**Exhibit2.1**

**IN THEUNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE**
| ** **                                  | **x**        |         |
|---------------------------------------------|--------------|--------------|
| **In re:**                                  | **:**        | Chapter 11   |
| ** **                                  | **:**        |         |
| **InSight Health Services Holdings Corp.,** | **:**        | Case No. 07- |
| **etal.**                                   | **:**        |         |
| ** **                                  | **:**        |         |
| ** **                                  | **Debtors.** | **:**        |   |
| ** **                                  | **x**        |         |
|                                             |              |              |  |

**SECONDAMENDED JOINT PREPACKAGED PLAN OF REORGANIZATION OFINSIGHT HEALTH SERVICES HOLDINGS CORP., ET AL.**

Mark D. CollinsDaniel J. DeFranceschiRICHARDS, LAYTON & FINGER, P.A.One Rodney Square920 North King StreetWilmington, DE 19801Telephone:  (302) 651-7700Facsimile:    (302) 498-7701

-and-

Michael B. SolowHarold D. IsraelKAYE SCHOLER LLC70 West Madison StreetSuite 4100Chicago, IL 60602Telephone:  (312) 583-2300Facsimile:    (312) 583-2360

Attorneys for InSight Health ServicesHoldings Corp., etal.
| Dated: | Wilmington, Delaware   May 29, 2007 |
|--------|-------------------------------------|

 

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**TABLE OF CONTENTS**
| ARTICLE I. |   | DEFINITIONS, RULES OF INTERPRETATION, AND  COMPUTATION OF TIME |                                        | 1                                                         |
|------------|--------|----------------------------------------------------------------|---------------------------------------------|-----------------------------------------------------------|
|       |   | A.                                                             | Scope Of Definitions; Rules Of Construction |                                                      | 1 |
|       |   | B.                                                             | Definitions                                 |                                                      | 1 |
|       |   |                                                           | 1.1                                         | “Ad Hoc Committee”                              |   | 1 |
|       |   |                                                           | 1.2                                         | “Administrative Claim”                          |   | 1 |
|       |   |                                                           | 1.3                                         | “Allowed”                                       |   | 1 |
|       |   |                                                           | 1.4                                         | “Allowed Claim”                                 |   | 2 |
|       |   |                                                           | 1.5                                         | “Allowed Class . . . Claim”                     |   | 2 |
|       |   |                                                           | 1.6                                         | “Allowed Class . . . Interest”   |   | 2 |
|       |   |                                                           | 1.7                                         | “Amended Prospectus and Solicitation Statement” |   | 2 |
|       |   |                                                           | 1.8                                         | “Bankruptcy Code”                               |   | 2 |
|       |   |                                                           | 1.9                                         | “Bankruptcy Court”                              |   | 2 |
|       |   |                                                           | 1.10                                        | “Bankruptcy Rules”                              |   | 2 |
|       |   |                                                           | 1.11                                        | “Bar Date(s)”                                   |   | 2 |
|       |   |                                                           | 1.12                                        | “Business Day”                                  |   | 3 |
|       |   |                                                           | 1.13                                        | “Cash”                                          |   | 3 |
|       |   |                                                           | 1.14                                        | “Certificate”                                   |   | 3 |
|       |   |                                                           | 1.15                                        | “Chapter 11 Cases”                         |   | 3 |
|       |   |                                                           | 1.16                                        | “Claim”                                         |   | 3 |
|       |   |                                                           | 1.17                                        | “Class”                                         |   | 3 |
|       |   |                                                           | 1.18                                        | “Collateral”                                    |   | 3 |
|       |   |                                                           | 1.19                                        | “Committee”                                     |   | 3 |
|       |   |                                                           | 1.20                                        | “Confirmation”                                  |   | 3 |
|       |   |                                                           | 1.21                                        | “Confirmation Date”                             |   | 3 |
|       |   |                                                           | 1.22                                        | “Confirmation Order”                            |   | 3 |
|       |   |                                                           | 1.23                                        | “Corporate Documents”                           |   | 3 |
|       |   |                                                           | 1.24                                        | “Creditor”                                      |   | 3 |
|       |   |                                                           | 1.25                                        | “Debtors”                                       |   | 3 |
|       |   |                                                           | 1.26                                        | “Disbursing Agent”                              |   | 3 |
|       |   |                                                           | 1.27                                        | “Disputed Claim”                                |   | 3 |
|       |   |                                                           | 1.28                                        | “Distribution Date”                             |   | 4 |
|       |   |                                                           | 1.29                                        | “Distribution Notification Date”                |   | 4 |
|       |   |                                                           | 1.30                                        | “Distribution Reserve”                          |   | 4 |
|       |   |                                                           | 1.31                                        | “Effective Date”                                |   | 4 |
|       |   |                                                           | 1.32                                        | “Equity Securities”                             |   | 4 |
|       |   |                                                           | 1.33                                        | “Estates”                                       |   | 5 |
|       |   |                                                           | 1.34                                        | “Exchange Offer”                                |   | 5 |
|       |   |                                                           | 1.35                                        | “Existing Equity”                               |   | 5 |
|       |   |                                                           | 1.36                                        | “Exit Lenders”                                  |   | 5 |
|       |   |                                                           | 1.37                                        | “Face Amount”                                   |   | 5 |
|       |   |                                                           | 1.38                                        | “Final Order”                                   |   | 5 |
|       |   |                                                           | 1.39                                        | “FRN Claim”                                     |   | 5 |
|       |   |                                                           | 1.40                                        | “FRN Documents”                                 |   | 5 |

 

i

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|   |   |   | 1.41 | “FRN Holder”                              |   | 5 |
|--------|--------|--------|------|-----------------------------------------------------|--------|---|
|   |   |   | 1.42 | “FRN Indenture”                           |   | 5 |
|   |   |   | 1.43 | “FRN Indenture Trustee”                   |   | 5 |
|   |   |   | 1.44 | “FRN Transaction Documents”               |   | 5 |
|   |   |   | 1.45 | “FRNs”                                    |   | 6 |
|   |   |   | 1.46 | “General Unsecured Claim”                 |   | 6 |
|   |   |   | 1.47 | “Holder”                                  |   | 6 |
|   |   |   | 1.48 | “Holdings”                                |   | 6 |
|   |   |   | 1.49 | “Impaired”                                |   | 6 |
|   |   |   | 1.50 | “Indentures”                              |   | 6 |
|   |   |   | 1.51 | “InSight”                                 |   | 6 |
|   |   |   | 1.52 | “InSight Entities”                        |   | 6 |
|   |   |   | 1.53 | “Intercompany Claims”                     |   | 6 |
|   |   |   | 1.54 | “Interest”                                |   | 6 |
|   |   |   | 1.55 | Initial Consenting Parties”                    |   | 6 |
|   |   |   | 1.56 | “Lender”                                  |   | 6 |
|   |   |   | 1.57 | “Lender Secured Claims”                   |   | 6 |
|   |   |   | 1.58 | “Lien”                                    |   | 6 |
|   |   |   | 1.59 | “Litigation Claims”                       |   | 6 |
|   |   |   | 1.60 | “Loan and Security Agreement”             |   | 7 |
|   |   |   | 1.61 | “Loan Documents”                          |   | 7 |
|   |   |   | 1.62 | “Loan Parties”                            |   | 7 |
|   |   |   | 1.63 | “Lockup Agreement”                        |   | 7 |
|   |   |   | 1.64 | “Management Incentive Plan”               |   | 7 |
|   |   |   | 1.65 | “New Common Stock”                        |   | 7 |
|   |   |   | 1.66 | “New Revolving Loan Facility”             |   | 7 |
|   |   |   | 1.67 | “Old Common Stock”                        |   | 7 |
|   |   |   | 1.68 | “Original Lockup Agreement”               |   | 8 |
|   |   |   | 1.69 | “Original Signing Noteholders”            |   | 8 |
|   |   |   | 1.70 | “Other Interests”                         |   | 8 |
|   |   |   | 1.71 | “Other Priority Claims”                   |   | 8 |
|   |   |   | 1.72 | “Other Secured Claim”                     |   | 8 |
|   |   |   | 1.73 | “Person”                                  |   | 8 |
|   |   |   | 1.74 | “Petition Date”                           |   | 8 |
|   |   |   | 1.75 | “Plan”                                    |   | 8 |
|   |   |   | 1.76 | “Plan Supplement”                         |   | 8 |
|   |   |   | 1.77 | “Priority Tax Claim”                      |   | 8 |
|   |   |   | 1.78 | “Professional”                            |   | 8 |
|   |   |   | 1.79 | “Professional Fee Claim”                  |   | 8 |
|   |   |   | 1.80 | “Pro Rata”                                |   | 9 |
|   |   |   | 1.81 | “Prospectus and Solicitation Statement”   |   | 9 |
|   |   |   | 1.82 | “Registration Rights Agreement”           |   | 9 |
|   |   |   | 1.83 | “Reinstated” or “Reinstatement” |   | 9 |
|   |   |   | 1.84 | “Reorganized Debtors”                     |   | 9 |
|   |   |   | 1.85 | “Reorganized Holdings”                    |   | 9 |
|   |   |   | 1.86 | “Reorganized InSight”                     |   | 9 |

 

ii

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|         |   |                                   | 1.87                                                                                                  | “Restated Corporate Documents”   |       | 9      |
|--------------|--------|----------------------------------------|-------------------------------------------------------------------------------------------------------|--------------------------------------------|------------|--------|
|         |   |                                   | 1.88                                                                                                  | “Restructuring”                  |       | 9      |
|         |   |                                   | 1.89                                                                                                  | “Schedules”                      |       | 10     |
|         |   |                                   | 1.90                                                                                                  | “Second Lockup Agreement”        |       | 10     |
|         |   |                                   | 1.91                                                                                                  | “Secured Claim”                  |       | 10     |
|         |   |                                   | 1.92                                                                                                  | “Securities Act”                 |       | 10     |
|         |   |                                   | 1.93                                                                                                  | “Setoff Claim”                   |       | 10     |
|         |   |                                   | 1.94                                                                                                  | “SSN Claim”                      |       | 10     |
|         |   |                                   | 1.95                                                                                                  | “SSN Holder”                     |       | 10     |
|         |   |                                   | 1.96                                                                                                  | “SSN Indenture”                  |       | 10     |
|         |   |                                   | 1.97                                                                                                  | “SSN Indenture Trustee”          |       | 10     |
|         |   |                                   | 1.98                                                                                                  | “SSNs”                           |       | 10     |
|         |   |                                   | 1.99                                                                                                  | “Stock Certificate”              |       | 10     |
|         |   |                                   | 1.100                                                                                                 | “Stock Options”                  |       | 10     |
|         |   |                                   | 1.101                                                                                                 | “Subsequent Signing Noteholders” |       | 10     |
|         |   |                                   | 1.102                                                                                                 | “Subsidiary Equity Interests”    |       | 11     |
|         |   |                                   | 1.103                                                                                                 | “Substantial Contribution Claim” |       | 11     |
|         |   |                                   | 1.104                                                                                                 | “Unimpaired Claim”               |       | 11     |
|         |   |                                   | 1.105                                                                                                 | “Unsecured Claim”                |       | 11     |
|         |   | C.                                     | Rules of Interpretation                                                                               |                                       | 11         |
|         |   |                                   | 1.                                                                                                    | General                                    |       | 11     |
|         |   |                                   | 2.                                                                                                    | Rule of “Contra Proferentum”     |       | 11     |
|         |   | D.                                     | Computation of Time                                                                                   |                                       | 11         |
|         |   |                                   |                                                                                                  |                                       |       |
| ARTICLE II.  |   | CLASSIFICATION OF CLAIMS AND INTERESTS |                                                                                                  | 12                                         |
|         |   | A.                                     | Introduction                                                                                          |                                       | 12         |
|         |   | B.                                     | Unclassified Claims (not entitled to vote on the  Plan)                                               |                                       | 12         |
|         |   |                                   | 1.                                                                                                    | Administrative Claims                      |       | 12     |
|         |   |                                   | 2.                                                                                                    | Priority Tax Claims                        |       | 12     |
|         |   | C.                                     | Unimpaired Classes of Claims (deemed to have  accepted the Plan and, therefore, not entitled to vote) |                                       |  

12 |
|         |   |                                   | 1.                                                                                                    | Class 1: Other Priority Claims        |       | 12     |
|         |   |                                   | 2.                                                                                                    | Class 2: Lender Secured Claims        |       | 12     |
|         |   |                                   | 3.                                                                                                    | Class 3: FRN Claims                   |       | 12     |
|         |   |                                   | 4.                                                                                                    | Class 4: Other Secured Claims         |       | 13     |
|         |   |                                   | 5.                                                                                                    | Class 6: General Unsecured Claims     |       | 13     |
|         |   |                                   | 6.                                                                                                    | Class 7: Intercompany Claims          |       | 13     |
|         |   | D.                                     | Impaired Classes Of Claims And Interests  (Classes 5 and 8 are entitled to vote on the Plan)     |                                       | 13         |
|         |   |                                   | 1.                                                                                                    | Class 5: SSN Claims                   |       | 13     |
|         |   |                                   | 2.                                                                                                    | Class 8: Old Common Stock Interests   |       | 13     |
|         |   |                                   | 3.                                                                                                    | Class 9: Other Interests              |       | 13     |
|         |   |                                   |                                                                                                  |                                       |       |   |
| ARTICLE III. |   | TREATMENT OF CLAIMS AND INTERESTS      |                                                                                                  | 13                                         |
|         |   | A.                                     | Unclassified Claims                                                                                   |                                       | 13         |
|         |   |                                   | 1.                                                                                                    | Administrative Claims                      |       | 13     |
|         |   |                                   | 2.                                                                                                    | Priority Tax Claims                        |       | 14     |
|              |        |                                        |                                                                                                       |                                            |            |        |  |  |

iii

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|         |   | B.                                                  | Unimpaired Classes Of Claims                                             |                                                           | 14     |
|--------------|--------|-----------------------------------------------------|--------------------------------------------------------------------------|----------------------------------------------------------------|--------|
|         |   |                                                | 1.                                                                       | Class 1: Other Priority Claims                            |   | 14 |
|         |   |                                                | 2.                                                                       | Class 2: Lender Secured Claims                            |   | 14 |
|         |   |                                                | 3.                                                                       | Class 3: FRN Claims                                       |   | 14 |
|         |   |                                                | 4.                                                                       | Class 4: Other Secured Claims                                  |   | 14 |
|         |   |                                                | 5.                                                                       | Class 6: General Unsecured Claims                              |   | 15 |
|         |   |                                                | 6.                                                                       | Class 7: Intercompany Claims                                   |   | 15 |
|         |   | C.                                                  | Impaired Classes of Claims                                               |                                                           | 15     |
|         |   |                                                | 1.                                                                       | Class 5: SSN Claims                                       |   | 15 |
|         |   |                                                | 2.                                                                       | Class 8: Old Common Stock Interests                            |   | 15 |
|         |   |                                                | 3.                                                                       | Class 9: Other Interests                                  |   | 15 |
|         |   | D.                                                  | Special Provision Regarding Unimpaired Claims                            |                                                           | 16     |
|         |   |                                                |                                                                     |                                                           |   |
| ARTICLE IV.  |   | MEANS FOR IMPLEMENTATION OF THE PLAN                |                                                                     | 16                                                             |
|         |   | A.                                                  | Continued Corporate Existence                                            |                                                           | 16     |
|         |   | B.                                                  | Corporate Action                                                         |                                                           | 16     |
|         |   |                                                | 1.                                                                       | Cancellation of the Equity Securities, SSNs and SSN  Indenture |   | 16 |
|         |   |                                                | 2.                                                                       | Restated Corporate Documents                                   |   | 17 |
|         |   |                                                | 3.                                                                       | Other General Corporate Matters                                |   | 17 |
|         |   | C.                                                  | Restructuring Transactions                                               |                                                           | 17     |
|         |   |                                                | 1.                                                                       | Implementation of Settlement/Lockup Agreements                 |   | 17 |
|         |   |                                                | 2.                                                                       | New Securities                                                 |   | 18 |
|         |   |                                                | 3.                                                                       | New Revolving Loan Facility                                    |   | 18 |
|         |   | D.                                                  | Directors And Officers                                                   |                                                           | 18     |
|         |   | E.                                                  | Revesting Of Assets                                                      |                                                           | 19     |
|         |   | F.                                                  | Preservation Of Rights Of Action; Settlement Of  Litigation Claims       |                                                           | 19     |
|         |   |                                                | 1.                                                                       | Retention of Causes of Action                                  |   | 19 |
|         |   | G.                                                  | Exclusivity Period                                                       |                                                           | 20     |
|         |   | H.                                                  | Termination Of Loan and Security Agreement                               |                                                           | 20     |
|         |   | I.                                                  | Effectuating Documents; Further Reorganization  Transactions             |                                                           | 20     |
|         |   | J.                                                  | Exemption From Certain Transfer Taxes                                    |                                                           | 20     |
|         |   |                                                |                                                                     |                                                           |   |
| ARTICLE V.   |   | ACCEPTANCE OR REJECTION OF THE PLAN                 |                                                                     | 21                                                             |
|         |   | A.                                                  | Classes Entitled To Vote                                                 |                                                           | 21     |
|         |   | B.                                                  | Acceptance By Impaired Classes                                           |                                                           | 21     |
|         |   |                                                |                                                                     |                                                           |
| ARTICLE VI.  |   | SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN |                                                                     | 21                                                             |
|         |   |                                                |                                                                     |                                                           |
| ARTICLE VII. |   | PROVISIONS GOVERNING DISTRIBUTIONS                  |                                                                     | 21                                                             |
|         |   |                                                |                                                                     |                                                           |
|         |   | A.                                                  | Distributions For Claims And Interests Allowed As Of  The Effective Date |                                                           | 21     |
|         |   | B.                                                  | Interest On Claims                                                       |                                                           | 22     |
|         |   | C.                                                  | Disbursing Agent                                                         |                                                           | 22     |
|         |   | D.                                                  | Surrender Of Securities Or Instruments                                   |                                                           | 22     |
|         |   | E.                                                  | Instructions To Disbursing Agent                                         |                                                           | 23     |
|              |        |                                                     |                                                                          |                                                                |        |  |  |  |

