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Acquisition Agreement

 

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Title:

Acquisition Agreement

Entities:

DVI, Inc.; US Diagnostic, Inc.; Drinker Biddle & Reath LLP; Greenberg Traurig

Date:

2002

Size:

Preview shows 70KB of 326KB total

Price:

$99

ID:

#137059

 

 

► M&A ► Acquisition Agreements
► Financial
► Financial ► Consumer Financial Services
► Services ► Legal

 

 

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ACQUISITION AGREEMENT

by and between

US DIAGNOSTIC INC.,

as Seller,

USD PAYMENT CORPORATION, INC., as an affiliate of Seller,

MEDICAL IMAGING CENTERS OF AMERICA, INC.,
MEDITEK INDUSTRIES, INC.,
MICA PACIFIC, INC.,
MICA CAL I, INC.,
MICA FLO I, INC.,
as Selling Subsidiaries,

and

DVI FINANCIAL SERVICES INC.,

as Purchaser

Dated as of September 12, 2002


Table of Contents

 

ARTICLE I

PURCHASE AND SALE OF ASSETS

2

 

Section 1.1

Acquired Assets

2

 

Section 1.2

Excluded Assets

5

 

Section 1.3

Assumed Liabilities

6

 

Section 1.4

Excluded Liabilities

7

 

Section 1.5

Purchase Price

9

 

Section 1.6

Purchase Price Adjustment

9

 

Section 1.7

Allocation of Purchase Price for Tax Purposes

9

 

Section 1.8

Escrow Agreement

9

 

Section 1.9

Transition Services; License of Names

10

ARTICLE II

THE CLOSING

10

 

Section 2.1

Closing

10

 

Section 2.2

Deliveries at Closing

10

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SELLING SUBSIDIARIES

12

 

Section 3.1

Organization

12

 

Section 3.2

Capitalization of Certain Subsidiaries

13

 

Section 3.3

Authority; Enforceability

13

 

Section 3.4

Consents and Approvals

13

 

Section 3.5

No Conflicts

14

 

Section 3.6

Compliance with Applicable Laws

14

 

Section 3.7

Permits

14

 

Section 3.9

Regulatory Compliance

17

 

Section 3.10

Contracts and Equipment

17

 

Section 3.11

Financial Information; Access to General Information

20

 

Section 3.12

Sufficiency and Condition of Assets; Assets of USD Payment Corp

22

 

Section 3.13

Supplies; Accounts Receivable

22

 

Section 3.14

Conduct of Business; Absence of Certain Changes or Events

23

 

Section 3.15

Title to Property

26

 

Section 3.16

Litigation

26

 

Section 3.17

Real Property

26

 

Section 3.18

Intellectual Property.

27

 

Section 3.19

Employment and Labor Matters

29

-i-


Table of Contents

 

Section 3.20

Employee Benefits

32

 

Section 3.21

Taxes

35

 

Section 3.22

Environmental Compliance

36

 

Section 3.23

Substantial Payors and Suppliers

37

 

Section 3.24

Audits

38

 

Section 3.25

No Outstanding Guarantees or Pledges

38

 

Section 3.26

Transactions with Related Persons

38

 

Section 3.27

Books and Records

38

 

Section 3.28

Insurance

38

 

Section 3.29

Tangible Personal Property

39

 

Section 3.30

Brokers

39

 

Section 3.31

Disclosure

39

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

39

 

Section 4.1

Organization

39

 

Section 4.2

Authority Relative to this Agreement

40

 

Section 4.3

Consents and Approvals

40

 

Section 4.4

No Violations

40

 

Section 4.5

Brokers

40

 

Section 4.6

Financial Resources

40

ARTICLE V

COVENANTS

40

 

Section 5.1

Bankruptcy Actions

40

 

Section 5.2

Bidding Procedures

43

 

Section 5.3

Compliance With Bidding Procedures Process; No Solicitation of Transactions; Maintenance of Confidentiality

44

 

Section 5.4

Conduct of Business by the Seller Pending the Closing

45

 

Section 5.5

Access and Information

47

 

Section 5.6

Approvals and Consents; Notification; Material Adverse Change

48

 

Section 5.7

Employee Matters

49

 

Section 5.8

Disclosure and Status of Material Contracts of Acquired Centers and Acquired Subsidiaries

50

 

Section 5.9

Books and Records

50

 

Section 5.10

Releases, Covenants Not to Sue, and Discharges

51

 

Section 5.11

Cure Assumed Contracts

54

 

Section 5.12

WARN Act

54

-ii-


Table of Contents

 

Section 5.13

Transition Services Agreement and Collection Services Agreement

54

 

Section 5.14

Certain Covenants of USD Payment Corp

54

ARTICLE VI

CONDITIONS PRECEDENT

54

 

Section 6.1

Conditions Precedent to Obligations of the Seller, Selling Subsidiaries and the Purchaser

