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Exhibit 10.39
AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT
This AMENDMENT NO. 5 AND LIMITED WAIVER TO CREDIT AGREEMENT
(this
"Amendment"), dated as of February 22, 2008, 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 Credit Agreement dated as of November
15, 2006 (as
amended by that certain (i) Limited Waiver and Amendment No. 1
to Credit
Agreement dated as of April 5, 2007, (ii) Amendment No. 2 to
Credit Agreement
dated as of May 30, 2007, (iii) Amendment No. 3 to Credit
Agreement dated as of
August 23, 2007 and (iv) Amendment No. 4 to Credit Agreement
dated as of
December 3, 2007, and as further amended, supplemented, restated
or otherwise
modified from time to time, the "Credit Agreement"); and
WHEREAS, the Borrowers, Agent, Requisite Lenders and the
Supermajority
Revolving Lenders have agreed to the amendments and limited
waiver 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:
1. Amendments to Credit Agreement.
(a) Amendment to Section 1.1(a). Section 1.1(a) of the
Credit Agreement is hereby amended by amending and restating the
third and
fourth sentence therein to read in their entirety as
follows:
"Amounts borrowed under this subsection (a) are collectively
referred to as the "Initial Term Loan B and together with
any
Incremental Term Loan (as defined below), the "Term Loan B"."
Borrower
shall repay the Initial Term Loan B through periodic payments on
the
dates and in the amounts indicated below (together with any
scheduled
payments of the Incremental Term Loan, "Scheduled
Installments")."
(b) Amendment to Section 1.1. Section 1.1 of the Credit
Agreement is hereby amended by inserting the following new
clause (g):
"(g) Incremental Loans.
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(i) Borrower may make up to five requests for an incremental
term loan (the "Incremental Term Loan") or incremental revolving
loan
(the "Incremental Revolving Loan"), each such request being for
at
least $5,000,000, and in an aggregate amount not to exceed
$40,000,000
for all such requests pursuant to delivery of a written request
from
the Borrower to the Agent. Each such notice shall specify the
date (an
"Increase Effective Date") on which the Borrower proposes that
the
increased or new Commitments shall be effective, which date
shall be a
date not less than ten (10) Business Days after such request
is
delivered to the Agent. The increased or new Commitments shall
become
effective on the applicable Increase Effective Date as long as
each of
the following conditions have been met:
(A) no Default or Event of Default has occurred or is
continuing or would result after giving effect to such
Incremental Term
Loan or Incremental Revolving Loan;
(B) (1) the maturity date of any Incremental Term
Loan, the weighted average life of any Incremental Term Loan,
the
effective yield to the Lenders under such Incremental Term
Loan
(including interest, fees received ratably by such Lenders and
original
issue discount) shall be the same as the Initial Term Loan B,
as
applicable, at the time such Incremental Term Loan is funded and
(2)
any Incremental Revolving Loan shall become part of the
Revolving Loans
with the same maturity, interest, fees and terms as the
Revolving
Loans;
(C) the Borrower has provided evidence reasonably
satisfactory to the Agent that the Borrower would have been
in
compliance with the financial covenants set forth in Section 6
assuming
that the Incremental Term Loan or Incremental Revolving Loan,
as
applicable, had been incurred on the last day of the then most
recently
completed Fiscal Quarter; and
(D) the Agent shall have received amendments to this
Agreement and the Loan Documents, joinder agreements for any
new
Lenders, and all other promissory notes, agreements, documents
and
instruments reasonably satisfactory to the Agent in its
reasonable
discretion evidencing and setting forth the conditions of
the
Incremental Term Loan or Incremental Revolving Loan, as
applicable.
(ii) Each Lender which (a) holds a Term Loan B on the date
the
Borrower delivers a written request to the Agent for a
Incremental Term
Loan or a Revolving Loan on the date the Borrower delivers a
written
request to the Agent for an Incremental Revolving Loan and (b)
notifies
the Agent in writing within five (5) days of receipt of written
notice
from the Agent that Borrower has requested an Incremental Term
Loan or
Incremental Revolving Loan, as applicable, shall have the right
to fund
its pro rata share of the Incremental Term Loan or
Incremental
Revolving Loan, as applicable, based upon its share of the Term
Loan B
Commitment or the Revolving Loan Commitment, as applicable,
as
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of the date the Agent originally received the applicable notice
from
the Borrower. Notwithstanding anything contained herein or
otherwise to
the contrary, no Lender shall have any obligation to fund all or
any
portion of, or participate in, the Incremental Term Loan or
the
Incremental Revolving Loan. Amounts of the Incremental Term Loan
which
are repaid may not be reborrowed.
