SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )(1)
Radiologix, Inc.
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(Name of Issuer)
Common Stock, par value $.0001 per share
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(Title of Class of Securities)
75040K109
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(CUSIP Number)
Jason Mudrick
c/o Contrarian Capital Management, L.L.C.
411 West Putnam Avenue
Suite 225
Greenwich, Connecticut 06830
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 6, 2006
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [X].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 75040K109
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Contrarian Capital Management, L.L.C.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC, AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
125,052
8. SHARED VOTING POWER
3,669,098
9. SOLE DISPOSITIVE POWER
125,052
10. SHARED DISPOSITIVE POWER
3,699,098
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,824,150
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.9%
14. TYPE OF REPORTING PERSON*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 75040K109
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Contrarian Equity Fund, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,699,098
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
3,699,098
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,699,098
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
14. TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 75040K109
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Item 1. Security and Issuer.
The name of the issuer is Radiologix, Inc. (the "Issuer"). The address of
the Issuer's offices is One Capital Center, 3600 JP Morgan Chase Tower, 2200
Ross Avenue, Dallas, Texas 75201-2776. This schedule 13D relates to the Issuer's
Common Stock, par value $.0001 per share (the "Shares").
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Item 2. Identity and Background
This statement is being filed on behalf of Contrarian Capital Management, L.L.C.
("CCM") and Contrarian Equity Fund, L.P. ("Contrarian Equity"), the "Reporting
Persons". CCM, a registered investment adviser engaged in the management of
institutional client accounts, serves as investment manager to and has voting
and investment discretion over certain investment vehicles and managed accounts.
Specifically, CCM serves as the general partner to Contrarian Equity, a Delaware
limited partnership that invests and trades in securities and financial
instruments. The address of the Reporting Persons is 411 West Putnam Avenue,
Suite 225, Greenwich, CT 06830. The Managing Member of CCM is Jon R. Bauer (the
"Managing Member"). Neither the Reporting Persons nor the Managing Member has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). Neither the Reporting Persons nor
the Managing Member has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction which
resulted in a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violations with respect to such laws. The Managing Member is a
citizen of the United States of America.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof, CCM may be deemed to beneficially own 3,824,150 Shares,
consisting of 3,699,098 Shares held by Contrarian Equity and 125,052 Shares held
in a client account managed by CCM (the "Managed Account").
As of the date hereof, Contrarian Equity may be deemed to beneficially own
3,699,098 Shares.
The funds for the purchase of the Shares beneficially owned by the Reporting
Persons came from each of Contrarian Equity and the Managed Account,
respectively. The total cost for the Shares beneficially owned by the Reporting
Persons is $13,376,449.
No borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business.
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Item 4. Purpose of Transaction.
On July 6, 2006, the Issuer entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Primedex Health Systems, Inc. ("Primedex"), a New York
corporation, that provides for the acquisition of the Issuer by Primedex by
means of a merger of an indirect wholly owned subsidiary of Primedex with and
into the Issuer. As an inducement for Primedex to enter into the Merger
Agreement and in consideration thereof, Contrarian Equity entered into a Voting
Agreement with Primedex dated July 6, 2006, whereby Contrarian Equity has agreed
to: (i) vote all of the Shares currently beneficially owned by Contrarian Equity
or acquired by Contrarian Equity after such date in favor of the merger and
related matters and (ii) grant Primedex an irrevocable proxy granting Primedex
the right to vote such Shares in favor of such matters. A copy of the Voting
Agreement is attached hereto as Exhibit B and is incorporated herein by
reference.
The Reporting Persons purchased the Shares based on the Reporting Persons'
belief that the Shares, when purchased, were undervalued and represented an
attractive investment opportunity. Depending upon overall market conditions,
other investment opportunities available to the Reporting Persons, and the
availability of Shares at prices that would make the purchase of additional
Shares desirable, the Reporting Persons may endeavor to increase their position
in the Issuer through, among other things, the purchase of Shares on the open
market or in private transactions or otherwise, on such terms and at such times
as the Reporting Persons may deem advisable.
