STOCK PUT/CALL OPTION AND SUCCESSOR DESIGNATION AGREEMENT

         This Stock  Put/Call  Option and Successor  Designation Agreement  (the
"Agreement")  is made effective as of this 1st day of August,  1998 by and among
Dennis E. Holt,  P.C. a  professional  corporation  (the "New PC")  incorporated
under the laws of the State of Oregon  (the  "State");  Dennis E. Holt,  D.D.S.,
M.S.  ("Dr.  Holt") who is duly licensed to practice  endodontics  in the State;
Omega  Orthodontics,   Inc.,  a  Delaware  corporation   ("OMEGA");   and  Omega
Orthodontics of Woodland Hills, Inc., a Delaware  corporation (the "MSO"), which
is a wholly-owned subsidiary of OMEGA, with reference to the following facts.

                                    RECITALS

         A.  OMEGA  is  an  orthodontic  and  other  dental  specialty  practice
management  company and has expertise in managing  orthodontic  and other dental
specialty  practices  including  practice  management  systems,   office  space,
equipment,  furnishings and active  administrative  personnel  necessary for the
operation of such  practices and providing  high quality  healthcare  management
services to such practices,  directly or indirectly  through  management service
organizations such as the MSO.

         B. OMEGA  acquired  certain assets of Dr. Holt pursuant to that certain
Affiliation Agreement and Asset Purchase Agreement (the "Affiliation Agreement")
dated as of May 1, 1998 by and between OMEGA and Dr. Holt.

         C. The New PC owns and  operates an  endodontic  practice  with offices
located in the facility  identified in Exhibit A (the "Endodontic  Offices") and
furnishes endodontic care to the general public through the services of Dr. Holt
affiliated with the New PC.

         D. The New PC and the MSO have  entered  into that  certain  Management
Services Agreement (the "Management  Services  Agreement") dated as of even date
herewith for the management by the MSO of the non-endodontic business affairs of
the New PC.

         E. Dr. Holt owns all of the capital stock (the "Capital  Stock") of the
New PC and desires to provide for  successor  ownership  upon the  occurrence of
certain events. When used in this Agreement, the term "Capital Stock" shall mean
all of Dr. Holt's right, title,  interest and estate in and to all of the issued
and outstanding  stock in the New PC,  including any stock hereafter  issued and
any rights to any  additional  stock and any  preemptive  rights,  warrants  and
instruments of like effect, as set forth on Exhibit B.

         F. As a condition of entering into the Management  Services  Agreement,
Dr. Holt has agreed to grant to the MSO, and the MSO desires to acquire from Dr.
Holt certain  rights,  including  but not limited to, the right to designate the
successor  purchaser  (the  "Designated  Successor")  of all or any  part of the
issued and outstanding  Capital Stock upon the occurrence of certain events.  In
addition,  under the Management  Services Agreement,  upon termination  thereof,
each of the New PC and the MSO were  granted  certain  rights to be set forth in
this Agreement.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
mutual promises contained herein, and for other good and valuable consideration,
the receipt and  sufficiency of which are hereby  acknowledged,  the New PC, Dr.
Holt, the MSO and OMEGA agree as follows:

         1. Defined Terms.  The capitalized  words and expressions  used in this
Agreement,  but which are not defined herein shall, unless the context otherwise
requires,  have the same  meaning as they are given in the  Management  Services
Agreement.

         2. Put  Option.  The MSO shall have the option  (the "Put  Option")  to
require the New PC, upon termination of the Management Services Agreement by the
MSO under Section 10.2 thereof or upon  expiration of the Term of the Management
Services Agreement, to:

                  (a)  Purchase  from the MSO at the  greater of the fair market
         value or the book value all of the  leasehold  improvements,  fixtures,
         furniture,  furnishings  and  equipment  comprising  or  located at the
         Endodontic  Offices,  including all replacements and additions  thereto
         made by the MSO pursuant to the  performance of its  obligations  under
         the  Management  Services  Agreement  and all other  assets,  including
         inventory and supplies and intangibles,  set forth on the balance sheet
         as at the  end of the  month  immediately  preceding  the  date of such
         termination  or  expiration  prepared  in  accordance  with  GAAP  (the
         "Balance  Sheet")  to reflect  operations  of the MSO in respect of the
         Endodontic  Offices,  including  depreciation,  amortization  and other
         adjustments of such assets shown on such Balance Sheet; and

                  (b) Purchase,  by obtaining an assignment from the MSO, at the
         greater of the fair market  value or book  value,  the right to receive
         payments  for  breach  of the  restrictive  covenants  provided  for in
         Section 3.7 of the Management  Services Agreement and in the applicable
         Employment  Agreement with Dr. Holt  contemplated  thereunder,  and any
         goodwill and other  intangible  assets set forth on the Balance  Sheet,
         reflecting  amortization or depreciation of the restrictive  covenants,
         and any goodwill and other intangible assets; and

                  (c) Assume  all debt and all  contracts,  payables  and leases
         which  are  obligations  of the  MSO and  which  relate  solely  to the
         performance of its obligations under the Management  Services Agreement
         or the properties subleased in respect of the Endodontic Offices.