iv

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|          |                                     | F.                                                                      | Services Of Indenture Trustees, Agents, And  Servicers                        |                                                    | 23     |
|---------------|------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------------|---------------------------------------------------------|--------|
|          |                                     | G.                                                                      | Notification Date For Distributions To Holders Of  Debt and Equity Securities |                                                    | 23     |
|          |                                     | H.                                                                      | Means Of Cash Payment                                                         |                                                    | 23     |
|          |                                     | I.                                                                      | Delivery Of Distributions                                                     |                                                    | 23     |
|          |                                     | J.                                                                      | Fractional Dollars; De Minimis Distributions                                  |                                                    | 24     |
|          |                                     | K.                                                                      | Withholding And Reporting Requirements                                        |                                                    | 24     |
|          |                                     | L.                                                                      | Calculation of Distribution Amounts of New Common  Stock                      |                                                    | 24     |
|          |                                     | M.                                                                      | Setoffs                                                                       |                                                    | 25     |
|          |                                     | N.                                                                      | Change of Control                                                             |                                                    | 25     |
|          |                                     |                                                                    |                                                                          |                                                    |   |
| ARTICLE VIII. | EXECUTORY CONTRACTS AND UNEXPIRED LEASES |                                                                    | 25                                                                            |
|          |                                     | A.                                                                      | Assumption                                                                    |                                                    | 25     |
|          |                                     | B.                                                                      | Pass-Through                                                                  |                                                    | 25     |
|          |                                     | C.                                                                      | Assumed Executory Contracts and Unexpired Leases  Related to Real Property    |                                                    | 26     |
|          |                                     | D.                                                                      | Cure Costs and Bar Dates                                                      |                                                    | 26     |
|          |                                     |                                                                    | 1.                                                                            | Cure                                                    |   | 26 |
|          |                                     |                                                                    | 2.                                                                            | Bar Date for Filing Claims for Rejection Damages        |   | 26 |
|          |                                     | E.                                                                      | Survival of Indemnification and Corporation  Contribution                     |                                                    | 26     |
|          |                                     |                                                                    |                                                                          |                                                    |   |
| ARTICLE IX.   |                                     | PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND  UNLIQUIDATED CLAIMS |                                                                          | 27                                                      |
|          |                                     | A.                                                                      | Objection Deadline; Prosecution Of Objections                                 |                                                    | 27     |
|          |                                     | B.                                                                      | No Distributions Pending Allowance                                            |                                                    | 27     |
|          |                                     | C.                                                                      | Distribution Reserve                                                          |                                                    | 27     |
|          |                                     | D.                                                                      | Distributions After Allowance                                                 |                                                    | 28     |
|          |                                     | E.                                                                      | General Unsecured Claims                                                      |                                                    | 28     |
|          |                                     |                                                                    |                                                                          |                                                    |   |
| ARTICLE X.    |                                     | CONDITIONS PRECEDENT TO CONFIRMATION AND  CONSUMMATION OF THE PLAN      |                                                                          | 28                                                      |
|          |                                     | A.                                                                      | Conditions To Confirmation                                                    |                                                    | 28     |
|          |                                     | B.                                                                      | Conditions To Consummation                                                    |                                                    | 29     |
|          |                                     | C.                                                                      | Substantial Consummation                                                      |                                                    | 31     |
|          |                                     | D.                                                                      | Waiver Of Conditions                                                          |                                                    | 31     |
|          |                                     |                                                                    |                                                                          |                                                    |   |
| ARTICLE XI.   |                                     | MODIFICATIONS AND AMENDMENTS                                            |                                                                          | 32                                                      |
|          |                                     |                                                                    |                                                                          |                                                    |
| ARTICLE XII.  |                                     | RETENTION OF JURISDICTION                                               |                                                                          | 32                                                      |
|          |                                     |                                                                    |                                                                          |                                                    |
| ARTICLE XIII. | COMPROMISES AND SETTLEMENTS              |                                                                    | 33                                                                            |
|          |                                     |                                                                    |                                                                          |
| ARTICLE XIV.  | MISCELLANEOUS PROVISIONS                 |                                                                    | 34                                                                            |
|          |                                     | A.                                                                      | Bar Dates For Certain Claims                                                  |                                                    | 34     |
|          |                                     |                                                                    | 1.                                                                            | Administrative Claims: Substantial Contribution  Claims |   | 34 |
|          |                                     |                                                                    | 2.                                                                            | Administrative Ordinary Course Liabilities              |   | 34 |
|          |                                     |                                                                    | 3.                                                                            | Administrative Tax Claims                               |   | 34 |
|               |                                          |                                                                         |                                                                               |                                                         |        |  |  |  |  |

 

v

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|             |   |                 | 4.                                                               | Professional Fee Claims |   | 35 |
|-------------|--------|----------------------|------------------------------------------------------------------|-------------------------|--------|----|
|        |   | B.                   | Payment Of Statutory Fees                                        |                    | 35     |
|        |   | C.                   | Severability Of Plan Provisions                                  |                    | 35     |
|        |   | D.                   | Successors And Assigns                                           |                    | 35     |
|        |   | E.                   | Discharge Of The Debtors                                         |                    | 36     |
|        |   | F.                   | Exculpation And Limitation Of Liability                          |                    | 36     |
|        |   | G.                   | Permanent Injunction                                             |                    | 37     |
|        |   | H.                   | Debtors’ Releases                                           |                    | 37     |
|        |   | I.                   | Releases by Holders of Claims and Interests                      |                    | 38     |
|        |   | J.                   | Binding Effect                                                   |                    | 38     |
|        |   | K.                   | Revocation, Withdrawal, Or Non-Consummation                      |                    | 39     |
|        |   | L.                   | Plan Supplement                                                  |                    | 39     |
|        |   | M.                   | Notices                                                          |                    | 39     |
|        |   | N.                   | Indemnification Obligations                                      |                    | 40     |
|        |   | O.                   | Prepayment                                                       |                    | 40     |
|        |   | P.                   | Term Of Injunctions Or Stay                                      |                    | 41     |
|        |   | Q.                   | Registration Rights Agreement                                    |                    | 41     |
|        |   | R.                   | Hart-Scott-Rodino Compliance                                     |                    | 41     |
|        |   | S.                   | Allocation of Plan Distributions Between Principal  and Interest |                    | 41     |
|        |   | T.                   | Dissolution of Committee                                         |                    | 41     |
|        |   | U.                   | No Admissions                                                    |                    | 41     |
|        |   | V.                   | Governing Law                                                    |                    | 42     |
|        |   |                 |                                                             |                    |   |
| ARTICLE XV. |   | CONFIRMATION REQUEST |                                                             | 42                      |

 

vi

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**TABLE OF EXHIBITS**
| Exhibit | ** ** | **Name**                                                       |
|---------|------------|----------------------------------------------------------------|
| A       |       | Amended and Restated Certificate of Incorporation of  Holdings |
| B       |       | Second Amended and Restated Bylaws of Holdings                 |
| C       |       | Registration Rights Agreement                                  |
| D       |       | Schedule of Rejected Executory Contracts                       |

 

vii

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**INTRODUCTION**

InSight Health Services Holdings Corp. and InSight Health ServicesCorp., each a Delaware corporation, (the “Debtors”) hereby propose thefollowing second amended joint prepackaged plan of reorganization (the “Plan”)for the resolution of their outstanding creditor Claims (hereinafter defined)and equity Interests (hereinafter defined). All holders of Claims and Interestsare encouraged to read the Plan and the accompanying solicitation materials intheir entirety before voting to accept or reject the Plan. No materials otherthan the accompanying solicitation materials and any exhibits and schedulesattached thereto or referenced therein have been authorized by the Debtors foruse in soliciting acceptances or rejections of the Plan. The Debtors are theproponents of this Plan within the meaning of section 1129 of theBankruptcy Code (hereinafter defined).

Subject to certain restrictions and requirements set forth insection 1127 of the Bankruptcy Code and Fed. R. Bankr. P. 3019and those restrictions on modifications set forth in Article X of thisPlan, the Debtors reserve the right to alter, amend, modify, revoke or withdrawthis Plan prior to its substantial consummation.

**ARTICLE I.**Definitions, Rules ofInterpretation,and Computation of Time

## **A.****                                    ScopeOf Definitions; Rules Of Construction**

For purposes of this Plan, except as expressly provided or unless thecontext otherwise requires, all capitalized terms not otherwise defined shallhave the meanings ascribed to them in Article 1 of this Plan. Any termused in this Plan that is not defined herein, but is defined in the BankruptcyCode or the Bankruptcy Rules, shall have the meaning ascribed to that term inthe Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires,such terms shall include the plural as well as the singular number. Themasculine gender shall include the feminine, and the feminine gender shallinclude the masculine.

## **B.****                                    Definitions**

1.1           “AdHoc Committee” means the informal committee of certain holders of the SSNs thatwas formed prior to the Petition Date who, among other things, negotiated theterms and conditions of this Plan and certain other related documents andpleadings with the Debtors prior to the Petition Date.

1.2           “AdministrativeClaim” means a Claim for payment of an administrative expense of a kindspecified in section 503(b) of the Bankruptcy Code and entitled topriority pursuant to section 507(a)(1) of the Bankruptcy Code and incurredprior to the Effective Date, including, but not limited to (a) ProfessionalFee Claims and (b) all fees and charges assessed against the Estates underchapter 123 of title 28, United States Code.

1.3           “Allowed”means when used in reference to a Claim or Interest within a particular Class,an Allowed Claim or Allowed Interest of the type described in such Class.

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1.4           “Allowed Claim” means a Claim or anyportion thereof (a) as to which no objection to allowance or request forestimation has been interposed on or before the Effective Date or theexpiration of such other applicable period of limitation fixed by theBankruptcy Code, Bankruptcy Rules, or the Bankruptcy Court or is listed on theSchedules as liquidated, non-contingent and undisputed, (b) as to whichany objection to its allowance has been settled, waived through payment, orwithdrawn, or has been denied by a Final Order, (c) that has been allowedby a Final Order, (d) as to which the liability of the Debtors, and theamount thereof are determined by final order of a court of competentjurisdiction other than the Bankruptcy Court, or (e) that is expresslyallowed in a liquidated amount in the Plan; *provided*,*however*, that with respect to anAdministrative Claim, “Allowed Claim” means an Administrative Claim as to whicha timely request for payment has been made in accordance withArticle XIV.A of this Plan (if such written request is required) or otherAdministrative Claim, in each case as to which the Debtors (1) have notinterposed a timely objection or (2) have interposed a timely objectionand such objection has been settled, waived through payment or withdrawn, orhas been denied by a Final Order.

1.5           “AllowedClass . . . Claim” means an Allowed Claim in the particular Class described.

1.6           “AllowedClass . . . Interest” means an Interest in the particularClass described (a) that has been allowed by a Final Order,(b) for which (i) no objection to its allowance has been filed withinthe periods of limitation fixed by the Bankruptcy Code or by any Final Order ofthe Bankruptcy Court or is listed on the Schedules as liquidated,non-contingent and undisputed, or (ii) any objection to its allowance hasbeen settled or withdrawn, or (c) that is expressly allowed in the Plan.

1.7           “AmendedProspectus and Solicitation Statement” means the Amended Prospectus andSolicitation Statement for solicitation of the Exchange Offer filed under Rule424(b) under the Securities and Exchange Act of 1933 with the United StatesSecurities and Exchange Commission on May 2, 2007.

1.8           “BankruptcyCode” means the Bankruptcy Reform Act of 1978, as codified in title 11 ofthe United States Code, 11 U.S.C. §§ 101-1532, as now in effector hereafter amended.

1.9           “BankruptcyCourt” means the United States Bankruptcy Court for the District of Delaware orsuch other court as may have jurisdiction over the Chapter 11 Cases.

1.10         “BankruptcyRules” means, collectively, the Federal Rules of Bankruptcy Procedure and theOfficial Bankruptcy Forms, as amended, the Federal Rules of Civil Procedure, asamended, as applicable to the Chapter 11 Cases or proceedings therein, and theLocal Rules of the Bankruptcy Court, as applicable to the Chapter 11 Casesor proceedings therein, as the case may be.

1.11         “BarDate(s)” means the date(s), if any, designated by the Bankruptcy Court as thelast dates for filing proofs of Claim or Interest against the Debtors.

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1.12         “BusinessDay” means any day, excluding Saturdays, Sundays or “legal holidays” (asdefined in Fed. R. Bankr. P. 9006(a)), on which commercial banksare open for business in New York, New York.

1.13         “Cash”means legal tender of the United States or equivalents thereof.

1.14         “Certificate”shall have the meaning set forth in Article VII.D of the Plan.

1.15         “Chapter 11Cases” means the bankruptcy cases of the Debtors commenced underchapter 11 of the Bankruptcy Code, captioned “In re InSight HealthServices Holdings Corp.,” etal. (Case No. 07                ).

1.16         “Claim”means a claim against the Debtors, whether or not asserted, as defined insection 101(5) of the Bankruptcy Code.

1.17         “Class”means a category of Holders of Claims or Interests, as described inArticle II below.

1.18         “Collateral”means any property or interest in property of the Debtors’ Estates subject to aLien to secure the payment or performance of a Claim, which Lien is not subjectto avoidance under the Bankruptcy Code or otherwise invalid under theBankruptcy Code or applicable state law.

1.19         “Committee”means the committee of unsecured Creditors, if any, appointed pursuant tosection 1102(a) of the Bankruptcy Code in the Chapter 11 Cases.

1.20         “Confirmation”means entry by the Bankruptcy Court of the Confirmation Order.

1.21         “ConfirmationDate” means the date of entry by the clerk of the Bankruptcy Court of theConfirmation Order.

1.22         “ConfirmationOrder” means the order entered by the Bankruptcy Court confirming the Planpursuant to section 1129 of the Bankruptcy Code.

1.23         “CorporateDocuments” means, as applicable, the certificate of incorporation and bylaws(or any other applicable organizational documents) of the Debtors in effect asof the Petition Date.

1.24         “Creditor”means any Person who holds a Claim against any Debtor.

1.25         “Debtors”means Holdings and InSight.

1.26         “DisbursingAgent” means the Reorganized Debtors or any party designated by the ReorganizedDebtors, in their sole discretion, to serve as a disbursing agent under thePlan.

1.27         “DisputedClaim” or “Disputed Interest” means any Claim or Interest not otherwise Allowedor paid pursuant to the Plan or an order of the Bankruptcy Court (a) whichhas been or hereafter is listed on the Schedules as unliquidated, contingent,or disputed, and

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whichhas not been resolved by written agreement of the parties or an order of theBankruptcy Court, (b) proof of which was required to be filed by order ofthe Bankruptcy Court but as to which a proof of Claim or Interest was nottimely or properly filed, (c) proof of which was timely and properly filedand which has been or hereafter is listed on the Schedules as unliquidated,disputed or contingent, (d) that is disputed in accordance with theprovisions of this Plan, or (e) as to which the Debtors have interposed atimely objection or request for estimation in accordance with the BankruptcyCode, the Bankruptcy Rules, and any orders of the Bankruptcy Court, or isotherwise disputed by the Debtors in accordance with applicable law, whichobjection, request for estimation, or dispute has not been withdrawn ordetermined by a Final Order; *provided*,*however*, that for purposes of determiningwhether a particular Claim or Interest is a Disputed Claim or Disputed Interestprior to the expiration of any period of limitation fixed for the interpositionby the Debtors of objections to the allowance of Claims or Interests, any Claimor Interest that is not identified by the Debtors as an Allowed Claim orAllowed Interest shall be deemed a Disputed Claim or Disputed Interest,respectively.