No Reporting Person has any present plan or proposal which would relate to or
result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of
Schedule 13D except as set forth herein or such as would occur upon completion
of any of the actions discussed above. The Reporting Persons intend to review
their investment in the Issuer on a continuing basis and engage in discussions
with management and the Board of Directors of the Issuer concerning the
business, operations and future plans of the Issuer. Depending on various
factors including, without limitation, the Issuer's financial position and
investment strategy, the price levels of the Shares, conditions in the
securities markets and general economic and industry conditions, the Reporting
Persons may in the future take such actions with respect to their investment in
the Issuer as they deem appropriate including, without limitation, seeking Board
representation, making proposals to the Issuer concerning changes to the
capitalization, ownership structure or operations of the Issuer, purchasing
additional Shares, selling some or all of their Shares, engaging in short
selling of or any hedging or similar transaction with respect to the Shares or
changing their intention with respect to any and all matters referred to in
Item 4.
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Item 5. Interest in Securities of the Issuer.
(a-e) As of the date hereof, CCM may be deemed to be the beneficial owner of
3,824,150 Shares, consisting of 3,699,098 Shares held by Contrarian Equity and
125,052 Shares held by the Managed Account, constituting 16.9% of the Shares of
the Issuer, based upon the 22,621,922 Shares outstanding as of June 30, 2006, as
represented by the Issuer in the Merger Agreement.
CCM has the sole power to vote or direct the vote of 125,052 Shares held by the
Managed Account; has the shared power to vote or direct the vote of 3,699,098
Shares held by Contrarian Equity; has sole power to dispose or direct the
disposition of 125,052 Shares held by the Managed Account; and has shared power
to dispose or direct the disposition of 3,699,098 Shares held by Contrarian
Equity.
As of the date hereof, Contrarian Equity may be deemed to be the beneficial
owner of 3,699,098 Shares constituting 16.4% of the Shares of the Issuer, based
upon the 22,621,922 Shares outstanding as of June 30, 2006, as represented by
the Issuer in the Merger Agreement.
Contrarian Equity has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 3,699,098 Shares; has sole power
to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 3,699,098 Shares.
There have been no transactions in the Shares during the past 60 days by the
persons named herein.
The Shares to which this filing relates were acquired for investment purposes.
The Reporting Persons may acquire additional Shares, dispose of all or some of
these Shares from time to time, in each case in open markets or private
transactions, block sales or purchases or otherwise, or may continue to hold the
Shares.
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The Voting Agreement by and between Primedex and Contrarian Equity, as described
in Item 4, is attached as Exhibit B.
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Item 7. Material to be Filed as Exhibits.
A Joint Filing Agreement on behalf of the Reporting Persons is filed herewith
as Exhibit A.
A Voting Agreement by and between Primedex Health Systems, Inc. and Contrarian
Equity Fund, L.P. is attached as Exhibit B.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
July 12, 2006
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(Date)
CONTRARIAN CAPITAL MANAGEMENT, L.L.C.
/s/ Jason Mudrick
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(Signature)
Jason Mudrick, Portfolio Manager
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(Name/Title)
CONTRARIAN EQUITY FUND, L.P
By: Contrarian Capital Management, L.L.C.
/s/ Jason Mudrick
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(Signature)
Jason Mudrick, Portfolio Manager
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(Name/Title)
Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
Exhibit A
JOINT FILING AGREEMENT
The undersigned agree that to this Schedule 13D dated July 12, 2006,
relating to the Common Stock, par value $.0001 per share of Radiologix, Inc.,
shall be filed on behalf of the undersigned.
CONTRARIAN CAPITAL MANAGEMENT, L.L.C.
/s/ Jason Mudrick
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(Signature)
Jason Mudrick, Portfolio Manager
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(Name/Title)
CONTRARIAN EQUITY FUND, L.P
By: Contrarian Capital Management, L.L.C.
