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                                                                   EXHIBIT 10.18

 
                              SECURITY AGREEMENT


     THIS AGREEMENT, entered into as of August 31, 1996, between GMS DENTAL 
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GROUP, INC., a Delaware corporation (the "Company"), and GRANT M. SADLER (the 
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"Purchaser").

                             W I T N E S S E T H:

     WHEREAS, the Purchaser has purchased from the Company 957,041 shares of the
Company's Common Stock (the "Shares"); and

     WHEREAS, the Company has loaned to the Purchaser the amount of $94,747.06 
which the Purchaser has used to pay a portion of the purchase price of the 
Shares; and

     WHEREAS, the Purchaser has executed and delivered to the Company a full-
recourse promissory note evidencing such loan (the "Note") and has agreed to
pledge all of the Shares to the Company as security for the payment of the Note:

     NOW, THEREFORE, it is agreed as follows:

     1.   The Purchaser hereby delivers to the Company one or more certificates
representing the Shares, together with two Assignments Separate From Certificate
signed by the Purchaser. The Purchaser hereby pledges and grants a security
interest in the Shares, including any shares into which the Shares may be
converted and all proceeds of the Shares, as security for the timely payment of
all of the Purchaser's obligations under the Note and for the Purchaser's
performance of all of its obligations under this Agreement. In the event of a
default in payment of the Note, the Purchaser hereby appoints the Company as his
true and lawful attorney to take such action as may be necessary or appropriate
to cause the Shares to be transferred into the name of the Company or any
assignee of the Company and to take any other action on behalf of the Purchaser
permitted hereunder or under applicable law.

     2.   The Company agrees to hold the Shares as security for the timely 
payment of all of the Purchaser's obligations under the Note and for the 
Purchaser's performance of all of its obligations under this Agreement, as
provided herein. At no time shall the Company dispose of or encumber the Shares,
except as otherwise provided in this Agreement.

     3.   At all times while the Company is holding the Shares as security under
this Agreement, the Company shall:

          (a)  Collect any dividends that may be declared on the Shares and 
     credit such dividends against any accrued interest or unpaid principal 
     under the Note, as part payment;

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          (b) Collect and hold any shares that may be issued upon conversion of 
     the Shares; and

          (c) Collect and hold any other securities or other property that may 
     be distributed with respect to the Shares.

Such shares and other securities or property shall be subject to the security 
interest granted in Section 1 of this Agreement and shall be held by the company
under this Agreement.

     4.   While the Company holds the Shares as security under this Agreement, 
the Purchaser shall have the right to vote the Shares at all meetings of the 
Company's stockholders; provided that the Purchaser is not in default in the 
performance of any term of this Agreement or in any payment due under the Note. 
In the event of such a default, the Company shall have the right to the extent 
permitted by law to vote and to give consents, ratifications and waivers and 
take any other action with respect to the Shares with the same force and effect 
as if the Company were the absolute and sole owner of the Shares.

     5.   Upon payment in full of the outstanding principal balance of the Note 
and all interest and other charges due under the Note, the Company shall release
from pledge and redeliver to the Purchaser the certificate(s) representing the 
Shares and the Assignment Separate From Certificate forms.

     6.   In the event that the Purchaser fails to perform any term of this 
Agreement or fails to make any payment when due under the Note, the Company 
shall have all of the rights and remedies of a creditor and secured party at law
and in equity, including (without limitation) the rights and remedies provided 
under the California Uniform Commercial Code. Without limiting the foregoing, 
the Company may, after giving ten (10) days' prior written notice to the 
Purchaser by certified mail at his residence or business address, sell any or 
all of the Shares in such manner and for such price as the Company may 
determine, including (without limitation) through a public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for 
future delivery. The Company is authorized at any such sale, if it deems it 
advisable to do so, to restrict the prospective bidders or purchasers of any of 
the Shares to persons who will represent and agree that they are purchasing for 
their own account for investment, and not with a view to the distribution or 
sale of any of the Shares, to restrict the prospective bidders or purchasers and
the use any purchaser may make of the Shares and impose any other restriction or
condition that the Company deems necessary or advisable under the federal and 
state securities laws. Upon any such sale the Company shall have the right to 
deliver, assign and transfer to the purchaser thereof the Shares so sold. Each 
purchaser at any such sale shall hold the Shares so sold absolute, free from any
claim or right of any kind. In case of any sale of any or all of the Shares on 

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credit or for future delivery, the Shares so sold may be retained by the Company
until the selling price is paid by the purchaser thereof, but the Company shall 
not incur any liability in case of the failure of such purchaser to take up and 
pay for the Shares so sold and, in case of any such failure, such Shares may 
again be sold under the terms of this section. The Purchaser hereby agrees that 
any disposition of any or all of the Shares by way of a private placement or 
other method which in the opinion of the Company is required or advisable under 
Federal and state securities laws is commercially reasonable. At any public
sale, the Company may (if it is the highest bidder) purchase all or any part of
the Shares at such price as the Company deems proper. Out of the proceeds of any
sale, the Company may retain an amount sufficient to pay all amounts then due
under the Note, together with the expenses of the sale and reasonable attorneys'
fees. The Company shall pay the balance of such proceeds, if any, to the
Purchaser. The Purchaser shall be liable for any deficiency that remains after
the Company has exercised its rights under this Agreement.

     7.   This Agreement shall be governed by and construed in accordance with 
the laws of the State of California. This Agreement shall inure to the benefit 
of, and be binding upon, the Company and its successors and assigns and be 
binding upon the purchaser and the Purchaser's legal representative, heirs, 
legatees, distributees, assigns and transferees by operation of law. This 
Agreement contains the entire security agreement between the Company and the 
Purchaser. The Purchaser will execute any additional agreements, assignments or 
documents or take any other actions reasonably required by the Company to 
preserve and perfect the security interest in the Shares granted to the Company 
herein and otherwise to effectuate this Agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer, and the Purchaser has personally 
executed this Agreement.

                                        GMS DENTAL GROUP, INC.

                                        By /s/ Kenneth J. Davis
                                          -----------------------------------
                                          Kenneth J. Davis, Vice
                                          President of Operations


                                        PURCHASER

                                         /s/ Grant M. Sadler
                                        -------------------------------------
                                        Grant M. Sadler

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