permitted Lien.

          12.1.13. Repudiation of or Default Under Guaranty. Any Guarantor shall
revoke or attempt to revoke the Guaranty signed by such Guarantor, shall
repudiate such Guarantor's liability thereunder.

          12.1.14. Criminal Forfeiture. Any Obligor is criminally indicted or
convicted for (i) a felony committed in the conducted of the business of such
Obligor or (ii) any state or federal law (including the Controlled Substances
Act, the Money Laundering Control Act of 1986, and the Illegal Exportation of
War Materials Act) that could lead to a forfeiture of any material (as
determined by Administrative Agent in the exercise of its discretion)
Collateral.

          12.1.15. Change of Control. A Change of Control shall occur.

          12.1.16. Loss of Certification. Any Medicaid Certification or Medicare
Certification of a Borrower, or any physician, medical professional corporation
or other Person with which a Borrower has entered into a services, management or
similar agreement shall expire, terminate, be canceled or otherwise lost, the
result of which shall or could reasonably be expected to have a Material Adverse
Effect.

          12.1.17. Change of Deposit Account Instructions. Any action is taken
by a Borrower in contravention of any instruction given by Administrative Agent
regarding the Collection Accounts, the Concentration Account, the Investment
Accounts or any Deposit Accounts subject to Control Agreements, any Control
Agreement is amended or terminated without the written consent of Administrative
Agent, or if any Borrower fails, within 7 Business Days of receipt, to forward
collections of Accounts that it receives to a Collection Account at a time when
a Restrictive Trigger Event has occurred.

     12.2. ACCELERATION OF OBLIGATIONS; TERMINATION OF COMMITMENT. Without in
any way limiting the right of Administrative Agent to demand payment of any
portion of the Obligations payable on demand in accordance with this Agreement
upon or at any time after the occurrence of an Event of Default (other than
pursuant to SECTION 12.1.10) and for so long as such Event of Default shall
exist, Administrative Agent may in its discretion (and, upon receipt of written
instructions to do so from the Required Lenders, shall) (a) declare the
principal of and any accrued interest on the Loans and all other Obligations
owing under any of the Loan Documents to be, whereupon the same shall become
without further notice or demand (all of which notice and demand each Borrower
expressly waives), forthwith due and payable and Borrowers shall forthwith pay
to Administrative Agent the entire principal of and accrued and unpaid interest
on the Loans and other Obligations plus reasonable attorneys' fees and court
costs if such principal and interest are collected by or through an
attorney-at-law and (b) terminate the Revolver Commitments; provided, however,
that upon the occurrence of an Event of Default specified in SECTION 12.1.10,
all of the Obligations shall become automatically due and payable without
declaration, notice or demand by Administrative Agent to or upon any Borrower or
any other Obligor and the Revolver Commitments shall automatically terminate as
if terminated by Administrative Agent pursuant to SECTION 6.2.1 and with the
effects specified in SECTION 6.2.4.

     12.3. OTHER REMEDIES. Upon and after the occurrence of an Event of Default
and for so long as such Event of Default shall exist, Administrative Agent may
in its discretion (and, upon receipt of


                                      -90-

written direction of the Required Lenders, shall) institute any Enforcement
Action and exercise from time to time the following rights and remedies (subject
to Applicable Law):

          12.3.1. All of the rights and remedies of a secured party under the
UCC or under other Applicable Law, and all other legal and equitable rights to
which Administrative Agent may be entitled under any of the Loan Documents, all
of which rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.

          12.3.2. The right to collect all amounts at any time payable to a
Borrower from any Account Debtor or other Person at any time indebted to such
Borrower.

          12.3.3. The right to enter any premises where any of the Collateral
shall be located (or deemed to be located) or where any books and records
compromising part of the Collateral shall be located and to keep and, if
applicable, store such Collateral on said premises until sold (and if said
premises be owned or leased by a Borrower, then such Borrower agrees not to
charge Administrative Agent for storage of any Collateral therein).

          12.3.4. The right to sell or otherwise dispose of all or any
Collateral in its then condition, at public or private sale or sales, with such
notice as may be required by Applicable Law, in lots or in bulk, for cash or on
credit, all as Administrative Agent, in its discretion, may deem advisable. Each
Borrower agrees that any requirement of notice to any Borrower or any other
Obligor of any proposed public or private sale or other disposition of
Collateral by Administrative Agent shall be deemed reasonable notice thereof if
given at least 10 days prior thereto, and such sale may be at such locations as
Administrative Agent may designate in said notice. Administrative Agent shall
have the right to conduct such sales on any Borrower's or any other Obligor's
premises, without charge therefor, and such sales may be adjourned from time to
time in accordance with Applicable Law. Administrative Agent shall have the
right to sell, lease or otherwise dispose of the Collateral, or any part
thereof, for cash, credit or any combination thereof, and Administrative Agent
may purchase all or any part of the Collateral at public or, if permitted by
law, private sale and, in lieu of actual payment of such purchase price, may set
off the amount of such price against the Obligations. The proceeds realized from
the sale or other disposition of any Collateral may be applied, after allowing 2
Business Days for collection, first to any Extraordinary Expenses incurred by
Administrative Agent and then to the remainder of the Obligations as specified
in SECTION 5.6.1.

          12.3.5. The right to obtain the appointment of a receiver, without
notice of any kind whatsoever, to take possession of the Collateral and to
exercise such rights and powers as the court appointing such receiver shall
confer upon such receiver.

          12.3.6. The right to require Borrowers to Cash Collateralize
outstanding Letters of Credit, and, if Borrowers fail promptly to make such
deposit, Lenders may (and shall upon the direction of the Required Lenders)
advance such amount as a Revolver Loan (whether or not an Out-of-Formula
Condition exists or is created thereby or the Commitments have been terminated).
Any such deposit or advance shall be held by Administrative Agent in the Cash
Collateral Account to fund future payments on any Letter of Credit. When all
Letters of Credit have been drawn upon or expired, any amounts remaining in the
Cash Collateral Account shall be applied against any outstanding Obligations,
or, after Full Payment of all Obligations, returned to Borrowers.

          Administrative Agent is hereby granted an irrevocable, non-exclusive
license or other right to use, license or sub-license (exercisable without
payment of royalty or other compensation to any


                                      -91-

Obligor or any other Person) any or all of each Borrower's Intellectual Property
and all of each Borrower's computer hardware and software, and any Property of a
similar nature, in realizing on the Collateral.

     12.4. SETOFF. In addition to any Liens granted under any of the Loan
Documents and any rights now or hereafter available under Applicable Law,
Administrative Agent and each Lender (and each of their respective Affiliates)
is hereby authorized by Borrowers at any time that an Event of Default exists,
without notice to Borrowers or any other Person (any such notice being hereby
expressly waived), to set off and to appropriate and apply any and all deposits,
general or special (including certificates of deposit whether matured or
unmatured (but not including trust accounts or any Collection Account into which
payments with respect to Governmental Receivables are directly deposited or
transferred)) and any other Debt at any time held or owing by such Lender or any
of their Affiliates to or for the credit or the account of any Borrower against
and on account of the Obligations of Borrowers arising under the Loan Documents
to Administrative Agent, such Lender or any of their Affiliates, including all
Loans and LC Obligations and all claims of any nature or description arising out
of or in connection with this Agreement, irrespective of whether or not (i)
Administrative Agent or such Lender, shall have made any demand hereunder, (ii)
Administrative Agent, at the request or with the consent of the Required
Lenders, shall have declared the principal of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by this Agreement
and even though such Obligations may be contingent or unmatured or (iii) the
Collateral for the Obligations is adequate. Notwithstanding the foregoing, each
of Administrative Agent and Lenders agree that Administrative Agent shall not,
without the express consent of the Required Lenders, and that it shall (to the
extent that it is lawfully entitled to do so) upon the request of the Required
Lenders, exercise its setoff rights hereunder, subject to the limitations set
forth in this SECTION 12.4, against any accounts of any Borrower now or
hereafter maintained with Administrative Agent, such Lender or any Affiliate of
any of them, but no Borrower shall have any claim or cause of action against
Administrative Agent or any Lender for any setoff made, subject to the
limitations set forth in this SECTION 12.4, without the consent of the Required
Lenders, and the validity of any such setoff shall not be impaired by the
absence of such consent. If any party (or its Affiliate) exercises the right of
setoff provided for and permitted hereunder, such party shall be obligated to
share any such setoff in the manner and to the extent required by this SECTION
12.4 and SECTION 13.5. Notwithstanding anything herein to the contrary,
Administrative Agent and its Affiliates shall not nor shall it be entitled to,
and each other Secured Party and its Affiliates (and each Participant of any
Lender and Affiliates) hereby waives any and all rights it may have to, set-off
or appropriate any or all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by each Secured
Party and its Affiliates and each Participant of any Lender and its Affiliates
or any branch or agency thereof to or for the credit or the account of any
Obligor, to the extent necessary for the Obligors and each Secured Party and its
Affiliates and each Participant of any Lender and its Affiliates to remain in
compliance with all Healthcare Laws.


                                      -92-

     12.5. REMEDIES CUMULATIVE; NO WAIVER.

          12.5.1. All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of Borrowers contained in this Agreement,
the other Loan Documents, or any other agreement between Administrative Agent of
any Lender and any Obligor, heretofore, concurrently, or hereafter entered into,
shall be deemed cumulative to and not in derogation or substitution of any of
the terms, covenants, conditions, or agreements of Borrowers herein contained.
The rights and remedies of Administrative Agent and Lenders under this Agreement
and the other Loan Documents shall be cumulative and not exclusive of any rights
or remedies that Administrative Agent or any Lender would otherwise have.

          12.5.2. The failure or delay of Administrative Agent or any Lender to
require strict performance by Borrowers of any provision of any of the Loan
Documents or to exercise or enforce any rights, Liens, powers or remedies under
any of the Loan Documents or with respect to any Collateral shall not operate as
a waiver of such performance, Liens, rights, powers and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in full force
and effect until all Loans and all other Obligations owing or to become owing
from Borrowers to Administrative Agent and Lenders shall have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrowers contained in this Agreement or any of the other
Loan Documents and no Event of Default by any Borrower under this Agreement or
any other Loan Documents shall be deemed to have been suspended or waived by
Administrative Agent or any Lender, unless such suspension or waiver is by an
instrument in writing specifying such suspension or waiver and is signed by a
duly authorized representative of Administrative Agent or such Lender and
directed to Borrowers.

          12.5.3. If Administrative Agent or any Lender shall accept performance
by a Borrower, in whole or in part, of any obligation that such Borrower is
required by any of the Loan Documents to perform only when a Default or Event of
Default exists, or if Administrative Agent or any Lender shall exercise any
right or remedy under any of the Loan Documents that may not be exercised other
than when a Default or Event of Default exists, Administrative Agent's or such
Lender's acceptance of such performance by a Borrower or Administrative Agent's
or such Lender's exercise of any such right or remedy shall not operate to waive
any such Event of Default or to preclude the exercise by Administrative Agent or
any Lender of any other right or remedy, unless otherwise expressly agreed in
writing by Administrative Agent or such Lender, as the case may be.

SECTION 13. ADMINISTRATIVE AGENT

     13.1. APPOINTMENT, AUTHORITY AND DUTIES OF ADMINISTRATIVE AGENT.

          13.1.1. Each Lender hereby irrevocably appoints and designates BofA as
Administrative Agent to act as herein specified. Administrative Agent may, and
each Lender by its acceptance of a Note and becoming a party to this Agreement
shall be deemed irrevocably to have authorized Administrative Agent to, enter
into all Loan Documents to which Administrative Agent is or is intended to be a
party and all amendments hereto and all Security Documents at any time executed
by any Obligor, for its benefit and the Pro Rata benefit of Lenders and, except
as otherwise provided in this SECTION 13, to exercise such rights and powers
under this Agreement and the other Loan Documents as are specifically delegated
to Administrative Agent by the terms hereof and thereof, together with such
other rights and powers as are reasonably incidental thereto. Each Lender agrees
that any action taken by Administrative Agent or the Required Lenders in
accordance with the provisions of this Agreement or the other Loan Documents,
and the exercise by Administrative Agent or the Required Lenders of any of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all Lenders.
Without limiting the generality of the foregoing, Administrative Agent shall


                                      -93-

have the sole and exclusive right and authority to (a) act as the disbursing and
collecting agent for Lenders with respect to all payments and collections
arising in connection with this Agreement and the other Loan Documents; (b)
execute and deliver as Administrative Agent each Loan Document (including each
Lien Waiver) and accept delivery of each such agreement by any Obligor or any
other Person; (c) act as collateral Administrative Agent for Secured Parties for
purposes of the perfection of all security interests and Liens created by this
Agreement or the Security Documents and, subject to the direction of the
Required Lenders, for all other purposes stated therein, provided that
Administrative Agent hereby appoints, authorizes and directs each Lender to act
as a collateral sub-agent for Administrative Agent and the other Lenders for
purposes of the perfection of all security interests and Liens with respect to a
Borrower's Deposit Accounts maintained with, and all cash and Cash Equivalents
held by, such Lender; (d) subject to the direction of the Required Lenders,
manage, supervise or otherwise deal with the Collateral; and (e) except as may
be otherwise specifically restricted by the terms of this Agreement and subject
to the direction of the Required Lenders, exercise all remedies given to
Administrative Agent with respect to any of the Collateral under the Loan
Documents relating thereto, Applicable Law or otherwise. The duties of
Administrative Agent shall be ministerial and administrative in nature, and
Administrative Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship with any Lender (or any of Lender's
participants). Unless and until its authority to do so is revoked in writing by
Required Lenders, Administrative Agent alone shall be authorized to determine
whether any Accounts constitute Eligible Accounts (basing such determination in
each case upon the meanings given to such terms in SECTION 1), or whether to
impose or release any reserve, and to exercise its own Credit Judgment in
connection therewith, which determinations and judgments, if exercised in good
faith, shall exonerate Administrative Agent from any liability to Lenders or any
other Person for any errors in judgment.

          13.1.2. Administrative Agent (which term, as used in this sentence,
shall include reference to Administrative Agent's officers, directors,
employees, attorneys, agents and Affiliates and to the officers, directors,
employees, attorneys and agents of Administrative Agent's Affiliates) shall not:
(a) have any duties or responsibilities except those expressly set forth in this
Agreement and the other Loan Documents or (b) be required to take, initiate or
conduct any Enforcement Action (including any litigation, foreclosure or
collection proceedings hereunder or under any of the other Loan Documents)
except to the extent directed to do so by the Required Lenders during the
continuance of any Event of Default. The conferral upon Administrative Agent of
any right hereunder shall not imply a duty on Administrative Agent's part to
exercise any such right unless instructed to do so by the Required Lenders in
accordance with this Agreement.

          13.1.3. Administrative Agent may perform any of its duties by or
through its agents and employees and may employ one or more Administrative Agent
Professionals and shall not be responsible for the negligence or misconduct of
any such Administrative Agent Professionals selected by it with reasonable care.
Borrowers shall promptly (and in any event, ON DEMAND) reimburse Administrative
Agent for all reasonable expenses (including all Extraordinary Expenses)
incurred by Administrative Agent pursuant to any of the provisions hereof or of
any of the other Loan Documents or in the execution of any of Administrative
Agent's duties hereby or thereby created or in the exercise of any right or
power herein or therein imposed or conferred upon it or Lenders (excluding,
however, general overhead expenses), and each Lender agrees promptly to pay to
Administrative Agent, ON DEMAND, such Lender's Pro Rata share of any such
reimbursement for expenses (including Extraordinary Expenses) that is not timely
made by Borrowers to Administrative Agent.

          13.1.4. The rights, remedies, powers and privileges conferred upon
Administrative Agent hereunder and under the other Loan Documents may be
exercised by Administrative Agent without the necessity of the joinder of any
other parties unless otherwise required by Applicable Law. If Administrative
Agent shall request instructions from the Required Lenders with respect to any
act or


                                      -94-

action (including the failure to act) in connection with this Agreement or any
of the other Loan Documents, Administrative Agent shall be entitled to refrain
from such act or taking such action unless and until Administrative Agent shall
have received instructions from the Required Lenders; and Administrative Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against Administrative Agent as a result of Administrative Agent acting or
refraining from acting hereunder or under any of the Loan Documents pursuant to
or in accordance with the instructions of the Required Lenders except for
Administrative Agent's own gross negligence or willful misconduct in connection
with any action taken by it. Notwithstanding anything to the contrary contained
in this Agreement, Administrative Agent shall not be required to take any action
that is in its opinion contrary to Applicable Law or the terms of any of the
Loan Documents or that would in its reasonable opinion subject it or any of its
officers, employees or directors to personal liability.

          13.1.5. Administrative Agent shall promptly, upon receipt thereof,
forward to each Lender (i) copies of any significant written notices, reports,
certificates and other information received by Administrative Agent from any
Obligor (but only if and to the extent such Obligor is not required by the terms
of the Loan Documents to supply such information directly to Lenders) and (ii)
copies of the results of any field audits or other examinations made or prepared
by or on behalf of Administrative Agent with respect to Borrowers or the
Collateral (each, a "Report" and collectively, "Reports"). Administrative Agent
shall conduct field audits of Borrowers at any time or times reasonably
requested by any Lender (but in no event shall Administrative Agent be obliged
to honor such requests more frequently than twice a calendar year unless an
Event of Default exists).

     13.2. AGREEMENTS REGARDING COLLATERAL AND EXAMINATION REPORTS.

          13.2.1. Lenders hereby irrevocably authorize Administrative Agent to
release any Lien with respect to any Collateral (i) upon the termination of the
Commitments and Full Payment of the Obligations (other than contingent
indemnification obligations for which no claim has been made), (ii) that is the
subject of an Asset Disposition which Borrowers certify in writing to
Administrative Agent is a Permitted Asset Disposition (and Administrative Agent
may rely conclusively on any such certificate without further inquiry), or (iii)
with the written consent of all Lenders. Administrative Agent shall have no
obligation whatsoever to any of the Lenders to assure that any of the Collateral
exists or is owned by a Borrower or is cared for, protected or insured or has
been encumbered, or that Administrative Agent's Liens have been properly,
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority or to exercise any duty of care with respect
to any of the Collateral.

          13.2.2. Administrative Agent and Lenders each hereby appoints each
other Lender as agent for the purpose of perfecting Liens (for the benefit of
Secured Parties) in any Collateral that, in accordance with the UCC or any other
Applicable Law, can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Administrative Agent
thereof, and, promptly upon Administrative Agent's request therefor, shall
deliver such Collateral to Administrative Agent or otherwise deal with such
Collateral in accordance with Administrative Agent's instructions.

          13.2.3. Each Lender agrees that neither BofA nor Administrative Agent
makes any representation or warranty as to the accuracy or completeness of any
Report and shall not be liable for any information contained in or omitted from
any such Report; agrees that the Reports are not intended to be comprehensive
audits or examinations and that BofA or Administrative Agent or any other Person
performing any audit or examination will inspect only specific information
regarding Obligations or the Collateral and will rely significantly upon
Borrowers' books and records as well as upon representations of Borrowers'
officers and employees; agrees to keep all Reports confidential and strictly for
its internal


                                      -95-

use and not to distribute the Reports (or the contents thereof) to any Person
(except to its Participants, attorneys, accountants and other Persons with whom
such Lender has a confidential relationship) or use any Report in any other
manner; and, without limiting the generality of any other indemnification
contained herein, agrees to hold Administrative Agent and any other Person
preparing a Report harmless from any action that the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any Loans or other credit accommodations that the indemnifying
Lender has made or may make to Borrowers, or the indemnifying Lender's
participation in, or its purchase of, a loan or loans of any Obligor, and to pay
and protect, and indemnify, defend and hold Administrative Agent and each other
such Person preparing a Report harmless from and against all claims, actions,
proceedings, damages, costs, expenses and other amounts (including attorneys'
fees) incurred by Administrative Agent and any such other Person preparing a
Report as the direct or indirect result of any third parties who might obtain
all or any part of any Report through the indemnifying Lender.

