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EXHIBIT 10.2
AMENDED, RESTATED AND CONSOLIDATED
LOAN AND SECURITY AGREEMENT
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THIS AMENDED, RESTATED AND CONSOLIDATED LOAN AND SECURITY
AGREEMENT
(this "Agreement") is made as of July 1,
2004 among Radnet Management, Inc., a
California corporation ("RMI"), Diagnostic
Imaging Services, Inc., a Delaware
corporation ("DIS"), ("Debtors" and each a
"Debtor") and DVI Financial Services
Inc. ("Secured Party").
R E C I T A L S
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WHEREAS, each of the Debtors is obligated to Secured Party in
the
amounts set forth on Schedule A hereto (as
of the date hereof) as evidenced by
those loan agreements, loan and security
agreements, master leases, schedules
and promissory notes set forth on Schedule
A hereto (collectively, as any of the
foregoing may have been amended, modified,
supplemented, extended or restated
from time to time, the "Prior Financing
Documents");
WHEREAS, each of the Debtors are affiliated with each other and
have
benefited from the loans and advances made
to all Debtors under the Prior
Financing Documents;
WHEREAS, the Debtors are in default of their respective obligations
to
Secured Party under the Prior Financing
Documents; and
WHEREAS, as part of a negotiated settlement among the Debtors and
the
Secured Party, the Debtors and the Secured
Party have agreed to amend, restate
and consolidate the Prior Financing
Documents into this Agreement on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other
good and valuable consideration, the
receipt and sufficiency of which is hereby
acknowledged, the parties hereto
agree as follows:
CERTAIN DEFINITIONS. THE FOLLOWING TERMS
SHALL HAVE THE
FOLLOWING RESPECTIVE
MEANINGS: COLLATERAL shall mean any assets
of Debtors now or hereafter securing the
Obligations.
EVENT OF DEFAULT shall mean those events
set forth in Section 10 hereof.
HEALTH CARE LAWS mean all federal, state
and local laws relating to health care
providers and health care services,
including, without limitation, Section
1877(a) of the Social Security Act as
amended by the Omnibus Budget
Reconciliation Act of 1993,42 U.S.C. ss.
l395nn.
LOAN shall have the meaning assigned to it
in Section 2(b) hereof.
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LOAN DOCUMENTS shall mean this Agreement,
the Security Documents and all other
guarantees, reaffirmation of guarantees,
security agreements, pledge agreements,
notes, instruments and other documents and
agreements executed in connection
with this Agreement or the Prior Loan
Documents and/or otherwise securing or
supporting the Obligations.
MATURITY DATE shall mean June 1, 2008;
PROVIDED, that such date shall be
automatically extended to the date which is
one month prior to the maturity date
set forth in either (i) any extension of
the 11.5% Series A convertible
subordinated debentures due June 30, 2008
of Primedex Health Systems Inc., so
long as such extension does not require any
payments of principal, increase the
interest rate charged, modify the
subordination terms as they apply to this
Agreement, or otherwise vary the payment
terms from the terms existing on the
date hereof or (ii) any refinancing of the
subordinated debt described in clause
(i) above so long as the terms of such
replacement subordinated debt do not
require principal payments until maturity
and are otherwise no more adverse to
Primedex Health Systems Inc. or to Secured
Party than the terms of the
subordinated debt described under clause
(i) above in effect or the date hereof;
PROVIDED, that in no event shall the
maturity Date under this Agreement extend
past October 31, 2010.
OBLIGATIONS shall mean all principal and
interest in respect of the Loan, all
Secured Party Expenses and all additional
amounts and other sums at any time due
and owing under this Agreement and any
other Loan Documents and the performance
and observance of all covenants and
conditions contained herein and therein.
SECURED PARTY EXPENSES means all (i) costs
and expenses (including, without
limitation, taxes and insurance premiums)
required to be paid by any Debtor
under this Agreement or under any of the
other Loan Documents that are paid or
advanced by Secured Party or any affiliate
of Secured Party, (ii) filing,
recording, publication and search fees paid
or incurred by Secured Party in
connection with Secured Party's
transactions with Debtors, (iii) costs and
expenses incurred by Secured Party to
correct any Event of Default, enforce any
provision of the Loan Documents or in
gaining possession of, maintaining,
handling, preserving, storing, shipping,
selling or preparing for sale or
advertising to sell any Collateral, whether
or not a sale is consummated, after
the occurrence and during the continuance
of an Event of Default, (iv) costs and
expenses of suit incurred by Secured Party
in enforcing or defending the Loan
Documents or any portion thereof, (v) costs
and expenses incurred by Secured
Party to convert any data submitted to
Secured Party by Debtor to a form
reasonably acceptable to Secured Party and
(vi) Secured Party's reasonable
attorney fees and expenses incurred (before
or after execution of this
Agreement) in advising Secured Party with
respect to, or in structuring,
drafting, reviewing, negotiating, amending,
terminating, enforcing, defending or
otherwise concerning, the Loan Documents or
any portion thereof, irrespective of
whether suit is brought.
