Exhibit
10.19


 


InSight Health Services Corp.


 


and


 


The Guarantors listed on Schedule B
hereto


 


$25,000,000


 


9 7/8 % Senior
Subordinated Notes Due 2011


 


 


Purchase Agreement


 


dated 
February 26, 2004


 


 


Banc of America Securities LLC


 

















 


Table of Contents


 


	
  Section 1.

  	
   

  	
  Representations and Warranties

  	
   

  
	
   

  	
  (a)

  	
   

  	
  No Registration Required

  	
   

  
	
   

  	
  (b)

  	
   

  	
  No
  Integration of Offerings or General Solicitation

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Eligibility
  for Resale Under Rule 144A

  	
   

  
	
   

  	
  (d)

  	
   

  	
  The Offering Memorandum

  	
   

  
	
   

  	
  (e)

  	
   

  	
  Incorporated Documents

  	
   

  
	
   

  	
  (f)

  	
   

  	
  The
  Purchase Agreement

  	
   

  
	
   

  	
  (g)

  	
   

  	
  The Registration
  Rights Agreement

  	
   

  
	
   

  	
  (h)

  	
   

  	
  The DTC Letter of
  Representations

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Authorization
  of the Securities and the Exchange Securities

  	
   

  
	
   

  	
  (j)

  	
   

  	
  Authorization of the
  Indenture

  	
   

  
	
   

  	
  (k)

  	
   

  	
  Descriptions
  in the Offering Memorandum

  	
   

  
	
   

  	
  (l)

  	
   

  	
  No Material Adverse
  Change

  	
   

  
	
   

  	
  (m)

  	
   

  	
  Independent Accountants

  	
   

  
	
   

  	
  (n)

  	
   

  	
  Preparation
  of the Financial Statements

  	
   

  
	
   

  	
  (o)

  	
   

  	
  Incorporation
  and Good Standing of Company and its Subsidiaries

  	
   

  
	
   

  	
  (p)

  	
   

  	
  Capitalization
  and Other Capital Stock Matters

  	
   

  
	
   

  	
  (q)

  	
   

  	
  Non-Contravention
  of Existing Instruments; No Further Authorizations or Approvals Required

  	
   

  
	
   

  	
  (r)

  	
   

  	
  No Material
  Actions or Proceedings

  	
   

  
	
   

  	
  (s)

  	
   

  	
  Intellectual Property
  Rights

  	
   

  
	
   

  	
  (t)

  	
   

  	
  All Necessary Permits, Etc.

  	
   

  
	
   

  	
  (u)

  	
   

  	
  Regulatory
  Matters

  	
   

  
	
   

  	
  (v)

  	
   

  	
  Medicare/Medicaid
  Participation

  	
   

  
	
   

  	
  (w)

  	
   

  	
  Title
  to Properties

  	
   

  
	
   

  	
  (x)

  	
   

  	
  Material
  Agreements

  	
   

  
	
   

  	
  (y)

  	
   

  	
  Tax
  Law Compliance

  	
   

  
	
   

  	
  (z)

  	
   

  	
  Company Not an “Investment
  Company”.

  	
   

  
	
   

  	
  (aa)

  	
   

  	
  Insurance

  	
   

  
	
   

  	
  (bb)

  	
   

  	
  No Price Stabilization or
  Manipulation

  	
   

  
	
   

  	
  (cc)

  	
   

  	
  Solvency

  	
   

  
	
   

  	
  (dd)

  	
   

  	
  No Unlawful
  Contributions or Other Payments

  	
   

  
	
   

  	
  (ee)

  	
   

  	
  Company’s Accounting
  System

  	
   

  
	
   

  	
  (ff)

  	
   

  	
  Compliance with
  Environmental Laws

  	
   

  
	
   

  	
  (gg)

  	
   

  	
  ERISA
  Compliance

  	
   

  
	
   

  	
  (hh)

  	
   

  	
  Regulation S Compliance

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  Taxes; Fees

  	
   

  
	
   

  	
  (jj)

  	
   

  	
  No
  Labor Disputes

  	
   

  
	
   

  	
  (kk)

  	
   

  	
  Brokers

  	
   

  
	
   

  	
  (ll)

  	
   

  	
  No
  Outstanding Loans or Other Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Purchase, Sale and Delivery of the
  Securities

  	
   

  
	
   

  	
  (a)

  	
   

  	
  The
  Securities

  	
   

  



 


i

















 


	
   

  	
  (b)

  	
   

  	
  The
  Closing Date

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Delivery
  of the Notes

  	
   

  
	
   

  	
  (d)

  	
   

  	
  Delivery of
  Offering Memorandum to the Initial Purchaser

  	
   

  
	
   

  	
  (e)

  	
   

  	
  Initial
  Purchaser as Qualified Institutional Buyer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Covenants

  	
   

  
	
   

  	
  (a)

  	
   

  	
  The
  Initial Purchaser’s Review of Proposed Amendments and Supplements

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Amendments
  and Supplements to the Offering Memorandum and Other Securities Act Matters

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Copies of the
  Offering Memorandum

  	
   

  
	
   

  	
  (d)

  	
   

  	
  Blue
  Sky Compliance

  	
   

  
	
   

  	
  (e)

  	
   

  	
  Depositary

  	
   

  
	
   

  	
  (f)

  	
   

  	
  Additional Issuer
  Information

  	
   

  
	
   

  	
  (g)

  	
   

  	
  Intentionally
  Omitted

  	
   

  
	
   

  	
  (h)

  	
   

  	
  Future
  Reports to the Initial Purchaser

  	
   

  
	
   

  	
  (i)

  	
   

  	
  No
  Integration

  	
   

  
	
   

  	
  (j)

  	
   

  	
  Legended
  Securities

  	
   

  
	
   

  	
  (k)

  	
   

  	
  PORTAL

  	
   

  
	
   

  	
  (l)

  	
   

  	
  Rating of Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Payment of Expenses

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Conditions to the Obligations of the
  Initial Purchaser

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Accountants’ Comfort Letter

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Opinion of Counsel for the Company

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Opinion of General Counsel for the Company

  	
   

  
	
   

  	
  (d)

  	
   

  	
  Opinion of Regulatory Counsel for the
  Company

  	
   

  
	
   

  	
  (e)

  	
   

  	
  Opinion of Counsel for the Initial
  Purchaser

  	
   

  
	
   

  	
  (f)

  	
   

  	
  Officers’ Certificate

  	
   

  
	
   

  	
  (g)

  	
   

  	
  Bring-down Comfort Letters

  	
   

  
	
   

  	
  (h)

  	
   

  	
  Registration Rights Agreement

  	
   

  
	
   

  	
  (i)

  	
   

  	
  Additional Documents

  	
   

  
	
   

  	
  (j)

  	
   

  	
  Ratings

  	
   

  
	
   

  	
  (k)

  	
   

  	
  CMI Acquisition
  Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Reimbursement of Initial Purchaser’s
  Expenses

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Offer, Sale and Resale Procedures

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Offers and Sales Only to Qualified
  Institutional Buyers and Non-U.S. Persons

  	
   

  
	
   

  	
  (b)

  	
   

  	
  No General Solicitation

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Restrictions on Transfer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Indemnification

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Indemnification
  of the Initial Purchaser

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Indemnification
  of the Company and the Guarantors and their Directors and Officers

  	
   

  



 


ii

















 


	
   

  	
  (c)

  	
   

  	
  Notifications
  and Other Indemnification Procedures

  	
   

  
	
   

  	
  (d)

  	
   

  	
  Settlements

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Contribution

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Termination of this Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Representations and Indemnities to
  Survive Delivery

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.

  	
   

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.

  	
   

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.

  	
   

  	
  Partial Unenforceability

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.

  	
   

  	
  Governing Law; Consent to Jurisdiction

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Governing Law Provisions

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Consent to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 16.

  	
   

  	
  General
  Provisions

  	
   

  



 


	
  SCHEDULE A

  	
  -

  	
  Material Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE B

  	
  -

  	
  List of Guarantors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE C

  	
  -

  	
  Subsidiaries of InSight Health Services
  Corp.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  -

  	
  Form of Opinion of Kaye Scholer LLP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  -

  	
  Form of Opinion of General Counsel for the
  Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  -

  	
  Form of Opinion of Regulatory Counsel for the
  Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX 1

  	
  -

  	
  Terms and Conditions of Offers and Sales

  	
   

  



 


iii

















 


Purchase Agreement


 


	
  February 26,
  2004

  
	
   

  
	
  BANC OF AMERICA
  SECURITIES LLC

  
	
  9 West 57th Street,

  
	
  New York, NY  10019

  



 


Ladies and Gentlemen:


 


Introductory.  InSight Health Services Corp., a Delaware
corporation (“the Company”), proposes to issue and sell to Banc of America
Securities LLC (the “Initial Purchaser”), $25,000,000 aggregate principal
amount of the Company’s 9 7/8% Senior Subordinated Notes Due 2011 (the
“Notes”).


 


The Notes will be
issued pursuant to that certain indenture, dated as of October 30, 2001,
among the Company, the Guarantors (as defined below) and U.S. Bank Trust
National Association (successor to State Street Bank and Trust Company N.A.),
as trustee (the “Trustee”) as supplemented through the date hereof (the
“Existing Indenture”) and as further supplemented pursuant to that certain
supplemental indenture to be dated as of March 8, 2004 (the “Supplemental
Indenture” and together with the Existing Indenture, the “Indenture”) among the
Company, the Guarantors and the Trustee. 
Notes issued in book-entry form will be issued in the name of Cede &
Co., as nominee of The Depository Trust Company (the “Depositary”) in
accordance with a letter of representations, to be dated as of the Closing Date
(as defined in Section 2), to be entered into in connection with the issuance
of the Securities (the “DTC Letter of Representations”) between the Company and
the Depositary.


