As filed with the Securities and Exchange Commission April 17, 1998
Registration Statement No. 33-
-----
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
SHERIDAN HEALTHCARE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-3252967
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
(954) 987-5822
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------------
Mitchell Eisenberg, M.D.
Chairman, President and Chief Executive Officer
Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
(954) 987-5822
(Name, address, including zip code, and telephone number, including area
code, of Registrant's agent for service)
With a copy to:
Kevin M. Dennis, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
- ----------------------------- ----------------------- -------------------------
Title of Securities Being Proposed Maximum Amount of
Registered Aggregate Offering Registration
Price(1) Fee
- ----------------------------- ----------------------- -------------------------
Common Stock, par value $16,810,000.00 $4,959.00
$.01 per share
- ----------------------------- ----------------------- -------------------------
(1) Based upon the average of the high and low sale prices of the Common Stock
of Sheridan Healthcare, Inc. reported on the NASDAQ National Market on
April 15 , 1998 and estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) of the Securities Act of
1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED APRIL 17, 1998
PROSPECTUS
- ----------
1,000,000 Shares
SHERIDAN HEALTHCARE, INC.
Common Stock
-----------------------------
This Prospectus relates to the registration of 1,000,000 shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
Sheridan Healthcare, Inc. ("Sheridan" or the "Company"). All of the shares of
Common Stock are being offered by the Company. The Common Stock is quoted on the
NASDAQ National Market ("NASDAQ") under the symbol "SHCR." On April ___, 1998,
the last reported sale price for the Company's Common Stock was ___ per share.
-----------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
-----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
PRICE PROCEEDS
TO PLACEMENT TO
PUBLIC FEE (1) COMPANY (2)
- --------------------------------------------------------------------------------
PER SHARE.......... $ $ $
- --------------------------------------------------------------------------------
TOTAL............. $ $ $
================================================================================
(1) The Company has agreed to indemnify the Placement Agent against certain
liabilities under the Securities Act of 1933, as amended, see "Plan of
Distribution".
(2) Before deducting expenses of the offering estimated at $
-------------- ,
payable by the Company.
-----------------------------
The Common Stock offered hereby is offered for sale by the Company to one
or more select accredited institutional investors. The Common Stock offered
hereby is being offered on a best efforts basis and the offering will terminate
fifteen business days following the date hereof. Purchasers of the shares
offered hereby must purchase a minimum of 300,000 shares. There are no
arrangements to place the funds received in an escrow trust or similar
arrangement. It is expected that the delivery of certificates representing the
shares of Common Stock will be made against payment for the shares in
- -----------------, ------------------- on or about April , 1998. ---
The date of this Prospectus is April , 1998.
---
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC" or the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at 7 World Trade Center, 13th Floor, New York, New York 10048, and Northwestern
Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such materials can be obtained upon written request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. The Company is required to file
electronic versions of these reports, proxy statements and other information
with the Commission via the Commission's Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") System. The Commission maintains a site on the World Wide
Web (http://www.sec.gov) that contains all EDGAR filings. In addition, material
filed by the Company can be inspected at the offices of The NASDAQ Stock market,
Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act with respect to the Common Stock. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. The Registration Statement, including exhibits thereto, may be
inspected and copied at the locations described above. Statements contained in
this Prospectus as to the contents of any contract or other document referred to
are not necessarily complete, and in each instance reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated in this Prospectus by
reference: (i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (File No. 0-26806), as filed on March 30, 1998, and
amended on Form 10-K/A, as filed on April 17, 1998; (ii) the Company's Current
Report on Form 8-K filed March 19, 1998, as amended on Form 8-K/A, as filed on
April 16, 1998; and (iii) the description of the Company's Common Stock
contained in its Registration Statement on Form 8-A filed September 20, 1995,
including any amendment or report filed for the purpose of amending such
description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the filing of a post-effective amendment hereto that indicates that all
securities offered hereunder have been sold or that deregisters all such
securities then remaining unsold shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in an applicable Prospectus Supplement) or in any subsequently filed
document that is incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus or any Prospectus Supplement, except as so
modified or superseded.
3
<PAGE>
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON, INCLUDING ANY
OWNER (BENEFICIAL OR OF RECORD) OF COMMON STOCK, TO WHOM A COPY OF THIS
PROSPECTUS IS DELIVERED, AT THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN
EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO
JAY A. MARTUS, ESQ., VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL, SHERIDAN
HEALTHCARE, INC., 4651 SHERIDAN STREET, SUITE 400, HOLLYWOOD, FLORIDA 33021,
TELEPHONE (954) 987-5822.
FORWARD LOOKING STATEMENTS
This Prospectus contains or incorporates certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 with respect to the financial condition, results of operations and business
of the Company. These forward-looking statements are subject to risks and
uncertainties that would cause actual results to differ materially from those
projected. Those risks and uncertainties include fluctuations in the volume of
services delivered by the Company's affiliated physicians, changes in
reimbursement rates for those services, uncertainty about the ability to collect
the appropriate fees for those services, the loss of significant hospital or
third-party payor relationships, and changes in the number of patients using the
Company's physician services as well as those items described in "Risk Factors".
THE COMPANY
The Company is a physician practice management company that provides and
manages practices that provide specialist physician services at hospitals and
ambulatory surgical facilities in the areas of anesthesia, neonatology,
pediatrics, obstetrics, pain management and emergency services. In addition, it
owns and operates, or manages, office-based obstetrical, general surgical,
gynecologic-oncology, perinatology and primary care practices. The Company
derives substantially all of its revenue from the medical services provided by
the physicians who are employed by the Company or whose practices are managed by
the Company. The Company generates revenue from its specialist physician
services by directly billing third-party payors or patients on a fee-for-service
or discounted fee-for-service basis. In addition, several hospitals at which the
Company provides specialist physician services pay subsidies to the Company to
supplement revenue from billings to third-party payors. The Company generates
revenue from its office-based physician services pursuant to various payment
arrangements, including shared-risk capitation arrangements, fee-for-service or
discounted fee-for-service arrangements and other capitation arrangements.
The Company's objective is to expand its business by increasing the
number of hospitals and other health care facilities at which it provides
specialist physician services, providing physician services in additional
specialties to existing hospital customers and acquiring or managing additional
physician practices. One of the Company's key strategies is to create integrated
networks providing women's and children's healthcare services, consisting of
both hospital-based and office-based physicians in various complementary
specialties that support the Company's hospital customers. As of April 8, 1998,
the Company employed, or managed the practices of, approximately 241 physicians
practicing under 52 specialty service contracts with 35 health care facilities
and at 24 office locations.
The Company's principal executive offices are located at 4651 Sheridan
Street, Suite 400, Hollywood, Florida 33021, and its telephone number is (954)
987-5822.
THE OFFERING
Common Stock Offered 1,000,000 shares
Common Stock to be outstanding after
the offering 9,197,736 shares
NASDAQ National Market Symbol SHCR
4
<PAGE>
RECENT DEVELOPMENTS
During the period from January 1998 to March 1998 the company completed
four transactions with physician practices for aggregate consideration of
approximately $37.3 million of which approximately $17.2 million was paid in
cash and approximately $20.1 million was paid through the issuance of
approximately 1,384,000 shares of the Company's common stock. In connection with
such transactions the Company entered into long-term management agreements with
a hospital-based anesthesia practice with twelve physicians, a hospital-based
anesthesia and pain management practice with eight physicians and an
office-based gynecologic-oncology practice with two physicians. These practices
are all located in Florida. The Company also entered into a long-term management
agreement with an office-based perinatology practice with two physicians that is
located in Texas (the "Perinatology Transaction").
The Company may be obligated to issue additional shares of Common Stock
(the "Additional Shares") as consideration for the Perinatology Transaction if
the total value of cash received and the fair market value of shares of Common
Stock held by each shareholder of the two entities through which the acquired
practice is conducted, as of March 4, 1999, is not equal to a specified dollar
value. Under the Company's Charter and the Delaware General Corporation Law, the
Board of Directors had the authority to approve the issuance of the Common
Stock. However, because the Additional Shares could, if issued, be equal to or
in excess of 20% of the number of shares outstanding prior to the issuance of
such shares, Rule 4310 of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") requires that stockholder approval be
obtained in order for the Additional Shares in excess of the 20% level to be
listed on Nasdaq. Accordingly, the Company shall be soliciting stockholder
approval for the issuance of such additional shares.
Effective April 1, 1998 the Company completed the sale of a primary care
practice with two office locations for an aggregate price of approximately $3.5
million. As consideration for the sale the Company received from the buyer a
promissory note pursuant to which payments are made based on a 20-year
amortization schedule, with a balloon payment at the end of the fifth year. The
annual interest rate on the note is 7.5%. The practices generated approximately
$ 8.2 million in net revenue for the year ended December 31, 1997. The Company
did not realize a significant gain or loss on the transaction.
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of the Company's Common Stock.
RISKS ASSOCIATED WITH THE COMPANY'S GROWTH STRATEGY
A key element of the Company's strategy involves growth through
acquisition of physician practices. The Company is subject to various risks
associated with this strategy, including the risk that the Company will be
unable to identify and recruit suitable acquisition candidates in the future.
The growth and profitability of the Company is also largely dependent on the
Company's ability to effectively integrate the acquired practices to maintain or
increase reimbursement levels, to manage and control costs, and to realize
economies of scale. Any failure of the Company to consummate economically
feasible acquisitions, effectively integrate acquired practices or price its
services appropriately could have a material adverse effect on the Company's
financial condition or results of operations.
