EXHIBIT 10.1
SETTLEMENT AND COMPROMISE AGREEMENT
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This Settlement, Release and Compromise Agreement (this "Agreement") is
made this 15th day of March, 2004, by and among Radnet Management, Inc. and its
Related Parties (1) (the "Company"), DVI Financial Services Inc. ("DVIFS"), DVI,
Inc. ("DVI"); DVI Business Credit Corporation ("DVIBC"), the Equipment
Corporations as defined herein, U.S. Bank, National Association ("USBNA"), Lyon
Financial Services, Inc. d/b/a/ US Bank Portfolio Services ("USBPS") (USBNA and
USBPS shall be collectively referred to herein as "USB") and certain limited
liability company affiliates of DVIFS and DVIBC commonly known as the Special
Purpose Vehicles(2) (the "SPVs").
RECITALS
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A. On August 25, 2003, DVIFS, DVI and DVIBC (the "Debtors") voluntarily
filed petitions for reorganization with the United States Bankruptcy Court for
the District of Delaware ("Bankruptcy Court") under chapter 11 of the Bankruptcy
Code, 11 U.S.C. ss. 101, et sec. ("Bankruptcy Code");
B. The Debtors are debtors and debtors-in-possession in
jointly-administered chapter 11 cases (the "Bankruptcy Cases") pending before
the Bankruptcy Court;
C. The Company, DVIFS and DVIBC entered into various lease, loan and
other financial accommodation agreements as set forth by affiliate name and
contract number on Exhibit "A" attached hereto (the "Financing Agreements"). The
Financing Agreements entered into between DVIFS and the Company shall be
referred to herein as the "DVIFS Contracts." The Financing Agreements entered
into between DVIBC and the Company shall be referred to herein as the "DVIBC
Contracts." The DVIFS Contracts and the DVIBC Contracts shall be collectively
referred to herein as the "DVI Contracts";
D. DVIFS and DVIBC have transferred their rights and interests to
certain of the Financing Agreements to the SPVs. The Financing Agreements which
have been transferred to the SPVs shall be referred to herein as the "SPV
Contracts." In addition, DVIFS has assigned equipment relating to the SPV
Contracts to certain affiliated corporations (the "Equipment Corporations").(3)
USBNA is the trustee for the note holders (the "Noteholders") pursuant to
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(1) The Related Parties are Howard G. Berger, Fran Renee Berger, Antelope
Valley MRI, Antelope Valley Imaging, Diagnostic Imaging Services, Inc.,
Healthcare Imaging Center, Imaging Center of La Habra, Medical Diagnostic
Imaging, Oncology Services, Radnet Management I, Inc. Radnet Management II,
Inc., Radnet Sub, Inc., San Gabriel Imaging Center, Santa Rosa Imaging, Socal MR
Site Management, Inc., North County Imaging, Stockton Imaging, Temecula Valley
Imaging Center, Tower Imaging, Beverly Radiology Group, Beverly Radiology Group
II, Beverly Radiology Group III and Primedex Health Systems, Inc.
(2) The Special Purpose Vehicles are DVI Business Credit Receivable Corporation
III, DVI Receivables LLC III, DVI Receivables LLC VIII, DVI Receivables LLC X,
DVI Receivables LLC XI, DVI Receivables LLC XII, DVI Receivables LLC XIV, DVI
Receivables LLC XV, DVI Receivables LLC XVI, DVI Receivables LLC XVII, DVI
Receivables LLC XVIII, DVI Receivables LLC XIX, DVI Receivables LLC XV, DVI
Funding, LLC.
