EX-10.23 11 radnet_10q-ex1023.htm AMENDMENT NO. 3 TO SECOND LIEN AGREEMENT

     EXHIBIT 10.23

                     AMENDMENT NO. 3 TO SECOND LIEN CREDIT AGREEMENT

                      This AMENDMENT NO. 3 TO SECOND LIEN CREDIT AGREEMENT (this
    "AMENDMENT"), dated as of August 23, 2007, by and among RADNET MANAGEMENT, INC.,
    a California corporation (the "BORROWER"), the other persons designated as
    Credit Parties on the signature pages hereof, GENERAL ELECTRIC CAPITAL
    CORPORATION, a Delaware corporation, as agent ("AGENT") and the Persons
    signatory thereto from time to time as Lenders. Unless otherwise specified
    herein, capitalized terms used in this Amendment shall have the meanings
    ascribed to them in the Credit Agreement (each as hereinafter defined).

                                        RECITALS
                                        --------

             WHEREAS, the Borrower, the Credit Parties, Agent and Lenders have
    entered into that certain Second Lien Credit Agreement dated as of November 15,
    2006 (as amended by that certain Limited Waiver and Amendment No. 1 to Second
    Lien Credit Agreement dated April 5, 2007 and that certain Amendment No. 2 to
    Second Lien Credit Agreement dated May 30, 2007 and as further amended,
    supplemented, restated or otherwise modified from time to time, the "CREDIT
    AGREEMENT"); and

             WHEREAS, the Borrowers, Agent and Requisite Lenders have agreed to the
    amendments as set forth herein;

             NOW THEREFORE, in consideration of the mutual execution hereof and
    other good and valuable consideration, the parties hereto agree as follows:

    AMENDMENTS TO CREDIT AGREEMENT.

                               AMENDMENT TO CREDIT AGREEMENT. The Credit Agreement
    is hereby amended by replacing each occurrence of the words "Primedex Health
    Systems" with the word "RadNet" therein.

                               AMENDMENT TO SECTION 4.9. SECTION 4.9 of the Credit
    Agreement is hereby amended and restated to read in its entirety as follows:

             "4.9 CASH MANAGEMENT SYSTEMS. Borrower shall, and shall cause each
    other Credit Party to, (i) enter into Control Agreements with respect to each
    deposit account maintained by Borrower or any Subsidiary of Borrower (other than
    (a) any payroll account or other disbursement account which is a zero balance
    account and (b) any account (a "GOVERNMENTAL ACCOUNT") into which amounts are
    paid by a governmental entity pursuant to one or more Health Care Laws) as of or
    after the Closing Date and (ii) cause all amounts on deposit in or credited to
    each Governmental Account to be transferred, every Business Day, to an account
    subject to a Control Agreement. Each such deposit account control agreement
    shall be in form and substance reasonably satisfactory to Agent."

1

                               AMENDMENT TO SECTION 5.1(F). SECTION 5.1(F) of the
    Credit Agreement is hereby amended by replacing the amount "$15,000,000" which
    appears therein with "$20,000,000".

                               AMENDMENT TO SECTION 5.6(V). SECTION 5.6(V) of the
    Credit Agreement is hereby amended and restated to read in its entirety as
    follows:

             "(v) the sum of all amounts payable in connection with any Permitted
             Acquisition (including the purchase price, all transaction costs and
             all Indebtedness, liabilities and Contingent Obligations incurred or
             assumed in connection therewith or otherwise reflected on a
             consolidated balance sheet of Borrower and Target) shall not exceed
             $12,000,000 (or an amount not to exceed $12,500,000 with respect to the
             Borg Acquisition) and the sum of such amounts payable in connection
             with all Permitted Acquisitions shall not exceed $50,000,000, and the
             portion thereof allocable to goodwill and intangible assets for all
             such Permitted Acquisitions during the term hereof shall not exceed
             $30,000,000."

                               AMENDMENT TO SECTION 5.7. SECTION 5.7 of the Credit
    Agreement is hereby amended by inserting the following new clause (d):

             "(d) the Identified Sale-Leaseback."

                               AMENDMENT TO SECTION 5.17. SECTION 5.17 of the Credit
    Agreement is hereby amended and restated to read in its entirety as follows:

                               "5.17   SALE-LEASEBACKS.