5
<PAGE>
RISKS ASSOCIATED WITH GROWTH FROM NEW CONTRACTS AND SERVICES
The Company's growth strategy is also based on obtaining new contracts
for the provision of specialist physician services. There is substantial
competition for such contracts and the Company is increasingly involved in a
competitive bidding process that requires the Company to accurately project
revenues and expenses on a forward basis with limited information. The
integration of new contracts, as well as the maintenance of existing contracts,
is made more difficult by increasing pressures from health care payors to reduce
reimbursement rates at a time when the cost of providing medical services
continues to increase. Any failure of the Company to identify opportunities for
new contracts and services, effectively integrate new contracts, and price its
services appropriately could have a material adverse effect on the Company's
operating results.
RISKS RELATING TO CAPITAL REQUIREMENTS
The Company's acquisition of physician practices requires substantial
capital investment. Capital is typically needed not only for the acquisition of
the physician practices, but also for the effective integration, operation and
expansion of the practices as well as the start-up of new contracts for
specialist physician services. The practices may require capital for renovation
and expansion and for the addition of medical equipment and technology.
Therefore, the Company will need to raise capital through the issuance of
long-term or short-term indebtedness or the issuance of its equity securities in
private or public transactions in order to complete further acquisitions and
expansion. This could result in dilution of existing equity positions and
increased interest expense. There can be no assurance that acceptable financing
for future acquisitions or for the integration and expansion of existing
physician practices can be obtained on suitable terms, if at all.
RISKS ASSOCIATED WITH EXPANSION INTO NEW GEOGRAPHIC MARKETS
In pursuing its growth strategy, the Company intends to expand its
presence into new geographic markets. Expansion of the operations of the Company
to other jurisdictions could require additional structural and organizational
modifications of the Company's form of relationship with hospitals or physician
practices. Those changes, if any, could have an adverse effect on the Company.
The laws in most states regarding the corporate practice of medicine and the
laws relating to self-referral have been subject to limited judicial and
regulatory interpretation and, therefore, no assurances can be given that if the
Company's activities are challenged that they will be found to be in compliance
with all applicable laws and regulations. The Company may also face competitors
with greater knowledge of such markets than the Company. There can be no
assurance that the Company will be able to effectively establish a presence in
these new markets.
COMPETITION
The provision of health care services and physician practice management
services are both competitive businesses in which the Company competes for
contracts with numerous entities in the health care industry. The Company also
competes with traditional providers and managers of health care services for the
recruitment of employed or managed physicians. In addition, the Company, in
pursuing its growth strategy, faces competitive pressures for the acquisition
of, and the provision of management services to, additional hospital-based and
office-based physician practices. Several companies, both publicly and privately
held, that have greater resources than the Company are pursuing the acquisition
of the assets of physician practices and management contracts with physician
practices. There can be no assurance that the Company will be able to continue
to compete effectively with such competitors, that additional competitors will
not enter the market, or that such competition will not make it more difficult
to acquire the assets of, and provide management services to, physician
practices on terms beneficial to the Company.
VOLATILITY OF STOCK PRICE
Historically there has been and there may continue to be volatility in
the market price for the Company's Common Stock. Quarterly operating results of
the Company and their relationship to analysts' projections, changes in general
conditions in the economy, the financial markets or the healthcare industry, or
other developments affecting the Company or its competitors, could cause the
market price of the Common Stock to fluctuate substantially. In addition, in
recent years, the stock market and, in particular, the healthcare industry
segment, has experienced significant price and volume fluctuations. This
volatility has affected the market prices of securities issued by many companies
for reasons unrelated to their operating performance.
6
<PAGE>
SHARES OF ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Common Stock in the public market after
this offering could adversely affect the market price of the Common Stock. In
addition to the 1,000,000 shares of Common Stock offered hereby and the
3,825,000 shares of Common Stock issued in the Company's initial public
offering, 2,975,459 shares of Common Stock owned by current stockholders of the
Company are currently eligible for sale in the public market, 13,564 shares will
be eligible for sale beginning in November 1998, 460,120 shares will be eligible
for sale beginning in January 1999 and 923,593 shares will be eligible for sale
beginning in March 1999. All of the executive officers and directors of the
Company, who currently hold 347,013 shares, have agreed not to publicly offer,
sell or otherwise dispose of any shares of Common Stock owned by them for 60
days from the date of this prospectus without the consent of the Placement
Agent. Upon the later of the expiration of such agreement or such dates,
pursuant to Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), such stockholders may sell such shares without registration,
subject to certain limitations, including limitation on volume of sales. If such
stockholders should sell or otherwise dispose of a substantial amount of Common
Stock in the public market, the prevailing market price for the Common Stock
could be adversely affected.
CONCENTRATION OF REVENUE
A significant portion of the Company's revenue is derived from
delivering or managing hospital-based physician services from hospitals that are
under common ownership by a limited number of entities. Of the Company's total
net revenue in 1997, approximately $21.8 million, or 22.1%, was derived from
anesthesia, obstetrics and neonatology services delivered at three hospitals
owned and operated by the South Broward Hospital District. In addition,
approximately $21.8 million, or 22.2% of the Company's total net revenue in
1997, was derived from anesthesia, neonatology, pediatric and emergency services
delivered at 11 hospitals and two ambulatory surgical facilities owned and
operated by Columbia/HCA Healthcare Corp. In addition, approximately $11.7
million, or 11.9% of the Company's total net revenue in 1997, was derived from
anesthesia, neonatology, pediatric, emergency and management services delivered
at seven hospitals owned and operated by Tenet Healthcare Corporation. The loss
of any of these arrangements or relationships would have a material adverse
effect on the Company's business.
A significant portion of the Company's revenue from both hospital-based
and office-based physician services is derived from various arrangements,
including fee-for-service and capitation arrangements, with Humana Medical
Plans, Inc., a third-party payor, and its affiliates. During 1997, the Company
derived total net revenue of approximately $14.1 million from Humana and its
affiliates, which accounted for 14.3% of the Company's total net revenue and
included approximately $7.7 million in shared-risk capitation revenue that was
eliminated as part of the sale of practices discussed under "Material Changes".
The loss of any existing contracts or arrangements with Humana could have a
material adverse effect on the Company's business.
EXPOSURE TO PROFESSIONAL LIABILITY
Due to the nature of its business, the Company from time to time becomes
involved as a defendant in medical malpractice lawsuits, some of which are
currently ongoing, and is subject to the attendant risk of substantial damage
awards. The most significant source of potential liability in this regard is the
negligence of physicians employed or contracted by the Company or the practices
it manages. To the extent such physicians are employees of the Company or were
regarded as agents of the Company in the practice of medicine, the Company
would, in most instances, be held liable for their negligence. In addition, the
Company could be found in certain instances to have been negligent in performing
its management services under contractual arrangements even if no agency
relationship with the physician were found to exist. The Company's contracts
with hospitals and third party payors generally require the Company to indemnify
such other parties for losses resulting from the negligence of physicians who
were employed or managed by or affiliated with the Company. The Company
maintains professional and general liability insurance on a claims made basis in
amounts deemed appropriate by management, based upon historical claims and the
nature and risk of its business. There can be no assurance, however, that an
existing or future claim or claims will not exceed the limits of available
insurance coverage, that any insurer will remain solvent and able to meet its
obligations to provide coverage for any such claim or claims or that such
coverage will continue to be available or available with sufficient limits and
at reasonable cost to adequately and economically insure the Company's
operations in the future. A judgement against the Company in excess of such
coverage could have a material adverse effect on the Company.
7
<PAGE>
LIMITATIONS ON REIMBURSEMENT
Substantially all of the Company's revenues are derived from third party
payors, such as governmental programs (primarily Medicare and Medicaid), private
insurance plans and managed care organizations. Reflecting current trends in the
health care industry, these third party payors increasingly are negotiating with
health care providers such as the Company concerning the prices charged for
medical services by its owned and managed practices, with the goal of lowering
reimbursement and utilization rates. The profitability of the Company may be
adversely affected by changes in Medicare and Medicaid reimbursement, cost
containment decisions of third party payors and other payment factors over which
the Company has no control.
A significant portion of the Company's revenue is derived from
delivering medical services to patients who are covered under various Medicare
and Medicaid health care programs. Approximately 15.8% of the Company's total
net revenue in 1997 was derived from the assignment of Medicare and Medicaid
benefits to the Company by patients of the Company's affiliated physicians. In
addition, approximately 7.9% of the Company's total net revenue in 1997 was
derived from capitation payments from health maintenance organizations for
patients who had assigned their Medicare or Medicaid benefits to the health
maintenance organizations. Medicare and Medicaid reimbursement policies are
subject to sweeping change and those programs are under significant pressure to
reduce the costs of providing health care services.
The federal Medicare program adopted a system of reimbursement of
physician services, known as the resource based relative value scale ("RBRVS"),
which took effect in 1992 and was implemented on December 31, 1996. The Company
expects that the RBRVS fee schedule and other future changes in Medicare
reimbursement, for the services it provides, will increase at or above the
overall rate of inflation throughout the U.S. economy, though there can be no
assurance that these increases will occur.
On August 5, 1997, the President signed into law a number of Medicare
provisions as part of the Balanced Budget Act of 1997. When compared with
projected Medicare levels under current law, the legislation could reduce
Medicare spending by $115 billion over 5 years. The vast majority of these
savings would come from reductions in payments for services of healthcare
facilities, practitioners and other providers. The legislation will eliminate
disparities in payment rates for similar services by physicians in different
specialties effective January 1, 1998. Beginning in 1998, inflation increases
will be adjusted based on a "sustainable growth rate" defined with reference to
the change in (i) the number of Medicare beneficiaries, (ii) the gross domestic
product per capita, and (iii) the level of expenditures for physician services.