     13.3. RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be
entitled to rely, and shall be fully protected in so relying, upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram, telecopier message or cable) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of Administrative Agent
Professionals selected by Administrative Agent. Without limiting the generality
of the foregoing, Administrative Agent may rely upon any Notice of Borrowing, LC
Request, Notice of Conversion/Continuation or any similar notice or request
believed by Administrative Agent to be genuine. As to any matters not expressly
provided for by this Agreement or any of the other Loan Documents,
Administrative Agent shall in all cases be fully protected in acting or
refraining from acting hereunder and thereunder in accordance with the
instructions of the Required Lenders, and such instructions of the Required
Lenders and any action taken or failure to act pursuant thereto shall be binding
upon Lenders.

     13.4. ACTION UPON DEFAULT. Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default unless it has
received written notice from a Lender or any or all Borrowers specifying the
occurrence and nature of such Default or Event of Default. If Administrative
Agent shall receive such a notice of a Default or an Event of Default or shall
otherwise acquire actual knowledge of any Default or Event of Default,
Administrative Agent shall promptly notify Lenders in writing and Administrative
Agent shall take such action and assert such rights under this Agreement and the
other Loan Documents, or shall refrain from taking such action and asserting
such rights, as the Required Lenders shall direct from time to time. If any
Lender shall receive a notice of a Default or an Event of Default or shall
otherwise acquire actual knowledge of any Default or Event of Default, such
Lender shall promptly notify Administrative Agent and the other Lenders in
writing. As provided in SECTION 13.3, Administrative Agent shall not be subject
to any liability by reason of acting or refraining to act pursuant to any
request of the Required Lenders except for its own willful misconduct or gross
negligence in connection with any action taken by it. In no event shall the
Required Lenders, without the prior written consent of each Lender, direct
Administrative Agent to accelerate and demand payment of the Loans held by one
Lender without accelerating and demanding payment of all other Loans or to
terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders. Each Lender agrees that, except as otherwise
provided in any of the Loan Documents or with the written consent of
Administrative Agent and the Required Lenders, it will not take any legal action
or institute any action or proceeding against any Obligor with respect to any of
the Obligations or Collateral or accelerate or otherwise enforce its portion of
the Obligations. Without limiting the generality of the foregoing, none of
Lenders may exercise any right that it might otherwise have under Applicable Law
to credit bid at foreclosure sales, UCC sales or other similar sales or
dispositions of any of the Collateral except as authorized by Administrative
Agent and the Required Lenders. Notwithstanding anything to the contrary set
forth in this SECTION 13.4 or elsewhere in this Agreement, each Lender shall be
authorized


                                      -96-

to take such action to preserve or enforce its rights against any Obligor where
a deadline or limitation period is otherwise applicable and would, absent the
taking of specified action, bar the enforcement of Obligations held by such
Lender against such Obligor, including the filing of proofs of claim in any
Insolvency Proceeding.

     13.5. RATABLE SHARING. If any Lender shall obtain any payment or reduction
(including any amounts received as adequate protection of a bank account deposit
treated as cash collateral under the Bankruptcy Code) of any Obligation of
Borrowers (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) in excess of its Pro Rata share of payments or reductions
on account of such Obligations obtained by all of the Lenders, such Lender shall
forthwith (i) notify the other Lenders and Administrative Agent of such receipt
and (ii) purchase from the other Lenders such participations in the affected
Obligations as shall be necessary to cause such purchasing Lender to share the
excess payment or reduction, net of costs incurred in connection therewith, on a
Pro Rata basis, provided that if all or any portion of such excess payment or
reduction is thereafter recovered from such purchasing Lender or additional
costs are incurred, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery or such additional costs, but without
interest. Each Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this SECTION 13.5 may, to the fullest extent
permitted by Applicable Law, exercise all of its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of Borrowers in the amount of such
participation.

     13.6. INDEMNIFICATION OF ADMINISTRATIVE AGENT INDEMNITEES.

          13.6.1. Each Lender agrees to indemnify and defend the Administrative
Agent Indemnitees (to the extent not reimbursed by Borrowers, but without
limiting the indemnification obligations of Obligors under any of the Loan
Documents), on a Pro Rata basis, and to hold each of the Administrative Agent
Indemnitees harmless from and against, any and all Claims which may be imposed
on, incurred by or asserted against any of the Administrative Agent Indemnitees
in any way related to or arising out of any of the Loan Documents or referred to
herein or therein or the transactions contemplated thereby (including the costs
and expenses which Borrowers are obligated to pay under SECTION 15.2 or amounts
Administrative Agent may be called upon to pay in connection with any lockbox or
Dominion Account arrangement contemplated hereby or under any indemnity,
guaranty or other assurance of payment or performance given by Administrative
Agent pursuant to SECTION 3.4.2 or the enforcement of any of the terms of any
Loan Documents).

          13.6.2. Without limiting the generality of the foregoing provisions of
this SECTION 13.6, if Administrative Agent should be sued by any receiver,
trustee in bankruptcy, debtor-in-possession or other Person on account of any
alleged preference or fraudulent transfer received or alleged to have been
received from any Borrower or any other Obligor as the result of any transaction
under the Loan Documents, then in such event any monies paid by Administrative
Agent in settlement or satisfaction of such suit, together with all
Extraordinary Expenses incurred by Administrative Agent in the defense of same,
shall be promptly reimbursed to Administrative Agent by Lenders to the extent of
each Lender's Pro Rata share.

          13.6.3. Without limiting the generality of the foregoing provisions of
this SECTION 13.6, if at any time (whether prior to or after the Commitment
Termination Date) any action or proceeding shall be brought against any of the
Administrative Agent Indemnitees by an Obligor or by any other Person claiming
by, through or under an Obligor, to recover damages for any act taken or omitted
by Administrative Agent under any of the Loan Documents or in the performance of
any rights, powers or remedies of Administrative Agent against any Obligor, any
Account Debtor, the Collateral or with respect to any Loans, or to obtain any
other relief of any kind on account of any transaction involving any
Administrative Agent Indemnitees under or in relation to any of the Loan
Documents, each Lender agrees


                                      -97-

to indemnify, defend and hold the Administrative Agent Indemnitees harmless with
respect thereto and to pay to the Administrative Agent Indemnitees such Lender's
Pro Rata share of such amount as any of the Administrative Agent Indemnitees
shall be required to pay by reason of a judgment, decree, or other order entered
in such action or proceeding or by reason of any compromise or settlement agreed
to by the Administrative Agent Indemnitees, including all interest and costs
assessed against any of the Administrative Agent Indemnitees in defending or
compromising such action, together with attorneys' fees and other legal expenses
paid or incurred by the Administrative Agent Indemnitees in connection
therewith; provided, however, that no Lender shall be liable to any
Administrative Agent Indemnitee for any of the foregoing to the extent that they
arise solely from the willful misconduct or gross negligence of such
Administrative Agent Indemnitee. In Administrative Agent's discretion,
Administrative Agent may also reserve for or satisfy any such judgment, decree
or order from proceeds of Collateral prior to any distributions therefrom to or
for the account of Lenders.

     13.7. LIMITATION ON RESPONSIBILITIES OF ADMINISTRATIVE AGENT.
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall have received further assurances to
its satisfaction from Lenders of their indemnification obligations under SECTION
13.6 against any and all Indemnified Claims which may be incurred by
Administrative Agent by reason of taking or continuing to take any such action.
Administrative Agent shall not be liable to Lenders for any action taken or
omitted to be taken under or in connection with this Agreement or the other Loan
Documents except as a result and to the extent of losses caused by the
Administrative Agent's actual gross negligence or willful misconduct.
Administrative Agent does not assume any responsibility for any failure or delay
in performance or breach by any Obligor or any Lender of its obligations under
this Agreement or any of the other Loan Documents. Administrative Agent does not
make to Lenders, and no Lender makes to Administrative Agent or the other
Lenders, any express or implied warranty, representation or guarantee with
respect to the Obligations, the Collateral, the Loan Documents or any Obligor.
Neither Administrative Agent nor any of its officers, directors, employees,
attorneys or agents shall be responsible to Lenders, and no Lender nor any of
its agents, attorneys or employees shall be responsible to Administrative Agent
or the other Lenders, for: (i) any recitals, statements, information,
representations or warranties contained in any of the Loan Documents or in any
certificate or other document furnished pursuant to the terms hereof; (ii) the
execution, validity, genuineness, effectiveness or enforceability of any of the
Loan Documents; (iii) the genuineness, enforceability, collectibility, value,
sufficiency, location or existence of any Collateral, or the validity, extent,
perfection or priority of any Lien therein; (iv) the validity, enforceability or
collectibility of any the Obligations; or (v) the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal status of
any Obligor or any Account Debtor. Neither Administrative Agent nor any of its
officers, directors, employees, attorneys or agents shall have any obligation to
any Lender to ascertain or inquire into the existence of any Default or Event of
Default, the observance or performance by any Obligor of any of the duties or
agreements of such Obligor under any of the Loan Documents or the satisfaction
of any conditions precedent contained in any of the Loan Documents.
Administrative Agent may consult with and employ legal counsel, accountants and
other experts and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such experts.

     13.8. SUCCESSOR ADMINISTRATIVE AGENT AND CO-AGENTS.

          13.8.1. Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, Administrative Agent may resign at any
time by giving at least 30 days written notice thereof to each Lender and
Borrowers. Upon receipt of any notice of such resignation, the Required Lenders,
after prior consultation with (but without having to obtain consent of) each
Lender, shall have the right to appoint a successor Administrative Agent which
shall be (i) a Lender, (ii) a United States based affiliate of a Lender, or
(iii) a commercial bank that is organized under the laws of the United States or
of any State thereof and has a combined capital surplus of at least $200,000,000
and, provided no


                                      -98-

Default or Event of Default then exists, is reasonably acceptable to Borrowers
(and for purposes hereof, any successor to BofA shall be deemed acceptable to
Borrowers). If no successor Administrative Agent is appointed prior to the
effective date of the resignation of Administrative Agent, then Administrative
Agent may appoint, after consultation with Lenders and Borrower Agent, a
successor agent from among Lenders. Upon the acceptance by a successor
Administrative Agent of an appointment to serve as an Administrative Agent
hereunder, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent without further act, deed or conveyance, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder but shall continue to enjoy the benefits of the indemnification set
forth in SECTIONS 13.6 and 15.2. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this SECTION 13
(including the provisions of SECTION 13.6) shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent. Notwithstanding anything to the contrary
contained in this Agreement, any successor by merger or acquisition of the stock
or assets of BofA shall continue to be Administrative Agent hereunder without
further act on the part of the parties hereto unless such successor shall resign
in accordance with the provisions hereof.

          13.8.2. It is the intent of the parties that there shall be no
violation of any Applicable Law denying or restricting the right of financial
institutions to transact business as agent or otherwise in any jurisdiction. In
case of litigation under any of the Loan Documents, or in case Administrative
Agent deems that by reason of present or future laws of any jurisdiction
Administrative Agent might be prohibited from exercising any of the powers,
rights or remedies granted to Administrative Agent or Lenders hereunder or under
any of the Loan Documents or from holding title to or a Lien upon any Collateral
or from taking any other action which may be necessary hereunder or under any of
the Loan Documents, Administrative Agent may appoint an additional Person as a
separate collateral agent or co-collateral agent which is not so prohibited from
taking any of such actions or exercising any of such powers, rights or remedies.
If Administrative Agent shall appoint an additional Person as a separate
collateral agent or co-collateral agent as provided above, each and every
remedy, power, right, claim, demand or cause of action intended by any of the
Loan Documents to be exercised by or vested in or conveyed to Administrative
Agent with respect thereto shall be exercisable by and vested in such separate
collateral agent or co-collateral agent, but only to the extent necessary to
enable such separate collateral agent or co-collateral agent to exercise such
powers, rights and remedies, and every covenant and obligation necessary to the
exercise thereof by such separate collateral agent or co-collateral agent shall
run to and be enforceable by either of them. Should any instrument from Lenders
be required by the separate collateral agent or co-collateral agent so appointed
by Administrative Agent in order more fully and certainly to vest in and confirm
to him or it such rights, powers, duties and obligations, any and all of such
instruments shall, on request, be executed, acknowledged and delivered by
Lenders whether or not a Default or Event of Default then exists. In case any
separate collateral agent or co-collateral agent, or a successor to either,
shall die, become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, duties and obligations of such separate collateral
agent or co-collateral agent, so far as permitted by Applicable Law, shall vest
in and be exercised by the Administrative Agent until the appointment of a new
collateral agent or successor to such separate collateral agent or co-collateral
agent.

     13.9. CONSENTS, AMENDMENTS AND WAIVERS ; OUT-OF-FORMULA LOANS.

          13.9.1. No amendment or modification of any provision of this
Agreement or any of the other Loan Documents, nor any waiver of any Default or
Event of Default, shall be effective without the prior written agreement or
consent of the Required Lenders; provided, however, that

          (i) without the prior written consent of Administrative Agent, no
amendment or waiver shall be effective with respect to any provision in any of
the Loan Documents (including


                                      -99-

SECTION 3.4 and this SECTION 13) to the extent such provision relates to the
rights, duties, immunities, exculpation, indemnification or discretion of
Administrative Agent;

          (ii) without the prior written consent of Issuing Bank, no amendment
or waiver with respect to any of the LC Obligations or the provisions of
Sections 2.3, 4.1.3 or 11.2.6 shall be effective;

          (iii) without the prior written consent of each affected Lender, no
amendment or waiver shall be effective that would (1) increase or otherwise
modify any Commitment of such Lender (other than to reduce such Lender's
Commitment on a proportionate basis with the same Commitments of other Lenders);
(2) alter (other than to increase) the rate of interest payable in respect of
any Obligations owed to such Lender; (3) waive or defer collection of any
interest or fee payable to such Lender pursuant to SECTION 3; or (4) subordinate
the payment of any Obligations owed to such Lender to the payment of any Debt
(except as expressly provided in SECTION 5.6.1); and

          (iv) without the prior written consent of all Lenders, no amendment or
waiver shall be effective that would (1) waive any Default or Event of Default
if the Default or Event of Default relates to any Borrower's failure to observe
or perform any covenant that may not be amended without the unanimous written
consent of Lenders (and, where so provided hereinafter, the written consent of
Administrative Agent) as hereinafter set forth; (2) alter the provisions of
SECTIONS 3.6, 3.7, 3.8, 3.10, 5.6, 5.7, 7.1 (except to add to the categories of
Property of Borrowers constituting Collateral), 13.9, 15.2, 15.3, 15.4 or 15.16;
(3) amend the definitions of "Pro Rata" or "Required Lenders" (and the other
defined terms used in such definitions), or any provision of this Agreement
obligating Administrative Agent to take certain actions at the direction of the
Required Lenders, or any provision of any of the Loan Documents regarding the
Pro Rata treatment or obligations of Lenders; or (4) subordinate the priority of
any Liens granted to Administrative Agent under any of the Loan Documents to
consensual, non-statutory Liens granted after the Restatement Effective Date to
any other Person, except as currently provided in or contemplated by the Loan
Documents (including a subordination in favor of the holders of Permitted Liens
that are permitted to have priority over Administrative Agent's Liens) and
except for Liens granted by an Obligor to financial institutions with respect to
amounts on deposit with such financial institutions to cover returned items,
processing and analysis charges and other charges in the Ordinary Course of
Business that relate to deposit accounts with such financial institutions.

          Notwithstanding the foregoing, the consent or agreement of Borrowers
shall not be necessary to the effectiveness of any amendment or waiver of any
provision of this Agreement that deals solely with the rights and duties of
Lenders and Administrative Agent as among themselves, including SECTIONS 5.6.1
and 15. The making of any Loans hereunder by any Lender during the existence of
a Default or Event of Default shall not be deemed to constitute a waiver of such
Default or Event of Default. Any waiver or consent granted by Lenders hereunder
shall be effective only if in writing and then only in the specific instance and
for the specific purpose for which it was given.

          13.9.2. No Borrower will, directly or indirectly, pay or cause to be
paid any remuneration or other thing of value, whether by way of supplemental or
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for or as an inducement to the consent to or
agreement by such Lender with any waiver or amendment of any of the terms and
provisions of this Agreement or any of the other Loan Documents to the extent
that the agreement of all Lenders to any such waiver or amendment is required,
unless such remuneration or thing of value is concurrently paid, on the same
terms, on a Pro Rata or other mutually agreed upon basis to all Lenders;
provided, however, that Borrowers may contract to pay a fee only to those
Lenders who actually vote in writing to approve any waiver or amendment of the
terms and provisions of this Agreement or any of the other Loan Documents to the
extent that such waiver or amendment may be implemented by vote of the Required
Lenders and such waiver or amendment is in fact approved.


                                      -100-

          13.9.3. Any request, authority or consent of any Person who, at the
time of making such request or giving such a authority or consent, is a Lender,
shall be conclusive and binding upon any Transferee of such Lender.

          13.9.4. Unless otherwise directed in writing by the Required Lenders,
Administrative Agent may require Lenders to honor requests by Borrowers for
Out-of-Formula Loans (in which event, and notwithstanding anything to the
contrary set forth in SECTION 2.1.1 or elsewhere in this Agreement, Lenders
shall continue to make Revolver Loans up to their Pro Rata share of the
Commitments) and to forbear from requiring Borrowers to cure an Out-of-Formula
Condition, (1) when no Event of Default exists (or if an Event of Default
exists, when the existence of such Event of Default is not known by
Administrative Agent), if and for so long as (i) such Out-of-Formula Condition
does not continue for a period of more than 14 consecutive days, following which
no Out-of-Formula Condition exists for at least 60 consecutive days before
another Out-of-Formula Condition exists, (ii) the amount of the Revolver Loans
outstanding at any time does not exceed the aggregate of the Commitments at such
time, and (iii) the Out-of-Formula Condition is not known by Administrative
Agent at the time in question to exceed $2,500,000; and (2) regardless of
whether or not an Event of Default exists, if Administrative Agent discovers the
existence of an Out-of-Formula Condition not previously known by it to exist,
but Lenders shall be obligated to continue making such Revolver Loans as
directed by Administrative Agent only (A) if the amount of the Out-of-Formula
Condition is not increased by more than $500,000 above the amount determined by
Administrative Agent to exist on the date of discovery thereof and (B) for a
period not to exceed 30 Business Days. In no event shall any Borrower or any
other Obligor be deemed to be a beneficiary of this SECTION 13.9.4 or authorized
to enforce any of the provisions of this SECTION 13.9.4.

     13.10. DUE DILIGENCE AND NON-RELIANCE. Each Lender hereby acknowledges and
represents that it has, independently and without reliance upon Administrative
Agent or the other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Agreement and to fund the Loans
to be made by it hereunder and to purchase participations in the LC Obligations
pursuant to SECTION 2.3.2, and each Lender has made such inquiries concerning
the Loan Documents, the Collateral and each Obligor as such Lender feels
necessary and appropriate, and has taken such care on its own behalf as would
have been the case had it entered into the other Loan Documents without the
intervention or participation of the other Lenders or Administrative Agent. Each
Lender hereby further acknowledges and represents that the other Lenders and
Administrative Agent have not made any representations or warranties to it
concerning any Obligor, any of the Collateral or the legality, validity,
sufficiency or enforceability of any of the Loan Documents. Each Lender also
hereby acknowledges that it will, independently and without reliance upon the
other Lenders or Administrative Agent, and based upon such financial statements,
documents and information as it deems appropriate at the time, continue to make
and rely upon its own credit decisions in making Loans and in taking or
refraining to take any other action under this Agreement or any of the other
Loan Documents. Except for notices, reports and other information expressly
required to be furnished to Lenders by Administrative Agent hereunder,
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any notices, reports or certificates furnished to Administrative
Agent by any Obligor or any credit or other information concerning the affairs,
financial condition, business or Properties of any Obligor (or any of its
Affiliates) which may come into possession of Administrative Agent or any of
Administrative Agent's Affiliates.

