INVESTMENT AND STOCKHOLDERS' AGREEMENT
THIS INVESTMENT AND STOCKHOLDERS' AGREEMENT (the "Agreement") is made as of
November 3, 1997, by and among Sheridan Healthcare, Inc., a Delaware corporation
("Sheridan"), and the individuals who are identified as Stockholders on Schedule
A attached to this Agreement (the "Stockholders").
PRELIMINARY STATEMENTS
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Reference is made to the: (i) Asset Purchase Agreement (the "APA"), dated
as of November 3, 1997, by and among Sheridan Healthcorp, Inc., Xxxxxxxxx X.
Xxxxxx, M.D., Inc. (the "Company"), and the Stockholders; (ii) the Management
Services Agreement, dated as of November 3, 1997 by and among the Company, the
Stockholders, and Sheridan Healthcorp, Inc.; (iii) each of the Restrictive
Covenant Agreements, dated as of November 3, 1997 by and between Sheridan
Healthcorp, Inc. and each of the Stockholders; (iv) the Purchase Option
Agreement, dated as of November 3, 1997 by and among Sheridan, the Company and
the Stockholders; and (v) each of the Physician Employment Agreements, dated as
of November 3, 1997 by and between Sheridan Healthcorp, Inc. and each of the
Stockholders (collectively, the "Acquisition Agreements"). Capitalized terms not
defined in this Agreement shall have the meanings given them in the Acquisition
Agreements.
The parties to this Agreement desire to set forth the terms of their
interest in the securities of Sheridan.
In consideration of the foregoing and the mutual covenants and agreements
contained in this Agreement, the parties to this Agreement agree as follows:
ARTICLE I ACQUISITION OF SECURITIES
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Section 1. Acquisition of Sheridan Common Stock by Stockholders. Pursuant
to the Purchase Option Agreement, each Stockholder has been issued by Sheridan
the respective number of shares of Sheridan Common Stock (as defined in the
Purchase Option Agreement), set forth opposite the name of that Stockholder on
Schedule A to this Agreement.
ARTICLE II THE CLOSING
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Section 1. Closing. The delivery and acceptance of the shares of Sheridan
Common Stock being acquired by the Stockholders pursuant to the Acquisition
Agreements (the "Closing Shares"), shall take place at the offices of Sheridan
concurrently with the Closing of the transactions contemplated by the
Acquisition Agreements or at a later date as agreed to in writing by the
parties, subject to satisfaction or waiver of all of the conditions set forth in
the Acquisition Agreements and in this Agreement. For the purposes of this
Agreement, the term "Closing Shares" shall mean: (a) any shares of Sheridan
Common Stock issued at Closing or at a later date as agreed to in writing by the
parties, pursuant to the Acquisition Agreements; and, (b) any securities of
Sheridan issued or issuable with respect to any of the shares described in
clause (a) above by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization (it being understood that for purposes of this Agreement, a
person will be deemed to be a holder of Closing Shares whenever that person has
the right to then acquire or obtain from Sheridan any Closing Shares, whether or
not that acquisition has actually been effected).
ARTICLE III RESTRICTIONS ON TRANSFER
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Section 1. Restrictions on Transfer of Closing Shares.
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(a) Each Stockholder agrees not to offer, transfer, donate, sell,
assign, pledge, hypothecate or otherwise dispose of (collectively "Transfer" and
the result of any of these actions is a "Transfer") any Closing Shares or other
rights in respect to those Closing Shares or rights pursuant to this Agreement,
whether occurring voluntarily or involuntarily, directly or indirectly, or by
operation of law or otherwise, except that a Stockholder may Transfer Closing
Shares in accordance with the provisions of Article III, Section 1(b).
(b) Notwithstanding anything in this Agreement, the following
transactions shall be exempt from the prohibition on Transfers in Section 1 of
this Article III:
(i) Transfers between a Stockholder and the trustees of a trust
revocable by that Stockholder alone and the sole beneficiary of which is that
Stockholder;
(ii) Transfers by gift by a Stockholder to that Stockholder's spouse
or issue or to the trustees or a trust for the benefit of that spouse and/or
issue;
(iii) Transfers between a Stockholder and that Stockholder's
guardian or conservator;
(iv) Transfers upon the death of a Stockholder by will, intestacy laws
or the laws of survivorship to that Stockholder's personal representatives,
heirs or legatees;
(v) Transfers by a Stockholder pursuant to an effective registration
statement filed under the Securities Act; and
(vi) Transfers by a Stockholder pursuant to Rule 144 under the
Securities Act.