If the MSO desires to exercise its Put Option, the MSO shall give written notice
of such  election to the New PC and Dr. Holt at least twenty (20)  calendar days
prior to the date  specified  in such  notice as the date for the closing of the
Put  Option.  Any  exercise  of the Put  Option  by the MSO  shall be made by an
aggregate  payment of the  amounts  computed  under  Clauses (a) and (b) of this
Section 2 (collectively,  the "Put Price"). It is understood and agreed that Dr.
Holt will  continue  to be bound by the terms of the  non-competition  agreement
attached hereto as Exhibit C.

Notwithstanding  the foregoing,  in the event of Dr. Holt, neither Omega nor the
MSO shall be entitled to exercise the Put Option against Dr. Holt's estate.

         3. Call Option. The New PC shall have the option (the "Call Option") to
require the MSO, upon  termination of the Management  Services  Agreement by the
New PC under Section 10.1 thereof, to:

                  (a)  Sell  to the  New PC all of the  leasehold  improvements,
         fixtures, furniture, furnishings and equipment comprising or located at
         the  Endodontic  Offices,  including  all  replacements  and  additions
         thereto made by the MSO pursuant to the  performance of its obligations
         under the Management Services Agreement and all other assets, including
         inventory and supplies and intangibles,  set forth on the Balance Sheet
         to reflect operations of the MSO in respect of the Endodontic  Offices,
         including  depreciation,  amortization  and other  adjustments  of such
         assets shown on such Balance Sheet; and

                  (b)  Assign  to, or grant a waiver in favor of the New PC, the
         restrictive  covenants  provided  for in Section 3.7 of the  Management
         Services Agreement and in the applicable  Employment Agreement with Dr.
         Holt  contemplated  thereunder,  and any goodwill and other  intangible
         assets  set forth on the  Balance  Sheet,  reflecting  amortization  or
         depreciation of the restrictive  covenants,  and any goodwill and other
         intangible assets, such; and

                  (c) Assign to the New PC (which it shall  assume) all debt and
         all contracts, payables and leases which are obligations of the MSO and
         which relate solely to the  performance  of its  obligations  under the
         Management Services Agreement or the properties subleased in respect of
         the Endodontic Offices.

If the New PC desires to exercise its Call Option, the New PC shall give written
notice of such  election to the MSO at least twenty (20)  calendar days prior to
the date  specified  in such  notice  as the date  for the  closing  of the Call
Option.  Any  exercise  of the  Call  Option  by the New PC  shall be made by an
aggregate payment to the MSO of an amount equal to the lesser of the fair market
value or the  amortized  book  value of the  assets,  tangible  and  intangible,
described  in Clauses  (a) and (b) of this  Section 3  (collectively,  the "Call
Price").  For purposes of this Section 3, the "fair market value" of such assets
shall be determined by an independent appraiser acceptable to, and appointed by,
the MSO and the New PC. In the event that the MSO and the New PC cannot agree on
an  independent  appraiser,  the  fair  market  value  of such  assets  shall be
determined by three  independent  appraisers,  one of whom shall be appointed by
the MSO,  one of whom  shall be  appointed  by the New PC and the  third of whom
shall be appointed by mutual agreement of the two appointed  appraisers.  Within
sixty  (60)  days  after  the  appointment  of the  third  appraiser,  the three
appraisers shall each submit in writing their determination of fair market value
of such assets to each of the MSO and the New PC, and the fair  market  value of
such assets shall be conclusively  determined by taking the numerical average of
the two fair market value  determinations  which are closest in amount. The cost
of obtaining these  appraisals shall be paid one-half by the MSO and one-half by
the New PC.

In addition to the foregoing, If Dr. Holt exercises the Call Option prior to the
registration  of the Omega Stock held by Dr. Holt as a result of the Affiliation
Agreement  and Asset  Purchase  Agreement  dated May 1, 1998 by and  between the
parties, then Dr. Holt may, at his option, tender such stock then held by him to
Omega,  at the price it was originally  granted to him. The foregoing  shall not
apply once such Stock is  registered.  Further,  if Dr. Holt  exercises the Call
Option within two (2) years of the Effective date of this agreement,  then Omega
shall refund to Dr. Holt  sixty-five  (65%) percent of the net  management  fees
actually received by Omega during the term of the MSO Agreement.

         Notwithstanding the foregoing,  in the event that the New PC terminates
the  Management  Services  Agreement  pursuant  to  Section  10.1(a)(1)  of  the
Management  Services  Agreement  and the MSO is not paying the MSO  Expenses (as
defined in the Management  Services  Agreement) as they become due such that the
ability of the New PC to continue to practice  endodontics is  compromised,  the
Call Option may be  exercised by the payment by the New PC to the MSO of the sum
of (i) the book value of the assets  described  in Clause (a) of this  Section 3
plus (ii) the book value of the assets  described  in Clause (b) of this Section
3, less an amount equal to two-thirds  (2/3) of the  difference  between (y) all
management  fees paid by the New PC to the MSO  pursuant  to  Schedule  3 of the
Management  Services  Agreement less (z) the sum of all the MSO Expenses paid by
the MSO under the Management Services Agreement plus the Rebates paid to the New
PC  pursuant  to  Schedule 3 of the  Management  Services  Agreement;  provided,
however,  that the amount due under  clause (ii) of this  sentence  shall not be
less than zero.