     13.11. REPRESENTATIONS AND WARRANTIES OF LENDERS. Each Lender represents
and warrants to each Borrower, Administrative Agent and the other Lenders that
it has the power to enter into and perform its obligations under this Agreement
and the other Loan Documents, and that it has taken all necessary and
appropriate action to authorize its execution and performance of this Agreement
and the other Loan Documents to which it is a party, each of which will be
binding upon it and the obligations


                                      -101-

imposed upon it herein or therein will be enforceable against it in accordance
with the respective terms of such documents; and none of the consideration used
by it to make or fund its Loans or to participate in any other transactions
under this Agreement constitutes for any purpose of ERISA or Section 4975 of the
Internal Revenue Code assets of any "plan" as defined in Section 3(3) of ERISA
or Section 4975 of the Internal Revenue Code and the rights and interests of
such Lender in and under the Loan Documents shall not constitute plan assets
under ERISA.

     13.12. THE REQUIRED LENDERS. As to any provisions of this Agreement or the
other Loan Documents under which action may or is required to be taken upon
direction or approval of the Required Lenders, the direction or approval of the
Required Lenders shall be binding upon each Lender to the same extent and with
the same effect as if each Lender joined therein. Notwithstanding anything to
the contrary contained in this Agreement, Borrowers shall not be deemed to be a
beneficiary of, or be entitled to enforce, sue upon or assert as a defense to
any of the Obligations, any provisions of this Agreement that requires
Administrative Agent or any Lender to act, or conditions their authority to act,
upon the direction or consent of the Required Lenders; and any action taken by
Administrative Agent or any Lender that requires the consent or direction of the
Required Lenders as a condition to taking such action shall, insofar as
Borrowers are concerned, be presumed to have been taken with the requisite
consent or direction of the Required Lenders.

     13.13. SEVERAL OBLIGATIONS. The obligations and Commitment of each Lender
under this Agreement and the other Loan Documents are several and neither
Administrative Agent nor any Lender shall be responsible for the performance by
the other Lenders of its obligations or Commitment hereunder or thereunder.
Notwithstanding any liability of Lenders stated to be joint and several to third
Persons under any of the Loan Documents, such liability shall be shared, as
among Lenders, Pro Rata.

     13.14. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and each Note
issued to it, Administrative Agent shall have the same rights and powers
hereunder and under the other Loan Documents as any other Lender or holder of a
Note and may exercise the same as though it were not performing the duties
specified herein; and the terms "Lenders," "Required Lenders," or any similar
term shall, unless the context clearly otherwise indicates, include
Administrative Agent in its capacity as a Lender. Administrative Agent and its
Affiliates may each accept deposits from, maintain deposits or credit balances
for, invest in, lend money to, act as trustee under indentures of, serve as
financial advisor to, and generally engage in any kind of business with any
Borrower or any other Obligor, or any Affiliate of any Borrower or any other
Obligor, as if it were any other bank and without any duty to account therefor
(or for any fees or other consideration received in connection therewith) to the
other Lenders. BofA or its affiliates may receive information regarding any
Borrower or any of such Borrower's Affiliates and account debtors (including
information that may be subject to confidentiality obligations in favor of
Borrowers or any of their Affiliates) and Lenders acknowledge that neither
Administrative Agent nor BofA shall be under any obligation to provide such
information to Lenders to the extent acquired by BofA in its individual capacity
and not as Administrative Agent hereunder.

     13.15. NO THIRD PARTY BENEFICIARIES. This SECTION 13 is not intended to
confer any rights or benefits upon Borrowers or any other Person except Lenders
and Administrative Agent, and no Person (including any Borrower) other than
Lenders and Administrative Agent shall have any right to enforce any of the
provisions of this SECTION 13 except as expressly provided in SECTION 13.17. As
between Borrowers and Administrative Agent, any action that Administrative Agent
may take or purport to take on behalf of Lenders under any of the Loan Documents
shall be conclusively presumed to have been authorized and approved by Lenders
as herein provided.


                                      -102-

     13.16. NOTICE OF TRANSFER. Administrative Agent may deem and treat a Lender
party to this Agreement as the owner of such Lender's portion of the Revolver
Loans for all purposes, unless and until a written notice of the assignment or
transfer thereof executed by such Lender has been received by Administrative
Agent.

     13.17. REPLACEMENT OF CERTAIN LENDERS. If a Lender ("Affected Lender")
shall have (i) failed to fund its Pro Rata share of any Loan requested (or
deemed requested) by Borrowers which such Lender is obligated to fund under the
terms of this Agreement and which such failure has not been cured, (ii)
requested compensation from Borrowers under SECTION 3.7 to recover increased
costs incurred by such Lender (or its parent or holding company) which are not
being incurred generally by the other Lenders (or their respective parents or
holding companies), (iii) delivered a notice pursuant to SECTION 3.6 claiming
that such Lender is unable to extend LIBOR Loans to Borrowers for reasons not
generally applicable to the other Lenders, (iv) defaulted in paying or
performing any of its obligations to Administrative Agent, or (v) failed or
refused to give its consent to any amendment, waiver or action for which consent
of all of the Lenders is required and in respect of which the Required Lenders
have consented, then, in any such case and in addition to any other rights and
remedies that Administrative Agent, any other Lender or any Borrower may have
against such Affected Lender, any Borrower or Administrative Agent may make
written demand on such Affected Lender (with a copy to Administrative Agent in
the case of a demand by Borrowers and a copy to Borrowers in the case of a
demand by Administrative Agent) for the Affected Lender to assign, and such
Affected Lender shall assign pursuant to one or more duly executed Assignment
and Acceptances within 5 Business Days after the date of such demand, to one or
more Lenders willing to accept such assignment or assignments, or to one or more
Eligible Assignees designated by Administrative Agent, all of such Affected
Lender's rights and obligations under this Agreement (including its Commitment
and all Loans owing to it) in accordance with SECTION 14. Administrative Agent
is hereby irrevocably authorized to execute one or more Assignment and
Acceptances as attorney-in-fact for any Affected Lender which fails or refuses
to execute and deliver the same within 5 Business Days after the date of such
demand. The Affected Lender shall be entitled to receive, in cash and
concurrently with execution and delivery of each such Assignment and Acceptance,
all amounts owed to the Affected Lender hereunder or under any other Loan
Document, including the aggregate outstanding principal amount of the Loans owed
to such Lender, together with accrued interest thereon through the date of such
assignment (but excluding any prepayment penalty or termination charge. Upon the
replacement of any Affected Lender pursuant to this SECTION 13.17, such Affected
Lender shall cease to have any participation in, entitlement to, or other right
to share in the Liens of Administrative Agent in any Collateral and such
Affected Lender shall have no further liability to Administrative Agent, any
Lender or any other Person under any of the Loan Documents (except as provided
in SECTION 13.6 as to events or transactions which occur prior to the
replacement of such Affected Lender), including any commitment to make Loans or
purchase participations in LC Obligations. Administrative Agent shall have the
right at any time, but shall not be obligated to, upon written notice to any
Lender and with the consent of such Lender (which may be granted or withheld in
such Lender's discretion), to purchase for Administrative Agent's own account
all of such Lender's right, title and interest in and to this Agreement, the
other Loan Documents and the Obligations (together with such Lender's interest
in the Commitments), for the face amount of the Obligations owed to such Lender
(or such greater or lesser amount as Administrative Agent and Lender may
mutually agree upon).

     13.18. REMITTANCE OF PAYMENTS AND COLLECTIONS.

          13.18.1. All payments by any Lender to Administrative Agent shall be
made not later than the time set forth elsewhere in this Agreement on the
Business Day such payment is due; provided, however, that if such payment is due
ON DEMAND by Administrative Agent and such demand is made on the paying Lender
after 11:00 a.m. on such Business Day, then payment shall be made by 11:00 a.m.
on the next Business Day. Payment by Administrative Agent to any Lender shall be
made by wire transfer,


                                      -103-

promptly following Administrative Agent's receipt of funds for the account of
such Lender and in the type of funds received by Administrative Agent; provided,
however, that if Administrative Agent receives such funds at or prior to 12:00
noon, Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on
such Business Day, but if Administrative Agent receives such funds after 12:00
noon, Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on
the next Business Day.

          13.18.2. With respect to the payment of any funds from Administrative
Agent to a Lender or from a Lender to Administrative Agent, the party failing to
make full payment when due pursuant to the terms hereof shall, ON DEMAND by the
other party, pay such amount together with interest thereon at the Federal Funds
Rate. In no event shall Borrowers be entitled to receive any credit for any
interest paid by Administrative Agent to any Lender, or by any Lender to
Administrative Agent, at the Federal Funds Rate as provided herein.

          13.18.3. If Administrative Agent pays any amount to a Lender in the
belief or expectation that a related payment has been or will be received by
Administrative Agent from an Obligor and such related payment is not received by
Administrative Agent, then Administrative Agent shall be entitled to recover
such amount from each Lender that receives such amount. If Administrative Agent
determines at any time that any amount received by it under this Agreement or
any of the other Loan Documents must be returned to an Obligor or paid to any
other Person pursuant to any Applicable Law, court order or otherwise, then,
notwithstanding any other term or condition of this Agreement or any of the
other Loan Documents, Administrative Agent shall not be required to distribute
such amount to any Lender.

SECTION 14. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

     14.1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of Borrowers, Administrative Agent and Lenders and their
respective successors and assigns (which, in the case of Administrative Agent,
shall include any successor Administrative Agent appointed pursuant to SECTION
13.8), except that (i) no Borrower shall have the right to assign its rights or
delegate performance of any of its obligations under any of the Loan Documents
and (ii) any assignment by any Lender must be made in compliance with SECTION
14.3. Administrative Agent may treat the Person which made any Loan or holds any
Note as the owner thereof for all purposes hereof unless and until such Person
complies with SECTION 14.3 in the case of an assignment thereof or, in the case
of any other transfer, a written notice of the transfer is filed with
Administrative Agent. Any assignee or transferee of any rights with respect to
any Note or Loan agrees by acceptance thereof to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of a Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.

     14.2. PARTICIPATIONS.

          14.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with Applicable Law, at any
time sell to one or more banks or other financial institutions (each a
"Participant") a participating interest in any of the Obligations owing to such
Lender, any Commitment of such Lender or any other interest of such Lender under
any of the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of its Loans and Commitments for all
purposes under the Loan Documents, all amounts payable by Borrowers under this
Agreement and any of the Notes shall be determined as if such Lender


                                      -104-

had not sold such participating interests, and Borrowers and Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents. If a Lender
sells a participation to a Person other than an Affiliate of such Lender, then
such Lender shall give prompt written notice thereof to Borrowers and the other
Lenders. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of SECTION 5.9 unless Borrowers are notified of
the participation sold to Participant and such Participant agrees, for the
benefit of Borrowers, to comply with SECTION 5.10 as though such Participant
were a Lender.

          14.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than an amendment,
modification or waiver with respect to any Loans or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the stated interest rate or the stated rates at which fees are payable
with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Loan or Commitment, or releases from liability any
Borrower or any Guarantor or releases any substantial portion of any of the
Collateral.

          14.2.3. Benefit of Set-Off. Each Borrower agrees that each Participant
shall be deemed to have the right of set-off provided in SECTION 12.4 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent and subject to the same requirements under this Agreement (including
SECTION 13.5) as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of set-off provided in SECTION 12.4 with respect to the amount
of participating interests sold to each Participant. Lenders agree to share with
each Participant, and each Participant by exercising the right of set-off
provided in SECTION 12.4 agrees to share with each Lender, any amount received
pursuant to the exercise of its right of set-off, such amounts to be shared in
accordance with SECTION 13.5 as if each Participant were a Lender. This SECTION
14.2.3 is subject to the limitations set forth in the last sentence of SECTION
12.4.

          14.2.4. Notices. Each Lender shall be solely responsible for notifying
its Participants of any matters relating to the Loan Documents to the extent
that any such notice may be required, and neither Administrative Agent nor any
other Lender shall have any obligation, duty or liability to any Participant of
any other Lender. Without limiting the generality of the foregoing, neither
Administrative Agent nor any Lender shall have any obligation to give notices or
to provide documents or information to a Participant of another Lender.

     14.3. ASSIGNMENTS.

          14.3.1. Permitted Assignments. Subject to its compliance with SECTION
14.3.2, a Lender may, in accordance with Applicable Law, at any time assign to
any Eligible Assignee all or any part of its rights and obligations under the
Loan Documents, so long as (i) each assignment is of a constant, and not a
varying, ratable percentage of all of the transferor Lender's rights and
obligations under the Loan Documents with respect to the Loans and the LC
Obligations and, in the case of a partial assignment, is in a minimum principal
amount of $5,000,000 (unless otherwise agreed by Administrative Agent in its
discretion) and integral multiples of $1,000,000 in excess of that amount; (ii)
except in the case of an assignment in whole of a Lender's rights and
obligations under the Loan Documents or an assignment by one original signatory
to this Agreement to another such signatory, immediately after giving effect to
any assignment, the aggregate amount of the Commitments retained by the
transferor Lender shall in no event be less than $5,000,000 (unless otherwise
agreed by Administrative Agent in its discretion); and (iii) the parties to each
such assignment shall execute and deliver to Administrative Agent, for its
acceptance and


                                      -105-

recording, an Assignment and Acceptance. Nothing contained herein shall limit in
any way the right of a Lender to pledge or assign all or any portion of its
rights under this Agreement or with respect to any of the Obligations to (x) any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, provided that, in each case, no such pledge
or assignment of a security interest shall release any Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for any Lender
as a party hereto, (y) direct or indirect contractual counterparties in swap
agreements relating to the Loans, provided that any payment by Borrowers to the
assigning Lender in respect of any assigned Obligations in accordance with the
terms of this Agreement shall satisfy Borrowers' obligations hereunder in
respect of such assigned Obligations to the extent of such payment, and no such
assignment shall release the assigning Lender from its obligations hereunder.

          14.3.2. Effect; Effective Date. Upon (i) delivery to Administrative
Agent of a notice of assignment substantially in the form attached as EXHIBIT H
hereto, together with any consents required by SECTION 14.3.1, and (ii) the
recordation of the assignment on the Register and (iii) payment of a $1,500 fee
to the Administrative Agent for processing any assignment to an Eligible
Assignee that is not an Affiliate of the transferor Lender, such assignment
shall become effective. The Assignment and Acceptance shall contain a
representation and warranty by the Eligible Assignee that the assignment
evidenced thereby will not result in a non-exempt "prohibited transaction" under
Section 406 of ERISA. On and after the effective date of such assignment, such
Eligible Assignee shall for all purposes be a Lender party to this Agreement and
the other Loan Document executed by the Lenders and shall have all the rights
and obligations of a Lender under the Loan Documents to the same extent as if it
were an original party thereto, and no further consent or action by Borrowers,
Lenders or Administrative Agent shall be required to release the transferor
Lender with respect to the Commitment (or portion thereof) of such Lender and
Obligations assigned to such Eligible Assignee. Without limiting the generality
of the foregoing, such Eligible Assignee shall be subject to and bound by all of
the Loan Documents. Upon the consummation of any assignment to an Eligible
Assignee pursuant to this SECTION 14.3, the transferor Lender, Administrative
Agent and Borrowers shall make appropriate arrangements so that replacement
Notes are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Eligible Assignee, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant
to such assignment. If the transferor Lender shall have assigned all of its
interests, rights and obligations under this Agreement pursuant to SECTION
14.3.1, then (i) such transferor Lender shall no longer have any obligation to
indemnify Administrative Agent with respect to any transactions, events or
occurrences that transpire after the effective date of such assignment, (ii)
each Eligible Assignee to which such transferor Lender shall make an assignment
shall be responsible to Administrative Agent to indemnify Administrative Agent
in accordance with this Agreement with respect to transactions, events and
occurrences transpiring on and after the effective date of such assignment to
it, and (iii) the transferor Lender shall continue to be entitled to the
benefits of those provisions of the Loan Documents (including indemnities from
Obligors) that survive Full Payment of the Obligations.

          14.3.3. Dissemination of Information. Each Borrower authorizes each
Lender and Administrative Agent to disclose to any Participant, any Eligible
Assignee or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee"), and any prospective Transferee, any and
all information in Administrative Agent's or such Lender's possession concerning
each Borrower, the Subsidiaries of each Borrower or the Collateral, subject to
appropriate confidentiality undertakings on the part of such Transferee.

     14.4. TAX TREATMENT. If any interest in any Loan Document is transferred to
any Transferee that is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of SECTION 5.9.3.


                                      -106-

SECTION 15. MISCELLANEOUS

     15.1. POWER OF ATTORNEY. Each Borrower hereby irrevocably designates,
makes, constitutes and appoints Administrative Agent (and all Persons designated
by Administrative Agent) as such Borrower's true and lawful attorney (and agent
in-fact) and Administrative Agent, or Administrative Agent's designee, may,
without notice to such Borrower and in either such Borrower's or Administrative
Agent's name, but at the cost and expense of Borrowers:

          15.1.1. At such time or times as Administrative Agent or said
designee, in its discretion, may determine during the continuance of Restrictive
Trigger Event, endorse such Borrower's name on any Payment Item or other
proceeds of the Collateral (including proceeds of insurance) which come into the
possession of Administrative Agent or under Administrative Agent's control.

          15.1.2. At any time that an Event of Default exists and subject to
Applicable Law: (i) demand payment of the Accounts from the Account Debtors,
enforce payment of the Accounts by legal proceedings or otherwise, and generally
exercise all of such Borrower's rights and remedies with respect to the
collection of the Accounts; (ii) settle, adjust, compromise, discharge or
release any of the Accounts or other Collateral or any legal proceedings brought
to collect any of the Accounts or other Collateral; (iii) sell or assign any of
the Accounts and other Collateral upon such terms, for such amounts and at such
time or times as Administrative Agent deems advisable; (iv) prepare, file and
sign such Borrower's name to a proof of claim in bankruptcy or similar document
against any Account Debtor or to any notice of Lien, assignment or satisfaction
of Lien or similar document in connection with any of the Collateral; (v)
receive, open and dispose of all mail addressed to such Borrower and to notify
postal authorities to change the address for delivery thereof to such address as
Administrative Agent may designate; (vi) endorse the name of such Borrower upon
any Payment Item relating to any Collateral and deposit the same to the account
of Administrative Agent for application to the Obligations; (vii) endorse the
name of such Borrower upon any Chattel Paper, Document, Instrument, invoice,
freight bill, bill of lading or similar document or agreement relating to any
Accounts or Inventory of any Obligor and any other Collateral; (viii) use such
Borrower's stationery and sign the name of such Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (ix) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to any Collateral; (x) make and adjust claims under
policies of insurance; (xi) sign the name of such Borrower to and file any proof
of claim in an Insolvency Proceeding of any Account Debtor and on notices of
Liens; (xii) take all action as may be necessary to obtain the payment of any
letter of credit or banker's acceptance of which such Borrower is a beneficiary;
and (xiii) do all other acts and things necessary, in Administrative Agent's
determination, to fulfill such Borrower's obligations under any of the Loan
Documents.