             Other than the Identified Sale-Leaseback, the Credit Parties shall not
    and shall not cause or permit any of their Subsidiaries to engage in any
    sale-leaseback, synthetic lease or similar transaction involving any of its
    assets."

                               AMENDMENT TO SECTION 5.20. SECTION 5.20 of the Credit
    Agreement is hereby amended by replacing the amount "$22,000,000" which appears
    therein with "$35,000,000".

                               AMENDMENT TO SECTION 6.1(A). SECTION 6.1(A) of the
    Credit Agreement is hereby amended and restated to read in its entirety as
    follows:

                      "CAPITAL EXPENDITURE LIMITS. Holdings and its Subsidiaries on
             a consolidated basis shall not make Capital Expenditures during the
             following periods that exceed the aggregate amounts set forth opposite
             each of such periods (the "CAPEX LIMIT"):

2

                                                                 MAXIMUM CAPITAL
                                                                 EXPENDITURES
                      PERIOD                                     PER PERIOD
                      ------                                     ---------------
                      Fiscal Year 2007                           $44,000,000
                      Fiscal Year 2008                           $44,000,000
                      Fiscal Year 2009                           $47,000,000
                      Fiscal Year 2010 and each Fiscal Year      $47,000,000
                      thereafter

             PROVIDED, HOWEVER, that the Capex Limit referenced above will be
             increased in any period by an amount equal to 50% of the difference
             obtained by taking the Capex Limit for the immediately prior period
             (excluding any Capex Carry Over Amounts) MINUS the actual amount of any
             Capital Expenditures expended during such prior period (the "CAPEX
             CARRY OVER AMOUNT"), and for purposes of measuring compliance herewith,
             the Capex Carry Over Amount shall be deemed to be the last amount spent
             on Capital Expenditures in that succeeding period."

                               AMENDMENT TO SECTION 6.2(E). SECTION 6.2(E) of the
    Credit Agreement is hereby amended by replacing the reference to "SECTIONS
    6.2(A)(III) AND (B)" with "SECTIONS 6.2(A)(I) AND (B)" therein, replacing the
    word "Month" which appears therein with the word "Quarter" and by deleting the
    phrase "and the portion of the current Fiscal Quarter then elapsed" therein.

                               AMENDMENT TO ANNEX A. ANNEX A of the Credit Agreement
    is hereby amended by inserting the following defined terms in their appropriate
    alphabetical order:

    "GOVERNMENTAL ACCOUNT HAS THE MEANING ASCRIBED TO IT IN SECTION 4.9."

    "IDENTIFIED SALE-LEASEBACK MEANS THE SALE-LEASEBACK OF ASSETS IDENTIFIED TO
    AGENT IN AN AMOUNT NOT TO EXCEED $13,000,000 ON TERMS AND PURSUANT TO
    DOCUMENTATION ACCEPTABLE TO AGENT."

                               AMENDMENT TO ANNEX F. SECTION 6.1(C) (Minimum Fixed
    Charge Coverage Ratio) to ANNEX F is hereby replaced with the revised SECTION
    6.1(C) attached as ANNEX F to this Amendment.

                               AMENDMENT TO EXHIBIT 6.2(D). EXHIBIT 6.2(D) (EBITDA)
    is hereby replaced with the revised EXHIBIT 6.2(D) attached as EXHIBIT 6.2(D) to
    this Amendment.

                               SCHEDULES. Each of SCHEDULES 3.1(A), 3.1(B), 3.10,
    3.11, 3.12, 3.14, 3.16, 3.17, 3.18, 3.19, 5.1, 5.2, 5.6, and 5.9 to the Credit
    Agreement is hereby replaced with the applicable SCHEDULE attached hereto.

3

                      REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES. The Credit
    Parties represent and warrant that:

                             the execution, delivery and performance by each Credit
            Party of this Amendment have been duly authorized by all necessary
            corporate action required on its part and this Amendment is a legal,
            valid and binding obligation of such Credit Party enforceable against
            such Credit Party in accordance with its terms except as the enforcement
            thereof may be subject to (i) the effect of any applicable bankruptcy,
            insolvency, reorganization, moratorium or similar laws affecting
            creditors' rights generally and (ii) general principles of equity
            (regardless of whether enforcement is sought in a proceeding in equity
            or at law); and

                             after giving effect to this Amendment, each of the
            representations and warranties contained in the Credit Agreement is true
            and correct in all material respects on and as of the date hereof as if
            made on the date hereof, except to the extent that such representations
            and warranties expressly relate to an earlier date.