(3) The Equipment Corporations are DVI Receivables Corporation III, DVI
Receivables Corporation VIII, DVI Receivables Corporation X, DVI Receivables
Corporation XI, DVI Receivables Corporation XII, DVI Receivables
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certain Indentures and Amended and Restated Indentures between USBNA and the
Debtors and their related entities concerning the SPV Contracts and is also the
sub-servicing agent, trustee, and/or collateral agent of certain collateral
securing certain of the Financing Agreements (the "Trustee"). USBPS is the
servicing agent and attorney-in-fact of the SPV Contracts (the "Servicing
Agent");
E. DVIFS has retained ownership of certain of the Financial Agreements
that were not been transferred to the SPVs (the "Owned Contracts");
F. The Owned Contracts and the SPV Contracts shall be referred to
herein as the "Contracts";
G. USB's participation in this Agreement is limited solely to its
capacity as Trustee and as Servicing Agent, and this Agreement shall not be
construed to bind or affect USB in any other way;
H. The parties have agreed to compromise the Company's payment
obligations under the DVIFS Contracts. The parties have agreed to treat this
compromise as if the payment provided for herein satisfies the Company's payment
obligations under the DVIFS Contracts;
I. As a condition of this compromise, the Company has agreed to payoff
on the Effective Date as defined herein the full balance owed on the DVIBC
Contracts as of the Effective Date;
J. Upon the terms and subject to the conditions set forth herein and
pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure ("Bankruptcy
Rules"), the parties and the Company desire to enter into this Agreement
providing for the full and final satisfaction of any and all indebtedness of the
Company to the Debtors or the SPVs with regard to the Contracts upon the Payment
of Seventy-Two Million, Seven Hundred Thousand Dollars ($72,700,000) as more
specifically adjusted herein in immediately available funds and other
consideration as set forth in detail herein, the "Transaction"); and
K. The parties recognize that time is of the essence and desire to
consummate the Transaction as promptly as practicable on the Effective Date. The
parties anticipate closing upon the Transaction on or before April 30, 2004.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth in this Agreement, and for other
good and valuable
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Corporation XIV, DVI Receivables Corporation XVI, DVI Receivables Corporation
XVII, DVI Receivables Corporation XVIII, DVI Receivables Corporation XIX, DVI
Receivables Corporation XV. The Equipment Corporations join this Agreement for
the sole purpose of conveying title to the equipment on an "as is, whereas"
basis.
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consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. INCORPORATION OF RECITALS. The foregoing Recitals are incorporated
herein by reference.
2. PAYOFF CONSIDERATION. On the Effective Date, in consideration of the
full and final satisfaction the Company's payment obligations under the
Contracts, the Company shall (a) pay to the Debtors and/or USB as Servicing
Agent, in immediately available funds, an aggregate amount equal to Seventy-Two
Million, Seven Hundred Thousand Dollars ($72,700,000) (the "Payoff
Consideration"). Notwithstanding the foregoing, the Payoff Consideration shall
be (a) increased, dollar for dollar, by the amount, if any, that the outstanding
balance of the DVIBC Contracts as of 12:01 a.m. eastern time on the Effective
Date (the "DVIBC Balance") exceeds $4,400,000; and (b) decreased, dollar for
dollar, by the amount, if any, that the DVIBC Balance is less than $4,400,000.
Payment of the Payoff Consideration shall be made by wire transfer(s) in
accordance with the instructions set forth on Schedule I attached hereto (the
"Wire Instructions"). The Payoff Consideration shall be split between the
parties as set forth on Schedule II hereto.
3. THIRD PARTY CLAIMS. On or prior to the Effective Date, the Company
shall satisfy all claims of third parties (the "Third Party Claims") related to
any of the Contracts which have not been fully funded by DVIFS or DVIBC (the
"Third Party Claims"). The Company's obligations herein include the obligation
to effectuate the withdraw or reduction of any proof of claim filed in the
Bankruptcy Cases by any party asserting a Third Party Claim. The reduction of
any proof of claim as contemplated herein shall be made to the extent of the
applicable Third Party Claim. The Company will not be obligated to effectuate a
reduction in any proof of claim for portions of said claim which do not relate
to the Contracts. Notwithstanding the foregoing, the Company will not be
obligated to pay more than four hundred and fifty thousand dollars ($450,000) in
aggregate with regard to the Third Party Claims.
4. CONDITION PRECEDENT TO THE OBLIGATIONS OF THE DEBTORS AND USB. The
obligations of Debtors and USB contained herein are contingent upon the
following:
a) On the Effective Date, the Company must pay the Payoff
Consideration;
b) Prior to the Effective Date, the Company must satisfy the
Third Party Claims;
c) The Company must deliver to the Debtors documents reasonably
satisfactory to the Debtors effectuating the waiver,
withdrawal, reduction or satisfaction of the Third Party
Claims;
d) The representations and warranties of the Company contained
herein, are true and correct and reaffirmed by the Company on
the Effective Date;
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e) The Person executing this Agreement on behalf of the Company
and the Related Parties must be duly authorized and empowered
to execute this Agreement on behalf of the Company and the
Related Parties;
f) The Equipment Corporations and/or DVIFS shall upon closing,
assign any rights, title or interest they may have in the
equipment related to the Financing Agreements to the Company
by way of quit claim without any representation or warranty.
5. TERMINATION OF CONTRACTS. Upon the complete performance of the
conditions set forth in paragraph 4 above, the Debtors and USB hereby
acknowledge and agree that the Company's payment obligations under each of the
Contracts will be fully satisfied.