 


The payment of
principal of, premium and Liquidated Damages (as defined in the Indenture), if
any, and interest on the Notes and the Exchange Notes (as defined below) will,
upon issuance of the Notes, become fully and unconditionally guaranteed on a
senior subordinated and unsecured basis, jointly and severally by (i) InSight
Health Services Holdings Corp. (“Holdings”), (ii) each of the Company’s
directly and indirectly wholly-owned subsidiaries listed in Schedule B
attached hereto, and (iii) any wholly-owned or other subsidiary of the Company
formed or acquired after the Closing Date that executes an additional guarantee
in accordance with the terms of the Indenture, and respective successors and
assigns of Holdings and the subsidiaries of the Company referred to in (ii) and
(iii) above (collectively, the “Guarantors,” and the subsidiaries referred to
in (ii) and (iii) above, the “Subsidiary Guarantors”), pursuant to their
guarantees (the “Guarantees”).  The
Notes and the Guarantees attached thereto are herein collectively referred to
as the “Securities,” and the Exchange Notes


 

















 


and the Guarantees attached thereto are herein collectively referred to
as the “Exchange Securities.”


 


The holders of the
Notes will be entitled to the benefits of a registration rights agreement, to
be dated as of the Closing Date (the “Registration Rights Agreement”), among
the Company, the Guarantors and the Initial Purchaser pursuant to which the
Company and the Guarantors agree to file, within 240 days of the Closing Date,
a registration statement with the Securities and Exchange Commission (the
“Commission”) registering the Exchange Securities under the Securities Act of
1933, as amended (the “Securities Act,” which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder).


 


Concurrent with
the offering, the Company is entering into a third amendment, waiver and
consent to its Existing Credit Agreement (defined below) (the “Bank
Amendment”), to facilitate the financing of the proposed acquisition (the “CMI
Acquisition”) by the Company of 22 diagnostic imaging centers as described in
the Offering Memorandum (as defined below).


 


The Company
understands that the Initial Purchaser proposes to make an offering of the
Securities on the terms and in the manner set forth herein and in the Offering
Memorandum (as defined below) and agrees that the Initial Purchaser may sell,
subject to the conditions set forth herein, all or a portion of the Securities
to purchasers (the “Subsequent Purchasers”) at any time after the date of this
Agreement.  The Securities are to be
offered and sold to or through the Initial Purchaser without being registered
with the Commission under the Securities Act, in reliance upon exemptions
therefrom.  The terms of the Securities
and the Indenture will require that investors that acquire Securities expressly
agree that Securities may only be resold or otherwise transferred, after the
date hereof, if such Securities are registered for sale under the Securities
Act or if an exemption from the registration requirements of the Securities Act
is available (including the exemptions afforded by Rule 144A under the
Securities Act (“Rule 144A”) or Regulation S under the Securities Act
(“Regulation S”)).


 


The Company has
prepared and delivered to the Initial Purchaser copies of a preliminary
offering memorandum, dated February 25, 2004 (the “Preliminary Offering
Memorandum,” it being understood that no financial statements of the business
to be acquired in the CMI Acquisition have been included in the Preliminary
Offering Memorandum), and has prepared and will deliver to the Initial
Purchaser, copies of the Offering Memorandum (defined below), describing the
terms of the Securities, each for use by the Initial Purchaser in connection
with its solicitation of offers to purchase the Securities.  As used herein, the “Offering Memorandum”
shall mean, with respect to any date or time referred to in this Agreement, the
offering memorandum, dated February 26, 2004 including amendments or
supplements thereto, any exhibits thereto and the Incorporated Documents (as
defined in Section 1 below), in the most recent form that has been
prepared and delivered by the Company to the Initial Purchaser in connection
with its solicitation of offers to purchase Securities.  Further, any reference to the Preliminary
Offering Memorandum or the Offering Memorandum shall be deemed to refer to and
include any Additional Issuer Information (as defined in Section 3) furnished by the
Company prior to the completion of the distribution of the Securities.


 


All references in
this Agreement to financial statements and other information which is
“contained,” “included” or “stated” in the Offering Memorandum (or other
references


 


2

















 


of like import) shall be deemed to mean and include all such financial
statements and schedules and other information which are incorporated by
reference in the Offering Memorandum; all references in this Agreement to
amendments or supplements to the Offering Memorandum shall be deemed to mean
and include the filing of any document under the Securities Exchange Act of
1934 (as amended, the “Exchange Act,” which term, as used herein, includes the
rules and regulations of the Commission promulgated thereunder) which is
incorporated or deemed to be incorporated by reference in the Offering
Memorandum; and all references in this Agreement to the Transaction Documents
shall be deemed to mean and include this Purchase Agreement, the Registration
Rights Agreement, the Indenture, the Securities and the DTC Letter of
Representations.  References herein to
“Subsidiaries” shall mean each corporation, partnership, limited liability
company, joint venture or other entity in which (i) the Company owns, directly
or indirectly, 50% or more of the outstanding voting securities or equity
interests or (ii) the Company or any Subsidiary is the sole general partner or
the sole managing member.


 


Each of the
Company and the Guarantors hereby confirms its respective agreement with the
Initial Purchaser as follows:


 


Section 1.                                            Representations
and Warranties.  The Company and
each of the Guarantors hereby jointly and severally represent, warrant and
covenant to the Initial Purchaser as follows:


 


(a)                                  No Registration Required.  Subject to compliance by the Initial
Purchaser with the representations and warranties set forth in
Section 2(e) hereof and with the procedures set forth in Section 7
hereof, it is not necessary in connection with the issuance and sale of the
Securities to the Initial Purchaser and the offer, sale and delivery of the
Securities to each Subsequent Purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to register the Securities under the
Securities Act or, until such time as the Exchange Securities are issued
pursuant to an effective registration statement, to qualify the Supplemental
Indenture under the Trust Indenture Act of 1939 (the “Trust Indenture Act,”
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder).


 


(b)                                 No Integration of Offerings or General Solicitation.  None of the Company or any Guarantor has,
directly or indirectly, solicited any offer to buy or offered to sell, and none
of them will, directly or indirectly, solicit any offer to buy or offer to
sell, in the United States or to any United States citizen or resident, any
security which is or would be integrated with the sale of the Securities in a
manner that would require the Securities to be registered under the Securities
Act.  None of the Company, the
Guarantors, their respective affiliates (as such term is defined in
Rule 501(b) under the Securities Act (each, an “Affiliate”)) or any person
acting on their behalf (other than the Initial Purchaser, as to whom none of
the Company or any Guarantor makes any representation or warranty) has engaged
or will engage, in connection with the offering of the Securities, in any form
of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act. 
With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Company, the Guarantors, their
Affiliates or any person acting on their behalf (other than the Initial
Purchaser, as to whom none of the Company or any Guarantor makes any
representation or warranty) has engaged or will


 


3

















 


engage in any directed
selling efforts within the meaning of Regulation S and (ii) each of
the Company, the Guarantors and their Affiliates and any person acting on their
behalf (other than the Initial Purchaser, as to whom none of the Company or any
Guarantor makes any representation or warranty) has complied and will comply
with the offering restrictions set forth in Regulation S.


 


(c)                                  Eligibility for Resale Under Rule 144A. 
The Securities are eligible for resale pursuant to Rule 144A and
will not be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated interdealer quotation system.


 


(d)                                 The Offering Memorandum.  The Offering Memorandum does not, and at the
Closing Date will not, include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from the
Offering Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by the Initial Purchaser expressly for use
in the Offering Memorandum.  Each of the
Preliminary Offering Memorandum and the Offering Memorandum, as of its
respective date, contains all the information specified in, and meeting the
requirements of Rule 144A(d)(4). 
None of the Company or any Guarantor has distributed and none of them
will distribute, prior to the later of the Closing Date and the completion of
the Initial Purchaser’s distribution of the Securities, any offering material
in connection with the offering and sale of the Securities other than the
Preliminary Offering Memorandum, the Offering Memorandum or as agreed upon by
the Initial Purchaser.


 


(e)                                  Incorporated Documents.  The Offering Memorandum as delivered from
time to time shall incorporate by reference the Annual Report of Holdings on
Form 10-K for the fiscal year ended June 30, 2003 filed with the
Commission on September 26, 2003 (the “Annual Report”), each Quarterly
Report of Holdings on Form 10-Q filed with the Commission between
September 26, 2003 and the Closing Date, the Current Report on Form 8-K filed
with the Commission on February 17, 2004 and each Current Report of the
Company on Form 8-K (and any amendment(s) thereto, but not including any
filings made under Item 9 or 12 of Form 8-K) filed with the Commission between
the date hereof and the Closing Date. 
The documents incorporated or deemed to be incorporated by reference in
the Offering Memorandum, at the time they were, or hereafter are, filed with
the Commission (collectively, the “Incorporated Documents”) complied and will
comply in all material respects with the requirements of the Exchange Act.


 


(f)                                    The Purchase Agreement.  This Agreement has been duly authorized,
executed and delivered by each of the Company and the Guarantors.


 


(g)                                 The Registration Rights Agreement.  At the Closing Date, the Registration Rights
Agreement will have been duly authorized, executed and delivered by, and
(assuming the due authorization, execution and delivery thereof by the other
parties thereto) will be a valid and binding agreement of, the Company and each
Guarantor,


 


4

















 


enforceable in accordance
with its terms, except as rights to indemnification and contribution thereunder
may be limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles (whether considered in
a proceeding at law or in equity). 
Pursuant to the Registration Rights Agreement, the Company and each
Guarantor will agree to file with the Commission, under the circumstances set
forth therein, (i) a registration statement under the Securities Act
relating to another series of debt securities of the Company with terms
substantially identical to the Notes (the “Exchange Notes”) to be offered in
exchange for the Notes (the “Exchange Offer”) and (ii) to the extent
required by the Registration Rights Agreement, a shelf registration statement
pursuant to Rule 415 of the Securities Act relating to the resale by
certain holders of the Notes, and in each case, to use its best efforts to
cause such registration statements to be declared effective.


 


(h)                                 The DTC Letter of Representations.  At the Closing Date, the DTC Letter of
Representations will have been duly authorized, executed and delivered by, and
(assuming the due authorization, execution and delivery thereof by the other
parties thereto) will be a valid and binding agreement of, the Company,
enforceable in accordance with its terms except as the enforcement thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles (whether considered in
a proceeding at law or in equity).


