AFFILIATION AGREEMENT AND ASSET PURCHASE AGREEMENT

THIS  AFFILIATION  AGREEMENT AND ASSET PURCHASE  AGREEMENT is entered into as of
the 1st day of August, 1998, by and between Omega Orthodontics, Inc., a Delaware
corporation  ("OMEGA" or "Surviving  Entity"),  and Dennis E. Holt, D.D.S., M.S.
("Dr.  Holt"),  who is duly  licensed  to practice  endodontics  in the state of
Oregon (the "State").

                                    RECITALS

A. OMEGA provides professional  management and marketing services to orthodontic
and other  dental  specialty  practices  in the United  States,  which  services
include  providing  practice  management  systems,   office  space,   equipment,
furnishings and active  administrative  personnel necessary for the operation of
such practices,  and which services are provided directly or indirectly  through
management service organizations.

B. Dr. Holt owns and operates an endodontic practice (the "Endodontic Practice")
with offices located at 1590 N.E. Williamson Boulevard,  Bend, Oregon 97701 (the
"Endodontic  Offices") and furnishes  endodontic care to the general public.  As
the owner and operator of the  Endodontic  Practice,  Dr. Holt is the owner of a
leasehold  interest in a lease of the Endodontic  Offices,  the owner of certain
personal  property  located  at the  Endodontic  Offices,  a  party  to  certain
contracts  relating to the  Endodontic  Practice  and the  beneficiary  of other
rights related to the Endodontic Practice.

C. OMEGA has conducted a review of the Endodontic Practice, and has reviewed the
Endodontic Practice's financial statement (the "Financial Statement"), a copy of
which is  attached  hereto as Exhibit  A. Based on its review of the  Endodontic
Practice  and  the  Financial  Statement,  OMEGA  has  issued  the  report  (the
"Report"), a copy of which has been furnished to Dr. Holt. Dr. Holt has reviewed
the Report and OMEGA's  literature,  and agrees with the Report and the concepts
of OMEGA's Exceptional Practice.

D. Subject to the terms and  conditions  of this  Agreement,  OMEGA and Dr. Holt
have  determined  that it is in the best interests of each for OMEGA to purchase
from Dr.  Holt  certain of the assets  comprising  the  Endodontic  Practice  as
provided in Section 1.1 hereof.

NOW,  THEREFORE,  in  consideration  of the  foregoing  recitals  and the mutual
promises  contained herein, and for other good and valuable  consideration,  the
receipt  and   sufficiency  of  which  are  hereby   acknowledged  to  the  full
satisfaction of the parties hereto, the parties hereto agree as follows:

ARTICLE I. ASSET PURCHASE

1.1      Purchase; Consideration and Payment.

(a) At the  Closing  (as  hereinafter  defined)  and  subject  to the  terms and
conditions  hereinafter set forth,  Dr. Holt agrees to sell,  transfer,  convey,
assign and deliver to OMEGA,  and OMEGA  agrees to purchase and acquire from Dr.
Holt and take delivery of, for the consideration  hereinafter  provided,  all of
Dr.  Holt's  right,  title  and  interest  in and to  all of the  assets  of the
Endodontic  Practice,  wheresoever  situated  and  whether  or not  specifically
referred to herein or in any instrument of conveyance  delivered pursuant hereto
(such  assets  and  rights  of Dr.  Holt  are  collectively  referred  to as the
"Assets"),  excepting  therefrom  the assets listed on Schedule I to the Bill of
Sale and  Assignment  (the  "Bill of Sale")  attached  hereto as  Exhibit D (the
"Excluded Assets"), and including without limitation the following Assets:

         (1) a lease  of the  Endodontic  Offices,  including  all  rights  and
         remedies (the "Lease");

         (2) all books,  records,  machinery and equipment  used or owned by the
         Endodontic  Practice  and all other  tangible and  intangible  personal
         property  at or  related  to the  Endodontic  Offices,  whether  or not
         located  at  the  Endodontic  Offices,  or to the  Endodontic  Practice
         conducted therein, whether or not located at the Endodontic Offices;

         (3) all Contracts (as defined below in Section 2.1);

         (4) all prepaid  claims,  prepaid taxes and other prepaid expense items
         and deferred charges,  credits,  advance  payments,  security and other
         deposits  made by Dr. Holt to any other person  relating to  Endodontic
         Practice;

         (5) any rights of Dr. Holt pertaining to any counterclaims, set-offs or
         defenses he may have with respect to any of the liabilities  assumed by
         OMEGA; and

         (6) any other rights  related in any way  whatsoever to the  Endodontic
         Practice or the Endodontic  Offices,  excepting  those assets listed on
         Schedule 1 and further  excepting  those  rights and  obligations  that
         cannot  legally or  ethically  be held by anyone  other than a licensed
         dentist or endodontist under applicable laws or ethical rules;

free and clear of any liens,  encumbrances,  restrictions  or claims of any kind
(other  than  those  liens,  encumbrances,  restrictions  and  claims  expressly
disclosed to OMEGA and  affirmatively  accepted by OMEGA prior to the  Closing),
without any further action on the part of any holder  thereof,  for an aggregate
consideration (the "Consideration") of:

         (i) Two  Hundred  Fifty Five  Thousand  Four  Hundred Forty One Dollars
         ($255,441) in cash (the "Cash Component");

         (ii) Two  Hundred  Ninety  Three  Thousand  Three  Hundred  Thirty Five
         Dollars  ($293,335)  to  be  represented  by  a  promissory  note  (the
         "Purchase Note") payable to Dr. Holt (the "Note Component") in the form
         attached hereto as Exhibit B; and

         (iii) Two Hundred  Ninety  Three  Thousand  Three  Hundred  Thirty Five
         Dollars  ($293,335) to be represented by issuance to Dr. Holt of shares
         of unregistered OMEGA common stock ("OMEGA Stock") based on a value per
         share  equal to $_____  (the  average of the  closing  prices for OMEGA
         Stock on The Nasdaq  SmallCap  Market  for each  business  day  (Monday
         through Friday,  not including any legal holidays) of the calendar week
         ending the Friday  immediately  preceding  the  effective  date of this
         Agreement and the Management  Services  Agreement  between Dr. Holt and
         OMEGA) the Closing (the "Stock  Component"),  which shall  thereupon be
         issued to Dr. Holt, fully paid and nonassessable.

1.2      Adjustment; Allocation.

         (a) The  Consideration  is based on the value of the Assets as mutually
         determined  by the  parties  from  the  information  set  forth  in the
         Financial Statement.

         (b) The  Consideration  shall be subject to adjustments at Closing for:
         (i) prepaid and  underpaid  rent and other  lease  obligations,  if the
         leases are to be continued  after Closing,  as well as for other agreed
         normal and customary prepaid and underpaid  expenses;  (ii) any accrued
         but unpaid salaries, bonuses and other compensation,  fringe and health
         insurance benefits,  employment or payroll taxes and related employment
         obligations;  and (iii) any accounts payable of the Endodontic Practice
         which have accrued  prior to the Closing and which remain  unpaid as of
         such  time (the  "Accounts  Payable")  in excess of an amount  equal to
         one-half  (1/2)  of one  "Average"  month  of  gross  income  from  the
         Endodontic Practice.  As used herein,  Average shall mean an average of
         the  gross  income of the  Endodontic  Practice  using the last  twelve
         months prior to the end of the month immediately preceding the Closing.

