EXHIBIT 10.36
DIVERSIFIED THERAPY CORP.
SUBSCRIPTION AGREEMENT made as of this 1st day of December, 1996 between
Diversified Therapy Corp., a Delaware corporation (the "Company") and US
Diagnostic Inc. (the "Subscriber").
WHEREAS, the Company desires to issue 5,000,000 shares (the "Shares") of
Common Stock, $.01 par value per share (the "Common Stock") in a private
placement, on the terms and conditions hereinafter set forth and the Subscriber
desires to acquire the Shares;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company the
Shares for a price equal to $3,500,000 and the Company agrees to sell such
Shares to the Subscriber for said purchase price. The purchase price is payable
by wire transfer payable to the Company, contemporaneously with the execution
and delivery of this Subscription Agreement.
1.2 This Subscriber recognizes that the purchase of Shares involves a high
degree of risk in that (i) the Company has not commenced operations and requires
substantial funds in addition to the proceeds of this private placement; (ii) an
investment in the Company is highly speculative and only investors who can
afford the loss of their entire investment should consider investing in the
Company; (iii) he may not be able to liquidate his investment; (iv)
transferability of the Shares is extremely limited; and (v) in the event of a
disposition, an investor could sustain the loss of his entire investment. Such
risks are more fully set forth in the Term Sheet furnished by the Company to the
Subscriber.
1.3 The Subscriber hereby acknowledges that this offering of Shares has
not been reviewed by the United States Securities and Exchange Commission
("SEC") because of the Company's representations that this is intended to be a
nonpublic offering pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber
represents that the Shares are being purchased for his own account, for
investment and not for distribution or resale to others. The Subscriber agrees
that he will not sell or otherwise transfer such securities unless they are
registered under the Act or unless and exemption from such registration is
available.
1.4 The Subscriber understands that the Shares have not been registered
under Act by reason of a claimed exemption under the provisions of the Act which
depends, in part, upon his investment intention. In this connection, the
Subscriber understands that it is the position of the SEC that the statutory
basis for such exemption would not be present if his representation merely meant
that his present intention was to hold such securities for a short period, such
as the capital gains period of tax statutes, for a deferred sale, for a market
rise, assuming that a market develops, or for any other fixed period. The
Subscriber realizes that, in the view of the SEC, a
purchase now with an intent to resell would represent a purchase with an intent
inconsistent with his representation to the Company, and the SEC might regard
such a sale or disposition as a deferred sale to which such exemptions are not
available.
1.5 The Subscriber understands that there is no public market for the
Shares. The Subscriber understands that even if a public market develops for the
Common Stock, Rule 144 (the "Rule") promulgated under the Act requires, among
other conditions, a two year holding period prior to the resale (in limited
amounts) of securities acquired in a non-public offering without having to
satisfy the registration requirements under the Act. The Subscriber understands
that the Company makes no representation or warranty regarding its fulfillment
in the future of any reporting requirements under the Securities Exchange Act of
1934, as amended, or its dissemination to the public of any current financial or
other information concerning the Company, as is required by the Rule as one of
the conditions of its availability. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the securities
comprising the Shares under the Act, with the exception of certain registration
rights set forth in Article IV herein. The Subscriber consents that the Company
may, if it desires, permit the transfer of the securities comprising the Shares
out of his name only when his request for transfer is accompanied by an opinion
of counsel reasonably satisfactory to the Company that neither the sale nor the
proposed transfer results in a violation of the Act or any applicable state
"blue sky" laws (collectively "Securities Laws") and subject to the provisions
of Section 1.9 hereof. The Subscriber agrees to hold the Company and its
directors, officers and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of any
misrepresentations made by him contained herein or any sale or distribution by
the undersigned Subscriber in violation of any Securities Laws.
1.6 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Shares stating that they have not
been registered under the Act and setting forth or referring to the restrictions
on transferability and sale thereof.
1.7 The Subscriber agrees to execute a lock-up agreement with the
underwriter in connection with any IPO similar in duration and terms as that
executed by the Founders (as defined below). The Company will use its best
efforts to insure that no Founder shall have its shares released from such
lock-up prior to the release of shares by Founder.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber that prior to the
consummation of this offering and at the Closing Date:
(a) The Company is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware and has the corporate power to
conduct the business which it conducts and proposes to conduct.