SECURITY DOCUMENTS means collectively, (i)
that certain Master Security
Agreement dated as of May 1, 2002 between
RMI and Secured Party, (ii) that
certain Master Security Agreement dated as
of March 20, 2002 between DIS and
Secured Party, (iii) that certain Master
Security Agreement dated as of July 11,
2001 between RMI and Secured Party, (iv)
that certain Securities Pledge
Agreement dated as of December 20, 1999
between RMI and Secured Party and (v)
all other security agreements, pledge
agreements, documents and agreements
granting Secured Party a lien in any assets
of any Debtor, in each case as
amended, restated, supplemented or
otherwise modified from time to time.
2
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DESCRIPTION OF LOANS.
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The Debtors acknowledge and agree that as
of the date hereof, (i) there exists
an outstanding amount of principal and
interest of not less than $17,800,000
owing to Secured Party under the Prior
Financing Documents, (ii) the Debtors are
in default of their respective payment
obligations under the Prior Financing
Documents and (iii) each Debtor has no
right of offset, defense or counterclaim
with respect to any amounts owing under the
Prior Financing Documents.
Upon satisfaction of the conditions set
forth in Section 17 hereof, the parties
hereto agree that (i) all the Prior
Financing Documents shall be amended,
restated and consolidated into this
Agreement, (ii) the amount of indebtedness
owed to Secured Party by Debtors under the
Prior Financing Documents and
outstanding as of the date hereof shall be
evidenced by this Agreement and shall
be in the principal amount of $15,200,000
(the "Loan") after giving effect to
the payment required under Section 17(c)
hereof. Interest shall accrue on the
outstanding amount of the loan at a rate
per annum equal to nine percent (9%)
calculated or the basis of a 360 day year
and accrual days elapsed.
The Debtors, jointly and severally, agree
to repay the Loan and interest accrued
thereon as follows: (i) on July 29, 2004,
interest only on the Loan shall be
paid for the month of July in the amount of
$114,000; (ii) on the last business
day of each of August, 2004, September,
2004, October, 2004, November, 2004 and
December, 2004 interest only on the Loan
shall be paid in arrears in the amount
of $114,000 for each such month, (iii)
thereafter, commencing on January 31,
2005 and on the last business day of each
month thereafter, equal monthly
installments of principal and interest
shall be paid in the amount of
$273,988.16 for each such month and (iv) on
June 1, 2008, the balance of the
principal and interest on the Loan equal to
$7,555,263.18 (PROVIDED, that if the
Maturity Date is extended pursuant to the
definition of "Maturity Date" herein,
the monthly installments under clause (iii)
above shall continue to be paid on
the last business day of each month after
May 30, 2008 until the extended
Maturity Date). Notwithstanding the
foregoing, on the earlier of (A) the
Maturity Date or (B) such earlier date on
which the Obligations are declared due
and payable pursuant to the terms of this
Agreement, the entire outstanding
principal amount of the Loan, together with
all accrued and unpaid interest
thereon, shall be due and payable. The
Debtors may prepay the Loan at any time
and from time to time in increments of
$100,000 without penalty or premium and
any such prepayments shall be applied to
reduce the scheduled installments
ratably against all scheduled installments.
No portion of the Loan may be
reborrowed once repaid. All payments of the
Obligations and other amounts set
forth on Section 17 hereof shall be made in
immediately available funds to
Secured Party per the wiring instructions
set forth on Schedule D hereto or
pursuant to such other instructions as
Secured Party shall provide to Debtors.