     15.2. GENERAL INDEMNITY. Whether or not any of the transactions
contemplated by any of the Loan Documents are consummated, each Borrower agrees
to indemnify and defend the Indemnitees and hold the Indemnitees harmless from
and against any Claims that may be instituted or asserted against or are
incurred by any of the Indemnitees. Without limiting the generality of the
foregoing, this indemnity shall extend to any Claims instituted or asserted
against or incurred by any of the Indemnitees (x) under any Environmental Laws
or (other similar laws by reason of a Borrower's or any other Person's failure
to comply with laws applicable to solid or hazardous waste materials or other
toxic substances) or (y) under any Anti-Terrorism Laws, including any fines
assessed against Administrative Agent or any Lender by any Governmental
Authority as a result of conduct of an Obligor. Additionally, if any Taxes
(excluding Excluded Taxes but including any intangibles tax, stamp tax or
recording tax) shall be payable by any party on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance or recording of
any of the other Loan Documents, or the creation or repayment of any of the
Obligations hereunder, by reason of any Applicable Law now or hereafter in
effect, Borrowers shall pay (and shall promptly reimburse Administrative Agent
and Lenders for their payment of) all such Taxes, including


                                      -107-

any interest and penalties thereon, and will indemnify and hold Indemnitees
harmless from and against all liability in connection therewith.

     15.3. SURVIVAL OF AND LIMITATIONS UPON INDEMNITIES. Notwithstanding
anything to the contrary in this Agreement or any of the other Loan Documents,
the obligation of each Borrower and each Lender with respect to each indemnity
given by it in this Agreement shall survive the Full Payment of the Obligations,
the termination of any of the Commitments and the resignation of Administrative
Agent. Notwithstanding anything to the contrary contained in this Agreement, no
Borrower shall have any obligation under this Agreement to indemnify an
Indemnitee with respect to any Claim to the extent that it is determined in a
final, non-appealable judgment by a court of competent jurisdiction that such
Claim resulted from the gross negligence or willful misconduct of such
Indemnitee.

     15.4. RESERVED.

     15.5. SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

     15.6. CUMULATIVE EFFECT; CONFLICT OF TERMS. The provisions of the Other
Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Without limiting the generality of the foregoing,
the parties acknowledge that this Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters and that such limitations, tests and measures are cumulative and
each must be performed, except as may be expressly stated to the contrary in
this Agreement. Except as otherwise provided in any of the other Loan Documents
by specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.

     15.7. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement and any amendments
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument. Loan Documents may be executed
by facsimile and the effectiveness of any such Loan Documents and signatures
thereon shall, subject to Applicable Law, have the same force and effect as
manually signed originals and shall be binding on all parties thereto.
Administrative Agent may require that any such documents and signatures be
confirmed by a manually-signed original thereof, provided that the failure to
request or deliver the same shall not limit the effectiveness of any facsimile
signature.

     15.8. CONSENT. Whenever the consent of Administrative Agent or Lenders (or
any combination of Lenders) is required to be obtained under this Agreement or
any of the other Loan Documents as a condition to any action, inaction,
condition or event, each party whose consent is required shall be authorized to
give or withhold its consent in its discretion and to condition its consent upon
the giving of additional collateral security for the Obligations, the payment of
money or any other matter.

     15.9. NOTICES AND COMMUNICATIONS.

          15.9.1. Except as otherwise provided in SECTION 4.1.5, all notices,
requests and other communications to or upon a party hereto shall be in writing
(including facsimile transmission or similar writing) and shall be given to such
party at the address or facsimile number for such party on the


                                      -108-

signature pages hereof (or, in the case of a Person who becomes a Lender after
the date hereof, at the address shown on the applicable Assignment and
Acceptance by which such Person became a Lender) or at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to Administrative Agent and Borrowers in accordance with the provisions of this
SECTION 15.9.

          15.9.2. Except as otherwise provided in SECTION 4.1.5, each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified
herein for the noticed party and confirmation of receipt is received, (ii) if
given by mail, 3 Business Days after such communication is deposited in the U.S.
Mail, with first-class postage pre-paid, addressed to the noticed party at the
address specified herein, or (iii) if given by personal delivery, when duly
delivered with receipt acknowledged in writing by the noticed party. In no event
shall a voicemail message be effective as a notice, communication or
confirmation under any of the Loan Documents. Notwithstanding the foregoing, no
notice to or upon Administrative Agent or BofA pursuant to SECTIONS 2.3, 3.1.2,
4.1 or 6.2.2 shall be effective until after actually received by Administrative
Agent. Any written notice, request or demand that is not sent in conformity with
the provisions hereof shall nevertheless be effective on the date that such
notice, request or demand is actually received by the individual to whose
attention at the noticed party such notice, request or demand is required to be
sent. Any notice received by Borrower Agent shall be deemed to have been
received by all Borrowers.

          15.9.3. Electronic mail and intranet websites may be used only to
distribute routine communications, such as financial statements, Borrowing Base
Certificates and other information required by SECTION 8 and SECTION 10.1.3, and
to distribute Loan Documents for execution by the parties thereto, and may not
be used for any other purpose as effective notice under this Agreement or any of
the other Loan Documents.

Administrative Agent and Lenders shall be authorized to rely and act upon any
notices (including telephonic communications) purportedly given by or on behalf
of any Borrower even if such notices were made in a manner other than as
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified or required herein, or the terms thereof, as understood
by the recipient, varied from any confirmation thereof. Borrowers jointly and
severally agree to indemnify and defend each Indemnitee from all losses, costs,
expenses and liabilities resulting from the reliance by any such Indemnitee on
each telephone communication purportedly given by or on behalf of any Borrower
other than to the extent constituting gross negligence or willful misconduct of
the Indemnitee.

     15.10. PERFORMANCE OF BORROWERS' OBLIGATIONS. If any Borrower shall fail to
discharge any covenant, duty or obligation hereunder or under any of the other
Loan Documents, Administrative Agent may, in its discretion at any time or from
time to time during the continuance of an Event of Default and subject to
Applicable Law, for such Borrower's account and at Borrowers' expense, pay any
amount or do any act required of Borrowers hereunder or under any of the other
Loan Documents or otherwise lawfully requested by Administrative Agent to (i)
enforce any of the Loan Documents or collect any of the Obligations, (ii)
preserve, protect, insure or maintain or realize upon any of the Collateral, or
(iii) preserve, defend, protect or maintain the validity or priority of
Administrative Agent's Liens in any of the Collateral, including the payment of
any judgment against any Borrower. All payments that Administrative Agent may
make under this Section and all reasonable out-of-pocket costs and expenses
(including Extraordinary Expenses) that Administrative Agent pays or incurs in
connection with any action taken by it hereunder shall be reimbursed to
Administrative Agent by Borrowers, ON DEMAND, with interest from the date such
payment is made or such costs or expenses are incurred to the date of payment
thereof at the Default Rate applicable for Revolver Loans that are Base Rate
Loans. Any payment made or other action taken by Administrative Agent under this
Section shall be without prejudice to any right to assert, and without waiver
of, an Event of Default hereunder and to without prejudice to Administrative
Agent's right proceed thereafter as provided herein or in any of the other Loan
Documents.


                                      -109-

     15.11. CREDIT INQUIRIES. Each Borrower hereby authorizes and permits
Administrative Agent and Lenders (but Administrative Agent and Lenders shall
have no obligation) to respond to usual and customary credit inquiries from
third parties concerning such Borrower or any of its Subsidiaries.

     15.12. TIME OF ESSENCE. Time is of the essence of this Agreement, the Other
Agreements and the Security Documents.

     15.13. INDULGENCES NOT WAIVERS. Administrative Agent's or any Lender's
failure at any time or times hereafter, to require strict performance by
Borrowers of any provision of this Agreement shall not waive, affect or diminish
any right of Administrative Agent or any Lender thereafter to demand strict
compliance and performance therewith.

     15.14. ENTIRE AGREEMENT; EXHIBITS AND SCHEDULES. This Agreement and the
other Loan Documents, together with all other instruments, agreements and
certificates executed by the parties pursuant to any Loan Document, embody the
entire understanding and agreement between the parties hereto and thereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements, understandings and inducements, whether express or implied, oral or
written, regarding the same subject matter. Each of the Exhibits and each of the
Schedules attached hereto are incorporated into this Agreement and by this
reference made a part hereof.

     15.15. INTERPRETATION. No provision of this Agreement or any of the other
Loan Documents shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial authority by
reason of such party having, or being deemed to have, structured, drafted or
dictated such provision. The paragraph and section headings are for convenience
of reference only and shall not affect the substantive meaning of any provision
of this Agreement.

     15.16. OBLIGATIONS OF LENDERS SEVERAL. The Obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
Commitment of any other Lender. Nothing contained in this Agreement and no
action taken by Lenders pursuant hereto shall be deemed to constitute Lenders to
be a partnership, association, joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled, to the extent not otherwise
restricted hereunder, to protect and enforce its rights arising out of this
Agreement and any of the other Loan Documents, and it shall not he necessary for
Administrative Agent or any other Lender to be joined as an additional party in
any proceeding for such purpose.

     15.17. CONFIDENTIALITY. Administrative Agent and Lenders each agrees to
take normal and reasonable precautions to maintain the confidentiality of any
Information (defined below) for a period of 24 months following the Commitment
Termination Date, except that Administrative Agent and any Lender may disclose
such information (i) to their respective Affiliates and individuals employed or
retained by Administrative Agent or such Lender who are or are expected to
become engaged in evaluating, approving, structuring, administering or otherwise
giving professional advice with respect to any of the Loans or Collateral,
including any of their respective legal counsel, auditors or other professional
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (ii) to any party to this Agreement from
time to time; (iii) pursuant to Applicable Law, the order of any court or
administrative agency provided, however, that, prior to disclosure pursuant to
this clause (iii), reasonable efforts shall be made to give the Borrowers notice
of request for disclosure and the Borrowers shall be given a reasonable
opportunity, at its expense, to prevent the disclosure or have the Information
maintained as confidential under a protective order; (iv) upon the request or
demand of any regulatory agency or other Governmental Authority having
jurisdiction over Administrative Agent or such Lender or in accordance with
Administrative Agent's or Lender's regulatory compliance policies,


                                      -110-

(v) to the extent reasonably required in connection with any litigation (with
respect to any of the Loan Documents or any of the transactions contemplated
thereby) to which Administrative Agent, any Lender or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedies hereunder, (vii) to any actual or proposed
Participant, Eligible Assignee or any other Transferee of all or part of a
Lender's rights hereunder so long as such Person has agreed in writing to be
bound by the provisions of this Section, (viii) to the National Association of
Insurance Commissioners or any similar organization or to any nationally
recognized rating agency that requires access to information about Lender's
portfolio in connection with ratings issued with respect to such Lender, or (ix)
with the consent of Borrowers. As used in this SECTION 15.17, "Information"
means all information received from the Obligors relating to an Obligor or any
of its Subsidiaries or their business, other than any such information that is
available to Agent or Lenders on a nonconfidential basis prior to disclosure by
an Obligor.

     15.18. CERTIFICATIONS REGARDING INDENTURES. Each Borrower hereby certifies
to Administrative Agent and Lenders that neither the execution or performance of
this Agreement by Borrowers nor the incurrence of any Debt pursuant to the terms
of this Agreement or any of the other Loan Documents by Borrowers violates any
of the Indentures, including (i) Section 4.09 of the Senior Subordinated Note
Indenture, or (ii) Sections 4.09 or 4.12 of the Senior Note Indenture. Each
Borrower further certifies to Administrative Agent and Lenders that this
Agreement constitutes a "Credit Agreement" under each of the foregoing
Indentures, that all Loans collectively constitute "Senior Bank Debt" under the
Senior Subordinated Notes Indenture and "Permitted Indebtedness" under the
"Credit Agreement" and that the Liens of Administrative Agent hereunder are
permitted under each of the Indentures.

     15.20. GOVERNING LAW. This Agreement has been negotiated, executed and
delivered, and shall be deemed to have been made, in New York, New York, and
shall be governed by and construed in accordance with the internal laws (but
without regard to conflict of law principles) of the State of New York, but
giving effect to federal laws relating to national banks.

     15.21. USA PATRIOT ACT NOTICE. Administrative Agent hereby notifies
Borrowers that pursuant to the requirements of the USA Patriot Act,
Administrative Agent is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of
each Borrower and other information that will allow Administrative Agent to
identify each Borrower in accordance with the USA Patriot Act.

     15.22. CONSENT TO FORUM. Each Borrower hereby consents to the non-exclusive
jurisdiction of any United States federal court sitting in or with direct or
indirect jurisdiction over the Southern District of New York or any New York
state or superior court sitting in New York County, New York, in any action,
suit or other proceeding arising out of or relating to this Agreement or any of
the other Loan Documents and each Borrower irrevocably agrees that all claims
and demands in respect of any such action, suit or proceeding may be heard and
determined in any such court and irrevocably waives any objection it may now or
hereafter have as to the venue of any such action, suit or proceeding brought in
any such court or that such court is an inconvenient forum. Nothing herein shall
limit the right of Administrative Agent or any Lender to bring proceedings
against any Borrower in the courts of any other jurisdiction. Any judicial
proceeding commenced by any Borrower against Administrative Agent, BofA, any
Lender or any holder of any of the Obligations, or any Affiliate of
Administrative Agent, BofA, any Lender or any holder of any Obligations,
involving, directly or indirectly, any matter in any way arising out of, related
to or connected with any Loan Document shall be brought only in a United States
federal court sitting in or with direct jurisdiction over the Southern District
of New York or any New York state or superior court sitting in New York County,
New York. Nothing in this Agreement shall be deemed to preclude the enforcement
by Administrative Agent of any judgment or order obtained in such forum or


                                     -111-

the taking of any action under this Agreement to enforce same in any other
appropriate forum or jurisdiction.

     15.23. WAIVERS BY BORROWERS. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, EACH BORROWER WAIVES (I) THE RIGHT TO TRIAL BY JURY (WHICH ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY ALSO WAIVE) IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS,
THE OBLIGATIONS OR THE COLLATERAL; (II) PRESENTMENT, DEMAND AND PROTEST AND
NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE,
COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER,
ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES
AT ANY TIME HELD BY ADMINISTRATIVE AGENT ON WHICH SUCH BORROWER MAY IN ANY WAY
BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT MAY DO
IN THIS REGARD IN CONNECTION WITH AN ENFORCEMENT ACTION BY ADMINISTRATIVE AGENT;
(III) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND
OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING
ADMINISTRATIVE AGENT TO EXERCISE ANY OF ADMINISTRATIVE AGENT'S REMEDIES; (IV)
THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (V) ANY CLAIM
AGAINST ADMINISTRATIVE AGENT OR ANY LENDER, ON ANY THEORY OF LIABILITY, FOR
SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS OPPOSED TO
DIRECT OR ACTUAL DAMAGES) IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY
OTHER THEORY OF LIABILITY ARISING OUT OF, OR THE TAKING OF ANY ENFORCEMENT
ACTION; OR RELATED TO ANY OF THE LOAN DOCUMENTS, ANY TRANSACTION THEREUNDER OR
THE USE OF THE PROCEEDS OF ANY LOANS; AND (VI) NOTICE OF ACCEPTANCE HEREOF. EACH
BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO
ADMINISTRATIVE AGENT'S AND LENDERS' ENTERING INTO THIS AGREEMENT AND THAT
ADMINISTRATIVE AGENT AND LENDERS ARE RELYING UPON THE FOREGOING WAIVERS IN ITS
FUTURE DEALINGS WITH BORROWERS. EACH BORROWER WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

[Remainder of page intentionally left blank; signatures begin on following page]


                                      -112-

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on
the day and year specified at the beginning of this Agreement.

                                        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]

                                        PARKWAY IMAGING CENTER, LLC


                                        By: /s/ Brian G. Drazba
                                            ------------------------------------
                                        Name: Brian G. Drazba
                                        Title: Manager


                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        DIAGNOSTIC SOLUTIONS 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]

                                        MAXUM HEALTH SERVICES CORP.


                                        By: /s/ Mitch C. Hill
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer


                                        By: /s/ Marilyn MacNiven Young
                                            ------------------------------------
                                            MARILYN MACNIVEN-YOUNG, Secretary


                                        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]

                                        MESI 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

                                        Address for all Borrowers:

                                        c/o InSight Health Services Corp.
                                        26250 Enterprise Court
                                        Suite 100
                                        Lake Forest, California 92630
                                        Attention: Mitch C. Hill
                                        Telecopier: (949) 462-0042

                                        With copies to:

                                        InSight Health Services Corp.
                                        26250 Enterprise Court
                                        Suite 100
                                        Lake Forest, California 92630
                                        Attention: General Counsel
                                        Telecopier: (949) 462-3703

                                        Kaye Scholer LLP
                                        425 Park Avenue
                                        New York, New York 10022-3598
                                        Attention: Ed Gabbay
                                        Telecopier: (212) 836-6476

                    [Signatures continued on following page]

                                        AGENT:

                                        BANK OF AMERICA, N.A.,
                                        as Administrative Agent


                                        By: /s/ Elizabeth L. Walker
                                            ------------------------------------
                                        Name: Elizabeth L. Walker
                                        Title: SVP

                                        Address for Agent:

                                        Bank of America, N.A., as
                                        Administrative Agent
                                        300 Galleria Parkway
                                        Suite 800
                                        Atlanta, Georgia 30339
                                        Attention: Loan Administration Manager
                                        Telecopier: (770) 859-2483

                                        With a copy to:

                                        Parker, Hudson, Rainer & Dobbs LLP
                                        1500 Marquis Two Tower
                                        285 Peachtree Center Avenue, N.E.
                                        Atlanta, Georgia 30303
                                        Attention: C. Edward Dobbs
                                        Telecopier: (404) 522-8409

                    [Signatures continued on following page]

                                        LENDER:

                                        BANK OF AMERICA, N.A.


                                        By: /s/ Elizabeth L. Walker
                                            ------------------------------------
                                        Name: Elizabeth L. Walker
                                        Title: SVP

                                        Address for Lender:

                                        Bank of America, N.A., as Lender
                                        300 Galleria Parkway
                                        Suite 800
                                        Atlanta, Georgia 30339
                                        Attention: Loan Administration Manager
                                        Telecopier: (770) 859-2483

                                        With a copy to:

                                        Parker, Hudson, Rainer & Dobbs LLP
                                        1500 Marquis Two Tower
                                        285 Peachtree Center Avenue, N.E.
                                        Atlanta, Georgia 30303
                                        Attention: C. Edward Dobbs
                                        Telecopier: (404) 522-8409

                                    EXHIBIT A

                              FORM OF REVOLVER NOTE

                                                              September __, 2005
U.S. $30,000,000.00                                           New York, New York

     FOR VALUE RECEIVED, the undersigned, INSIGHT HEALTH SERVICES CORP., a
Delaware corporation (hereinafter referred to as "Borrower Agent"), and those
subsidiaries of Borrower Agent listed on the signature pages hereto (Borrower
Agent and each of its subsidiaries listed on the signature pages hereto, being
referred to collectively herein as "Borrowers," and individually as a
"Borrower"), hereby unconditionally, and jointly and severally, promise to pay
to the order of _____________________ (herein, together with any subsequent
holder hereof, called the "Holder") the principal sum of $30,000,000 or such
lesser sum as may constitute Holder's Pro Rata share of the outstanding
principal amount of all Revolver Loans pursuant to the terms of the Loan
Agreement (as defined below) on the date on which such outstanding principal
amounts become due and payable pursuant to SECTION 5.2 of the Loan Agreement, in
strict accordance with the terms thereof. Borrowers likewise unconditionally,
and jointly and severally, promise to pay to Holder interest from and after the
date hereof on the Holder's Pro Rata share of the outstanding principal amount
of Revolver Loans at such interest rates, payable at such times, and computed in
such manner as are specified in SECTION 3.1 of the Loan Agreement, in strict
accordance with the terms thereof.

     This Revolver Note ("Note") is issued pursuant to, and is one of the
"Revolver Notes" referred to in, the Amended and Restated Loan and Security
Agreement dated September 22, 2005 (as the same may be amended from time to
time, the "Loan Agreement"), among Borrowers, Bank of America, N.A., as
collateral and administrative agent (in such capacity, together with its
successors in such capacity, the "Administrative Agent") for itself and the
financial institutions from time to time parties thereto as lenders ("Lenders"),
and such Lenders, and Holder is and shall be entitled to all benefits thereof
and of all Loan Documents executed and delivered in connection therewith. This
Note is subject to certain restrictions on transfer or assignment as provided in
the Loan Agreement. All capitalized terms used herein, unless otherwise defined
herein, shall have the meanings ascribed to such terms in the Loan Agreement.