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(b) The execution, delivery and performance of this Subscription
Agreements by the Company will have been duly approved by the Board of Directors
of the Company and all other actions required to authorize and effect the offer
and sale of the Shares will have been duly taken and approved.
(c) The Company knows of no pending or threatened legal or governmental
proceedings to which the Company is a party which could materially adversely
affect the business, property, financial condition or operations of the Company.
III. REGISTRATION RIGHTS
3.1 The Company hereby agrees with the holders of the Shares or their
transferees (collectively, the "Holder") to use its best efforts to ensure that
the Shares (the "Registrable Securities") shall be registered for resale under
the Act, subject to the lock-up provisions of Section 1.7 hereof as part of the
Company's registration of securities in the initial public offering ("IPO"). If
the underwriter of the IPO objects to the inclusion of the Registrable
Securities in such registration statement, then the Company shall file a
registration statement with respect to the Registrable Securities prior to the
expiration of the underwriter's lockup.
The obligation of the Company under this Section 3.1 shall be limited to
one registration statement. The Company shall pay the expenses described in
Section 3.4 for the registration statement filed pursuant to this Section 3.1,
except for underwriting discounts and commissions and legal fees of the
Requesting Holders, which shall be borne by the Requesting Holders.
3.2 "PIGGYBACK" REGISTRATION RIGHTS. Commencing 24 months following the
closing of an IPO and until the Registrable Securities are eligible for sale
under Rule 144(k), if the Company shall determine to proceed with the actual
preparation and filing of an additional registration statement under the Act in
connection with the proposed offer and sale of any of its securities by it or
any of its security holders (other than a registration statement on Form X-0,
X-0 or other limited purpose form), the Company will give written notice of its
determination to all record holders of the Registrable Securities. Upon the
written request from the Holder within twenty (20) days after receipt of any
such notice from the Company, the Company will, except as herein provided, cause
all such Registrable Securities to be included in such registration statement,
all to the extent requisite to permit the sale or other disposition by the
prospective seller or sellers of the Registrable Securities to be so registered;
provided, further, that nothing herein shall prevent the Company from, at any
time, abandoning or delaying any registration. If any registration pursuant to
this Section 3.2 shall be underwritten in whole or in part, the Company may
require that the Registrable Securities requested for inclusion pursuant to this
Section 3.2 be included in the underwriting on the same terms and conditions as
the securities otherwise being sold through the underwriters. In the event that
the Registrable Securities requested for inclusion pursuant to this Section 3.2
together with any other shares which have similar piggyback registration rights
(such shares and the Registrable Securities being collectively referred to as
the "Requested Stock") would constitute more than 15% of the total number of
shares to be included in a proposed underwritten public offering, and if in the
good faith judgment of the managing underwriter of such public offering the
inclusion of all of the
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Requested Stock originally covered by a request for registration would reduce
the number of shares to be offered by the Company or interfere with the
successful marketing of the shares of stock offered by the Company, the number
of shares of Requested Stock otherwise to be included in the underwritten public
offering may be reduced pro-rata (by number of shares) among the holders thereof
requesting such registration or excluded in their entirety if so required by the
underwriter. To the extent only a portion of the Requested Stock is included in
the underwritten public offering, those shares of Requested Stock which are thus
excluded from the underwritten public offering shall be withheld from the market
by the holders thereof for a period, not to exceed 180 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering.
The obligation of the Company under this Section 3.2 shall be limited to
two registration statements.
3.3 REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 3.1 or 3.2 to effect the registration of
Registrable Securities under the Act, the Company will:
(a) prepare and file with the SEC a registration statement with respect to
such securities, and use its best efforts to cause such registration statement
to become and remain effective for such period as may be reasonably necessary to
effect the sale of such securities, not to exceed six months;
(b) prepare and file with the SEC such amendments to such registration
statement and supplements to the prospectus contained therein as may be
necessary to keep such registration statement effective for such period as may
be reasonably necessary to effect the sale of such securities, not to exceed six
months;
(c) furnish to the security holders participating in such registration and
to the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities covered by
such registration statement under such state securities or blue sky laws of such
jurisdictions as such participating holders may reasonably request in writing
within twenty (20) days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified;
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed;
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(f) notify such holders promptly of any request by the SEC for the
amending or supplementing of such registration statement or prospectus or for
additional information;
(g) prepare and file with the SEC, promptly upon the request of any such
holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such holders (and concurred in
by counsel for the Company), is required under the Act or the rules and
regulations thereunder in connection with the distribution of Common Stock by
such holder;
(h) prepare and promptly file with the SEC and promptly notify such
holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise such holders, promptly after is shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued.