1.28         “DistributionDate” means the date, occurring as soon as practicable after the EffectiveDate, upon which distributions are made by the Reorganized Debtors to Holdersof Administrative, Priority Tax, and Class 1, 2, 4, 5 and 6 Claims andClass 8 Interests.

1.29         “DistributionNotification Date” means the notification date for purposes of makingdistributions under the Plan on account of Allowed Claims, which date shall bethe fifth (5th) Business Day following the Effective Date.

1.30         “DistributionReserve” means the reserve, if any, established and maintained by theReorganized Debtors, into which the Reorganized Debtors shall deposit theamount of Cash or other property that would have been distributed by theReorganized Debtors on the Distribution Date to Holders of (a) DisputedClaims, (b) contingent liquidated Claims, if such Claims had beenundisputed or noncontingent Claims on the Distribution Date, pending (i) theallowance of such Claims, (ii) the estimation of such Claims for purposesof allowance, or (iii) the realization of the contingencies, and(c) unliquidated Claims, if such Claims had been liquidated on theDistribution Date, such amount to be estimated by the Bankruptcy Court oragreed upon by the Debtors or Reorganized Debtors, as the case may be, and theHolders thereof as sufficient to satisfy such unliquidated Claim upon suchClaim’s (x) allowance, (y) estimation for purposes of allowance, or(z) liquidation, pending the occurrence of such estimation or liquidation.

1.31         “EffectiveDate” means the Business Day on which all conditions to the consummation of thePlan as set forth in Article X.B hereof have been satisfied or waived asprovided in Article X.D hereof.

1.32         “EquitySecurities” means, collectively, the Old Common Stock and Stock Options,together with any options, warrants, or rights, contractual or otherwise, toacquire or receive any such stock or ownership interests, including, but notlimited to, the Stock Options and any contracts or agreements pursuant to whichthe non-debtor party was or could have been entitled to receive shares of stockor other ownership interests in Holdings.

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1.33         “Estates”means the estates of the Debtors in the Chapter 11 Cases, created pursuantto section 541 of the Bankruptcy Code.

1.34         “ExchangeOffer” means the exchange offer defined in the Amended Prospectus andSolicitation Statement.

1.35         “ExistingEquity” means the holders of the Equity Securities as of the Petition Date.

1.36         “ExitLenders” means the lender(s) under the New Revolving Loan Facility.

1.37         “FaceAmount” means (a) when used in reference to a Disputed Claim, the fullstated amount claimed by the Holder of such Claim in any proof of Claim timelyfiled with the Bankruptcy Court or otherwise deemed timely filed by any FinalOrder of the Bankruptcy Court or other applicable bankruptcy law, and(b) when used in reference to an Allowed Claim, the allowed amount of suchClaim.

1.38         “FinalOrder” means an order or judgment of the Bankruptcy Court, or other court ofcompetent jurisdiction, as entered on the docket in the Chapter 11 Cases,the operation or effect of which has not been stayed, reversed, or amended andas to which order or judgment (or any revision, modification, or amendmentthereof) the time to appeal or seek review or rehearing has expired and as towhich no appeal or petition for review or rehearing was filed or, if filed,remains pending.

1.39         “FRNClaim” means a Claim of a FRN Holder arising under or on account of the FRNs.

1.40         “FRNDocuments” means, collectively, (a) the FRN Indenture, (b) each othersecurity agreement or pledge agreement entered into pursuant to the FRNIndenture or other documents designated as a “Security Document” in the FRNIndenture and (c) each other agreement that creates or purports to createor perfect a Lien in favor of the FRN Indenture Trustee.

1.41         “FRNHolder” means a Holder of the FRNs.

1.42         “FRNIndenture” means the indenture dated September 22, 2005, among InSight,Holdings and each other subsidiary guarantor a signatory thereto and the FRNIndenture Trustee, as amended, pursuant to which the FRNs were issued.

1.43         “FRNIndenture Trustee” means U.S. Bank National Association or its successor, in eithercase in its capacity as indenture trustee pursuant to the FRN Indenture.

1.44         “FRNTransaction Documents” means that certain (i) Waiver and Agreement No. 1 toIndenture dated May 29, 2007 by and among the Loan Parties and the InitialConsenting Parties, and acknowledged by the FRN Indenture Trustee (ii) theSecond Supplemental Indenture dated May 29, 2007 by and among the Loan Partiesand the FRN Indenture Trustee, (iii) commitment letter dated May 29, 2007 byand among Initial Consenting Parties and the Debtors,

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and(iv) that certain Black Diamond Capital Management, L.L.C. (“Black Diamond”)Participation Agreement dated May 29, 2007 by and among the Debtors and BlackDiamond.

1.45         “FRNs”means the Senior Secured Floating Rate Notes due 2011 of InSight issued andoutstanding under the FRN Indenture.

1.46         “GeneralUnsecured Claim” means any Unsecured Claim against the Debtors that is not(a) included in Classes 1 through 5, inclusive, (b) anAdministrative Claim, (c) a Priority Tax Claim, or (d) an IntercompanyClaim.

1.47         “Holder”means the beneficial holder of any Claim or Interest.

1.48         “Holdings”means InSight Health Services Holdings Corp.

1.49         “Impaired”means, when used with reference to a Claim or Interest, a Claim or Interestthat is impaired within the meaning of section 1124 of the BankruptcyCode.

1.50         “Indentures”shall mean the FRN Indenture and the SSN Indenture.

1.51         “InSight”means InSight Health Services Corp.

1.52         “InSightEntities” means the Debtors’ domestic operating subsidiaries.

1.53         “IntercompanyClaims” means any Claims by a Debtor or an affiliate of a Debtor againstanother Debtor or an affiliate of a Debtor.

1.54         “Interest”means (a) the legal, equitable, contractual and other rights of any Personwith respect to Old Common Stock, Stock Options, or any other Equity Securitiesof Holdings and (b) the legal, equitable, contractual or other rights ofany Person to acquire or receive any of the foregoing.

1.55         InitialConsenting Parties” means J.P. Morgan Securities, Inc. and Black DiamondCapital Management, L.L.C. and each of their affiliates.

1.56         “Lender”means Bank of America, N.A.

1.57         “LenderSecured Claims” means all of the Claims of Lender and its successors andpermitted assigns, under or arising out of any of the Loan Documents.

1.58         “Lien”means a charge against or interest in property to secure payment of a debt orperformance of an obligation.

1.59         “LitigationClaims” means the claims, rights of action, suits, or proceedings, whether inlaw or in equity, whether known or unknown, that the Debtors or the Estates mayhold against any Person, which are to be retained by the Reorganized Debtorspursuant to Article IV.F of this Plan.

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1.60         “Loanand Security Agreement” means that certain Amended and Restated Loan andSecurity Agreement, dated as of September 22, 2005, among the Loan Partiesand the Lender, as amended, modified, or supplemented from time to timethereafter.

1.61         “LoanDocuments” means, collectively (a) the Loan and Security Agreement,(b) each other security agreement or pledge agreement entered intopursuant to the Loan and Security Agreement or other documents designated as a “LoanDocument” in the Loan and Security Agreement, and (c) each other agreementthat creates or purports to create or perfect a Lien in favor of the Lender.

1.62         “LoanParties” means Holdings, InSight and the following direct and indirectwholly-owned subsidiaries of Holdings: Comprehensive Medical Imaging Centers,Inc., Comprehensive Medical Imaging, Inc., Comprehensive Medical Imaging-Bakersfield,Inc., Comprehensive Medical Imaging-Biltmore, Inc., Comprehensive MedicalImaging-Fairfax, Inc., Comprehensive Medical Imaging-Fremont, Inc.,Comprehensive Medical Imaging-San Francisco, Inc., Comprehensive OPEN MRI-Garland,Inc., Comprehensive OPEN MRI-Carmichael/Folsom, LLC, Comprehensive OPENMRI-East Mesa, Inc., Diagnostic Solutions Corp., IMI of Arlington, Inc., IMI ofKansas City, Inc., InSight Health Corp., InSight Imaging Services Corp.,Jefferson MRI, Jefferson MRI-Bala, Los Gatos Imaging Center, Maxum HealthCorp., Maxum Health Services Corp., Maxum Health Services of Dallas, Inc.,Maxum Health Services of North Texas, Inc., Mesa MRI, Mountain View MRI, MRIAssociates, L.P., NDDC, Inc., Open MRI, Inc., Orange County Regional PETCenter-Irvine, LLC, Parkway Imaging Center, LLC, Phoenix Regional PETCenter-Thunderbird, LLC, Radiosurgery Centers, Inc., San Fernando ValleyRegional PET Center, LLC, Signal Medical Services, Inc., Syncor DiagnosticsBakersfield, LLC, Syncor Diagnostics Sacramento, LLC, TME Arizona, Inc.,Valencia MRI, LLC, Wilkes-Barre Imaging, L.L.C., and Woodbridge MRI.

1.63         “LockupAgreement” means the Original Lockup Agreement and the Second Lockup Agreement.

1.64         “ManagementIncentive Plan” means the management incentive plan that will be implemented bythe Reorganized Debtors to provide equity incentives to the Reorganized Debtors’management; provided that any equity issued under the ManagementIncentive Plan will dilute all holders of New Common Stock, including theHolders of SSN Claims and Old Common Stock Interests, on a pro rata basis.

1.65         “NewCommon Stock” means 8,644,444 registered shares of common shares of ReorganizedHoldings authorized under Article IV of the Plan and issued pursuant tothe Plan or the Exchange Offer, as the case may be.

1.66         “NewRevolving Loan Facility” means the new senior secured credit facilit(ies) in anaggregate principal amount that is not anticipated to be more than $30 million,which the Reorganized Debtors will enter into as a condition to theconsummation of the Plan.

1.67         “OldCommon Stock” means the common stock of Holdings issued and outstanding as ofthe Petition Date with a par value $0.0001 per share.

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1.68         “OriginalLockup Agreement” means the Lockup Agreement, dated as of February 16,2007, among the Debtors and the Original Signing Noteholders who have agreed totender all of their SSNs to the Debtors in the Exchange Offer, as amended.

1.69         “OriginalSigning Noteholders” means the holders of the SSNs that are signatories to theOriginal Lockup Agreement.

1.70         “OtherInterests” means all Interests in the Debtors as of the Petition Date that arenot included in Class 8. Other Interests shall include the Interests of Holdersof Stock Options to purchase Old Common Stock issued and outstanding on thePetition Date.

1.71         “OtherPriority Claims” means a Claim entitled to priority under sections 507(a)(2),(3), (4), (5), (6), (7) and/or (9) of the Bankruptcy Code.

1.72         “OtherSecured Claim” means any Secured Claim against Debtors, other than Claims inClasses 2 and 3.

1.73         “Person” means an individual,partnership, limited liability company, trust, incorporated or unincorporatedassociation, joint venture, joint stock company, government (or an agreed orpolitical subdivision thereof) or other entity of any kind.

1.74         “PetitionDate” means the date or dates on which each of the respective Debtors filetheir voluntary petitions for reorganization relief under chapter 11 of theBankruptcy Code commencing the Chapter 11 Cases.

1.75         “Plan”means this chapter 11 reorganization plan for the Debtors and all exhibitsannexed hereto or referenced herein, as the same may be amended, modified orsupplemented from time to time.

1.76         “PlanSupplement” means the compilation of documents and forms of documents specifiedin the Plan which will be filed with the Bankruptcy Court not later than ten(10) days prior to the Confirmation Date.

1.77         “PriorityTax Claim” means a Claim that is entitled to priority pursuant tosection 507(a)(8) of the Bankruptcy Code.

1.78         “Professional”means any professional employed (i) by the Ad Hoc Committee in the event thatthe Ad Hoc Committee does not disband after the commencement of the Chapter 11Cases, and (ii) in the Chapter 11 Cases pursuant to sections 327, 328 or1103 of the Bankruptcy Code or otherwise and the professionals seekingcompensation or reimbursement of expenses in connection with theChapter 11 Cases pursuant to section 503(b)(4) of the BankruptcyCode.

1.79         “ProfessionalFee Claim” means a Claim of a Professional for compensation or reimbursement ofcosts and expenses relating to services incurred after the Petition Date andprior to and including the Effective Date.

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1.80         “ProRata” means, at any time, the proportion that the Face Amount of a Claim or Interest,as applicable in a particular Class bears to the aggregate Face Amount ofall Claims (including Disputed Claims) in such Class or all Interests(including Disputed Interests), as applicable, unless the Plan providesotherwise.

1.81         “Prospectusand Solicitation Statement” means the Prospectus and Solicitation Statement forsolicitation and approval of this Plan set forth in the Registration Statementon Form S-4, dated as of March 21, 2007, Registration No. 333-140754.

1.82         “RegistrationRights Agreement” means an agreement to be entered into by the ReorganizedDebtors and certain holders of the New Common Stock with respect to the NewCommon Stock, a copy of which will be filed as a Plan Supplement.

1.83         “Reinstated”or “Reinstatement” means (i) leaving unaltered the legal, equitable, andcontractual rights to which a Claim entitles the holder of such Claim so as toleave such Claim unimpaired in accordance with section 1124 of the BankruptcyCode or (ii) notwithstanding any contractual provision or applicable lawthat entitles the holder of such Claim to demand or receive accelerated paymentof such Claim after the occurrence of a default (a) curing any suchdefault that occurred before or after the Petition Date, other than a defaultof a kind specified in section 365(b)(2) of the Bankruptcy Code;(b) reinstating the maturity of such Claim as such maturity existed beforesuch default; (c) compensating the holder of such Claim for any damagesincurred as a result of any reasonable reliance by such holder on suchcontractual provision or such applicable law; and (d) not otherwisealtering the legal, equitable, or contractual rights to which such Claimentitles the holder of such Claim; *provided*,*however*, that any contractualright that does not pertain to the payment when due of principal and intereston the obligation on which such Claim is based, including, but not limited to,financial covenant ratios, negative pledge covenants, covenants or restrictionson merger or consolidation, and affirmative covenants regarding corporateexistence prohibiting certain transactions or actions contemplated by the Plan,or conditioning such transactions or actions on certain factors, shall not berequired to be reinstated in order to accomplish Reinstatement.

1.84         “ReorganizedDebtors” means the Debtors as revested with the property of the Estates on andafter the Effective Date.

1.85         “ReorganizedHoldings” means Holdings as revested with the property of its Estate on andafter the Effective Date.

1.86         “ReorganizedInSight” means InSight as revested with the property of its Estate on and afterthe Effective Date.

1.87         “RestatedCorporate Documents” means as applicable, the amended and restated certificateof incorporation and bylaws (or any other applicable organizational documents)of the Reorganized Debtors in effect on the Effective Date, a copy of whichwill be filed as a Plan Supplement.

1.88         “Restructuring”means, collectively, the transactions and transfers described inArticle IV of this Plan.

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1.89         “Schedules”means the schedules of assets and liabilities and the statements of financialaffairs, if any, filed in the Bankruptcy Court pursuant to section 521 of theBankruptcy Code and Bankruptcy Rule 1007(b) by the Debtors as suchschedules or statements may be amended or supplemented from time to time inaccordance with Fed. R. Bankr. P. 1009 or orders of the BankruptcyCourt.

1.90         “SecondLockup Agreement” means the Lockup Agreement, dated as of May 1, 2007, amongthe Debtors and the Subsequent Signing Noteholders who have agreed to tenderall of their SSNs to the Debtors in the Exchange Offer.

1.91         “SecuredClaim” means a Claim that is secured by a security interest in or lien uponproperty, or the proceeds of the sale of such property, in which the Debtorshave an interest, to the extent of the value, as of the Effective Date or suchlater date as is established by the Bankruptcy Court, of such interest or lienas determined by a Final Order of the Bankruptcy Court pursuant to section 506of the Bankruptcy Code or as otherwise agreed upon in writing by the Debtors orReorganized Debtors and the Holder of such Claim.

1.92         “SecuritiesAct” means the Securities Act of 1933, 15 U.S.C. §§ 77a-77aa,as now in effect or hereafter amended.

1.93         “SetoffClaim” means a Claim, against the Debtors, of a Holder that has a valid rightof setoff with respect to such Claim, which right is enforceable undersection 553 of the Bankruptcy Code as determined by a Final Order or asotherwise agreed in writing by the Debtors, to the extent of the amount subjectto such right of setoff.