6. EFFECTIVE DATE. The Transaction shall be effective upon the date
(the "Effective Date") that all of the following have occurred:
(a) all of the parties hereto execute this Agreement;
(b) the Payoff Approval Order shall have been entered and
shall be final, in full force and effect, and shall provide that the Debtors are
authorized and, subject to the conditions set forth in this Agreement, directed
to enter into the transactions contemplated by this Agreement and to execute and
deliver all documents and perform all acts necessary or appropriate to
effectuate the Transaction with the Company;
(c) the ten-day period for filing a notice of appeal with
respect to the Payoff Approval Order under Rule 8002(a) of the Bankruptcy Rules
has passed and no appeal has been. filed or extension of the appeal period
pursuant to Bankruptcy Rule 8002(b) has occurred; and
(d) All other conditions set forth in this Agreement have been
satisfied.
7. RELEASES.
(a) COMPANY RELEASE. In connection with and as a condition to the
consummation of the Transaction, and as a material inducement to the Debtors,
the SPVs and USB to agree to the Transaction, the Company releases and forever
discharges, effective upon the delivery of the Payoff Consideration as provided
for herein, the Debtors, the SPVs, USB, the Noteholders and their respective
Affiliates and each of their respective officers, directors, managers, members,
agents, employees, attorneys, predecessors, shareholders, successors and assigns
(collectively, the "Released Parties") from any and all causes of action,
claims, suits, claims for sums of money, contracts, controversies, agreements,
costs, damages, judgments, disputes and demands whatsoever, whether in law or
equity, of the Company against, with respect to or involving any of the Released
Parties, whether known or unknown, foreseen or unforeseen, which the Company may
have or have had or may in the future have against any of the Released Parties
arising under, or with respect to the Contracts. Notwithstanding the foregoing,
nothing contained herein shall be construed as effectuating a release on any
claim arising under or related to this Agreement.
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(b) DEBTORS', SPVS, AND USB RELEASE. In connection with and as a
condition to the consummation of the Transaction, and as a material inducement
to the Company to agree to the Transaction, the Debtors, the SPVs and USB,
solely in its capacity as Trustee and Servicing Agent of the SPV Contracts,
release and forever discharge, effective upon the delivery of the Payoff
Consideration as provided for herein, the Company and its Affiliates and their
respective officers, directors, managers, members, agents, employees, attorneys,
predecessors, shareholders, successors and assigns (collectively, the "Company
Released Parties") from any and all causes of action, claims, suits, claims for
sums of money, contracts, controversies, agreements, costs, damages, judgments,
disputes and demands whatsoever, whether in law or equity, of the Company
against, with respect to or involving any of the Company Released Parties,
whether known or unknown, foreseen or unforeseen, which the Debtors, the SPVs
and USB solely in its capacity as Trustee and Servicing Agent of the SPV
Contracts may have or have had or may in the future have against any of the
Company Released Parties and arising under, or with respect to the Contracts.
Notwithstanding the foregoing, nothing contained herein shall be construed as
effectuating a release on any claim arising under or related to this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Debtors, the SPVs and USB and each Affiliate
thereof that upon execution of this Agreement:
(a) it has full power and authority to execute and deliver this
Agreement;
(b) this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against it in
accordance with its terms;
(c) the Contracts are the only indebtedness owed by it to the
Debtors, the SPVs and/or any Affiliates of thereof;
(e) it is the owner of all claims that are covered by this
Agreement that have been or may be asserted by it and that are
released hereby and that it has not assigned or otherwise
transferred and will not assign or otherwise transfer any such
claims to any other Person;
(f) no person or entity other than the Company, its successors or
assigns has any interest in the claims, obligations, actions,
demands, rights, costs, expenses, compensation, or causes of
action for damages or other relief referred to in this
Agreement;
(g) no further consents, approvals or orders of any kind or nature
are required to make this Agreement complete, final and
binding other than entry of the Payoff Approval Order; and
(h) it has cash available on hand, or will have permitted
borrowing capacity under facilities or equity or debt based
financing commitments that together are sufficient to enable
it to deliver the Payoff Consideration and other consideration
described herein at the Effective Date
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(i) the Person executing this Agreement is the duly authorized
representative of the Company with full power and authority to
enter into this Agreement and bind the Company.