/s/ Jason Mudrick
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(Signature)
Jason Mudrick, Portfolio Manager
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(Name/Title)
VOTING AGREEMENT
This Voting Agreement (this "Agreement") is made as of July 6, 2006, by and
between Primedex Health Systems, Inc., a New York corporation ("Primedex"), and
Contrarian Equity Fund, L.P. (the "Stockholder"). Terms not otherwise defined
herein shall have the respective meanings ascribed to them in the Merger
Agreement (defined below).
WHEREAS, Radiologix, Inc., a Delaware corporation ("Radiologix"), Primedex,
Radnet Management, Inc. and PR Acquisition Corporation have entered into an
Agreement and Plan of Merger, dated and in effect as of the date hereof (as the
same may be amended or supplemented for ministerial changes or corrections, the
"Merger Agreement"), providing for the merger (the "Merger") of an indirect
subsidiary of Primedex with and into Radiologix, with Radiologix surviving the
Merger and becoming a wholly-owned indirect subsidiary of Primedex upon the
terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of shares of common stock, par value $.0001 per share ("Radiologix Common
Stock"), of Radiologix set forth opposite its name on Schedule A attached hereto
(such shares of Radiologix Common Stock, referred to herein as the "Subject
Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Primedex has requested that the Stockholder enter into this Agreement
pursuant to which the Stockholder shall, among other things, vote in favor of
adopting and approving the Merger Agreement and the Merger in accordance with
the terms hereof and thereof.
NOW, THEREFORE, to induce Primedex to enter into, and in consideration of
its entering into, the Merger Agreement, and in consideration of the promises
and the representations, warranties and agreements contained herein, the parties
agree as follows:
1. Proxy. Contemporaneously with the execution of this Voting Agreement,
Stockholder shall deliver to Primedex a duly executed proxy in the form attached
to this Voting Agreement as Schedule B, which proxy is coupled with an interest
and shall be irrevocable to the fullest extent permitted by law, with respect to
the Subject Shares referred to therein (the "Proxy").
2. Restrictions on Shares.
(a) Stockholder shall not, directly or indirectly, transfer (except as
may be specifically required by court order or by operation of law), grant an
option with respect to, sell, exchange, pledge or otherwise dispose of, or
encumber, the Subject Shares, or make any offer or enter into any agreement
providing for any of the foregoing, at any time from the date of this Agreement
and prior to the date of the Radiologix stockholders meeting at which
Stockholder has voted the Subject Shares in accordance with the terms of this
Agreement.
(b) At any time from the date of this Agreement and prior to the
Expiration Date, Stockholder shall not, directly or indirectly, take any action
that would make any representation or warranty contained herein untrue or
incorrect or have the effect of impairing the ability of Stockholder to perform
its obligations under this Agreement or, preventing or delaying the consummation
of any of the transactions contemplated hereby.
3. Representations and Warranties of Stockholder. The Stockholder hereby
represents and warrants to Primedex as follows:
(a) Authority; No Conflict. The Stockholder has all requisite power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Stockholder and constitutes a valid and binding obligation of the Stockholder
enforceable against the Stockholder in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will not,
conflict with, result in any violation of, or constitute (with or without notice
of lapse of time or both) default under, any provision of any material trust
agreement, loan or credit agreement, bond, note, mortgage, indenture, lease,
partnership agreement or other contract, agreement, obligation, commitment,
arrangement, understanding, instrument, permit, concession, franchise or license
or any statute, law, ordinance, rule, regulation, judgment, order, notice or
decree applicable to the Stockholder or to any of the Stockholder's property or
assets.
(b) The Subject Shares. The Stockholder is the sole beneficial owner
of, and has good and marketable title to, the Subject Shares, free and clear of
any Encumbrances whatsoever. The Stockholder does not own, of record or
beneficially, any shares of capital stock of Radiologix other than the Subject
Shares set forth opposite its name on Schedule A attached hereto. The
Stockholder has the sole right to vote such Subject Shares, and none of such
Subject Shares is subject to any voting trust or other agreement, arrangement or
restriction with respect to the voting of such Subject Shares. The Subject
Shares are and will be at all times through the Expiration Date free and clear
of any Encumbrances of any nature that would adversely affect the Merger or the
fulfillment of the rights and obligations of the parties to this Agreement.