1.94         “SSNClaim” means a Claim of a SSN Holder arising under or on an account of theSSNs.

1.95         “SSNHolder” means a holder of the SSNs.

1.96         “SSNIndenture” means the indenture, dated as of October 30, 2001, amongInSight, Holdings and each other subsidiary guarantor a signatory thereto andthe SSN Indenture Trustee, as amended, pursuant to which the SSNs were issued.

1.97         “SSNIndenture Trustee” means U.S. Bank Trust National Association (as successor toState Street Bank and Trust Company, N.A) or its successor, in either case inits capacity as indenture trustee pursuant to the SSN Indenture.

1.98         “SSNs”means the 9.875% Senior Subordinated Notes Due 2011 of InSight, issued andoutstanding under the SSN Indenture.

1.99         “StockCertificate” shall have the meaning set forth in Article VII.D of the Plan.

1.100       “StockOptions” means the outstanding options to purchase Old Common Stock, as of thePetition Date, if any.

1.101       “SubsequentSigning Noteholders” means the holders of the SSNs that are signatories to theSecond Lockup Agreement.

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1.102       “SubsidiaryEquity Interests” means any Interest of a Debtor in another Debtor.

1.103       “SubstantialContribution Claim” means a claim for compensation or reimbursement of expensesincurred in making a substantial contribution in the Chapter 11 Cases pursuantto sections 503(b)(3), (4), or (5) of the Bankruptcy Code.

1.104       “UnimpairedClaim” means a Claim that is not an Impaired Claim.

1.105       “UnsecuredClaim” means any claim against the Debtors that is not an Other Priority Claim,Other Secured Claim, Priority Tax Claim or Secured Claim.

## **C.****                                    Rulesof Interpretation**

### 1.*             General*

For purposes of the Plan(a) any reference in the Plan to a contract, instrument, release,indenture, or other agreement or document being in a particular form or onparticular terms and conditions means that such document shall be substantiallyin such form or substantially on such terms and conditions, (b) anyreference in the Plan to an existing document or exhibit filed or to be filedmeans such document or exhibit as it may have been or may be amended, modified,or supplemented, (c) unless otherwise specified, all references in thePlan to Sections, Articles, Schedules, and Exhibits are references to Sections,Articles, Schedules, and Exhibits of or to the Plan, (d) the words “herein”and “hereto” refer to the Plan in its entirety rather than to a particularportion of the Plan, (e) captions and headings to Articles and Sectionsare inserted for convenience of reference only and are not intended to be apart of or to affect the interpretation of the Plan, and (f) the rules ofconstruction set forth in section 102 of the Bankruptcy Code and in theBankruptcy Rules shall apply.

2.*             Rule of “Contra Proferentum”* Not Applicable

This Plan is the productof extensive discussions and negotiations between and among, *inter alia*, the Debtors, the Ad HocCommittee, and certain other creditors and constituencies. Each of theforegoing was represented by counsel who either (a) participated in theformulation and documentation of or (b) was afforded the opportunity toreview and provide comments on, the Plan, the Lockup Agreements, the Prospectusand Solicitation Statement, and the documents ancillary thereto. Accordingly,unless explicitly indicated otherwise, the general rule of contractconstruction known as “*contra proferentum*”shall not apply to the construction or interpretation of any provision of thisPlan, the Lockup Agreements, the Prospectus and Solicitation Statement, or anycontract, instrument, release, indenture, or other agreement or documentgenerated in connection therewith.

## **D.****                                    Computationof Time**

In computing any periodof time prescribed or allowed by the Plan, the provisions of Fed. R.Bankr. P. 9006(a) shall apply.

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**ARTICLE II.**Classification of Claims andInterests

## **A.****                                    Introduction**

All Claims and Interests,Administrative Claims and Priority Tax Claims, are placed in the Classes setforth below. In accordance with section 1123(a)(1) of the Bankruptcy Code,Administrative Claims and Priority Tax Claims, as described below, have notbeen classified.

A Claim or Interest isplaced in a particular Class only to the extent that a Claim or Interest fallswithin the description of that Class, and is classified in other Classes to theextent that any portion of the Claim or Interest falls within the descriptionof such other Classes. A Claim is also placed in a particular Class forthe purpose of receiving distributions pursuant to the Plan only to the extentthat such Claim is an Allowed Claim in that Class and such Claim has not beenpaid, released, or otherwise settled prior to the Effective Date.

## **B.****                                    UnclassifiedClaims (not entitled to vote on the Plan)**

### 1.*             AdministrativeClaims*

### 2.*             PriorityTax Claims*

## **C.****                                    UnimpairedClasses of Claims (deemed to have accepted the Plan and, therefore, notentitled to vote)**

### 1.*             Class 1:  Other Priority Claims*

Class 1 consists of all Other Priority Claims. These Claims areprimarily for employee wages, vacation pay, severance pay, contributions tobenefit plans and other similar amounts. The Debtors estimate that theaggregate amount of Allowed Other Priority Claims will be $0 on the EffectiveDate.

### 2.*             Class 2:  Lender Secured Claims*

Class 2 consists of all Claims against Debtors, secured by and tothe extent of the value (as of the Petition Date), if any, of the Collateralsecuring such Claims directly or indirectly arising from or under, or relatingin any way to, the Loan Documents. The Debtors’ records reflect that there was$9.6 million outstanding under the Loan and Security Agreement on the PetitionDate and approximately $2.6 million of standby letters of credit outstandingthereunder, of which $600,000 is cash collateralized and not drawn against thePrepetition Loan Agreement. As of that date, the Debtors had $4.5 million inadditional effective borrowing availability under the Loan and SecurityAgreement as of that date.

### 3.*             Class 3:  FRN Claims*

Class 3 consists of all Claims against the Debtors, secured by andto the extent of the value (as of the Petition Date), if any, of the Collateralsecuring such Claims directly or

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indirectly arising from, or relating in any way to theFRN Documents. The Class 3 FRN Claims shall be deemed Allowed Class 3FRN Claims in the aggregate amount of $300 million.

### 4.*             Class 4:  Other Secured Claims*

Class 4 consists of all Secured Claims against the Debtors otherthan those claims in Classes 2 and 3. For purposes of the Plan, each suchAllowed Other Secured Claim will be deemed a separate subclass.

### 5.*             Class 6:  General Unsecured Claims*

Class 6 consists of all General Unsecured Claims. GeneralUnsecured Claims include trade and vendor claims, lease rejection Claims filedin accordance with Article VIII.D.2 and all other Unsecured Claims. The Debtorsrecords indicate approximately $1 million in Unsecured Claims that would beincluded in Class 6 as of the Petition Date.

### *6.            *Class 7:  Intercompany Claims

Class 7 consists ofall Intercompany Claims.

## **D.****                                    ImpairedClasses Of Claims And Interests (Classes 5 and 8 are entitled to vote onthe Plan)**

### 1.*             Class 5:  SSN Claims*

Class 5 consists of all SSN Claims against the Debtors. TheClass 5 SSN Claims shall be deemed Allowed Class 5 SSN Claims in theaggregate amount of $194.5 million.

### 2.*             Class 8:  Old Common Stock Interests*

Class 8 consists ofall Interests in Holdings directly or indirectly arising from or under, orrelating in any way to, any of the Old Common Stock of Holdings.

### 3.*             Class 9:  Other Interests*

Class 9 consists of all Other Interests of Holdings.

**ARTICLE III.**

**Treatmentof Claims and Interests**

## **A.****                                    UnclassifiedClaims**

### 1.*             AdministrativeClaims*

Except as otherwiseprovided for herein, and subject to the requirements of Article XIV.A.1hereof, each Holder of an Allowed Administrative Claim shall, in full satisfaction,release, settlement and discharge of such Allowed Administrative Claim:(i) to the extent such Claim is due and owing on the Effective Date, bepaid in full, in Cash, on the

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Distribution Date;(ii) to the extent such Claim is not due and owing on the Effective Date,be paid in full, in Cash, in accordance with the terms of any agreement betweenthe Debtors and such Holder, or as may be due and owing under applicablenon-bankruptcy law or in the ordinary course of business; or (iii) be treatedon such other terms and conditions as are acceptable to the Debtors and theHolder of such Claim.

### 2.*             PriorityTax Claims*

Each Holder of an AllowedPriority Tax Claim shall, in full satisfaction, release, and discharge of suchAllowed Priority Tax Claim: (a) to the extent such Claim is due and owingon the Effective Date, be paid in full, in Cash, on the Distribution Date;(b) to the extent such Claim is not due and owing on the Effective Date,be paid in full, in Cash, in accordance with the terms of any agreement betweenthe Debtors and such Holder, or as may be due and owing under applicablenon-bankruptcy law, or in the ordinary course of business; or (c) betreated on such other terms and conditions as are acceptable to the Debtors andthe Holder of such Claim.

## **B.****                                    UnimpairedClasses Of Claims**

### 1.*             Class 1:  Other Priority Claims*

The Debtors intend to seek an order approving the payment of OtherPriority Claims in the ordinary course during the pendency of theChapter 11 Cases. To the extent such an order is not entered or suchclaims are not paid prior to the Effective Date, pursuant to the Plan, thelegal, equitable and contractual rights of the Holders of Allowed Class 1Claims are unaltered by the Plan. Each Holder of an Allowed Class 1 Claim,will, in full satisfaction of and in exchange for such Allowed Class 1Claim: (a) to the extent such claim is due and owing on the EffectiveDate, be paid in full, in Cash, on the Distribution Date; (b) to theextent such claim is not due and owing on the Effective Date, be paid in full,in Cash, in accordance with the terms of any agreement between the parties, oras may be due and owing under applicable non-bankruptcy law or in theordinary course of business; or (c) be treated on such other terms andconditions as are acceptable to the parties.

### 2.*             Class 2:  Lender Secured Claims*

On the Effective Date,the Holder of the Allowed Class 2 Lender Secured Claims shall, to the extentany Allowed Class 2 Lender Secured Claim has not been paid or satisfied byperformance in full prior to the Effective Date, be paid in full, in Cash, onthe Effective Date.

### 3.*             Class 3:  FRN Claims*

On the Effective Date, each Holder of an Allowed Class 3 FRN Claimshall have its Claim Reinstated.

### 4.*             Class4:  Other Secured Claims*

At the Debtors’ option, each Holder of an Allowed Class 4 Claim willeither (a) have the property that serves as collateral for its claimreturned, or (b) have its claim cured and Reinstated, within the meaningof section 1124(2) of the Bankruptcy Code.

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5.*             Class6:  General Unsecured Claims*

To the extent any AllowedGeneral Unsecured Claim has not been paid or satisfied by performance in fullprior to the Effective Date, the legal, equitable and contractual rights of theHolders of the Allowed Class 6 Claims are unaltered by the Plan. In fullsatisfaction of and in exchange for each Allowed Class 6 Claim, the Holderwill: (a) to the extent such Claim is due and owing on the Effective Date,be paid in full, in cash, on the Distribution Date; (b) to the extent suchClaim is not due and owing on the Effective Date, be paid in full, in cash, inaccordance with the terms of any agreement between the parties, or as may bedue and owing under applicable nonbankruptcy law or in the ordinary course ofbusiness; or (c) be treated on such other terms and conditions as areacceptable to the parties.

### 6.*             Class7:  Intercompany Claims*

On the Effective Date,each Holder of an Allowed Class 7 Intercompany Claim shall have its ClaimReinstated.

## **C.****                                    ImpairedClasses of Claims**

### 1.*             Class 5:  SSN Claims*

On, or as soon asreasonably practicable after, the Distribution Date, the Debtors or theReorganized Debtors, as the case may be, shall distribute to the SSN IndentureTrustee, for the ratable benefit of the Holders of Allowed Class 5 SSNClaims, and in full satisfaction, settlement, release, and discharge of and inexchange for all such Allowed Class 5 SSN Claims, 90% of the aggregate NewCommon Stock, subject to dilution resulting from the issuance of equitypursuant to the Management Incentive Plan. The SSN Indenture Trustee shall, inaccordance with the terms of the SSN Indenture, promptly distribute to eachHolder of an Allowed Class 5 SSN Claim, as of the DistributionNotification Date, such Holder’s Pro Rata share of 90% of the aggregate NewCommon Stock, subject to dilution resulting from the issuance of equitypursuant to the Management Incentive Plan. As of the Effective Date, the SSNswill be cancelled as set forth in Article IV.B.1 hereof.

### 2.*             Class8:  Old Common Stock Interests*

On, or as soon asreasonably practicable after, the Distribution Date, the Debtors or theReorganized Debtors, as the case may be, shall distribute to each Holder of anAllowed Class 8 Old Common Stock Interest, such Holder’s Pro Rata share of10% of the aggregate New Common Stock, subject to dilution resulting from theissuance of equity pursuant to the Management Incentive Plan. As of theEffective Date, all of the Equity Securities will be cancelled as set forth inArticle IV.B.1 hereof.

### 3.*             Class 9:  Other Interests*

On the Effective Date, the Holders of Allowed Other Interests shall notreceive a Distribution on or on account of such Other Interests and such OtherInterests shall be cancelled. Each Holder of a Class 9 Other Interest is deemedto reject the Plan.

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## **D.****                                    SpecialProvision Regarding Unimpaired Claims**

Except as otherwiseprovided in the Plan, nothing shall affect the Debtors’ or Reorganized Debtors’rights and defenses, both legal and equitable, with respect to any UnimpairedClaims, including, but not limited to, all rights with respect to legal andequitable defenses to Setoff Claims or recoupments against Unimpaired Claims.

# **ARTICLEIV.MEANS FOR IMPLEMENTATION OF THE PLAN**

## **A.****                                    ContinuedCorporate Existence**

The Debtors shallcontinue to exist after the Effective Date as separate corporate entities, inaccordance with applicable non-bankruptcy law, and pursuant to their CorporateDocuments in effect prior to the Effective Date, except to the extent suchCorporate Documents are amended by the Restated Corporate Documents pursuant tothis Plan.

## **B.****                                    CorporateAction**

### 1.*             Cancellationof the Equity Securities, SSNs and SSN Indenture*

On the Effective Date,except as otherwise provided for herein, (i) the SSNs, the EquitySecurities and any other note, bond, indenture, or other instrument or documentevidencing or creating any indebtedness or obligation of the Debtors related tothe SSNs and the Equity Securities, shall be canceled, and (ii) theobligations of the Debtors under any agreements, indentures or certificates ofdesignation governing the SSNs, the Equity Securities and any other note, bond,indenture or other instrument or document evidencing or creating anyindebtedness or obligation of the Debtors related to the SSNs, the EquitySecurities, shall be discharged; *provided*,*however*, that each indenture orother agreement that governs the rights of the Holder of a SSN Claim and thatis administered by an indenture trustee, an agent, or a servicer shall continuein effect solely for the purposes of (a) allowing such indenture trustee,agent, or servicer to make the distributions to be made on account of suchClaims under the Plan as provided in Article III hereof and(b) permitting such indenture trustee, agent, or servicer to maintain anyrights or liens it may have for fees, costs and expenses under such indentureor other agreement; *provided*,*further*, that the provisions ofclause (ii) of this paragraph shall not affect the discharge of theDebtors’ liabilities under the Bankruptcy Code and the Confirmation Order orresult in any expense or liability to the Reorganized Debtors.  The Reorganized Debtors shall not have anyobligations to any indenture trustee, agent or servicer (or to any DisbursingAgent replacing such indenture trustee, agent or servicer) for any fees, costsor expenses related to the SSNs; *provided*,*however*, that nothing herein shallpreclude such indenture trustee, agent or servicer (or any Disbursing Agentreplacing such indenture trustee, agent or servicer) from being paid orreimbursed for pre-petition and post-petition fees, costs and expenses from thedistributions until payment in full of such fees, costs or expenses related tothe SSNs that are governed by the respective indenture or other agreement inaccordance with the provisions set forth therein.

Any actions taken by anindenture trustee, an agent, or a servicer that are not for the purposesauthorized in this Article IV.B.1 of the Plan shall not be binding uponthe Debtors.

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Notwithstandingthe foregoing, the Debtors may terminate any indenture or other governingagreement related to the SSNs and the authority of any indenture trustee,agent, or servicer to act thereunder at any time, with or without cause, bygiving five (5) days written notice of termination to the indenture trustee,agent, or servicer.  If distributionsunder the Plan have not been completed at the time of termination of theindenture or other governing agreement, the Debtors shall designate aDisbursing Agent to act in place of the indenture trustee, agent, or servicer,and the provisions of this Article IV.B.1 shall be deemed to apply to thenew distribution agent.

