Court File and Parties

Court File No.: CV-20-84595 Date: 2025-09-24 Ontario Superior Court of Justice

Between: Dr. Demetrius Dalios and Dr. Mahmood Khedmatgozar, Applicants – and – Dr. Dana Price and Dr. Dana Price Dentistry Professional Corporation, Respondents

Counsel: Charles M. Gibson and Ian Houle, lawyers for the Applicants G. James Thorlakson and Julia Dales, lawyers for the Respondents

Heard: May 1, 2025

Endorsement – Buy-Sell Provisions

Justice Marc R. Labrosse

Overview

[1] Further to my Reasons for Decision dated July 14, 2023, the parties returned before me pursuant to para. 105 of those reasons to determine the terms of the court-ordered buy-sell process.

[2] Through the exchange of draft buy-sell provisions, the parties have succeeded in narrowing the issues which require adjudication. At the end of the original application, the respondent, Dr. Price, had proposed terms for a buy-sell process in a document titled "Buy/Sell Notice". As part of the return of this matter, this applicant, Dr. Dalios, provided a track changes version of the Buy/Sell Notice which identified four areas of change:

a. The deletion of WHEREAS "E" and "F";

b. The fixing of the value of the dental practice by the Court;

c. A reduction in the purchase price for Dr. Dalios;

d. The inclusion of a 60-day transition period for the departing dentist;

e. An adjustment to the non-compete section to exclude a situation of minority shareholdings.

[3] Prior to the continuation of this application, Dr. Price provided a revised version of the Buy/Sell Notice which incorporated the non-competition provisions of s. 3.11 of the draft Shareholders' Agreement. Dr. Dalios is agreeable to this revised way of dealing with the non-competition provisions such that they apply to the working dentist if she sells and leaves the practice but not to Dr. Dalios if he should sell and leave the practice. This issue is thus resolved.

[4] At the continuation of this application, the parties agreed to the deletion of WHEREAS "E" and "F" and to the inclusion of a transition provision.

[5] Accordingly, the only remaining issues for adjudication are if the court should fix the value of the dental practice and the court's decision on the request by Dr. Dalios that his purchase price should be discounted from Dr. Price's purchase price.

[6] Following the oral argument, the court wrote to the parties to seek clarification on certain items. Correspondence dated June 19, 2025, was received by the court from Mr. Houle, with the consent of Mr. Thorlakson which addressed the court's questions. The parties sent revised versions of each party's Buy/Sell Notice to the court which indicated a disagreement on the transition provision consented to in oral argument.

[7] The correspondence dated June 19, 2025, suggested that Dr. Price no longer agreed with the transition provision. The court wrote to the parties seeking for Mr. Thorlakson to clarify his position. Mr. Thorlakson confirmed on behalf of Dr. Price that she does not oppose the 60-day transition period.

Analysis

Determination of Value for Buy/Sell Notice

[8] The determination of the value of the dental practice is not a legal issue per se. Dr. Price had initially relied upon a value of $5,862,000 as determined by a business valuation prepared in August 2023. At the time of the original application, Dr. Price took the position that the value of the dental practice did not necessarily reflect the value that she was prepared to attribute in the Buy/Sell Notice. As evidenced in the Buy/Sell Notice dated November 2023, the value practice was determined at the time as being $5,862,000. However, for the purposes of the buy-sell process, Dr. Price was offering to buy or sell her interest in the dental practice based on a total value of $6.1 million.

[9] She has now taken the position that as time has passed since the date of that offer, that she should be able to attribute whatever value she wants to the buy-sell process and not have to be tied to a business valuation.

[10] Dr. Dalios, on the other hand, seeks to have the value of the dental practice fixed for the purpose of the Buy/Sell Notice. He relies on a Non-Binding Letter of Intent dated November 6, 2024, from Dr. Nima Nohan Dentistry Professional Corporation and Kingsway Clinics, Inc. who offered to purchase Dr. Dalios' 50% share based on a value of $6,454,000 being at 7 x EBITDA. Dr. Dalios states that this offer is without conditions and is still open for acceptance.

[11] My review of the Non-Binding Letter of Intent is that there is a revenue guarantee requirement, a number of key assumptions and numerous conditions including a lease extension, financing approval and the approval by Brian Holland and Dr. Nima Noyan. It is not without conditions. However, it is noted that there are no conditions that Dr. Price must sign an associate agreement requiring her to remain as the working dentist for a certain period of time.

[12] Regardless of the conditional nature of the Non-Binding Letter of Intent, I am of the view that it is not proper, in the context of a buy-sell procedure, to bind any party to the purchase price based on the value that a third party attributes to the dental practice. The inherent nature of a buy/sell process is that it reflects the price that the specific shareholder is willing to pay to buy or receive to sell, and this may not always be reflective of fair market value. The perfect example is seen in the first Buy/Sell Notice of Dr. Price, whereby she had the dental practice valued at $5,862,000 but for the purposes of the Buy/Sell Notice, she attributed a value of $6,100,000.