3.4 EXPENSES.
(a) With respect to each registration requested pursuant to Section 3.1
hereof, and with respect to each inclusion of Registrable Securities in a
registration statement pursuant to Section 3.2 hereof, all fees, costs and
expenses of and incidental to such registration, inclusion and public offering
(as specified in paragraph (b) below) in connection therewith shall be borne by
the Company, provided, however, that any security holders participating in such
registration shall bear their pro rata share of the underwriting discount and
commissions and transfer taxes.
(b) The fees, costs and expenses of registration to be borne by the
Company as provided in paragraph (a) above shall include, without limitation,
all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in 3.4(a) above). Fees and
disbursement of counsel and accountants for the selling security holders and any
other expenses incurred by the selling security holders not expressly included
above shall be borne by the selling security holders.
3.5 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each holder of
Registrable Securities which are included in a registration statement pursuant
to the provisions of Sections
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3.1 or 3.2 hereof, its directors and officers, and any underwriter (as defined
in the Act) for such holder and each person, if any, who controls such holder or
such underwriter within the meaning of the Act, from and against, and will
reimburse such holder and each such underwriter and controlling person with
respect to, any and all loss, damage, liability, cost and expense to which such
holder or any such underwriter or controlling person may become subject under
the Act or otherwise, insofar as such losses, damages, liabilities, costs or
expenses are caused by any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost or expenses arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such holder, such underwriter
or such controlling person in writing specifically for use in the preparation
thereof.
(b) Each holder of Registrable Securities included in a registration
pursuant to the provisions of Sections 3.1 or 3.2 hereof will indemnify and hold
harmless the Company, its directors and officers, any controlling person and any
underwriter from and against, and will reimburse the Company, its directors and
officers, any controlling person and any underwriter with respect to, any and
all loss, damage, liability, cost or expense to which the Company or any
controlling person and/or any underwriter may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement, or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
holder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 3.5 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
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indemnified parties which are different from or in addition to those available
to the indemnified party, or if there is a conflict of interest which would
prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties have the right to select
separate counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the indemnified
party shall have employed counsel in accordance with the provisions of the
preceding sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after the notice of the commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
IV. MISCELLANEOUS
4.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at the address furnished to
Subscriber and to the Subscriber at his address indicated on the last page of
this Subscription Agreement. Notices shall be deemed to have been given on the
date of mailing, except notices of change of address, which shall be deemed to
have been given when received.
4.2 This Subscription Agreement shall not be changed, modified or amended
except by a writing signed by the parties to be charged, and this Subscription
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.
4.3 This Subscription Agreement shall be binding upon the inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
4.4 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of Florida. The parties hereby agree that any dispute
which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in Palm Beach
County, Florida and they hereby submit to the exclusive jurisdiction of the
courts of the State of Florida located in Palm Beach County, Florida and of the
federal courts in the Palm Beach Count, Florida with respect to any action or
legal proceeding commenced by any party, and irrevocably waive any objection
they now or hereafter may have respecting the venue of any such action or
proceeding brought in such a court or respecting the fact that such court is in
an
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inconvenient forum, relating to or arising out of this Subscription Agreement or
any acts or omissions relating to the sale of the securities hereunder, and
consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in care of the
address set forth below or such other address as the undersigned shall furnish
in writing to the other.
4.5 This Subscription Agreement may be executed in counterparts. Upon the
execution and delivery of this Subscription Agreement by the Subscriber, this
Subscription Agreement shall become a binding obligation of the Subscriber with
respect to the purchase of shares as herein provided; subject, however, to the
right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add and/or to delete other persons as subscribers.
4.6 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
4.7 It is agreed that a waiver by either party of a breach of any
provision of this Subscription Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
4.8 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
IN WITNESS WHEREOF, the parties have executed this Subscription Agreement
as of the day and year first written above.
US DIAGNOSTIC INC.
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Subscription Accepted:
DIVERSIFIED THERAPY CORP.
By:
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Date:
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