         (c) The adjustments to the  Consideration,  if any, shall be applied in
         the following order of priority;  first to the Cash Component,  second,
         to the Note Component, and the balance, if any, to the Stock Component.

         (d) The parties  hereby agree to allocate the  Consideration  among the
         Assets in  accordance  with Section  1060 of the Internal  Revenue Code
         (the  "Code") on the basis of the fair market value of the Assets as of
         the  Closing,   which  allocation  shall  be  reduced  to  writing  and
         acknowledged  by the parties  hereto within thirty (30) days  following
         the Closing.  The parties agree to file timely any information that may
         be  required  to be filed  pursuant to  regulations  promulgated  under
         Section  1060(b) of the Code. The parties further agree that they shall
         report the federal, state,  municipal,  foreign and local and other tax
         consequences of the purchase and sale hereunder in a manner  consistent
         with the allocation  determined pursuant to this section, and that they
         shall not take any position  inconsistent  therewith in connection with
         any tax return, refund claim, litigation or otherwise.

1.3 Time and Place of  Closing.  The  closing of the  transactions  contemplated
hereby (herein called the "Closing")  shall be held at 1:00pm EDT on May 1, 1998
at such place, as may be fixed by mutual agreement of the parties.

1.4 Delivery of Records,  Contracts;  Transfer of Accounts.  At the Closing, Dr.
Holt shall deliver or cause to be delivered to OMEGA:

         (a) all of the Assets,  including without limitation,  books,  records,
         leases,  contracts,  employment  agreements,   non-compete  agreements,
         commitments and rights relating to the Endodontic  Practice,  with such
         rights of transfer so as to allow OMEGA the full benefit of the same.

         (b) Evidence of malpractice insurance coverage for the current and five
         (5) prior  years,  and if  applicable,  evidence  of  so-called  "tail"
         insurance  for such  period  naming Dr. Holt (and any  successor)  as a
         co-insured  or otherwise  assigning to OMEGA and its successor the full
         benefits thereof.

         (c) any documentation  necessary for the transfer of any of the Assets,
         including  the  Bill of  Sale,  together  with  any  warranty  or other
         documentation.  Dr. Holt shall  cooperate with OMEGA in the transfer of
         any utility accounts for the Endodontic Offices.
<PAGE>
ARTICLE II.  ASSUMED LIABILITIES

2.1  Contracts For purposes of this Article II the term  "Contracts"  shall mean
only those  leases,  licenses,  permits,  contracts,  subleases,  registrations,
authorizations,  commitments,  purchase orders, contracts to purchase materials,
contracts  to  perform or  receive  services  (including  work in  process)  and
supplies,  and all other agreements (whether written or oral) that relate to the
Endodontic Practice and are set forth on Exhibit Y attached hereto.

2.2 Transfer. At the Closing, Dr. Holt shall assign and transfer to OMEGA all of
Dr.  Holt's  right,  title and interest in and to the  Contracts and OMEGA shall
assume and agree to perform all  obligations  and liabilities on the part of Dr.
Holt under the Contracts accruing on and after the Closing; provided that to the
extent that the assignment of any Contract is not permitted  without the consent
of the  other  party or  parties  to such  Contract,  this  Agreement  shall not
constitute  an agreement  to assign such  Contract if such consent is not given;
and provided  further  that Dr. Holt and OMEGA,  as  appropriate,  shall use all
reasonable  efforts  to obtain  such  consents,  it being  understood  that such
reasonable efforts shall not include any requirement to offer or grant financial
accommodations to any third party.

2.3 Assumption of Liabilities by OMEGA. At the Closing, Dr. Holt shall assign to
OMEGA, and OMEGA shall assume and pay, perform and discharge,  and indemnify and
hold  Dr.  Holt  harmless  from  and  against,  the  following  obligations  and
liabilities   of  Dr.  Holt,   and  none  other   (collectively,   the  "Assumed
Liabilities"): all obligations and liabilities on the part of Dr. Holt under the
Contracts arising on and after the Closing.

2.4 No Enlargement. The assumption by OMEGA of the Assumed Liabilities shall not
enlarge any rights or remedies  of any third party under any  Contract  with Dr.
Holt.  OMEGA agrees to  indemnify,  defend and hold Dr. Holt and his  employees,
harmless  from and against any and all  liability,  loss,  cost,  damage  and/or
expense (including,  without limitation,  reasonable  attorneys' fees and costs)
pertaining to the Assumed Liabilities.

2.5 No Other Liabilities Assumed. OMEGA and Dr. Holt intend that OMEGA shall not
assume  or be  obligated  to  pay,  perform  or  discharge  any  of  Dr.  Holt's
obligations other than the Assumed Liabilities  specified in Section 2.3. Except
for the  Assumed  Liabilities  specified  in  Section  2.3,  OMEGA and Dr.  Holt
expressly  agree  OMEGA is  acquiring  the  Assets  free and clear of all liens,
claims and encumbrances.
<PAGE>
ARTICLE III.  REPRESENTATIONS AND WARRANTIES

The  Representations  and Warranties of Dr. Holt in the attached  Schedule 1 are
hereby  incorporated  as if fully  set forth  herein.  The  Representations  and
Warranties  of OMEGA in the attached  Schedule 2 are hereby  incorporated  as if
fully set forth herein. Capitalized words and expressions used in this Agreement
and which are defined in said  Schedules 1 and 2 shall have the same  meaning as
they are given therein.

ARTICLE IV.  COVENANTS OF DR. HOLT

Dr. Holt hereby covenants and agrees with OMEGA as follows:

4.1 Conduct of Business.  Between the date of this Agreement and the Closing, he
will do the following unless OMEGA shall otherwise consent in writing:

         (a) conduct his business only in the ordinary course,  and refrain from
         changing or introducing  any method of management or operations  except
         in the ordinary course of business and consistent with prior practices;

         (b) refrain from making any purchase,  sale or disposition of any asset
         or  property  other  than in the  ordinary  course  of  business,  from
         purchasing  any  capital  asset  costing  more  than  $1,000  and  from
         mortgaging, pledging, subjecting to a lien or otherwise encumbering any
         of the Assets;

         (c) refrain from  incurring  any  contingent  or fixed  obligations  or
         liabilities  except  those  that are usual and  normal in the  ordinary
         course of business;

         (d) refrain from  offering  patients  discounts of five percent (5%) or
         more for prepayments of fees for service;

         (e) refrain from selling,  assigning or otherwise transferring accounts
         receivable to any bank, finance company or other third party;

         (f) maintain accounts payable at levels consistent with past practices;

         (g) use his best efforts to keep available his present employees and to
         preserve the goodwill of all  patients,  suppliers,  and others  having
         business relations with him;

         (h) not commit or fail to commit any act which  would cause Dr. Holt to
         suffer the revocation,  suspension or limitation of Dr. Holt's license;
         and

         (i) permit OMEGA and its authorized representatives to have full access
         to all his properties, assets, records, tax returns, records, contracts
         and  documents and furnish to OMEGA or its  authorized  representatives
         such  financial and other  information  with respect to his business or
         properties as OMEGA may from time to time reasonably request.

4.2 Authorization from Others.  Prior to the Closing, he will have used his best
efforts to obtain  all  assignments,  authorizations,  consents  and  permits of
others  required  to permit the  consummation  by Dr.  Holt of the  transactions
contemplated by this Agreement.  In the event any necessary  authorizations have
not been  received,  Dr. Holt shall inform Omega  thereof and the parties  shall
meet and mutually resolve such issues.