     The repayment of the principal balance of this Note is subject to the
provisions of SECTION 5.2 of the Loan Agreement. The entire unpaid principal
balance and all accrued interest on this Note shall be due and payable
immediately upon the termination of the Commitments as set forth in SECTION 6.2
of the Loan Agreement.

     All payments of principal and interest shall be made in Dollars in
immediately available funds to Administrative Agent for Holder's benefit as
specified in the Loan Agreement.

     Upon or after the occurrence of an Event of Default and for so long as such
Event of Default exists, the principal balance and all accrued interest of this
Note may be declared (or shall become) due and payable in the manner and with
the effect provided in the Loan Agreement, and the unpaid principal balance
hereof shall bear interest at the Default Rate as and when provided in SECTION
3.1.5 of the Loan Agreement. Borrowers jointly and severally agree to pay, and
save Holder harmless against, any liability for the payment of, all costs and
expenses, including, but not limited to, reasonable attorneys' fees, if this
Note is collected by or through an attorney-at-law.

     All principal amounts of Revolver Loans made by Holder to Borrowers
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and

shall continue to be owing by Borrowers until paid in accordance with the terms
of this Note and the Loan Agreement.

     In no contingency or event whatsoever, whether by reason of advancement of
the proceeds hereof or otherwise, shall the amount paid or agreed to be paid to
Holder for the use, forbearance or detention of money advanced hereunder exceed
the highest lawful rate permissible under any law which a court of competent
jurisdiction may deem applicable hereto; and, in the event of any such payment
inadvertently paid by Borrowers or inadvertently received by Holder, such excess
sum shall be, at Borrowers' option, returned to Borrowers forthwith or credited
as a payment of principal, but shall not be applied to the payment of interest.
It is the intent hereof that Borrowers not pay or contract to pay, and that
Holder not receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by Borrowers under
Applicable Law.

     Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.

     Wherever possible each provision of this Note shall be interpreted in such
a manner as to be effective and valid under Applicable Law, but if any provision
of this Note shall be prohibited or invalid under Applicable Law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of Holder in the exercise of any right or
remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in
any default, nor shall any single or partial exercise by Holder of any right or
remedy preclude any other right or remedy. Holder, at its option, may enforce
its rights against any Collateral securing this Note without Administrative
Agent or Holder enforcing its rights against any Borrower, any Guarantor of the
indebtedness evidenced hereby or any other property or indebtedness due or to
become due to any Borrower. Each Borrower agrees that, without releasing or
impairing any Borrower's liability hereunder, Holder or Administrative Agent may
at any time release, surrender, substitute or exchange any Collateral securing
this Note and may at any time release any party primarily or secondarily liable
for the indebtedness evidenced by this Note.

     The rights of Holder and obligations of Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of New York. This Note is
intended to take effect as an instrument under seal under New York law.

     This Note amends and restates the "Revolving Notes" under (and as defined
in) the Existing Credit Agreement (the "Prior Notes"). Nothing contained herein
is intended to constitute a novation or an accord and satisfaction of the Prior
Notes.


                                      -2-

     IN WITNESS WHEREOF, each Borrower has caused this Note to be executed under
seal and delivered by its duly authorized officers on the date first above
written.

                                        BORROWERS:

                                        INSIGHT HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                            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:
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer


                                        MRI ASSOCIATES, L.P.

                                        By: InSight Health Corp., as the general
                                            partner


                                        By:
                                            ------------------------------------
                                            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:
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer

                    [Signatures continued on following page]


                                      -3-

                                        PARKWAY IMAGING CENTER, LLC


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        INSIGHT HEALTH CORP.
                                        OPEN MRI, INC.
                                        MAXUM HEALTH CORP.
                                        RADIOSURGERY CENTERS, INC.
                                        DIAGNOSTIC SOLUTIONS 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:
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer

                    [Signatures continued on following page]


                                      -4-

                                        MAXUM HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer


                                        By:
                                            ------------------------------------
                                            MARILYN MACNIVEN-YOUNG, Secretary


                                        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:
                                            ------------------------------------
                                            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:
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer

                    [Signatures continued on following page]


                                      -5-

                                        MESI 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:
                                            ------------------------------------
                                            MITCH C. HILL, Executive Vice
                                            President and Chief Financial
                                            Officer


                                      -6-

                                    EXHIBIT C

                    FORM OF NOTICE OF CONVERSION/CONTINUATION

                           Date ______________, ______

Bank of America, N.A., as Administrative Agent
300 Galleria Parkway
Suite 800
Atlanta, Georgia 30339
Attention: Loan Administration Officer

     Re:  Amended and Restated Loan and Security Agreement dated September 22,
          2005, by and among INSIGHT HEALTH SERVICES CORP., a Delaware
          corporation (hereinafter referred to as "Borrower Agent"), and those
          subsidiaries of Borrower Agent listed on the signature pages thereto
          (Borrower Agent and each of its subsidiaries listed on the signature
          pages thereto, being referred to collectively herein as "Borrowers,"
          and individually as a "Borrower") and BANK OF AMERICA, N.A., as
          collateral and administrative agent for certain Lenders from time to
          time parties thereto, and such Lenders (as at any time amended, the
          "Loan Agreement")

Gentlemen:

     This Notice of Conversion/Continuation is delivered to you pursuant to
SECTION 3.1.2 of the Loan Agreement. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings attributable thereto in
the Loan Agreement. Borrowers hereby give notice of their request as follows:

Check as applicable:

     [ ]  A conversion of Loans from one Type to another, as follows:

          (i)  The requested date of the proposed conversion is ______________,
               20__ (the "Conversion Date");

          (ii) The Type of Loans to be converted pursuant hereto are presently
               __________________ [select either LIBOR Loans or Base Rate Loans]
               in the principal amount of $_____________ outstanding as of the
               Conversion Date;

          (iii) The portion of the aforesaid Loans to be converted on the
               Conversion Date is $_____________ (the "Conversion Amount");

          (iv) The Conversion Amount is to be converted into a ____________
               [select either a LIBOR Loan or a Base Rate Loan] (the "Converted
               Loan") on the Conversion Date.

          (v)  [In the event a Borrower selects a LIBOR Loan:] Borrowers hereby
               request that the Interest Period for such Converted Loan be for a
               duration of _____ [insert length of Interest Period].

     [ ]  A continuation of LIBOR Loans for new Interest Period, as follows:

          (i)  The requested date of the proposed continuation is
               _______________, 20__ (the "Continuation Date");

          (ii) The aggregate amount of the LIBOR Loans subject to such
               continuation is $________________;

          (iii) The duration of the selected Interest Period for the LIBOR Loans
               which are the subject of such continuation is: _____________
               [select duration of applicable Interest Period];

     Each Borrower hereby ratifies and reaffirms all of its liabilities and
obligations under the Loan Documents and certifies that no Event of Default
exists on the date hereof.

     Borrowers have caused this Notice of Conversion/Continuation to be executed
and delivered by their duly authorized representative, this _______ day of
______________, 20__.

                                        INSIGHT HEALTH SERVICES CORP.
                                        ("Borrower Agent")


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


                                      -2-

                                    EXHIBIT D

                           FORM OF NOTICE OF BORROWING

                            Date ______________, 20__

Bank of America, N.A., as Administrative Agent
300 Galleria Parkway
Suite 800
Atlanta, Georgia 30339
Attention: Loan Administration Officer

     Re:  Amended and Restated Loan and Security Agreement dated September 22,
          2005, by and among INSIGHT HEALTH SERVICES CORP., a Delaware
          corporation (hereinafter referred to as "Borrower Agent"), and those
          subsidiaries of Borrower Agent listed on the signature pages thereto
          (Borrower Agent and each of its subsidiaries listed on the signature
          pages thereto, being referred to collectively herein as "Borrowers,"
          and individually as a "Borrower"), and BANK OF AMERICA, N.A., as
          collateral and administrative agent for certain Lenders from time to
          time parties thereto, and such Lenders (as at any time amended, the
          "Loan Agreement")

Gentlemen:

     This Notice of Borrowing is delivered to you pursuant to SECTION 4.1 of the
Loan Agreement. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Loan Agreement. Borrowers
hereby request a Revolver Loan in the aggregate principal amount of
$______________, to be made on _____________, _____, and to consist of:

     Check as applicable: [ ] Base Rate Loans in the aggregate principal amount
                          of $_____________

                          [ ] LIBOR Loans in the aggregate principal amount of
                          $___________, with Interest Periods as follows:

                              (i)  As to $_____________, an Interest Period of
                                   ______ month(s);

                              (ii) As to $_____________, an Interest Period of
                                   ______ months;

                              (iii) As to $_____________, an Interest Period of
                                   ______ months.

     Each Borrower hereby ratifies and reaffirms all of its liabilities and
obligations under the Loan Documents and hereby certifies that no Default or
Event of Default exists on the date hereof.

     Borrowers have caused this Notice of Borrowing to be executed and delivered
by their duly authorized representative, this ______ day of _____________, 20__.

                                        INSIGHT HEALTH SERVICES CORP.


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                    EXHIBIT E

                             COMPLIANCE CERTIFICATE

                            [Letterhead of Borrower]

                            __________________, 20__

Bank of America, N.A., as Administrative Agent
300 Galleria Parkway, N.W.
Suite 800
Atlanta, Georgia 30339

     The undersigned, the chief financial officer of INSIGHT HEALTH SERVICES
CORP., a Delaware corporation (hereinafter referred to as "Borrower Agent"), and
those subsidiaries of Borrower Agent listed on the signature pages thereto
(Borrower Agent and each of its subsidiaries listed on the signature pages
thereto, being referred to collectively herein as "Borrowers," and individually
as a "Borrower"), gives this certificate to BANK OF AMERICA, N.A.
("Administrative Agent") in accordance with the requirements of SECTION 10.1.3
of that certain Amended and Restated Loan and Security Agreement dated September
22, 2005, among Borrowers, Administrative Agent and the Lenders referenced
therein ("Loan Agreement"). Capitalized terms used in this Certificate, unless
otherwise defined herein, shall have the meanings ascribed to them in the Loan
Agreement.

          1. Based upon my review of the balance sheets and statements of income
of Borrowers and their Subsidiaries for the [Fiscal Year] [quarterly period]
ending __________________, 20__, copies of which are attached hereto, I hereby
certify that:

          (a) If a Financial Covenant Trigger Event has occurred and is
     continuing, Fixed Charge Coverage Ratio is ____ to ____;

          (b) Liquidity is $____________;

          I    Capital Expenditures during the period and for the Fiscal Year to
               date total $_________ for Borrowers.

          2. No Default exists on the date hereof, other than: _________________
___________________________________________________________________ [if none, so
state]; and

          3. No Event of Default exists on the date hereof, other than _________
_______________________________________________________________ [if none, so
state].

          4. As of the date hereof, each Borrower is current in its payment of
all accrued rent and other charges to Persons who own or lease any premises
where any of the Collateral is located, and there are no pending disputes or
claims regarding any Borrower's failure to pay or delay in payment of any such
rent or other charges.

          5. Attached hereto is a schedule showing the calculations that support
Borrowers' compliance [non-compliance] with the financial covenants, as shown
above.

                                        Very truly yours,


                                        ----------------------------------------
                                        Chief Financial Officer

                                    EXHIBIT G

                        FORM OF ASSIGNMENT AND ACCEPTANCE

Dated as of ______, 20__

     Reference is made to the Amended and Restated Loan and Security Agreement
dated September 22, 2005 (at any time amended, the "Loan Agreement"), among
INSIGHT HEALTH SERVICES CORP. ("Borrower Agent"), those subsidiaries of Borrower
Agent listed on the signature pages thereto (Borrower Agent and each of its
subsidiaries listed on the signature pages thereto being referred to
collectively as "Borrowers" and individually as a "Borrower"), BANK OF AMERICA,
N.A., a national bank, in its capacity as collateral and administrative agent
("Administrative Agent") for the financial institutions from time to time party
to the Loan Agreement ("Lenders"), and such Lenders. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Loan Agreement.

     ______________________________________ (the "Assignor") and
______________________________________ (the "Assignee") agree as follows:

     1. Assignor hereby assigns to Assignee and Assignee hereby purchases and
assumes from Assignor (i) a principal amount of $________ of the outstanding
Revolver Loans held by Assignor and $___________ of participations of Assignor
in LC Obligations (which amount[S], according to the records of Administrative
Agent, represent[S] _______% of the total principal amount of outstanding
Revolver Loans and LC Obligations) and (ii) a principal amount of $__________ of
Assignor's Revolver Commitment (which amount includes Assignor's outstanding
Revolver Loans being assigned to Assignee pursuant to clause (i) above and
which, according to the records of Administrative Agent, represents (____%) of
the total Revolver Commitments of Lenders under the Loan Agreement) (the
"Assigned Interest"), together with an interest in the Loan Documents
corresponding to the Assigned Interest. This Agreement shall be effective from
the date on which the following have been satisfied (the "Assignment Effective
Date"): (x) Assignor receives the principal amount of the Assigned Interest in
the Loans, if any; (y) Administrative Agent receives a copy of this Agreement
duly executed by Assignor and Assignee; and (z) Administrative Agent records the
assignment in the Register. From and after the Assignment Effective Date,
Assignee hereby expressly assumes, and undertakes to perform, all of Assignor's
obligations in respect of Assignor's Commitments to the extent, and only to the
extent, of Assignee's Assigned Interest, and all principal, interest, fees and
other amounts which would otherwise be payable to or for Assignor's account in
respect of the Assigned Interest shall be payable to or for Assignee's account,
to the extent such amounts have accrued subsequent to the Assignment Effective
Date.

     2. Assignor (i) represents that as of the date hereof, the aggregate of its
Commitments under the Loan Agreement (without giving effect to assignments
thereof, which have not yet become effective) is $__________, and the
outstanding balance of its Loans and participations in LC Obligations (unreduced
by any assignments thereof, which have not yet become effective) is $__________;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document furnished pursuant thereto, other than that
Assignor is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim; [and]

(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrowers, the performance or observance
by Borrowers of any of their obligations under the Loan Agreement or any of the
Loan Documents[; and (iv) attaches the Notes held by it and requests that
Administrative Agent exchange such Notes for new Notes payable to Assignee and
the Assignor in the principal amounts set forth on Schedule A hereto].

     3. Assignee (i) represents and warrants that it is legally authorized to
enter into this Assignment and Acceptance; (ii) confirms that it has received a
copy of the Loan Agreement, together with copies of the most recent financial
statements delivered pursuant to SECTION 10.1.3 thereof, and copies of such
other Loan Documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(iii) agrees that it shall, independently and without reliance upon the Assignor
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement; (iv) confirms that it is eligible to become an
Assignee; (v) appoints and authorizes Administrative Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Agreement as
are delegated to Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; (vi) agrees that it will strictly observe and
perform all the obligations that are required to be performed by it as a
"Lender" under the terms of the Loan Agreement and the other Loan Documents;
(vii) agrees that it will keep confidential all information with respect to
Borrowers furnished to it by Borrowers or the Assignor to the extent provided in
the Loan Agreement; and (vii) represents and warrants that the assignment
evidenced hereby will not result in a non-exempt "prohibited transaction" under
Section 406 of ERISA.

     4. Assignee acknowledges and agrees that it will not sell or otherwise
dispose of the Assigned Interest or any portion thereof, or grant any
participation therein, in a manner which, or take any action in connection
therewith which, would violate the terms of any of the Loan Documents.

     5. This Agreement and all rights and obligations shall be interpreted in
accordance with and governed by the laws of the State of New York. If any
provision hereof would be invalid under Applicable Law, then such provision
shall be deemed to be modified to the extent necessary to render it valid while
most nearly preserving its original intent; no provision hereof shall be
affected by another provision's being held invalid.

     6. Each notice or other communication hereunder shall be in writing, shall
be sent by messenger, by telecopy or facsimile transmission or by first-class
mail, shall be deemed given when sent and shall be sent as follows:

          (a)  If to Assignee, to the following address (or to such other
               address as Assignee may designate from time to time):

               _________________________

               _________________________

               _________________________


          (b)  If to Assignor, to the following address (or to such other
               address as Assignor may designate from time to time):

               _________________________

               _________________________

               _________________________


                                      -2-

     Payments hereunder shall be made by wire transfer of immediately available
Dollars as follows:

     If to Assignee, to the following account (or to such other account as
Assignee may designate from time to time):

               _________________________

               ABA No.__________________

               _________________________

               Account No.______________

               Reference: ______________________

     If to Assignor, to the following account (or to such other account as
Assignor may designate from time to time):

               _________________________

               _________________________

               _________________________

               ABA No.___________________

               For Account of:___________

               Reference:  _____________________

     IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed and delivered by their respective duly authorized
officers, as of the date first above written.

                                        ----------------------------------------
                                        ("Assignor")


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


                                        ----------------------------------------
                                        ("Assignee")


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


                                      -3-

                     SCHEDULE A TO ASSIGNMENT AND ACCEPTANCE

                                    EXHIBIT H

                                 FORM OF NOTICE

     Reference is made to (i) the Amended and Restated Loan and Security
Agreement dated September 22, 2005 (as at any time amended, the "Loan
Agreement") among INSIGHT HEALTH SERVICES CORP. ("Borrower Agent"), those
subsidiaries of Borrower Agent listed on the signature pages thereto (Borrower
Agent and each of its subsidiaries listed on the signature pages thereto being
referred to collectively as "Borrowers" and individually as a "Borrower"), BANK
OF AMERICA, N.A., a national bank, in its capacity as collateral and
administrative agent ("Administrative Agent") for the financial institutions
from time to time party to the Loan Agreement ("Lenders"), and such Lenders, and
(ii) the Assignment and Acceptance dated as of ____________, 20__ (the
"Assignment Agreement") between __________________ (the "Assignor") and
____________________ (the "Assignee"). Except as otherwise defined herein,
capitalized terms used herein which are defined in the Loan Agreement are used
herein with the respective meanings specified therein.

     The Assignor hereby notifies Borrowers and Administrative Agent of
Assignor's intent to assign to Assignee pursuant to the Assignment Agreement a
principal amount of (i) $________ of the outstanding Revolver Loans and
participations in LC Obligations held by Assignor, (ii) $___________ of
Assignor's Revolver Commitment (which amount includes the Assignor's outstanding
Revolver Loans being assigned to Assignee pursuant to clause (i) above),
together with an interest in the Loan Documents corresponding to the interest in
the Loans and Commitments so assigned. Pursuant to the Assignment Agreement,
Assignee has expressly assumed all of Assignor's obligations under the Loan
Agreement to the extent of the Assigned Interest (as defined in the Assignment
Agreement).

     For purposes of the Loan Agreement, Administrative Agent shall deem
Assignor's share of the Revolver Commitment to be reduced by $_________ and
Assignee's share of the Revolver Commitment [and Term Loan Commitment] to be
increased by $_________.

     The address of the Assignee to which notices, information and payments are
to be sent under the terms of the Loan Agreement is:

                            _________________________

                            _________________________

                            _________________________

                            _________________________

     Assignee's LIBOR Lending Office address is as follows:

                            _________________________

                            _________________________

                            _________________________

                            _________________________

     This Notice is being delivered to Borrowers and Administrative Agent
pursuant to SECTION 14.3 of the Loan Agreement. Please acknowledge your receipt
of this Notice by executing and returning to Assignee and Assignor a copy of
this Notice.

     IN WITNESS WHEREOF, the undersigned have caused the execution of this
Notice, as of _________________, 20__.