4. Representations and Warranties of Primedex. Primedex hereby represents
and warrants to the Stockholder that Primedex has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by Primedex and constitutes a valid and binding obligation of Primedex
enforceable against Primedex in accordance with its terms. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not, conflict
with, result in any violation of, or constitute (with or without notice or lapse
of time or both) default under, any provisions of the Certificate of
Incorporation, as amended, or Bylaws of Primedex or any material trust
agreement, loan or credit agreement, bond, note, mortgage, indenture, lease or
other contract, agreement, obligation, commitment, arrangement, understanding,
instrument, permit, concession, franchise or license or any statute, law,
ordinance, rule, regulation, judgment, order, notice or decree applicable to
Primedex or any of Primedex's property or assets.
5. Covenants of Stockholder. The Stockholder agrees as follows:
(a) Without in any way limiting the Stockholder's right to vote the
Subject Shares in its sole discretion on any other matters that may be submitted
to a stockholder vote, consent or other approval (including by written consent),
at any meeting of the stockholders of Radiologix called upon to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval (including written
consent) with respect to the Merger and the Merger Agreement is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares:
(i) in favor of the Merger, the approval and adoption of the
Merger Agreement and approval of the other transactions
contemplated by the Merger Agreement and any action required in
furtherance thereof; and
(ii) against (A) any Acquisition Proposal or any merger agreement
or merger (other than the Merger and the Merger Agreement),
consolidation, combination, sale of substantially all of
Radiologix's assets, sale or issuance of securities of Radiologix
or its subsidiaries, reorganization, joint venture,
recapitalization, dissolution, liquidation or winding up of or by
Radiologix or its subsidiaries and (B) as directed by Primedex,
any amendment of Radiologix's Certificate of Incorporation or
Bylaws or other proposal or transaction involving Radiologix or
any of its subsidiaries which amendment or other proposal or
transaction would or could reasonably be expected to impede,
frustrate, prevent, nullify or result in a breach of any
covenant, representation or warranty or any other obligation or
agreement of Radiologix under or with respect to, the Merger, the
Merger Agreement or any of the transactions contemplated by the
Merger Agreement or by this Agreement.
(b) The Stockholder shall not directly or indirectly, grant any
proxies or powers of attorney with respect to the Subject Shares, deposit the
Subject Shares into a voting trust or enter into a voting agreement with respect
to the Subject Shares.
6. Consent and Waiver. Stockholder hereby gives any consents or waivers
that are reasonably required for the consummation of the Merger under the terms
of any agreement or instrument to which Stockholder is a party. Without limiting
the generality or effect of the foregoing, Stockholder hereby waives any and all
rights to contest or object to the execution and delivery of the Merger
Agreement, Radiologix' Board of Directors' actions in approving and recommending
the Merger, the consummation of the Merger and the other transactions provided
for in the Merger Agreement, or to seek damages or other legal or equitable
relief in connection therewith. From and after the Effective Time, Stockholder's
right to receive the Merger Consideration on the terms and subject to the
conditions set forth in the Merger Agreement shall constitute Stockholder's sole
and exclusive right against Radiologix and/or Primedex in respect of
Stockholder's ownership of the Subject Shares or status as a Stockholder of
Radiologix or any agreement or instrument with Radiologix pertaining to the
Subject Shares or Stockholder's status as a Stockholder of Radiologix.