4.3 Breach of  Representations  and Warranties.  Promptly upon becoming aware of
the actual, impending or threatened occurrence of any event which would cause or
constitute a breach, or would have caused or constituted a breach had such event
occurred  or been  known  to them  prior  to the  date  hereof,  of any of their
representations and warranties contained in or referred to in this Agreement, he
shall give detailed  written notice thereof to and shall use his best efforts to
prevent or promptly remedy the same.

4.4  Consummation  of  Agreement.  He shall use his best  efforts to perform and
fulfill all  conditions  and  obligations on his or its part to be performed and
fulfilled under this Agreement, to the end that the transactions contemplated by
this Agreement shall be fully carried out.

ARTICLE V.  COVENANTS OF OMEGA.

OMEGA hereby covenants and agrees with Dr. Holt as follows:

5.1 Authorization from Others.  Prior to the Closing,  it will have obtained all
authorizations,   consents  and  permits  of  others   required  to  permit  the
consummation by it of the transactions contemplated by this Agreement.

5.2  Consummation  of  Agreement.  It shall use its best  efforts to perform and
fulfill all conditions and  obligations on its part to be performed or fulfilled
under this  Agreement,  to the end that the  transactions  contemplated  by this
Agreement shall be fully carried out.

5.3 Breach of  Representations  and Warranties.  Promptly upon becoming aware of
the actual, impending or threatened occurrence of any event which would cause or
constitute a breach, or would have caused or constituted a breach had such event
occurred  or been  known  to them  prior  to the  date  hereof,  of any of their
representations  and warranties  contained in or referred to in this  Agreement,
OMEGA  shall  give  detailed  written  notice  thereof to and shall use his best
efforts to prevent or promptly remedy the same.

ARTICLE VI.  CONDITIONS TO OBLIGATIONS OF OMEGA

The  obligations  of OMEGA to consummate  this  Agreement  and the  transactions
contemplated  hereby are subject to the condition  that on or before the Closing
the actions required by this Article VI will have been accomplished.

6.1  Representations;  Warranties;  Covenants.  Each of the  representations and
warranties  of Dr.  Holt  contained  in  Schedule 1 shall be true and correct as
though made on and as of the Closing,  and Dr. Holt shall have  performed all of
his  obligations  hereunder  which by the terms hereof are to be performed on or
before the Closing.

6.2 New PC. Dr. Holt shall have formed a new professional  entity (the "New PC")
under the laws of the State in order to commence  the  practice  of  endodontics
through the New PC. Dr. Holt shall have furnished (i) a certificate of the State
Secretary of State as to the legal existence and  professional  corporation good
standing of New PC; and (ii) a copy of the  resolutions  adopted by the board of
directors and  stockholders  of New PC authorizing  and approving the Management
Services  Agreement  and the Stock  Put/Call  Option and  Successor  Designation
Agreement.

6.3 Other Agreements.  Dr. Holt shall have executed and delivered, or shall have
caused  the New PC to  execute  and  deliver,  to  OMEGA a  Management  Services
Agreement and a Stock Put/Call Option and Successor Designation Agreement,  each
having  substantially the terms and conditions of the forms hereof  collectively
attached hereto as Exhibit E.

6.4      [INTENTIONALLY OMITTED]

6.5  Absence  of  Certain  Litigation.   There  shall  not  be  any  injunction,
restraining  order or order  of any  nature  issued  by any  court of  competent
jurisdiction  which  directs that this  Agreement  or any  material  transaction
contemplated hereby shall not be consummated as herein provided, or suit, action
or other  proceeding  which in the  reasonable  opinion of counsel  for OMEGA is
likely to result in the  restraint or  prohibition  of the  consummation  of any
material transaction contemplated hereby.

6.6 Notices. Dr. Holt shall, at OMEGA's request and expense, notify all patients
and  obligors  of  accounts  receivable,  and  third  party  payors  and  others
designated  by  OMEGA  of  the  asset   purchase  and  the  other   transactions
contemplated  hereunder pursuant to notice in a form mutually  acceptable to the
parties and which is comparable in scope to the form attached  hereto as Exhibit
C.

6.7 Financial  Condition.  The financial  condition of the  Endodontic  Practice
shall not be materially  adversely  different from the Financial  Statement,  as
determined by OMEGA.  During the period from the date of the Financial Statement
to the  Closing,  there shall not have been any material  adverse  change in the
financial  condition,  results  of  operations,  business  or  prospects  of the
Endodontic Practice,  nor any material loss or damage to the Assets,  whether or
not insured,  which materially affects the ability of the Endodontic Practice to
conduct its  business.  Dr. Holt shall have  delivered  to OMEGA a  certificate,
dated the date of Closing,  to the foregoing  effect,  and further to the effect
that  there  are no  Accounts  Payable  or other  liabilities  as of the date of
Closing that are not reflected on the Financial Statement other than those which
have been  disclosed  in writing to and  accepted  in writing by OMEGA and which
incurred  since the date of the  Financial  Statement in the ordinary  course of
business.

6.8 Due Diligence. OMEGA, acting in good faith and in its sole discretion, shall
be reasonably  satisfied with the results of its "Due Diligence" on Dr. Holt and
the  Endodontic  Practice  as not  reflecting  any  data  or  information  which
individually or in the aggregate, if previously disclosed,  would have indicated
that there was a material adverse change in the professional  status of Dr. Holt
or the business of the Endodontic  Practice or in the condition of the Assets or
the  prospects  (financial or  otherwise)  of the  Endodontic  Practice from the
information  provided  prior to the date hereof.  As used herein,  Due Diligence
shall mean,  without  limitation,  the results of any investigations or analyses
conducted  by or on behalf of OMEGA  (financial  or  otherwise)  related  to, or
otherwise  deemed  material  by OMEGA,  regarding  Dr.  Holt and the  Endodontic
Practice, including location of the Endodontic Offices and its demographics, the
leases, the Equipment,  insurance,  licensing,  malpractice issues, liabilities,
compliance with laws and regulations and health surveys.

ARTICLE VII.  CONDITIONS TO OBLIGATIONS OF DR. HOLT

The  obligations of Dr. Holt to consummate  this Agreement and the  transactions
contemplated  hereby are subject to the condition  that on or before the Closing
the actions required by this Article VII will have been accomplished.

7.1  Representations;  Warranties;  Covenants.  Each of the  representations and
warranties of OMEGA  contained in Schedule 2 shall be true and correct as though
made  on and  as of the  Closing  and  OMEGA  shall  have  performed  all of its
obligations hereunder which by the terms hereof are to be performed on or before
the Closing.

7.2      [INTENTIONALLY OMITTED]

7.3 Other  Agreements.  OMEGA shall have  executed and delivered to Dr. Holt and
New PC a Management Services Agreement and a Stock Put/Call Option and Successor
Designation Agreement, each having substantially the terms and conditions of the
forms hereof collectively attached hereto as Exhibit E.

7.4      [INTENTIONALLY OMITTED]

7.5  Absence  of  Certain  Litigation.   There  shall  not  be  any  injunction,
restraining  order or order  of any  nature  issued  by any  court of  competent
jurisdiction  which  directs that this  Agreement  or any  material  transaction
contemplated hereby shall not be consummated as herein provided, or suit, action
or other proceeding  which in the reasonable  opinion of counsel for Dr. Holt is
likely to result in the  restraint or  prohibition  of the  consummation  of any
material transaction contemplated hereby.