54

 

Section 6.2

Conditions Precedent to Obligations of the Seller and the Selling Subsidiaries

56

 

Section 6.3

Conditions Precedent to Obligations of the Purchaser

57

ARTICLE VII

TERMINATION, AMENDMENT, AND WAIVER

59

 

Section 7.1

Termination by Mutual Consent

59

 

Section 7.2

Termination by Either the Purchaser or the Seller

59

 

Section 7.3

Termination by the Purchaser

59

 

Section 7.4

Termination by the Seller

59

 

Section 7.5

Effect of Termination and Abandonment

60

ARTICLE VIII

GENERAL PROVISIONS

60

 

Section 8.1

Indemnification

60

 

Section 8.2

Claims Against Escrow Account other than for Indemnification

63

 

Section 8.3

Tax Matters; 338 Election

64

 

Section 8.4

Notices

65

 

Section 8.5

Descriptive Headings

66

 

Section 8.6

Entire Agreement; Assignment

67

 

Section 8.7

Governing Law

67

 

Section 8.8

Expenses

67

 

Section 8.9

Amendment

67

 

Section 8.10

Waiver

67

 

Section 8.11

Counterparts; Effectiveness

67

 

Section 8.12

Severability; Validity; Parties in Interest

67

 

Section 8.13

Public Announcements

68

 

Section 8.14

Further Assurances

68

 

Section 8.15

Transfers Not Effected as of Closing

68

 

Section 8.16

Appointment of Agent for Seller Entities

69

ARTICLE IX

DEFINITIONS

70

-iii-


Table of Contents

TABLE OF SCHEDULES

Schedule A

Acquired Subsidiaries

Schedule B

Acquired Centers

Schedule C

Retained Centers

Schedule 1.2(b)

Excluded Supply Contracts

Schedule 1.2(c)

Excluded Maintenance Contracts

Schedule 1.2(e)

Excluded Employment Related Contracts

Schedule 1.2(h)

Real Property on which Retained Centers are Located

Schedule 3.2

Capitalization of Certain Subsidiaries

Schedule 3.4

Consents and Approvals

Schedule 3.6

Compliance with Applicable Laws

Schedule 3.7

Permits and Third-Party Licenses

Schedule 3.8(a)

Compliance with Medicare and Medicaid

Schedule 3.8(b)

Reimbursement for Medicare and Medicaid

Schedule 3.8(d)

Certifications to Participate in Material Payor Programs

Schedule 3.8(e)

Material Payor Participation

Schedule 3.8(f)

Reimbursement for Material Payor Programs

Schedule 3.8(g)

Accreditation

Schedule 3.8(h)

Settlement or Corporate Integrity Agreements

Schedule 3.8(i)

Medical Records

Schedule 3.8(j)

Operations

Schedule 3.9

Regulatory Compliance

Schedule 3.10(a)(1)

Assumed Contracts

Schedule 3.10(a)(2)

All Other Contracts

Schedule 3.10(b)

Cure Amount

Schedule 3.10(d)

Current Government Contracts

Schedule 3.11(a)

Financial Statements

Schedule 3.11(b)

Undisclosed Liabilities

Schedule 3.12(a)

Sufficiency and Condition of Assets

Schedule 3.12(b)

Security Interests

Schedule 3.13(a)

Supplies

Schedule 3.13(b)

Accounts Receivable

Schedule 3.14(a)

Material Adverse Changes

Schedule 3.14(a)(iv)

MAC Contracts

Schedule 3.14(a)(v)

MAC Specific Contracts

Schedule 3.14(b)

Conduct of Business; Absence of Certain Other Changes and Events

Schedule 3.15

Title to Property

Schedule 3.16

Litigation

Schedule 3.17(a)

Real Property

Schedule 3.17(b)

Compliance with Zoning Laws

Schedule 3.17(c)

Utilities

Schedule 3.17(d)

Improvements

Schedule 3.18(a)

Intellectual Property

Schedule 3.18(b)

IP License Agreements

Schedule 3.18(c)

Use and Infringement of Intellectual Property

Schedule 3.19(a)

Employment and Labor Matters

-iv-


Table of Contents

Schedule 3.19(b)

WARN Act

Schedule 3.19(c)

Selected and Certain Other Employees

Schedule 3.19(d)

Agreements Concerning Employees

Schedule 3.20(a)

Employee Benefit Plans

Schedule 3.20(b)

Employee Benefit Plans Compliance with Laws

Schedule 3.20(c)

Seller Plans Compliance with Laws

Schedule 3.20(e)

Liabilities to Employment Regulatory Bodies

Schedule 3.20(f)

Filings in Respect of Seller Plans

Schedule 3.20(g)

Severance Pay; Accelerated Vesting of Benefits

Schedule 3.20(h)

COBRA

Schedule 3.20(i)