3
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INTEREST. AT SECURED PARTY'S OPTION,
INTEREST WILL ACCRUE ON THE UNPAID PORTION
OF PRINCIPAL OF THE LOAN HEREOF AND ALL
OTHER SUMS DUE FROM DEBTOR HEREUNDER AND
UNDER THE LOAN DOCUMENTS FOLLOWING THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT UNTIL THE DATE OF PAYMENT
IN FULL OF SUCH PRINCIPAL AND ALL OTHER SUMS
DUE HEREUNDER OR UNDER THE LOAN DOCUMENTS AT
A FIXED RATE OF 18% PER ANNUM (THE "Default
Rate"). INTEREST AT THE DEFAULT RATE WILL BE
COLLECTIBLE AS PART OF ANY JUDGMENT
HEREUNDER AND SECURED BY THE COLLATERAL.
DEBTORS ACKNOWLEDGE AND AGREE THAT THE
INCREASE IN THE INTEREST RATE AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT IS INTENDED TO COMPENSATE
SECURED PARTY FOR THE ADDED RISKS OF
MAINTAINING A DEFAULTED LOAN AND IS NOT
INTENDED AS A PREMIUM, PENALTY, LIQUIDATED
DAMAGES OR REIMBURSEMENT FOR INTERNAL OR
OUT-OF-POCKET COSTS ASSOCIATED THEREWITH.
ANY JUDGMENT OBTAINED HEREUNDER OR UNDER THE
LOAN DOCUMENTS WILL ACCRUE INTEREST AT THE
DEFAULT RATE UNTIL PAID.
SECURITY INTEREST IN COLLATERAL.
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The provisions under the Prior Financing
Documents granting liens and security
interests in the assets of Debtors are
hereby reaffirmed and shall be
incorporated into this Section 4 of this
Agreement by reference and such liens
and security interests in the assets
described in such Prior Financing Documents
shall continue to secure the Obligations
hereunder. Each Debtor party to any of
the Security Documents hereby reaffirms all
the security grants and obligations
of such Debtor under such Security
Documents which Security Documents shall
continue to remain in effect until all
Obligations are paid in full and this
Agreement is terminated. Each Debtor party
to any of the Security Documents
agrees, acknowledges and confirms with
Secured Party that the term "DVI
Indebtedness" as set forth in such Security
Documents shall include all
Obligations under this Agreement and the
term "Collateral" as defined in such
Security Documents shall secure the
Obligations under this Agreement.
4
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In addition to the foregoing, each Debtor
hereby grants and assigns a security
interest to Secured Party and its
successors and assigns in all the equipment
and other property of such Debtor described
in Schedule B attached to this
Agreement, and all substitutions, renewals
or replacements of and alterations,
additions or improvements, if any, to such
Collateral together with in each and
every case all proceeds thereof. Each
Debtor irrevocably authorizes Secured
Party(or its agent) to file at any time and
from time to time such financing
statements under the uniform commercial
code of any jurisdiction with respect to
the Collateral as Secured Party may require
and any amendments or continuations
thereto, in each case naming a Debtor, as
debtor, and Secured Party, as secured
party, under such financing statements,
amendments and continuations.
Each item of Collateral shall secure all
the Obligations and all other present
and future indebtedness or obligations of
Debtors to Secured Party of every kind
and nature whatsoever. Each Debtor warrants
and agrees that the Collateral will
be used primarily for business or
commercial purposes and that regardless of the
manner of affixation the Collateral shall
remain personal property and shall not
become part of the real estate. Each Debtor
agrees to keep the Collateral at the
locations of such Debtor set forth on
Schedule B and will not make any change in
the location of the Collateral without the
prior written consent of Secured
Party.
TIME IS OF THE ESSENCE; LATE CHARGES. TIME
IS OF THE ESSENCE IN THIS AGREEMENT AND IF
ANY SCHEDULED INSTALLMENT IS NOT PAID WITHIN
THE TEN (10) DAYS AFTER THE DUE DATE
THEREOF, SECURED PARTY SHALL HAVE THE RIGHT
TO ADD AND COLLECT, AND DEBTORS, JOINTLY AND
SEVERALLY, AGREE TO PAY, A LATE CHARGE ON
AND IN ADDITION TO, SUCH SCHEDULED
INSTALLMENT EQUAL TO FIVE PERCENT (5%) OF
SUCH SCHEDULED INSTALLMENT OR A LESSER
AMOUNT IF ESTABLISHED BY ANY STATE OR
FEDERAL STATUTE APPLICABLE THERETO.