7.6  Financial  Condition.  The  financial  condition  of  OMEGA  shall  not  be
materially  adversely  different  from the Financial  Statement  (10-K) filed by
OMEGA with the SEC.  During the period from the date of the Financial  Statement
(10-K) to the Closing,  there shall not have been any material adverse change in
the financial condition, results of operations,  business or prospects of OMEGA,
nor any material  loss or damage to the Assets,  whether or not  insured,  which
materially affects the ability of OMEGA to conduct its business.

ARTICLE VIII.  OBLIGATIONS AFTER CLOSING.

8.1 OMEGA Exceptional Practice and the Report Suggestions.
On and after the Closing,  Dr. Holt agrees to cause the New PC to implement  the
suggestions in the Report and the concepts of OMEGA's Exceptional Practice.

8.2 Books and  Records.  OMEGA  shall  permit  Dr.  Holt,  his  accountants  and
attorneys,  reasonable  access to such  books and  records  for the  purpose  of
preparing  such tax  returns of Dr. Holt and the  Endodontic  Practice as may be
reasonably  requested after the Closing and for other proper purposes reasonably
approved by OMEGA.

8.3  License.  Dr.  Holt shall  maintain  all  licenses  necessary  to  practice
endodontics  in the State.  Dr.  Holt shall not commit or fail to commit any act
which would cause Dr. Holt or the New PC to suffer the revocation, suspension or
limitation of Dr. Holt's or the New PC's license.

8.4 OMEGA hereby grants to Dr. Holt appropriate "piggyback"  registration rights
so that in the event OMEGA  registers any  previously  unregistered  OMEGA stock
OMEGA  shall  cause any  unregistered  stock  held by Dr.  Holt to be  similarly
registered.

ARTICLE IX.  INDEMNIFICATION.

9.1 Indemnification By Dr. Holt. Subject to the limitations set forth in Section
9.3,  Dr.  Holt agrees to defend,  indemnify  and hold OMEGA  harmless  from and
against any  damages,  liabilities,  losses and expenses  (including  reasonable
counsel  fees)  of any kind or  nature  whatsoever  which  may be  sustained  or
suffered  by  OMEGA  based  upon a breach  of any  representation,  warranty  or
covenant  made by Dr. Holt in this  Agreement  or in any  exhibit,  certificate,
schedule or financial statement delivered hereunder,  or by reason of any claim,
action or proceeding  asserted or instituted  growing out of any matter or thing
covered by such representations, warranties or covenants.

9.2  Indemnification  By OMEGA.  Subject to the limitations set forth in Section
9.3,  OMEGA  agrees to defend,  indemnify  and hold Dr. Holt  harmless  from and
against any  damages,  liabilities,  losses and expenses  (including  reasonable
counsel  fees)  of any kind or  nature  whatsoever  which  may be  sustained  or
suffered  by Dr.  Holt based upon a breach of any  representation,  warranty  or
covenant  made  by  OMEGA  in this  Agreement  or in any  exhibit,  certificate,
schedule or financial statement delivered hereunder,  or by reason of any claim,
action or proceeding  asserted or instituted  growing out of any matter or thing
covered by such representations, warranties or covenants.

9.3      Exclusions.  Notwithstanding Sections 9.1 and 9.2:

(a) no  indemnification  shall be  payable to the extent any claim is covered by
insurance; and

(b) no  indemnification  shall be payable with respect to claims  asserted  more
than five (5) years after the Closing.

9.4  Notice:  Defense  of  Claims.  Prompt  written  notice  of each  claim  for
indemnification  hereunder  shall be given to the other  party,  specifying  the
amount and nature of the claim,  and of any matter  which in the  opinion of the
claimant is likely to give rise to an  indemnification  claim.  The indemnifying
party shall have the right to  participate  at its own expense in the defense of
any such matter or its settlement.  If, in the opinion of the indemnified party,
its financial  condition or business would not be impaired  thereby,  such party
may authorize the indemnifying  party to take over the defense of such matter so
long as such  defense is  expeditious.  Failure to give notice of a matter which
may give rise to an  indemnification  claim  shall not  affect the rights of any
party  to  collect  such  claim  from the  other  party  or its  transferees  in
liquidation.

9.5 Payment of Claims; Alternative Dispute Resolution. Indemnification claims by
either  party shall be paid or otherwise  satisfied  within 30 days after notice
thereof  is  given  by the  party  seeking  indemnification.  In the  event  the
indemnifying  party indicates in a writing  delivered to the other party that he
or it  disputes  the nature or amount of the claim,  in which  event the dispute
upon the election of any party hereto after said 30-day period shall be referred
to the American  Arbitration  Association to be settled by  alternative  dispute
resolution  in Oregon in  accordance  with the  commercial  alternative  dispute
resolution rules of said  Association,  with the fees and expenses thereof to be
borne 50% by OMEGA and 50% by the New PC and Dr. Holt.

9.6 Notwithstanding anything to the contrary contained in this Agreement, or any
Schedule or Exhibit hereto,  in no event shall Dr. Holt, the New PC, OMEGA,  the
MSO its  officers,  directors  or  employees be liable for any form of indirect,
special,  incidental  or  consequential  damages,  whether such damages arise in
contract or tort, irrespective of fault, negligence or strict liability.

ARTICLE X.  MISCELLANEOUS.

10.1     Termination.

(a) At any time prior to the Closing,  this  Agreement may be terminated  (i) by
mutual  consent of the parties  with the approval of their  respective  board of
directors   or   members,   (ii)  by  either  if  there  has  been  a   material
misrepresentation,  breach of  warranty or breach of covenant by the other party
in its  representations,  warranties  and covenants  set forth herein,  (iii) by
OMEGA if the conditions stated in Article VI have not been satisfied at or prior
to the Closing, or (iv) by Dr. Holt if the conditions stated in Article VII have
not been satisfied at or prior to the Closing.

(b)      [INTENTIONALLY OMITTED]

10.2  Survival  of  Warranties  and  Other  Obligations.   All  representations,
warranties,  agreements,  covenants and  obligations  herein or in any schedule,
exhibit,  certificate  or financial  statement  delivered by either party to the
other party incident to the transactions contemplated hereby are material, shall
be deemed to have been  relied  upon by the other  party and shall  survive  the
Closing  regardless of any  investigation and shall not merge in the performance
of any obligation by either party hereto.

10.3 Fees and Expenses. Each of the parties will bear its or his own expenses in
connection  with  the  negotiation  and  the  consummation  of the  transactions
contemplated by this Agreement.

10.4  Notices.  Any  notice  or other  communication  in  connection  with  this
Agreement  shall be deemed to be  delivered  if in writing  (or in the form of a
telegram or facsimile  transmission)  addressed as provided  below and if either
(a) actually  delivered at said address,  or (b) in the case of a letter,  three
business days shall have elapsed after the same shall have been deposited in the
United States mail, postage prepaid and registered or certified,  return receipt
requested, or sent by reputable overnight courier:

                  If to Dr. Holt, to:

                  Dennis E. Holt, D.D.S., M.S.
                  1590 N.E. Williamson Boulevard
                  Bend, Oregon 97701

                  CC:

                  Kevin J. Keillor
                  747 SW Industrial Way
                  Bend, Oregon 97702

                  If to the OMEGA, to:

                  Omega Orthodontics, Inc.
                  3621 Silver Spur Lane
                  Acton, California  93510
                  Attn:   Robert Schulhof

and in any case at such other address as the addressee  shall have  specified by
written  notice.  All  periods  of  notice  shall be  measured  from the date of
delivery thereof.