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provided, however, that, except in the case of Transfers pursuant to
Article III, Section 1(b)(v) and 1(b)(vi), the transferee agrees in writing for
the benefit of the other Stockholders and Sheridan, as a condition to that
Transfer, to be bound by all of the provisions of this Agreement to the same
extent as was the transferor prior to that Transfer; and provided, further, that
any of these transferees shall take all Closing Shares and rights so transferred
subject to all the provisions of this Agreement as if those Closing Shares or
rights were still held by the Stockholder who made the Transfer. If any Transfer
is effected in accordance with the provisions of this Article III, Section
1(b)(i), (ii), (iii) or (iv), then the transferee shall be referred to as a
"Permitted Transferee," and for all purposes of this Agreement unless expressly
indicated to the contrary, the Permitted Transferee shall be deemed to be a
"Stockholder," but only to the extent that the transferor was included within
that definition prior to the transfer.
(c) If any Transfer by a Stockholder is made or attempted contrary to
the provisions of this Agreement, that purported Transfer shall be void ab
initio; Sheridan and the other Stockholders (and their transferees) shall have,
in addition to any other legal or equitable remedies which they may have, the
right to enforce the provisions of this Agreement by actions for specific
performance (to the extent permitted by law); and Sheridan shall have the right
to refuse to recognize any Transferee of a Stockholder pursuant to any Transfer
that is made or attempted contrary to the provisions of this Agreement as one of
its stockholders for any purpose.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
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By execution of a counterpart of this Agreement, any Stockholder at the
time of that execution makes the following representations and warranties to
Sheridan, these representations and warranties being made in connection with the
issuance of the Closing Shares:
1. This Agreement is made in reliance on each Stockholder's representations to
Sheridan that all Closing Shares acquired by that Stockholder will be acquired
for investment for that Stockholder's own account, not as a nominee or agent,
and not with a view toward distribution of any part thereof, and that
Stockholder has, except as otherwise contemplated in the Acquisition Agreements,
no present intention of selling, granting participation in, or otherwise
distributing those Closing Shares.
2. Each Stockholder understands that the Closing Shares will not be
registered under the Securities Act, on the ground that the sale and issuance of
the same are exempt from registration under Section 4(2) of the Securities Act,
and that Sheridan's reliance on that exemption is predicated on the
representations of each Stockholder set forth in this Agreement.
3. Each Stockholder understands that the Closing Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Closing Shares or an available exemption
from registration under the Securities Act, the Closing Shares must be held
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indefinitely. Each Stockholder agrees that, in addition to any other applicable
limitations on the transfer of the Closing Shares, in no event will it make a
transfer, pledge or other disposition of any of the Closing Shares other than
pursuant to an effective registration statement under the Securities Act, unless
and until: (i) that Stockholder shall have notified Sheridan of the proposed
disposition and shall have furnished to Sheridan a statement of the
circumstances surrounding the disposition; and, (ii) at the expense of the
Stockholder or its transferee, it shall have furnished to Sheridan an opinion of
counsel reasonably satisfactory to Sheridan and its counsel to the effect that
the proposed transfer, pledge or other disposition may be made without
registration under the Securities Act.
4. Each Stockholder: (i) by reason of his or her business and financial
experience, has that knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and risks of his or
her investment in the Closing Shares; and, (ii) believes his or her financial
condition and investments enable him or her to bear the economic risk of a
complete loss of the Closing Shares. Each Stockholder has consulted with its own
advisers with respect to their proposed investment in Sheridan. Each Stockholder
has had the opportunity to ask questions and to receive answers concerning the
financial condition, operations and prospects of Sheridan and the terms and
conditions of the Stockholder's investment, as well as the opportunity to obtain
any additional information necessary to verify the accuracy of information
furnished in connection therewith that Sheridan possesses or can acquire without
unreasonable effort or expense. In addition, the Stockholder acknowledges that
he or she has received prior to the execution of this Agreement the following
documentation: (i) a prospectus for Sheridan, dated as of October 31, 1995 (ii)
annual reports for 1995 and 1996; (iii) 10Ks for 1995 and 1996; and, (iv)
Sheridan's Form 10-Q for the time period ended June 30, 1997. Each Stockholder
has carefully reviewed that documentation and has had the opportunity to review
that documentation with his or her own advisers and Sheridan.