7. Certain Events. The Stockholder agrees that, to the fullest extent
permitted by law, this Agreement and the obligations hereunder shall attach to
the Subject Shares and shall be binding upon any person or entity to which legal
or beneficial ownership of such Subject Shares shall pass, whether by operation
of law or otherwise, including the Stockholder's successors. In the event of any
stock split, stock dividend, merger, reorganization, recapitalization or other
change in the capital structure of Radiologix affecting Radiologix Common Stock,
or the acquisition of additional shares of Radiologix Common Stock or other
voting securities of Radiologix by the Stockholder (whether by purchase,
conversion or otherwise), the number of Subject Shares listed in Schedule A
beside the name of the Stockholder shall be adjusted appropriately and this
Agreement and the obligations hereunder shall attach to any additional or
decreased shares of Radiologix Common Stock or other voting securities of
Radiologix issued to or acquired or disposed of by the Stockholder, and such
shares shall be treated as "Subject Shares" for all purposes of this Agreement.
8. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by the Stockholder, on the one hand,
without the prior written consent of Primedex nor by Primedex, on the other
hand, without the prior written consent of the Stockholder, except that Primedex
may assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Primedex. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
9. Termination. This Agreement shall terminate, and the provisions hereof
shall be of no further force or effect, upon the earlier of (i) the Effective
Time, (ii) November 30, 2006 and (iii) the valid termination of the Merger
Agreement in accordance with its terms (the "Expiration Date").
10. Appraisal Rights. Stockholder agrees not to exercise any rights of
appraisal or dissenters' rights that Stockholder may have (whether under
applicable law or otherwise) or could potentially have or acquire in connection
with the Merger.
11. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or sent by overnight courier (providing proof of delivery)
to Primedex in accordance with Section 9.2 of the Merger Agreement and to the
Stockholder at its address set forth on Schedule A hereto (or at such other
address for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to a
Section or Schedule, such reference shall be to a Section of or Schedule to this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(d) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other parties.
(e) Entire Agreement; No Third Party Beneficiaries. This Agreement
(including, without limitation, the Proxy) (i) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and (ii) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and construed
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
(g) Delivery to Radiologix. Stockholder hereby authorizes Primedex to
deliver a copy of this Agreement to Radiologix and hereby agrees that each of
Primedex and Radiologix may rely upon such delivery as conclusively evidencing
the waivers of Stockholder set forth herein.
12. Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity. Stockholder waives any
and all defenses which could exist in its favor in connection with such
enforcement and waives any requirement for the security or posting of any bond
in connection with such enforcement.
13. Public Announcements. Except as required by law, the Stockholder shall
not issue any press release or other public statement with respect to the
transactions contemplated by this Agreement and the Merger Agreement without the
prior written consent of Primedex. Stockholder acknowledges that Radiologix and
Primedex intend to publicly disclose the Merger and this Agreement upon
execution by Primedex and Radiologix of the Merger Agreement; provided, however,
that Stockholder shall be entitled to review and reasonably approve any use of
its name in any press release issued by Primedex or Radiologix in connection
with the transaction.
14. Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement shall
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with valid and enforceable provision that will
achieve, to the fullest extent possible, the original intent of the parties.
In Witness Whereof, the parties hereto have caused this Agreement to be
executed as of the date first written above.
PRIMEDEX HEALTH SYSTEMS, INC.
By: /s/ Howard Berger, M.D.
--------------------------
Howard Berger, M.D.
Chairman and Chief Executive Officer
CONTRARIAN EQUITY FUND, L.P.