The Company has experienced a reduction in reimbursement for certain medical
services provided by its physicians with a specialty in surgery due to this
legislation. This reduction has not been significant. The legislation will also
revise Medicare payments for practice expense costs and change payments to
managed care plans from the current rate of 95% of fee-for-service rates in the
area, to a nationwide average per capita fee for service spending, with an
adjustment factor for local area wage rates. Any further reductions in payment
for the services offered by the Company could have an adverse effect on the
Company's results of operations and financial condition.
Some private insurance plans and managed care organizations with which
the company has contracts or to whose members it provides medical services have
limited operating histories. A default of a third-party payor and non-payment
for the Company's medical services could have an adverse effect on the Company's
results of operations and financial condition.
SIGNIFICANT GOVERNMENT REGULATION
Because the Company is a participant in the health care industry, its
operations and relationships are subject to extensive and increasing regulation
by a number of governmental entities at the federal, state and local levels. The
Company is also subject to laws and regulations relating to business
corporations in general. The Company believes its operations are in material
compliance with applicable laws. However, the assortment of laws and regulations
affecting the Company's business is complex, in many cases un-clear and many
provisions have not been the subject of regulatory or judicial interpretation
and there can be no assurance that a review of the Company's business by courts
or regulatory authorities will not result in a determination that the Company
has not complied fully with all applicable laws and regulations in one or more
aspects of its business or that could otherwise adversely affect the operations
of the Company. Further, there can be no assurance that the health care
regulatory environment will not change so as to restrict the Company's existing
operations or their expansion.
8
<PAGE>
The laws of many states prohibit business corporations such as the
Company from practicing medicine and employing physicians to practice medicine
and certain self-referral laws and regulations restrict the activities of
physicians who are employed by entities in which they have ownership interests.
The structure of the Company's operations in certain states is influenced by the
laws prohibiting business corporations from practicing medicine and the
structure of the Company's arrangements with physicians, who may be restricted
by self-referral laws, is influenced by those self-referral laws and
regulations.
Expansion of the operations of the Company to other jurisdictions could
require additional structural and organizational modifications of the Company's
form of relationship with hospitals or physician practices. Those changes, if
any, could have an adverse effect on the Company. The laws in most states
regarding the corporate practice of medicine and the laws relating to
self-referral have been subject to limited judicial and regulatory
interpretation and, therefore, no assurances can be given that if the Company's
activities are challenged that they will be found to be in compliance with all
applicable laws and regulations.
In addition to prohibiting the practice of medicine, numerous states
prohibit entities like the Company from engaging in certain health care related
activities such as fee-splitting with physicians. Florida, for instance, enacted
in April 1992 a Patient Self-Referral Act that severely restricts patient
referrals for certain services, prohibits mark-ups of certain procedures,
requires disclosure of ownership in businesses to which patients are referred
and places other regulations on health care providers. The Company believes that
its Florida practices fit within the group practice exemption contained in the
Patient Self-Referral Act. However, investments or contractual relationships
with businesses not specifically operated by the Company would, in some cases,
be prohibited. The Company believes that it is likely that other states will
adopt similar legislation. Accordingly, expansion of the operations of the
Company to jurisdictions may require it to comply with such jurisdictions'
regulations which could lead to structural and organizational modifications of
the Company's form of relationship with hospitals or physician practices in
those states. Those changes, if any, could have an adverse effect on the
Company.
Certain provisions of the Social Security Act, commonly referred to as
the "Anti-kickback Statute," prohibit the offer, payment, solicitation or
receipt of any form of remuneration in return for the referral of Medicare or
state health program patients or patient care opportunities, or in return for
the recommendation, arrangement, purchase, lease, or order of items or services
that are covered by Medicare or state health programs. The Anti-kickback Statute
is broad in scope and has been broadly interpreted by courts in many
jurisdictions. Read literally, the statute places at risk many business
arrangements, potentially subjecting such arrangements to lengthy, expensive
investigations and prosecutions initiated by federal and state governmental
officials. Many states have adopted similar prohibitions against payments
intended to induce referrals of Medicaid and other third-party payor patients.
The Company believes that it has not violated the Anti-kickback Statute.
Violation of the Anti-kickback Statute is a felony, punishable by fines up to
$25,000 per violation and imprisonment for up to five years. In addition, the
Department of Health and Human Services may impose civil penalties excluding
violators from participation in Medicare or state health programs.
The federal government has published regulations that provide
exceptions, or "safe harbors," for transactions that will be deemed not to
violate the Anti-kickback Statute. Among the safe harbors included in the
regulations were provisions relating to the sale of practitioner practices,
management and personal service agreements, and employee relationships. Although
the Company believes that it is not in violation of the Anti-kickback Statute,
some of its operations do not fit within any of the existing or proposed safe
harbors, and, accordingly, there can be no assurance that the Company's
practices will not be found to be in violation of the statute, and any such
finding could have a material adverse effect on the Company.
9
<PAGE>
Significant prohibitions against physician referrals were enacted by
Congress in the Omnibus Budget Reconciliation Act Of 1993. These prohibitions,
commonly known as "Stark II," prohibit, subject to certain exemptions, a
physician or a member of his immediate family from referring Medicare or
Medicaid patients to an entity providing "designated health services" in which
the physician has an ownership or investment interest, or with which the
physician has entered into a compensation arrangement including the physician's
own group practice. The designated health services include radiology and other
diagnostic services, radiation therapy services, physical and occupational
therapy services, durable medical equipment, parenteral and enteral nutrients,
equipment, supplies, prosthetics, orthotics, outpatient prescription drugs, home
health services, and inpatient and outpatient hospital services. The penalties
for violating Stark II include a prohibition on payment by these government
programs and civil penalties of as much as $15,000 for each violative referral
and $100,000 for participation in a "circumvention scheme." While the Company
believes it is in compliance with the Stark legislation, there can be no
assurance this is the case. Moreover, the violation of Stark I or II by the
Company could result in significant fines or penalties and exclusion from
participation in the Medicare and Medicaid programs. Such penalties or
exclusion, if applied to the Company, could result in significant loss of
reimbursement which would adversely affect the Company.
On March 27, 1996, the United States Department of Health and Human
Services promulgated regulations pursuant to the requirements of the Omnibus
Budget Reconciliation Act of 1990 concerning physician incentive plans. The
regulations provide that physician incentive plans may operate only if no
specific payment is made directly or indirectly under the plan as an inducement
to reduce or limit medically necessary services furnished to a specific
enrollee. These regulations only apply to enrollees who are entitled to Medicare
or Medicaid benefits under a prepaid health plan. The Company does not believe
these regulations will have a material effect on the Company's current
operations, including its contractual arrangements with its physicians and
prepaid health plans.
Because the Company intends to maintain certain of the health care
practices that it acquires as separate legal entities, they may be deemed
competitors subject to a range of antitrust laws which prohibit anti-competitive
conduct, including price fixing, concerted refusals to deal and division of
market. The Company intends to comply with such state and federal laws as may
affect its operations, but there is no assurance that the review of the
Company's business by courts or regulatory authorities will not result in a
determination that could adversely affect the operations of the Company.
There are also state and federal civil and criminal statutes imposing
substantial penalties, including civil and criminal fines and imprisonment, on
health care providers which fraudulently or wrongfully bill governmental or
other third-party payors for health care services. The federal law prohibiting
false billings allows a private person to bring a civil action in the name of
the United States government for violations of its provisions. The Company
believes it is in material compliance with such laws, but there is no assurance
that the Company's activities will not be challenged or scrutinized by
governmental authorities. Moreover, technical Medicare and other reimbursement
rules affect the structure of physician billing arrangements. The Company
believes it is in material compliance with such regulations, but regulatory
authorities may differ and in such event the Company may have to modify its
physician billing arrangements. Noncompliance with such regulations may
adversely affect the operation of the Company and subject it to penalties and
additional costs.
Laws in all states regulate the business of insurance and the operation
of HMOs. Many states also regulate the establishment and operation of networks
of health care providers. While these laws do not generally apply to the hiring
and contracting of physicians by other health care providers or to companies
which participate in capitated arrangements, there can be no assurance that
regulatory authorities of the states in which the Company operates would not
apply these laws to require licensure of the Company's operations as an insurer,
as an HMO or as a provider network. The Company believes that it is in
compliance with these laws in the states in which it does business, but there
can be no assurance that future interpretations of insurance laws and health
care network laws by the regulatory authorities in these states or in the states
into which the Company may expand will not require licensure or a restructuring
of some or all of the Company's operations.
ANTI-TAKEOVER EFFECT OF DELAWARE LAW AND CHARTER AND BY-LAW PROVISIONS
Certain provision of the Company's certificate of incorporation, by-laws
and Delaware law could, together or separately, discourage potential acquisition
proposals, delay or prevent a change in control of the Company and limit the
price that certain investors might be willing to pay in the future for shares of
the Common Stock. These provisions include a classified Board of Directors and
the ability of the Board of Directors to authorize the issuance, without further
stockholder approval, of preferred stock with rights and privileges which could
be senior to the Common Stock. The Company also is subject Section 203 of the
Delaware General Corporation Laws which, subject to certain exceptions,
prohibits a Delaware corporation from engaging in any of a broad range of
business combinations with any "interested stockholder" for a period of three
years following the date that stockholder became an interested stockholder.
DEPENDENCE ON KEY MANAGEMENT
The Company is highly dependent on its senior and middle management. The
loss of key management personnel or inability to attract, retain and motivate
sufficient number of qualified management personnel could adversely affect the
Company's business. In addition, the Company may enter into employment
agreements with key physicians and administrative personnel of acquired
practices. The loss of these key personnel could adversely affect the
performance of the acquired practice and the Company.
10
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Common
Stock offered hereby will be approximately $ million. The Company intends
-----
to utilize the entire proceeds to repay a portion of the Company's outstanding
indebtedness under the Company's revolving credit facility with NationsBank
National Association ("NationsBank"). The revolving credit facility currently
bears interest at the weighted average rate of 7.60% and is payable in December
2000. The Company utilized the proceeds of the currently outstanding
indebtedness under its credit facility to finance the acquisition of certain
physician practices and for working capital and other general corporate
purposes.
