Summary of September 1997 offer from ADP ^[18]

For the doctors

•   There would be either an upfront, all cash or stock offering of ADP shares (each doctor’s choice) at some predetermined price per share that would go to each owner/partner of record

◦  This amount would reflect a transfer of ownership of each practitioner’s patients of record to the new entity

◦  The amount paid to each partner of record would be determined by his most recent production numbers during the last year in practice

◦ This cash/stock amount was one of the negotiated items. Consideration of what was appropriate used as one element national numbers for a traditional purchase from one dentist by another

•   A quarterly bonus system would be established by which ADP would pay additional amounts to the partners as the facility hit certain mutually-agreed production figures

•   ADP would assume certain debts of the facility

•   The original owners retained overall control of all decisions by the new entity (majority voting rights)

•   The original dentist/owners retained control of their practice, its clinical decisions, kept net revenue (minus ADP’s share) and continued in all other ways as required by state law.

•   The original partners would share in the production revenue of any new associates, future buy-ins of newly established practices (not previously purchased) within the facility or new satellites or future acquisitions.

•   ADP would assume certain debts of future capital improvements of the office, some of which were pre-negotiated (some upgrading of equipment, facility improvements)

•   ADP would offer the facility economies of scale (contracted dental software, dental supplies discount, healthcare plans to staff, 401K’s, etc)

•   ADP would offer its expertise and advice to RDA for both present and future acquisitions, expansion strategies, marketing, etc

•   ADP would help research, expend capital, assume certain debt to develop additional facilities in the Washington, DC area

•   ADP would consider a long-term lease agreement with the partner/owners of the building in Reston (not all dental practice owners also owned the building)

•   The original partners would have exclusive rights (such as in a franchise) to a negotiated geographical area in the tri-state area, making any additional ADP purchases part of their exclusive domain.

•   The original partners would be the managing partners, participate in the revenues and retain overarching control of any satellite offices or practice acquisitions in the area

•   The original partners would have their accounts receivable at the time of purchase be a separate cash purchase.

•   The original partners would receive a bonus if they elected to stay beyond a pre-determined minimum time period

For ADP

•   ADP would take a minority interest in all revenues generated by the purchased practices as well as the future revenues generated by the new entity.

•   The original partners’ practices were transferred to the new entity, which was dentist controlled.

•   ADP owned all the dental equipment and good will

•   ADP would have a voice in non-clinical decisionmaking

•   There was a non-compete clause for a pre-determined period of time for the original partners