 


(i)                                     Authorization
of the Securities and the Exchange Securities.  (i) The Notes to be issued to the
Initial Purchaser are in the form contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the Indenture
and, at the Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor, will constitute valid and binding
agreements of the Company, enforceable in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles (whether considered in a proceeding at law or in equity) and will be
entitled to the benefits of the Indenture; (ii) prior to their issuance,
the Exchange Notes will have been duly and validly authorized for issuance by
the Company, and when issued and authenticated in accordance with the terms of
the Indenture, the Registration Rights Agreement and the Exchange Offer, will
constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, or similar laws relating to or affecting
enforcement of the rights and remedies of creditors or by general equitable
principles (whether considered in a proceeding at law or in equity) and will be
entitled to the benefits of the Indenture; (iii) the Guarantees of the Notes
will be in the form contemplated by the Indenture, will have been, prior to
their issuance, duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and will have been duly executed by each of the
Guarantors and, when the Guarantees have been


 


5

















 


authenticated in the
manner provided for in the Indenture and delivered, will constitute valid and
binding agreements of the Guarantors, enforceable in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by
general equitable principles (whether considered in a proceeding at law or in
equity) and will be entitled to the benefits of the Indenture; and (iv) prior
to their issuance, the Guarantees of the Exchange Notes will be in the form
contemplated by the Indenture and will have been duly and validly authorized
for issuance and sale pursuant to the Indenture and when issued and
authenticated in accordance with the terms of the Indenture, will constitute
valid and binding agreements of the Guarantors, enforceable in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by
general equitable principles (whether considered in a proceeding at law or in
equity) and will be entitled to the benefits of the Indenture.


 


(j)                                     Authorization of the Indenture.  The Existing Indenture has been duly
authorized, executed and delivered by the Company and the Guarantors and the
Supplemental Indenture has been duly authorized by the Company and the
Guarantors and, at the Closing Date, will have been duly executed and delivered
by the Company and the Guarantors and (assuming due authorization, execution
and delivery by other parties thereto) the Existing Indenture constitutes, and
the Indenture will constitute, a valid and binding agreement of the Company and
the Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles (whether considered in a
proceeding at law or in equity).


 


(k)                                  Descriptions in the Offering Memorandum.  The Notes, the Guarantees of the Notes and
the Indenture conform, or will conform, in all material respects to the
respective statements relating thereto contained in the Offering Memorandum.  The Exchange Notes and the Guarantees of the
Exchange Notes will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum and the
Registration Statement at the time such Registration Statement becomes
effective.


 


(l)                                     No Material Adverse Change.  Except as otherwise disclosed in the
Offering Memorandum, subsequent to the respective dates as of which information
is given in the Offering Memorandum, (i) there has been no material adverse
change or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in the
business, assets, properties, liabilities (contingent or otherwise) or
operations, of Holdings or the Company and its Subsidiaries considered as one
entity (any such change or development is called a “Material Adverse Change”);
(ii) Holdings, the Company and the Subsidiaries of the Company considered
as one entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business nor
entered into any material


 


6

















 


transaction or agreement
not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by Holdings, the
Company or any of the Subsidiaries of the Company on any class of capital stock
(except for dividends paid by a Subsidiary of the Company to the Company or to
another Subsidiary of the Company) or repurchase or redemption by Holdings, the
Company or any of the Subsidiaries of the Company of any class of capital
stock.


 


(m)                               Independent Accountants.  Arthur Andersen LLP, Ernst & Young LLP,
Herbein + Company, Inc. and PricewaterhouseCoopers LLP, each of whom who have
expressed their opinion with respect to the respective financial statements
(which term as used in this Agreement includes the related notes thereto)
included in or incorporated by reference in the Offering Memorandum are or, in
the case of Arthur Andersen LLP, were independent public or certified public
accountants as to the Company within the meaning of Regulation S-X under
the Exchange Act.


 


(n)                                 Preparation of the Financial Statements.  The consolidated financial statements of
Holdings (including its predecessor InSight Health Services Corp.), together
with the related notes, included or incorporated by reference in the Offering
Memorandum present fairly, in all material respects, the consolidated financial
position of Holdings, the Company and its Subsidiaries, on a consolidated
basis, as of and at the dates indicated and the results of their operations and
cash flows for the periods specified. 
The financial statements of Holdings (including its predecessor InSight
Health Services Corp.) included or incorporated by reference in the Offering
Memorandum comply as to form with the applicable requirements of the Securities
Act, except that the Offering Memorandum does not include certain pro forma
financial information as described under the caption “SEC Review” in the
Offering Memorandum.  Such financial
statements of Holdings (including its predecessor InSight Health Services
Corp.) have been prepared in conformity with generally accepted accounting
principles as applied in the United States of America applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereto.  The financial
data with respect to Holdings (including its predecessor InSight Health
Services Corp.) set forth in the Offering Memorandum under the captions
“Offering Memorandum Summary—Summary Consolidated Historical Forma Financial
Data,”  present fairly, in all material
respects, the historical financial information set forth therein on a basis consistent
with that of the audited and unaudited financial statements of Holdings
(including its predecessor InSight Health Services Corp.) incorporated by
reference in the Offering Memorandum. 
The pro forma financial information included in notes to Holdings’
financial statements in the Annual Report and the Quarterly Reports
incorporated by reference into the Offering Memorandum as described in clause
1(e) above present fairly, in all material respects, the information contained
therein, have been properly presented on the bases described therein, and the
assumptions used in the preparation thereof are believed to be reasonable in
light of then existing conditions and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein. The consolidated financial statements of each of the businesses
acquired or to be acquired, as the case may be, in the Central Valley
acquisition, the CDL acquisition and the CMI Acquisition (each as described in
the Offering Memorandum) included in the annexes to Offering Memorandum present
fairly


 


7

















 


the financial position of
such businesses as of the dates indicated and the results of their operations
and cash flows for the periods specified, except that, as disclosed in the
Offering Memorandum, the financial statements of the business to be acquired in
the CMI Acquisition include financial information and results of a facility
which will not be acquired by the Company. 
Such financial statements have been prepared in all material respects in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto and except that the audit opinion for the
financial statements of the business acquired in the Central Valley acquisition
has not been provided.


 


(o)                                 Incorporation and Good Standing of Company
and its Subsidiaries. 
Each of Holdings, the Company and the Subsidiaries of the Company has
been duly organized and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization; each of Holdings, the
Company and the Subsidiaries of the Company has the power and authority to own,
lease and operate its properties and to conduct its business as described in
the Offering Memorandum; and each of Holdings, the Company and the Subsidiary
Guarantors has the power and authority to enter into and/or perform its
obligations, as the case may be, under each of this Agreement, the Indenture,
the Registration Rights Agreement, the DTC Letter of Representations, the
Securities and the Exchange Securities to which it is a party.  Each of Holdings, the Company and each of
its Subsidiaries is duly qualified as a foreign corporation, limited liability
company or limited partnership, as the case may be, to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or to
be in good standing would not, individually or in the aggregate, result in a
Material Adverse Change.


 


(p)                                 Capitalization
and Other Capital Stock Matters.  At the date specified in such table, Holdings had the authorized,
issued and outstanding capitalization as set forth in the Offering Memorandum
under the caption “Capitalization” under the heading “Actual.”  At the date specified in such table, on a
consolidated basis, after giving pro forma effect to  the issuance
and sale of the Securities and additional borrowings under the Company’s credit
facilities as described in the Offering Memorandum (the “Existing Credit
Agreement”), Holdings would have an authorized and outstanding capitalization
as set forth in the Offering Memorandum under the caption “Capitalization”
under the heading “Pro Forma.”  All of
the outstanding shares of capital stock of Holdings and the Company have been
duly authorized and validly issued, are fully paid and nonassessable.  None of the outstanding shares of capital
stock of Holdings or the Company were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of Holdings or the Company, as the case may be.  Except for rights of first refusal or
“tag-along” or “drag along” rights customarily contained in stockholders’
agreements, partnership agreements or joint venture operating agreements, there
are no authorized or outstanding options, warrants, preemptive rights, rights
of first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of Holdings
or the Company or any of the Subsidiaries, other than those described in the


 


8

















 


Offering Memorandum.  The
description of Holdings’ stock option, stock bonus, stock purchase and other
stock plans or arrangements and the options or other rights granted thereunder,
set forth in the Offering Memorandum accurately and fairly describes, in all
material respects, such plans, arrangements, options and rights.  As of the date hereof, all of the issued and
outstanding capital stock of the Company has been duly authorized and validly
issued, is fully paid and nonassessable and is owned directly by Holdings, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim except for any security interests, mortgages, pledges, liens,
encumbrances or claims of the lenders existing under the Existing Credit
Agreement and except as described in the Offering Memorandum.  In addition, all of the issued and outstanding
capital securities of each Subsidiary of the Company has been duly authorized
and validly issued, is fully paid and nonassessable and, except as described in
Schedule C, is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim, except for any security interests, mortgages, pledges, liens,
encumbrances or claims of the lenders existing under the Credit Agreement,
dated as of October 17, 2001, among the Company, the Guarantors, Bank of
America, N.A., as administrative agent, Wachovia Bank, National Association
(formerly known as First Union National Bank), as syndication agent, The CIT
Group/Business, Inc., as documentation agent, and the other lenders party
thereto (such agreement, as amended from time to time, the “Existing Credit
Agreement”).  The only Subsidiaries of
the Company are those Subsidiaries listed in Schedule C
hereto.  All of the Company’s
wholly-owned Subsidiaries are Guarantors.