(iii) On any Increase Effective Date on which Incremental
Revolving Loans are effected, subject to the satisfaction of
the
foregoing terms and conditions, (A) each of the Lenders with
Revolving
Loan Commitments shall assign to each Lender with an
Incremental
Revolving Loan (each, an "Incremental Revolving Loan Lender")
and each
of the Incremental Revolving Loan Lenders shall purchase from
each of
the Lenders with Revolving Loan Commitments, at the principal
amount
thereof (together with accrued interest), such interests in
the
Revolving Loans on such Increase Effective Date as shall be
necessary
in order that, after giving effect to all such assignments
and
purchases, such Revolving Loans will be held by existing Lenders
with
Revolving Loan and Incremental Revolving Loan Lenders ratably
in
accordance with their Revolving Loan Commitments after giving
effect to
the addition of such Incremental Revolving Loans to the
Revolving Loan
Commitments, (B) each Incremental Revolving Loan shall be deemed
for
all purposes a Revolving Loan Commitment and each Loan made
thereunder
shall be deemed, for all purposes, a Revolving Loan and (C)
each
Incremental Revolving Loan Lender shall become a Lender with
respect to
the Revolving Loan Commitment and all matters relating
thereto.
(iv) On any Increase Effective Date on which Incremental
Term
Loans are effected, subject to the satisfaction of the foregoing
terms
and conditions, (A) each Lender with an Incremental Term Loan
(each, an
"Incremental Term Loan Lender") shall make a Loan to the
Borrower in an
amount equal to the amount of the Incremental Term Loan such
Lender has
committed to fund and (B) each Incremental Term Loan Lender
shall
become a Lender hereunder with respect to the Incremental Term
Loan.
Amounts of the Incremental Term Loan repaid may not be
reborrowed.
(v) Each of the Borrower, Lenders and Agent acknowledges and
agrees that an Incremental Term Loan or Incremental Revolving
Loan (and
related amendments and documents described in clause (iv)
above)
meeting the conditions set forth in this Section 1.1(g) shall
not
require the consent of any Lender other than those Lenders, if
any,
which have agreed to participate in the Incremental Term Loan or
the
Incremental Revolving Loan, as applicable."
(c) Amendment to Section 1.2(a). Section 1.2(a) of
the Credit Agreement is hereby amended by (i) replacing each
occurrence of the
term "2.00%" with the term "3.25%" and (ii) replacing each
occurrence of the
term "3.50%" with the term "4.25%" therein.
(d) Amendment to Section 1.3(a). Section 1.3(a) of
the Credit Agreement is hereby amended and restated to read in
its entirety as
follows:
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"Fee Letter. Borrower shall pay to GE Capital, individually,
the Fees specified in that certain fee letter dated as of June
27, 2006
among Borrower and GE Capital, as supplemented by that
certain
Supplemental Fee Letter dated as of the Amendment No. 3 Closing
Date
and as supplemented by that certain Supplemental Fee Letter
dated as of
the Amendment No. 5 Closing Date (collectively, the "GE Capital
Fee
Letter"), at the times specified for payment therein."
(e) Amendment to Section 1.5(d). Section 1.5(d) of
the Credit Agreement is hereby amended and restated to read in
its entirety as
follows:
"Prepayments from Issuance of Securities; Segregated
Account.
Immediately upon the receipt by Holdings, Borrower or any of
its
Subsidiaries of the proceeds of the issuance of Stock, Borrower
shall
prepay the Loans in an amount equal to fifty percent (50%) of
such
proceeds, net of underwriting discounts and commissions and
other
reasonable out-of-pocket costs associated therewith. The
payments shall
be applied in accordance with Section 1.5(e). Notwithstanding
the
foregoing, the following proceeds of stock issuance shall be
excluded
from any mandatory prepayment: (i) proceeds of issuances of
Stock by
Holdings or Borrower on or prior to the Closing Date, (ii)
proceeds of
issuances of Stock of Holdings (and options and warrants for
the
issuance of Stock of Holdings) to employees and directors of
Holdings,
Borrower or Beverly and proceeds from the exercise of options
and
warrants by employees and directors and (iii) proceeds of
issuances of
Stock by any Subsidiary of Borrower to Borrower which
constitutes an
Investment permitted hereunder. On the one hundred twentieth
day
following (i) the Amendment No. 5 Closing Date, the Borrower
shall
prepay the Loans, in accordance with Section 1.5(e), in an
amount equal
to 100% of the remaining funds in the Segregated Account which
were
deposited in the Segregated Account on the Amendment No. 5
Closing Date
and have not been used to pay the purchase price of the
Strategic
Initiatives and (ii) the date on which any additional funds
are
deposited into the Segregated Account, the Borrower shall prepay
the
Loans, in accordance with Section 1.5(e), in an amount equal to
100% of
the remaining funds in the Segregated Account which were
deposited on
such date and have not been used to pay the purchase price of
the
Strategic Initiatives."