PLAN OF DISTRIBUTION
The Shares offered hereby are being offered for sale directly by the
Company to a limited number of accredited institutional investors and affiliates
of such accredited institutional investors in minimum purchase amounts of
300,000 shares. The price of the Shares offered hereby will be determined
through negotiations between the Company and prospective purchasers of the
Shares. Pacific Growth Equities, Inc. (the "Placement Agent") has been retained
to assist the Company, on a best efforts basis, in arranging sales of 1,000,000
shares to be sold in the offering. The Placement Agent is not obligated to
purchase any of the shares offered hereby. No investor funds will be accepted
prior to the effectiveness of the Registration Statement. There can be no
assurance that the Company will be successful in selling any or all of the
Shares offered hereby.
The Company has agreed to pay to the Placement Agent a fee equal to 5%
of the purchase price of the shares. The Company has also agreed to indemnify
the Placement Agent against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for
the Company by Goodwin, Procter & Hoar LLP, Boston, Massachusetts.
EXPERTS
The consolidated financial statements and schedule incorporated by
reference in this Prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen LLP, independent certified public accountants,
as indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of that firm as experts in giving those reports.
11
<PAGE>
========================================== =================================
No dealer, salesperson or other
individual has been authorized to give
any information or make any
representations not contained in this
Prospectus. If given or made, such
information or representation must not 1,000,000 SHARES
be relied upon as having been authorized
by the Company or the Selling SHERIDAN
Stockholders. This Prospectus does not HEALTHCARE, INC.
constitute an offer to sell, or a
solicitation of an offer to buy, the
Common Stock in any jurisdiction where,
or to any person to whom, it is unlawful
to make such offer or solicitation. COMMON STOCK
Neither the delivery of this Prospectus
nor any sale made hereunder shall, under
any circumstances, create an implication
that there has not been any change in
the facts set forth in this Prospectus
or in the affairs of the Company since
the date hereof.
---------------------------------
Prospectus
---------------------------------
April , 1998
---
========================================== =================================
<PAGE>
II-24
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
--------------------------------------------
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee are estimated):
Registration fee -- Securities and Exchange Commission..... $ 4,959.00
Accountants' fees and expenses............................. *
Blue Sky fees and expenses................................. *
Legal fees and expenses (other than Blue Sky).............. *
Miscellaneous.............................................. *
-----------
TOTAL................................................... $ *
===========
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with Section 145 of the General Corporation Law of the
State of Delaware, Article VII of the Company's Third Amended and Restated
Certificate of Incorporation (the "Certificate") provides that no director of
the Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or (iv)
for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the Delaware General
Corporation Law is amended to authorize the further elimination or limitation of
the liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Article V of the Company's Amended and Restated By-laws provides for
indemnification by the Company of its officers and certain non-officer employees
under certain circumstances against expenses (including attorneys fees,
judgments, fines, taxes, penalties and amounts paid in settlement) reasonably
incurred in connection with the defense or settlement of any threatened, pending
or completed legal proceeding in which any such person is involved by reason of
the fact that such person is or was an officer or employee of the Company if
such person acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
criminal actions or proceedings, if such person had no reasonable cause to
believe his or her conduct was unlawful.
The Amended and Restated Stockholders' Agreement, filed as Exhibit 4.2
to the Company's registration statement on Form S-1 (File No. 33-93290) filed on
June 8, 1995, as amended (the "Form S-1"), provides for indemnification by the
Company of its existing principal stockholders and the controlling persons of
such stockholders against certain liabilities arising under the securities laws.
Under Section 7 of the Underwriting Agreement filed as Exhibit 1.1 to
the Form S-1, the underwriters of the Company's initial public offering have
agreed to indemnify, under certain conditions, the Company, its directors,
certain of its officers and persons who control the Company within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), against
certain liabilities.
The Company carries directors' and officers' liability insurance
covering its directors and officers.
II-2
<PAGE>
Item 16. Exhibits.
3.1 Form of Placement Agreement between the Company and the
Placement Agent dated April , 1998.
---
3.2 Form of Common Stock Purchase Agreement between the Company
and certain purchasers dated April , 1998.
---
4.1 Third Amended and Restated Certificate of Incorporation, as
amended effective May 27, 1997 (incorporated herein by
reference to Exhibit 3.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997).
4.2 Amended and Restated By-laws (incorporated herein by
reference to Exhibit 3.2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1995).
5.1* Opinion of Goodwin, Procter & Hoar LLP as to the legality
of the securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Certified Public
Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
24.1 Powers of Attorney (included on the signature page of this
Registration Statement).
* To be filed by amendment
ITEM 17. UNDERTAKINGS.
-------------
(a) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in this Registration Statement shall
be deemed to be a new Registration Statement relating to the securities offered
therein and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
(c) The Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the Form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registrant statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hollywood, State of Florida, on April 17, 1998.
SHERIDAN HEALTHCARE, INC.
By: /s/ Mitchell Eisenberg
------------------------------------------
Mitchell Eisenberg, M.D.
Chairman, President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Mitchell Eisenberg, M.D. and Jay A. Martus, Esq., and each of them, as her or
his true and lawful attorney-in-fact and agent, with full power of substitution,
for her or him and in her or his name, place and stead, in any and all
capacities to sign any or all amendments or post-effective amendments to this
registration statement (or any registration statement for the same offering that
is to be effective upon filing pursuant to Rule 462(b) under the Securities Act
of 1933), and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or her or his substitute may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
/s/ Mitchell Eisenberg, M.D. Chairman of the Board of, April 17, 1998
- ---------------------------- Directors, President and
Mitchell Eisenberg, M.D. Chief Executive Officer
(Principal Executive Officer)
/s/ Michael F. Schundler Chief Operating Officer and April 17, 1998
- ------------------------- Chief Financial (Principal
Michael F. Schundler Financial Officer and
Principal Accounting Officer)
/s/ Lewis D. Gold, M.D. Executive Vice President- April 17, 1998
- ---------------------------- Business Development and
Lewis D. Gold, M.D. Director
/s/ Henry E. Golembesky, M.D. Director April 17, 1998
- -----------------------------
Henry E. Golembesky, M.D.
/s/ Jamie Hopping Director April 17, 1998
- -----------------------------
Jamie Hopping
/s/ Neil A. Natkow, D.O. Director April 17, 1998
- -----------------------------
Neil A. Natkow, D.O.
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
3.1 Form of Placement Agreement between the Company and the
Placement Agent dated April , 1998.
---
3.2 Form of Common Stock Purchase Agreement between the Company
and certain purchasers dated April , 1998.
---
4.1 Third Amended and Restated Certificate of Incorporation, as
amended effective May 27, 1997 (incorporated herein by
reference to Exhibit 3.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997).
4.2 Amended and Restated By-laws (incorporated herein by
reference to Exhibit 3.2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1995).
5.1* Opinion of Goodwin, Procter & Hoar LLP as to the legality
of the securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Certified Public
Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
24.1 Powers of Attorney (included on the signature page of this
Registration Statement).
* To be filed by amendment
II-6
<PAGE>
Exhibit 3.1
---------------------------
PLACEMENT AGREEMENT
---------------------------
April ___, 1998
PACIFIC GROWTH EQUITIES 353 Sacramento Street, 16th Floor San Francisco,
California 94111
Ladies and Gentlemen:
SECTION 1. Introductory. Sheridan Health Care, Inc., a
Delaware corporation (the "Company"), hereby engages Pacific Growth Equities
(the "Agent") upon the terms and conditions set forth herein, as the Company's
agent in connection with the proposed offering to the entities identified on
Exhibit A of the number of shares set forth opposite each such entity's name on
Exhibit A (the "Placement Shares") of the Company's authorized but unissued
common stock, $.01 par value ("Common Stock").
SECTION 2. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Agent that:
(a) A registration statement on Form S-3 (File No.
[file no.]) as to [number of shares] shares of Common Stock of the Company has
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, has been filed with the Commission, and has been
declared effective by the Commission. The [number of shares] shares of Common
Stock to which this filing relates are sometimes referred to herein as the
"Shares." The Company meets the necessary requirements for filing on Form S-3.
The Company [has prepared and has filed an amendment to the registration
statement prior to the effective date of the registration statement, and] may
prepare and file amendments to the registration statement after the effective
date of the registration statement, any and all such amendments [have been or]
will be similarly prepared. There have been delivered to you two signed copies
of the registration statement and any amendments thereto, together with two
copies of each exhibit filed therewith. The Company will next file with the
Commission a final prospectus in accordance with Rules 430A and/or 424(b) of the
Rules and Regulations. As filed, the final prospectus, and any post-effective
amendments to the registration statement shall include all Rule 430A Information
(as hereinafter defined) and, except to the extent that you shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the date and time that this Agreement was executed and
delivered by the parties hereto or, to the extent not completed at such date and
time, shall contain only such specific additional information and other changes
(beyond those contained in the latest Preliminary Prospectus (as hereinafter
defined)) as the Company shall have previously advised you in writing would be
included or made therein.
<PAGE>
The term "Registration Statement" as used in this Agreement
shall mean, collectively, the registration statement referred to in the
preceding paragraph at the time such registration statement becomes effective
and, in the event any post-effective amendments thereto become effective prior
to the Closing Date (as hereinafter defined), shall also mean the registration
statement as so amended; provided, however, that such term shall also include
all Rule 430A Information deemed to be included in such registration statements
at the time such registration statement becomes effective as provided by Rule
430A of the Rules and Regulations. The term "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Shares in the form in which it is first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or, (ii) if no filing pursuant to Rule
424(b) of the Rules and Regulations is required, the form of final prospectus
included in the Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information with
respect to the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A of the
Rules and Regulations.