                      CONDITIONS TO EFFECTIVENESS. This Amendment shall be effective
    upon satisfaction of the following conditions precedent:

             This Amendment shall have been executed and delivered by the Agent,
             Requisite Lenders and the Credit Parties;

             The execution and delivery of the Amendment No. 3 to the First Lien
             Credit Agreement, in form, substance and manner satisfactory to the
             Agent; and

                      (c) The Agent shall have received a nonrefundable amendment
    fee equal to $120,000 which shall be fully earned and payable on the date
    hereof.

                      REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT.

                             The Credit Agreement and the other Loan Documents shall
            remain in full force and effect, as amended hereby, and are hereby
            ratified and confirmed.

                             The execution, delivery and effectiveness of this
            Amendment shall not operate as a waiver of any right, power or remedy of
            Agent or any Lender under the Credit Agreement or any Loan Document, nor
            constitute a waiver or amendment of any provision of the Credit
            Agreement or any Loan Document, except as specifically set forth herein.
            Upon the effectiveness of this Amendment, each reference in the Credit
            Agreement to "this Credit Agreement," "hereunder," "hereof," "herein" or
            words of similar import shall mean and be a reference to the Credit
            Agreement as amended hereby.

                      GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
    CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

4

                      HEADINGS. Section headings in this Amendment are included
    herein for convenience of reference only and shall not constitute a part of this
    Amendment for any other purposes.

                      COUNTERPARTS. This Amendment may be executed in any number of
    counterparts, each of which when so executed shall be deemed an original, but
    all such counterparts shall constitute one and the same instrument.

                      REAFFIRMATION OF GUARANTIES. The Credit Parties signatory
    hereto hereby reaffirm their Guaranties of the Obligations and reaffirm that the
    Obligations are and continue to be secured by the security interest granted by
    the Credit Parties in favor of the Agent, on behalf of itself and the Lenders,
    under the Security Agreement and the Pledge Agreement and all of the terms,
    conditions, provisions, agreements, requirements, promises, obligations, duties,
    covenants and representations of the Credit Parties under such documents and
    agreements entered into with respect to the obligations under the Credit
    Agreement are incorporated herein by reference and are hereby ratified and
    affirmed in all respects by the Credit Parties. Each Credit Party acknowledges
    that all references to "Credit Agreement" in the Loan Documents shall take into
    account the provisions of this Amendment and be a reference to the "Credit
    Agreement" as amended hereby.

                                           * *

5

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first written above.

| RADNET MANAGEMENT, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| RADNET, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| BEVERLY RADIOLOGY MEDICAL GROUP III
| By: ProNet Imaging Medical Group, Inc., its general partner
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| By: Beverly Radiology Medical Group, Inc., its general partner
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| PRONET IMAGING MEDICAL GROUP, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President

6

| BEVERLY RADIOLOGY MEDICAL GROUP, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| RADNET SUB, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| SO CAL MR SITE MANAGEMENT, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| RADNET MANAGEMENT I, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| RADNET MANAGEMENT II, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President

7

| RADNET MANAGED IMAGING SERVICES, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| DIAGNOSTIC IMAGING SERVICES, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: Chief Financial Officer
| RADIOLOGIX, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| ADVANCED IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| IDE IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President

8

| MID ROCKLAND IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| PACIFIC IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| QUESTAR IMAGING, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| TREASURE COAST IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| COMMUNITY IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President

9

| RADIOLOGY AND NUCLEAR MEDICINE IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| VALLEY IMAGING PARTNERS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| QUESTAR DULUTH, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| QUESTAR LOS ALAMITOS, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| QUESTAR VICTORVILLE, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President

10

| ROCY MOUNTAIN OPENSCAN MRI, LLC
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| FRI, INC.
| By: | /s/ Howard G. Berger
|  | Name: Howard G. Berger, M.D.
|  | Title: President
| GENERAL ELECTRIC CAPITAL
| CORPORATION
| as Agent and a Lender
| By: | /s/ Andrew Moore
|  | Duly Authorized Signatory
| Brencourt BD, LLC., as Lender
| By: | /s/Michael Palmer
|  | Name: Michael Palmer
|  | Title: CFO

