INVESTMENT AND STOCKHOLDERS' AGREEMENT
THIS INVESTMENT AND STOCKHOLDERS' AGREEMENT (the "Agreement") is made
as of June 26, 1998, 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
Reference is made to: (i) the Stock Purchase Agreement, dated as of
June 26, 1998 by and among Dr. Ian Jeffries Neonatology Associates, M.D., Inc.,
a Florida corporation ("IJNA"), Ian P. Jeffries, M.B., and Sheridan; (ii) the
Stock Purchase Agreement, dated as of June 26, 1998 by and among Andrew B.
Kairalla, M.D., Inc., a Florida corporation ("ABK"), Andrew B. Kairalla, M.D.,
and Sheridan; (iii) a Stock Purchase Agreement, dated as of June 26, 1998 by and
among Felix A. Estrada, M.D., Inc., a Florida corporation (the "FAE"), Felix A.
Estrada, and Sheridan;(ii) each of the Restrictive Covenant Agreements, dated as
of June 26, 1998 by and between Sheridan and each of the Stockholders; and (iii)
each of the Physician Employment Agreements, dated as of June 26, 1998 by and
between Sheridan Children's Healthcare Services, Inc., a Florida corporation and
each of 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 Stock Purchase Agreement, each Stockholder has been issued by
Sheridan the respective number of shares of Sheridan Common Stock (as defined in
the Stock Purchase 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 Stock
Purchase 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 Sheridan 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 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.
(a)ab 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 of 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 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.
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 June 26, 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
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 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 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 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 1996 and 1997; (iii) 10Ks for 1996 and
1997; and, (iv) Sheridan's Form 10-Q for the time period ended March
31, 1998. 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.
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 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.
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 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
JUNE 26, 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.
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 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.
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: Holland & Knight LLP
701 Brickell Avenue, Suite 3000
Miami, Florida 33131
Attn: Lee Lasris, Esq.
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
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. Litigation; Prevailing Party. Except as otherwise required
by applicable law or as expressly provided in this Agreement, in the event of
any litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
Section 12. 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 13. 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.
SHERIDAN:
SHERIDAN HEALTHCARE, INC.
By:
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Jay A. Martus, Vice President
STOCKHOLDERS:
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Felix A. Estrada, M.D.
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Ian P. Jeffries, M.B.
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Andrew B. Kairalla, M.D.
SCHEDULE A
Name and Address Consideration Paid
of Stockholder in Sheridan Stock
Felix A. Estrada, M.D.
9901 N.E. 13th Avenue
Miami Shores, Florida 33136 $125,000.00
Ian P. Jeffries, M.B.
10118 S.W. 125th Street
Miami, Florida 33176 $125,000.00
Andrew B. Kairalla, M.D.
9820 S.W. 60th Street
Miami, Florida 33173 $125,000.00