(b) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus, and each
Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date, has
not included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the time the
Registration Statement became effective, and at all times subsequent thereto up
to and including the Closing Date, the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained or incorporated
by reference, and will contain or incorporate by reference, all material
statements and information required to be included therein by the Act and the
Rules and Regulations and conformed and will conform in all material respects to
the requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, included or incorporated by reference, or will include or incorporate
by reference, any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, no representation or warranty
contained in this subsection 2(b) shall be applicable to information contained
in or omitted from any Preliminary Prospectus, the Registration Statement, the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Agent, specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries of the Company described in the Registration Statement or the
materials incorporated by reference therein or set forth in Schedule 2(c)
hereto. The Company has been duly incorporated and is validly existing under the
laws of the State of Delaware. The Company has full power and authority
(corporate and other) to own and lease its properties and conduct its business
as described in the Prospectus or the materials incorporated by reference
therein; except as disclosed in the Prospectus or the materials incorporated by
reference therein, the Company now holds, and at the Closing Date will hold, all
authorizations, licenses, permits, and certificates from Federal, State, and
other regulatory authorities (collectively, "Permits") that are necessary for
the conduct of its business (as such business is currently conducted), except
where the failure to hold such Permit would not have a material adverse effect
on the Company; the Company is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the ownership or
leasing of properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to so qualify would
not have a material adverse effect upon the Company; and no proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, the Company's qualification or power and
authority to do business within such jurisdiction.
<PAGE>
(d) The Company has authorized and issued share
capital as set forth in the Prospectus; the issued and outstanding shares of
Common Stock have been duly authorized and validly issued, are fully paid, have
been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and conform to the description thereof
contained in the Prospectus, the materials incorporated by reference therein
[and Schedule 2(d) attached hereto]. Except as disclosed in the Prospectus or
the materials incorporated by reference therein and the financial statements of
the Company, and related notes thereto included in or incorporated into the
Prospectus, the Company does not have outstanding any options to purchase,
preemptive rights or other rights to subscribe for or to purchase, or any
obligations convertible into, any shares of its capital stock, or any contracts
or commitments to issue or sell shares of its capital stock or any such options,
rights or convertible securities or obligations. The description of the
Company's stock option, stock bonus and other stock schemes, plans or
arrangements, and the options or other rights granted and exercised thereunder,
incorporated by reference into the Prospectus accurately and fairly presents the
information required to be shown with respect to such schemes, plans,
arrangements, options and rights. The Common Stock is quoted on the Nasdaq
National Market.
(e) The Placement Shares to be sold by the Company
have been duly authorized and, when issued, delivered and paid for in the manner
set forth in the Agreements with the purchasers thereof, will be validly issued
and fully paid, and will conform in all material respects to the description
thereof contained in the Prospectus or incorporated by reference therein. No
preemptive rights or other subscription or purchase rights exist with respect to
the issuance and sale of the Placement Shares by the Company. No stockholder of
the Company has any right that has not been waived to require the Company to
register the sale of any shares owned by such stockholder under the Act in
connection with the offering of the Placement Shares. No further approval or
authority of the stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Placement Shares to be sold by the
Company as contemplated herein.
(f) The Company has full legal right, power and
authority to enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Company. The making and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not (i) violate any
provisions of the Certificate of Incorporation or other organizational documents
of the Company, and (ii) except for any conflicts, defaults, breaches or
violations that would not have a material adverse affect on the Company, will
not conflict with, result in the breach or violation of, or constitute, either
by themselves or upon notice or the passage of time or both, a default under (A)
any agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company is a party or by which the
Company or any of its properties may be bound or affected, or (B) any statute or
any authorization, judgment, decree, order, rule or regulation of any court,
regulatory body, administrative agency or other governmental body applicable to
the Company or any of its properties. No consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for compliance with the Act, the Blue Sky laws applicable to the public offering
of the Placement Shares by the Company and the Agent on behalf of the Company
and the clearance of such offering with the National Association of Securities
Dealers, Inc. (the "NASD").
(g) Arthur Andersen, which has expressed its opinion
with respect to the financial statements and schedules incorporated by reference
into the Registration Statement and Prospectus, are an independent accounting
firm as required by the Act and the Rules and Regulations.
<PAGE>
(h) The financial statements and schedules of the
Company and the related notes thereto incorporated by reference into the
Registration Statement and the Prospectus present fairly the financial position
of the Company as of the respective dates of such financial statements and
schedules, and the results of operations and changes in financial position of
the Company for the respective periods covered thereby. Such statements,
schedules and related notes have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(g). No other financial statements
or schedules are required to be included in the Registration Statement or
incorporated by reference therein.
(i) Except as disclosed in the Prospectus or the
materials incorporated by reference therein, and except as to defaults that
individually or in the aggregate would not have a material, adverse affect on
the Company, the Company is not in violation of, or in default under, any
provision of its Certificate of Incorporation or other organizational documents,
nor is it in breach of, or in default under, any provision of any agreement,
judgment, decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by which it or
any of its properties are bound; and there does not exist any state of facts
that constitutes an event of default on the part of the Company as defined in
such documents or that, with notice or lapse of time or both, would constitute
such an event of default.
(j) There are no contracts or other documents
required to be described in or incorporated by reference into the Registration
Statement or to be filed as exhibits to the Registration Statement by the Act or
the Rules and Regulations that have not been described, incorporated by
reference or filed as required. The descriptions of the contracts contained in
the Prospectus or incorporated by reference therein are accurate and complete in
all material respects; all such contacts, other than contracts the termination
of which would not have a material adverse affect on the Company, are in full
force and effect on the date hereof.
(k) Except as disclosed in the Prospectus or the
materials incorporated by reference therein, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company's
knowledge, threatened to which the Company is or may be a party or of which
property owned or leased by the Company is or may be the subject, or related to
environmental or discrimination matters, which might, individually or in the
aggregate, prevent or materially adversely affect the transactions contemplated
by this Agreement or result in a material adverse change in the condition
(financial or otherwise), properties, business, results of operations or, to the
best of the Company's knowledge, prospects of the Company; and no labor
disturbance by the employees of the Company exists or is imminent that might be
expected to have a material adverse affect on such condition, properties,
business, results of operations or, to the best of Company's knowledge,
prospects. The Company is not a party or subject to the provisions of any
material injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(l) Except as disclosed in the Prospectus, the
Company has good and marketable title to all the properties and assets reflected
as owned in the Prospectus, including the financial statements thereto, and any
such properties or assets are not subject to any liens, mortgages, pledges,
charges or encumbrances of any kind except (i) those, if any, reflected in the
Prospectus, or (ii) those which are not material in amount and do not adversely
affect the use made and proposed to be made of such property or assets by the
Company. The Company holds its leased properties under valid and binding leases,
with such exceptions as are not materially significant in relation to the
business of the Company. Except as disclosed in the Prospectus, the Company owns
or leases all such properties as are necessary to its operations as now
conducted.
<PAGE>
(m) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, and except as
described in or contemplated by the Prospectus or the materials incorporated by
reference therein: (i) the Company has not incurred any material liability or
obligation, indirect, direct or contingent, or entered into any material verbal
or written agreement or other transaction that is not in the ordinary course of
business or that, in the Company's reasonable judgment, is likely to result in a
material reduction in the future earnings of the Company; (ii) the Company has
not sustained any material loss or interference with its business or properties
from fire, flood, windstorm, accident or other calamity, whether or not covered
by insurance; (iii) the Company has not paid or declared any dividends or other
distributions with respect to its issued share capital and the Company is not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any material change in the share capital
(other than upon the sale of the Placement Shares hereunder) or indebtedness of
the Company (other than in the ordinary course of business); and (v) there has
not been any material adverse change in the condition (financial or otherwise),
business, properties, results of operations or, to the best of the Company's
knowledge, prospects of the Company.
(n) Except as disclosed in or specifically
contemplated by the Prospectus or the materials incorporated by reference
therein, (i) to the best of the Company's knowledge, the Company has sufficient
trademarks, trade names, patent rights, copyrights, licenses and other similar
rights and proprietary knowledge (collectively, the "Intangibles"), approvals
and governmental authorizations to conduct its businesses as now conducted; (ii)
the Company has not received any written notice of infringement by it of
Intangibles or trade secrets of others; and (iii) to the best of the Company's
knowledge, there is no claim being made against the Company regarding the
infringement of Intangibles or trade secrets that could have a material adverse
affect on the condition (financial or otherwise), business, results of
operations or, to the best of the Company's knowledge, prospects of the Company.
(o) Except as disclosed in the Prospectus or the
materials incorporated by reference therein, the Company has not been advised,
and has no reason to believe, that it is not conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which it
conducts business, including, without limitation, all applicable local, state
and federal environmental laws and regulations; except where failure to be so in
compliance would not materially adversely affect the condition (financial or
otherwise), business, results of operations or, to the best of the Company's
knowledge, prospects of the Company.
(p) The Company has filed all necessary federal,
state and other income and franchise tax returns and has paid all taxes shown as
due on all such returns; and the Company has no knowledge of any tax deficiency
that has been or might be asserted or threatened against the Company that could
materially and adversely affect the business, operations or properties of the
Company.
(q) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the offering and sale of the Placement Shares other than the Preliminary
Prospectus, the Prospectus, the Registration Statement and other materials the
distribution of which is permitted under the Act.
(s) Except as described in the Prospectus or the
materials incorporated by reference therein, the Company maintains insurance of
the types and in amounts generally deemed adequate for its business, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is in full
force and effect.