For the avoidance ofdoubt, none of the foregoing shall be applicable to the FRN Indenture and theFRN Indenture Trustee.  The FRN Notes andthe FRN Indenture Trustee shall continue to be governed by the FRN Indenture,which shall be assumed and Reinstated.

### 2.*             RestatedCorporate Documents*

The Corporate Documents of Holdings shall be amended as necessary tosatisfy the provisions of the Plan and the Bankruptcy Code and shall include,among other things, pursuant to section 1123(a)(6) of the Bankruptcy Code,(x) a provision prohibiting the issuance of non-voting equity securities,and if applicable (y) a provision as to the classes of securities issuedpursuant to the Plan or thereafter possessing voting power, for an appropriatedistribution of such power among such classes, including, in the case of anyclass of equity securities having a preference over another class of equitysecurities with respect to dividends, adequate provisions for the election ofdirectors representing such preferred class in the event of default in thepayment of such dividends.  On theEffective Date or as soon thereafter as is practicable, Reorganized Holdingsshall file with the Secretary of the State of Delaware in accordance withsections 103 and 303 of the Delaware General Corporation Law, the applicableamended certificate of incorporation.

### 3.*            **Other General Corporate Matters*

On or after the EffectiveDate, the Reorganized Debtors will be authorized to take such action as isnecessary under the laws of the State of Delaware, federal law and otherapplicable law to effect the terms and provisions of the Plan.  Without limiting the foregoing, the issuanceof the New Common Stock, the election and the appointment of directors orofficers, the Management Incentive Plan, and any other matter involving thecorporate structure of the Reorganized Debtors shall be deemed to have occurredand shall be in effect from and after the Effective Date pursuant to section303 of the Delaware General Corporation Law without any requirement of furtheraction by the stockholders or directors of the Debtors or the ReorganizedDebtors.

## **C.****                                    RestructuringTransactions**

### 1.*             Implementationof Settlement/Lockup Agreements*

The Plan incorporates and implements a compromise and settlement withcertain Holders of the SSN Claims, as set forth in the Lockup Agreements.  The distributions provided for herein toHolders of Claims and Interests represent the negotiated distributions as setforth in the Lockup Agreements.

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### 2.*             NewSecurities*

##### (a)                                  Authorization

As of the Effective Date,the issuance by Reorganized Holdings of the New Common Stock is herebyauthorized without further act or action under applicable law, regulation,order or rule.

##### (b)                                 Issuance

The New Common Stockauthorized pursuant to Article IV.C.2 hereof shall be issued byReorganized Holdings pursuant to the Plan and the Amended Prospectus andSolicitation Statement without further act or action under applicable law,regulation, order or rule.  The holdersthereof will have no preemptive or other rights to subscribe for additionalshares.  The Confirmation Order shallprovide that the issuance of the New Common Stock shall be exempt from theregistration requirements of the Securities Act of 1933, as amended, inaccordance with section 1145 of the Bankruptcy Code.  The Confirmation Order shall provide that theissuance of the New Common Stock was in compliance with the registrationrequirements of the Securities Act of 1933, as amended.

### 3.*             NewRevolving Loan Facility*

The Debtors or theReorganized Debtors, as the case may be, expect to enter into one or morepost-confirmation loan facilities, which may be the New Revolving LoanFacility, in order to (a) refinance amounts outstanding on the Effective Dateunder  the Loan and Security Agreement,(b) make other payments required to be made on the Effective Date or theDistribution Date, and (c) provide the additional borrowing capacity requiredby the Reorganized Debtors and their subsidiaries following the Effective Dateto maintain their operations.

## **D.****                                    DirectorsAnd Officers**

The initial directors andofficers of Reorganized Holdings and Reorganized InSight shall each consist ofthe identical seven members, five designated by the Ad Hoc Committee, all ofwhom shall be reasonably acceptable to the Holdings’ board of directors as ofthe Petition Date and shall comply with the director independence requirementsthat are imposed on public companies, one designated by the Holders of the OldCommon Stock, and Reorganized Holdings’ Chief Executive Officer.  Those directors and officers of the Debtors,if any, who continue to serve after the Effective Date shall not be liable toany Person for any Claim that arose prior to the Effective Date in connectionwith such directors’ or officers’ service to the Debtors, in their capacity asdirector or officer.  On or before thedeadline for filing the Plan Supplement, the Debtors shall file with theBankruptcy Court (i) a schedule setting forth the names of the persons tobe appointed by the board of directors of the Reorganized Debtors pursuant tothis section and (ii) a schedule disclosing such additional information asis necessary to satisfy section 1129(a)(5) of the Bankruptcy Code including(1) the identity and affiliation of any other individual who is proposedto serve as an officer or director of the Reorganization Debtors; (2) theidentity of any other insider who will be employed or retained by theReorganized Debtors; and (3) the compensation for each suchindividual.  The initial board ofdirectors of Reorganized Holdings and Reorganized InSight shall serve until thefirst annual

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meeting of theholders of the New Common Stock. Thereafter, the board of directors of Reorganized Holdings andReorganized InSight will be elected in accordance with the Restated CorporateDocuments set forth in Article IV.B.2 above and applicable non-bankruptcylaw.  The boards of directors of the ReorganizedDebtors shall have the responsibility for the management, control, andoperation of the Reorganized Debtors on and after the Effective Date.

## **E.****                                      RevestingOf Assets**

Except as otherwise setforth herein or in the Confirmation Order, as of the Effective Date, allproperty of the Estates shall revest in the Reorganized Debtors free and clearof all Claims, Liens, encumbrances and other Interests of the Holders of Claimsor Interests.  Subsidiary EquityInterests shall be retained, and the legal, equitable and contractual rights towhich the Holders of such Allowed Subsidiary Equity Interests are entitledshall remain unaltered.  From and afterthe Effective Date, the Reorganized Debtors may operate their businesses anduse, acquire and dispose of property and settle and compromise Claims or Interestswithout supervision by the Bankruptcy Court and free of any restrictions of theBankruptcy Code or Bankruptcy Rules, other than those restrictions expresslyimposed by the Plan and the Confirmation Order. Without limiting the generality of the foregoing, the Debtors may,without application to or approval by the Bankruptcy Court, pay fees that itincurs after the Effective Date for professional fees and expenses.

## **F.****                                      PreservationOf Rights Of Action; Settlement Of Litigation Claims**

### 1.*             Retentionof Causes of Action*

Except to the extent such rights, Claims, causes of action, defenses,and counterclaims are expressly and specifically released in connection withthe Plan, the Confirmation Order or in any settlement agreement approved duringthe Chapter 11 Cases, or otherwise provided in the Confirmation Order or in anycontract, instrument, release, indenture or other agreement entered into inconnection with the Plan, in accordance with section 1123(b) of theBankruptcy Code:  (1) any and allrights, Claims, causes of action (including avoidance actions or recoveryactions under Chapter 5 of the Bankruptcy Code), defenses, and counterclaims ofor accruing to the Debtors or their Estates shall remain assets of and vest inthe Reorganized Debtors, whether or not litigation relating thereto is pendingon the Effective Date, and whether or not any such rights, claims, causes ofaction, defenses and counterclaims have been listed or referred to in the Plan,the Schedules, or any other document filed with the Bankruptcy Court, and(2) neither the Debtors nor the Reorganized Debtors waive, relinquish, orabandon (nor shall they be estopped or otherwise precluded from asserting) anyright, Claim, cause of action, defense, or counterclaim that constitutesproperty of the Estates: (a) whether or not such right, Claim, cause of action, defense, orcounterclaim has been listed or referred to in the Plan or the Schedules, orany other document filed with the Bankruptcy Court, (b) whether or notsuch right, Claim, cause of action, defense, or counterclaim is currently knownto the Debtors, and (c) whether or not a defendant in any litigationrelating to such right, Claim, cause of action, defense or counterclaim filed aproof of Claim in the Chapter 11 Cases, filed a notice of appearance orany other pleading or notice in the Chapter 11 Cases, voted for or againstthe Plan, or received or retained any consideration under the Plan.  Without in any manner limiting the generalityof the foregoing, notwithstanding any otherwise applicable principal of law orequity, without limitation, any

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principals of judicial estoppel, res judicata,collateral estoppel, issue preclusion, or any similar doctrine, the failure tolist, disclose, describe, identify, or refer to a right, Claim, cause ofaction, defense, or counterclaim, or potential right, Claim, cause of action,defense, or counterclaim, in the Plan, the Schedules, or any other documentfiled with the Bankruptcy Court shall in no manner waive, eliminate, modify,release, or alter the Reorganized Debtors’ right to commence, prosecute, defendagainst, settle, and realize upon any rights, Claims, causes of action,defenses, or counterclaims that the Debtors or the Reorganized Debtors have, ormay have, as of the Confirmation Date. The Reorganized Debtors may commence, prosecute, defend against, settle,and realize upon any rights, Claims, causes of action, defenses, andcounterclaims in their sole discretion, in accordance with what is in the bestinterests, and for the benefit, of the Reorganized Debtors.

## **G.****                                    ExclusivityPeriod**

The Debtors shall retainthe exclusive right to amend or modify the Plan, and to solicit acceptances ofany amendments to or modifications of the Plan, through and until the earlierof (i) the Effective Date, or, (ii) the expiration of the Debtors’ exclusiveperiod to solicit acceptances of the Plan under section 1121(d) of theBankruptcy Code.

## **H.****                                    TerminationOf  Loan and Security Agreement**

The Loan and SecurityAgreement shall be terminated upon Full Payment (as defined in the Loan andSecurity Agreement) of the Lender Secured Claims, provided, however, that theobligations of the Debtors and the Reorganized Debtors that expressly survivetermination of the Loan and Security Agreement shall survive as provided therein.  Notwithstanding anything to the contrary inthis Plan, unless and until Lender has received Full Payment of all LenderSecured Claims, each of the Loan Documents shall remain binding and enforceableaccording to its terms and all liens and security interests granted by orarising under any of the Loan Documents shall continue to encumber property ofthe Debtors and the Reorganized Debtors as if the Plan had not been confirmed.

## **I.****                                         EffectuatingDocuments; Further Reorganization Transactions**

The chairman of the boardof directors, president, chief financial officer, manager, or any otherappropriate officer of the Debtors or, after the Effective Date, theReorganized Debtors, shall be authorized to execute, deliver, file, or recordsuch contracts, instruments, releases, indentures, and other agreements ordocuments, and take such actions as may be necessary or appropriate toeffectuate and further evidence the terms and conditions of the Plan.  The secretary or assistant secretary of theDebtors or, after the Effective Date, the Reorganized Debtors, shall beauthorized to certify or attest to any of the foregoing actions.

## **J.****                                      ExemptionFrom Certain Transfer Taxes**

Pursuant tosection 1146(c) of the Bankruptcy Code, the issuance, transfer, orexchange of a security, or the making of delivery of an instrument of transferfrom the Debtors to the Reorganized Debtors or any other Person or entitypursuant to the Plan may not be taxed under any law imposing a stamp tax orsimilar tax, and the Confirmation Order shall direct the appropriate state orlocal governmental officials or agents to forego the collection of any such tax

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or governmentalassessment and to accept for filing and recordation any of the foregoinginstruments or other documents without the payment of any such tax orgovernmental assessment.

# **ARTICLEV.ACCEPTANCE OR REJECTION OF THE PLAN**

## **A.****                                    ClassesEntitled To Vote**

Each Impaired Class ofClaims that will (or may) receive or retain property or any interest inproperty under the Plan, shall be entitled to vote to accept or reject thePlan.  By operation of law, eachUnimpaired Class of Claims is deemed to have accepted the Plan and, therefore,is not entitled to vote to accept or reject the Plan.

## **B.****                                    AcceptanceBy Impaired Classes**

An Impaired Class ofClaims shall have accepted the Plan if (i) the Holders (other than anyHolder designated under section 1126(e) of the Bankruptcy Code) of atleast two-thirds in amount of the Allowed Claims actually voting in suchClass have voted to accept the Plan and (ii) the Holders (other thanany Holder designated under section 1126(e) of the Bankruptcy Code) ofmore than one-half in number of the Allowed Claims actually voting in suchClass have voted to accept the Plan. An Impaired Class of Interests shall have accepted the Plan if(i) the Holders (other than any Holder designated undersection 1126(e) of the Bankruptcy Code) of at least two-thirds in amountof the Allowed Interests actually voting in such Class have voted toaccept the Plan.

# **ARTICLEVI.SECURITIES TO BE ISSUEDIN CONNECTION WITH THE PLAN**

On or before theDistribution Date, the Reorganized Holdings shall issue for distribution inaccordance with the provisions of the Plan the New Common Stock.  All securities to be issued will be deemedissued as of the Distribution Date regardless of the date on which they areactually distributed.

# **ARTICLEVII.PROVISIONS GOVERNING DISTRIBUTIONS**

## **A.****                                    DistributionsFor Claims And Interests Allowed As Of The Effective Date**

Except as otherwiseprovided herein or as ordered by the Bankruptcy Court, distributions to be madeon account of Claims that are Allowed Claims and Interests that are AllowedInterests as of the Effective Date shall be made on the Distribution Date, oras soon thereafter as practicable.  TheNew Common Stock to be issued under this Plan shall be deemed issued as of theDistribution Date regardless of the date on which they are actuallydistributed.  Distributions

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on account ofClaims that first become Allowed Claims after the Effective Date shall be madepursuant to Articles III, VII, and IX of this Plan.

## **B.****                                    InterestOn Claims**

Except for interest, feesand expenses owed and owing to the Lender pursuant to the Loan Documents or, tothe FRN Holders pursuant to the FRN Documents, unless otherwise specificallyprovided by this Plan or the Confirmation Order, or by applicable bankruptcylaw, post-petition interest shall not accrue and not be paid on Allowed Claimswhen due under the contract, agreement, or other instrument governing the termsand conditions of the obligation comprising such Allowed Claim.  Post-petition interest shall accrue and bepaid upon, and to the extent, any Disputed Claim in respect of the period fromthe Effective Date to the date a final distribution is made thereon, if andafter such Disputed Claim becomes an Allowed Claim.

## **C.****                                    DisbursingAgent**

The Disbursing Agentshall make all distributions required under this Plan (subject to theprovisions of Articles III and IX hereof) except distributions to theHolders of Allowed Class 5 SSN Claims, which distributions shall bedeposited with the SSN Indenture Trustee, who shall deliver such distributionsto the Holders of such Claims in accordance with the provisions of this Planand the terms of the SSN Indenture.

If the Disbursing Agentis an independent third party designated by the Reorganized Debtors to serve insuch capacity, such Disbursing Agent shall receive, without further BankruptcyCourt approval, reasonable compensation for distribution services renderedpursuant to the Plan and reimbursement of reasonable out-of-pocket expensesincurred in connection with such services from the Reorganized Debtors on termsacceptable to the Reorganized Debtors. No Disbursing Agent shall be required to give any bond or surety orother security for the performance of its duties unless otherwise ordered bythe Bankruptcy Court.  If otherwise soordered, all costs and expenses of procuring any such bond shall be paid by theReorganized Debtors.

## **D.****                                    SurrenderOf Securities Or Instruments**

On or before theDistribution Date, or as soon as practicable thereafter, each holder of aninstrument evidencing (i) a Claim on account of SSNs (a “Certificate”) shallsurrender such Certificate to the SSN Indenture Trustee and such Certificateshall be cancelled and (ii) an Equity Security Interest (a “Stock Certificate”)shall surrender such Stock Certificate to the Disbursing Agent and such StockCertificate shall be cancelled.  Nodistribution of property hereunder shall be made by the SSN Indenture Trusteeor the Disbursing Agent, as the case may be, to any such holder unless anduntil such Certificate or Stock Certificate is received by the SSN IndentureTrustee or the Disbursing Agent, as applicable, or the unavailability of suchCertificate or Stock Certificate is reasonably established to the satisfactionof the SSN Indenture Trustee or the Disbursing Agent, as applicable.  Any such holder who fails to surrender orcause to be surrendered such Certificate or Stock Certificate or fails toexecute and deliver an affidavit of loss and indemnity reasonably satisfactoryto the SSN Indenture Trustee or the Disbursing Agent, as applicable, prior tothe second (2nd) anniversary of the Effective Date, shall be deemed

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to have forfeitedall rights and Claims in respect of such Certificate or all rights andInterests in respect of such Stock Certificate, as applicable, and shall notparticipate in any distribution hereunder, and all property in respect of suchforfeited distribution, including interest accrued thereon, shall revert to theReorganized Debtors notwithstanding any federal or state escheat laws to thecontrary.