5
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NO WARRANTIES. THIS AGREEMENT IS SOLELY A
FINANCING AGREEMENT. EACH DEBTOR
ACKNOWLEDGES THAT: THE COLLATERAL HAS BEEN
SELECTED AND ACQUIRED SOLELY BY SUCH DEBTOR
FOR SUCH DEBTOR'S PURPOSES; SECURED PARTY IS
NOT THE MANUFACTURER, DEALER, VENDOR OR
SUPPLIER OF SAID COLLATERAL; THE COLLATERAL
IS OF A SIZE, DESIGN CAPACITY, DESCRIPTION
AND MANUFACTURE SELECTED BY THE DEBTOR;
DEBTOR IS SATISFIED THAT THE COLLATERAL IS
SUITABLE AND FIT FOR ITS PURPOSES; AND
SECURED PARTY HAS NOT MADE AND DOES NOT MAKE
ANY WARRANTY OR REPRESENTATION WHATSOEVER,
EITHER EXPRESS OR IMPLIED AS TO THE FITNESS,
CONDITION, MERCHANTABILITY, DESIGN OR
OPERATION OF THE COLLATERAL, ITS FITNESS FOR
ANY PARTICULAR PURPOSE, THE VALUE OF THE
COLLATERAL, WORKMANSHIP IN THE COLLATERAL,
NOR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER. EACH DEBTOR ACKNOWLEDGES AND
AGREES THAT NEITHER THE MANUFACTURER,
VENDOR, A DEALER OR SUPPLIER, NOR ANY
SALESMAN, REPRESENTATIVE, OR OTHER AGENT OF
THE MANUFACTURER, DEALER, VENDOR OR
SUPPLIER, IS AN AGENT OF SECURED PARTY. NO
SALESMAN, REPRESENTATIVE OR AGENT OF THE
MANUFACTURER, DEALER VENDOR OR SUPPLIER IS
AUTHORIZED TO WAIVE OR ALTER ANY TERM OR
CONDITION OF THIS AGREEMENT AND NO
REPRESENTATION AS TO THE COLLATERAL OR ANY
OTHER MATTER BY ANY MANUFACTURER DEALER,
VENDOR OR SUPPLIER SHALL AFFECT ANY DEBTOR'S
DUTY TO PAY THE LOAN AND PERFORM THE OTHER
OBLIGATIONS AS SET FORTH IN THIS AGREEMENT.
6
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INSURANCE AND RISK OF LOSS. ALL RISK OF LOSS
OF, DAMAGE TO, OR DESTRUCTION OR THE
COLLATERAL SHALL AT ALL TIMES BE ON DEBTORS.
EACH DEBTOR WILL PROCURE FORTHWITH AND
MAINTAIN PROPERTY AND GENERAL LIABILITY
INSURANCE WITH EXTENDED OR COMBINED
ADDITIONAL COVERAGE ON THE COLLATERAL FOR
THE FULL INSURABLE VALUE THEREOF FOR THE
LIFE OF THIS AGREEMENT PLUS SUCH OTHER
INSURANCE AS SECURED PARTY MAY SPECIFY AND
PROMPTLY DELIVER EACH TO SECURED PARTY WITH
A STANDARD LONG FORM ENDORSEMENT ATTACHED
SHOWING LOSS PAYABLE TO SECURED PARTY OR
ASSIGNS AS RESPECTIVE INTERESTS MAY APPEAR.
SUCH POLICIES SHALL NAME EACH SUCH DEBTOR AS
OWNER OF THE COLLATERAL AND SECURED PARTY AS
INSURED OR LOSS PAYEE AS THE CASE MAY BE.
EACH INSURER SHALL AGREE BY ENDORSEMENT UPON
SUCH POLICY ISSUED BY IT OR BY INDEPENDENT
INSTRUMENT FURNISHED TO SECURED PARTY AND
EACH SUCH DEBTOR THAT IT WILL GIVE SECURED
PARTY AND SUCH DEBTOR THIRTY (30) DAYS
WRITTEN NOTICE BEFORE THE POLICY IN QUESTION
SHALL BE MATERIALLY ALTERED OR CANCELLED.
SECURED PARTY'S ACCEPTANCE OF POLICIES IN
LESSER AMOUNTS OR RISKS SHALL NOT BE A
WAIVER OF DEBTORS' FOREGOING OBLIGATION.
DEBTORS' REPRESENTATIONS AND WARRANTIES.
