EXHIBIT 99.2
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
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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."
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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"):
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MAXIMUM CAPITAL
EXPENDITURES
PERIOD PER PERIOD
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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.
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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.
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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.
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