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Exhibit 10.19
January 28, 1997
Xxxxxx X. Xxxxxxxx, D.D.S
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xx 00000
Re: Practice Acquisition
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Dear Xx. Xxxxxxxx:
This letter agreement confirms our mutual understanding with respect to the
acquisition by First New England Dental Centers, Inc., a Delaware corporation
("FNEDC"), of your dental practice (the "Practice") conducted through New
England Dental Center, Inc., a Connecticut professional corporation (the
"Company").
1. DEFINITIVE AGREEMENTS; CONSUMMATION OF THE ACQUISITION. Subject to (i) a
due diligence investigation, including completion of the schedules to be
attached to the Plan of Reorganization and Agreement of Merger attached hereto
as EXHIBIT A (the "Merger Agreement"), satisfactory to FNEDC, (ii) strict
compliance by you and the Company of the restrictive covenants set forth herein,
and (iii) the conditions to closing set forth in the Merger Agreement, the
following shall occur:
(a) FORMATION OF SUBSIDIARY. On or before the Closing Date (defined
below), the Company shall (i) form a Connecticut business corporation
subsidiary, (ii) transfer all of the Company's assets to such subsidiary,
(iii) acquire all of the assets, but none of the liabilities, of New
England Dental Lab., Inc. and transfer all of such assets to the Company's
subsidiary, and (iv) transfer stock ownership of such subsidiary to you.
(b) PLAN OF REORGANIZATION AND AGREEMENT OF MERGER. You and FNEDC will
execute the Merger Agreement on the Closing Date, whereby the Company's
subsidiary will be merged with and into FNEDC.
(c) EMPLOYMENT AGREEMENT. You and Xxxxxx and Watkin, D.M.D., P.C.
shall enter into the Employment Agreement attached hereto as EXHIBIT B on
the Closing Date.
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(d) ANCILLARY AGREEMENTS. On the Closing Date, you and FNEDC shall
execute the Lease Agreement and the Consulting Agreement, and FNEDC shall
execute the Promissory Note, attached hereto as EXHIBIT C, EXHIBIT D and
EXHIBIT E, respectively, and you and FNEDC shall execute and deliver such
other instruments, agreements and documents as required by the Merger
Agreement or as either party shall reasonably request in order to fulfill
the terms and conditions of the Merger Agreement.
2. INTERIM CONDUCT OF THE PRACTICE. Between the date of this letter
agreement and the Closing Date, unless FNEDC shall otherwise consent in writing,
the following covenants shall be in full force and effect:
(a) REQUIRED ACTIONS. The Company shall do the following, other than
as expressly provided for herein:
i) maintain its corporate existence;
ii) conduct its business only in the ordinary course;
iii) preserve its business organization intact, retain its
permits and licenses, and use its best efforts to preserve
the existing contracts and goodwill of its patients,
prospective patients, suppliers and others having business
relations with it;
iv) have in effect and maintain at all times all insurance of
the kinds, in the amounts and with the insurers as is
presently in effect or equivalent insurance;
v) keep in working condition and good order and repair all of
the material equipment, fixtures and other properties of the
Company, normal wear and tear excepted, and use best efforts
to preserve the goodwill of those persons, firms or
corporations having business relations with the Company;
vi) maintain its books, accounts and records in its usual,
regular and ordinary manner and post all entries therein
promptly in compliance with accepted practice and all
applicable laws;
vii) pay and discharge when due all taxes, assessments and
governmental charges imposed upon it or any of its
properties, or upon the income or profit therefrom;
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viii) operate in such a manner as to assure that your
representations and warranties set forth in the Merger
Agreement will be true and correct as of the Closing Date;
and
ix) meet its obligations under all contracts, agreements,
instruments and arrangements.