                                        ----------------------------------------
                                        ("Assignor")


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


                                        ----------------------------------------
                                        ("Assignee")


                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


ACKNOWLEDGED AND AGREED TO
AS OF THE DATE SET FORTH ABOVE:

BORROWERS:*

- -------------------------------------


By:
    ---------------------------------
Title:
       ------------------------------


- -------------------------------------


By:
    ---------------------------------
Title:
       ------------------------------


- -------------------------------------


By:
    ---------------------------------
Title:
       ------------------------------


*    No signature required by any Borrower when an Event of Default exists.

BANK OF AMERICA, N.A.,
as Administrative Agent


By:
    ---------------------------------
Title:
       ------------------------------


                                      -2-

                                    EXHIBIT I

                            LETTER OF CREDIT REQUEST

Bank of America, N.A., as Administrative Agent
The Treasury and International Services Group,
GA1-006-10-32
600 Peachtree Street. NE, 10th Floor
Atlanta, Georgia 30308
Attention: Ms. Sue Sewell

     This Letter of Credit Request is delivered to you pursuant to the Amended
and Restated Loan and Security Agreement, dated September 22, 2005, among
INSIGHT HEALTH SERVICES CORP., a Delaware corporation (hereinafter referred to
as "Borrower Agent"), and those subsidiaries of Borrower Agent listed on the
signature pages thereto (Borrower Agent and each of its subsidiaries listed on
the signature pages thereto, being referred to collectively herein as
"Borrowers," and individually as a "Borrower"), and various financial
institutions as are, or may become, parties thereto (collectively, the
"Lenders"), BANK OF AMERICA, N. A., as collateral and administrative agent (in
such capacity, the "Administrative Agent") (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Loan
Agreement"). Unless otherwise defined herein, terms used herein have the
meanings assigned to them in the Loan Agreement.

     Borrowers hereby request Issuing Bank to issue a Letter of Credit, as
follows:

     (1)  Borrower's/Account Party's Name             ______________________

     (2)  Amount of Letter of Credit:                 $_____________________

     (3)  Issuance Date:                              ______________________

     (4)  Beneficiary's Name:                         ______________________

     (5)  Beneficiary's Address:                      ______________________

                                                      ______________________

                                                      ______________________

                                                      ______________________

     (6)  Expiry Date:                                ______________________

     (7)  Draw Conditions:                            ______________________

                                                      ______________________

                                                      ______________________

                                                      ______________________

     (8)  Single draw [ ] or Multiple draw [ ]        ______________________

     (9)  Purpose of Letter of Credit:                ______________________

                                                      ______________________

                                                      ______________________

                                                      ______________________

     Attached hereto is Issuing Bank's form of LC Application, completed with
the details of the Letter of Credit requested herein.

     Each Borrower hereby certifies that each of the LC Conditions is now, and
will on the date of issuance of the Letter of Credit, be satisfied in all
respects and that no Default or Event of Default exists. Each Borrower hereby
ratifies and reaffirms all of the Loan Documents and Obligations arising
thereunder.

     IN WITNESS WHEREOF, each Borrower has caused this Letter of Credit Request
to be executed and delivered by its duly authorized officer, this ___ day of
_________________, 20__.

                                        INSIGHT HEALTH SERVICES CORP.
                                        ("Borrower Agent")


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      -2-

                                    EXHIBIT J

                    PORTFOLIO INTEREST EXEMPTION CERTIFICATE

     Reference is hereby made to the Amended and Restated Loan and Security
Agreement dated September 22, 2005 among InSight Health Services Corp. ("InSight
Health"), certain subsidiaries of InSight Health (together with InSight Health,
collectively "Borrowers") and Bank of America, N.A. as collateral and
administrative agent (together with its successors in such capacity,
"Administrative Agent") (as at any time amended, the "Loan Agreement"). The
undersigned hereby certifies the following on behalf of
_____________________________________ ("Lender"):

          1. The Lender is not a bank for purposes of SECTION 881(C)(3)(A) of
the Internal Revenue Code of 1986, as amended (the "Code");

          2. The Lender is not a 10-percent shareholder of the Borrower (within
the meaning of SECTION 871(H)(3)(B) of the Code); and

          3. The Lender is not a controlled foreign corporation related to the
Borrower (within the meaning of SECTION 864(D)(4) of the Code.

     Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of the Lender.

                                        ----------------------------------------
                                        Date


By:
    ---------------------------------
Title:
       ------------------------------

                                    EXHIBIT K

                       FORM OF BORROWING BASE CERTIFICATE

                                 [See Attached]

                          INSIGHT HEALTH SERVICES CORP.
            AND EACH OF ITS SUBSIDIARIES LISTED ON THE PAGES HERETO,

                                  as Borrowers

                           LOAN AND SECURITY AGREEMENT

                            Dated: September 22, 2005

                                 $30,000,000.00

                                       and

                        BANK OF AMERICA, N.A., as Lender

                                TABLE OF CONTENTS



                                                                             Page
                                                                             ----
                                                                       
Section 1.  DEFINITIONS; RULES OF CONSTRUCTION..........................        2
   1.1.     Definitions...................................................      2
   1.2.     Accounting Terms..............................................     37
   1.3.     Other Terms...................................................     37
   1.4.     Certain Matters of Construction...............................     37
Section 2.  CREDIT FACILITY.............................................       38
   2.1.     Commitment....................................................     38
   2.2.     Reserved......................................................     39
   2.3.     LC Facility...................................................     39
   2.4.     Bank Products.................................................     43
Section 3.  INTEREST, FEES AND CHARGES..................................       44
   3.1.     Interest......................................................     44
   3.2.     Fees..........................................................     46
   3.3.     Computation of Interest and Fees..............................     47
   3.4.     Reimbursement Obligations.....................................     47
   3.5.     Bank Charges..................................................     48
   3.6.     Illegality....................................................     48
   3.7.     Increased Costs...............................................     49
   3.8.     Capital Adequacy..............................................     50
   3.9.     Mitigation....................................................     50
   3.10.    Funding Losses................................................     50
   3.11.    Maximum Interest..............................................     51
Section 4.  LOAN ADMINISTRATION.........................................       52
   4.1.     Manner of Borrowing and Funding Revolver Loans................     52
   4.2.     Defaulting Lender.............................................     55
   4.3.     Special Provisions Governing LIBOR Loans......................     56
   4.4.     Borrower Agent................................................     56
   4.5.     All Loans to Constitute One Obligation........................     57
Section 5.  PAYMENTS....................................................       57
   5.1.     General Payment Provisions....................................     57
   5.2.     Repayment of Revolver Loans...................................     57
   5.3.     Reserved......................................................     58
   5.4.     Payment of Other Obligations..................................     58
   5.5.     Marshaling; Payments Set Aside................................     59
   5.6.     Allocation of Payments........................................     59
   5.7.     Application of Payments and Collateral Proceeds...............     60
   5.8.     Loan Accounts; Account Stated.................................     60
   5.9.     Taxes.........................................................     61
   5.10.    Nature and Extent of Each Borrower's Liability................     62
Section 6.  TERM AND TERMINATION OF COMMITMENT...........................      64
   6.1.     Term of Commitments...........................................     64
   6.2.     Termination...................................................     64
Section 7.  COLLATERAL..................................................       64
   7.1.     Grant of Security Interest....................................     65
   7.2.     Reserved......................................................     65


                                                                        
   7.3.     Reserved......................................................     65
   7.4.     Certain After-Acquired Collateral.............................     65
   7.5.     No Assumption of Liability....................................     65
   7.6.     Lien Perfection; Further Assurances...........................     65
Section 8.  COLLATERAL ADMINISTRATION...................................       66
   8.1.     General Provisions............................................     66
   8.2.     Administration of Accounts....................................     66
   8.3.     Administration of Deposit Accounts............................     68
   8.4.     Borrowing Base Certificates...................................     69
Section 9.  REPRESENTATIONS AND WARRANTIES..............................       69
   9.1.     General Representations and Warranties........................     69
   9.2.     Reaffirmation of Representations and Warranties...............     76
   9.3.     Survival of Representations and Warranties....................     76
Section 10. COVENANTS AND CONTINUING AGREEMENTS.........................       76
   10.1.    Affirmative Covenants.........................................     76
   10.2.    Negative Covenants............................................     79
   10.3.    Financial Covenants...........................................     85
Section 11. CONDITIONS PRECEDENT........................................       86
   11.1.    Conditions Precedent to Initial Credit Extensions.............     86
   11.2.    Conditions Precedent to All Credit Extensions.................     87
   11.3.    Limited Waiver of Conditions Precedent........................     88
Section 12. EVENTS OF DEFAULT; REMEDIES ON DEFAULT......................       88
   12.1.    Events of Default.............................................     88
   12.2.    Acceleration of Obligations; Termination of Commitment........     90
   12.3.    Other Remedies................................................     90
   12.4.    Setoff........................................................     92
   12.5.    Remedies Cumulative; No Waiver................................     93
Section 13. ADMINISTRATIVE AGENT........................................       93
   13.1.    Appointment, Authority and Duties of Administrative Agent.....     93
   13.2.    Agreements Regarding Collateral and Examination Reports.......     95
   13.3.    Reliance By Administrative Agent..............................     96
   13.4.    Action Upon Default...........................................     96
   13.5.    Ratable Sharing...............................................     97
   13.6.    Indemnification of Administrative Agent Indemnitees...........     97
   13.7.    Limitation on Responsibilities of Administrative Agent........     98
   13.8.    Successor Administrative Agent and Co-Administrative Agents...     98
   13.9.    Consents, Amendments and Waivers; Out-of-Formula Loans.......      99
   13.10.   Due Diligence and Non-Reliance................................    101
   13.11.   Representations and Warranties of Lenders.....................    101
   13.12.   The Required Lenders..........................................    102
   13.13.   Several Obligations...........................................    102
   13.14.   Administrative Agent in its Individual Capacity...............    102
   13.15.   No Third Party Beneficiaries..................................    102
   13.16.   Notice of Transfer............................................    103
   13.17.   Replacement of Certain Lenders................................    103
   13.18.   Remittance of Payments and Collections........................    103
Section 14. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS........      104
   14.1.    Successors and Assigns........................................    104
   14.2.    Participations................................................    104
   14.3.    Assignments...................................................    105



                                                                        
   14.4.    Tax Treatment.................................................    106
Section 15. MISCELLANEOUS...............................................      107
   15.1.    Power of Attorney.............................................    107
   15.2.    General Indemnity.............................................    107
   15.3.    Survival of and Limitations Upon Indemnities..................    108
   15.4.    Reserved......................................................    108
   15.5.    Severability..................................................    108
   15.6.    Cumulative Effect; Conflict of Terms..........................    108
   15.7.    Counterparts; Facsimile Signatures............................    108
   15.8.    Consent.......................................................    108
   15.9.    Notices and Communications....................................    108
   15.10.   Performance of Borrowers' Obligations.........................    109
   15.11.   Credit Inquiries..............................................    110
   15.12.   Time of Essence...............................................    110
   15.13.   Indulgences Not Waivers.......................................    110
   15.14.   Entire Agreement; Exhibits and Schedules......................    110
   15.15.   Interpretation................................................    110
   15.16.   Obligations of Lenders Several................................    110
   15.17.   Confidentiality...............................................    110
   15.18.   Certifications Regarding Indentures...........................    111
   15.20.   Governing Law.................................................    111
   15.22.   Consent to Forum..............................................    111
   15.23.   Waivers by Borrowers..........................................    112



                         LIST OF EXHIBITS AND SCHEDULES

Exhibit A   Form of Revolver Note
Exhibit C   Form of Notice of Conversion/Continuation
Exhibit D   Form of Notice of Borrowing
Exhibit E   Form of Compliance Certificate
Exhibit G   Form of Assignment and Acceptance
Exhibit H   Form of  Notice
Exhibit I   Letter of Credit Request
Exhibit J   Portfolio Interest Exemption Certificate
Exhibit K   Form of Borrowing Base Certificate

Schedule 8.3      Listing of All Deposit Accounts
Schedule 9.1.4    Capital Structure of Borrowers
Schedule 9.1.5    Corporate Names
Schedule 9.1.6    Borrowers' Business Locations
Schedule 9.1.12   Surety Obligations
Schedule 9.1.13   Tax Identification Numbers of Borrowers and Subsidiaries
Schedule 9.1.18   Litigation
Schedule 9.1.21   Pension Plans
Schedule 9.1.22   Labor Contracts
Schedule 10.2.5   Permitted Liens

EX-12.1

exv12w1

EX-21.1

Exhibit 21.1

Name of Subsidiary	State of Organization
Asheville Mobile MRI Services, LLC	North Carolina
Berwyn Magnetic Resonance Center, L.L.C	Illinois
Comprehensive Medical Imaging, Inc.	Delaware
Comprehensive Medical Imaging Centers, Inc.	Delaware
Comprehensive Medical Imaging-Bakersfield, Inc.	Delaware
Comprehensive Medical Imaging-Biltmore, Inc.	Delaware
Comprehensive Medical Imaging-Fairfax, Inc.	Delaware
Comprehensive Medical Imaging-Fremont, Inc.	Delaware
Comprehensive Medical Imaging-San Francisco, Inc.	Delaware
Comprehensive OPEN MRI-Carmichael/ Folsom, LLC	California
Comprehensive OPEN MRI-East Mesa, Inc.	Delaware
Comprehensive OPEN MRI-Garland, Inc	Delaware
Connecticut Lithotripsy, LLC	Connecticut
Diagnostic Solutions Corp.	Delaware
Dublin Diagnostic Imaging, LLC	Ohio
Encinitas Imaging Center, LLC	California
Garfield Imaging Center, Ltd.	California
IMI of Arlington, Inc.	Delaware
IMI of Kansas City, Inc.	Delaware
InSight Health Corp.	Delaware
InSight Health Services Corp.	Delaware
InSight Imaging Services Corp.	Delaware
InSight-Premier Health, LLC	Maine
InSight ProScan, LLC	Ohio
Jefferson MRI	Texas
Jefferson MRI-Bala	Texas
Kessler Imaging Associates, LLC	New Jersey
Lockport MRI, LLC	New York
Los Gatos Imaging Center	Texas
Maxum Health Corp.	Delaware
Maxum Health Services Corp.	Delaware
Maxum Health Services of Dallas, Inc.	Texas
Maxum Health Services of North Texas, Inc.	Texas
Mesa MRI	Texas
Mountain View MRI	Texas
MRI Associates, L.P.	Indiana
NDDC, Inc.	Texas
Open MRI, Inc.	Delaware
Orange County Regional PET Center-Irvine, LLC	California
Parkway Imaging Center, LLC	Nevada
Phoenix Regional PET Center-Thunderbird, LLC	Arizona
Radiosurgery Centers, Inc.	Delaware
Rainbow Imaging, LLC	New York

Name of Subsidiary	State of Organization
San Fernando Valley Regional PET Center, LLC		California
Signal Medical Services, Inc.		Delaware
St. John’s Regional Imaging Center, LLC		California
Sun Coast Imaging Center, LLC		Florida
Syncor Diagnostics Bakersfield, LLC		California
Syncor Diagnostics Sacramento, LLC		California
TME Arizona, Inc		Texas
Valencia MRI, LLC		California
Wilkes-Barre Imaging, LLC		Pennsylvania
Woodbridge MRI		Texas

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

      We hereby consent to the use in this Registration Statement on Form S-4 of InSight Health Services Holdings Corp. of our report dated September 22, 2005 relating to the financial statements and financial statement schedule of InSight Health Services Holdings Corp., which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PRICEWATERHOUSECOOPERS LLP

Orange County, California

October 28, 2005

EX-25.1

                                                                    Exhibit 25.1

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          --------------------------

                                    FORM T-1

                         STATEMENT OF ELIGIBILITY UNDER
                      THE TRUST INDENTURE ACT OF 1939 OF A
                   CORPORATION DESIGNATED TO ACT AS TRUSTEE
             Check if an Application to Determine Eligibility of
                  a Trustee Pursuant to Section 305(b)(2)___

                          -------------------------

                         U.S. BANK NATIONAL ASSOCIATION
             (Exact name of Trustee as specified in its charter)

                                   41-1973763
                      I.R.S. Employer Identification No.


           300 EAST DELAWARE AVENUE, 8TH FLOOR
           WILMINGTON, DELAWARE                                   19809
           (Address of principal executive offices)               (Zip Code)


                                 James Vellanti
                         U.S. Bank National Association
                           100 Wall Street, Suite 1600
                               New York, NY 10005
                            Telephone (212) 361-2506
            (Name, address and telephone number of agent for service)

                          INSIGHT HEALTH SERVICES CORP.
               (Exact name of obligor as specified in its charter)

            DELAWARE                                        33-0702770
            (State or other jurisdiction of                 (I. R. S. Employer
            incorporation or organization)                  Identification No.)

            26250 ENTERPRISE COURT, SUITE 100
            LAKE FOREST, CALIFORNIA                         92630
            (Address of principal executive offices)        (Zip Code)

                          ----------------------------

                   SENIOR SECURED FLOATING RATE NOTES DUE 2011

================================================================================

ITEM 1.  GENERAL INFORMATION. Furnish the following information as to the
         Trustee.

         a)   Name and address of each examining or supervising authority to
              which it is subject.

                  Comptroller of the Currency
                  Washington, D.C.

         b)   Whether it is authorized to exercise corporate trust powers.

                  Yes

ITEM 2.  AFFILIATIONS WITH OBLIGOR.  If the obligor is an affiliate of the
         Trustee, describe each such affiliation.

            None


ITEMS 3-15    The Trustee is a Trustee under other Indentures under which
              securities issued by the obligor are outstanding. There is not and
              there has not been a default with respect to the securities
              outstanding under other such Indentures.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this
         statement of eligibility and qualification.

         1.   A copy of the Articles of Association of the Trustee now in
              effect, incorporated herein by reference to Exhibit 1 of Form T-1,
              Document 6 of Registration No. 333-84320.

         2.   A copy of the certificate of authority of the Trustee to commence
              business, incorporated herein by reference to Exhibit 2 of Form
              T-1, Document 6 of Registration No. 333-84320.

         3.   A copy of the certificate of authority of the Trustee to exercise
              corporate trust powers, incorporated herein by reference to
              Exhibit 3 of Form T-1, Document 6 of Registration No. 333-84320.

         4.   A copy of the existing bylaws of the Trustee, as now in effect,
              incorporated herein by reference to Exhibit 4 of Form T-1,
              Document 6 of Registration No. 333-113995.

         5.   Not applicable.

         6.   The consent of the Trustee required by Section 321(b) of the Trust
              Indenture Act of 1939, incorporated herein by reference to Exhibit
              6 of Form T-1, Document 6 of Registration No. 333-84320.

         7.   A copy of the Report of Condition of the Trustee as of June 30,
              2005, published pursuant to law or the requirements of its
              supervising or examining authority, attached as Exhibit 7.

         8.   Not applicable.

         9.   Not applicable.



                                       2

                                    SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of New
York, State of New York on the 27th day of October, 2005.

                              U.S. BANK NATIONAL ASSOCIATION

                              By:    /s/ Cheryl L. Clarke
                                     ------------------------
                              Name:  Cheryl L. Clarke
                              Title: Assistant Vice President




                                       3

EXHIBIT 7

                         U.S. BANK NATIONAL ASSOCIATION
                        STATEMENT OF FINANCIAL CONDITION
                               AS OF JUNE 30, 2005

                                    ($000'S)



                                                                       6/30/2005
                                                                       ---------
                                                                    
ASSETS
   Cash and Balances Due From Depository Institutions                   $405,383
   Fixed Assets                                                              233
   Intangible Assets                                                     101,857
   Other Assets                                                           31,529
                                                                        --------
      TOTAL ASSETS                                                      $538,971

LIABILITIES

   Other Liabilities                                                    $ 15,921
                                                                        --------
   TOTAL LIABILITIES                                                    $ 15,921

EQUITY

   Common and Preferred Stock                                           $  1,000
   Surplus                                                               505,932
   Undivided Profits                                                      16,118
                                                                        --------
      TOTAL EQUITY CAPITAL                                              $523,050

TOTAL LIABILITIES AND EQUITY CAPITAL                                    $538,971


To the best of the undersigned's determination, as of this date the above
financial information is true and correct.