EACH DEBTOR REPRESENTS AND WARRANTS TO
SECURED PARTY AS FOLLOWS:
Such Debtor is a corporation fully
organized and existing under the laws of the
State of its incorporation without limit as
to the duration of its existence and
is authorized and in good standing to do
business in said State. Such Debtor has
corporate powers and adequate authority,
rights and franchises to own its own
property and to carry on its business as
now conducted, and is duly qualified
and in good standing in each state in which
the character of the properties
owned by it therein or the conduct of its
business makes such qualifications
necessary; and such Debtor has the
corporate power and adequate authority to
make and carry out this Agreement.
The execution, delivery and performance of
this Agreement are duly authorized
and do not, to the best of such Debtor's
knowledge, require the consent or
approval of any governmental body or other
regulatory authority; are not in the
contravention of or in conflict with any
law, regulation or any term or
provision of its articles or certificate of
incorporation, bylaws and this
Agreement is the valid, binding and legally
enforceable obligation of such
Debtor in accordance with its terms.
7
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The execution, delivery and performance of
this Agreement will not contravene or
conflict with any agreement, indenture or
undertaking to which such Debtor is a
party or by which it or any of its property
may be bound by or affected, and
will not cause any lien, charge or other
encumbrance to be created or imposed
upon any such property by-reason
thereof.
After giving effect to the releases
contemplated by Section 17(f) hereof, such
Debtor has good and valid title to its
Collateral which is free from, and will
be kept free from, all liens, claims,
security interests and encumbrances,
except for the security interest granted in
favor of Secured Party.
No financing statement covering the
Collateral listed on Schedule B hereto or
any proceeds thereof is on file in favor of
anyone other than Secured Party,
unless the lien evidenced by such financing
statement is subordinated to the
liens of Secured Party in a manner
acceptable to Secured Party.
All necessary action, including the filing
of UCC-1 Financing Statements, has
been taken in order to provide Secured
Party with a perfected security interest
in the Collateral.
Such Debtor (i) has obtained all material
permits, licenses and other
authorizations that are required under
Health Care Laws applicable to such
Debtor, (ii) is in compliance in all
material respects with all terms and
conditions of such required permits,
licenses and authorizations and (c) is in
compliance in all material respects with
all other limitations, restrictions,
conditions, standards, prohibitions,
requirements, obligations, schedules and
timetables contained in such Health Care
Laws.
DEBTORS' AGREEMENTS. EACH DEBTOR AGREES:
To defend at such Debtor's own cost and
expense any action, proceeding or claim
affecting the Collateral.
To promptly pay all Secured Party Expenses
upon demand by Secured Party.
To pay promptly all taxes, assessments,
license fees and other public or private
charges when levied or assessed against the
Collateral or this Agreement and
this obligation shall survive the
termination of this Agreement.
That if a certificate of title is required
or permitted by law, such Debtor
shall obtain such certificate with respect
to the Collateral, showing the
security interests of Secured Party thereon
and in any event do everything
necessary or expedient to preserve or
perfect the security interest of Secured
Party.
That such Debtor will not misuse, fail to
keep in good repair, secrete, or
without the prior written consent of
Secured Party and notwithstanding Secured
Party's claim to proceeds, sell, rent,
lend, encumber or transfer any of the
Collateral.
That Secured Party may enter upon such
Debtor's premises or wherever the
Collateral may be located at any reasonable
time to inspect the Collateral and
such Debtor's books and records pertaining
to the Collateral and such Debtor
shall assist Secured Party in making such
inspection.
8
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That the security interest granted by such
Debtor to Secured Party shall
continue effective irrespective of the
payment of the Obligations, so long as
there are any obligations of any kind,
including obligations under guaranties or
assignments, owed by any Debtor to Secured
Party.
Mark and identify the Collateral with all
information and such manner as Secured
Party may request from time-to-time and
replace promptly any such markings or
identification which are removed, de laced
or destroyed.
Indemnify and hold Secured Party harmless
from and against all claims, losses
liabilities (including negligence, tort and
strict liability), damages,
judgments, suits and all legal proceedings
and any and all costs and expense in
connection therewith (including attorney's
fees) arising out of or in any manner
connected with the manufacture, purchase,
financing, ownership, delivery,
rejection, nondelivery, possession use,
transportation storage operation,
maintenance, repair, return or other
disposition of the Collateral or with this
Agreement or any other Loan Documents
including, without limitation, claims for
injury to, or death of, persons and for
damage, to property, and