5. Each Stockholder is an individual who either (i) has an individual net worth,
or joint net worth with that Stockholder's spouse as of the date hereof which
exceeds One Million Dollars ($1,000,000.00); or (ii) has had income in excess of
Two Hundred Thousand Dollars ($200,000.00) in each of the two (2) most recent
years or joint income with that Stockholder's spouse in excess of Three Hundred
Thousand Dollars ($300,000.00) in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
6. Each Stockholder's legal domicile for purposes of the applicable
securities laws is as set forth on Schedule A attached to this Agreement
executed by that Stockholder.
7. This Agreement and each agreement, instrument and document to be
executed and delivered by each Stockholder pursuant to or as contemplated by
this Agreement constitute, or when executed and delivered by that Stockholder
will constitute, valid and binding obligations of that Stockholder enforceable
in accordance with their respective terms.
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8. The execution, delivery and performance by each Stockholder of this
Agreement and each agreement, document and instrument:
(a) do not and will not violate any laws, rules or regulations of the United
States or any state or other jurisdiction applicable to that Stockholder, or
require that Stockholder to obtain any approval, consent or waiver of, or to
make any filing with, any person that has not been obtained or made; and
(b) do not and will not result in a breach of, constitute a default under,
accelerate any obligation under or give rise to a right of termination of any
indenture or loan agreement or any other agreement, contract, instrument,
mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award to which that Stockholder is a party
or by which the property of that Stockholder is bound or affected, or result in
the creation or imposition of any mortgage, pledge, lien, security interest or
other charge or encumbrance on any of the assets or properties of that
Stockholder.
ARTICLE V OBLIGATIONS OF SHERIDAN
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Section 1. Rule 144 Requirements. Sheridan, which is subject to the
reporting requirements of Section 13 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), will use its best efforts to file with the
Commission all information as is specified under that Section for so long as
there are holders of Closing Shares; and Sheridan shall use its best efforts to
take all action as may be required by an issuer as a condition to the
availability of Rule 144 under the Securities Act (or any comparable successor
rules). Sheridan shall furnish to any holder of Closing Shares upon request a
written statement executed by Sheridan as to the steps it has taken to comply
with the current public information requirement of Rule 144 (or any comparable
successor rules). Sheridan, subject to the limitations on transfers imposed by
this Agreement, shall use its best efforts to facilitate and expedite transfers
of Closing Shares pursuant to Rule 144 under the Securities Act, which efforts
shall include timely notice to its transfer agent to expedite any transfers of
Closing Shares. The provisions of this Section 1, as they relate to certain
Closing Shares, subject to Rule 144, shall terminate and be of no further force
and effect as of November 3, 1999.
ARTICLE VI MISCELLANEOUS PROVISIONS
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Section 1. Survival of Representations and Warranties. The Stockholders
agree that each representation, warranty, covenant and agreement made by them in
this Agreement or in any certificate, instrument or other document delivered
pursuant to this Agreement is material, shall be deemed to have been relied upon
by Sheridan, shall remain operative and in full force and effect after the date
of this Agreement regardless of any investigation or the acceptance of
securities hereunder and payment therefor.
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This Agreement shall not be construed so as to confer any right or benefit
upon any Person other than the parties to this Agreement and their respective
successors and permitted assigns.
Section 2. Legend on Securities. Sheridan and the Stockholders acknowledge
and agree that substantially the following legend shall be typed on each
certificate evidencing any of the securities issued under the Acquisition
Agreements or held at any time by the Stockholders (and their transferees):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO: (1) A
REGISTRATION STATEMENT WITH RESPECT TO THESE SECURITIES WHICH IS EFFECTIVE UNDER
THAT ACT; OR, (2) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THAT ACT
RELATING TO THE DISPOSITION OF SECURITIES. THESE SECURITIES ARE ALSO SUBJECT TO
THE PROVISIONS OF A CERTAIN INVESTMENT AND STOCKHOLDERS' AGREEMENT, DATED AS OF
NOVEMBER 3, 1997, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THAT
AGREEMENT. A COMPLETE AND CORRECT COPY OF THAT AGREEMENT IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF SHERIDAN AND WILL BE FURNISHED UPON
WRITTEN REQUEST AND WITHOUT CHARGE.