U.S. Bank National Association

By:   /s/ Cheryl L. Clarke
      ------------------------------
      Name  Cheryl Clarke
      Title Assistant Vice President

Date:  October 27, 2005



                                       4

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL
FOR
OFFER TO EXCHANGE
$300,000,000
SENIOR SECURED FLOATING RATE NOTES DUE 2011
FOR
REGISTERED SENIOR SECURED FLOATING RATE NOTES DUE 2011
OF
INSIGHT HEALTH SERVICES CORP.

Pursuant to the Prospectus, dated [                   ], 2005

THE EXCHANGE OFFER (AS DEFINED HEREIN) WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [                   ], 2004 (THE “EXPIRATION DATE”), UNLESS THE EXCHANGE OFFER IS EXTENDED BY INSIGHT HEALTH SERVICES CORP. IN ITS SOLE DISCRETION. TENDERS OF INITIAL NOTES (AS DEFINED HEREIN) MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

EXCHANGE AGENT:
U.S. Bank National Association

By Hand, Overnight Delivery or
Registered/Certified Mail
U.S. Bank National Association
Corporate Trust Services
EP-MN-WS-2N
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Specialized Finance

Facsimile Transmissions:
(Eligible Institutions Only)
(651) 495-8158

To Confirm Facsimile by Telephone or for Information Call:
(800) 934-6802

                    DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

                    THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

                    HOLDERS (AS DEFINED HEREIN) WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES (AS DEFINED HEREIN) FOR THEIR INITIAL NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR INITIAL NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.

                    By execution hereof, the undersigned acknowledges receipt of the prospectus dated [                   ], 2005 (as the same may be amended or supplemented from time to time, the “Prospectus”) of InSight Health Services Corp., a Delaware corporation (“InSight”), which, together with this Letter of Transmittal and the instructions hereto (this “Letter of Transmittal”), constitute InSight’s offer (the “Exchange Offer”) to exchange $1,000 in principal amount of its Senior Secured Floating Rate Notes due 2011 (the “Exchange Notes”) for each $1,000 in principal amount of outstanding Senior Secured Floating Rate Notes due 2011 (the “Initial Notes” and, together with the Exchange Notes, the “Notes”). The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Initial Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes have been registered under the Securities Act of 1933, as amended (the “Securities Act”), and, therefore, do not bear legends restricting the transfer thereof.

                    InSight reserves the right, at any time or from time to time, to extend the Exchange Offer in its sole discretion, in which event the term “Expiration Date” shall mean the latest time and date to which the Exchange Offer is extended. InSight will notify the Exchange Agent of any extension by written notice and will make a public announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

                    This Letter of Transmittal is to be used by Holders if: (i) certificates representing Initial Notes along with this Letter of Transmittal are to be physically delivered to the Exchange Agent herewith by Holders prior to the Expiration Date; (ii) except as set forth in the following paragraph, tender of Initial Notes is to be made by book-entry transfer to the Exchange Agent’s account at The Depository Trust Company (“DTC”), pursuant to the procedures set forth in the “The Exchange Offer — Book-Entry Transfer” section of the Prospectus which book-entry transfer must be received by the Exchange Agent prior to the Expiration Date; or (iii) tender of Initial Notes is to be made according to the guaranteed delivery procedures set forth in the “The Exchange Offer — Guaranteed Delivery Procedures” section of the Prospectus. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

                    If delivery of the Initial Notes is to be made by book-entry transfer to the account maintained by the Exchange Agent at DTC as set forth in clause (ii) in the immediately preceding paragraph, this Letter of Transmittal need not be manually executed; provided, however, that tenders of Initial Notes must be effected by sending electronic instructions to DTC through DTC’s communication system in accordance with the procedures mandated by DTC’s Automated Tender Offer Program (“ATOP”). To tender Initial Notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the Exchange Agent must reflect that the participant acknowledges its receipt of and agrees to be bound by this Letter of Transmittal.

                    Unless the context requires otherwise, the term “Holder” for purposes of this Letter of Transmittal means: (i) any person in whose name Initial Notes are registered on the books of InSight or any other person who has obtained a properly completed bond power from the registered Holder; or (ii) any participant in DTC whose Initial Notes are held of record by DTC who desires to deliver such Initial Notes by book-entry transfer at DTC.

                    The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

                    HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR INITIAL NOTES, OTHER THAN THROUGH ATOP, MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.

2

Ladies and Gentlemen:

                    The undersigned hereby tenders to InSight the aggregate principal amount of Initial Notes indicated in this Letter of Transmittal, upon the terms and subject to the conditions set forth in the Prospectus, receipt of which is hereby acknowledged, and in this Letter of Transmittal. Subject to, and effective upon, the acceptance for exchange of the aggregate principal amount of the Initial Notes tendered herewith, the undersigned hereby sells, exchanges, assigns and transfers to, or upon the order of, InSight all right, title and interest in and to such Initial Notes that are being tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that said Exchange Agent also acts as the agent of InSight and as trustee under the indenture for the Initial Notes and the Exchange Notes), with full power of substitution (such power of attorney being an irrevocable power coupled with an interest) to:

                    (a) deliver such Initial Notes in registered certificated form, or transfer ownership of such Initial Notes through book-entry transfer at DTC, to or upon the order of InSight, upon receipt by the Exchange Agent, as the undersigned’s agent, of the same aggregate principal amount of Exchange Notes; and

                    (b) present such Initial Notes for transfer on the books of InSight and receive, for the account of InSight, all benefits and otherwise exercise, for the account of InSight, all right of beneficial ownership of the Initial Notes tendered hereby in accordance with the terms of the Exchange Offer.

                    The undersigned represents and warrants that it has full power and authority to tender, sell, exchange, assign and transfer the Initial Notes tendered hereby and to acquire Exchange Notes issuable upon the exchange of such tendered Initial Notes, and that, when the same are accepted for exchange, InSight will acquire good, marketable and unencumbered title to the tendered Initial Notes, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sale agreements or other obligations to their sale or transfer, and not subject to any adverse claim. The undersigned also represents and warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or InSight to be necessary or desirable to complete the sale, exchange, assignment and transfer of tendered Initial Notes.

                    The Exchange Offer is subject to certain conditions as set forth in the Prospectus under the caption “Exchange Offer — Conditions.” The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by InSight) as more particularly set forth in the Prospectus, InSight may not be required to exchange any of the Initial Notes tendered hereby and, in such event, the Initial Notes not exchanged will be returned to the undersigned at the address shown below the signature of the undersigned, or in the case of Initial Notes tendered by book-entry transfer into the Exchange Agent’s account at DTC, such nonexchanged Initial Notes will be credited to an account maintained at DTC.

                    The undersigned also acknowledges that this Exchange Offer is being made based upon InSight’s understanding of an interpretation by the staff of the Securities and Exchange Commission (the “SEC”) as set forth in no-action letters issued to third parties unrelated to InSight, including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991) and Shearman & Sterling (available July 2, 1993) (the “SEC No-Action Letters”), that the Exchange Notes issued in exchange for the Initial Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by a Holder (other than a broker-dealer who acquires such Exchange Notes directly from InSight for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act or any such Holder that is an “affiliate” of InSight or of any of the guarantors under the indenture relating to the Notes within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such Holder’s business and such Holder is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes and has no arrangement with any person to participate in the distribution of such Exchange Notes. The SEC has not, however, considered the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in the SEC No-Action Letters.

                    By tendering, the undersigned represents and warrants to InSight that (i) any Exchange Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such

3

Exchange Notes, whether or not such person is such undersigned, (ii) neither the undersigned Holder of Initial Notes nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes and no such person will have any such arrangement or understanding at the time of consummation of the Exchange Offer and (iii) neither the Holder nor any such other person is an “affiliate” of InSight or of any of the guarantors of the Notes within the meaning of Rule 405 under the Securities Act, or, if such Holder or such other person is an “affiliate,” it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. The undersigned agrees to all of the terms of the Exchange Offer as described in the Prospectus and herein.

                    If the undersigned is not a broker-dealer, it hereby represents and warrants to InSight that it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Initial Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; provided, however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. InSight has agreed to use all commercially reasonable efforts to keep the registration statement of which the Prospectus forms a part effective for a period beginning when Exchange Notes are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 180th day after the Exchange Offer has been completed and such time as broker-dealers are no longer required to comply with the prospectus delivery requirements in connection with offers and sales of Exchange Notes.

                    The undersigned acknowledges that if the undersigned is tendering Initial Notes in the Exchange Offer with the intention of participating in any manner in a distribution of the Exchange Notes (i) the undersigned cannot rely on the position of the staff of the SEC set forth in the SEC No-Action Letters and in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the Exchange Notes and such secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 of Regulation S-K under the Securities Act and (ii) failure to comply with such requirements could result in the undersigned incurring liability under the Securities Act.

                    For purposes of the Exchange Offer, InSight shall be deemed to have accepted validly tendered Initial Notes when, as and if InSight has given oral or written notice thereof to the Exchange Agent. If any tendered Initial Notes are not accepted for exchange pursuant to the Exchange Offer for any reason or if Initial Notes are submitted for a greater principal amount than the Holder desires to exchange, such unaccepted or non-exchanged Initial Notes will be returned without expense to the tendering Holder thereof or, in the case of Initial Notes tendered by book-entry transfer into the Exchange Agent’s account at DTC, such non-exchanged Initial Notes will be credited to an account maintained with DTC promptly after the expiration or termination of the Exchange Offer.

                    All authority conferred or agreed to be conferred by this Letter of Transmittal and every obligation of the undersigned hereunder shall survive the death, incapacity or dissolution of the undersigned and every obligation under this Letter of Transmittal shall be binding upon the undersigned’s heirs, executors, administrators, trustees in bankruptcy, legal representatives, personal representatives, successors and assigns.

                    The undersigned understands that tenders of Initial Notes not withdrawn before the Expiration Date pursuant to the instructions hereto will constitute an agreement between the undersigned and InSight upon the terms and subject to the conditions of the Exchange Offer.

                    Unless otherwise indicated under “Special Issuance Instructions,” please issue Exchange Notes in exchange for the Initial Notes accepted for exchange and return any Initial Notes not tendered or not exchanged, in the name(s) of the undersigned (or in either such event in the case of Initial Notes tendered by DTC, by credit to the account at DTC). Similarly, unless otherwise indicated under “Special Delivery Instructions,” please send the Exchange Notes issued in exchange for the Initial Notes accepted for exchange and any Initial Notes not tendered or not exchanged (and accompanying documents as appropriate) to the undersigned at the address shown below the undersigned’s signature, unless, in either event, tender is being made through DTC. In the event that both “Special Issuance Instructions” and “Special Delivery Instructions” are completed, please issue the Exchange Notes issued in exchange for the Initial Notes

4

accepted for exchange and return any Initial Notes not tendered or not exchanged in the name(s) of, and send said Exchange Notes to, the person(s) so indicated. The undersigned recognizes that InSight has no obligation pursuant to the “Special Issuance Instructions” and “Special Delivery Instructions” to transfer any Initial Notes from the name of the registered holder(s) thereof if InSight does not accept for exchange any of the Initial Notes so tendered.

                    The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus, this Letter of Transmittal and the accompanying Notice of Guaranteed Delivery (the “Notice of Guaranteed Delivery”) may be directed to the Exchange Agent. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

5

                    THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF INITIAL NOTES” AND SIGNING THIS LETTER OF TRANSMITTAL AND DELIVERING SUCH INITIAL NOTES AND THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE TENDERED THE INITIAL NOTES AS SET FORTH IN SUCH BOX.

                    List below the Initial Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers, if any, and principal amounts should be listed on a separate signed schedule affixed to this Letter of Transmittal. Tenders of Initial Notes will be accepted only in authorized denominations of $1,000 or integral multiples thereof.

DESCRIPTION OF INITIAL NOTES

	Certificate
	Number(s)*
Name(s) and Address(es) of Holder(s)	(Attach signed list	Aggregate Principal Amount
(Please fill in, if blank)	if necessary)	Tendered (if less than all)**
TOTAL PRINCIPAL AMOUNT OF INITIAL NOTES TENDERED

*	Need not be completed by Holders tendering by book-entry transfer.
**	Need not be completed by Holders who wish to tender with respect to all Initial Notes listed. See Instruction 2.

USE OF BOOK ENTRY TRANSFER

[  ]	CHECK HERE IF TENDERED INITIAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
	THE EXCHANGE AGENT’S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
	Name of Tendering Institution:
	DTC Book-Entry Account No.:
	Transaction Code No.:

6

USE OF GUARANTEED DELIVERY

     Holders who wish to tender their Initial Notes and (i) whose Initial Notes are not immediately available but are not lost, or (ii) who cannot deliver their Initial Notes, this Letter of Transmittal or any other required documents to the Exchange Agent prior to the Expiration Date, may effect a tender of such Initial Notes according to the guaranteed delivery procedures set forth in the Prospectus and in the instructions to this Letter of Transmittal and must also complete the Notice of Guaranteed Delivery.

[   ]	CHECK HERE IF TENDERED INITIAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
	Name(s) of Holder(s) of Initial Notes:
	Window Ticket No. (if any):
	Date of Execution of Notice of Guaranteed Delivery:
	Name of Eligible Institution that Guaranteed Delivery:
	DTC Book-Entry Account No.:
	If Delivered by Book-Entry Transfer, Name of Tendering Institution:
	Transaction Code No.:

BROKER-DEALER COPIES OF PROSPECTUS

[   ]	CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
	Name:
	Address:
	Aggregate Principal Amount of Initial Notes so held:

7

FOR USE BY AFFILIATES

[   ]	CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU ARE TENDERING INITIAL NOTES IS AN AFFILIATE OF INSIGHT.
	Name:
	Address:
	Aggregate Principal Amount of Initial Notes so held:

PLEASE SIGN HERE

     (TO BE COMPLETED BY ALL TENDERING HOLDERS OF INITIAL NOTES REGARDLESS OF WHETHER INITIAL NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)

     This Letter of Transmittal must be signed by the Holder(s) of Initial Notes exactly as their name(s) appear(s) on certificate(s) for Initial Notes or, if tendered by a participant in DTC, exactly as such participant’s name appears on a security position listing as the owner of Initial Notes, or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below under “Capacity” and submit evidence satisfactory to InSight of such person’s authority to so act. See Instruction 3 herein. If the signature appearing below is not of the registered Holder(s) of the Initial Notes, then the registered Holder(s) must sign a valid proxy.

X	Date:
X	Date:

(Signature(s) of Holder(s) or Authorized Signatory)

Name(s):

(Please Print)

Capacity:

Address:

(Including Zip Code)

Area Code and Telephone No.:

Tax Identification or Social Security No(s).:

8

PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN

SIGNATURE GUARANTEE (See Instruction 3 herein)

Certain Signatures Must be Guaranteed by an Eligible Institution

(Name of Eligible Institution Guaranteeing Signatures)

(Address (Including Zip Code) and Telephone Number (Including Area Code) of Firm)

(Authorized Signature)

(Printed Name)

(Title)

Date:                      , 2005

SPECIAL ISSUANCE INSTRUCTIONSî

(See Instructions 3 and 4 herein)

To be completed ONLY if certificates for Initial Notes not exchanged and/or Exchange Notes issued pursuant to the Exchange Offer are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) within this Letter of Transmittal or if Initial Notes tendered by book-entry transfer that are not accepted for exchange are to be returned by credit to an account maintained at DTC other than the account indicated above.

Issue Exchange Notes and/or Initial Notes in the name of:

Name:
	(Please Print)
Address:
	(Please Print)
	Zip Code

     Taxpayer Identification or Social Security Number (See Substitute Form W-9 herein)

Credit exchanged Initial Notes delivered by book-entry transfer to the DTC account set forth below:

(DTC Account Number)

Name of Account Party:

SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 3 and 4 herein)

To be completed ONLY if certificates for Initial Notes not exchanged and/or Exchange Notes issued pursuant to the Exchange Offer are to be sent to someone other than the person or persons whose signature(s) appear(s) within this Letter of Transmittal or to such person or persons at an address different from that shown in the box entitled “Description of Initial Notes” within this Letter of Transmittal.

Mail Exchange Notes and/or Initial Notes to:

Name:
	(Please Print)
Address:
	(Please Print)
	Zip Code

Taxpayer Identification or Social Security Number (See Substitute Form W-9 herein)

9

TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYER’S NAME: U.S. BANK NATIONAL ASSOCIATION, AS EXCHANGE AGENT

Name

Business name, if different from above

Check appropriate box: o Individual/Sole
Proprietor o Corporation o Partnership o Other 4 o Exempt from backup
withholding

Address (number, street, and apt. or suite no.)

City, State, and Zip Code

SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service Payer’s Request for Taxpayer Identification Number (TIN)	Part 1—PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Part 2—Certification—Under Penalties of Perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (“IRS”) that I am subject to backup withholding as a result of failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding and (3) I am a U.S. person (including a U.S. resident alien).	Social Security Number OR Employer Identification Number Part 3- Awaiting TIN o
	Certificate instructions—You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2).
	SIGNATURE	DATE

NOTE:     FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING, CURRENTLY AT THE RATE OF 28%, WITH RESPECT TO ANY PAYMENTS MADE TO HOLDERS OF EXCHANGE NOTES PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

10

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

     I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number within 60 days, all reportable payments made to me thereafter will be subject to withholding, currently at the rate of 28%, until I provide a number.

Signature Date

11

INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer

1.          Delivery of this Letter of Transmittal and Initial Notes; Guaranteed Delivery Procedures. The certificates for the tendered Initial Notes (or a timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s account at DTC of all Initial Notes delivered electronically), as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Initial Notes may only be tendered in a principal amount of $1,000 and any integral multiple thereof.

     THE METHOD OF DELIVERY OF THE TENDERED INITIAL NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT ARE AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTER OF TRANSMITTAL OR INITIAL NOTES SHOULD BE SENT TO INSIGHT.

          Holders who wish to tender their Initial Notes and whose Initial Notes are not immediately available but are not lost, or who cannot deliver their Initial Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Initial Notes pursuant to the guaranteed delivery procedures set forth in the Prospectus and the instructions to this Letter of Transmittal below. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below) and the Holder must sign a Notice of Guaranteed Delivery; (ii) on or prior to the Expiration Date, the Exchange Agent must have received from the Holder and the Eligible Institution a written or facsimile copy of a properly completed and duly executed Notice of Guaranteed Delivery setting forth the name and address of the Holder of the Initial Notes, the certificate number or numbers of such tendered Initial Notes and the principal amount of Initial Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the date of delivery of the Notice of Guaranteed Delivery, this Letter of Transmittal together with the certificate(s) representing the Initial Notes (or timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s account at DTC) and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) such properly completed and executed Letter of Transmittal (or copy thereof), as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all tendered Initial Notes in proper form for transfer (or timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s account at DTC), must be received by the Exchange Agent within five business days after the Expiration Date. Any Holder of Initial Notes who wishes to tender Initial Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery and Letter of Transmittal prior to 5:00 p.m., New York City time, on the Expiration Date.

          All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Initial Notes will be determined by InSight in its sole discretion, which determination will be final and binding. InSight reserves the absolute right to reject any and all Initial Notes not properly tendered or any Initial Notes InSight’s acceptance of which would, in the opinion of counsel for InSight, be unlawful. InSight also reserves the right to waive any defects, irregularities or conditions of tender as to particular Initial Notes, but if InSight waives any condition of the Exchange Offer, it will waive that condition for all Holders. InSight’s interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Initial Notes must be cured within such time as InSight shall determine. Neither InSight, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Initial Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Initial Notes will not be deemed to have been made until such defects or irregularities have been cured or waived and will be returned by the Exchange Agent to the tendering Holders of Initial Notes, unless otherwise provided in this Letter of Transmittal, promptly following the Expiration Date unless the Exchange Offer is extended.

