Exhibit 10.1
PURCHASE AND SALE
AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is
made and entered into effective as of the 1 st day of
October 2008 (the “ Agreemen t”), by and among
Dental Patient Care America, Inc., and its subsidiaries Dental
Practice Transition, Inc. and Dental Cooperative, Inc.
(collectively, the “ Seller ”), DPAT-2 Owners,
LLC (the “ Purchaser ”), and DPAT-2, LLC (the
“ Company ”). The parties agree as
follows:
RECITALS
A. Seller
owns all of the outstanding Membership Interest of the Company (the
“Interest”);
B. Purchaser
wishes to acquire the Interest and Seller desires to sell the
Interest on the terms and conditions set forth herein;
and
C. This
Agreement is intended to memorialize actions taken during November
and December 2008, which are to be effective as of October 1,
2008.
ARTICLE I
SALE AND PURCHASE OF THE
INTEREST
1.1
Purchase and Sale . In reliance on
Purchaser’s representations, warranties and agreements
contained or referred to herein, effective October 1, 2008, Seller
has sold, transferred and conveyed, and does hereby sell, transfer
and convey to Purchaser, and Purchaser purchases and accepts from
Seller, the Interest for the aggregate consideration described in
the following subparagraphs of this Section 1.1 (the “
Purchase Price ”).
(a)
Assumption of Liabilities . Seller has assigned and
transferred, and does hereby assign and transfer to Purchaser, and
Purchaser accepts from Seller, all obligations of Seller to be
performed under the Cooperative Agreements from and after October
1, 2008. As used in this Agreement, the “Cooperative
Agreements” means the agreements that Dr. Richard Clegg
and/or Richard R. Clegg DDS PC (individually and collectively
“Clegg”) entered into with Dental Cooperative, Inc.
that are captioned “Affiliate Member Practice Purchase
Agreement” and “Management Services Agreement”,
and which are dated November 17, 2006. Clegg has consented and does
hereby consent to the assignment of the Cooperative Agreements to
Purchaser, releases Seller from any and all obligations arising
from the Cooperative Agreements on or after October 1, 2008, and
agrees that any provisions in the Cooperative Agreements calling
for the issuance of Seller securities to Clegg on or after October
1, 2008 are void and of no further force or effect.
(b)
Management Fee . Purchaser shall pay Seller a management fee
equal to 19% of the annual margin of the Company, commencing to
accrue January 1, 2009 and continuing until such time as Purchaser
shall sell its Interest in the Company. Margin is herein defined as
Gross Patient Charges (accrual basis) less all write-offs and
adjustments and minus all accrual basis operating and overhead
expenses including compensation paid to independent contract dental
providers. Such management fee shall be calculated and paid on a
quarterly basis.
(c)
Disposition Fee . In the event that Purchaser should sell
its Interest in the Company, acquired herewith, Purchaser shall pay
Seller a disposition fee equal to 19% of the net profit of such
sale.
1.2
Operating Agreement . The parties have executed an operating
agreement of the Company, which evidences the transfer of the
Interest from Seller to Purchaser and confirms that Purchaser is
the sole member of the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SELLER
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Seller hereby represents and
warrants to Purchaser as follows:
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2.1
Access to Information . In making the decision to sell the
Interest, Seller and its advisers have had access to all
information they deemed material.
2.2
Authority . Seller has all necessary power and authority to
enter into and perform this Agreement and to sell, transfer and
convey the Interest to Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
3.1
Representations and Warranties of Purchaser . Purchaser
represents and warrants to Seller and the Company that:
(a) Purchaser
is able to bear the economic risk of an investment in the Interest
for an indefinite period of time, can afford the loss of the entire
investment in the Interest, and will, after making an investment in
the Interest, have suffic