(b) PROHIBITED ACTIONS. The Company shall not do any of the following,
other than as expressly provided for herein:
i) change its method of management or operations;
ii) terminate the services of any present employee, consultant
or agent;
iii) amend its charter or bylaws;
iv) directly or indirectly redeem, purchase or otherwise acquire
or dispose of any properties or assets except in the
ordinary course of business;
v) subject any of its properties or assets to any mortgage,
pledge, security interest or lien;
vi) directly or indirectly redeem, purchase or otherwise acquire
any of its outstanding capital stock;
vii) incur any indebtedness for borrowed money, make any loans or
advances to any individual, firm or corporation or assume,
guarantee or endorse or otherwise become responsible for the
obligation of any other individual, firm or corporation
except in the ordinary course of business;
viii) modify, amend, cancel or terminate any existing agreement
material to its business, including the making of any
substantial prepayment on any existing obligation, except in
the ordinary course of business;
ix) make any material change in the accounting methods or
practices employed by the Company as at the date hereof in
respect of the business of the Company;
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x) enter into any contract or commitment other than in the
usual and ordinary course of business consistent with past
practice;
xi) increase the compensation payable or to become payable to
any officer, director, employee or agent of the Company or
make or enter into any bonus payment arrangement with any
officer, director, employee, or agent, or hire or engage any
additional management personnel or consultants for the
business of the Company;
xii) declare or pay any dividend or distribution in respect of
its capital stock, either in cash, kind or in shares of
stock or issue or authorize any securities of the Company or
grant stock options, warrants or other rights to acquire
shares of its stock or securities convertible into or
exchangeable for shares of its capital stock;
xiii) take any other action which would adversely affect or
detract from the value of the Company or its capital stock,
including without limitation cancelling any debts or claims;
and/or
xiv) waive any rights of material value or modify, amend, alter
or terminate any material contract.
(c) NO OFFER. Neither you nor the Company will, directly or
indirectly, offer, solicit offers for or sell, assign, pledge or otherwise
transfer any shares of the Company's capital stock prior to the Closing
Date. Neither you nor the Company will, directly or indirectly, through any
officer, director, agent or otherwise, (i) solicit, initiate or encourage
submission of proposals or offers from any person relating to any
acquisition or purchase of any of the shares of the Company's capital stock
and/or the Company's assets, or any equity interest in, the Company or any
equity investment, merger, consolidation or business combination with the
Company, or (ii) participate in any discussions or negotiations regarding,
or furnish to any other person, any non-public information with respect to,
or otherwise cooperate in any way with, or assist or participate,
facilitate or encourage, any effort or attempt by any other person to do or
seek any of the foregoing.
3. CONFIDENTIALITY. Except as otherwise required by law, the parties agree
to hold in confidence all confidential data and information acquired from one
another and will not use or divulge
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to third parties (other than agents and representatives of such parties) any
such confidential data or information.
4. CLOSING DATE. The Closing contemplated by the Merger Agreement shall
take place on February 14, 1997 or such other date as the parties shall mutually
agree to by written amendment to this letter agreement (the "Closing Date").
5. ANNOUNCEMENTS. You hereby agree that this proposed acquisition may be
disclosed in detail in any registration statement filed with the Securities
Exchange Commission by FNEDC.
6. JURISDICTION. The provisions of this letter agreement shall be governed
by Massachusetts law.
7. BINDING NATURE. It is the intent of you, the Company and FNEDC that this
letter agreement constitute, and this letter agreement does constitute, a
binding agreement between the parties hereto, subject to its terms and
condition.
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8. ACCEPTANCE. If the foregoing is acceptable to you and the Company,
please sign and return the enclosed copy of this letter to the undersigned. This
letter may be executed in counterparts.
Very truly yours,
FIRST NEW ENGLAND DENTAL
CENTERS, INC.
By:___________________________
Xxxxxx Xxxxxxx
President
Accepted and Agreed:
NEW ENGLAND DENTAL CENTER, INC.
By:___________________________________
Xxxxxx X. Xxxxxxxx, D.D.S.,
President
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Xxxxxx X. Xxxxxxxx, D.D.S,
Individually
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