10.5 Entire  Agreement.  This  Agreement  (including  all  exhibits or schedules
appended  to  this  Agreement  and  all  documents  delivered  pursuant  to  the
provisions of this  Agreement,  all of which are hereby  incorporated  herein by
reference)  together  with  the  Management  Services  Agreement  and the  Stock
Put/Call Option and Successor  Designation Agreement (including all exhibits and
schedules thereto), taken together,  constitute the entire agreement between the
parties,  and all  promises,  representations,  understandings,  warranties  and
agreements  with reference to the subject  matter hereof and  inducements to the
making of this  Agreement  relied upon by my party hereto,  have been  expressed
herein or therein.

10.6 Binding  Agreement,  Successors.  This Agreement shall be binding upon, and
shall be  enforceable  by and inure to the benefit of, the parties  named herein
and their  respective  successors  and  assigns;  provided,  however,  that this
Agreement may not be assigned by either of the parties without the prior written
consent of the other party which will not be unreasonably withheld.

10.7  Confidentiality.  As used  herein,  "Confidential  Information"  means any
information  or data  that a party  has  acquired  from  another  party  that is
confidential or not otherwise available to the public,  whether oral or written,
including  without  limitation  any  analyses,  computations,  studies  or other
documents  prepared  from  such  information  or data  by or for the  directors,
officers, employees, agents or representatives of such party (collectively,  the
"Representatives"), but excluding information or data which (i) became available
to the  public  other  than  as a  result  of  such  party's  violation  of this
Agreement,  (ii)  became  available  to such party from a source  other than the
other party if that  source was not bound by a  confidentiality  agreement  with
such other party and such source lawfully  obtained such information or data, or
(iii) is required to be disclosed by  applicable  law,  provided  that  promptly
after being compelled to disclose any such  information or data, the party being
so compelled shall provide prompt notice thereof to the other party so that such
other party may seek a protective order or other appropriate  remedy. Each party
covenants and agrees that it and its Representatives shall keep confidential and
shall not disclose all Confidential  Information,  except to its Representatives
and lenders who need to know such information and agree to keep it confidential.
Each  party  shall  be  responsible  for any  breach  of this  provision  by its
Representatives.  In the event that the Closing does not occur,  each party will
promptly  return to the other all  copies  of such  other  party's  Confidential
Information.

10.8 Governing Law; Severability. This Agreement shall be deemed a contract made
under  the laws of the  State of  Oregon  and,  together  with  the  rights  and
obligations of the parties  hereunder,  shall be construed under and governed by
the laws of such state. The invalidity or  unenforceability  of any provision of
this  Agreement  shall not affect the  validity or  enforceability  of any other
provision hereof.

10.9  Referrals.  Nothing in this  Agreement  shall be  construed as an offer or
payment to the other  party or any  affiliate  of the other party of any cash or
other  remuneration  whether  directly  or  indirectly,   overtly  or  covertly,
specifically  for  patient  referrals  or  for  recommending  or  arranging  the
purchase,  lease  or  order  of any item or  service.  The  Consideration  to be
received upon the Closing  represents the fair market value of the Assets and is
not in any way related to or dependent  upon  referrals by and between OMEGA and
Dr. Holt.

10.10 Further  Assurances.  Following the execution of this Agreement,  Dr. Holt
and OMEGA each agrees:

(a)  to  deliver  such  other  instruments  of  title,  certificates,  consents,
endorsements,  assignments,  assumptions and other documents or instruments,  in
form reasonably  acceptable to the party requesting the same and its counsel, as
may be reasonably necessary to carry out and/or to comply with the terms of this
Agreement, and the transactions contemplated herein;

(b) to confer on a regular basis with the other, report on material  operational
matters  and  promptly  advise  the other  orally or in writing of any change or
event resulting in or which,  insofar as can reasonably be foreseen could result
in, a material adverse effect on such party or which would cause or constitute a
material breach of any of the  representations,  warranties or covenants of such
party contained herein; and

(c) to provide the other (or its  counsel)  promptly  with copies of all filings
made by such party with any state or federal  governmental  entity in connection
with this Agreement or the transactions contemplated hereby.

10.11  Counterparts;  Section Headings;  Gender. This Agreement may be executed,
accepted and delivered in any number of counterparts, but all counterparts shall
together  constitute but one and the same  instrument.  The  underlined  section
headings  are  inserted  for  convenience  of  reference  only and are not to be
construed as part of this  Agreement.  The use of the masculine or neuter gender
includes each of the other genders.

IN WITNESS  WHEREOF the parties hereto have caused this Agreement to be executed
as of the date set forth above by their duly authorized representatives.


                                                                 D.D.S., M.S.
                                   Printed Name: Dennis E. Holt, D.D.S., M.S.



                                   OMEGA ORTHODONTICS, INC.

                                   By: 
                                      Printed Name: Robert J. Schulhof
                                      Its President and Chief Executive Officer
                                      Duly Authorized
<PAGE>
                                   Exhibit A

                              Financial Statement

[DR. HOLT PROVIDE]
<PAGE>
                                   Exhibit B

                         NON-NEGOTIABLE PROMISSORY NOTE

$180,000                                              Acton, California
                                                      _________ ___, 1998

     FOR VALUE  RECEIVED,  Omega  Orthodontics,  Inc.,  a  Delaware  corporation
("Omega"),  promises  to pay to Dr.  Dennis  E. Holt  ("Dr.  Holt") at 1590 N.E.
Williamson Boulevard, Bend, Oregon 97701 or other location specified by Dr. Holt
in  writing,  One Hundred  Eighty  Thousand  Dollars  ($180,000)  together  with
interest on any and all  principal  amounts,  such interest to be at the rate of
8.0% per annum and  payable  monthly on the first day of each  month,  beginning
with the first month following the date of this Note.

     1. Payments. Payments of principal under this Note shall be due and payable
in 48 equal monthly installments,  beginning on the first day of the first month
following  the  date of this  Note.  In any  event,  the  balance  of  principal
remaining  unpaid  shall be due and  payable  on the first day of the 48th month
following the date of this Note.

     Payments  of  interest on the  outstanding  principal  balance of this Note
shall  be due and  payable  on the  first  day of each of the  first  48  months
following the date of this Note.  Interest  shall accrue in arrears and shall be
computed on the basis of a 360-day year and a 30-day month.

     Both  principal  and  interest  are  payable in lawful  money of the United
States of America.

     2.  Acceleration/Events  of Default.  At the option of Dr. Holt, the entire
unpaid principal  balance  hereunder with interest then outstanding shall become
immediately  due and payable upon the occurrence of any of the following  events
of default  (hereinafter  "Events of Default") which are not cured in accordance
with the  provisions of Section 3: (i) failure to pay principal when due on this
Note;  (ii)  failure to pay any  interest on this Note 30 days after  payment is
due;  (iii) failure to perform any other  covenant of Omega under this Note, and
such failure continues for 60 days after written notice by the holder;  and (iv)
the making of an  assignment  for the benefit of  creditors,  trust  mortgage or
composition  with  creditors or other  arrangement  of similar  import by or the
commencement of any  proceedings  under any bankruptcy or insolvency law, now or
hereafter enacted, by or against, Omega or any endorser.