[13] It is also important to note that the buy-sell provisions of the draft Shareholders' Agreement, which is relied upon by this court to be indicative of the parties' expectations, did not include a valuation process for the dental practice. The amount of the buy-sell process was the amount attributed by the offeror.

[14] Accordingly, I am of the view that it is not appropriate or required to fix the value of the dental practice for the purpose of determining the offer price which would be applicable to either Dr. Price or Dr. Dalios. Dr. Dalios' request in this regard is dismissed.

Difference in Purchase Price

[15] The main issue that requires adjudication is the request by Dr. Dalios that his purchase price for Dr. Price's shares should be reduced by .75 x EBITDA.

[16] Dr. Dalios arrives at this amount by differentiating the 8 x EBITDA that MCA was prepared to pay for the dental practice if Dr. Price remained as an employee as opposed to the 6.5 x EBITDA that MCA was prepared to pay if Dr. Price walked away and Dr. Dalios stayed on. This difference has been quantified at $1,586,000 for the value of the entire practice or $793,000 being 0.75 x EBITDA if only Dr. Dalios' shares were being purchased.

[17] Dr. Dalios advances that there is an increased value to the dental practice for Dr. Price as she is the face of the dental practice as opposed to the value which remains to Dr. Dalios if Dr. Price were to leave the practice. In that scenario, Dr. Dalios advances that he is at risk that both patients and clients may leave the practice, thereby reducing its value without Dr. Price.

[18] In support of his position, Dr. Dalios relies on Balofsky v. Balofsky, 2018 ONSC 4628 and Kummen v. Kummen-Shopman Ltd., 1983 CarswellOntMan 85 to highlight that the court has jurisdiction to adjust the price of a buy-sell provision in certain circumstances.

[19] In Balofsky, the purchase price was adjusted in a court-ordered sale of shares to reflect a disparity of contributions to the business by two brothers. The price was adjusted on equitable grounds.

[20] In Kummen, it was recognized that where a sale of shares is court ordered, there is general equitable authority to make an order which compensates one shareholder in circumstances that the court deems just.

[21] In support of her position, Dr. Price relies on Leavens v. Schwartz, 2023 ONSC 3381 which she says supports the proposition that where there is risk that a purchasing shareholder my lose clients or employees as a result of a sale of shares, that risk is mitigated by the inclusion of non-competition and non-solicitation provisions such as those that formed part of the draft Shareholders' Agreement which are now imported into the Buy/Sell Notice.

[22] It is noteworthy to consider that even in the draft shareholders' agreement, provisions had been put in place to recognize Dr. Price's role as the working dentist. It was negotiated in the last draft that a non-compete provision applied to her as the working dentist but did not apply to Dr. Dalios should he leave the dental practice. As I have already stated in my original decision in this matter, the draft shareholders' agreement was in large part agreed to and serves as an indicator of the parties' reasonable expectations in the event of a breakdown in their relationship.

[23] Section 3.11 of the draft shareholders' agreement treats the parties differently and recognizes that Dr. Dalios requires additional protection in the event that Dr. Price were to leave the dental practice. This is precisely what is recognized by the courts in Leavens. It demonstrates that the parties turned their mind to the different roles being fulfilled by Dr. Price and Dr. Dalios and in doing so made specific adjustments to the draft shareholders' agreement to account for those differentiating roles and how Dr. Dalios should be protected in the event of Dr. Price's departure.

[24] Most relevant is the fact that neither sections 7.1 nor 7.2, which are the buy/sell provisions negotiated, give any additional advantage or consideration for the fact that Dr. Price would be leaving the practice as the working dentist. Once again this is reflective of the reasonable expectations of the parties in the event of a breakdown of their relationship.

[25] Finally, this is not a circumstance as reflected in Balofsky or Kummens where one shareholder has received an unfair advantage out of the operation of the company which must be accounted for at the time of sale. I have been directed to no evidence whereby Dr. Price has received an unfair advantage which requires that Dr. Dalios be compensated. The Buy/Sell Notice as prepared by Dr. Price reflects the expectations of the parties that either of them could have triggered the buy/sell provision by inserting one price for either the purchase of the other party's shares or the sale of shares to the other party. In both situations, there is one price that applies to both Dr. Price and to Dr. Dalios.