 


(q)                                 Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required.  None of Holdings, the Company or any of its
Subsidiaries is in violation of its charter or by-laws or is in default or has
violated any provision of, or committed or failed to perform any act which,
with or without notice, lapse of time, or both, would reasonably be expected to
constitute a default (“Default”) under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease, license or other instrument to
which Holdings, the Company or any of its Subsidiaries is a party or by which
it or any of them may be bound or to which any of the property or assets of
Holdings, the Company or any of its Subsidiaries is subject (each, an
“Instrument”), except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change or except for such defaults that
have been waived in writing.  The
Company’s and each Guarantor’s execution, delivery and performance of this
Agreement, the Company’s and each Guarantor’s execution and delivery of, and
the performance by the Company and the Guarantors of, the Registration Rights
Agreement and the Indenture, the Company’s execution and delivery of, and the
performance by the Company of, the DTC Letter of Representations and the CMI
Acquisition Agreement (as defined below), and the issuance and delivery of the
Securities or the Exchange Securities, and consummation of the transactions
contemplated hereby and thereby and by the Offering Memorandum (including the
CMI Acquisition Agreement) (i) will not result in any violation of the
provisions of the partnership agreement, operating agreement, charter or
by-laws, as applicable, of Holdings, the Company or any of its Subsidiaries,
(ii) will not conflict with or constitute a breach of, or Default or a
Debt Repayment Triggering Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of Holdings,


 


9

















 


the Company or any of its
Subsidiaries pursuant to, or require the consent of any other party to, any
Instrument, except for consents required under the Existing Credit Agreement to
complete the CMI Acquisition which will be obtained if the Bank Amendment
becomes effective and except for such conflicts, breaches, Defaults, Debt
Repayment Triggering Events, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and
(iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to Holdings or the
Company or any of its Subsidiaries except for such violations that would not,
individually or in the aggregate, result in a Material Adverse Change.  No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company’s or each
Guarantor’s execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the DTC Letter of Representations, the Indenture
or the CMI Acquisition Agreement, to which it is a party, or the issuance and
delivery of the Securities or the Exchange Securities, or consummation of the
transactions contemplated hereby and thereby and by the Offering Memorandum
(including the CMI Acquisition), except such as will be obtained by the Company
or the Guarantors and are in full force and effect under the Securities Act,
the Trust Indenture Act and such as may be required under state securities laws
or the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Initial Purchaser in the manner
contemplated herein and in the Offering Memorandum and in connection with
Holdings’, the Company’s and the Subsidiary Guarantors’ obligations under the
Registration Rights Agreement.  As used
herein, a “Debt Repayment Triggering Event” means any event or condition which
gives, or with the giving of notice or lapse of time would give, the holder of
any note, debenture or other evidence of material indebtedness (or any person
acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by Holdings or the
Company or any of its Subsidiaries.


 


(r)                                    No Material Actions or Proceedings.  Except as otherwise disclosed in the
Offering Memorandum, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the knowledge of Holdings and the
Company, threatened (i) against or affecting Holdings or the Company or
any of the Subsidiaries, (ii) which has as the subject thereof any
property owned or leased by Holdings, the Company or any of its Subsidiaries,
where in any such case (A) there is a reasonable possibility that such
action, suit or proceeding might be determined adversely to Holdings or the
Company or such Subsidiary and (B) any such action, suit or proceeding, if
so determined adversely, would reasonably be expected to result in a Material
Adverse Change or materially and adversely affect the transactions contemplated
by this Agreement.


 


(s)                                  Intellectual Property Rights.  The Company and its Subsidiaries own,
possess or license sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”) reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse
Change.  Neither the Company nor any of
its Subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others,


 


10

















 


which infringement or
conflict, if the subject of an unfavorable decision, ruling or filing would
reasonably be expected to result in a Material Adverse Change and, except as
otherwise disclosed in the Offering Memorandum, neither the Company nor any of
its Subsidiaries is in default under the terms of any license or similar
agreement related to any Intellectual Property Rights necessary to conduct
their business as now conducted or contemplated except as would not reasonably
be expected to result in a Material Adverse Change.


 


(t)                                    All Necessary Permits, Etc.  The Company and each of its Subsidiaries
possess such valid and current certificates, authorizations or permits issued
by the appropriate municipal, state, federal or foreign regulatory agencies or
bodies necessary to conduct their respective businesses as now conducted except
as would not reasonably be expected to result in a Material Adverse Change, and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such
license, certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to result in a Material Adverse Change.


 


(u)                                 Regulatory Matters.  To the knowledge of Holdings, the Company
and each Subsidiary Guarantor, none of (i) the Company, any of its
Subsidiaries, or the officers, directors, employees, or agents (as defined in
42 C.F.R. Part 420 Subpart C and 42 C.F.R. Section 1001.1001(a)(2)) of the
Company or any of its Subsidiaries, or (ii) any entity which the Company or any
of its Subsidiaries manages or for which the Company or any of its Subsidiaries
provides billing services (“Managed Entity”) or the employees of any Managed
Entity who are leased from the Company or any of  its Subsidiaries, has been charged with, or has been or is being
investigated with respect to, any activity (and with respect to the officers,
directors, agents and employees of the Company or any of its Subsidiaries or
any employee of any Managed Entity as described above, only as to any activity
during their employment or association with the Company, any Subsidiary of the
Company or any Managed Entity) that materially contravenes or could materially
contravene or constitutes or could constitute a material violation of any
Healthcare Law.  To the knowledge of
Holdings, the Company and each Subsidiary Guarantor, no person who has a direct
or indirect ownership interest of 5% or more (as those terms are defined in 42
C.F.R. Part 420 Subpart C and 42 C.F.R. Section 1001.1001(a)(2)) in the
Company or any Subsidiary, has been charged with, or has been or is being
investigated with respect to, any activity involving the Company or any
Subsidiary that materially contravenes or could materially contravene or
constitutes or could constitute a material violation of any Healthcare
Law.  To the actual knowledge of the
officers of the Company, none of the officers, directors and agents of any
Managed Entity has been charged with, or has been or is being investigated with
respect to, any activity during their employment or association with any
Managed Entity that materially contravenes or could materially contravene or
constitutes or could constitute a material violation of any Healthcare
Law.  To the actual knowledge of the
officers of the Company, no person who has a direct or indirect ownership
interest of 5% or more (as those terms are defined in 42 C.F.R. Part 420 Subpart
C and 42 C.F.R. Section 1001.1001(a)(2)) in a Managed Entity has been
charged with, or has been or is being investigated with respect to, any
activity in connection with the Managed Entity that materially contravenes or
could materially


 


11

















 


contravene or constitutes
or could constitute a material violation of any Healthcare Law.  To the knowledge of Holdings, the Company
and each Subsidiary Guarantor, none of the Company, any of its Subsidiaries,
any Managed Entity or any of the officers, directors, employees or agents (as
described above) of the Company or any Subsidiary or any employee of any
Managed Entity who is leased from the Company or any Subsidiary, has engaged in
any activity (and with respect to the officers, directors, agents and employees
of the Company or any Subsidiary or any employee of any Managed Entity as
described above, only as to any activity during their employment or association
with the Company, any Subsidiary or any Managed Entity) that materially
contravenes or constitutes a material violation of any Healthcare Law during
their employment or association with the Company, any Subsidiary, or any
Managed Entity.  To the actual knowledge
of the officers of the Company, none of the officers, directors or agents of
any Managed Entity has engaged in any activity during their employment or
association with the Company, any Subsidiary or any Managed Entity that
materially contravenes or constitutes a material violation of any Healthcare
Law.  “Healthcare Law” means the
following laws or regulations relating to the regulation of the health care
industry or to payment for services rendered by healthcare providers:  (i) Sections 1877, 1128, 1128A or 1128B of
the Social Security Act (“SSA”); (ii) any prohibition on the making of any false
statement or misrepresentation of material facts to any governmental agency
that administers a federal or state health care program (including, but not
limited to, Medicare, Medicaid, and the federal Military Health System
(“Tricare”); (iii) the licensure, certification or registration requirements of
health care facilities, services or equipment, including, but not limited to,
the Mammography Quality Standards Act; (iv) any state certificate of need or
similar law governing the establishment of health care facilities or services
or the making of health care capital expenditures; (v) any state law relating
to fee-splitting or the corporate practice of medicine; (vi) any state
physician self-referral prohibition or state anti-kickback law; (vii) any criminal
offense relating to the delivery of, or claim for payment for, a healthcare
item or service under any federal or state health care program; (viii) any
federal or state law relating to the interference with or obstruction of any
investigation into any criminal offense; and (ix) any criminal offense under
federal or state law relating to the unlawful manufacture, distribution,
prescription or dispensing of a controlled substance.


 


(v)                                 Medicare/Medicaid Participation.  To the knowledge of Holdings, the Company
and each Subsidiary, none of the Company, any of its Subsidiaries, or any
existing officers or directors of the Company or the respective Subsidiary who
is expected to be an officer, director, agent (as defined in 42 C.F.R.
Section 1001.1001(a)(2)), or managing employee (as defined in SSA
Section 1126(b) or any regulations promulgated thereunder) of the Company
or the respective Subsidiary:  (1) has
had a material civil monetary penalty assessed against it under
Section 1128A of the SSA or any regulations promulgated thereunder; (2)
has been excluded from participation under the Medicare program or a federal or
state health care program; or (3) has been convicted (as that term in defined
in 42 C.F.R. Section 1001.2) of any of the following categories of
offenses as described in SSA Section 1128(a) and (b)(1), (2), (3) or any
regulations promulgated thereunder:  (i)
criminal offenses relating to the delivery of an item or service under Medicare
or any federal or state health care program; (ii) criminal offenses under
federal or state law relating to patient neglect or abuse in connection with


 


12

















 


the delivery of a
healthcare item or service; criminal offenses under federal or state law
relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or
other financial misconduct in connection with the delivery of a healthcare item
or service or with respect to any act or omission in a program operated by or
financed in whole or in part by any federal, state or local governmental
agency; (iii) federal or state laws relating to the interference with or
obstruction of any investigation into any criminal offense described above in
this paragraph; or (iv) criminal offenses under federal or state law relating
to the unlawful manufacture, distribution, prescription or dispensing of a
controlled substance. The Company, a Subsidiary, or an entity owned in whole or
in part by the Company or a Subsidiary has a Medicare provider number, and a
participating provider agreement in force with a Medicare Part B carrier, and
materially meets all applicable Medicare conditions of coverage, in each
locale, as applicable, in which the Company, such Subsidiary or such entity
bills directly to Medicare for services furnished by the Company, such
Subsidiary or such entity.  The Company,
a Subsidiary, or an entity owned in whole or in part by the Company or a
Subsidiary has a Medicare provider number, and a participating provider agreement,
and materially satisfies all applicable Medicaid conditions of coverage, in
each state, as applicable, in which the Company, such Subsidiary, or such other
entity bills directly to such state’s Medicaid agency for services provided by
the Company, such Subsidiary, or such other entity for Medicaid patients.