## **E.****                                      InstructionsTo Disbursing Agent**

Prior to any distributionon account of an Allowed Class 5 SSN Claim, the SSN Indenture Trusteeshall instruct the Disbursing Agent, in a form and manner that the DisbursingAgent reasonably determines to be acceptable, of the names of the Holders ofAllowed Class 5 SSN Claims, and the New Common Stock to be issued anddistributed to or on behalf of such Holders of Allowed Class 5 SSN Claims inexchange for properly surrendered SSNs.

## **F.****                                      ServicesOf Indenture Trustees, Agents, And Servicers**

The services, withrespect to consummation of the Plan, of indenture trustees, agents, andservicers under indentures and other agreements that govern the rights ofHolders of Claims, shall be as set forth in Article IV.B.1 and elsewherein the Plan.

## **G.****                                    NotificationDate For Distributions To Holders Of Debt and Equity Securities**

At the close of businesson the Distribution Notification Date, the transfer ledgers for the SSNs andthe Old Common Stock shall be closed, the Claims register for transfer ofClaims and Interests pursuant to Bankruptcy Rule 3001(e) will also be closedand there shall be no further changes in the record holders of the SSNs and theOld Common Stock.  The ReorganizedDebtors and the Disbursing Agent, if any, shall have no obligation to recognizeany transfer of such SSNs or Old Common Stock occurring after the DistributionNotification Date and shall be entitled instead to recognize and deal for allpurposes hereunder with only those holders stated on the applicable transferledgers as of the close of business on the Distribution Notification Date.

## **H.****                                    MeansOf Cash Payment**

Cash payments madepursuant to this Plan shall be in U.S. funds, by the means agreed to by thepayor and the payee, including by check or wire transfer, or, in the absence ofan agreement, such commercially reasonable manner as the payor shall determinein its sole discretion.

## **I.****                                         DeliveryOf Distributions**

Distributions to Holdersof Allowed Claims and Allowed Interests shall be made by the Disbursing Agentor the SSN Indenture Trustee, as the case may be, (a) at the addresses setforth on the proofs of Claim or Interest filed by such Holders (or at the lastknown addresses of such Holders if no proof of Claim or Interest is filed or ifthe Debtors have been notified in writing of a change of address), (b) atthe addresses set forth in any written notices of address changes delivered tothe Disbursing Agent after the date of any related proof of Claim or Interest,(c) at the addresses reflected in the Schedules if no proof of Claim orInterest has been filed and the

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Disbursing Agenthas not received a written notice of a change of address, (d) in the case ofthe Holder of a Claim that is governed by an indenture or other agreement andis administered by an indenture trustee, agent, or servicer, at the addressescontained in the official records of such indenture trustee, agent, orservicer, or (e) at the addresses set forth in a properly completed letterof transmittal accompanying securities properly remitted to the Debtors.  If any Holder’s distribution is returned asundeliverable, no further distributions to such Holder shall be made unless anduntil the Disbursing Agent or the appropriate indenture trustee, agent, orservicer is notified of such Holder’s then current address, at which time allmissed distributions shall be made to such Holder without interest.  Amounts in respect of undeliverable distributionsmade through the Disbursing Agent or the indenture trustee, agent, or servicer,shall be returned to the Reorganized Debtors until such distributions areclaimed.  All claims for undeliverabledistributions must be made on or before the second (2nd) anniversary of theEffective Date, after which date all unclaimed property shall revert to theReorganized Debtors free of any restrictions thereon and the claim of anyholder or successor to such holder with respect to such property shall bedischarged and forever barred, notwithstanding any federal or state escheatlaws to the contrary.

## **J.****                                      FractionalDollars; De Minimis Distributions**

Any other provision ofthe Plan notwithstanding, payments of fractions of dollars shall not bemade.  Whenever any payment of a fractionof a dollar under the Plan would otherwise be called for, the actual paymentmade shall reflect a rounding of such fraction to the nearest whole dollar (upor down), with half dollars being rounded down. The Disbursing Agent, or any indenture trustee, agent, or servicer, asthe case may be, shall not make any payment of less than twenty-five dollars($25.00) with respect to any Claim unless a request therefor is made in writingto such Disbursing Agent, indenture trustee, agent, or servicer, as the casemay be.

## **K.****                                    WithholdingAnd Reporting Requirements**

In connection with thisPlan and all distributions hereunder, the Disbursing Agent shall, to the extentapplicable, comply with all tax withholding and reporting requirements imposedby any federal, state, local, or foreign taxing authority, and alldistributions hereunder shall be subject to any such withholding and reportingrequirements.  The Disbursing Agent shallbe authorized to take any and all actions that may be necessary or appropriateto comply with such withholding and reporting requirements.

## **L.****                                     Calculationof Distribution Amounts of New Common Stock**

No fractional shares ofNew Common Stock shall be issued or distributed under the Plan by theReorganized Debtors, the Disbursing Agent, or the SSN Indenture Trustee.  Each Person entitled to receive New CommonStock will receive the total number of whole shares of New Common Stock towhich such Person is entitled.  Wheneverany distribution to a particular Person would otherwise call for distributionof a fraction of a share of New Common Stock, the actual distribution of sharesof such New Common Stock shall be rounded to the next higher or lower wholenumber as follows:  (a) fractions 1⁄2or greater shall be rounded to the next higher whole number, and(b) fractions of less than 1⁄2 shall be rounded to the next lower wholenumber.  The total number of shares ofNew Common Stock to be distributed to the holder of a Class 5

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SSN Claim shall beadjusted as necessary to account for the rounding provided for in thisArticle VII.L.  No considerationshall be provided in lieu of fractional shares that are rounded down.

## **M.****                                  Setoffs**

The Reorganized Debtorsmay, but shall not be required to, set off against any Claim, and the paymentsor other distributions to be made pursuant to the Plan in respect of suchClaim, claims of any nature whatsoever that the Debtors or Reorganized Debtorsmay have against the holder of such Claim; *provided*,*however*, that neither the failure to doso nor the allowance of any Claim hereunder shall constitute a waiver orrelease by the Reorganized Debtors of any such claim that the Debtors orReorganized Debtors may have against such holder.

## **N.****                                    Changeof Control**

Notwithstanding anything to the contrary contained in this Plan, theLoan and Security Agreement, the Indentures, or any executory contract to whichany of the Debtors is a party, the transactions to be consummated in accordancewith the Plan shall not create, or be deemed to create, (a) any right onthe part of the Holder of an SSN or FRN to require that any of the Debtors orthe Reorganized Debtors repurchase such Holder’s SSNs or FRNs, respectively, or(b) any other claim in connection therewith, upon a “Change of Control,”as such term may be defined in any of the Indentures, the Loan and SecurityAgreement or in any executory contract being assumed pursuant to the Plan.

# **ARTICLEVIII.**

# **EXECUTORYCONTRACTS AND UNEXPIRED LEASES**

## **A.****                                    Assumption**

On the Effective Date, and to the extent permitted by applicable law,all of the Debtors’ executory contracts and unexpired leases will be assumed bythe Debtors, unless such executory contract or unexpired lease:

(a)           is filed as part of thePlan Supplement as a contract or lease that is being rejected pursuant to thePlan; or

(b)           is the subject of amotion to reject filed on or before the Confirmation.

## **B.****                                    Pass-Through**

Any rights or arrangements necessary or useful to the operation of theDebtors’ business but not otherwise addressed as a claim or equity interest,including non-exclusive or exclusive patent, trademark, copyright, maskwork orother intellectual property licenses and other executory contracts notassumable under section 365(c) of the Bankruptcy Code, shall, in the absence ofany other treatment, be passed through the bankruptcy proceedings for theDebtors and the Debtors’ counterparty’s benefit, unaltered and unaffected bythe bankruptcy filings or the Chapter 11 Cases.

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## **C.****                                    AssumedExecutory Contracts and Unexpired Leases Related to Real Property**

Each executory contract and unexpired lease that is assumed and relatesto the use, ability to acquire, or occupancy of real property will include(a) all modifications, amendments, supplements, restatements, or otheragreements made directly or indirectly by any agreement, instrument, or otherdocument that in any manner affect such executory contract or unexpired lease,and (b) all executory contracts or unexpired leases and other rightsappurtenant to the property, including all easements, licenses, permits,rights, privileges, immunities, options, rights of first refusal, powers, uses,reciprocal easement agreements, vaults, tunnel or bridge agreements orfranchises, and any other equity interests in real estate or rights in remrelated to such premises, unless any of the foregoing agreements has beenrejected pursuant to an order of the Bankruptcy Court or is the subject of amotion to reject filed on or before the Confirmation Date.

## **D.****                                    CureCosts and Bar Dates**

### 1.*             Cure*

Except to the extent different treatment is agreed to among the parties,any monetary amounts by which each executory contract and unexpired lease to beassumed pursuant to the Plan is in default will be satisfied, under section365(b)(1) of the Bankruptcy Code, at the Debtors’ option, by the payment ofCash or distribution of other property as necessary to cure any defaults.  If there is a dispute regarding (i) thenature or amount of any cure, (ii) the Debtors’ ability or the ability ofthe Debtors’ assignees to provide “adequate assurance of future performance”(within the meaning of section 365 of the Bankruptcy Code) under the contractor lease to be assumed, or (iii) any other matter pertaining toassumption, cure will occur following the entry of a Final Order resolving thedispute and approving the assumption or assumption and assignment, as the casemay be.

### 2.*             BarDate for Filing Claims for Rejection Damages*

If the rejection of an executory contract or unexpired lease gives riseto a Claim, a proof of Claim must be served upon the Debtors and the Debtors’counsel within 30 days after the later of:

(a)           notice of entry of theConfirmation; or

(b)           other notice that theexecutory contract or unexpired lease has been rejected.

Anyclaim not served within such time period will be forever barred.  Each such Claim will constitute aClass 6 Claim, to the extent such Claim is Allowed by the BankruptcyCourt.

## **E.****                                      Survivalof Indemnification and Corporation Contribution**

Notwithstanding anything to the contrary contained in the Plan, theobligations of the Debtors, if any, to indemnify and/or provide contribution toits directors, officers, agents, employees and representatives who are servingin such capacity on the Petition Date, pursuant to

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the Corporate Documents applicable statutes, orcontractual obligations, in respect of all past, present and future actions,suits and proceedings against any of such directors, officers, agents,employees and representatives, based on any act or omission related to theservice with, for or on behalf of the Debtors will be deemed and treated asexecutory contracts that are assumed by the applicable Debtor or ReorganizedDebtor pursuant to the Plan and section 365 of the Bankruptcy Code as ofthe Effective Date.  Accordingly, suchindemnification obligations will not be discharged, but will instead surviveand be unaffected by entry of the Confirmation Date.

# **ARTICLEIX.PROCEDURES FOR RESOLVING DISPUTED,CONTINGENT, AND UNLIQUIDATED CLAIMS**

## **A.****                                    ObjectionDeadline; Prosecution Of Objections**

As soon as practicable,but in no event after the later (i) than sixty (60) days after the EffectiveDate (unless extended by an order of the Bankruptcy Court) and (ii) the dateany Claim is filed and served upon the Debtors, the Reorganized Debtors shallfile objections to Claims with the Bankruptcy Court and serve such objectionsupon the holders of each of the Claims to which objections are made.  Nothing contained herein, however, shalllimit the Reorganized Debtors’ right to object to Claims, if any, filed oramended more than sixty (60) days after the Effective Date.

## **B.****                                    NoDistributions Pending Allowance**

Notwithstanding any otherprovision of the Plan, no payments or distributions shall be made with respectto all or any portion of a Disputed Claim unless and until all objections tosuch Disputed Claim have been settled or withdrawn or have been determined byFinal Order, and the Disputed Claim, or some portion thereof, has become anAllowed Claim.

## **C.****                                    DistributionReserve**

The Disbursing Agent shall withhold the Distribution Reserve from theCash or other property (other than the New Common Stock to be distributed tothe SSN Indenture Trustee for the ratable benefit of the holders of AllowedClass 5 SSN Claims) to be distributed under the Plan.  As to any Disputed Claim, upon a request forestimation by the Debtors, the Bankruptcy Court shall determine what amount issufficient to withhold as the Distribution Reserve.  The Debtors may request estimation for everyDisputed Claim that is unliquidated and the Disbursing Agent shall withhold theDistribution Reserve based upon the estimated amount of such Claim as set forthin a Final Order.  In no event shall theholder of a Disputed Claim be entitled to a distribution in excess of theDebtors’ estimate of such Disputed Claim. If the Debtors elect not to request such an estimation from theBankruptcy Court with respect to a Disputed Claim that is liquidated, theDisbursing Agent shall withhold the Distribution Reserve based upon the FaceAmount of such Claim.

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## **D.****                                    DistributionsAfter Allowance**

The Reorganized Debtorsor the Disbursing Agent, as the case may be, shall make payments anddistributions from the Distribution Reserve to each holder of a Disputed Claimthat has become an Allowed Claim in accordance with the provisions of the Plangoverning the class of Claims to which such holder belongs.  On the next succeeding interim distributiondate after the date that the order or judgment of the Bankruptcy Court allowingall or part of such Claim becomes a Final Order, the Disbursing Agent shalldistribute to the holder of such Claim any Cash or other property in theDistribution Reserve that would have been distributed on the Distribution Datehad such Allowed Claim been allowed on the Distribution Date.  After a Final Order has been entered, orother final resolution has been reached, with respect to each Disputed Claim,any Cash or other property remaining in the Distribution Reserve shall becomeproperty of the Reorganized Debtors.  Alldistributions made under Article IX.D of the Plan on account of an AllowedClaim shall be made together with any dividends, payments, or otherdistributions made on account of, as well as any obligations arising from, thedistributed property, as if such Allowed Claim had been an Allowed Claim on theDistribution Date.  Notwithstanding theforegoing, the Disbursing Agent shall not be required to make distributionsunder Article IX.D more frequently than once every 180 days or to make anyindividual payments in an amount less than $25.00.

## **E.****                                      GeneralUnsecured Claims**

Notwithstanding thecontents of the Schedules, Claims listed therein as undisputed, liquidated andnot contingent shall be reduced by the amount, if any, that was paid by theDebtors prior to the Effective Date including pursuant to orders of theBankruptcy Court.  To the extent suchpayments are not reflected in the Schedules, such Schedules will be deemedamended and reduced to reflect that such payments were made.  Nothing in the Plan shall preclude theReorganized Debtors from paying Claims that the Debtors were authorized to paypursuant to any Final Order entered by the Bankruptcy Court prior to theConfirmation Date.

# **ARTICLEX.CONDITIONS PRECEDENT TO CONFIRMATION ANDCONSUMMATION OF THE PLAN**

## **A.****                                    ConditionsTo Confirmation**

###### 1.             TheBankruptcy Court shall not enter the Confirmation Order unless and until(i) the Confirmation Order shall be reasonably acceptable in form andsubstance to the Debtors, the Initial Consenting Parties, and the Exit Lendersand (ii) the Confirmation Order includes a finding of fact that theDebtors, the Reorganized Debtors, the Initial Consenting Parties, the Ad HocCommittee, and their respective present and former members, officers,directors, employees, advisors, attorneys, and agents acted in good faithwithin the meaning of and with respect to all of the actions described insection 1125(e) of the Bankruptcy Code and are therefore not liable for theviolation of any applicable law, rule, or regulation governing such actions.

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###### 2.             TheDebtors shall have arranged for credit availability under the New RevolvingLoan Facility, in amount, form and substance acceptable to the Debtors orReorganized Debtors, as the case may be, to provide the Reorganized Debtors andtheir subsidiaries with their working capital needs.

