On May 23, 2005, E-Z-EM, Inc. (“E-Z-EM”) executed an Agreement for Purchase and Sale (the “Agreement”) with Kalaty Rugs, Inc. (“Kalaty”).

Under the Agreement, E-Z-EM has agreed to sell, and Kalaty has agreed to buy, E-Z-EM’s warehouse facility located at 717 Main Street, Westbury, New York, consisting of the land and all buildings, structures and all other improvements thereon (the “Property”).

The purchase price for the Property is $4,937,500, of which $150,000 was paid into escrow upon signing the Agreement, $100,000 is payable into escrow when Kalaty receives the mortgage commitment described below, and the balance of $4,687,500 is payable on the closing date.

The closing date of the acquisition is 30 days from the earlier of (i) the receipt by Kalaty of a mortgage commitment or (ii) June 16, 2005. The sale of the Property is on an “as-is” and “where-is” basis as of the closing date, except that E-Z-EM is required to either (i) expend not more than $100,000 to cure any adverse environmental condition on the Property, if such is determined to exist, or (ii) provide Kalaty with a credit of not more than $100,000 against the purchase price for the cost of such cure. The closing of the transaction is subject to (i) Kalaty’s obtaining a commitment for mortgage financing in an amount not greater than $3,703,125 on or before July 16, 2005 and (ii) E-Z-EM’s curing any objections to title to the Property other than customary permitted encumbrances.

If E-Z-EM breaches the Agreement, Kalaty may, as its sole remedy, either (i) terminate the Agreement if E-Z-EM is unable to perform its obligations thereunder or (ii) sue for specific performance if E-Z-EM is able to perform but declines to do so. If Kalaty breaches the Agreement, E-Z-EM may terminate the Agreement and retain the $150,000 down payment as liquidated damages as its sole remedy.