     3. Omega's Right to Cure.  Notwithstanding  the  foregoing,  Omega shall at
minimum have the right:  (i) to cure  monetary  defaults  hereunder or under any
instrument, document or undertaking given or entered into in connection herewith
within  15  calendar  days  after  the  Event  of  Default;  and  (ii)  to  cure
non-monetary  defaults  hereunder  or under  any such  instrument,  document  or
undertaking within 30 calendar days after the Event of Default,  in which event,
this Note and the loan evidenced  hereby shall be  reinstated.  The time periods
provided  herein for cure shall be concurrent  with and not  consecutive  to any
other grace periods  which may be provided in or with respect to any  obligation
having the benefit of this provision.

     4. Voluntary Prepayment.  Omega may prepay this Note in whole or in part at
any time without penalty or premium, upon written notice to Dr. Holt.

     5.  Expenses.  Omega  agrees  to pay  all  expenses,  including  reasonable
attorney's fees,  which Dr. Holt may incur in effecting  collection of this Note
upon default or at maturity.

     6. Delays. Dr. Holt shall not, by any act, delay, omission or otherwise, be
deemed to have waived any of his rights or remedies hereunder unless such waiver
be in  writing  and  signed  by Dr.  Holt.  A delay,  omission  or waiver on one
occasion shall not be deemed a waiver or bar on any future  occasion of the same
or any other right.

     7. Certain Waivers.  Omega hereby (i) waives presentment,  demand,  notice,
protest  and all other  demands  and notices in  connection  with the  delivery,
acceptance,  performance,  default  or  enforcement  of  this  Note,  except  as
specifically  provided herein with respect to notices of  non-monetary  default;
(ii) waives all  suretyship  defenses;  and (iii)  assents to any  extension  or
postponement  of the time of payment or any other  indulgence or forbearance and
to the addition or release of any other party primarily or secondarily liable.

     8.  Remedies.  Omega hereby  acknowledges  and agrees that no remedy of Dr.
Holt under this Note is intended to be exclusive of any other  remedy,  and each
and every remedy given  hereunder now or hereafter  existing at law or in equity
by statute or other  provision  of law may be  exercised  in any order or manner
without waiving rights and may be exercised cumulatively.

     9. Notices.  Notices to Omega shall be deemed given when  delivered in hand
to Omega,  or one (1) day after being sent by  receipted  commercial,  overnight
courier or five (5) days after being mailed by certified mail,  postage prepaid,
return receipt requested,  to Omega at 3621 Silver Spur Lane, Acton,  California
93510 or other address of which Omega shall have notified Dr. Holt in writing.

     10. Governing Law. This Note shall be deemed to be a Oregon instrument, and
all rights and obligations  hereunder shall be governed by the laws of the State
of Oregon

INTENTIONALLY LEFT BLANK

<PAGE>
         This  instrument  has been duly  executed  by an  officer of Omega duly
authorized, and shall take effect upon the date and year first above written.


WITNESS:                                    OMEGA ORTHODONTICS, INC.


________________________                    By:_________________________
                                               Robert J. Schulhof,
                                               President
<PAGE>
                                   Exhibit C

                                     Notice

                                                     __________________, 1998

[Name and address
of  Patient/Account Debtor/Third Party Payors/Others]

Re:      Dr. Dennis E. Holt, D.D.S., M.S.

Ladies and Gentlemen:

         I am pleased to inform you that my practice has become  affiliated with
Omega  Orthodontics,  Inc., a nationwide  dental specialty  practice  management
company.  My  affiliation  with Omega affords me the  opportunity  to provide my
patients with  professional  billing,  collection and other management  systems,
thereby permitting me to continue to focus on providing quality endodontic care.

         Commencing  immediately and until further notice from Omega and myself,
I direct you to pay all  amounts  owing and  payable to Dennis E. Holt,  D.D.S.,
M.S. and [Insert Name of New PC] in the manner and to the place specified in any
notice Omega sends to you. In addition,  I consent to the provisions of any such
notice from Omega to you.

         Thank you for your cooperation;  should you have any questions,  please
contact the undersigned.

Very truly yours,


---------------------------
Dennis E. Holt, D.D.S., M.S.

[Insert Name of New PC]


By _________________________
     Dennis E. Holt, D.D.S., M.S.
     President

<PAGE>
                                    Exhibit D

                           BILL OF SALE AND ASSIGNMENT

         The undersigned, Dennis E. Holt, D.D.S., M.S. ("Dr. Holt") for good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged,  hereby sells, assigns,  transfers,  delivers and conveys to Omega
Orthodontics,  Inc., a Delaware corporation, having a usual place of business in
Acton, California ("OMEGA"),  all of his right, title and interest in and to all
of the assets of the endodontic  practice  operated by Dr. Holt (the "Endodontic
Practice") at 1590 N.E. Williamson  Boulevard,  Bend, Oregon 97701,  wheresoever
situated  and whether or not  specifically  referred to herein  (such assets and
rights of Dr.  Holt are  collectively  referred to as the  "Assets"),  excepting
therefrom  the assets  listed on Schedule I (the  "Excluded  Assets"),  attached
hereto and made a part hereof, and including without  limitation,  the following
Assets:

         (a) a lease at 1590 N.E. Williamson Boulevard,  Bend, Oregon 97701 (the
"Endodontic Offices"), including all rights and remedies (the "Lease");

         (b) all books, records, machinery and equipment ("Equipment"),  used or
owned by the Endodontic Practice, and all other tangible and intangible personal
property at or related to the Endodontic Offices,  whether or not located at the
Endodontic Offices, or to the Endodontic Practice conducted therein,  whether or
not located at the Endodontic Offices

         (c) all leases, licenses, permits, contracts, subleases, registrations,
authorizations,  commitments,  purchase orders, contracts to purchase materials,
contracts  to  perform or  receive  services  (including  work in  process)  and
supplies,  and all other  agreements  (whether  written or oral) relating to the
Endodontic Practice listed on the attached Exhibit Y (the "Contracts");

         (d) all prepaid  claims,  prepaid taxes and other prepaid expense items
and deferred charges,  credits,  advance  payments,  security and other deposits
made by Dr. Holt to any other person relating to the Endodontic Practice;

         (e) any rights of Dr. Holt pertaining to any counterclaims, set-offs or
defenses he may have with  respect to any of the  liabilities  assumed by OMEGA;
and

         (f) any other rights  related in any way  whatsoever to the  Endodontic
Practice or the Endodontic Offices,  excepting those assets listed on Schedule 1
and further  excepting  those  rights and  obligations  that  cannot  legally or
ethically be held by anyone other than a licensed  dentist or endodontist  under
applicable laws or ethical rules.

         Dr. Holt represents that he has good and marketable title in fee simple
to all of the Assets,  free of liens and encumbrances.  All of the Assets are in
good  repair,  have  been  well  maintained,   substantially  conform  with  all
applicable ordinances, regulations and zoning or other laws. The Equipment is in
good working order.

         OMEGA assumes and agrees to pay,  perform and discharge,  and indemnify
and hold Dr. Holt  harmless  from and against,  the  following  obligations  and
liabilities of Dr. Holt, and none other:  (a) obligations and liabilities  under
the Lease and the  Contracts  arising on and after the  Closing  and any and all
claims,  liabilities,  losses,  costs, damages or expenses (including reasonable
attorneys' fees and expenses)  resulting from or arising out of ownership of the
Assets or the operation and maintenance of the Endodontic Practice, or caused by
or  occurring  upon  the  Assets,   on  and  after  the  Closing  (the  "Assumed
Liabilities").

