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