9. REPRESENTATIONS AND WARRANTIES OF DEBTORS, THE SPVS AND USB AS
TRUSTEE AND AS SERVICING AGENT OF THE SPV CONTRACTS. The Debtors and USB as
Trustee and Servicing Agent of the SPV Contracts hereby respectively represent
and warrant to the Company that upon entry of the Payoff Approval Order:
(a) the Debtors and USB as Trustee and as Servicing Agent of
the SPV Contracts respectively has full power and authority to execute
and deliver this Agreement;
(b) this Agreement constitutes the legal, valid and binding
obligation of the respective parties in accordance with its terms.
10. TERMINATION. This Agreement may be terminated at any time prior to
the Effective Date:
(a) by the mutual written consent of the parties;
(b) by the Debtors if the Debtors have reason to believe that
the Company does not have the financial resources necessary to
consummate the Transaction; or
(c) by either the Debtors or USB or the Company upon notice to
the other parties hereto if (i) the Bankruptcy Court has not entered
the Payoff Approval Order on or before March 31, 2004; or (ii) the
Effective Date shall not have occurred on or before April 30, 2004.
11. RELEASE OF SECURITY INTERESTS; UCC TERMINATION STATEMENTS. Upon
receipt of the Payoff Consideration, all guaranties, suretyships, Liens
(including security interests in all Collateral) and all right, title and
interest in and to the assets, business, properties and rights of the Company,
its subsidiaries and any other individuals or entity that have been granted,
pledged, conveyed, transferred and set over to the Debtors or the SPVs pursuant
to any Contract or to otherwise secure repayment of the Company's obligations
under the Contracts shall automatically be released, terminated and of no
further force and effect without requiring further action of the Debtors, USB or
the SPVs. Upon payment of the Payoff Amount by the Company pursuant to the Wire
Instructions, the Company by or through its attorneys is authorized to file
termination statements terminating all UCC financing statements on file that
relate to the Contracts and the Debtors, the SPVs and USB hereby agree to
deliver promptly to the Company, (a) originally executed releases any other
liens granted to the Debtors or the SPVs relating to the Contracts and (b)
possessory Collateral in the possession of the Debtors, USB or the SPVs pledged
as Collateral to secure repayment of the Contracts. The Debtors and/or USB also
agree to execute and deliver such other releases, documents and agreements as
the Company may reasonably request to evidence the foregoing release.
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12. FURTHER ASSURANCES. The Debtors, the SPVs and USB agree to use
their best efforts to cause any and all Affiliates of Debtors and the SPVs to
take any and all actions necessary or appropriate to consummate the terms of the
Transaction.
13. DEFINITIONS.
In addition to the terms defined elsewhere in this Agreement (including
the Preamble and the Recitals), the following terms shall have the following
meanings when used in this Agreement:
"ACTION" shall mean any claim, dispute, demand, cause of action or
action asserted in any arbitration, litigation, adversary proceeding, mediation,
suit, investigation or other proceeding and any appeal therefrom.
"AFFILIATE" shall mean, with respect to any Person, any Person which,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. As used in this
definition, the term "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to (a) vote one-third (1/3) or more of the voting power of the outstanding
voting securities of such Person, or (b) otherwise direct the management
policies of such Person by contract or otherwise.
"COLLATERAL" shall mean the collateral in which the Debtors or SPVs
have been granted a Lien pursuant to the Pledge or Security Agreement and any
and all security of any kind for or in respect of the Contracts.
"GOVERNMENTAL AUTHORITY" shall mean any foreign, federal, state, local
or other governmental, administrative or regulatory authority, body, agency,
court, tribunal or similar entity including any arbitrator or arbitration panel,
including, without limitation, the Bankruptcy Court.
"LAW" shall mean any law, statute, rule, regulation, ordinance,
standard, requirement, administrative ruling, order or process promulgated by
any Governmental Authority as in effect from time to time (including, without
limitation, any zoning or land use law or ordinance, building code, securities,
blue sky, civil rights or occupational health and safety law or regulation and
any court, administrative agency or arbitrator's order or process).
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or other),
preference, priority, or other security agreement or preferential arrangement,
of any kind or nature whatsoever.
"PAYOFF APPROVAL MOTION" shall mean the Debtor's motion filed with the
Bankruptcy Court seeking approval of the Payoff Approval Order.
"PAYOFF APPROVAL ORDER" shall mean an older of the Bankruptcy Court
customary for a discounted payoff transaction similar to the Transaction
contemplated herein, substantially in the form and substance of the order
attached hereto as SCHEDULE III.
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"PERSON" shall mean any individual, general or limited partnership,
corporation, limited liability company, association, business trust, joint
venture, Governmental Authority, business entity.
14. NOTICES. Unless otherwise specifically provided herein, any notice
or other communication required or permitted to be given hereunder will, be in
writing and addressed to the respective party as set forth below its signature
hereunder, or to such other address as the party may designate in writing to the
other.