         The  assumption by OMEGA of the Assumed  Liabilities  shall not enlarge
any rights or  remedies of any third party  under any  Contract  with Dr.  Holt.
OMEGA agrees to indemnify, defend and hold Dr. Holt and his employees,  harmless
from and  against any and all  liability,  loss,  cost,  damage  and/or  expense
(including, without limitation, reasonable attorneys' fees and costs) pertaining
to the Assumed Liabilities.

         OMEGA and Dr. Holt  intend that OMEGA shall not assume or be  obligated
to pay,  perform  or  discharge  any of Dr.  Holt's  obligations  other than the
Assumed  Liabilities.  Except for the  Assumed  Liabilities,  OMEGA and Dr. Holt
expressly  agree that OMEGA is acquiring the Assets free and clear of all liens,
claims and encumbrances.

         This  Bill  of  Sale  and  Assignment  is  executed  and  delivered  in
connection with the Affiliation  Agreement and Asset Purchase  Agreement entered
into by and between Dr. Holt and OMEGA dated as of __________ ___, 1998.

         WITNESS  the  execution  under  seal as of this ____ day of  _________,
1998.


                                       ---------------------------
                                       Dennis E. Holt, D.D.S., M.S.

<PAGE>
Schedule I

Excluded Assets

1.  Don Zylius Watercolors and Prints
2.  Antique Lenzkirch Clock
3.  Personal Property of Non-Dental Nature



<PAGE>
Exhibit Y

List of Contracts

1.     Loan for Dental Equipment
       a.  #50049326 (Bank of the Cascades)            80,000
           (Balance May 5, 1998)                       41,070
           (Balance May 5, 1998)                       25,000 new loan*

                    Total                              66,070

2.     Lease of Diginal X-ray
       a.  #9702530-701
       b.  #9702530-702

           Affiliated Capital Corp.
           707 Skokie Blvd.
           Northbrook, Ill. 60062

3.     Yellow Pages                                    40/mo.

4.     Laundry                                         200/mo.

5.     Janitorial (Dawn Spencer)                       340/mo.

6.     Seasonal Expenditures
       a.  Snowplowing (Jack Fields)                   variable
       b.  High Desert Landscaping                     200/300 mo.

7.     Postage Meter Rental                            250/yr.

8.     East Cascade Security System                    250/yr.

9.     Building Insurance                              1747/yr.
       A.  DBC (Dentists Benefits Corp)
       B.  DBC (overhead)                              460/yr.

10.    U.S. Satellite Broadcasting                     848/yr.

11.    Lease for Office Building at 1590 N.E. Williamson Blvd., Bend, OR

*  Currently  held in account to pay for Dell  Computer,  Professional  Business
Systems software, painting, rock work and roof repair.

<PAGE>
Exhibit E

Draft Management Services Agreement and
Stock Put/Call Option and Successor Designation Agreement

Executed copies of even date herewith have been delivered to the parties.

<PAGE>
Schedule 1

Representations and Warranties of
Dr. Holt to OMEGA

         Dr. Holt hereby represents and warrants to OMEGA as follows:

     1. The Endodontic Practice. The Assets of the Endodontic Practice are owned
100% by Dr. Holt.  Dr. Holt has the full power to conduct  business as currently
conducted  by the  Endodontic  Practice  and to own and  lease the  property  he
purports to own.

     2. Authorization of Transaction. All necessary action has been taken by Dr.
Holt to authorize the execution of this  Agreement by Dr. Holt, and the delivery
and performance of this Agreement and the transactions  contemplated hereby, and
this  Agreement is the valid and binding  obligation  of Dr.  Holt,  enforceable
against Dr. Holt in accordance with its terms.

     3. Present  Compliance with  Obligations  and Laws.  Except as disclosed on
Exhibit  X  attached  to this  Schedule,  there  is not:  (a) a  default  in the
performance  of any  obligation,  agreement or condition of any debt  instrument
from Dr.  Holt  which  (with or  without  the  passage  of time or the giving of
notice) affords to any person the right to accelerate any material  indebtedness
or  terminate  any right;  (b) a default  of or breach of (with or  without  the
passage of time or the giving of notice) any other contract to which Dr. Holt is
a party or by which he or the Assets are bound; or (c) any violation of any law,
regulation,  administrative  order or judicial order applicable to Dr. Holt, the
Endodontic Practice or the Assets.

     4. No Conflict of Transaction with Obligations and Laws.

     (a) Neither the execution,  delivery and performance of this Agreement, nor
the performance of the transactions contemplated hereby, will: (i) conflict with
or  constitute  (with or without  the passage of time or the giving of notice) a
breach of, or default under,  any debt  instrument to which Dr. Holt is a party,
or give any person the right to  accelerate  any  indebtedness  or terminate any
right; (ii) constitute (with or without the passage of time or giving of notice)
a default  under or breach of any other  agreement,  instrument or obligation to
which  Dr.  Holt is a party or by which he or the  Assets  are  bound;  or (iii)
result in a violation of any law,  regulation,  administrative order or judicial
order applicable to Dr. Holt, the Endodontic Practice or the Assets.

     (b) Except as  disclosed on the attached  Exhibit X to this  Schedule,  the
execution,  delivery and  performance  of this  Agreement  and the  transactions
contemplated  hereby by Dr. Holt do not require the consent,  waiver,  approval,
authorization, exemption of or giving of notice to any governmental authority.

     5. Investigations and Licenses.

     (a) Dr. Holt has all  necessary  licenses to  practice  endodontics  in the
State.

     (b) Dr.  Holt is not  subject  to any  investigation,  whether  threatened,
current or  pending,  under  which Dr. Holt may be required to forfeit or suffer
the  revocation,  suspension or  limitation  of Dr.  Holt's  license to practice
endodontics  and  Dr.  Holt  is  not  subject  to  any  investigation,   whether
threatened, current or pending by a commercial third-party payor.

     6.  Financial  Statement.  Attached  as Exhibit A to the  Agreement  is the
Financial  Statement of the  Endodontic  Practice.  To the best knowledge of Dr.
Holt, the Financial Statement is complete and correct and fairly presents in all
material  respects the financial  position of the Endodontic  Practice as at the
date of such  statement  and the results of its  operations  for the period then
ended, in accordance with generally accepted accounting principles  consistently
applied throughout the periods covered thereby for the periods covered thereby.

     7. Property; Liens; Condition.

     (a) Except as set forth on Exhibit X to this  Schedule,  Dr.  Holt has good
and marketable title to all of the Assets,  including  without  limitation,  all
personal  property,  machinery  and  equipment  used or owned by the  Endodontic
Practice (the "Equipment"), free of liens and encumbrances (the "Property"). All
the  Property  owned or  leased  by Dr.  Holt is in good  repair,  has been well
maintained,  substantially conforms with all applicable ordinances,  regulations
and zoning or other laws. The Equipment is in good working order.

     (b) No other  practice or person owns any of the assets  necessary  for the
operation of the Endodontic  Practice.  The Endodontic Practice does not operate
any of its practice through any other entities or persons.