## **B.****                                    ConditionsTo Consummation**

The following areconditions precedent to the occurrence of the Effective Date, each of whichmust be (i) satisfied or (ii) waived in accordance withArticle X.D. below:

###### 1.             The Confirmation Order, in form andsubstance reasonably acceptable to the Debtors, the Initial Consenting Parties,and the Exit Lenders, confirming the Plan, as the same may have been modified,must, among other things, provide that:

(a)           the Debtors andReorganized Debtors are authorized and directed to take all actions necessaryor appropriate to enter into, implement and consummate the contracts,instruments, releases, indentures and other agreements or documents created inconnection with the Plan or the Restructuring;

(b)           the provisions of theConfirmation Order are nonseverable and mutually dependent;

(c)           the transfers ofproperty by the Debtors (a) to the Reorganized Debtors (i) are orwill be legal, valid, and effective transfers of property, (ii) vest orwill vest the Reorganized Debtors with good title to such property free andclear of all Liens, charges, Claims, encumbrances, or Interests, except asexpressly provided in the Plan or Confirmation Order, (iii) do not andwill not constitute avoidable transfers under the Bankruptcy Code or underapplicable bankruptcy or nonbankruptcy law, and (iv) do not and will notsubject the Reorganized Debtors to any liability by reason of such transferunder the Bankruptcy Code or under applicable nonbankruptcy law, including,without limitation, any laws affecting successor or transferee liability, and(b) to holders of Claims under the Plan are for good consideration andvalue and are in the ordinary course of the Debtors’ businesses;

(d)           except as expresslyprovided in the Plan, the Debtors are discharged effective upon theConfirmation Date from any “debt” (as that term is defined insection 101(12) of the Bankruptcy Code), and the Debtors’ liability inrespect thereof is extinguished completely, whether reduced to judgment or not,liquidated or unliquidated, contingent or noncontingent, asserted orunasserted, fixed or unfixed, matured or unmatured, disputed or undisputed,legal or equitable, or known or unknown, or obligation of the Debtors incurredbefore the Confirmation Date, or from any conduct of the Debtors prior to theConfirmation Date, or that otherwise arose before the Confirmation Date,including, without limitation, all interest, if any, on any such debts, whethersuch interest accrued before or after the Petition Date;

(e)           the Plan does notprovide for the liquidation of all or substantially all of the property of theDebtors and its confirmation is not likely to be followed by the liquidation ofthe Reorganized Debtors or the need for further financial reorganization;

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(f)            the New Common Stock,issued under the Plan in exchange for the SSN Claims against the Debtors areexempt from registration under the Securities Act pursuant to section 1145of the Bankruptcy Code, except to the extent that holders of the New CommonStock are “underwriters,” as that term is defined in section 1145 of theBankruptcy Code.  The issuance of the NewCommon Stock pursuant to the Exchange Offer was in compliance with theregistration requirements of the Securities Act of 1933, as amended;

(g)           no beneficial owner ofan SSN Claim shall receive a distribution of New Common Stock for 35% or moreof the shares of the New Common Stock that will be outstanding on the EffectiveDate; and

(h)           all executory contractsor unexpired leases assumed or assumed and assigned by the Debtors during theChapter 11 Cases or hereunder shall remain in full force and effect for thebenefit of the Debtors or their assignees notwithstanding any provision in suchcontract or lease (including those described in sections 365(b)(2) and (f) ofthe Bankruptcy Code) that prohibits such assignment or transfer or thatenables, permits, or requires termination of such contract or lease.

###### 2.             The Reorganized Debtors shall have creditavailability under the New Revolving Loan Facility, in amount, form andsubstance acceptable to the Debtors or Reorganized Debtors, as the case may be,to provide the Reorganized Debtors and their subsidiaries with their workingcapital needs.

###### 3.             The following agreements, in formreasonably satisfactory to the Debtors or Reorganized Debtors, shall have beenexecuted and delivered, and all conditions precedent thereto shall have beensatisfied:

(a)           Restated CorporateDocuments.

(b)           Registration RightsAgreement.

(c)           New Revolving LoanFacility.

###### 4.             All authorizations, consents, andregulatory approvals required, if any, in connection with the consummation ofthis Plan shall have been obtained.

###### 5.             The Amended Prospectus and SolicitationStatement shall remain effective and no “stop order” is in effect.

###### 6.             The Debtors shall have executed anddelivered all documents necessary to effectuate the issuance of the New CommonStock.

###### 7.             Confirmation shall have occurred and theConfirmation Order shall have been entered by the Bankruptcy Court.

###### 8.             The Confirmation Order shall have become aFinal Order.

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###### 9.             There shall not be in effect on theEffective Date any (i) order entered by a U.S. court or (ii) anyorder, opinion, ruling or other decision entered by any other court orgovernmental entity or (iii) United States or other applicable lawstaying, restraining, enjoining or otherwise prohibiting or making illegal theconsummation of any of the transactions contemplated by the Plan.

###### 10.           No request for revocation of theConfirmation Order under section 1144 of the Bankruptcy Code shall remainpending.

###### 11.           None of the Lockup Agreements shall havebeen terminated.

###### 12.           The Debtors or the Reorganized Debtors havemade Full Payment (as such term is defined in the Loan and Security Agreement)of all of the Lender Secured Claims.

###### 13.           The Debtors shall have issued $15 million ofnew senior secured floating rates notes to the Initial Consenting Parties orsuch other parties identified by them pursuant to the terms of that certaincommitment letter (the “Commitment Letter”) dated May 29, 2007 by and among theDebtors and the Initial Consenting Parties.

###### 14.           The Debtors shall have paid all fees relatedto (i) Waiver and Agreement No. 1 to the FRN Indenture dated May 29, 2007 byand among the Initial Consenting Parties and the Loan Parties, and acknowledgedby the FRN Indenture Trustee and (ii) the Commitment Letter.

###### 15.           All definitive documentation relating to thePlan and the transactions contemplated thereby shall be consistent in allmaterial respects with the Lockup Agreements and all other documents materialto the consummation of the transactions contemplated under the Plan shall bereasonably acceptable to the Debtors and in form and substance.

###### 16.           All actions, documents and agreementsnecessary to implement the Plan shall have been effected or executed.

## **C.****                                    SubstantialConsummation**

On the Effective Date, the Plan shall be deemed to be substantiallyconsummated under sections 1101 and 1127(b) of the Bankruptcy Code.

## **D.****                                    WaiverOf Conditions**

Each of the conditionsset forth in Article X. (except with respect to the Full Payment (as suchterm is defined in the Loan and Security Agreement) of the Lender Secured Claimmay be waived in whole or in part by the Debtors or Reorganized Debtors,without any notice to parties in interest or the Bankruptcy Court (except tothe Ad Hoc Committee and the Initial Consenting Parties) and without ahearing.  The failure to satisfy or waiveany condition to the Effective Date may be asserted by the Debtors or theReorganized Debtors, regardless of the circumstances giving rise to the failureof such condition to be satisfied (including any action or inaction by theDebtors or Reorganized Debtors).  Thefailure of the Debtors or the Reorganized Debtors to exercise any of the foregoingrights shall not be deemed a waiver of any other rights, and each such rightshall be deemed an ongoing right that may be asserted at any time.

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# **ARTICLEXI.MODIFICATIONS AND AMENDMENTS**

The Debtors may alter,amend, or modify the Plan or any Exhibits thereto under section 1127(a) ofthe Bankruptcy Code at any time prior to the Confirmation Date.  After the Confirmation Date and prior tosubstantial consummation of the Plan, as defined in section 1101(2) of theBankruptcy Code, the Debtors may, under section 1127(b) of the BankruptcyCode, institute proceedings in the Bankruptcy Court to remedy any defect oromission or reconcile any inconsistencies in the Plan, or the ConfirmationOrder, and such matters as may be necessary to carry out the purposes andeffects of the Plan so long as such Proceedings do not materially adverselyaffect the treatment of Holders of Claims or Interests under the Plan; *provided*,*however*, that prior notice of such proceedings shall be served inaccordance with the Bankruptcy Rules or order of the Bankruptcy Court.

# **ARTICLEXII.RETENTION OF JURISDICTION**

Under sections 105(a) and1142 of the Bankruptcy Code, and notwithstanding entry of the ConfirmationOrder and occurrence of the Effective Date, the Bankruptcy Court shall retainexclusive jurisdiction over all matters arising out of, and related to, theChapter 11 Cases and the Plan to the fullest extent permitted by law,including, among other things, jurisdiction to:

A.            Allow, disallow,determine, liquidate, classify, estimate or establish the priority or secured orunsecured status of any Claim or Interest, including the resolution of anyrequest for payment of any Administrative Claim and the resolution of anyobjections to the allowance or  priorityof Claims or Interests;

B.            Hear and determine allapplications for compensation and reimbursement of expenses of Professionalsunder the Plan or under sections 330, 331, 503(b), 1103 and 1129(a)(4) of theBankruptcy Code; *provided*, *however*,that from and after the Effective Date, the payment of the fees and expenses ofthe retained professionals of the Reorganized Debtors shall be made in theordinary course of business and shall not be subject to the approval of theBankruptcy Court;

C.            Hear and determine allmatters with respect to the assumption or rejection of any executory contractor unexpired lease to which one or more of the Debtors are parties or withrespect to which one or more of the Debtors may be liable, including, ifnecessary, the nature or amount of any required cure or the liquidation of anyclaims arising therefrom;

D.            Hear and determine anyand all adversary proceedings, motions, applications, and contested orlitigated matters arising out of, under, or related to, the Chapter 11 Cases;

E.             Enter such orders asmay be necessary or appropriate to execute, implement, or consummate theprovisions of the Plan and all contracts, instruments, releases, and otheragreements or documents created in connection with the Plan, or theConfirmation Order;

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F.             Hear and determinedisputes arising in connection with the interpretation, implementation,consummation, or enforcement of the Plan, including disputes arising underagreements, documents or instruments executed in connection with the Plan;

G.            Consider anymodifications of the Plan, cure any defect or omission, or reconcile anyinconsistency in any order of the Bankruptcy Court, including, withoutlimitation, the Confirmation Order;

H.            Issue injunctions,enter and implement other orders, or take such other actions as may benecessary or appropriate to restrain interference by any entity withimplementation, consummation, or enforcement of the Plan or the ConfirmationOrder;

I.              Enter and implementsuch orders as may be necessary or appropriate if the Confirmation Order is forany reason reversed, stayed, revoked, modified, or vacated;

J.             Hear and determineany matters arising in connection with or relating to the Plan, theConfirmation Order, or any contract, instrument, release, or other agreement ordocument created in connection with the Plan, or the Confirmation Order;

K.            Enforce all orders,judgments, injunctions, releases, exculpations, indemnifications and rulingsentered in connection with the Chapter 11 Cases;

L.             Recover all assets ofthe Debtors and property of the Debtors’ Estates, wherever located;

M.           Hear and determinematters concerning state, local, and federal taxes in accordance withsections 346, 505, and 1146 of the Bankruptcy Code;

N.            Hear and determine alldisputes involving the existence, nature, or scope of the Debtors’ discharge;

O.            Hear and determinesuch other matters as may be provided in the Confirmation Order or as may beauthorized under, or not inconsistent with, provisions of the Bankruptcy Code;and

P.             Enter a final decreeclosing the Chapter 11 Cases.

# **ARTICLEXIII.COMPROMISES AND SETTLEMENTS**

Pursuant to BankruptcyRule 9019, and in consideration for the classification, distribution and otherbenefits provided under the Plan, the provisions of the Plan shall constitute agood faith compromise and settlement of all Claims and controversies resolvedpursuant to the Plan, including, without limitation, all Claims arising priorto the Petition Date, whether known or unknown, foreseen or unforeseen,asserted or unasserted, arising out of, relating to or in connection with thebusiness or affairs of, or transactions with, the Debtors.  The entry of the Confirmation Order shallconstitute the Bankruptcy Court’s approval of each of the foregoing

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compromises orsettlements, and all other compromises and settlements provided for in thePlan, and the Bankruptcy Court’s findings shall constitute its determinationthat such compromises and settlements are in the best interests of the Debtors,the Estate, Creditors and other parties in interest, and are fair, equitableand within the range of reasonableness.

# **ARTICLEXIV.**

# **MISCELLANEOUSPROVISIONS**

## **A.****                                    BarDates For Certain Claims**

### 1.*             AdministrativeClaims:  Substantial Contribution Claims*

The Confirmation Order will establish an Administrative Claims Bar Datefor filing of all Administrative Claims, including Substantial ContributionClaims (but not including Professional Fee Claims or claims for the expenses ofthe members of the Committee (if one has been appointed)), which date will be45 days after the Effective Date. Holders of asserted Administrative Claims, other than Professional FeeClaims, claims for U.S. Trustee fees under 28 U.S.C. §1930, administrative taxclaims and administrative ordinary case liabilities, must submit proofs ofAdministrative Claim on or before such Administrative Claims Bar Date orforever be barred from doing so.  Anotice prepared by the Reorganized Debtors will set forth such date andconstitute notice of this Administrative Claims Bar Date.  The Debtors or Reorganized Debtors, as thecase may be, shall have 45 days (or such longer period as may be allowed byorder of the Bankruptcy Court) following the Administrative Claims Bar Date toreview and object to such Administrative Claims before a hearing fordetermination of allowance of such Administrative Claims.

### 2.*             AdministrativeOrdinary Course Liabilities*

Holders of Administrative Claims that are based on liabilities incurredin the ordinary course of the Debtors’ businesses (other than Claims ofgovernmental units for taxes (and for interest and/or penalties related to suchtaxes)) shall not be required to file any request for payment of suchClaims.  Such Administrative Claims,unless objected to by the Debtors, shall be assumed and paid by the Debtors, inCash, pursuant to the terms and conditions of the particular transaction givingrise to such Administrative Claim.

### 3.*             AdministrativeTax Claims*

All requests for payment of Administrative Claims by a governmentalunit for taxes (and for interest and/or penalties related to such taxes) forany tax year or period, all or any portion of which occurs or falls within theperiod from and including the Petition Date through and including the EffectiveDate, and for which no bar date has otherwise been previously established, mustbe filed and served on the Reorganized Debtors and any other party specificallyrequesting a copy in writing on or before the later of (a) thirty (30)days following the Effective Date; and (b) one hundred and twenty (120)days following the filing of the tax return for such taxes for such tax year orperiod with the applicable governmental unit. Any Holder of any such Claim that is required to file a request forpayment of such taxes and does not file and properly serve such a claim by theapplicable bar date shall be forever barred from

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asserting any such claim against the Debtors, theReorganized Debtors or their property, regardless of whether any such Claim isdeemed to arise prior to, on, or subsequent to the Effective Date.  Any interested party desiring to object to anAdministrative Claim for taxes must file and serve its objection on counsel tothe Debtors and the relevant taxing authority no later than ninety (90) daysafter the taxing authority files and serves its application.

### 4.*             ProfessionalFee Claims*

All final requests forcompensation or reimbursement of Professional Fees pursuant tosections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code forservices rendered to the Debtors or the Committee (if one has been appointed)prior to the Effective Date (other than Substantial Contribution Claims undersection 503(b)(4) of the Bankruptcy Code) must be filed and served on theReorganized Debtors and their counsel no later than 45 days after the EffectiveDate, unless otherwise ordered by the Bankruptcy Court.  Objections to applications of suchProfessionals or other entities for compensation or reimbursement of expensesmust be filed and served on the Reorganized Debtors and their counsel and therequesting Professional or other entity no later than 45 days (or such longerperiod as may be allowed by order of the Bankruptcy Court) after the date onwhich the applicable application for compensation or reimbursement was served.

## **B.****                                    PaymentOf Statutory Fees**

All fees payable pursuantto section 1930 of title 28 of the United States Code, as determined bythe Bankruptcy Court at Confirmation shall be paid on or before the EffectiveDate.

## **C.****                                    SeverabilityOf Plan Provisions**

If, prior toConfirmation, any term or provision of the Plan is held by the Bankruptcy Courtto be invalid, void or unenforceable, the Bankruptcy Court, at the request ofthe Debtors, shall have the power to alter and interpret such term or provisionto make it valid or enforceable to the maximum extent practicable, consistentwith the original purpose of the term or provision held to be invalid, void orunenforceable, and such term or provision shall then be applicable as alteredor interpreted.  Notwithstanding any suchholding, alteration or interpretation, the remainder of the terms and provisionsof the Plan shall remain in full force and effect and shall in no way beaffected, impaired or invalidated by such holding, alteration orinterpretation.  The Confirmation Ordershall constitute a judicial determination and shall provide that each term andprovision of the Plan, as it may have been altered or interpreted in accordancewith the foregoing, is valid and enforceable pursuant to its terms.

## **D.****                                    SuccessorsAnd Assigns**

The rights, benefits andobligations of any entity named or referred to in the Plan shall be binding on,and shall inure to the benefit of, any heir, executor, administrator, successoror assign of such entity.

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## **E.****                                      DischargeOf The Debtors**

All considerationdistributed under the Plan shall be in exchange for, and in completesatisfaction, settlement, discharge, and release of, all Claims of any naturewhatsoever against the Debtors or any of their assets or properties, and,except as otherwise provided herein or in the Confirmation Order, andregardless of whether any property shall have been distributed or retainedpursuant to the Plan on account of such Claims, upon the Effective Date, (a)the Debtors, shall be deemed discharged and released undersection 1141(d)(1)(A) of the Bankruptcy Code from any and all Claims,including, but not limited to, demands and liabilities that arose before theConfirmation Date, and all debts of the kind specified in sections 502(g),502(h) or 502(i) of the Bankruptcy Code, whether or not (i) a proof ofClaim based upon such debt is filed or deemed filed under section 501 ofthe Bankruptcy Code, (ii) a Claim based upon such debt is Allowed undersection 502 of the Bankruptcy Code, or (iii) the Holder of a Claimbased upon such debt accepted the Plan; and (b) all Interests and otherrights of the equity security holders in the Debtors shall be terminated.  The Confirmation Order shall be a judicialdetermination of discharge of all liabilities of the Debtors, subject to theEffective Date occurring.

