Once RadNet uses up the maximum amount of first-lien debt (FLD), should the company choose second-lien debt (bank debt) or public high-yield (HY) debt to finance the acquisition? Discuss the pros and cons associated with each option

Exhibit 10 RADNET, INC.: FINANCING AN ACQUISITION Middle Market Health Care Company Comparables (in millions of dollars) Rating Senior Secured Term Loan (Senior Secured) Company Transaction S&P/Moody's Date Total Deal Size Amount Term (Yr) Pricing (L+) Amount Second-Lien Loan Term (Yr) Pricing Non-Call (L+) Period Company Financials Sales Credit Statistics ( EBITDA) EBITDA First-Lien Second-Lien Total Leverage Leverage Leverage (Yr) TLC Health Care May-06 B-/B2 $170.0 $120.0 6.0 L+300 $50.0 7.0 L+700 Quintiles Apr-06 BB-/B1 $1,220.0 $1,000.0 7.0 L+225 $220.0 8.0 L+400 $309.9 $32.2 $1,104.7 $256.8 3.7x 5.3x 5.3x 3.9x 4.8 4.8 Angiotech Apr-06 BB-/Ba3 $600.0 $350.0 7.0 L+150 $250.0 8.0 L+775 $375.0 $165.0 2.1x 3.6x 3.6x Beverly Apr-06 B+/B1 $450.0 $350.0 5.0 L+275 $100.0 5.5 L+775 $1,822.0 $135.7 2.6x 3.3 3.3x Matria Healthcare Jan-06 BB-/B- $330.0 $245.0 6.0 L+225 $85.0 6.5 L+675 $440.0 $96.0 2.6x 3.5x 3.5x