15. PURPOSE. The parties hereto acknowledge and agree that this
Agreement is made in order to compromise and settle disputed claims between and
among all parties, so as to avoid time-consuming litigation, and the burden,
inconvenience and expense associated therewith, and without admission of any
liability or wrongdoing by any party hereto with respect to any matters.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company shall survive the Effective Date.
17. ASSIGNMENT: SUCCESSORS. This Agreement and all of the terms and
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Prior to the Effective Date,
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by the any of the parties.
18. GOVERNING LAW.
(a) THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO
SHALL BE GOVERNED BY THE LAWS OF STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW).
(b) Until the entry of an order either closing or dismissing the
Bankruptcy Cases, each party hereto (i) irrevocably elects as the sole judicial
forum for the adjudication of any matters arising under or in connection with
the Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy
Court; (ii) expressly waives any defense or objection to jurisdiction or venue
based on the doctrine of forum non-conveniens; and (iii) stipulates that the
Bankruptcy Court shall have in personam jurisdiction and venue over such party.
(c) After the entry of an order either closing or dismissing the
Bankruptcy Cases, each party to this Agreement hereby irrevocably submits to the
exclusive jurisdiction of any Delaware federal court (a "Delaware Court") in any
Action arising out of or relating to this Agreement, and each such party hereby
irrevocably agrees that all claims in respect of such Action shall be heard and
determined in such Delaware Court. Each party, to the extent permitted by
applicable Laws, hereby expressly waives any defense or objection to
jurisdiction or venue based on the doctrine of forum non-conveniens, and
stipulates that any Delaware Court shall have in personam jurisdiction and venue
over such party for the purpose of litigating any dispute or controversy between
the parties arising out of or related to this Agreement. In the event any party
shall commence or maintain any Action arising out of or related to this
Agreement in a forum other than an Delaware Court, the other party shall be
entitled to request the dismissal or stay of such Action, and each such party
stipulates for itself that such Action shall be dismissed or stayed. To the
extent that any party to this Agreement has or hereafter may
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acquire any immunity from jurisdiction of any Delaware Court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) with respect to itself or its
property, each such party hereby irrevocably waives such immunity.
(d) After the entry of an order either closing or dismissing the
Bankruptcy Cases, each party irrevocably consents to the service of process of
any of the Delaware Courts in any such Action by any means permitted by the
rules applicable in such Delaware Court including, if permissible, personal
delivery of the copies thereof or by the mailing of the copies thereof by
certified mail, return receipt requested, postage prepaid, to it as its address
specified herein, such service to become effective upon the earlier of (i) the
date ten (10) calendar days after such mailing or (ii) any earlier date
permitted by applicable Law.
(e) THE PARTIES HERETO HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER, OR
REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED
TRANSACTIONS OR UNDER OR IN CONNECTION WITH ANY AMENDMENT, INSTRUMENT, DOCUMENT,
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION, AND AGREE THAT ANY SUCH
ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR THE PARTIES
ENTERING INTO THIS AGREEMENT.
19. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding of the parties with respect to the matters discussed herein,
supersedes all prior agreements and understandings between the parties on these
particular issues, is intended to be a binding agreement between the parties and
shall not be changed, modified, amended, extended, terminated, waived, or
discharged except by an instrument signed in writing by all the parties hereto.
Additionally, the consideration recited herein is the full, complete and entire
consideration for this Agreement, and there is to be no further consideration to
be exchanged by any party hereto.
20. AGREEMENT NOT SEVERABLE. Should any material provision of this
Agreement be deemed unenforceable or void by a court of competent jurisdiction,
this Agreement shall be null and void in its entirety.
21. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original or facsimile, but all of which together shall
constitute one of the same instrument.
[Remainder of Page Intentionally Left Blank.
Signature Page Follows.]
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IN WITNESS WHEREOF, the patsies have executed this Settlement, Release
and Compromise Agreement as of the date first written above.
COMPANY: DEBTORS:
RADNET MANAGEMENT, INC. DVI FINANCIAL SERVICES, INC.
By: /s/ Howard G. Berger, MD By: /s/ John P. Boyle
Name: Howard G. Berger, MD Name: John P. Boyle
Title: President & CEO Title: VP and CEO
TRUSTEE: DVI, INC.