Retiree Benefits

Schedule 3.21(a)

Tax Returns

Schedule 3.21(b)

Audits

Schedule 3.21(e)

Tax Liens

Schedule 3.22

Environmental Compliance

Schedule 3.23

Substantial Payors and Suppliers

Schedule 3.25

Outstanding Guarantees or Pledges

Schedule 3.26

Transactions with Related Persons

Schedule 3.28

Insurance

Schedule 3.29

Tangible Personal Property

Schedule 5.4

Conduct of Business by Seller Entities Pending Closing

Schedule 5.8

Material Acquired Center/Subsidiary Contracts

TABLE OF EXHIBITS

Exhibit A

Form of Bill of Sale

Exhibit B

Form of Assignment and Assumption Agreement

Exhibit C

Form of Bid Procedures Order

Exhibit D

Form of Sale Approval Order

Exhibit E

Bidding Procedures

Exhibit F

Form of Escrow Agreement

Exhibit G

Budget

Exhibit H

Form of License Agreement

-v-


Table of Contents

ACQUISITION AGREEMENT

                    THIS ACQUISITION AGREEMENT, dated as of September 12, 2002 (the Agreement), is made by and between (i) US Diagnostic Inc., a Delaware corporation (the Seller), (ii) USD Payment Corporation, Inc., a Florida corporation (USD Payment Corp.), (iii) Medical Imaging Centers of America, Inc., a California corporation, Meditek Industries, Inc., a Florida corporation, MICA Pacific, Inc., a California corporation, MICA Cal I, Inc., a California corporation, and MICA Flo I, Inc., a California corporation (collectively, the Selling Subsidiaries), and (iv) DVI Financial Services Inc., a Delaware corporation, or its designated wholly-owned subsidiary or Affiliate (the Purchaser).  Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Article IX.

                    WHEREAS, the Seller is engaged (either directly or indirectly through one or more wholly-owned direct or indirect subsidiaries) in the business of operating 21 outpatient diagnostic imaging and related facilities (the Business);

                    WHEREAS, the Seller, along with certain of the Seller Debtor Entities, intends to file (the Bankruptcy Filing) voluntary petitions (the Petitions) for relief (the Bankruptcy Cases) under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. 101, et seq., as amended (the Bankruptcy Code) in the United States Bankruptcy Court for the Southern District of Florida (the Bankruptcy Court);

                    WHEREAS, the Seller and the Selling Subsidiaries intend to continue in the management and possession of their assets and businesses as debtors-in-possession in the Bankruptcy Cases pursuant to Sections 1107 and 1108 of the Bankruptcy Code and subject to the terms and conditions of this Agreement;

                    WHEREAS, the Business is conducted in the United States by the Seller and through various direct and indirect subsidiaries of the Seller;

                    WHEREAS, the Purchaser proposes to acquire all assets and properties of the Seller and its various subsidiaries related to the operations of the Business at the Acquired Centers (as defined below);

                    WHEREAS, in furtherance of its purposes, the Purchaser desires to purchase and acquire, and the Seller desires to sell, transfer, convey and assign or cause to be sold, transferred, conveyed and assigned, to the Purchaser (a) all of the equity interests and partnership interests (the Interests) in the direct and indirect subsidiaries of the Seller set forth on Schedule A (each an Acquired Subsidiary and collectively, the Acquired Subsidiaries, for the purpose of acquiring the 22 outpatient diagnostic imaging centers set forth on and located at the addresses listed on Schedule B (the Acquired Centers, which shall be deemed to include any imaging center location governed by the provisions of any contract between any Seller Entity and any member of the IDE Group entered into after December 21, 2001), and (b) all of the assets necessary, used or useable for the Purchasers operation of the Acquired Centers that may be held by any Seller Entity wherever located, including without limitation, those assets specifically

-1-


Table of Contents

designated in Sections 1.1(b)(i) through 1.1(d), all in the manner and subject to the terms and conditions set forth herein and in accordance with Sections 105, 363 and 365 of the Bankruptcy Code (together with the sale and purchase of the Acquired Assets and the assignment and assumption of the Assumed Liabilities, the Acquisition).

                    NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE OF ASSETS


           Section 1.1  Acquired Assets.  On the terms and subject to the conditions set forth in this Agreement and subject to approval of the Bankruptcy Court pursuant to Sections 105, 363 and 365 of Bankruptcy Code, at the Closing, the Seller shall, and shall cause, as applicable, each of the Selling Subsidiaries, the Acquired Subsidiaries, and each Other Subsidiary, to sell, assign, transfer, convey, and deliver, or cause to be sold, assigned, transferred, conveyed and delivered, to the Purchaser, free and clear of all liens, claims and encumbrances of any nature except for Permitted Exceptions, and the Purchaser shall purchase and accept from the appropriate Seller Entity the following assets (the Acquired Assets), but excluding the Excluded Assets:


 

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