11

| Man Mac Schreckhorn 14B Ltd., as Lender
| By: | /s/ Michael Palmer
|  | Name: Michael Palmer
|  | Title: CFO
| CIFC Funding 2006-I, Ltd as Lender
| By: | /s/ Sean O. Dougherty
|  | Name: Sean O. Dougherty
|  | Title: General Counsel
| PREMIER FUNDING, LTD., as a Lender
| By: Citigroup Global Markets Realty Corp., as Collateral Administrator
| By: | /s/ authorized signatory
|  | Name: Authorized Signatory
| [CAINE FUNDING], as a Lender
| By: | /s/ Neam Ahmed
|  | Name: Neam Ahmed
|  | Title: Authorized Signatory

12

| CypressTree CLAIF Funding LLC, as a Lender
| By: | /s/ Tara E. Kenny
|  | Name: Tara E.Kenny
|  | Title: Assistant Vice President
| INVESTORS BANK & TRUST COMPANY AS SUB-CUSTODIAN AGENT OF CYPRESSTREE INTERNATIONAL LOAN HOLDING COMPANY LIMITED
| By: | /s/ John Frabotta
|  | Name: John Frabotta
|  | Title: Managing Director
| By: | /s/ Martha Hadeler
|  | Name: Martha Hadeler
|  | Title: Managing Director
| EATON VANCE SENIOR INCOME TRUST, as a Lender
| By: Eaton Vance Management as Investment Advisor
| By: | /s/ Michael B. Botthof
|  | Name: Michael B. Botthof
|  | Title: Vice President
| EATON VANCE CDO VII PLC, as a Lender
| By: Eaton Vance Management as Investment Advisor
| By: | /s/ Michael B. Botthof
|  | Name: Michael B. Botthof
|  | Title: Vice President

13

| EATON VANCE CDO VIII PLC, as a Lender
| By: Eaton Vance Management as Investment Advisor
| By: | /s/ Michael B. Botthof
|  | Name: Michael B. Botthof
|  | Title: Vice President
| EATON VANCE CDO X PLC, as a Lender
| By: Eaton Vance Management as Investment Advisor
| By: | /s/ Michael B. Botthof
|  | Name: Michael B. Botthof
|  | Title: Vice President
| EATON VANCE SENIOR FLOATING-RATE TRUST, as a Lender
| By: Eaton Vance Management as Investment Advisor
| By: | /s/ Michael B. Botthof
|  | Name: Michael B. Botthof
|  | Title: Vice President
| EATON VANCE CREDIT OPPORTUNITIES FUND, as a Lender
| By: Eaton Vance Management as Investment Advisor
| By: | /s/ Michael B. Botthof
|  | Name: Michael B. Botthof
|  | Title: Vice President

14

| Crystal Capital Fund, Ltd., as a Lender
| As duly authorized:
| Crystal Capital Fund Management, L.P.
| By: Crystal Capital Fund GP, LLC, its General Partner
| By: | /s/Edward J. Siskin
|  | Name: Edward J. Siskin
|  | Title: Executive Managing Director
| Crystal Capital Fund, L.P., , as a Lender
| By: Crystal Capital Fund GP, LLC, its General Partner
| By: | /s/Edward J. Siskin
|  | Name: Edward J. Siskin
|  | Title: Executive Managing Director
| KROLL CATALYST PARTNERS, LLC, as a Lender
| By: | /s/ George N. Skegas
|  | Name: George N. Skegas
|  | Title: Managing Director
| TELOS CLO 2007-2, LTD, as a Lender
| By: | /s/ Jonathan Tepper
|  | Name: Jonathan Tepper
|  | Title: Principal
| S.A.C. CAPITAL ASSOCIATES, LLC, as a Lender
| By: S.A.C. Capital Advisors, LLC, its General Partner
| By: | /s/Peter Nussbaum
|  | Name: Peter Nusbaum
|  | Title: Authorized Signatory