US BANK, NATIONAL ASSOCIATION
As Trustee
By: /s/ signature By: /s/ John P. Boyle
Name: Name: John P. Boyle
Title: Title: VP and CEO
RELATED PARTIES:
HOWARD G. BERGER, M.D. DVI BUSINESS CREDIT CORPORATION
As an authorized representative
of the Related Parties
By: /s/ Howard G. Berger, MD By: /s/ G. Alexander Cole
Name: G. Alexander Cole
Title: VP & Chief Credit Officer
SPVs:
LYON FINANCIAL SERVICES, INC. d/b/a DVI RECEIVABLES VIII, INC. as the
US Bancorp Portfolio Services, sole member and manager of the SPVs
as Agent and Attorney in Fact for as Agent and Attorney in Fact for
the SPVs the SPVs
By: /s/ signature By: /s/ John P. Boyle
Name: Name: John P. Boyle
Title: Title: VP and CEO
DVI BUSINESS CREDIT RECEIVABLES EQUIPMENT CORPORATIONS as defined
CORPORATION III herein by their respective
authorized representative
By: /s/ G. Alexander Cole By: /s/ John P. Boyle
Name: G. Alexander Cole Name: John P. Boyle
Title: President Title: VP and CEO
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SCHEDULE I
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WIRE INSTRUCTIONS
TO BE SUPPLIED BY DEBTORS
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SCHEDULE II
ALLOCATION OF PAYOFF CONSIDERATION
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OWNED CONTRACTS (DVIFS) $13,600,000
SPV CONTRACTS $54,700,000
DVIBC CONTRACTS $ 4,400,000(4)
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(4) Plus or minus the adjustment as described in paragraph 2.
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SCHEDULE III
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PAYOFF APPROVAL ORDER
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
DVI, INC., ) Case Nos. 03-12656
DVI FINANCIAL SERVICES INC. and ) through 03-12658
DVI BUSINESS CREDIT CORPORATION, )
) Jointly Administered
Debtors.
Hearing Date: March 2, 2004 @ 10:30 a.m.
Response Date: Jan. 28, 2004
ORDER APPROVING COMPROMISE BETWEEN THE
DEBTOR AND RADNET MANAGEMENT INC. AND RELATED ENTITIES [DOCKET
1161]
Upon consideration of the Motion of DVI Financial Services Inc.
("DVIFS") For Entry of an Order Approving Settlement Between the DVIFS and
Radnet Management, Inc. and Related Entities Pursuant to Federal Rule of
Bankruptcy Procedure 9019 (the "Motion") and any objections that may have been
filed to the Motion, and it appearing that the compromise outlined in the
Motion, as amended hereby, is fair and reasonable and in the best interests of
the Debtors' estates and their respective creditors, it is hereby
ORDERED as follows:
1. The Motion is granted.
2. The definition of "Contracts" in the Motion shall include
contract number 001-0003441-011.
3. The Payoff Amount as defined in the Motion shall be no less
than $13,600,000.
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4. The Settlement is approved in its entirety and the terms and
provisions of the Settlement are incorporated herein by
reference,
5. DVIFS is authorized and, subject to the conditions set forth
in the Settlement and Compromise Agreement, directed to enter
into the transactions contemplated by the Settlement and
Compromise Agreement and to execute and deliver all documents
and perform all acts necessary or appropriate to effectuate
the Settlement and Compromise Agreement with the Company
without further Order of Court.
6. Capitalized terms not defined or amended herein shall have the
meaning as set forth in the Motion.
BY THE COURT:
MARY F. WALRATH
CHIEF U.S. BANKRUPTCY JUDGE
Dated:
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EXHIBIT A (page 1 of 4)
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FINANCING AGREEMENTS
001-0000002-002 DIAGNOSTIC IMAGING SERVICES, INC.
001-0001231-037 RADNET MANAGEMENT, INC.
001-0001231-051 RADNET MANAGEMENT, INC.
001-0002785-002 RADNET MANAGEMENT I, INC.
001-0003155-002 RADNET MANAGEMENT, INC.
001-0003155-012 RADNET MANAGEMENT, INC.
001-0003155-015 RADNET MANAGEMENT, INC.
001-0003155-016 RADNET MANAGEMENT, INC.
001-0003155-028 RADNET MANAGEMENT, INC.
001-0003155-029 RADNET MANAGEMENT, INC.
001-0003155-030 RADNET MANAGEMENT, INC.
001-0003155-031 RADNET MANAGEMENT, INC.
001-0003155-032 RADNET MANAGEMENT, INC.
001-0003155-033 RADNET MANAGEMENT, INC.
001-0003155-034 RADNET MANAGEMENT, INC.
001-0003155-035 RADNET MANAGEMENT, INC.
001-0003155-036 RADNET MANAGEMENT, INC.