2.          Partial Tenders; Withdrawal Rights. Tenders of Initial Notes will be accepted only in the principal amount of $1,000 and integral multiples thereof. If less than all Initial Notes evidenced by a submitted certificate are tendered, the tendering Holder should fill in the aggregate principal amount of Initial Notes tendered in the third column of the box entitled

12

“Description of Initial Notes.” All Initial Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. A reissued certificate representing the balance of nontendered Initial Notes will be sent to such tendering Holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, promptly after the Expiration Date. ALL OF THE INITIAL NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.

          Holders may withdraw tenders of Initial Notes at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For the withdrawal to be effective, the Exchange Agent must receive a written notice of withdrawal at its address set forth herein prior to the Expiration Date. Any such notice of withdrawal must: (i) specify the name of the person who tendered the Initial Notes to be withdrawn; (ii) identify the Initial Notes to be withdrawn, including the certificate number or numbers and principal amount of such withdrawn Initial Notes; (iii) be signed by the Holder in the same manner as the original signature on this Letter of Transmittal by which such Initial Notes were tendered or as otherwise set forth in Instruction 3, including any required signature guarantees, or be accompanied by a bond power in the name of the person withdrawing the tender, in satisfactory form as determined by InSight in InSight’s sole discretion, duly executed by the registered Holder, with the signature thereon guaranteed by an Eligible Institution together with the other documents required upon transfer by the indenture governing the Notes; and (iv) specify the name in which such Initial Notes are to be registered, if different from the person who deposited the Initial Notes pursuant to such documents of transfer.

          InSight will determine all questions as to the validity, form and eligibility, including time of receipt, of such withdrawal notices in its sole discretion. The Initial Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Initial Notes which have been tendered for exchange but which are withdrawn will be returned to their Holder without cost to such Holder promptly after withdrawal. Properly withdrawn Initial Notes may be retendered by following one of the procedures described in “The Exchange Offer — Procedures for Tendering Initial Notes” of the Prospectus at any time on or prior to the Expiration Date.

3.          Signature on this Letter of Transmittal; Bond Power and Endorsements; Guarantee of Signatures. If this Letter of Transmittal (or copy hereof) is signed by the registered Holder(s) of the Initial Notes tendered hereby, the signature must correspond exactly with the name(s) as written on the face of the Initial Notes without alteration, enlargement or any change whatsoever.

          If any tendered Initial Notes are owned of record by two or more joint owners, all of such owners must sign this Letter of Transmittal.

          If any tendered Initial Notes are registered in different names on several certificates or securities positions listings, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations.

          If this Letter of Transmittal is signed by a person other than the registered Holder(s) of Initial Notes listed herein, such Initial Notes must be endorsed or accompanied by properly completed bond powers signed by the registered Holder exactly as the name(s) of the registered Holder or Holders appears on the Initial Notes with the signatures on the Initial Notes or the bond powers guaranteed by an Eligible Institution.

          If this Letter of Transmittal or any Initial Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by InSight, evidence satisfactory to InSight of their authority to so act must be submitted with this Letter of Transmittal.

          Endorsements on Initial Notes or signatures on bond powers required by this Instruction 3 must be guaranteed by an Eligible Institution.

          Signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an “Eligible Institution”), unless the Initial Notes tendered pursuant hereto are tendered (i) by a registered Holder (including any participant in DTC whose name appears on a security position

13

listing as the owner of Initial Notes) who has not completed the box set forth herein entitled “Special Issuance Instructions” or “Special Delivery Instructions” or (ii) for the account of an Eligible Institution. If signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by an Eligible Institution.

4.          Special Issuance and Delivery Instructions. Tendering Holders should include, in the applicable spaces, the name and address to which Exchange Notes or substitute Initial Notes for any principal amount not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. A Holder of Initial Notes tendering Initial Notes by book-entry transfer may request that Initial Notes not exchanged be credited to such account maintained at DTC as such Holder may designate hereon. If no such instructions are given, such Initial Notes not exchanged will be returned to the name or address of the person signing this Letter of Transmittal or credited to the account listed beneath the box entitled “Description of Initial Notes,” as the case may be.

5.          Taxpayer Identification Number. Federal income tax law generally requires that a tendering Holder whose Initial Notes are accepted for exchange must provide InSight with such Holder’s correct taxpayer identification number (“TIN”) on Substitute Form W-9, which, in the case of a tendering Holder who is an individual, is his or her social security number. If InSight is not provided with the current TIN or an adequate basis for an exemption, such tendering Holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, delivery to such tendering Holder of Exchange Notes may be subject to backup withholding, currently at the rate of 28% (subject to future adjustment), with respect to all reportable payments made after the exchange. If withholding results in an overpayment of taxes, a refund may be obtained.

          Exempt Holders of Initial Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (the “W-9 Guidelines”) for additional instructions.

          To prevent backup withholding, each tendering Holder of Initial Notes must provide its correct TIN by completing the Substitute Form W-9 included herein, certifying that the TIN provided is correct (or that such Holder is awaiting a TIN) and that (i) the Holder is exempt from backup withholding, (ii) the Holder has not been notified by the Internal Revenue Service that such Holder is subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the Holder that such Holder is no longer subject to backup withholding. If the tendering Holder of Initial Notes is a nonresident alien or foreign entity not subject to backup withholding, such Holder must give InSight a completed Form W-8BEN, Certificate of Foreign Status. These forms may be obtained from the Exchange Agent. If the Initial Notes are in more than one name or are not in the name of the actual owner, such Holder should consult the W-9 Guidelines for instructions on applying for a TIN, check the box in Part 3 of the Substitute Form W-9 and write “applied for” in lieu of its TIN. Note: Checking such box and writing “applied for” on the form means that such Holder has already applied for a TIN or that such Holder intends to apply for one in the near future. If such Holder does not provide its TIN to InSight within 60 days, backup withholding will begin and continue until such Holder furnishes its TIN to InSight.

6.           Transfer Taxes. InSight will pay all transfer taxes, if any, applicable to the exchange of Initial Notes pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any reason other than the exchange of Initial Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes, whether imposed on the registered Holder or any other person, will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder.

          EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE INITIAL NOTES LISTED IN THIS LETTER OF TRANSMITTAL.

7.           Waiver of Conditions. InSight reserves the absolute right to amend, waive or modify, in whole or in part, any or all of the conditions to the Exchange Offer set forth in the Prospectus.

8.          Mutilated, Lost, Stolen or Destroyed Initial Notes. Any Holder whose Initial Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions. The Holder will then be instructed as to the steps that must be taken to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the Initial Notes have been replaced.

14

9.          Requests For Assistance or Additional Copies. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth herein.

10.           Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Initial Notes will be determined by InSight in its sole discretion, which determination will be final and binding. InSight reserves the absolute right to reject any and all Initial Notes not properly tendered or any Initial Notes InSight’s acceptance of which would, in the opinion of counsel for InSight, be unlawful. InSight also reserves the right to waive any defects, irregularities or conditions of tender as to particular Initial Notes, but if InSight waives any condition of the Exchange Offer, it will waive that condition for all Holders. InSight’s interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Initial Notes must be cured within such time as InSight shall determine. Neither InSight, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Initial Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Initial Notes will not be deemed to have been made until such defects or irregularities have been cured or waived and will be returned by the Exchange Agent to the tendering Holders of Initial Notes, unless otherwise provided in this Letter of Transmittal, promptly following the Expiration Date unless the Exchange Offer is extended.

11.          No Conditional Tenders. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders of Initial Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Initial Notes for exchange.

12.          Inadequate Space. If the space provided herein is inadequate, the aggregate principal amount of Initial Notes being tendered and the certificate number or numbers (if available) should be listed on a separate schedule attached hereto and separately signed by all parties required to sign this Letter of Transmittal.

          IMPORTANT: TO TENDER IN THE EXCHANGE OFFER, A HOLDER MUST COMPLETE, SIGN AND DATE THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH CERTIFICATES FOR INITIAL NOTES AND ALL OTHER REQUIRED DOCUMENTS) AND HAVE THE SIGNATURES HEREON GUARANTEED IF REQUIRED BY THIS LETTER OF TRANSMITTAL, OR DELIVER A NOTICE OF GUARANTEED DELIVERY, TO THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

15

Exchange Agent:

U.S. BANK NATIONAL ASSOCIATION

By Hand, Overnight Delivery or
Registered/Certified Mail
U.S. Bank National Association
Corporate Trust Services
EP-MN-WS-2N
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Specialized Finance

Facsimile Transmissions:
(Eligible Institutions Only)
(651) 495-8158

To Confirm Facsimile by Telephone or for Information Call:
(800) 934-6802

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the Payor — Social Security numbers (SSN) have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers (EIN) have nine digits separated by one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payor.

		Give the SOCIAL				Give the EMPLOYER
		SECURITY				IDENTIFICATION
For this type of account:		number of —	For this type of account:			number of —
1.	Individual	The individual		6.	Sole proprietorship or single-member LLC	The owner(3)
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on		7.	A valid trust, estate or pension trust	The legal entity(4)
		the account(1)		8.	Corporate or LLC electing corporate status on Form 8832	The corporation
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)		9.	Association, club, religious, charitable, educational or other tax-exempt organization	The organization
4. a.	The usual revocable savings trust	The grantor- trustee(1)		10.	Partnership or multi-member LLC	The partnership
	(grantor is also trustee)
b.	So-called trust account that is not a legal or valid trust under State law	The actual owner(1)		11.	A broker or registered nominee	The broker or nominee
5.	Sole proprietorship or single-member LLC	The owner(3)		12.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district or prison) that receives agricultural program payments	The public entity

(1)	List first and circle the name of the person whose number you furnish.
(2)	Circle the minor’s name and furnish the minor’s social security number.
(3)	Show your individual name. You may also enter your business name. You may use your SSN or EIN.
(4)	List first and circle the name of the valid trust, estate, or pension trust. (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
(Section references are to the Internal Revenue Code)
Page 2

Name

If you are an individual, you must generally provide the name shown on your social security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, please enter your first name, the last name shown on your social security card, and your new last name.

Obtaining a Number

If you don’t have a taxpayer identification number (“TIN”), apply for one immediately. To apply, obtain Form SS-5, Application for a Social Security Card, from your local office of the Social Security Administration, or Form SS-4, Application for Employer Identification Number, from your local Internal Revenue Service (“IRS”) office.

Payees and Payments Exempt from Backup Withholding

The following is a list of payees exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reordering under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except that a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting.

(1)	A corporation.
(2)	An organization exempt from tax under section 501(a), or an individual retirement plan (“IRA”), or a custodial account under section 403(b)(7).
(3)	The United States or any of its agencies or instrumentalities.
(4)	A state, the District of Columbia, a possession of the United States or any of their political subdivisions or instrumentalities.
(5)	A foreign government or any of its political subdivisions, agencies or instrumentalities.
(6)	An international organization or any of its agencies or instrumentalities.
(7)	A foreign central bank of issue.
(8)	A dealer in securities or commodities required to register in the U.S. or a possession of the U.S.
(9)	A futures commission merchant registered with the Commodity Futures Trading Commission.
(10)	A real estate investment trust.
(11)	An entity registered at all times during the tax year under the Investment Company Act of 1940.
(12)	A common trust fund operated by a bank under section 584(a).
(13)	A financial institution.
(14)	A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List.
(15)	A trust exempt from tax under section 664 or described in section 4947.

      Payments of dividends generally not subject to backup withholding include the following:

— Payments to nonresident aliens subject to withholding under section 1441.

— Payments to partnerships not engaged in a trade or business in the U.S. and that have at least one nonresident partner.

— Payments made by certain foreign organizations.

     Payments of interest generally not subject to backup withholding include the following:

— Payments of interest on obligations issued by individuals.

Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payor’s trade or business and you have not provided your correct TIN to the payor.

— Payments of tax-exempt interest (including exempt-interest dividends under section 852).

— Payments described in section 6049(b)(5) to nonresident aliens.

— Payments on tax-free covenant bonds under section 1451.

— Payments made by certain foreign organizations.

— Mortgage interest paid by you.

     Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N, and the regulations under those sections.

Privacy Act Notice. — Section 6109 requires you to furnish your correct TIN to persons who must file information returns with the IRS to report interest, dividends and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. You must provide your TIN whether or not you are qualified to file a tax return. Payors must generally withhold 28% (subject to future adjustments) of taxable interest, dividend and certain other payments to a payee who does not furnish a TIN to a payor. Certain penalties may also apply.

Penalties

(1) Failure to Furnish TIN — If you fail to furnish your correct TIN to a requester (the person asking you to furnish your TIN), you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding — If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3) Criminal Penalty for Falsifying Information — Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT OR THE IRS.

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY
FOR
OFFER TO EXCHANGE
$300,000,000
SENIOR SECURED FLOATING RATE NOTES DUE 2011
FOR REGISTERED SENIOR SECURED FLOATING RATE NOTES DUE 2011
OF
INSIGHT HEALTH SERVICES CORP.

EXCHANGE AGENT:

U.S. Bank National
Association

By Hand, Overnight Delivery or
Registered/Certified Mail
U.S. Bank National Association
Corporate Trust Services
EP-MN-WS-2N
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Specialized Finance

Facsimile Transmissions:
(Eligible Institutions Only)
(651) 495-8158

To Confirm Facsimile by Telephone or for Information Call:
(800) 934-6802

     All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the prospectus, dated [   ], 2005 (as it may be supplemented or amended from time to time, the “Prospectus”), of InSight Health Services Corp., a Delaware corporation (“InSight”).

     As set forth in the Prospectus and in the accompanying letter of transmittal and instructions thereto (the “Letter of Transmittal”), registered Holders (as defined below) of outstanding Senior Secured Floating Rate Notes due 2011 (the “Initial Notes”) of InSight who wish to tender their Initial Notes in exchange for a like principal amount of registered Senior Secured Floating Rate Notes due 2011 (the “Exchange Notes”) of InSight and, in each case, whose Initial Notes are not immediately available but not lost or who cannot deliver their Initial Notes, the Letter of Transmittal and any other documents required by the Letter of Transmittal to U.S. Bank National Association (the “Exchange Agent”) prior to the Expiration Date (as hereinafter defined), or who cannot complete the procedure for book-entry transfer on a timely basis, may use this Notice of Guaranteed Delivery (this “Notice of Guaranteed Delivery”) to tender their Initial Notes if (i) such tender is made by or through an Eligible Institution (as defined below) and the Holder signs this Notice of Guaranteed Delivery; (ii) on or prior to the Expiration Date, the Exchange Agent has received from the Holder and the Eligible Institution a written or facsimile copy of a properly completed and duly executed Notice of Guaranteed Delivery setting forth the name and address of the Holder of the Initial Notes, the certificate number or numbers of such tendered Initial Notes and the principal amount of Initial Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five business days after the date of delivery of this Notice of Guaranteed Delivery, the Letter of Transmittal (or a copy of thereof) together with the certificate(s) representing the Initial Notes (or timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s account at the Depository Trust Company (“DTC”)) and any

other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (ii) such properly completed and executed Letter of Transmittal (or copy thereof), as well as all other documents required by the Letter of Transmittal and the certificate(s) representing all tendered Initial Notes in proper form for transfer (or timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s Account at DTC), is received by the Exchange Agent within five business days after the Expiration Date. Any Holder of Initial Notes who wishes to tender Initial Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives this Notice of Guaranteed Delivery and Letter of Transmittal prior to 5:00 p.m., New York City time, on the Expiration Date. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission (receipt confirmed by telephone and an original delivered by guaranteed overnight delivery) or mail to the Exchange Agent. See “The Exchange Offer — Procedures for Tendering Initial Notes” in the Prospectus.

          Unless the context requires otherwise, (i) the term “Holder” for purposes of this Notice of Guaranteed Delivery means: (A) any person in whose name Initial Notes are registered on the books of InSight or any other person who has obtained a properly completed bond power from the registered Holder; or (B) any participant in DTC whose Initial Notes are held of record by DTC who desires to deliver such Initial Notes by book-entry transfer at DTC, and (ii) the term “Eligible Institution” means an eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

THE EXCHANGE OFFER (AS DEFINED BELOW) WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON [                 ], 2005 (THE “EXPIRATION DATE”) UNLESS
THE EXCHANGE OFFER
IS EXTENDED BY INSIGHT IN ITS SOLE DISCRETION.
TENDERS OF INITIAL NOTES MAY BE
WITHDRAWN AT ANY TIME PRIOR TO 9:00
A.M., NEW YORK CITY TIME, ON THE NEXT
BUSINESS DAY AFTER THE EXPIRATION DATE.

          FOR ANY QUESTIONS REGARDING THIS NOTICE OF GUARANTEED DELIVERY OR FOR ANY ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT (800) 934-6802 OR BY FACSIMILE AT (651) 495-8158.

          DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

          This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an Eligible Institution, such signature guarantee must appear in the applicable space provided in the Letter of Transmittal.

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Ladies and Gentlemen:

          The undersigned hereby tender(s) to InSight, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, receipt of which is hereby acknowledged, the aggregate principal amount of Initial Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus and the instructions to the Letter of Transmittal.

          The undersigned understands that tenders of Initial Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof. The undersigned understands that tenders of Initial Notes pursuant to InSight’s offer to exchange Exchange Notes for Initial Notes pursuant to, and upon the terms and conditions described in, the Prospectus, Letter of Transmittal and instructions thereto (the “Exchange Offer”) may not be withdrawn after 5:00 p.m., New York City time, on the Expiration Date.

          All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned.

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PLEASE COMPLETE AND SIGN

Signature(s) of Registered Holder(s) or Authorized Signatory:	Name(s) of Registered Holder(s):
Principal Amount of Initial Notes Tendered:	Address:
Certificate No(s). of Initial Notes (if available):	Area Code and Tel. No.:

Date: If Initial Notes will be delivered by book-entry transfer at The Depository Trust Company, insert Depository Account No.:

     This Notice of Guaranteed Delivery must be signed by the registered Holder(s) of Initial Notes exactly as its (their) name(s) appears on certificate(s) for Initial Notes or on a security position listing as the owner of Initial Notes, or by person(s) authorized to become registered Holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information:

PLEASE PRINT

Name(s):

Capacity:

Address(es):

DO NOT SEND INITIAL NOTES WITH THIS FORM. INITIAL NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

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GUARANTEE OF DELIVERY
(Not to Be Used for Signature Guarantee)

     The undersigned, a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each of the foregoing, an “Eligible Institution”), hereby (a) represents that each holder of Initial Notes on whose behalf this tender is being made “own(s)” the Initial Notes covered hereby within the meaning of Rule 14e-4 under the Exchange Act, (b) represents that such tender of Initial Notes complies with such Rule 14e-4 and (c) guarantees that, within five business days after the date of delivery of this Notice of Guaranteed Delivery, a properly completed and duly executed Letter of Transmittal, together with certificates representing the Initial Notes covered hereby in proper form for transfer (or timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s account at DTC) and any other required documents will be deposited by the undersigned with the Exchange Agent and such properly completed and executed Letter of Transmittal, as well as all other documents required by the Letter of Transmittal and the
certificate(s) representing all tendered Initial Notes in proper form for transfer (or timely confirmation of the book-entry transfer of Initial Notes into the Exchange Agent’s account at DTC) are received by the Exchange Agent within five business days after the Expiration Date.

     THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL AND INITIAL NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME SET FORTH ABOVE AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO THE UNDERSIGNED.

Name of Firm:
Authorized Signature:
Title:
Address:
	(Zip Code)

Area Code and Telephone No.: Date:__________________, 2005      

DO NOT SEND INITIAL NOTES WITH THIS FORM. INITIAL NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

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