(f) Amendment to Section 3.25. Section 3.25 of the
Credit Agreement is hereby amended and restated to read in its
entirety as
follows:
"3.25 Segregated Account. As of the Amendment No. 5 Closing
Date,
Borrower has deposited into deposit account number 112813519 at
City
National Bank $17,271,000 ("Segregated Account") which (i) funds
(along
with any additional funds deposited into the Segregated Account
within
forty-five (45) days of the Amendment No. 5 Closing Date) will
be used
solely to (A) pay for Strategic Initiatives approved in writing
by the
Agent or (B) repay Loans hereunder as required by Section 1.5(d)
and
(ii) will be subject to a Control Agreement. The Agent shall
have sole
dominion and control of the Segregated Account and shall
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withdraw funds therefrom (i) upon the written request of the
Borrower,
to pay for Strategic Initiatives approved in writing by the
Agent or
(ii) to repay Loans as required by Section 1.5(d) (and the
Borrower
hereby acknowledges that the Agent may, without notice to the
Borrower,
withdraw funds from the Segregated Account for the purposes set
forth in
this sentence)."
(g) Amendment to Section 5.1(f). Section 5.1(f) of
the Credit Agreement is hereby amended by replacing the amount
"$20,000,000"
which appears therein with "$25,000,000". (h) 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
$20,000,000 and the sum of such amounts payable in connection
with all
Permitted Acquisitions shall not exceed $100,000,000, and the
portion
thereof allocable to goodwill and intangible assets for all
such
Permitted Acquisitions during the term hereof shall not
exceed
$60,000,000."
(i) 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"):
Period Maximum Capital
Expenditures per Period
Fiscal Year 2007 $42,000,000
Fiscal Year 2008 and $50,000,000
each Fiscal Year 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; provided further
that
(i) the Capex Limit for Fiscal Year 2008 shall be reduced by
the
positive difference, if any, between (A) the actual amount
of
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Capital Expenditures expended during Fiscal Year 2007 minus (B)
the
Capex Limit for Fiscal Year 2007 and (ii) that the Capex Carry
Over
Amount for any Fiscal Year shall not exceed $10,000,000."
(j) Amendment to Section 6.1(c). Section 6.1(c) of
the Credit Agreement is hereby amended and restated to read in
its
entirety as follows:
"Minimum Fixed Charge Coverage Ratio. Holdings and its
Subsidiaries shall have on a consolidated basis at the end of
each
Fiscal Quarter set forth below, a Fixed Charge Coverage Ratio
for the
12-Fiscal Month period then ended of not less than the
following:
1.20 for the Fiscal Quarters ending December 31, 2006 and
March 31, 2007;
1.15 for the Fiscal Quarter ending June 30, 2007;
1.10 for each Fiscal Quarter ending after June 30, 2007
but on or prior to December 31, 2011; and
1.20 for each Fiscal Quarter ending thereafter."
(k) Amendment to Section 6.1(e). Section 6.1(e) of
the Credit Agreement is hereby amended and restated to read in
its
entirety as follows:
"Maximum Leverage Ratio. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter
set
forth below, a Leverage Ratio as of the last day of such Fiscal
Quarter
and for the 12-Fiscal Month period then ended, of not more than
the
following:
4.35 for the Fiscal Quarters ending December 31, 2006,
2006 and March 31, 2007;
4.70 for the Fiscal Quarter ending June 30, 2007; 4.80 for
the Fiscal Quarter ending September 30, 2007;
5.00 for the Fiscal Quarters ending December 31, 2007,
March 31, 2008, June 30, 2008 and September 30, 2008;
4.75 for the Fiscal Quarters ending December 31, 2008 and
March 31, 2009;
4.50 for the Fiscal Quarter ending June 30, 2009 and
September 30, 2009;
4.25 for the Fiscal Quarters ending December 31, 2009,
March 31, 2010 and June 30, 2010;
4.00 for the Fiscal Quarters ending September 30, 2010 and
December 31, 2010;
3.25 for the Fiscal Quarters ending March 31, 2011, June
30, 2011, September 30, 2011 and December 31, 2011;
and
3.00 for the Fiscal Quarter ending March 31, 2012 and for
each Fiscal Quarter ending thereafter."