15

| Grand Central Asset Trust, DES Series, as a Lender
| By: | /s/ Pam Gwin
|  | Name: Pam Gwin
|  | Title: Attorney-in-fact
| Canadian Imperial Bank of Commerce, as a Lender
| By: | /s/ John O’Dowd
|  | Name: John O’Dowd
|  | Title: Authorized Signatory

16

ANNEX F TO AMENDMENT NO. 3 TO SECOND CREDIT AGREEMENT
MINIMUM FIXED CHARGE COVERAGE RATIO
(Section 6.1(c))

EBITDA (calculated in Section 6.1(b) of this Annex) | $ ___________
$ Less: any provision for income taxes (whether paid or payable in cash) | ___________
Capital Expenditures (calculated in Section 6.1(a) of this Annex), other than the portion thereof funded by third party financing | ___________
Operating Cash Flow | $
| ===========
$ Fixed Charge Coverage Ratio is defined as follows: |
Interest expense (whether cash or non-cash) deducted in the determination of Consolidated Net Income, including interest expense with respect to any Funded Debt and interest expense that has been capitalized |
Less: Amortization of capitalized fees and expenses incurred with respect to the Related Transactions included in interest expense above | $ ___________
Amortization of any original discount attributable to any Funded Debt or warrants included in interest expense above | ____________
Interest paid in kind and included in interest expense above | ____________
Imputed interest or other non-cash interest related to swap or other interest rate agreements | ____________
Interest Expense* | $ ____________
Plus: Scheduled payments of principal with respect to all Indebtedness** | ____________
Fixed Charges | $
| ============
Fixed Charge Coverage Ratio (Operating Cash Flow from above, divided by Fixed Charges) |
| ============

* During the period from the Closing Date through the Fiscal Quarter ended September 30, 2008, cash Interest Expense shall be calculated for the period commencing on the Closing Date and ending on the date most recently ended for which a Compliance Certificate is delivered to Agent divided by the number of days in such period and multiplied by 360 days. Thereafter, cash Interest Expense shall be calculated for the twelve (12) month period ending on the date most recently ended for which a Compliance Certificate is delivered to Agent.
** For calculations as of September 30, 2007, scheduled payments of principal with respect to all Indebtedness will be deemed to be the actual amount of such payments for the fiscal quarter ended September 30, 2007 multiplied by 4.0. For calculations as of December 31, 2007, scheduled payments of principal with respect to all Indebtedness will be deemed to be the actual amount of such payments for the fiscal quarters ended September 30, 2007 and December 31, 2007 multiplied by 2.0. For calculations of as March 31, 2008, scheduled payments of principal with respect to all Indebtedness will be deemed to be the actual amounts of such payments for the fiscal quarters ended September 30, 2007, December 31, 2007 and March 31, 2008 multiplied by 1.33 or one and one-third.

SCHEDULE II
EXHIBIT 6.2(d)
EBITDA

Consolidated Net Income is defined as follows: |
Net income during the measuring period on a consolidated basis excluding: | _____________
the income (or deficit) of any Person accrued prior to the date it became a Subsidiary of, or was merged or consolidated into, Holdings or any of Holdings' Subsidiaries | _____________
the income (or deficit) of any Person (other than a Subsidiary) in which Holdings has an ownership interest, except to the extent any such income has actually been received by Borrower or any of its Subsidiaries in the form of cash dividends or distributions | _____________
the undistributed earnings of any Subsidiary of Holdings to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation or requirement of law applicable to such Subsidiary | _____________
any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period | _____________
any net gain attributable to the write-up of any asset | _____________
any loss attributable to the write-down of any asset (other than Accounts and Inventory) | _____________
any net gain from the collection of the proceeds of life insurance policies | _____________
any net gain arising from the acquisition of any securities, or the extinguishment of any Indebtedness, of Holdings or any of its Subsidiaries | _____________