<PAGE>
(t) The Company has not at any time during the last
five years (i) made any unlawful contribution to any candidate for public
office, or failed to disclose fully any contribution in violation of law, or
(ii) made any payment to any governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments required
or permitted by the laws of the United States or any jurisdiction thereof.
(u) The Company has not taken and will not take,
directly or indirectly, any action designed or that might be reasonably expected
to cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Placement Shares.
(v) No transfer taxes are required to be paid in
connection with the sale and delivery of the Placement Shares hereunder.
(w) The Placement Shares have been duly authorized
for quotation on the Nasdaq National Market.
SECTION 3. Representations and Warranties of the Agent. The
Agent represents and warrants to the Company that (A) it is duly registered as a
broker/dealer pursuant to the Securities Exchange Act of 1934 and is a member in
good standing of the NASD, and (B) it has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the offering and sale of the Placement Shares, or any other shares, other than
the Preliminary Prospectus, the Registration Statement and other materials the
distribution of which is permitted under the Act. The Company acknowledges and
agrees that no information set forth in the Prospectus was furnished to the
Company by and on behalf of the Agent for use in connection with the preparation
of the Registration Statement and the Prospectus.
SECTION 4. Purchase, Sale and Delivery of the Placement
Shares. The purchase price per share to be paid by the several purchasers to the
Company shall be determined by separate agreement among the Company and the
purchasers. The Company agrees to pay to the Agent at the Closing a commission
equal to $[amount of commission].
Delivery of certificates for the Placement Shares shall be
made as agreed by the purchasers and the Company.
SECTION 5. Covenants of the Company. The Company covenants and
agrees that:
(a) If the Registration Statement has become or
becomes effective pursuant to Rule 430A of the Rules and Regulations, or the
filing of a Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file such Prospectus, properly completed, pursuant
to the applicable paragraph of Rule 424(b) of the Rules and Regulations within
the time period prescribed and will provide evidence satisfactory to you of such
timely filing. The Company will promptly advise you in writing of (i) the
receipt of any comments of the Commission, (ii) any request from the Commission
for an amendment of or supplement to the Registration Statement (either before
or after the Registration Statement becomes effective), any Preliminary
Prospectus or the Prospectus or for additional information, or (iii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose. If the Commission shall enter any such stop order at any time, the
Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. The Company will not file any amendment or supplement
to the Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus if you have not been furnished with a
copy of such amendment or supplement a reasonable time prior to such filing or
if you reasonably object to such amendment or supplement.
(b) The Company will prepare and file promptly with
the Commission any amendments or supplements to the Registration Statement or
the Prospectus that in the reasonable opinion of counsel for the Company or
counsel for the Agent may be necessary or advisable to enable the Agent to
continue the placement of the Placement Shares on behalf of the Company and will
use its best efforts to cause any such amendments or supplements to become
effective as promptly as possible. To the extent required by law, the Company
will fully and completely comply with the provisions of Rule 430A of the Rules
and Regulations with respect to information omitted from the Registration
Statement in reliance upon such Rule.
(c) As soon as practicable, but no later than 45 days
after the end of the first quarter following the one-year anniversary of the
"effective date of the Registration Statement" (as defined in Rule 158(c) of the
Rules and Regulations), the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering a
period consisting of the twelve (12) consecutive months immediately following
the effective date of the Registration Statement, which statement will satisfy
the provisions of the last paragraph of Section 11(a) of the Act.
(d) During such period as a prospectus is required by
law to be delivered in connection with sales by a dealer, the Company, at its
expense, but only for the nine-month period referred to in Section 10(a)(3) of
the Act, will furnish to you or mail to your order copies of the Registration
Statement, the Prospectus, the Preliminary Prospectus and all amendments and
supplements to any such documents, in each case as soon as available and in such
quantities as you may request, for the purposes contemplated by the Act.
<PAGE>
(e) The Company shall cooperate with you and your
counsel in order to qualify or register the Placement Shares for sale under (or
obtain exemptions from the application of) the Blue Sky laws of such
jurisdictions as you designate, and shall comply with such laws and maintain
such qualifications, registrations and exemptions so long as reasonably required
for the distribution of the Placement Shares. The Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not presently qualified. The Company
shall advise you promptly of the suspension of the qualification or registration
of (or any such exemption relating to) the Placement Shares for offering, sale
or trading in any jurisdiction, or of the initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company, with your
cooperation, will use its best efforts to obtain the withdrawal thereof.
(f) For a period of five (5) years commencing on the
date hereof, the Company will furnish to you (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other reports filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Shares.
(g) The Company shall apply the net proceeds of the
sale of the Placement Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
You may, in your sole discretion, waive in writing
the performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
SECTION 6. Payment of Expenses. Except as set forth in Section
8, whether or not the transactions contemplated hereunder are consummated, you
and the Company each agree to pay all of your own costs, fees and expenses
incurred in connection with the performance of your respective obligations
hereunder and in connection with the transactions contemplated hereby.
SECTION 7. Conditions of the Obligations of the Agent. The
Company shall not complete the sale of any of the Placement Shares unless the
representations and warranties on the part of the Company herein set forth are
true as of the date of such sale and the consummation or settlement thereof (the
"Closing Date") and:
(a) The Registration Statement shall have become
effective by no later than 7:00 P.M. (or, in the case of a registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations relating to
the Placement Shares, by no later than 10 P.M.), Washington, D.C. time, on the
date of this Agreement, or at such later time as shall have been consented to by
you; if the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Prospectus shall have
been filed in the manner and within the time period required by Rule 424(b) of
the Rules and Regulations; and prior to such Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company or you, shall be contemplated by
the Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with.
(b) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, (i) there
shall not have been any change in the authorized or issued share capital of the
Company other than pursuant to the exercise of outstanding options disclosed in
the Prospectus or the materials incorporated by reference therein or any
material change in the indebtedness (other than in the ordinary course of
business) of the Company, (ii) except as set forth or contemplated by the
Registration Statement, the Prospectus or the materials incorporated by
reference therein, no material verbal or written agreement or other transaction
shall have been entered into by the Company that is not in the ordinary course
of business or that could result in a material reduction in the future earnings
of the Company, (iii) no loss or damage (whether or not insured) to the property
of the Company shall have been sustained that materially and adversely affects
the condition (financial or otherwise), business, results of operations or
prospects of the Company, (iv) no legal or governmental action, suit or
proceeding affecting the Company that is material to the Company or that affects
or may affect the transactions contemplated by this Agreement shall have been
instituted or threatened, and (v) there shall not have been any material change
in the condition (financial or otherwise), business, management, results of
operations or prospects of the Company that makes it impractical or inadvisable
in your judgment to proceed with the public offering or purchase of the
Placement Shares as contemplated hereby.
(c) There shall have been furnished to you, on the
Closing Date, in form and substance satisfactory to you, except as otherwise
expressly provided below:
(i) An opinion of Goodwin, Procter & Hoar
lLP, counsel for the Company, addressed to you to the effect set forth on
Appendix A hereto.
(ii) A certificate of the Company executed
by the Chief Executive Officer, the President and the Chief Financial Officer of
the Company, dated the Closing Date, to the effect that:
<PAGE>
(1) The representations and
warranties of the Company set forth in Section 2 of this Agreement are true and
correct as of the date of this Agreement and as of the Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions to
be performed or satisfied by it on or prior to the Closing Date;
(2) The Commission has not issued
any order preventing or suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the Registration
Statement has been issued; and to the best of the knowledge of the respective
signers, no proceedings for that purpose have been instituted or are pending or
contemplated under the Act;
(3) Each of the respective signers
of the certificate has carefully examined the Registration Statement and the
Prospectus; in his or her opinion and to the best of his or her knowledge, the
Registration Statement and the Prospectus and any amendments or supplements
thereto contain or incorporate by reference all statements required to be stated
therein regarding the Company and its subsidiaries; and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto includes or
incorporates by reference any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(4) Since the initial date on which
the Registration Statement was filed, no agreement, written or oral, transaction
or event has occurred that should have been set forth in an amendment to the
Registration Statement or in a supplement to or amendment of the Preliminary
Prospectus or the Prospectus which has not been disclosed in such a supplement
or amendment;
(5) Since the respective dates as of
which information is given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus or the materials
incorporated by reference therein, there has not been any material adverse
change or a development involving a material adverse change in the condition
(financial or otherwise), business, properties, results of operations,
management or, to the best knowledge of the respective signing officers,
prospects of the Company, and no legal or governmental action, suit or
proceeding is pending or threatened against the Company that is material to the
Company, whether or not arising from transactions in the ordinary course of
business, or that may adversely affect the transactions contemplated by this
Agreement; since such dates and except as so disclosed, neither the Company nor
any of its subsidiaries has entered into any verbal or written agreement or
other transaction that is not in the ordinary course of business or that could
result in a material reduction in the future earnings of the Company or incurred
any material liability or obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change in its short-term debt or
funded debt or repurchased or otherwise acquired any of the Company's capital
stock; and the Company has not declared or paid any dividend, or made any other
distribution upon its outstanding capital stock payable to stockholders of
record on a date prior to the Closing Date; and
(6) Since the respective dates as of
which information is given in the Registration Statement and the Prospectus and
except as disclosed in or contemplated by the Prospectus, the Company has not
sustained a material loss or damage by strike, fire, flood, windstorm, accident
or other calamity (whether or not insured).
(iii) A letter addressed to you from Arthur
Andersen, independent accountants, dated the Closing Date, to the effect set
forth on Appendix B hereto.
If any of the foregoing conditions is not satisfied, this
Agreement at your election will terminate upon notification by you to the
Company without liability on the part of the Agent or the Company except to the
extent provided in Section 8 or 9 hereof.
