EXHIBIT 10.72
Doc. No. 21
OPTION AGREEMENT
This OPTION AGREEMENT ("Option Agreement"), effective as of May 31, 1996,
by and between X. Xxxxxx Xxxxxx (the "Shareholder") and Castle Dental Centers of
Tennessee, Inc. (the "Optionee").
RECITALS
A. The Shareholder is the sole shareholder of Castle Mid-South Dental
Centers, P.C., a Tennessee professional corporation ("New PC"), which is engaged
in the practice of dentistry.
B. Shareholder desires to afford the Optionee an opportunity to purchase
all of the ownership interest held by him in New PC ("Shareholder Interest") on
the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. GRANT OF OPTION. Shareholder hereby irrevocably grants to Optionee the
right and option (hereinafter called the "Option") to purchase all of the
Shareholder Interest at the exercise price set forth in paragraph 2, during the
period and subject to the conditions herein set forth.
2. EXERCISE PRICE. The exercise price (the "Exercise Price") for the
Shareholder Interest shall be One Hundred Dollars ($100.00).
3. OPTION TERM. The term of this Option shall expire simultaneously with
the expiration or termination in accordance with the terms of the Management
Services Agreement (the "Management Services Agreement") effective as of May 31,
1996 between New PC and Optionee (the "Expiration Date").
4. EXERCISE OF OPTION. On execution of this Option Agreement, the Option
shall immediately become exercisable and shall be exercisable at any time
thereafter until the Expiration Date (the "Option Period"); provided that in no
event shall the Option be exercisable by Optionee or by any transferee under
Section 7 until such time as Optionee or such transferee shall have taken
such action as may be necessary to permit such person to lawfully hold an
ownership interest in New PC.
5. NOTICE PERIOD. Before exercising the Option, Optionee shall give at
least twenty-four (24) hours written notice to Shareholder (or Shareholder's
representative). During the notice period, Shareholder (or Shareholder's
representative) may not sell, transfer, exchange, encumber, or otherwise
alienate the Shareholder Interest. Any such sale, transfer, exchange,
encumbrance, or alienation shall be void. In addition, during the notice period,
Shareholder shall not take any action that is materially adverse to New PC's
practice of dentistry.
6. MANNER OF EXERCISE. The notice of exercise of the Option shall be
accompanied by the Optionee's check payable to Shareholder for the amount of the
Exercise Price. Upon delivery of such notice and payment, the Optionee shall be
deemed to have acquired the Shareholder Interest and shall be deemed to have
become a shareholder of New PC without any further action on the part of the
Optionee, the Shareholder or New PC. However, at the Optionee's request,
Shareholder shall also deliver an assignment of his Shareholder Interest in New
PC to the Optionee in form and substance reasonably satisfactory to Optionee. In
the event the Option shall be exercised by any person or persons other than the
Optionee, such notice shall be accompanied by appropriate proof of the right to
such person or persons to exercise the Option.
7. TRANSFERABILITY OF OPTION. The Option is transferable by Optionee at
any time to any person.
8. NO OBLIGATION TO EXERCISE OPTION. Optionee shall be under no obligation
to exercise the Option.
9. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. Shareholder hereby
represents and warrants to, and covenants with, Optionee that Shareholder is the
only shareholder of New PC and no other person will be permitted to become a
shareholder (other than pursuant to the exercise of this Option) without prior
written notice to the Optionee and the grant to Optionee of an option on all of
such person's ownership interest in New PC in form and substance comparable to
this Agreement. For so long as Shareholder is a shareholder of New PC,
Shareholder agrees to maintain his license to practice dentistry in good
standing and in compliance with all laws and regulations of the State of
Tennessee relating to the practice of dentistry, and to maintain professional
liability insurance coverage in amounts contemplated by the Management Services
Agreement.
10. RESTRICTIONS ON TRANSFER OF SHAREHOLDER INTEREST; CONSENTS. During the
Option Period, Shareholder shall not "Transfer" all or any part of his
Shareholder Interest without the prior written
-2-
consent of the Optionee. For purposes of this Option Agreement, "Transfer" shall
include any dissolution of New PC or any assignment, mortgage, hypothecation,
transfer, pledge, creation of a security interest in or lien upon, encumbrance,
gift or other disposition unless such "Transfer" is made subordinate to or
subject to this Option. Further, New PC and the Shareholder shall not amend or
modify New PC's Articles of Incorporation or Bylaws in any manner that would
adversely affect the Optionee's prior written consent.
11. NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed to be properly given when personally delivered to
the party entitled to receive the notice or when sent by certified or registered
mail, postage prepaid, properly addressed to the party entitled to receive such
notice at the address stated below or at such other address as may be furnished
in writing by any party hereto to the other:
If to Shareholder: X. Xxxxxx Xxxxxx, D.D.S.
0000 Xxxxxxxxxxxx Xx., Xxxxx 000
Xxxxxxxx, XX 00000
If to Optionee: Castle Dental Centers of Tennessee, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx, Xx.
12. SUCCESSORS AND ASSIGNS. This Option Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective executors,
administrators, heirs and assigns.
13. GOVERNING LAW. This Option Agreement shall be governed by and
construed under the laws of the State of Tennessee without regard to the
conflicts of laws provisions of that state.
14. COUNTERPARTS. This Option Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. AMENDMENT. This Option Agreement may not be amended except by an
instrument in writing signed by all the parties.
-3-
IN WITNESS WHEREOF, the parties hereto have duly executed this Option
Agreement as of the date first above written.
OPTIONEE:
CASTLE DENTAL CENTERS
OF TENNESSEE, INC.
By: __________________________
Xxxx X. Xxxxxx, Xx.
President
SHAREHOLDER:
______________________________
X. Xxxxxx Xxxxxx, D.D.S.
-4-
CONSENT
Castle Mid-South Dental Centers, P.C., a Tennessee professional
corporation, consents to the Option on the Shareholder Interest granted herein,
and agrees to recognize Optionee as a substituted shareholder immediately upon
exercise of this Option with respect to the Shareholder Interest and payment of
the Exercise Price therefor, subject to applicable state laws and regulations.
CASTLE MID-SOUTH DENTAL
CENTERS, P.C., a Tennessee professional
corporation
By: _____________________________
X. Xxxxxx Xxxxxx, D.D.S.
President
-5-