     9.  Payment  of Taxes.  Dr.  Holt has filed  all  federal,  state and local
income,  excise or franchise tax returns,  real estate and personal property tax
returns,  sales and use tax returns  and other tax returns  required to be filed
and has paid all  taxes  owing  except  taxes  which  have  not yet  accrued  or
otherwise become due for which adequate provision has been made in the Financial
Statement. All transfer, excise or other taxes payable by reason of the purchase
of the Assets  pursuant to this  Agreement  shall be paid or provided for by Dr.
Holt after the Closing out of the Consideration to be received upon consummation
of this Agreement.

     10. Absence of Undisclosed Liabilities and Changes.

     (a) As of the date of the Financial Statement, to the best knowledge of Dr.
Holt,  Dr. Holt had no  liabilities of any nature,  whether  accrued,  absolute,
contingent or otherwise  (including without limitation  liabilities as guarantor
or otherwise with respect to obligations of others, or liabilities for taxes due
or then accrued or to become due) relating to the  Endodontic  Practice,  except
(i)  liabilities  stated  or  adequately   reserved  against  on  the  Financial
Statement,  (ii)  liabilities  not in excess of $5,000  arising in the  ordinary
course  of  business  since  the  date of the  Financial  Statement,  and  (iii)
liabilities  disclosed in Exhibit X to this  Schedule.  To the best knowledge of
Dr.  Holt there is no fact which  materially  adversely  affects,  or may in the
future (so far as can now be reasonably  foreseen)  materially adversely affect,
the business,  properties,  operations or condition of the  Endodontic  Practice
which  has not  been  specifically  disclosed  herein  or in  Exhibit  X to this
Schedule.

     (b) Except as  disclosed in Exhibit X to this  Schedule,  since the date of
the Financial Statement there has not been:

                  (i) any change in the financial condition, properties, assets,
liabilities,  business or  operations  of Dr. Holt or the  Endodontic  Practice,
which change by itself or in conjunction with all other such changes, whether or
not arising in the ordinary course of business, has been materially adverse with
respect to Dr. Holt or the Endodontic Practice;

                  (ii) any  mortgage,  encumbrance  or lien placed on any of the
Property, or the property subject to any lease, or which remains in existence on
the date hereof or at the time of Closing; or

                  (iii)  any  obligation  or  liability  incurred  by  Dr.  Holt
relating to the  Endodontic  Practice  other than  obligations  and  liabilities
incurred in the ordinary  course of business and disclosed on Exhibit X attached
to this Schedule.

     11. Litigation. Except for matters described on Exhibit X to this Schedule,
there is no action, suit, claim,  proceeding or investigation pending or, to the
knowledge of Dr. Holt,  threatened against the Endodontic  Practice or Dr. Holt,
at law or in equity,  or before or by any  Federal,  state,  municipal  or other
governmental department, commission, board, bureau, agency or instrumentality or
governmental  inquiry  pending  or, to the  knowledge  of Dr.  Holt,  threatened
against or involving Dr. Holt or the  Endodontic  Practice,  and to the best the
knowledge of Dr. Holt, there is no basis for any of the foregoing, and there are
no outstanding court orders,  court decrees,  or court stipulations to which the
Endodontic  Practice or Dr. Holt is a party which  question  this  Agreement  or
affect  the  transactions  contemplated  hereby,  or which  will  result  in any
materially adverse change in the business,  properties,  operations,  prospects,
assets  or in  the  condition,  financial  or  otherwise,  of  Dr.  Holt  or the
Endodontic Practice.

     12. Insurance.  Dr. Holt has possessed  occurrence  professional  liability
coverage for the five (5) years prior to the date of this  Agreement  protecting
the Endodontic Practice and Dr. Holt from any professional malpractice liability
that might arise because of the  Endodontic  Practice's  or Dr. Holt's  practice
activities over the preceding five (5) years.  Prior to the Closing,  the New PC
shall have  obtained  and shall  continue to maintain,  at its cost,  Occurrence
Medical  Malpractice  Liability  Insurance  for Dr.  Holt  and  the New PC.  The
Endodontic Practice possesses adequate insurance coverage for its Property.

<PAGE>
                                    EXHIBIT X

                        Exceptions to Representations and
                            Warranties of Dr. Holt to
                                      OMEGA

DR. HOLT AND COUNSEL PROVIDE, IF ANY

None.



<PAGE>
Schedule 2

Representations and Warranties of
OMEGA to Dr. Holt

         OMEGA hereby represents and warrants to Dr. Holt as follows:

     1. Organization of OMEGA. That it is a corporation duly organized,  validly
existing and in good  standing  under the laws of Delaware  with full  corporate
power to own or lease its  properties  and to conduct its business in the manner
and in the places where such  properties are owned or leased or such business is
conducted by it.

     2.  Authorization  of  Transaction.  All  necessary  action,  corporate  or
otherwise,  has been  taken  by it to  authorize  the  execution,  delivery  and
performance  of this  Agreement,  and  this  Agreement  is a valid  and  binding
obligation of it enforceable against it in accordance with its terms, subject to
laws of general application affecting creditor's rights generally.

     3.  Litigation.  There  is no  litigation  pending  or,  to its  knowledge,
threatened  against it which  would  prevent or hinder the  consummation  of the
transactions contemplated by this Agreement.

     4. No Conflict of Transaction with Obligations and Laws.

         (a) Neither the execution,  delivery and performance of this Agreement,
nor the performance of the transactions  contemplated hereby, will: (i) conflict
with or constitute (with or without the passage of time or the giving of notice)
a breach of, or default under, any debt instrument to which OMEGA is a party, or
give any person the right to accelerate any indebtedness or terminate any right;
(ii)  constitute  (with or  without  the  passage of time or giving of notice) a
default  under or breach of any other  agreement,  instrument  or  obligation to
which  OMEGA is a party or by which its Assets are bound;  or (iii)  result in a
violation  of any  law,  regulation,  administrative  order  or  judicial  order
applicable to OMEGA.

     5.  Financial  Statement.  Attached as Exhibit AA to the  Agreement  is the
Financial  Statement  (10-K)  of OMEGA.  To the best  knowledge  of  OMEGA,  the
Financial  Statement is complete and correct and fairly presents in all material
respects the  financial  position of OMEGA as at the date of such  statement and
the results of its  operations  for the period then ended,  in  accordance  with
generally accepted  accounting  principles  consistently  applied throughout the
periods covered thereby for the periods covered thereby.

     6. Absence of Undisclosed  Liabilities and Changes.  Except as disclosed in
Exhibit X to this  Schedule,  since the date of the Financial  Statement  (10-K)
there has not been any change in the financial  condition,  properties,  assets,
liabilities,  business  or  operations  of OMEGA,  which  change by itself or in
conjunction with all other such changes,  whether or not arising in the ordinary
course of business, has been materially adverse with respect to OMEGA;

     7. Litigation.  Except for matters described on Exhibit X to this Schedule,
there is no action, suit, claim,  proceeding or investigation pending or, to the
knowledge of OMEGA,  threatened against OMEGA, at law or in equity, or before or
by any Federal, state, municipal or other governmental  department,  commission,
board, bureau,  agency or instrumentality or governmental inquiry pending or, to
the knowledge of OMEGA,  threatened  against or involving OMEGA, and there is no
basis for any of the foregoing, and there are no outstanding court orders, court
decrees,  or court  stipulations  to which OMEGA is a party which  question this
Agreement or affect the transactions  contemplated  hereby, or which will result
in any  materially  adverse  change  in the  business,  properties,  operations,
prospects, assets or in the condition, financial or otherwise, of OMEGA.