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(l) Amendment to Section 6.1(f). Section 6.1(f) of
the Credit Agreement is hereby amended and restated to read in
its
entirety as follows:
"Maximum Senior Leverage Ratio. Holdings and its
Subsidiaries
on a consolidated basis shall have, at the end of each Fiscal
Quarter
set forth below, a Senior Leverage Ratio as of the last day of
such
Fiscal Quarter and for the 12-Fiscal Month period then ended, of
not
more than the following:
2.85 for the Fiscal Quarter ending December 31, 2006;
2.85 for the Fiscal Quarter ending March 31, 2007;
2.95 for the Fiscal Quarter ending June 30, 2007;
3.00 for the Fiscal Quarter ending September 30, 2007;
3.15 for the Fiscal Quarters ending December 31,
2007, March 31, 2008, June 30, 2008, September 30,
2008 and December 31, 2008;
3.00 for the Fiscal Quarters ending March 31, 2009, June
30, 2009, September 30, 2009 and December 31, 2009;
2.75 for the Fiscal Quarters ending March 31, 2010, June
30, 2010, September 30, 2010 and December 31, 2010;
and
2.50 for the Fiscal Quarter ending March 31, 2011 and for
each Fiscal Quarter ending thereafter."
(m) Amendment to Section 6.2(a)(i). Section 6.2(a)(i)
of the Credit Agreement is hereby amended and restated to read
in its entirety
as follows:
"As soon as available and in any event within forty-five
(45)
days (or if Holdings files an extension with the Securities
& Exchange
Commission, fifty (50) days; provided, that Borrower has given
Agent a
written explanation forty- five (45) days after the end of
the
applicable Fiscal Quarter of Holdings, in form and substance
reasonably
acceptable to Agent, regarding the need for such extension)
after the
end of each Fiscal Quarter (excluding the last Fiscal Quarter
of
Holdings' Fiscal Year), Borrower will deliver (1) the
consolidated and
consolidating balance sheets of Holdings and its Subsidiaries,
as at
the end of such quarter, and the related consolidated and
consolidating
statements of income, stockholders' equity and cash flow for
such
Fiscal Quarter and for the period from the beginning of the
then
current Fiscal Year of Holdings to the end of such Fiscal
Quarter, (2)
a report setting forth in comparative form the corresponding
figures
for the corresponding periods of the previous Fiscal Year and
the
corresponding figures from the most recent Projections for the
current
Fiscal Year delivered pursuant to Section 6.2(h) and (3) a
schedule of
the outstanding Indebtedness for borrowed money of Holdings and
its
Subsidiaries describing in reasonable detail
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each such debt issue or loan outstanding and the principal
amount and
amount of accrued and unpaid interest with respect to each such
debt
issue or loan."
(n) Amendment to Section 6.2(d). Section 6.2(d) of
the Credit Agreement is hereby amended by replacing the term
"Fiscal Quarter"
with the term "Fiscal Month" therein.
(o) Amendment to Section 8.2(m). Section 8.2(m) of
the Credit Agreement is hereby amended by adding "AND (E)
AUTHORIZES AND
INSTRUCTS THE AGENT ON ITS BEHALF TO ENTER INTO THE FIRST
AMENDMENT TO
INTERCREDITOR AGREEMENT AS FIRST LIEN AGENT (AS DEFINED THEREIN)
AND ON BEHALF
OF SUCH LENDER" after clause (D) in the first sentence
thereof.
(p) Amendment to Section 9.2(b). Section 9.2(b) of
the Credit Agreement is hereby amended by inserting the
following sentence after
the third sentence therein: "No amendment, modification,
termination or waiver
of or consent with respect to any provision of any Loan Document
appropriate (as
reasonably determined by the Agent) to evidence or implement an
Incremental
Revolving Loan or Incremental Term Loan, shall be effective
unless the same
shall be in writing and signed by Agent, Borrower, and any
Incremental Revolving
Loan Lender or Incremental Term Loan Lender, as applicable;
provided, however,
that any amendment to Section 1.1(g) shall require the written
consent of the
Required Lenders."
(q) Amendments to Annex A. Annex A of the Credit
Agreement is hereby amended by inserting the following defined
terms in their
appropriate alphabetical order:
(1) "Amendment No. 5 Closing Date" means
February 22, 2008."