001-0003155-037 RADNET MANAGEMENT, INC.
001-0003155-038 RADNET MANAGEMENT, INC.
001-0003441-009 DIAGNOSTIC IMAGING SERVICES, INC.
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EXHIBIT A (page 2 of 4)
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FINANCING AGREEMENTS
--------------------
001-0003441-010 HEALTHCARE IMAGING CENTER
001-0003441-011 NORTH COUNTY IMAGING
001-0003502-007 STOCKTON IMAGING
001-0003502-008 SANTA CLARITA IMAGING
001-0003502-009 RADNET MANAGEMENT, INC.
021-0000873-007 DIAGNOSTIC IMAGING SERVICES, INC.
021-0001231-032 RADNET MANAGEMENT, INC.
021-0001231-041 RADNET MANAGEMENT, INC.
023-0003024-003 RADNET MANAGEMENT II, INC.
024-0001231-034 RADNET MANAGEMENT, INC.
024-0001231-035 RADNET MANAGEMENT, INC.
024-0003155-007 RADNET MANAGEMENT, INC.
024-0003155-008 RADNET MANAGEMENT, INC.
025-0001231-040 RADNET MANAGEMENT, INC.
025-0001231-042 RADNET MANAGEMENT, INC.
025-0001231-043 RADNET MANAGEMENT, INC.
025-0001231-044 RADNET MANAGEMENT, INC.
025-0002661-001 SOCAL MR SITE MANAGEMENT, INC.
025-0002661-004 SOCAL MR SITE MANAGEMENT, INC.
026-0001231-045 RADNET MANAGEMENT, INC.
16
EXHIBIT A (page 3 of 4)
-----------------------
FINANCING AGREEMENTS
--------------------
026-0001231-046 RADNET MANAGEMENT, INC.
026-0002661-002 SOCAL MR SITE MANAGEMENT, INC.
026-0002661-003 SOCAL MR. SITE MANAGEMENT, INC.
026-0002785-001 RADNET MANAGEMENT I, INC.
029-0000873-011 DIAGNOSTIC IMAGING SERVICES
029-0003155-006 RADNET MANAGEMENT, INC.
029-0003155-010 RADNET MANAGEMENT, INC.
029-0003218-001 ANTELOPE VALLEY MRI
029-0003222-001 TEMECULA VALLEY IMAGING
029-0003225-001 IMAGING CENTER OF LA HABRA
029-0003230-001 SANTA ROSA IMAGING
030-0003024-001 RADNET MANAGEMENT II, INC.
030-0003024-002 RADNET MANAGEMENT II, INC.
030-0003155-013 RADNET MANAGEMENT, INC.
030-0003441-001 DIAGNOSTIC IMAGING SERVICES
031-0002839-002 SAN GABRIEL IMAGING CENTER
031-0003155-001 RADNET MANAGEMENT, INC.
031-0003155-011 RADNET MANAGEMENT I, INC.
031-0003441-005 MEDICAL DIAGNOSTIC IMAGING
031-0003441-008 DIAGNOSTIC IMAGING SERVICES, INC.
17
EXHIBIT A (page 4 of 4)
-----------------------
FINANCING AGREEMENTS
--------------------
031-0003502-001 RADNET MANAGEMENT, INC.
031-0003502-005 ONCOLOGY SERVICES
031-0003564-001 TOWER IMAGING
032-0001231-047 RADNET MANAGEMENT, INC.
032-0001231-048 RADNET MANAGEMENT, INC.
032-0001232-010 RADNET SUB, INC
032-0003441-003 DIAGNOSTIC IMAGING SERVICES
032-0003502-002 ANTELOPE VALLEY IMAGING
084-0003155-003 RADNET MANAGEMENT, INC.
084-0003155-004 RADNET MANAGEMENT, INC.
084-0003155-009 RADNET MANAGEMENT, INC.
083-0003155-014 RADNET MANAGEMENT, INC.
083-0003155-017 RADNET MANAGEMENT, INC.
083-0003155-018 RADNET MANAGEMENT, INC.
083-0003155-019 RADNET MANAGEMENT, INC.
083-0003441-012 RADNET MANAGEMENT, INC.
83-1231-49 RADNET MANAGEMENT, INC.
83-1231-50 RADNET MANAGEMENT, INC.
18
RADNET
MANAGEMENT, INC.
----------------
April 28, 2004
VIA FACSIMILE
- -------------
DVI Financial Services
2500 York Road
Jamison, PA 18929
Re: Settlement and Compromise Agreement
Dated March 15, 2004 Between Radnet Management, Inc.