[26] I conclude that Dr. Dalios has failed to persuade me that there is any reason in this case why the court would exercise a general equitable authority to rectify a situation between the parties. Accordingly, the request by Dr. Dalios to be compensated for the fact that he is the purchasing shareholder is denied, and his protections are properly found in the non-competition and non-solicitation provisions which form part of the Buy/Sell Notice as imported from s. 3.11 of the draft shareholders' agreement. His request for a reduction in his purchase price is dismissed.

[27] I have attached as Appendix "A" the version of the final Buy/Sell Notice which only requires each party to insert the value being attributed to the shares either purchased or sold. The parties have advised that they are confident that they can determine a just process for communicating each party's Buy/Sell Notice to the other and agree on the eventual timing for the transaction. In the event that they are unable to do so, they may request a further appearance before me to determine any disputes in the mechanics of how to give effect to the buy-sell process.

Conclusion

[28] For the reasons set out herein, the Court concludes that for the purpose of the buy/sell process, there shall be no determination of the value of the dental practice and there is no basis to order the equitable remedy that Dr. Dalios' purchase price be reduced.

Costs

[29] If the parties are unable to finalize the terms of the buy-sell without Court assistance, they can move on to the issue of costs and if they are unable to resolve that issue, they may make costs submissions in writing, maximum five pages plus attachments. I will assume that they will be able to determine a timetable for costs submissions once they determine if any further adjudication is required failing which they can write to me.

Justice Marc R. Labrosse

Released: September 24, 2025

Appendix "A"

BUY/SELL NOTICE

TO: Dr. Demetrius Dalios ("Dr. Dalios" or the "Offeree")

FROM: Dr. Dana Price ("Dr. Price" or the "Offeror")

WHEREAS

A. Dr. Dana Price Dentistry Professional Corporation (the "Corporation") has the following issued and outstanding shares, which shares represent all of the issued and outstanding shares in the capital of the Corporation:

Shareholder	Number and Class of Shares
Dr. Demetrius Dalios	50 Class B Common Shares 50 Class H Common Shares
Dr. Dana Price	50 Class A Common Shares 50 Class H Common Shares

B. Dr. Price and Dr. Dalios were parties to Ontario Superior Court of Justice action no. CV-20-84595, judgment from which was released on July 14, 2023, bearing the citation Dalios et al v. Price et al., 2023 ONSC 4179 (the "Judgment").

C. Pursuant to the Judgment, Justice Labrosse held that, inter alia, the parties were in a deadlock which was to be resolved by way of a buy/sell pursuant to sections 7.1 and 7.2 of the draft Shareholders' Agreement (the "Draft USA").

D. Dr. Price is desirous of purchasing all, but not less than all, of the shares in the share capital of the Corporation held by Dr. Dalios or selling all, but not less than all, of her shares in the share capital of the Corporation.

E. This Buy/Sell Notice is delivered by Dr. Price, as the Offeror, to Dr. Dalios, as the Offeree, in accordance with sections 7.1 and 7.2 of the Draft USA and the directions of Mr. Justice Labrosse.

NOW THEREFORE

Pursuant to the Judgment and sections 7.1 and 7.2 of the Draft USA, Dr. Price as the Offeror hereby delivers this Buy/Sell Notice to Dr. Dalios as the Offeree (the "Notice") upon and subject to the terms and conditions hereinafter set forth:

1. Unless otherwise specified, capitalized terms used but not otherwise defined in this Notice have the meanings given to them in the Draft USA.

Offer to Purchase

2. Dr. Price as the Offeror hereby offers to purchase from Dr. Dalios as the Offeree (the "Offer to Purchase") all of the Shares beneficially owned by Dr. Dalios (the "Dalios Shares"), pursuant to the following terms and conditions:

a. Dr. Price shall purchase all of Dalios Shares for a purchase price of $__________ (CAN) per share, for a total purchase price of $__________ (CAN);

b. Dr. Price as the Offeror will deliver a copy of this Notice, along with a certified cheque equal to the lesser of $50,000 or 25% of the purchase price contemplated in this Offer to Purchase. Such amounts will be held in trust and applied against the purchase price in the event Dr. Dalios as Offeree accepts the Offer to Purchase.

c. The remaining aggregate sale price for the Dalios Shares shall be paid to Dr. Dalios as the Offeree by Dr. Price as the Offeror on Closing by way of cash, certified cheque or other immediately available funds.

d. At the Closing of the transaction contemplated by the Offer to Purchase, Dr. Dalios as the Offeree shall deliver all documents required pursuant to the Draft USA.