## **F.****                                      ExculpationAnd Limitation Of Liability**

None of the ReorganizedDebtors, Lender, the Initial Consenting Parties, or the Ad Hoc Committee, orany of their respective present or former members, equity holders, partners,officers, directors, employees, advisors, attorneys, or agents, shall have orincur any liability to any Holder of a Claim or an Interest, or any other partyin interest, or any of their respective agents, employees, representatives,financial advisors, attorneys, or affiliates, or any of their successors orassigns, for any act or omission in connection with, relating to, or arisingout of, the Chapter 11 Cases, negotiation of the Plan, the solicitation ofacceptances of the Plan, the pursuit of confirmation of the Plan, theconsummation of the Plan, or the administration of the Plan or the property tobe distributed under the Plan, except for their gross negligence or willfulmisconduct, and in all respects shall be entitled to reasonably rely upon theadvice of counsel with respect to their duties and responsibilities under thePlan.

Notwithstanding any otherprovision of this Plan, no Holder of a Claim or Interest, no other party ininterest, none of their respective agents, employees, representatives,financial advisors, attorneys, or affiliates, and no successors or assigns ofthe foregoing, shall have any right of action against the Reorganized Debtors,the Estates, the Lender, the Initial Consenting Parties, the Ad Hoc Committee,any official committee appointed in the Chapter 11 Cases, or any of theirrespective present or former members, equity holders, partners, officers,directors, employees, advisors, attorneys, or agents, for any act or omissionin connection with, relating to, or arising out of, the Exchange Offer, theChapter 11 Cases, the solicitation of acceptances of the Plan, the pursuitof confirmation of the Plan, the consummation of the Plan, or theadministration of the Plan or the property to be distributed under the Plan,except for their gross negligence or willful misconduct.

The foregoing exculpationand limitation on liability shall not, however, limit, abridge, or otherwiseaffect the rights, if any, of the Reorganized Debtors to enforce, sue on,settle, or compromise the Litigation Claims retained pursuant toArticle IV.F hereof.

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## **G.****                                    PermanentInjunction**

Except as otherwiseexpressly provided in the Plan or the Confirmation Order, all entities who haveheld, hold or may hold Claims against, or Interests in, the Debtors will bepermanently enjoined, on and after the Effective Date, from (i) commencingor continuing in any manner any action or other proceeding of any kind withrespect to any such Claim or Interest, (ii) the enforcement, attachment,collection, or recovery by any manner or means of judgment, award, decree ororder against the Debtors on account of any such Claim or Interest, (iii) creating,perfecting, or enforcing any encumbrance of any kind against the Debtors oragainst the property or interests in property of the Debtors on account of anysuch Claim or Interest, and (iv) asserting any right of setoff orsubrogation of any kind against any obligation due from the Debtors or againstthe property or interests in property of the Debtors on account of any suchClaim or Interest.  The foregoinginjunction will extend to successors of the Debtors (including, withoutlimitation, the Reorganized Debtors) and their respective properties andinterests in property.

## **H.****                                    Debtors’Releases**

As of the Effective Date, the Debtors, the Reorganized Debtors and anysuccessors shall be deemed, to the maximum extent permitted by applicable law,to forever release, waive and discharge all claims, obligations, suits,judgments, damages, demands, debts, rights, causes of action and liabilitieswhatsoever in connection with or related to the Debtors or the ReorganizedDebtors, the Chapter 11 Cases or the Plan (other than the rights of theDebtors and Reorganized Debtors and any successors to enforce the Plan and thecontracts, instruments, releases, indentures, and other agreements or documentsassumed, passed through or delivered in connection with such plan) and whetherliquidated or unliquidated, fixed or contingent, matured or unmatured, known orunknown, foreseen or unforeseen, then existing or thereafter arising, in law,equity or otherwise that are based in whole or part on any act, omission,transaction, event or other occurrence taking place on or prior to theEffective Date and in any way relating to the Debtors, Reorganized Debtors orany successors or their property, the Chapter 11 Cases, the Plan, the Lender,the Initial Consenting Parties (solely in their capacity as Holders of FRNClaims or as parties to the FRN Transaction Documents), or the Ad Hoc Committeeand its present and former members (solely in their capacity as present orformer members of such committee), any official committee appointed in the Chapter 11Cases and its present and former members (solely in their capacity as presentor former members of such committee) and that may be asserted by or on behalfof the Debtors or the Reorganized Debtors against the Lender, the InitialConsenting Parties (solely in their capacity as Holders of FRN Claims or asparties to the FRN Transaction Documents), the Holders of the SSN Claims(including the Ad Hoc Committee and its present and former members), theSSN Indenture Trustee, any official committee appointed in the Chapter 11Cases and its present and former members (solely in their capacity as presentor former members of such committee) and any successors or their property andeach of their directors, officers, employees, agents, financial advisors, representatives,affiliates, attorneys and professionals as of the Effective Date; *provided*, *however*,that such releases shall not operate as a waiver or release of any causes ofaction arising out of (x) any express contractual obligation owing by anysuch director, officer, or employee, agent, financial advisor, representative,affiliate, attorney or professional, or (y) the willful misconduct, grossnegligence, intentional fraud or criminal conduct of such director, officer, oremployee, agent, financial advisor, representative, affiliate or professional.

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## **I.****                                         Releasesby Holders of Claims and Interests**

As of the Effective Date, for good and valuable consideration, theadequacy of which is hereby confirmed, each Holder of a Claim (including aLender Secured Claim, FRN Claim, or a SSN Claim) or Interest that votes infavor of the Plan (or is deemed to accept the Plan), and to the fullest extentpermissible under applicable law, as such law may be extended or integratedafter the Effective Date, each Holder of a Claim or Interest that does not voteto accept the Plan, shall be deemed to unconditionally, forever release, waiveand discharge all Claims, Interests, suits, judgments, damages, demands, debts,rights, causes of action and liabilities whatsoever in connection with orrelated to the recapitalization and restructuring efforts undertaken by theDebtors, the Chapter 11 Cases, the Plan (other than the rights to enforce thePlan and the contracts, instruments, releases, indentures, and other agreementsor documents assumed, passed through or delivered in connection with such Plan)whether liquidated or unliquidated, fixed or contingent, matured or unmatured,known or unknown, foreseen or unforeseen, then existing or thereafter arising,in law, equity or otherwise that are based in whole or in part on any act,omission, transaction, event or other occurrence taking place on or prior tothe Effective Date in any way relating to the Debtors, the Reorganized Debtors,the InSight Entities and any successors, the Chapter 11 Cases, the Plan, theLender, the Initial Consenting Parties (solely in their capacity as Holders ofFRN Claims or as parties to the FRN Transaction Documents), the Ad HocCommittee and its present and former members (solely in their capacity as presentor former members of such committee), or any official committee appointed inthe Chapter 11 Cases (and its present and former members solely in theircapacity as present or former members of such committee) against (i) theDebtors, the Reorganized Debtors and any successors, (ii) the Debtors’present and former directors, officers, employees, agents, financial advisors,attorneys and professionals, (iii) the Lender and its successors andassigns and advisors, (iv) the Initial Consenting Parties and each of theirsuccessors and assigns (solely in their capacity as Holders of FRN Claims or asparties to the FRN Transaction Documents), (v) the Ad Hoc Committee and itspresent and former members (solely in their capacity as present or formermembers of such committee) and advisors, and (vi) any official committeeappointed in the Chapter 11 Cases and its present and former members(solely in their capacity as present or former members of such committee) andadvisors; *provided*, *however*, that the foregoing shall notwaive or release any causes of action arising out of (x) any expresscontractual obligations owing by any such director, officer, employee, agent,financial advisor, attorney or professional of the Debtors, the ReorganizedDebtors and any successors, or (y) the willful misconduct, grossnegligence, intentional fraud or criminal conduct of such director, officer,employee, agent, financial advisor, representative or professional of theDebtors.

## **J.****                                      BindingEffect**

The Plan shall be bindingupon and inure to the benefit of the Debtors, all present and former Holders ofClaims against and Interests in the Debtors, their respective successors andassigns, including, but not limited to, the Reorganized Debtors, and all otherparties-in-interest in these Chapter 11 Cases.

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## **K.****                                    Revocation,Withdrawal, Or Non-Consummation**

The Debtors reserve theright to revoke or withdraw the Plan at any time prior to the Confirmation Dateand to file subsequent plans of reorganization. If the Debtors revoke or withdraw the Plan, or if Confirmation orconsummation of the Plan does not occur, then (i) the Plan shall be nulland void in all respects, (ii) any settlement or compromise embodied inthe Plan (including the fixing or limiting to an amount certain any Claim orClass of Claims), and any document or agreement executed pursuant to thePlan shall be deemed null and void, and (iii) nothing contained in thePlan, and no acts taken in preparation for consummation of the Plan, shall(a) constitute or be deemed to constitute a waiver or release of anyClaims by or against, or any Interests in, the Debtors or any other Person,(b) prejudice in any manner the rights of the Debtors or any Person in anyfurther proceedings involving the Debtors, or (c) constitute an admissionof any sort by the Debtors or any other Person.

## **L.****                                     PlanSupplement**

Any and all exhibits,lists, or schedules not filed with the Plan shall be contained in the PlanSupplement and filed with the Clerk of the Bankruptcy Court not later than thetenth (10th) day prior to the Effective Date. Upon filing with the Bankruptcy Court, the Plan Supplement may beinspected in the office of the Clerk of the Bankruptcy Court during normalcourt hours.  Holders of Claims orInterests may obtain a copy of the Plan Supplement upon written request to theDebtors in accordance with Article XIV.M of the Plan.

## **M.****                                  Notices**

Any notice, request, ordemand required or permitted to be made or provided to or upon  Debtors, Reorganized Debtors or the Ad HocCommittee under the Plan shall be (i) in writing, (ii) served by(a) certified mail, return receipt requested, (b) hand delivery,(c) overnight delivery service, (d) first class mail, or(e) facsimile transmission, and (iii) deemed to have been duly givenor made when actually delivered or, in the case of notice by facsimiletransmission, when received and telephonically confirmed, addressed as follows:

INSIGHT HEALTHSERVICES HOLDINGS CORP.26250 Enterprise CourtSuite 100Lake Forest, CA  92630Attn:  General CounselTelephone:  (949) 282-6000Facsimile:   (949) 462-3703

with a copy to:

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Mark D. CollinsDaniel J. DeFranceschiRICHARDS, LAYTON & FINGER, P.A.One Rodney Square920 North King StreetWilmington, DE 19801Telephone:   (302) 651-7700Facsimile:     (302) 498-7701

and

Michael B. SolowHarold D. IsraelKAYE SCHOLER LLC70 West Madison StreetSuite 4100Chicago, IL 60602Telephone:   (312) 583-2300Facsimile:     (312) 583-2360

and

AD HOC COMMITTEEOF HOLDERS OFINSIGHT’S SENIOR SUBORDINATED NOTESc/o Robert J. StarkBrown Rudnick Berlack Israels LLP7 Times SquareNew York, NY  10036Telephone:   (212) 704-0100Facsimile:     (212) 704-0196

## **N.****                                    IndemnificationObligations**

Except as otherwisespecifically limited in this Plan, any obligations or rights of the Debtors toindemnify its present and former directors, officers, or employees pursuant tothe Debtors’ Corporate Documents, policy of providing employee indemnification,applicable state law, or specific agreement in respect of any claims, demands,suits, causes of action, or proceedings against such directors, officers, oremployees based upon any act or omission related to such present and formerdirectors’, officers’, or employees’ service with, for, or on behalf of theDebtors, shall survive confirmation of this Plan and remain unaffected thereby,irrespective of whether indemnification is owed in connection with anoccurrence before or after the Petition Date.

## **O.****                                   Prepayment**

Except as otherwiseprovided in this Plan, the Confirmation Order or the FRN Indenture, the Debtorsshall have the right to prepay, without penalty, all or any portion of anAllowed

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Claim at any time;*provided*, *however*, that any such prepayment shallnot be violative of, or otherwise prejudice, the relative priorities among theClasses of Claims.

## **P.****                                     TermOf Injunctions Or Stay**

Unless otherwise providedherein or in the Confirmation Order, all injunctions or stays provided for inthe Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Codeor otherwise, and extant on the Confirmation Date (excluding any injunctions orstays contained in this Plan or the Confirmation Order), shall remain in fullforce and effect until the Effective Date.

## **Q.****                                   RegistrationRights Agreement**

Without limiting theeffect of section 1145 of the Bankruptcy Code, on the Effective Date, certainholders of New Common Stock shall have the option to become a party to aRegistration Rights Agreement and, accordingly, will be afforded the rightsthereby and will be subject to the obligations provided therein.  The Registration Rights Agreement willprovide, among other things, for demand and piggyback registration rights forthe benefit of the signatories thereto.

## **R.****                                    Hart-Scott-RodinoCompliance**

Any shares of New CommonStock distributed to any entity required to file a Premerger Notification andReport Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended, shall not be distributed until the notification and waiting periodsapplicable under such Act to such entity shall have expired or been terminated.  Any filing fees associated with any suchfiling shall be paid by the Reorganized Debtors.

## **S.****                                     Allocationof Plan Distributions Between Principal and Interest**

To the extent that anyAllowed Claim entitled to a distribution under the Plan is comprised ofindebtedness and accrued but unpaid interest thereon, the value of suchdistribution shall be allocated to the principal amount of the Claim first andthen, to the extent consideration exceeds the principal amount of the Claim, toaccrued but unpaid interest.

## **T.****                                     Dissolutionof Committee**

On the Effective Date, the Committee shall dissolve and the members ofthe Committee shall be released and discharged from all authority, duties,responsibilities and obligations related to and arising from and in connectionwith the Chapter 11 Cases.

## **U.****                                     NoAdmissions**

Notwithstanding anything herein to the contrary, nothing contained inthe Plan shall be deemed as an admission by the Debtors with respect to anymatter set forth herein including, without limitation, liability on any Claim.

**[Remainder of Page Intentionally Left Blank]**

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## **V.****                                   GoverningLaw**

Unless a rule of law orprocedure is supplied by federal law (including the Bankruptcy Code andBankruptcy Rules), the laws of the State of Delaware shall govern theconstruction and implementation of the Plan and any agreements, documents, andinstruments executed in connection with the Plan as well as corporategovernance matters with respect to the Debtors, without giving effect to theprinciples of conflicts of law thereof.

# **ARTICLEXV.**

# **CONFIRMATIONREQUEST**

The Debtors request Confirmation of the Plan under section 1129 of theBankruptcy Code.  If any Impaired Classdoes not accept the Plan pursuant to section 1126 of the Bankruptcy Code, theDebtors request Confirmation pursuant to section 1129(b) of the BankruptcyCode.  In that event, the Debtors reservethe right to modify the Plan to the extent (if any) that Confirmation of thePlan under section 1129(b) of the Bankruptcy Code requires modification.
| Dated:     | Wilmington,  Delaware                              |              |
|------------|----------------------------------------------------|-------------------|
|       | May 29, 2007                                       |              |
|       |                                               |
|       |                                               |
| ** ** | **INSIGHT HEALTH SERVICES  HOLDINGS CORP., ETAL.** |
| ** ** | ** **                                         |
| ** ** | ** **                                         |
|       | By:                                                | /s/ Mitch C. Hill |
|       |                                               | Name:             | Mitch C. Hill |
|       |                                               | Title:            | Executive Vice President and |
|       |                                               |              | Chief Financial Officer |

 
| Mark D. Collins                     |
|-------------------------------------|
| Daniel J. DeFranceschi              |
| RICHARDS, LAYTON & FINGER, P.A. |
| One Rodney Square                   |
| 920 North King Street               |
| Wilmington, DE 19801                |
| Telephone:                          |   | (302) 651-7700 |
| Facsimile:                          |   | (302) 498-7701 |
|                                |   |   |
| Michael B. Solow                    |
| Harold D. Israel                    |
| KAYE SCHOLER LLC                    |
| 70 West Madison Street              |
| Suite 4100                          |
| Chicago, IL 60602                   |
| Telephone:                          |   | (312) 583-2300 |
| Facsimile:                          |   | (312) 583-2360 |

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**EXHIBIT A**

**AMENDED CERTIFICATE OF INCORPORATION OF HOLDINGS**

**(To follow)**

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**EXHIBIT B**

**SECOND AMENDED AND RESTATED BYLAWS OF HOLDINGS**

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**EXHIBIT C**

**REGISTRATION RIGHTS AGREEMENT**

**(To follow)**

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**EXHIBIT D**

**SCHEDULE OF REJECTED EXECUTORY CONTRACTS**

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