And its related Parties and DVI, Inc. et al. (the "Settlement
Agreement")
Gentlemen:
This will confirm that Radnet Management, Inc., and its Related Parties
(the "Company") has requested DVI Financial Services Inc. ("DVIFS") to agree not
to exercise its right to terminate the Settlement Agreement between April 30,
2004 and July 1, 2004 to allow the Company additional time to secure its
financing.
This will also confirm that DVIFS has agreed to the Company's request
conditioned upon a payment to DVIFS in the amount of $100,000 (the "Extension
Fee"). The Extension Fee is due on or before May 1, 2004, by wire transfer. The
Extension Fee will be non-refundable and will not be credited against the Payoff
Consideration on the Effective Date. In addition, if the Effective Date does not
occur by May 31, 2004, the portion of the Payoff Consideration relating to the
DVIFS Owned Contracts in the amount of $13,600,000 shall bear interest starting
June 1, 2004 at $6,800 per day (18 percent per annum) until paid or until the
Settlement Agreement is terminated.
Nothing herein shall be construed as a waiver of DVIFS's right to
terminate the Settlement Agreement prior to July 1, 2004: a) upon the mutual
written consent of the parties; or b) if DVIS has good reason to believe that
the Company will not have the financial resources necessary to sonsummate the
Transaction by July 1, 2004. If the Settlement Agreement is terminated by any
party prior to the Effective Date, the parties acknowledge that notwithstanding
anything set forth herein or in the Settlement Agreement, the Company is
responsible for the payment of the full amount due and owing under the Financing
Agreements including all interest.
DVI Financial Services
April 28, 2004
Page Two
Capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Settlement Agreement.
If the foregoing accurately sets forth our understanding, kindly
evidence your assent to the terms and conditions herein set forth by causing a
copy of this letter to be signed, dated and returned to the undersigned.
Radnet Management, Inc.
and Related Parties
By: /s/ Howard Berger, M.D.
-------------------------------
Howard Berger, M.D.,
Authorized Representative
and/or President
Accepted and agreed as of this 29
day of April, 2004.
DVI Financial Services Inc.
/s/ Montgomery W. Cornell
-------------------------
Name: Montgomvery W. Cornell
Title: Authorized Signatory
RADNET
MANAGEMENT, INC.
----------------
April 28, 2004
VIA FACSIMILE 507-537-5201
- --------------------------
Joe Andries
US Bank Portfolio Services
1301 Madrid Street
Marshall, Minnesota 56258
Re: Settlement and Compromise Agreement
Dated March 15, 2004 Between Radnet Management, Inc.
And its related Parties and DVI, Inc. et al. (the "Settlement
Agreement")
Dear Mr. Andries:
This will confirm that Radnet Management, Inc., and its Related Parties
(the "Company") has requested USB to agree not to exercise its right to
terminate the Settlement Agreement between April 30, 2004 and July 1, 2004 to
allow the Company additional time to secure its financing.
This will also confirm that USB has agreed to the Company's request
conditioned upon a payment to USB in the amount of $100,000 (the "Extension
Fee"). The Extension Fee is due on or before May 1, 2004, by wire transfer. The
Extension Fee will be non-refundable and will not be credited against the Payoff
Consideration on the Effective Date. In addition, if the Effective Date does not
occur by May 31, 2004, USB, in connection with the SPV Contracts will receive,
in addition to their share of the Payoff Consideration, payment of $5,000 per
day (a rate of $150,000 per month) until paid or until the Settlement Agreement
is terminated.
Nothing herein shall be construed as a waiver of USB's right to
terminate the Settlement Agreement prior to July 1, 2004 upon the mutual written
consent of the parties. If the Settlement Agreement is terminated by any party
prior to the Effective Date, the parties acknowledge that notwithstanding
anything set forth herein or in the Settlement Agreement, the Company is
responsible for the payment of the full amount due and owing under the Financing
Agreements including all interest.
Mr. Joe Andries
US Bank Portfolio Services
April 28, 2004
Page Two
Capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Settlement Agreement.
If the foregoing accurately sets forth our understanding, kindly
evidence your assent to the terms and conditions herein set forth by causing a
copy of this letter to be signed, dated and returned to the undersigned.
Radnet Management, Inc.
and Related Parties
By: /s/ Howard Berger, M.D.
-------------------------------
Howard Berger, M.D.,
Authorized Representative
and/or President
Accepted and agreed as of this 29
day of April, 2004.
USB /s/ Joseph Andries
-------------------------
Joseph Andries
Senior Vice President