 


(w)                               Title to Properties.  Except as otherwise disclosed in the
Offering Memorandum, the Company and each of its Subsidiaries has good and
marketable title to all their properties and assets reflected as owned in the
financial statements referred to in Section 1(n) above (or elsewhere in
the Offering Memorandum), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other defects,
except as would not reasonably be expected to result in a Material Adverse
Change.  Any real property,
improvements, equipment and personal property held under lease by the Company
or any of its Subsidiaries are held under valid and enforceable leases, except
for such invalidations and unenforceabilities as would not reasonably be
expected to result in a Material Adverse Change.


 


(x)                                   Material Agreements.  The agreements, contracts or instruments
listed as exhibits to the Annual Report and those listed in Schedule A
attached hereto are the only material agreements, contracts or instruments
binding upon Holdings and/or the Company and its Subsidiaries, or agreements,
contracts or instruments that provide for the payments by Holdings, the Company
or any of its Subsidiaries in excess of $5 million  during the current fiscal year and any fiscal year ending after
the Closing Date.


 


(y)                                 Tax Law Compliance.  The Company and its Subsidiaries have filed
all material federal, state and foreign income and franchise tax returns
required to be filed and have paid all taxes shown on such returns required to
be paid by any of them which are due and payable and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them.  The Company and each Subsidiary Guarantor
has made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(n) above in respect of all federal,
state and foreign income and franchise taxes for all periods as to which the
tax liability of the Company or any of its


 


13

















 


Subsidiaries has not been
finally determined, except where such failure would not reasonably be expected
to result in a Material Adverse Change.


 


(z)                                   Company Not an “Investment Company”.  Holdings and the Company have been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the “Investment Company Act”). 
None of Holdings or the Company is an “investment company” within the
meaning of Investment Company Act and each of Holdings and the Company will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.


 


(aa)                            Insurance.  Each of the Company and its Subsidiaries are
insured by recognized, financially sound institutions with policies in such amounts
and with such deductibles and covering such risks as are generally deemed
adequate and customary for their businesses including, but not limited to,
policies covering real and personal property owned or leased by the Company and
its Subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes.  The Company has no reason
to believe that it or any Subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. 
To the best of the Company’s knowledge, after due inquiry, neither the
Company nor any Subsidiary has been denied any insurance coverage which it has
sought or for which it has applied and there are no claims by the Company or
any of its Subsidiaries under any current insurance policy as to which any
insurance company or institution is denying, or will deny, liability or
coverage or defending under a reservation of rights clause.


 


(bb)                          No Price Stabilization or Manipulation.  None of the Company, the Guarantors or any of their respective
Affiliates has taken or will take, directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.


 


(cc)                            Solvency.  Holdings, the Company and each of the
Company’s Subsidiaries, taken as a whole, is Solvent.  As used herein, the term “Solvent” means, with respect to
Holdings, the Company and its Subsidiaries, taken as a whole, on a particular
date, that on such date (i) such entity is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
ordinary course of business, (ii) such entity does not intend to, and does
not believe that it will, incur debts or liabilities beyond such entity’s
ability to pay as such debts and liabilities mature in their ordinary course,
(iii) such entity is not engaged in a business or a transaction, and is
not about to engage in a business or a transaction, for which such entity’s
assets would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such entity
is engaged or is to engage, (iv) the fair value of the assets of such
entity is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such entity and (v) the present
fair salable value of the assets of such entity is not less than the amount
that will be required to pay the probable liability of such entity on its debts
as they become absolute and


 


14

















 


matured.  In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.


 


(dd)                          No Unlawful Contributions or Other Payments.  Neither the Company nor any of its Subsidiaries nor, to the best
of the Company’s or any Guarantor’s knowledge, any employee or agent of the
Company or any Subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character necessary to be disclosed in the
Offering Memorandum in order to make the statements therein not misleading.


 


(ee)                            Company’s Accounting System.  The Company and each of its Subsidiaries
maintains a system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii)  transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States of America and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.


 


(ff)                                Compliance with Environmental Laws. 
Except as otherwise disclosed in the Offering Memorandum or as would
not, individually or in the aggregate, result in a Material Adverse Change
(i)  the Company and each of its Subsidiaries have all permits,
authorizations and approvals required under any Environmental Laws and are in
compliance with their requirements, (ii) neither the Company nor any of its
Subsidiaries, to the knowledge of the Company, after due inquiry, is in
violation of any federal, state, local or foreign law or regulation relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, “Materials of
Environmental Concern”), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern (collectively, “Environmental Laws”), which
violation includes, but is not limited to, noncompliance with any permits or
other governmental authorizations required for the operation of the business of
the Company or its Subsidiaries under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company or any
of its Subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges
that the Company or any of its Subsidiaries is in violation of any
Environmental Law; (iii) there is, to the knowledge of the Company, after
due inquiry, no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company or
any Subsidiary has received written notice, and no written notice by any person
or entity


 


15

















 


alleging potential
liability for investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries, attorneys’ fees
or penalties arising out of, based on or resulting from the presence, or
release into the environment, of any Material of Environmental Concern at any
location owned, leased or operated by the Company or any of its Subsidiaries,
now or in the past (collectively, “Environmental Claims”), pending or, to the
best of the Company’s or any Guarantor’s knowledge, threatened against the
Company or any of its Subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law; and (iv) to the knowledge
of the Company, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a violation of any Environmental
Law or form the basis of a potential Environmental Claim against the Company or
any of its Subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law.


 


(gg)                          ERISA Compliance.  The Company and its Subsidiaries and any
“employee benefit plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published interpretations
thereunder (collectively, “ERISA”)) established or maintained by the Company,
its Subsidiaries or their “ERISA Affiliates” (as defined below) are in
compliance in all respects with ERISA or, if not in compliance, would not
reasonably be expected to result in a Material Adverse Change.  “ERISA Affiliate” means, with respect to the
Company or a Subsidiary, any member of any group of organizations described in
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the
“Code”) of which the Company or such Subsidiary is a member.  No “reportable event” (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates. 
No “employee benefit plan” established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan”
were terminated, would have any “amount of unfunded benefit liabilities” (as
defined under ERISA).  Neither the
Company, its Subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any “employee benefit plan”
or (ii) Sections 412, 4971, 4975 or 4980B of the Code.  Each “employee benefit plan” established or
maintained by the Company, its Subsidiaries or any of their ERISA Affiliates
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.


 


(hh)                          Regulation S Compliance.  The Company, the Guarantors and their
respective Affiliates and all authorized persons acting on their behalf (other
than the Initial Purchaser, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering
of the Securities outside the United States


 


16

















 


and, in connection
therewith, the Offering Memorandum will contain the disclosure required by
Rule 902(h).


 


(ii)                                  Taxes; Fees.  There are no stamp or other issuance or
transfer taxes or duties or other similar fees or charges required to be paid
in connection with the execution and delivery of this Agreement or the issuance
or sale by the Company of the Securities.


 


(jj)                                  No Labor Disputes.  As of the date hereof, (i) there is no
unfair labor practice complaint pending against the Company or any of its
Subsidiaries or, to the best knowledge of the Company, threatened against any
of them, before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company or any of its Subsidiaries or, to the best
knowledge of the Company, threatened against any of them, (ii) there is no
material strike, labor dispute, slowdown or stoppage pending against the
Company or any of its Subsidiaries or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries and (iii) the Company
is not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal customers, suppliers, manufacturers or
contractors, in each case which is likely to result in a Material Adverse
Change.


 


(kk)                            Brokers. Except for the
Initial Purchaser, there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder’s fee or other fee or
commission as a result of offering, issuance and sale of the Notes contemplated
by this Agreement.


 


(ll)                                  No Outstanding Loans or Other Indebtedness.  There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees or indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the members of any of
their families, except as disclosed in the Offering Memorandum.


 


(mm)                      CMI Acquisition Agreement.  The CMI
Acquisition has been duly authorized by the Company and, to the knowledge of
the Company, CMI.  The stock purchase
agreement relating to the CMI Acquisition, dated February 13, 2004
(the “CMI Acquisition Agreement”) has been duly authorized and is a valid and
binding agreement of the Company and, to the knowledge of the Company, CMI,
enforceable against the Company and, to the knowledge of the Company, CMI in
accordance with its terms, except as rights to indemnification thereunder may
be limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.


 


Any certificate
signed by an officer of the Company or any Guarantor and delivered to the
Initial Purchaser pursuant to this Agreement or to counsel for the Initial


 


17

















 


Purchaser shall be deemed to be a representation and warranty by the
Company or such Guarantor to the Initial Purchaser as to the matters set forth
therein.


 


Section 2.                                            Purchase,
Sale and Delivery of the Securities.


 


(a)                                  The Securities.  On the basis of the representations and
warranties contained in this Agreement, and subject to the terms and conditions
herein, the Company agrees to issue and sell, and the Initial Purchaser agrees
to purchase from the Company, $25,000,000 aggregate principal amount of Notes
at a purchase price of  $24,375,000.00
payable on the Closing Date.


 


(b)                                 The Closing Date.  Delivery of certificates for the Securities
in definitive form to be issued and sold to the Initial Purchaser (and payment
of the purchase price therefor) shall be made at the offices of Shearman &
Sterling LLP, 599 Lexington Avenue, New York, New York 10022-6069 (or such
other place as may be agreed to by the Company and the Initial Purchaser) at
9:00 a.m. New York City time, on March 8, 2004, or such other time
and date as the Company and the Initial Purchaser shall mutually agree upon
(the time and date of such closing are called the “Closing Date”).


 


(c)                                  Delivery of the Notes.  The Company shall deliver, or cause to be
delivered to the Initial Purchaser, certificates for the Notes at the Closing
Date against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor.   The certificates for the Notes shall be in
such denominations and registered in the name of the Depositary or its nominee,
pursuant to the DTC Letter of Representations, and shall be made available for
inspection on the business day preceding the Closing Date at a location in New
York City, as the Initial Purchaser may designate.  Time shall be of the essence.


 


(d)                                 Delivery of Offering Memorandum to the Initial Purchaser.  Not later than 12:00 p.m. on the second
business day following the date of this Agreement, the Company shall deliver or
cause to be delivered copies of the Offering Memorandum in such quantities and
at such places as the Initial Purchaser shall reasonably request.