(2) "Delaware Imaging" means Delaware
Imaging Partners, Inc., a Delaware
corporation.
(3) "First Amendment to Intercreditor
Agreement" means that certain First
Amendment to Intercreditor Agreement, dated
February 22, 2008, among the Agent, the
Second Lien Agent and the Credit Parties.
(4) "Increase Effective Date" has the
meaning ascribed to it in Section 1.1(g).
(5) "Incremental Revolving Loan" has the
meaning ascribed to it in Section 1.1(g).
(6) "Incremental Revolving Loan Lender" has
the meaning ascribed to it in Section
1.1(g).
(7) "Incremental Term Loan" has the meaning
ascribed to it in Section 1.1(g).
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(8) "Incremental Term Loan Lender" has the
meaning ascribed to it in Section 1.1(g).
(9) "New Imaging Center" means, as of any
date of determination, any new imaging
center which has been open for business for
less than (12) months.
(10) "New Imaging Center EBITDA" means with
respect to any New Imaging Center for any
period (a "Measurement Period"), the product
of (I) the "center level profit or loss" of
such New Imaging Center determined in
accordance with GAAP for the period (the
"Annualization Period") from and including
the date such New Imaging Center opened
through and including the last day of the
Measurement Period multiplied by (II) a
number obtained by dividing 365 by the
number of days in the Annualization Period.
(r) Amendments to Annex A.
(1) Annex A of the Credit Agreement is
hereby amended by amending and restating the
following definitions to each read in its
entirety as follows:
"Lenders means GE Capital, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall
decide
to assign all or any portion of the Obligations, such term
shall
include any assignee of such Lender, and any other financial
institution that becomes a party hereto by execution of a
joinder
agreement in connection with any Incremental Term Loans or
Incremental
Revolving Loans and any assignee of such Lender."
"Revolving Loan Commitment means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of
Revolving
Credit Advances or incur its Pro Rata Share of Letter of
Credit
Obligations (including, in the case of the Swing Line Lender,
its
commitment to make Swing Line Advances as a portion of its
Revolving
Loan Commitment) as set forth on Annex B (as supplemented by
Supplemental Annex B to the Agreement) or in the most recent
Assignment
Agreement, if any, executed by such Lender and, if applicable,
the
commitment of such Lender to make Incremental Revolving Loans,
which
commitment is in the amount set forth in the applicable
joinder
agreement, or in the most recent Assignment Agreement, if any,
executed
by such Lender and (b) as to all Lenders, the aggregate
commitment of
all Lenders to make the Revolving Credit Advances (including, in
the
case of the Swing Line Lender, Swing Line Advances) or incur
Letter of
Credit Obligations, which aggregate commitment shall be
FIFTY-FIVE
MILLION DOLLARS ($55,000,000) on the Amendment No. 3 Closing
Date, as
such amount may be adjusted, if at all, from time to time in
accordance
with the Agreement."
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"Term Loan B Commitment means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of the Term
Loan B
(as set forth on Annex B (as supplemented by Supplemental Annex
B)) in
the maximum aggregate amount set forth in Section 1.1(a) or in
the most
recent Assignment Agreement, if any, executed by such Lender and
the
commitment of such Lender to make Incremental Term Loans,
which
commitment is in the amount set forth in the applicable
joinder
agreement, or in the most recent Assignment Agreement, if any,
executed
by such Lender and (b) as to all Lenders, the aggregate
commitment of
all Lenders to make the Term Loan B. The Term Loan B Commitment
with
respect to each Term Loan B shall reduce automatically by the
amount
prepaid or repaid in respect of such Term Loan B (but solely by
the
amount of such prepayment or repayment allocable to a Lender,
for
purposes of clause (a) of this definition)."
(2) Annex A of the Credit Agreement is
hereby amended by replacing the phrase
"Telerate Page 3750" with the phrase
"Reuters Screen LIBOR01 Page" in the
definition of "LIBOR Rate" therein.
(s) Amendment to Annex F. Annex F is hereby replaced
with the revised Annex F attached as Annex F to this Amendment.
(t) 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, and 5.2, to the Credit Agreement is hereby replaced
with the
applicable Schedule attached hereto.
(u) Schedule II to Exhibit 6.2(d) is hereby amended
and restated to read in its entirety as set forth on Schedule II
to Exhibit
6.2(d) attached hereto.
(v) Omnibus Amendment to Credit Agreement. Each
reference in the Credit A
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