INVESTMENT AND STOCKHOLDERS' AGREEMENT
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THIS INVESTMENT AND STOCKHOLDERS' AGREEMENT (the "Agreement") is made as of
January 28, 1998, by and among Sheridan Healthcare, Inc., a Delaware corporation
("SHCR"), 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: (i) the Management Services Agreement, dated as of
January 28, 1998 by and among Comprehensive Pain Medicine, Inc. ("CPM") and
Northwest Florida Anesthesia Consultants, Inc. ("NFAC"), each a Florida
corporation (collectively, the "Company"), the Stockholders, and Sheridan
Healthcorp, Inc., a Florida corporation ("Sheridan"); (ii) each of the
Restrictive Covenant Agreements, dated as of January 28, 1998 by and between
Sheridan and each of the Stockholders; (iii) the Purchase Option Agreement,
dated as of January 28, 1998 by and among SHCR, the Company and the
Stockholders; (iv) each of the Physician Employment Agreements, dated as of
January 28, 1998 by and between either CPM or NFAC and each of the Stockholders;
and (v) the Management Option Agreement by and between Sheridan, the Company and
the Stockholders (collectively, the "Related Documents"). Capitalized terms not
defined in this Agreement shall have the meanings given them in the Related
Documents.
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 SHCR the
respective number of shares of SHCR 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 SHCR Common
Stock being acquired by the Stockholders pursuant to the Purchase Option
Agreement (the "Closing Shares"), shall take place at the offices of Sheridan
concurrently with the Closing of the transactions contemplated by the Related
Documents, or at a later date as agreed to in writing by the parties and subject
to satisfaction or waiver of all of the conditions set forth in the Related
Documents and in this Agreement. For the purposes of this Agreement, the term
"Closing Shares" shall mean: (a) any shares of SHCR Common Stock issued at
Closing or at a later date as agreed to in writing by the parties, pursuant to
the Related Documents; and, (b) any securities of SHCR 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 SHCR 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 now or
hereafter acquired 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; and,
(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 delegatees.
provided, however, that, except in the case of Transfers pursuant to
Article III, the transferee agrees in writing for the benefit of the other
Stockholders and SHCR, 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.
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(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; SHCR 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 SHCR 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.
Section 2 Termination of Restrictions on Transfer of Closing Shares. The
provisions of this Article III, as they relate to certain Closing Shares, shall
terminate and be of no further force and effect as of January 28, 1999.
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
SHCR, 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 SHCR 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 Related Documents, 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 SHCR'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 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 SHCR of the proposed disposition and shall have
furnished to SHCR a statement of the circumstances surrounding the
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disposition; and, (ii) at the expense of the Stockholder or its
transferee, it shall have furnished to SHCR an opinion of counsel
reasonably satisfactory to SHCR 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 SHCR. Each
Stockholder has had the opportunity to ask questions and to receive
answers concerning the financial condition, operations and prospects
of SHCR 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 SHCR 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 SHCR,
dated as of October 31, 1995 (ii) annual reports for 1995 and 1996;
(iii) 10Ks for 1995 and 1996; and, (iv) SHCR's Form 10-Q for the time
period ended September 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 SHCR.
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.
8. The execution, delivery and performance by each Stockholder of
this Agreement and each agreement, document and instrument:
(d) 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
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to obtain any approval, consent or waiver of, or to make any
filing with, any person that has not been obtained or made;
and
(e) 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 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 SHCR, 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.
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. SHCR 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 Related Documents 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
JANUARY 28, 1998, 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.
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SHCR IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF STOCK. SHCR 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 SHCR.
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
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.
SHCR: Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attn:Mitchell Eisenberg, M.D.
President
with a copy to: Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attn:Jay A. Martus, Esq.
To Stockholders: At the Addresses listed on Schedule A attached to
this Agreement
with a copy to: Lozier, Tipton, Thames & Frazier
One Pensacola Plaza, Suite 224
125 West Romana Street
Pensacola, Florida 32501
Attn:Daniel R. Lozier, Esq.
or to any other address of which any party may notify the other parties as
provided above.
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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 SHCR may
refuse to recognize any unauthorized transferee as one of its stockholders for
any purpose, including, without limitation, for purposes of dividend and 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 SHCR.
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
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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. Jury Trial. 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.
SHCR:
SHERIDAN HEALTHCARE, INC.,
a Delaware corporation
By:
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Jay A. Martus, Vice President
STOCKHOLDERS:
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Ruben B. Timmons, M.D.
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Jeffrey L. Buchalter, M.D.
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Kurt A. Krueger, M.D.
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David E. Fairleigh, M.D.
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INVESTMENT AND STOCKHOLDERS' AGREEMENT
SCHEDULE A
Name and Address Consideration Consideration
of Stockholder Paid in SHCR Paid in SHCR
stock for CPM Stock for NFAC
Ruben B. Timmons, M.D.
4541 Canopy Road
Pensacola, Florida 32504 $909,216.00 $290,822.40
Jeffrey L. Buchalter, M.D.
94 Chanteclaire Circle
Gulf Breeze, Florida 32561 $779,328.00 $210,988.80
Kurt A. Krueger, M.D.
3913 W. Madura Road
Gulf Breeze, Florida 32561 $779,328.00 N/A
David E. Fairleigh, M.D.
96 Chanteclaire Circle
Gulf Breeze, Florida 32561 $779,328.00 $210,988.80