 


(e)                                  Initial Purchaser as Qualified Institutional
Buyer.  The Initial
Purchaser represents and warrants to, and agrees with, the Company that
(i) it is a “qualified institutional buyer” within the meaning of
Rule 144A (a “Qualified Institutional Buyer”), and (ii) with respect
to those Securities sold in reliance on Regulation S, (A) has not
engaged and will not engage in any direct selling efforts within the meaning of
Regulation S and (B) has complied and will comply with the offering
restrictions requirements of Regulations S.


 


18

















 


Section 3.                                            Covenants.  The Company and the Guarantors undertake,
jointly and severally, to cooperate with the Initial Purchaser and provide
information required by the Initial Purchaser in connection with the offer and
sale of the Securities to Subsequent Purchasers.  The Company and each Guarantor further jointly and severally
covenant and agree with the Initial Purchaser as follows:


 


(a)                                  The Initial Purchaser’s Review of Proposed Amendments and Supplements.   Prior to amending or supplementing the
Offering Memorandum (including any amendment or supplement through
incorporation by reference of any report filed under the Exchange Act), the
Company shall furnish to the Initial Purchaser for review a copy of each such
proposed amendment or supplement, and the Company shall not use any such
proposed amendment or supplement to which the Initial Purchaser reasonably
objects in writing within 3 business days (with advice from its independent
counsel).


 


(b)                                 Amendments and Supplements to the Offering
Memorandum and Other
Securities Act Matters.  If,
prior to the completion of the placement of the Securities by the Initial
Purchaser with the Subsequent Purchasers, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when the Offering Memorandum is delivered to a Subsequent
Purchaser, not misleading, or if in the opinion of the Initial Purchaser or
counsel for the Initial Purchaser it is otherwise necessary to amend or
supplement the Offering Memorandum to comply with law, the Company agrees to
promptly prepare (subject to Section 3(a) hereof), and furnish at its own
expense to the Initial Purchaser, amendments or supplements to the Offering
Memorandum so that the statements in the Offering Memorandum as so amended or
supplemented will not, in the light of the circumstances when the Offering
Memorandum is delivered to a Subsequent Purchaser, be misleading or so that the
Offering Memorandum, as amended or supplemented, will comply with law.


 


The Company and
the Guarantors hereby expressly acknowledge that the indemnification and
contribution provisions of Sections 8 and 9 hereof are specifically
applicable and relate to each offering memorandum, registration statement,
prospectus, amendment or supplement referred to in this Section 3(b).


 


(c)                                  Copies of the Offering Memorandum.  The Company agrees to furnish the Initial
Purchaser, without charge, as many copies of the Offering Memorandum and any
amendments and supplements thereto as it shall have reasonably requested prior
to or at the time of the original printing of the Offering Memorandum or any
amendment or supplement thereto.


 


(d)                                 Blue Sky Compliance.  Holdings, the Company and the Subsidiary
Guarantors shall cooperate with the Initial Purchaser and counsel for the
Initial Purchaser to qualify or register the Securities for sale under (or
obtain exemptions from the application of) the Blue Sky or state securities
laws of those jurisdictions designated by the Initial Purchaser, shall comply
with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the
Securities.  Holdings, the Company and
the Subsidiary Guarantors shall not be required


 


19

















 


to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where
it would be subject to taxation as a foreign corporation.  Holdings and the Company will advise the
Initial Purchaser promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for
offering, sale or trading in any jurisdiction or any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance of any
order suspending such qualification, registration or exemption, Holdings, the
Company and the Subsidiary Guarantors shall use their reasonable best efforts
to obtain the withdrawal thereof at the earliest possible moment.


 


(e)                                  Depositary.  The Company will cooperate with the Initial
Purchaser and use its reasonable best efforts to permit the Securities to be
eligible for clearance and settlement through the facilities of the Depositary.


 


(f)                                    Additional Issuer Information.  Prior to the completion of the placement of
the Securities by the Initial Purchaser with the Subsequent Purchasers, the
Company, or, if permitted by the Exchange Act, Holdings, shall file, on a
timely basis, with the Commission all reports and documents required to be
filed under Section 13 or 15 of the Exchange Act; provided that if such
filings are being made by Holdings, rather than by the Company, such filings
shall adequately disclose the Company’s results of operations and financial
condition in the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” section in at least such detail as would be
required if the Company were filing such report.  In addition, at any time Holdings or the Company is not subject
to Section 13 or 15 of the Exchange Act, Holdings and the Company covenant
that they will furnish, at their expense, upon request, to registered holders
of Securities within the time periods specified in the Exchange Act
(i) all quarterly and annual reports that would be required to be filed
with the Commission on Forms 10-Q and 10-K if Holdings or the Company were
required to file such Forms, (including, in each case, financial information
and a “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and, with respect to the annual information only, a report on
the annual financial statements by Holdings’ and the Company’s certified
independent accountants); and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if Holdings or the
Company were required to file such reports. 
In addition, following the date the Company is required to consummate
the exchange offer contemplated by the Registration Rights Agreement, whether
or not required by the Commission, Holdings and the Company will file a copy of
all of the information and reports referred to in clauses (i) and (ii) above
with the Commission for public availability within the time periods specified
in the Commission’s rules and regulations (unless the Commission will not accept
such a filing) and make such information available to securities analysts and
prospective purchasers of Securities upon request.  In addition, the Company and the Guarantors agree that, for so
long as Securities (but not the Exchange Securities) remain outstanding, they
will furnish to holders and beneficial owners of Securities and to securities
analysts and prospective purchasers of Securities, upon their request, the
information (together with the documents referred to in the second sentence of
this paragraph, the “Additional Issuer Information”) required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.


 


20

















 


(g)                                 [Intentionally Omitted]


 


(h)                                 Future Reports to the Initial Purchaser.  For so long as any Securities or Exchange
Securities remain outstanding, Holdings and the Company will furnish to the
Initial Purchaser (i) as soon as reasonably practicable after the end of
each fiscal year, copies of the Annual Report of Holdings and the Company
containing the balance sheet of Holdings and the Company as of the close of
such fiscal year and statements of income, stockholders’ equity and cash flows
for the year then ended and the opinion thereon of Holdings’ and the Company’s
independent public or certified public accountants; (ii) as soon as
reasonably practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other report filed by Holdings and the
Company with the Commission; and (iii) as soon as available, copies of any
report or communication of Holdings and the Company mailed generally to holders
of its capital stock or debt securities (including the holders of the
Securities).


 


(i)                                     No Integration.  Each of Holdings and the Company agrees that
it will not and will cause its affiliates not to, make any offer or sale of
securities of any class if, as a result of the doctrine of “integration”
referred to in Rule 502 under the Securities Act, such offer or sale would
render invalid (for the purpose of (i) the issuance and sale of the
Securities by the Company to the Initial Purchaser, (ii) the resale of the
Securities by the Initial Purchaser to Subsequent Purchasers or (iii) the
resale of the
Securities by such Subsequent Purchaser to others) the exemption from the
registration requirements of the Securities Act provided by Section 4(2)
thereof or by Rule 144A or by Regulation S thereunder or otherwise.


 


(j)                                     Legended Securities.  Each certificate for a Note will bear the
legend substantially in the form set forth in the section of the Offering
Memorandum entitled “Notice to Investors” for the time period and upon the
other terms stated therein.


 


(k)                                  PORTAL.  The Company will use its reasonable best
efforts to cause such Notes when issued to be eligible for the National
Association of Securities Dealers, Inc. PORTAL market (the “PORTAL market”).


 


(l)                                     Rating of Securities.  The
Company shall take all reasonable action necessary to enable Standard &
Poor’s Ratings Services, a division of McGraw Hill, Inc. (“S&P”), and
Moody’s Investor Services, Inc. (“Moody’s”) to provide their respective credit
ratings to the Securities.


 


(m)                               Marketing. The Company and the Guarantors shall, if reasonably
requested by the Initial Purchaser, assist in marketing the Securities
following the date of this Agreement, which marketing assistance shall include,
but not be limited to, (i) assisting in the preparation of marketing materials
and supplementing and updating any such materials, (ii) having the senior
management and directors of the Company and the Guarantors selected by the
Initial Purchaser (in consultation with you) participate, at the Initial
Purchaser’s reasonable request, in presentations (including “one-on-one”
meetings) with proposed purchasers of the Securities and (iii) promptly, upon
the Initial Purchaser’s


 


21

















 


reasonable request, providing, and causing the
Guarantors to provide, to the Initial Purchaser all information deemed
reasonably necessary by the Initial Purchaser to successfully sell any  Notes, including, but not limited to,
information and projections prepared by the Company or the Guarantors or on
behalf of any of the Company or the Guarantors relating to the CMI Acquisition.


 


The Initial
Purchaser, may, in its sole discretion, waive in writing the performance by
Holdings or the Company of any one or more of the foregoing covenants or extend
the time for their performance.


 


Section 4.                                            Payment
of Expenses.  The Company agrees,
and Holdings shall cause the Company, to pay all reasonable costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Securities to the Initial
Purchaser, (ii) all reasonable fees and expenses of the Company’s and the
Guarantors’ counsel, independent public or certified public accountants and
other advisors, (iii) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of each
Preliminary Offering Memorandum and the Offering Memorandum (including
financial statements), and all amendments and supplements thereto,
(iv) all filing fees, reasonable attorneys’ fees and expenses incurred by
the Company, the Guarantors or the Initial Purchaser in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Securities for offer and sale under the
Blue Sky laws and, if requested by an Initial Purchaser, preparing and printing
a “Blue Sky Survey” or memorandum, and any supplements thereto, advising such
Initial Purchaser of such qualifications, registrations and exemptions, such
fees and expenses under this clause (iv) not to exceed $10,000 in the
aggregate, (v) the reasonable fees and expenses of the Trustee, including
the fees and disbursements of counsel for the Trustee in connection with the
Indenture, the Securities and the Exchange Securities, (vi) all fees and
expenses (including reasonable fees and expenses of counsel) of the Company in
connection with approval of the Securities by the Depositary for “book-entry”
transfer, and (vii) the performance by Company of its other obligations
under this Agreement.  Except as
provided in this Section 4, Section 6, Section 8 and Section 9
hereof, the Initial Purchaser shall pay its own expenses, including the fees
and disbursements of its counsel, and shall be responsible for all roadshow
related costs.