any deferred credit representing the excess of equity in any Subsidiary of Holdings at the date of acquisition of such Subsidiary over the cost to Holdings of the investment in such Subsidiary | _____________
Consolidated Net Income | $____________
EBITDA is defined as follows: | _____________
Consolidated Net Income (from above) | _____________
Less: (in each case to the extent included in the calculation of Consolidated Net Income, but without duplication): | _____________
income tax credits | _____________
interest income | _____________
gain from extraordinary items | _____________
any gain arising from the sale, exchange or other disposition of assets (including Equipment) out of the ordinary course of business, other than Accounts and Inventory | _____________
any other non-cash gains | _____________
expenditures related to the Related Transactions and not reflected on the Pro Forma or the footnotes thereto | _____________
non-recurring gains | _____________
Plus: (in each case to the extent deducted in the calculation of Consolidated Net Income, but without duplication): | _____________
any provision for income taxes | _____________
Interest expense (whether cash or non-cash) deducted in the determination of Consolidated Net Income, including interest expense with respect to any Funded Debt and interest expense that has been capitalized | _____________
depreciation and amortization | _____________
amortized debt discount (but in the case of amortization and expenses of Related Transactions, only to the extent included in the Pro Forma) | _____________

any deduction as the result of any grant to any members of the management of Holdings or any of its Subsidiaries of any Stock | _____________
loss from extraordinary items | _____________
any loss arising from the sale, exchange or other disposition of assets (including Equipment) out of the ordinary course of business, other than Accounts and Inventory | _____________
any other non-cash losses (other than non-cash losses relating to write-offs, write-downs or reserves with respect to Accounts and Inventory) | _____________
expenses of the Related Transactions, provided that such expenses were included in the Pro Forma, or disclosed in any notes thereto | _____________
employee severance expenses and retention bonuses in an aggregate amount not to exceed $2,600,000 paid on or prior to December 31, 2007 which expenses arose as a result of the transactions contemplated by the Radiologix Merger Agreement for all periods ending on or after the Closing Date | _____________
Other agreed to adjustments1 | _____________
Plus: Pro Forma Cost Savings2 | _____________
EBITDA3 | $ _____________

____________________
1. Other agreed adjustments to include EBITDA related to operating leases to the extent such leases have been converted to capital leases as of the end of the applicable measuring period.
2. With respect to each trailing twelve month period ending on the Fiscal Quarter as specified on Exhibit A attached hereto, Pro Forma Cost Savings shall be deemed to be the amount set forth opposite such Fiscal Quarter on Exhibit A.
3. EBITDA for entities acquired in a Permitted Acquisition or EBITDA relating to new joint ventures or management arrangements shall be included to the extent that such EBITDA has been approved by Agent in its reasonable discretion (it being agreed that to the extent not already included in EBITDA of Holdings and its Subsidiaries, EBITDA of Radiologix and its Subsidiaries for the Fiscal Months set forth on Exhibit B attached hereto shall be deemed to be the amount set forth opposite such Fiscal Month on Exhibit B).

EXHIBIT A
PRO FORMA COST SAVINGS

Fiscal Month | Adjustment
December, 2006 | $10,975,410.00
January, 2007 | $10,929,679.10
February, 2007 | $10,838,217.40
March, 2007 | $10,701,024.80
April, 2007 | $10,518,101.30
May, 2007 | $10,280,300.70
June, 2007 | $9,978,476.90
July, 2007 | $9,603,483.80
August, 2007 | $9,137,028.80
September, 2007 | $8,569,966.00
October, 2007 | $7,893,149.00
November, 2007 | $7,097,431.80
December, 2007 | $6,301,714.60
January, 2008 | $5,432,828.00
February, 2008 | $4,609,672.20
March, 2008 | $3,832,247.30
April, 2008 | $3,100,553.30
May, 2008 | $2,423,736.40
Jiine, 2008 | $1,810,942.70
July, 2008 | $1,271,318.30
August, 2008 | $823,155.80
September, 2008 | $475,601.10
October, 2008 | $237,800.60
November, 2008 | $118,900.30

EXHIBIT B
EBITDA OF RADIOLOGIX AND ITS SUBSIDIARIES

Fiscal Month | EBITDA
September, 2005 | $3,939,000.00
October, 2005 | $3,796,000.00
November, 2005 | $2,545,000.00
December, 2005 | $4,386,000.00
January, 2006 | $3,430,000.00
February, 2006 | $3,048,000.00
March, 2006 | $5,435,000.00
April, 2006 | $2,564,000.00
May, 2006 | $3,449,000.00
June, 2006 | $5,059,000.00
July, 2006 | $3,028,000.00
August, 2006 | $4,048,000.00
September, 2006 | $4,449,000.00