SETTLEMENT AGREEMENT

Exhibit 10.1

12/26/07

SETTLEMENT AGREEMENT

Following are the terms for the settlement of the claims involving PDG, P.A. and Dental Specialists of Minnesota, P.A. (collectively, “PDG”) and PDHC, Ltd. and American Dental Partners, Inc. (“ADPI” and collectively, with PDHC, Ltd., “PDHC”) and Northland Dental Partners, PLLC, fka James Ludke, D.D.S., PLLC (“Ludke PLLC”).

PDHC will retain the offices referred to as Apple Valley, Ridges, Eagan, Maple Grove, Prior Lake, and St. Louis Park (the “PDHC Offices”) and all related assets and interests owned by PDHC other than the Park Dental Name. PDHC will also retain the office known as the Resource Group (the “Resource Group”), as well as all other assets not expressly transferred to PDG.

a. Clinic Services. (i) For the PDG Offices, PDHC will provide those items and services generally included as Clinic Expense through February 29, 2008. Effective March 1, 2008, PDG will employ all of its own clinic-based staff and PDHC will no longer provide any clinic based services or be paid Clinic Expense. (ii) For the PDHC Offices in which PDG doctor(s) continue to practice, PDHC will provide services included in Clinic Expense for the PDG doctor(s) until the Doctor Transition Date. PDG shall reimburse PDHC semi-monthly for all Clinic Expenses as incurred by it in connection with the services provided with respect to the PDG Offices and with respect to the PDG Doctors in the PDHC Offices, not later than five days after written notice and reasonable detail of such Clinic Expenses is provided to PDG; provided that in the case of lease payments or other obligations that are known in advance and payable on a known date, PDG shall pay the amount of such obligations not less than three days prior to the applicable payment date.

b. Resource Services. For purposes of Resource Group services, the Transition Period will be divided into two periods. During January and February 2008 (the “Initial Period”), PDHC will provide those services described in the attached Exhibit B as Initial Period Services. For the balance of the Transition Period, PDHC will provide the services described on the attached Exhibit B as Full Transition Period Services As to any specific service category (e.g., financial reporting, HR, payroll), PDG may (as it achieves the capability to provide its own services), upon 60 days’ written notice, terminate such services prior to September 30, 2008.

For these services, PDG shall pay PDHC an aggregate amount of $19 million, payable in 12 consecutive equal monthly installments on or before the 15th day of each calendar month, except that the January payment will be due on January 30, 2008. Such fee shall be payable notwithstanding the termination of any or all of these services by PDG or due to the expiration of the Transition Period.

For purposes of these provisions, the Clinic Expenses will be allocated on a reasonable basis based on the doctors with respect to which the expenses are incurred. For example, if there is a “mix” of doctors (both PDG and non-PDG doctors) in an office, the Clinic Expenses associated with team members working solely with a PDG Doctor will be allocated to PDG, none of the Clinic Expenses associated with team members working solely for another Doctor would be allocated to PDG, and the Clinic Expenses associated with other team members in that office, as well as occupancy costs, supplies, and other unallocated costs, would be allocated based on the respective doctors’ contribution to total gross production.

Until the Doctor Transition Date, doctors employed by PDG who are currently practicing in a PDHC Office will continue to have the right to practice in that

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office, and doctors who are currently practicing in a PDG Office will have the right to continue practicing in that office. On or before the Doctor Transition Date, the doctors who will not be remaining with PDG will be relocated to PDHC offices, and the PDG doctors in the PDHC offices will be relocated to PDG Offices. The parties will exercise reasonable efforts to accommodate requests of a doctor to move from a PDHC Office to a PDG Office or from a PDG Office to a PDHC Office and to schedule doctors in each other’s offices prior to the Doctor Transition Date.

For any Non-PDG doctor, as defined below, all of his or her current patients will receive an agreed upon form of letter informing the patient that Non-PDG doctor’s new practice circumstances, including as and when applicable his or new office, practice name, location and contact information, and explaining to the patient how he or she can request a record transfer should that patient want to leave that practice and go with that Non-PDG doctor. As to this list of patients of non-PDG doctors, the non-solicitation provision of PDG’s employment contracts shall not apply. If a patient calls an office to schedule an appointment with that patient’s Non-PDG doctor of record, and that Non-PDG doctor has changed offices, that patient will be given the new contact information for his or her Non-PDG doctor. If a patient calls a PDHC Office to schedule an appointment with a PDG doctor, as defined below, of record, that patient will be given the new contact information for his or her PDG doctor. These procedures will remain in place until December 31, 2008.

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EXHIBIT A

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EXHIBIT B

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