By: CONTRARIAN CAPITAL MANAGEMENT, L.L.C.,
Its General Partner
By: /s/ Jason Mudrick
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Jason Mudrick
SCHEDULE A
Schedule of Share Ownership
Name Shares
Contrarian Equity Fund, L.P............ 3,699,098 shares of common stock
411 West Putnam Avenue
Greenwich, CT 06830
SCHEDULE B
FORM OF IRREVOCABLE PROXY
The undersigned stockholder of Radiologix, Inc., a Delaware corporation
(the "Company"), hereby irrevocably (to the fullest extent permitted by law)
appoints and constitutes the members of the Board of Directors of Primedex
Health Systems, Inc., a New York corporation ("Primedex"), and each of them, the
attorneys and proxies of the undersigned with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
(i) all outstanding shares of capital stock of the Company owned beneficially by
the undersigned as of the date of this proxy, which shares are specified on
Schedule A to the Voting Agreement (as hereinafter defined), and (ii) any and
all other shares of capital stock of the Company which the undersigned may
acquire on or after the date hereof and which are Subject Shares (as defined in
the Voting Agreement). (The shares of the capital stock of the Company referred
to in clauses (i) and (ii) of the immediately preceding sentence are
collectively referred to as the "Shares.") Upon the execution hereof, all prior
proxies given by the undersigned with respect to any of the Shares are hereby
revoked, and the undersigned agrees that no subsequent proxies will be given
with respect to any of the Shares, nor will the undersigned enter into any
agreement or understanding with any Person (as defined in the Merger Agreement
(defined below)) to vote or give instructions with respect to the Shares in any
manner inconsistent with the terms of this Irrevocable Proxy until after the
Expiration Date (as defined below).
Until the Expiration Date, this proxy is irrevocable (to the fullest extent
permitted by applicable law), is coupled with an interest and is granted as
required by the Voting Agreement, dated as of the date hereof, between Primedex
and the undersigned (the "Voting Agreement"), and is granted in consideration of
Primedex entering into the Agreement and Plan of Merger, dated as of the date
hereof, among Primedex, Radnet Management, Inc., PR Acquisition Corporation and
the Company as the same may be amended or supplemented (the "Merger Agreement").
The attorney and proxy named above will be empowered, and may exercise this
proxy, to vote the Shares at any time until the earlier to occur of (i) the
valid termination of the Merger Agreement, (ii) November 30, 2006 and (iii) the
Effective Time (as defined in the Merger Agreement) (the "Expiration Date") at
every meeting of the stockholders of the Company, however called, and in
connection with any solicitation of written consents from stockholders of the
Company:
(a) in favor of the Merger (as defined in the Merger Agreement),
the approval and adoption of the Merger Agreement and approval of
the other transactions contemplated by the Merger Agreement and
any action required in furtherance thereof; and
(b) against (A) any Acquisition Proposal (as defined in the
Merger Agreement) or any merger agreement or merger (other than
the Merger and the Merger Agreement), consolidation, combination,
sale of substantially all of the Company's assets, sale or
issuance of securities of the Company or its subsidiaries,
reorganization, joint venture, recapitalization, dissolution,
liquidation or winding up of or by the Company or its
subsidiaries and (B) as directed by Primedex, any amendment of
the Company's Certificate of Incorporation or Bylaws or other
proposal or transaction involving the Company or any of its
subsidiaries which amendment or other proposal or transaction
would or could reasonably be expected to impede, frustrate,
prevent, nullify or result in a breach of any covenant,
representation or warranty or any other obligation or agreement
of the Company under or with respect to, the Merger, the Merger
Agreement or any of the transactions contemplated by the Merger
Agreement or by this Agreement.
This proxy shall be binding upon any person or entity to which legal or
beneficial ownership of the Subject Shares shall pass, whether by operation of
law or otherwise, including the Stockholder's successors.
If any provision of this proxy or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part under such circumstances and in such
jurisdiction shall not affect the validity or enforceability of such provision
or part thereof under any other circumstances or in any other jurisdiction, and
(c) the invalidity or unenforceability of such provision or part thereof shall
not affect the validity or enforceability of the remainder of such provision or
the validity or enforceability of any other provision of this proxy. Each
provision of this proxy is separable from every other provision of this proxy,
and each part of each provision of this proxy is separable from every other part
of such provision.
Dated: July 6, 2006
By: /s/ Jason Mudrick
------------------------
Jason Mudrick
Contrarian Equity Fund, L.P.
NUMBER OF SHARES OF COMMON STOCK OF
THE COMPANY OWNED OF RECORD AS OF THE
DATE OF THIS PROXY:
3,699,098
01385.0001 #622350c