<PAGE>
SECTION 8. Reimbursement of Agent' Expenses. Notwithstanding
any other provisions hereof, if, following the occurrence of any sale of
Placement Shares to any purchaser the sale is not consummated because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse you upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by you in connection with the proposed sale of the Placement
Shares, including but not limited to reasonable fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile charges,
telegraph charges and telephone charges relating directly to the offering
contemplated by the Registration Statement. Any such failure to consummate a
sale of Placement Shares shall not create liability of any party to any other
party, except that the provisions of Section 6, this Section 8 and Section 9
shall at all times continue to be effective and applicable.
SECTION 9. Indemnification.
(a) The Company agrees to indemnify and hold harmless
the Agent, and each person, if any, who controls the Agent within the meaning of
the Act, against any losses, claims, damages, liabilities or expenses (including
amounts paid in settlement of any litigation, if such settlement is effected
with the written consent of the Company), whether joint or several, to which the
Agent or such controlling person may become subject under the Act, the Exchange
Act or any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state in any of such documents a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and will reimburse each Agent and each such controlling person for
any legal and other expenses as such expenses are reasonably incurred by such
Agent or such controlling person in connection with investigating, defending,
settling, compromising or paying any such losses, claims, damages, liabilities,
expenses or actions; provided, however, that the Agent and/or any controlling
person of the Agent will not be reimbursed for amounts paid in settlement of any
litigation unless the Company consented to such settlement in writing before it
was effected; and provided further that the Company will not be liable in any
such case to the extent that any such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 3 hereof. In addition
to its other obligations under this Section 9(a), the Company agrees that, as an
interim measure during the pendency of any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, or any inaccuracy in the representations and
warranties of the Company herein or failure to perform its obligations
hereunder, all as described in this Section 9(a), it will reimburse each Agent
on a quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse each Agent for such expenses and the possibility that
such payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, each Agent shall promptly (and in any event no later
than thirty (30) days after the date such payments are finally held to be
improper) return such payment to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by Bank of America NT&SA, San Francisco, California (the "Prime Rate"). Any
interim reimbursement payment that is required to be made by the Company
hereunder and is not made by the Company within thirty (30) days of the
Company's receipt of a request for reimbursement by the Agent shall bear
interest at the Prime Rate from the date of such request until paid in full.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) The Agent will severally indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages, liabilities or
expenses (including in any amounts paid in settlement of any litigation, if such
settlement is effected with the written consent of such Agent) to which the
Company, of any such director, officer or controlling person may become subject,
under the Act, the Exchange Act or any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state in any of such
documents a material fact required to be stated therein or necessary to make the
statements therein 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 made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with the information furnished to the Company pursuant to
Section 3 hereof; and will reimburse the Company, or any such director, officer
or controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such losses,
claims, damages, liabilities, expenses or actions. In addition to its other
obligations under this Section 9(b), each Agent severally agrees that, as an
interim measure during the pendency of any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 9(b) which relates
to information furnished to the Company pursuant to Section 3 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director or
controlling person) on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
<PAGE>
of a judicial determination as to the propriety and enforceability of the
Agent's obligation to reimburse the Company (and, to the extent applicable, each
officer, director or controlling person) for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company (and, to the extent
applicable, each officer, director or controlling person) shall promptly (and in
any event no later than thirty (30) days after such payment is finally held to
be improper) return it to the Agent together with interest, compounded daily,
determined on the basis of the Prime Rate. Any interim reimbursement payment
which the Agent is required to make hereunder that is not made by the Agent
within thirty (30) days of the Agent's receipt of a request for reimbursement by
the Company (or the officer, director or controlling person, as the case may
be), shall bear interest at the Prime Rate from the date of such request until
paid in full. This indemnity agreement will be in addition to any liability
which such Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; provided that failure by the indemnified party to so
notify the indemnifying party will not relieve the indemnifying party from any
liability which it may have to any indemnified party for contribution or
otherwise than under this Section 9 or to the extent the indemnifying party is
not prejudiced as a proximate result of such failure to notify. In case any such
action is brought against any indemnified party and such indemnified party seeks
or intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, reasonably approved
by the Agent in the case of paragraph (a), representing the indemnified parties
which are parties to such action). Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 9 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence or (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the reasonable fees and
expenses of counsel for the indemnified party shall be at the expense of the
indemnifying party.
(d) If the indemnification provided for in this
Section 9 is required by its terms but is for any reason held to be unavailable
to or otherwise insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Agent from the offering of the Placement Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Agent in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Agent shall be deemed to be in the same proportion, in the case
of the Company, as the total price paid to the Company for the Placement Shares
sold by them less the commissions to the Agent contemplated hereby (but before
deducting expenses) bears to the total price paid to the Company by the
purchasers before deducting such commissions, and in the case of the Agent as
the commissions received by them bears to the total price paid to the Company by
the purchasers before deducting such commissions. The relative fault of the
Company and the Agent shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or the Agent, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in subparagraph (c) of
this Section 9, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in subparagraph (c) of this Section 9 with respect to
notice of commencement of any action shall apply if a claim for contribution is
to be made under this subparagraph (d); provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under subparagraph (c) for purposes of indemnification. The Company and
the Agent agree that it would not be just and equitable if contribution pursuant
to this Section 9 were determined solely by pro rata allocation (even if the
Agent were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of
this Section 9, Agent shall not be required to contribute any amount in excess
of the amount of the total commissions received by Agent in connection with the
Placement Shares. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Agent's
obligations to contribute pursuant to this Section 9 are several and not joint.
<PAGE>
(e) It is agreed that any controversy arising out of
the operation of the interim reimbursement arrangements set forth in Sections
9(a) and 9(b) hereof, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted pursuant to the NASD's Code of Arbitration Procedure. Any
such arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not make
such designation of an arbitration tribunal in such demand or notice, then the
party responding to said demand or notice is authorized to do so. The scope of
any such arbitration shall be limited to the operation of the interim
reimbursement provisions contained in Sections 9(a) and 9(b) hereof and shall
not resolve the ultimate propriety or enforceability of the obligation to
reimburse expenses which is created by the provisions of this Section 9.
SECTION 10. Termination. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof:
(a) The Company may terminate this Agreement at any
time prior to any sale of Placement Shares.
(b) This Agreement shall also terminate at 5:00 P.M.,
California time, on the fifteenth full business day following the date on which
the Registration Statement shall have become effective if no sale of Placement
Shares shall have occurred at or prior to such time. Any termination pursuant to
this subsection (b) shall be without liability on the part of the Agent to the
Company or on the part of the Company to the Agent except to the extent provided
in Section 8 or Section 9 hereof.
SECTION 11. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company and of its officers and of the Agent set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Agent or the
Company or any of its or their partners, officers or directors, or any
controlling person, as the case may be. The respective indemnities,
representations and warranties of the Company and the Agent will survive
delivery of and payment for the Placement Shares sold hereunder and any
termination of this Agreement.
SECTION 12. Notices. All communications hereunder shall be in
writing and, if sent to the Agent shall be mailed, delivered or telegraphed and
confirmed to you at Pacific Growth Equities, 353 Sacramento Street, San
Francisco, California 94111, Attention: George J. Milstein; with a copy to
Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A Professional Corporation,
Three Embarcadero Center, 7th Floor, San Francisco, California 94111, Attention:
Mark D. Whatley; and if sent to the Company shall be mailed, delivered or
telegraphed and confirmed to the Company at 4651 Sheridan Street, Suite 400,
Hollywood, Florida 33021, Attention: Mitchell Eisenberg, M.D.; with a copy to
Goodwin, Procter & Hoar LLP, Exchange Place, Boston, Massachusetts, 02109,
Attention: Kevin M. Dennis. The Company or you may change the address for
receipt of communications hereunder by giving notice to the others.
<PAGE>
SECTION 13. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto, and to the benefit of the
officers and directors and controlling persons referred to in Section 9, and in
each case their respective successors, personal representatives and assigns, and
no other person will have any right or obligation hereunder. No such assignment
shall relieve any party of its obligations hereunder. The term "successors"
shall not include any purchaser of the Placement Shares as such merely by reason
of such purchase.
SECTION 14. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make the Agreement valid and enforceable.
SECTION 15. Applicable Law. This Agreement shall be governed
by and construed in accordance with the internal laws (and not the laws
pertaining to conflicts of laws) of the State of California.
SECTION 16. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and you.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement between the Company and the Agent,
all in accordance with its terms.
Very truly yours,
SHERIDAN HEALTH CARE, INC.
By:
--------------------------------------------
Mitchell Eisenberg, M.D.
Chairman, President and Chief
Executive Officer
The foregoing Placement Agreement is
hereby confirmed and accepted by us
in San Francisco, California as of
the date first above written.
PACIFIC GROWTH EQUITIES, INC.
By:
-----------------------------
George J. Milstein
Authorized Signatory
<PAGE>
EXHIBIT A
SCHEDULE OF PURCHASERS OF PLACEMENT SHARES
<PAGE>
APPENDIX A
FORM OF OPINION OF GOODWIN, PROCTER & HOAR LLP,
COUNSEL TO THE COMPANY
PURSUANT TO SECTION 7(C)(I)
<PAGE>
APPENDIX B
FORM OF LETTER FROM ARTHUR ANDERSEN
PURSUANT TO SECTION 7(C)(III)
<PAGE>
Exhibit 3.2
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is entered into
as of , 1998, by and among Sheridan Healthcare, Inc., a Delaware
-----------
corporation (the "Company") with its principal office at 4651 Sheridan Street,
Hollywood, Florida 33021 and the purchaser whose name and address is set forth
on the signature page hereto (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and the Purchaser agree as follows:
Section 1.