 


Section 5.                                            Conditions
to the Obligations of the Initial Purchaser.  The obligation of the Initial Purchaser to purchase and pay for
the Notes as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
each Guarantor set forth in Section 1 hereof as of the date hereof and as
of the Closing Date as though then made, to the timely performance by the
Company and each Guarantor of its covenants and other obligations hereunder,
and to each of the following additional conditions:


 


(a)                                  Accountants’ Comfort Letter.  On the date hereof, the Initial Purchaser
shall have received from each of PricewaterhouseCoopers LLP, independent public
or certified public accountants for Holdings and Herbein + Company, Inc.,
public or certified public accountants letters dated the date hereof addressed
to the Initial


 


22

















 


Purchaser, in form and
substance reasonably satisfactory to the Initial Purchaser, containing
statements and information of the type ordinarily included in accountant’s
“comfort letters” to the Initial Purchaser, delivered according to Statement of
Auditing Standards Nos. 71, 72, 76 and 100 (or any successor bulletins), with
respect to the audited and unaudited financial statements and other financial
information included or incorporated by reference in the Offering Memorandum.


 


(b)                                 Opinion of Counsel for the Company.  On the Closing Date, the Initial Purchaser
shall have received an opinion letter, reasonably satisfactory to the Initial
Purchaser, from Kaye Scholer LLP, counsel for the Company, dated as of such
Closing Date, in substantially the same form attached as Exhibit A.


 


(c)                                  Opinion of General Counsel for the Company.  On the Closing Date, the Initial Purchaser
shall have received an opinion letter, reasonably satisfactory to the Initial
Purchaser, from Marilyn U. MacNiven-Young, General Counsel for the Company,
dated as of such Closing Date, in substantially the same form attached as Exhibit B.


 


(d)                                 Opinion of Regulatory Counsel for the Company.  On the Closing Date, the Initial Purchaser
shall have received an opinion letter from Davis Wright Tremaine LLP,
regulatory counsel for the Company, dated as of such Closing Date, in the form
attached as Exhibit C.


 


(e)                                  Opinion of Counsel for the Initial Purchaser.  On the Closing Date, the Initial Purchaser
shall have received an opinion letter, reasonably satisfactory to the Initial
Purchaser, from Shearman & Sterling LLP, counsel for the Initial Purchaser
dated as of the Closing Date, with respect to certain matters in form and
substance satisfactory to the Initial Purchaser.


 


(f)                                    Officers’ Certificate.  On the Closing Date, each of Holdings and the Company shall
deliver to the Initial Purchaser written certificates, executed by the Chief
Executive Officer, President, Executive Vice President or Senior Vice President
of each of Holdings and the Company, as the case may be, and the Chief
Financial Officer or Chief Accounting Officer of each of Holdings and the
Company, as the case may be, dated as of the Closing Date, to the effect that:


 


(i)                                     for
the period from and after the date of this Agreement and prior to the Closing
Date, to their knowledge, after due inquiry, there has not occurred any
Material Adverse Change;


 


(ii)                                  for
the period from the date of this Agreement and prior to the Closing Date, there
shall not have been any downgrading from the ratings of B3 by Moody’s and B- by
S&P (in each case with a “negative outlook” by such rating agencies) on the
Securities, nor shall any notice (other than that which is contained in
S&P’s ratings release dated February 5, 2004 and Moody’s rating
release dated February 18, 2004, in each case, relating to the Company)
have been given from such rating agencies of any intended or potential
downgrading, or of


 


23

















 


any review for a possible change that does
not indicate the direction of the possible change in any such ratings;


 


(iii)                               the
representations, warranties and covenants of the Company and each Guarantor, as
the case may be, and set forth in Section 1 of this Agreement are true and
correct in all material respects (without giving effect to any limitation as to
“materiality” or “Material Adverse Change” set forth therein) with the same
force and effect as though expressly made on and as of the Closing Date; and


 


(iv)                              the
Company and the Guarantors have complied in all material respects with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.


 


(g)                                 E&Y Comfort Letter and Bring-down Comfort Letters.  On the Closing Date the Initial Purchaser
shall have received (i) from Ernst & Young LLP, independent public or
certified public accountants, a letter dated the date hereof addressed to the
Initial Purchaser, in form and substance reasonably satisfactory to the Initial
Purchaser, containing statements and information of the type ordinarily
included in accountant’s “comfort letters” to the Initial Purchaser, delivered
according to Statement of Auditing Standards Nos. 71, 72, 76 and 100 (or any
successor bulletins), with respect to the audited and unaudited financial
statements of the business to be acquired in the CMI Acquisition included or
incorporated by reference in the Offering Memorandum and (ii) from
PricewaterhouseCoopers LLP, independent public or certified public accountants
for Holdings, a letter dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a)
of this Section 5, except that the specified date referred to therein for
the carrying out of procedures shall be no more than three business days prior
to the Closing Date.


 


(h)                                 Registration Rights Agreement.  The Company and the Guarantors shall enter
into the Registration Rights Agreement and deliver to the Initial Purchaser
executed counterparts thereof.


 


(i)                                     Additional Documents.  On or before the Closing Date, the Company shall deliver to the
Initial Purchaser and counsel for the Initial Purchaser such information and
documents as the Initial Purchaser and such counsel may reasonably require for
the purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of any
of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.


 


(j)                                     Ratings.  There shall not have been any downgrading from the ratings of B3
by Moody’s and B- by S&P (in each case with a “negative outlook” by such
rating agencies) on the Securities, nor shall any notice (other than that which
is contained in S&P’s ratings release dated February 5, 2004 and
Moody’s rating release dated February 18, 2004, in each case, relating to
the Company) have been given by such rating agencies


 


24

















 


of any intended or
potential downgrading, or of any review for a possible change that does not
indicate the direction of the possible change in any such ratings.


 


(k)                                  CMI
Acquisition Agreement. The CMI Acquisition Agreement shall be in full
force and effect.


 


Section 6.                                            Reimbursement
of Initial Purchaser’s Expenses.   
The Company also agrees to, and Holdings agrees to cause the Company to,
reimburse the Initial Purchaser for upon demand for all reasonable out-of-pocket
expenses that shall have been incurred by the Initial Purchaser in connection
with the proposed offering and sale of the Securities (including the fees and
expenses of its counsel) in an amount of $112,500, provided, however, that, if this Agreement is terminated
pursuant to Section 5 or Section 10, or if the issuance and sale to
the Initial Purchaser of the Securities on the Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company to perform
any agreement herein or to comply with any provision hereof, the Company agrees
to, and Holdings agrees to cause the Company to, reimburse the Initial
Purchaser upon demand for all reasonable out-of-pocket expenses that shall have
been incurred by the Initial Purchaser in connection with the proposed offering
and sale of the Securities.


 


Section 7.                                            Offer,
Sale and Resale Procedures.  The
Initial Purchaser, on the one hand, and Holdings and the Company, on the other
hand, hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Securities:


 


(a)                                  Offers and Sales Only to Qualified Institutional Buyers and
Non-U.S. Persons.  Offers and
sales of the Securities will be made only by the Initial Purchaser or
Affiliates thereof qualified to do so in the jurisdictions in which such offers
or sales are made.  Each such offer or
sale shall only be made (A) to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers (as defined in
Rule 144A under the Securities Act) or (B) non-U.S. persons outside
the United States to whom the offeror or seller reasonably believes offers and
sales of the Securities may be made in reliance upon Regulation S under
the Securities Act, upon the terms and conditions set forth in Annex I
hereto, which Annex I is hereby expressly made a part hereof.


 


(b)                                 No General Solicitation.  The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis.  No general solicitation or general
advertising (within the meaning of Rule 502(c) under the Securities Act)
will be used in the United States in connection with the offering of the
Securities.


 


(c)                                  Restrictions on Transfer.  Upon original issuance by the Company, and until such time as the
same is no longer required under the applicable requirements of the Securities
Act, the Notes (and all securities issued in exchange therefor or in
substitution thereof, other than the Exchange Securities) shall bear a legend
substantially in the form contained in the section entitled “Notice to
Investors” in the Offering Memorandum.


 


Following the sale of the Securities by the Initial Purchaser to
Subsequent Purchasers pursuant to the terms hereof, the Initial Purchaser shall
not be liable or responsible to the Company for any losses, damages or
liabilities suffered or incurred by the Company, including


 


25

















 


any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.


 


Section 8.                                            Indemnification.


 


(a)                                  Indemnification of the Initial Purchaser.  Each of Holdings, the Company and each of
the Subsidiary Guarantors jointly and severally agrees to indemnify and hold
harmless the Initial Purchaser, its directors, officers and employees, and each
person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which
such Initial Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of Holdings
and the Company), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
(i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; or (ii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company or any Guarantor contained
herein; or (iii) in whole or in part upon any failure of the Company or
any Guarantor to perform its obligations hereunder or under law; or
(iv) any act or failure to act or any alleged act or failure to act by any
Initial Purchaser in connection with, or relating in any manner to, the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any
matter covered by clause (i) above to the extent such loss, claim, damage,
liability or expense is not covered in items (i) through (iii) (subject to the
limitations set forth below), provided that
none of the Company or any Guarantor shall be liable under this
clause (iv) to the extent that a court of competent jurisdiction shall
have determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Initial Purchaser through its gross negligence or
willful misconduct; and to reimburse such Initial Purchaser and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by the Initial Purchaser) as such expenses are
reasonably incurred by such Initial Purchaser or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Initial Purchaser
expressly for use in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto).  The indemnity agreement set forth in this Section 8(a) shall
be in addition to any liabilities that Holdings or the Company and the
Subsidiary Guarantors may otherwise have.