Offer to Sell

3. Dr. Price as the Offeror hereby offers to sell to Dr. Dalios as the Offeree (the "Offer to Sell") all of the Shares beneficially owned by Dr. Price as the Offeror (the "Dr. Price Shares") pursuant to the following terms and conditions:

a. In accordance with the Valuation, Dr. Price as the Offeror shall sell all of the Dr. Price Shares for a purchase price of $__________ (CAN) per share, for a total purchase price of $__________ (CAN);

b. The aggregate sale price for the Dr. Price Shares shall be paid to Dr. Price as the Offeror by Dr. Dalios as the Offeree on Closing by way of cash, certified cheque or other immediately available funds;

c. At the Closing of the transaction contemplated by the Offer to Sell Dr. Price as the Offeror shall deliver all documents required pursuant to the Shareholders' Agreement. Dr. Price as the Offeree shall continue to occupy the same role which she currently occupies at the Corporation for a period of 60 days following the transfer of her shares in the Corporation to Dr. Dalios to ensure an orderly transition, unless Dr. Dalios gives written notice to Dr. Price that she can cease occupying said same role earlier.

d. Pursuant to section 3.11 of the Draft USA, Dr. Price agrees as a "Working Dentist" that should she cease to be a shareholder, she shall not:

i. Directly or indirectly carry on (or be associated with) the practice of dentistry or dental hygiene within a radius of three (3) kilometers (the "Territory") of the Premises as defined in the Draft USA;

ii. Directly or indirectly, solicit for employment, or advise or recommend to any other person, firm, corporation or entity that they employ or solicit for employment any person employed by the Corporation at the Premises or by a corporation related to a Shareholder (this provision applying to independent contracts as well); or

iii. Provide services, directly or indirectly, in any manner whatsoever to any patient who had previously been a patient of the Corporation at the Premises during the period of time that such Working Dentist was a Shareholder of the Corporation.

iv. Subsections 3(d)i - 3(d)iii do not apply to the situation where Dr. Price is a minority shareholder of a competing corporation so long as Dr. Price is not personally involved in the decisions and actions of that competing corporation in relations to the matters covered in subsections 3(d)i - 3(d)iii.

Additional Terms

4. The Offer to Sell and the Offer to Purchase shall be irrevocable for a period of ninety (90) days from the date this Notice is delivered to Dr. Dalios as the Offeree.

5. Dr. Dalios as the Offeree may either accept the Offer to Purchase or the Offer to Sell by written notice to the solicitor of Dr. Price as the Offeror (at the address listed below), provided that if Dr. Dalios as the Offeree fails to indicate by written notice to Dr. Price as the Offeror within ninety (90) days from the delivery of this Notice its desire to accept either the Offer to Purchase or the Offer to Sell, then pursuant to the Draft USA, the Offer to Sell shall be deemed null and void and Dr. Dalios as the Offeree shall be conclusively deemed to have accepted the Offer to Purchase and it shall be binding on the parties at the price and on the terms and conditions set out in this Notice.

6. Dr. Dalios as the Offeree shall deliver its written notice to the solicitor of Dr. Price as the Offeror at:

James Thorlakson, Dentons Canada LLP 2500 Stantec Tower, 10220-103 Avenue NW Edmonton, AB, T5J 0K4 Email: james.thorlakson@dentons.com

7. The transaction of purchase and sale pursuant to the Offer to Purchase or the Offer to Sell, as applicable, shall be completed on the ninetieth (90th) day following the date upon which this Notice is accepted or deemed to have been accepted or sooner if Dr. Price as the Offeror and Dr. Dalios as the Offeree agrees to an earlier closing (the "Closing"). In the event such Closing day falls on a weekend or statutory holiday, the Closing shall take place on the next following business day.

8. This Notice, and the Offer to Sell and the Offer to Purchase contained herein, are subject to the terms and conditions of sections 7.1 and 7.2 of the draft Shareholders' Agreement.

9. This Notice, and the Offer to Sell, the Offer to Purchase and the transactions contemplated herein, shall be governed by the laws of the Province of Ontario and the laws of Canada applicable therein.

10. Dr. Price as the Offeror and Dr. Dalios as the Offeree shall each bear their own costs and expenses in connection with the execution and delivery of all documents and the performance of their respective obligations hereunder.

11. The matters contained and referred to in the preamble to this Notice are hereby ratified and confirmed and are expressly incorporated into this Notice.

12. This Notice may be executed manually or by facsimile, pdf or other electronic signature by the parties hereto and may be executed in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original, such that all such counterparts together shall constitute one and the same Instrument.

DATED at Ottawa, Ontario this _______ day of___________________, 2025

______________________ Dr. Dana Price

The Offeror hereby offers to purchase and sell the Shares

The Offeree hereby accepts the Offer to Purchase

DATED at Ottawa, Ontario this _______ day of___________________, 2025

______________________ Dr. Demetrius Dalios

OR

The Offeree hereby accepts the Offer to Sell

DATED at Ottawa, Ontario this _______ day of___________________, 2025

______________________ Dr. Demetrius Dalios