Authorization and Sale of Shares
--------------------------------
1.1 Authorization of Sale of Shares. The Company has authorized the
sale of up to shares (the "Shares") of the Company's common stock, par
-----
value $.01 per share (the "Common Stock"), pursuant to a Registration Statement
(such Registration Statement, together with the Prospectus comprising a part
thereof, referred to herein as the "Registration Statement") on Form S-3 (File
No. filed with, and declared effective by, the Securities and
------------)
Exchange Commission (the "Commission") pursuant to the provisions of the
Securities Act of 1933, as amended (the "Act").
1.2 Sale of Shares. At the Closing (as defined in Section 2), the
Company will sell to the Purchaser, and the Purchaser will buy from the Company,
upon the terms and conditions hereinafter set forth, the number of shares of
Common Stock specified below at a price of $___ per share:
Number of Shares to be Purchased Aggregate Price
-------------------------------- ---------------
----------------------------- $
------------------------
1.3 Sale of Remaining Shares. The Company proposes to enter into
purchase agreements with certain other investors with respect to the sale of the
balance of the Shares. There is no assurance that the Company will be successful
in selling any or all of the balance of the Shares and the Company has not fixed
a minimum number of the Shares to be sold.
Section 2.
Closing Date, Delivery
2.1 Closing Date. The closing (the "Closing") of the purchase and sale
of the shares of Common Stock hereunder shall occur at the offices of
on
- ----------------------------------------------- -----------, 1998 or at such
other time as the parties hereto may agree (the "Closing Date").
<PAGE>
2.2 Delivery. At the Closing, the Company will deliver to the Purchaser
a certificate (or certificates), representing the shares to be purchased by the
Purchaser, registered in the Purchaser's name as shown on the signature page
hereof or, if different, in the name of the Purchaser's nominee as indicated on
the signature page. Such delivery shall be against payment of the purchase price
for and shares purchased determined pursuant to Section 1.2 above by wire
transfer to a bank account as specified in instructions provided to such
Purchaser by the Company. The location of delivery of and the form of payment
for such shares may be varied by agreement between the Company and the
Purchaser.
2.3 Subsequent Sales of Shares. At any time on or after the date
hereof, the Company may sell up to the balance of the Shares not sold at the
Closing of the Purchaser and upon such terms as may be approved by the Board of
Directors of the Company.
Section 3.
Representations and Warranties of the Company
The Company represents and warrants to the Purchaser as follows:
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement; the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to so qualify would not
have a material adverse effect on the Company.
(b) The Company has full power and authority (corporate and otherwise)
to enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement on
the part of the Company, enforceable against the Company in accordance
with its terms, except as rights may be limited by applicable laws of
equitable principles and except as enforcement hereof may be limited to
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles; the performance of this Agreement by the Company
and the consummation by the Company of the transactions contemplated
hereby, including without limitation, the sale of the Shares, will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, (i) any lease, contract or other
agreement or instrument to which the Company is a party or by which its
properties are bound, or (ii) the Certificate of Incorporation or
By-Laws of the Company or (iii) any law, order, rule, regulation, writ,
injunction or decree of any court or governmental agency or body
binding on the Company; and the Company is not required to obtain or
make (as the case may be) any consent, approval, authorization, order,
designation or filing by or with any court or regulatory,
administrative or other governmental agency or body is required for the
consummation by the Company of the transactions herein contemplated,
except such as may be required under the Act and state securities laws.
2
<PAGE>
(c) The authorized capital stock of the Company consists of 30,000,000
shares of Common Stock, 1,000,000 shares of Class A Common Stock and
5,000,000 shares of Preferred Stock, in each case with a par value of
$.01 per share. As of the date hereof, the Company has outstanding
[ ] shares of Common Stock, all of which are validly issued,
------ fully paid and non-assessable and which represents all
of the outstanding shares of capital stock of the Company.
(d) The shares of Commons Stock to be purchased from the Company
hereunder have been duly authorized for issuance and, when issued and
delivered to the Purchaser by the Company against payment therefor in
accordance with the terms of this Agreement, will be duly and validly
issued and fully paid and non-assessable.
(e) Subsequent to the respective dates as of which information is given
in the Registration Statement there has not been (i) any material
adverse change, or any development which, in the Company's reasonable
judgment, is likely to cause a material adverse change, in the
business, properties or assets described or referred to in the
Registration Statement, or the results of operations, conditions
(financial or otherwise), business or operations of the Company, (ii)
any transaction which is material to the Company, except transactions
in the ordinary course of business, (iii) any obligation, direct or
contingent, which is material to the Company, incurred by the Company,
except obligations incurred in the ordinary course of business, (iv)
any material change in the capital stock or outstanding indebtedness of
the Company or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company.
(f) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is listed on the Nasdaq national Market.
(g) The Registration Statement has become effective and the Company has
not received, and has no notice of, any order of the Commission
preventing or suspending the use of the Registration Statement or the
Prospectus contained therein, or proceedings instituted for that
purpose.
(h) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the requirements of the Act and the published rules and regulations of
the Commission. The Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
3
<PAGE>
Section 4.
Representations and Warranties of the Purchaser.
------------------------------------------------
The Purchaser hereby represents and warrants to the Company as follows:
This Agreement has been duly authorized, executed and delivered by the
Purchaser and constitutes a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, except as may be limited by
applicable laws or equitable principles and except as enforcement hereof may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. The Purchaser is a "qualified institutional buyer" as such
term is defined in Rule 144A under the Act or affiliate thereof.
Section 5.
Conditions to Closing of Purchaser
----------------------------------
The Purchaser's obligation to purchase shares at the Closing is subject
to fulfillment or waiver as of the Closing Date of the following conditions:
(a) The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing
Date with the same force and effect as if they had been made on and as
of said date.
(b) All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing
Date shall have been performed or complied with in all respects.
(c) The Purchaser shall have received a legal opinion of Goodwin,
Procter & Hoar LLP counsel to the Company, in substantially the form of
Exhibit A.
(d) The Registration Statement shall continue to be effective, and no
stop order suspending the effectiveness thereof shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company, threatened, by the Commission.
4
<PAGE>
Section 6.
Conditions to Closing of Company
--------------------------------
The Company's obligation to sell and issue the Shares at the closing is
subject to the fulfillment or waiver as of the Closing Date of the following
conditions:
(a) The representations made by the Purchaser in Section 4 hereof shall
be true and correct when made, and shall be true and correct on the
Closing Date.
(b) All covenants, agreements and conditions contained in the Agreement
to be performed by the Purchaser on or prior to the Closing Date shall
have been performed or complied with in all material respects.
(c) The Registration Statement shall continue to be effective, and no
stop order suspending the effectiveness thereof shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company, threatened, by the Commission.
Section 7.
Miscellaneous
-------------
7.1 Waivers and Amendments. The terms of this Agreement may be waived
or amended only with the written consent of the Company and the Purchaser. The
failure by either party at any time to enforce or to require the performance of
any provision of this Agreement shall in no way be construed to be a waiver of
any such provision and shall not affect the rights of such party hereunder
thereafter to enforce or require the performance of such provision in accordance
with the terms of this Agreement.
7.2 Governing Law. This Agreement shall be governed in all respects by
the laws of the Commonwealth of Massachusetts, without regard to the conflict of
laws rules thereof.
7.3 Successors and Assigns. This Agreement may not be assigned by the
Purchaser without the written consent of the Company.
7.4 Entire Agreement. This Agreement, which includes the Exhibits
hereto, constitutes the full and entire understanding and agreement between the
parties with regard to the subjects thereof.
7.5 Notices, etc. Any notice or other communication required or
permitted under this Agreement shall be in writing and may be sent by personal
delivery, by telecopy, overnight delivery service or U.S. mail, in which event
it shall be mailed first-class, certified or registered, postage prepaid. All
such notices and communications must be addressed to the Company or the
Purchaser, as the case may be, at their respective addresses and telecopy number
set forth (i) at the beginning of this Agreement in the case of the Company's
address and to (954) 987-8359, Attention: Chief Financial Officer, in the case
5
<PAGE>
of a telecopy sent to the Company, and (ii) on the signature page hereto in the
case of the Purchaser, or at such other address or telecopy number as the
Company or the Purchaser shall have furnished to the other party in writing. All
notices and other communications shall be effective upon the earlier of actual
receipt thereof and (A) in the case of notices and communications sent by
personal delivery or telecopy, three hours following the first time during
normal business following the time at which such notice or communication arrives
at the applicable address or was successfully sent to the applicable telecopy
number, (B) in the case of notices and communications sent by overnight delivery
service, at noon (local time) on the first business day following the day such
notice or communication was sent, and (C) in the case of notices and
communications sent by U.S. mail, five days after such notice or communication
shall have been deposited in the U.S. mail.
7.6 Titles and Subtitles. The titles and the paragraphs and
subparagraphs of this Agreement are for convenience or reference only and are
not to be considered in construing this Agreement.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.8 Further Assurances. Each party to this Agreement shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as the other party hereto may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
[The remainder of this page left blank intentionally]
6
<PAGE>
7.9 Expenses. The Company and the Purchaser shall each bear its own
expense incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, including fees of legal counsel.
7.10 Survivability. The respective representations and covenants of the
parties hereto shall survive the Closing of the transactions contemplated
hereby.
The foregoing Agreement is hereby executed as of the date first above
written.
SHERIDAN HEALTHCARE, INC.
By:
---------------------------------
PURCHASER:
Name of Purchaser (Print):
- ---------------------------------
By:
-----------------------------
Name:
Title:
- ---------------------------------
Address
- ---------------------------------
Telephone
- ---------------------------------
Telecopy
- ---------------------------------
Nominee Name (if any)
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-3 of our
reports dated February 23, 1998 (except for the matter discussed in Note 12, as
to which the date is March 12, 1998) included in Sheridan Healthcare, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1997 and to all
references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Miami, Florida
April 17, 1998.