 


26

















 


(b)                                 Indemnification of the Company and the Guarantors and their Directors
and Officers.  The Initial
Purchaser agrees to indemnify and hold harmless Holdings and the Company and
each of their respective directors and each person, if any, who controls the
Company or Holdings within the meaning of the Securities Act or the Exchange
Act against any loss, claim, damage, liability or expense, as incurred, to
which Holdings or the Company or any such director, or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Initial Purchaser), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto), or arises out of or is
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein in the light of the circumstances under which they were made not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Offering Memorandum or the Offering Memorandum (or
any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Initial Purchaser expressly
for use therein; and to reimburse Holdings and the Company or any such director
or controlling person for any legal and other expenses reasonably incurred by
Holdings or the Company or any such director or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.  Holdings and the Company hereby acknowledge
that the only information that the Initial Purchaser has furnished to the Company
expressly for use in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto) are the statements set
forth in (A) the sixth full paragraph on introductory page ii of the Offering
Memorandum relating to stabilizing transactions, (B) the third sentence under
the caption “Risk Factors—Risks Relating to the Notes —You cannot be sure that
an active trading market will develop for the Notes,” and (C) the first
sentence of the third paragraph, the first three sentences of the fourth
paragraph, the third sentence of the sixth paragraph and the seventh paragraph
under the caption “Plan of Distribution” in the Offering Memorandum; and the
Initial Purchaser confirms that such statements are correct. The indemnity agreement
set forth in this Section 8(b) shall be in addition to any liabilities
that the Initial Purchaser may otherwise have.


 


(c)                                  Notifications and Other Indemnification Procedures.  Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party for contribution or otherwise than under the
indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure.  In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to


 


27

















 


participate in and, to
the extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf
of such indemnified party or parties. 
Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party (the Initial
Purchaser in the case of Section 8 and Section 9), representing the
indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.


 


(d)                                 Settlements.  The indemnifying party under this
Section 8 shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than
45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the final terms
of such proposed settlement as soon as practicable prior to such settlement
being entered into and (iii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.  No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes an


 


28

















 


unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.


 


Section 9.                                            Contribution.  If the indemnification provided for in
Section 8 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims,
damages, liabilities or expenses referred to therein (i) in such proportion
as is appropriate to reflect the relative benefits received by Holdings, the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of Holdings and the Company and the Subsidiary
Guarantors, on the one hand, and the Initial Purchaser, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations.  The relative benefits
received by Holdings and the Company and the Subsidiary Guarantors, on the one
hand, and the Initial Purchaser, on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds, if any, from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total discount, if any, received by
the Initial Purchaser bear to the aggregate initial offering price of the
Securities.  The relative fault of the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact or any such inaccurate
or alleged inaccurate representation or warranty relates to information
supplied by Holdings, the Company or the Subsidiary Guarantors, on the one
hand, or the Initial Purchaser, on the other hand, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.


 


The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.  The provisions set forth in Section 8(c) with respect to
notice of commencement of any action shall apply if a claim for contribution is
to be made under this Section 9; provided
that no additional notice shall be required with respect to any action for
which notice has been given under Section 8(c) for purposes of
indemnification.


 


The Company, the Guarantors and the Initial Purchaser agree that it would not be just and equitable
if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 9.


 


29

















 


Notwithstanding the provisions of this Section 9, the Initial
Purchaser shall not be required to
contribute any amount in excess of the discount received by the Initial
Purchaser in connection with the
Securities distributed by it.  No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 9, each
director, officer and employee of the Initial Purchaser and each person, if any, who controls the Initial
Purchaser within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Initial Purchaser, and each director of Holdings and the Company and
each person, if any, who controls Holdings and the Company within the meaning
of the Securities Act and the Exchange Act shall have the same rights to
contribution as Holdings and the Company.


 


Section 10.                                      Termination
of this Agreement.  On or prior to
the Closing Date this Agreement may be terminated by the Initial Purchaser by
notice given to the Company if at any time (i) trading or quotation in any
of the Company’s securities shall have been suspended or limited by the
Commission or by the Nasdaq National Market or NYSE, or trading in securities
generally on either the Nasdaq Stock Market or the New York Stock Exchange
shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such stock exchanges by the Commission or
the NASD; (ii) a general banking moratorium shall have been declared by
any federal, New York or Delaware authority; (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any substantial change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of the Initial
Purchaser is material and adverse and makes it impracticable to market the Securities in the manner and on the
terms described in the Offering Memorandum or to enforce contracts for the sale
of securities or (iv) in the reasonable judgment of the Initial Purchaser
there shall have occurred any Material Adverse Change.  Any termination pursuant to this
Section 10 shall be without liability on the part of (a) the Company
to the Initial Purchaser, except that the Company shall be obligated to
reimburse the expenses of the Initial Purchaser pursuant to Sections 4 and
 6 hereof, (b)  the Initial Purchaser to the Company, or (c) of
any party hereto to any other party except that the provisions of
Section 8 and Section 9 shall at all times be effective and shall
survive such termination.


 


Section 11.                                      Representations
and Indemnities to Survive Delivery. 
The respective indemnities, agreements, representations, warranties and
other statements of Holdings and the Company of their officers and of the
Initial Purchaser set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of the Initial Purchaser, Holdings or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.


 


Section 12.                                      Notices.  All communications hereunder shall be in
writing and shall be mailed, hand delivered or by facsimile and confirmed to
the parties hereto as follows:


 


30

















 


	
  If to the
  Initial Purchaser:

  
	
   

  	
   

  
	
   

  	
  Banc of America Securities LLC

  
	
   

  	
  9 West 57th Street

  
	
   

  	
  New York, NY 
  10019

  
	
   

  	
  Facsimile: 
  212-583-8567

  
	
   

  	
  Attention: 
  Legal Department

  
	
   

  	
   

  
	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Shearman & Sterling LLP

  
	
   

  	
  599 Lexington Avenue

  
	
   

  	
  New York, NY 
  10022

  
	
   

  	
  Facsimile: 
  212-848-7179

  
	
   

  	
  Attention: 
  James S. Scott, Sr.

  
	
   

  	
   

  
	
  If to the
  Company or Holdings:

  
	
   

  	
   

  
	
   

  	
  InSight Health Services Corp.

  
	
   

  	
  26250 Enterprise Court

  
	
   

  	
  Suite 100

  
	
   

  	
  Lake Forest, CA 
  92630

  
	
   

  	
  Facsimile: 
  949-462-3703

  
	
   

  	
  Attention: 
  General Counsel

  
	
   

  	
   

  
	
  with copies to:

  
	
   

  	
   

  
	
   

  	
  J.W. Childs Associates, L.P.

  
	
   

  	
  111 Huntington Avenue

  
	
   

  	
  Suite 2900

  
	
   

  	
  Boston, MA  02199

  
	
   

  	
  Facsimile:  617-753-1101

  
	
   

  	
  Attention: 
  Edward D. Yun

  
	
   

  	
   

  
	
  and to:

  	
   

  
	
   

  	
   

  
	
   

  	
  The Halifax Group, L.L.C.

  
	
   

  	
  1133 Connecticut Avenue N.W.

  
	
   

  	
  Suite 700

  
	
   

  	
  Washington, D.C. 
  20036

  
	
   

  	
  Facsimile: 
  202-296-7133

  
	
   

  	
  Attention: 
  David W. Dupree

  
			



 


31

















 


	
  and to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Kaye Scholer LLP

  
	
   

  	
  245 Park Avenue

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Facsimile: 
  212-836-8689

  
	
   

  	
  Attention: 
  Stephen C. Koval, Esq.

  



 


Any party hereto
may change the address for receipt of communications by giving written notice
to the others.


 


Section 13.                                      Successors.  This Agreement will inure to the benefit of
and be binding upon the parties hereto and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8
and Section 9, and in each case their respective successors, and no other
person will have any right or obligation hereunder.  The term “successors” shall not include any purchaser of the Securities as such from the Initial
Purchaser by reason of such purchase.


 


Section 14.                                      Partial
Unenforceability.  The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof.  If any Section,
paragraph or provision of this Agreement is for any reason determined to be
invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.


 


Section 15.                                      Governing
Law; Consent to Jurisdiction.


 


(a)                                  Governing Law Provisions.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SUCH STATE.


 


(b)                                 Consent to Jurisdiction.  Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
(“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York
(collectively, the “Specified Courts”), and each party hereto irrevocably
submits to the non-exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. 
Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally
waive any objection to the laying of venue of any suit, action or other
proceeding in the Specified Courts and irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such suit, action or
other proceeding brought in any such court has been brought in an inconvenient
forum.


 


32

















 


Section 16.                                      General
Provisions.  This
Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.  This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.  This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition
herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. 
The Table of Contents and the section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.


 


33

















 


Kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in
accordance with its terms.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INSIGHT HEALTH
  SERVICES HOLDINGS CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSIGHT HEALTH SERVICES
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSIGHT HEALTH CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIGNAL MEDICAL
  SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  



 

















 


	
   

  	
  OPEN MRI, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MAXUM HEALTH CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T. Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RADIOSURGERY CENTERS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MAXUM HEALTH SERVICES
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MRI ASSOCIATES, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  InSight Health Corp.,
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  



 

















 


	
   

  	
  MAXUM HEALTH SERVICES
  OF NORTH TEXAS,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MAXUM HEALTH SERVICES
  OF DALLAS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NDDC, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIAGNOSTIC SOLUTIONS
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ORANGE COUNTY REGIONAL
  PET CENTER-

  IRVINE, LLC

  
	
   

  	
  By:

  	
  InSight Health Corp.,
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  



 

















 


	
   

  	
  VALENCIA MRI, LLC

  
	
   

  	
  By:

  	
  InSight Health Corp.,
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SAN FERNANDO VALLEY
  REGIONAL PET

  CENTER, LLC

  
	
   

  	
  By:

  	
  InSight Health Corp.,
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILKES-BARRE IMAGING,
  LLC

  
	
   

  	
  By:

  	
  InSight Health Corp.,
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven T.
  Plochocki

  	
   

  
	
   

  	
   

  	
  Name: Steven T.
  Plochocki

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  



 

















 


The foregoing Purchase
Agreement is hereby confirmed and accepted by the Initial Purchaser as of the
date first above written.


 


	
  BANC OF AMERICA
  SECURITIES LLC

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Elton Vogel

  	
   

  
	
   

  	
  Name: Elton Vogel

  
	
   

  	
  Title: Managing
  Director