SHERIDAN IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF STOCK. SHERIDAN WILL
FURNISH TO EACH STOCKHOLDER WHO SO REQUESTS A COPY OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE RIGHTS AND LIMITATIONS OF EACH OUTSTANDING CLASS OF
STOCK OF SHERIDAN.
Section 3. Amendment and Waiver. Any party may waive any provision of this
Agreement intended for its benefit in writing. Except as specifically set forth
in this Agreement to the contrary, no failure or delay on the part of any party
to this Agreement in exercising any right, power or remedy under this Agreement
shall operate as a waiver. The remedies in this Agreement are cumulative and are
not exclusive of any remedies that may be available to any party to this
Agreement at law or in equity or otherwise. This Agreement may be amended with
the prior written consent of all parties.
Section 4. Notices. Whenever any notice, request, information or other
document is required or permitted to be given under this Agreement, that notice,
demand or request shall be in writing and shall be either hand delivered, sent
by United States certified mail, postage prepaid or delivered via overnight
courier to the addresses below or to any other address that any party may
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specify by notice to the other parties. No party shall be obligated to send more
than one notice to each of the other parties and no notice of a change of
address shall be effective until received by the other parties. A notice shall
be deemed received upon hand delivery, two days after posting in the United
States mail or one day after dispatch by overnight courier.
Sheridan: Sheridan Healthcare, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx, M.D., President
with a copy to: Sheridan Healthcare, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxx, Esq., Vice President
To Stockholders: At the Addresses listed on Schedule A attached to this
Agreement
with a copy to: Xxxxxx Xxxxx & Xxxxxxxxx
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to any other address of which any party may notify the other parties as
provided above.
Section 5. Headings. The Article and Section headings used or
contained in this Agreement are for convenience of the reference only and
shall not affect the construction of this Agreement.
Section 6. Counterparts. This Agreement may be executed in one or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which together
shall be deemed to constitute one and the same agreement.
Section 7. Remedies; Severability. It is specifically understood and agreed
that any breach of the provisions of this Agreement by any person subject to
this Agreement will result in irreparable injury to the other parties to this
Agreement, that the remedy at law alone will be an inadequate remedy for that
breach, and that, in addition to any other legal or equitable remedies which
they may have, those other parties may enforce their respective rights by
actions for specific performance (to the extent permitted by law) and Sheridan
may refuse to recognize any unauthorized transferee as one of its stockholders
for any purpose, including, without limitation, for purposes of dividend and
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voting rights, until the relevant party or parties have complied with all
applicable provisions of this Agreement. In the event that any one or more of
the provisions contained in this Agreement, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of that provision in every
other respect and of the remaining provisions contained in this Agreement shall
not be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties to this Agreement shall be enforceable to the fullest
extent permitted by law.
Section 8. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be complete and exclusive
statement of the agreement and understanding of the parties to this Agreement in
respect of the subject matter contained in this Agreement and their agreement
and understanding. This Agreement supersedes all prior agreements and
understandings between the parties with respect to that subject matter.
Section 9. Adjustments. All references to share prices and amounts
herein shall be equitably adjusted to reflect stock splits, stock dividends,
recapitalizations and similar changes affecting the capital stock of Sheridan.
Section 10. Law Governing. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the state of Delaware
(without giving effect to principles of conflicts of law).
Section 11. Construction. This Agreement shall be construed without regard
to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted, including any presumption of superior
knowledge or responsibility based upon a party's business or profession or any
professional training, experience, education or degrees of any member, agent,
officer or employee of any party. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the party against whom the
words are construed, then this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
Section 12. Word Usage. Words used in the masculine shall apply to
the feminine where applicable, and wherever the context of this Agreement
directs, the plural shall be read as the singular and the singular as the
plural.
Section 13. Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY
ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE
STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
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IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SHERIDAN:
SHERIDAN HEALTHCARE, INC.
By: ------------------------------
Xxx X. Xxxxxx
Vice President
STOCKHOLDERS:
------------------------------
Xxxxxxxxx X. Xxxxxx, M.D.
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SCHEDULE A
Name and Address Consideration Paid
of Stockholder in Sheridan Stock
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Xxxxxxxxx X. Xxxxxx, M.D. $200,000.00
000 Xxxx Xxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