         4. Closing and Delivery.  At the closing ("Closing") of the exercise by
the MSO of the Put Option  under  Section 2 or of the  exercise by the New PC of
the Call Option under  Section 3, as the case may be, the New PC shall pay cash,
or, at the option of the New PC and with the consent of Dr. Holt, a  combination
of cash,  forgiveness  of amounts due to Dr. Holt under the Purchase Note and/or
return of the shares of Omega  Common Stock  received by Dr. Holt under  Section
1.1(a)(iii)  of the  Affiliation  Agreement  (the  value  of such  shares  to be
determined by multiplying such number of shares by the average of the last sales
(or closing) price for Omega's Common Stock on Nasdaq (or a national  securities
exchange) for each of the sixty (60) trading days immediately preceding the date
of the Put Option Notice or the Call Option Notice,  as the case may be) for the
repurchased assets, whether the Put Price pursuant to exercise by the MSO of the
Put  Option or the Call Price  pursuant  to  exercise  by the New PC of the Call
Option, as the case may be. The New PC and Dr. Holt shall execute such documents
as may be  required  by the MSO to assume the  liabilities  set forth in Section
2(c) or 3(c), as the case may be, and shall use their respective best efforts to
remove the MSO from any liability  with respect to such  repurchased  assets and
with respect to any property  leased or subleased by the MSO. From and after any
such Closing,  each party shall provide to the other party reasonable  access to
books and records  then owned by it to permit such  requesting  party to satisfy
reporting and contractual  obligations which may be required of it. In addition,
following any such Closing, the MSO or its designee shall have reasonable access
during normal business hours to the New PCs records,  including  patient records
regarding records of collections,  expenses and disbursements as kept by the MSO
in performing its obligations under the Management Services  Agreement,  and the
MSO may copy any or all such records.

         5.       Successor Designation Option.

         (a) Upon  termination of the Management  Services  Agreement by the MSO
under  Section 10.2  thereof or upon  expiration  of the Term of the  Management
Services Agreement or upon the happening of any of the following events (each of
such  termination,  expiration  or  event  being  hereinafter  referred  to as a
"Transfer  Event"),  the MSO shall have the option  (the  "Designated  Successor
Option") to designate a  Designated  Successor to purchase all or any portion of
the Capital Stock then held by Dr. Holt:

                  (i)      the death of Dr. Holt;

                  (ii) if Dr. Holt is determined to be  permanently  disabled so
         as to be unable to render any  professional  services  on behalf of the
         New PC, as determined in accordance  with paragraph (b) of this Section
         5 below;

                  (iii)  if  Dr.  Holt  voluntarily  terminates  his  employment
         without first  proposing and obtaining the MSO's approval of a proposed
         qualified  successor  endodontist  reasonably  acceptable to the MSO on
         behalf of the New PC;

                  (iv) if Dr.  Holt acts in a  criminally  or grossly  negligent
         manner  with  respect to the  performance  of  professional  endodontic
         services rendered or to be rendered on behalf of the New PC;

                  (v)      if Dr. Holt becomes hospitalized for alcohol or drug
         abuse;

                  (vi)     if Dr. Holt is convicted of a felony;

                  (vii) if Dr. Holt loses his license or is otherwise determined
         to be  disqualified  from rendering  services as an endodontist for the
         New PC by the applicable dental or other comparable regulatory board of
         the State;

                  (viii) if Dr.  Holt's shares of Capital Stock are or are to be
         transferred  voluntarily  or by operation of law to any person who is a
         "disqualified  person,"  as  defined  in the  professional  corporation
         statute of the Laws of the State;

                  (ix) if Dr.  Holt  voluntarily  files  a  petition  under  any
         bankruptcy or  insolvency  law or a petition for the  appointment  of a
         receiver, or makes an assignment for the benefit of creditors;

                  (x) if Dr. Holt is subjected  involuntarily to such a petition
         or assignment,  or any creditor or other persons  obtains an attachment
         or other legal or equitable interest in any shares of the Capital Stock
         of Dr. Holt and such involuntary petition,  assignment or attachment is
         not discharged within sixty (60) days after creation;

                  (xi) if Dr. Holt is required to transfer any shares of Capital
         Stock by reason of a judgment, court order or decree or by operation of
         law;

                  (xii) if Dr. Holt retires  within the meaning of Paragraph (c)
         of this Section 5; or

                  (xiii) if Dr. Holt desires to sell more than twenty five (25%)
         percent any of his shares of Capital  Stock to another  endodontist  as
         contemplated under Section 8 hereof.

         (b) For  purposes  hereof,  "permanent  disability"  means any illness,
injury,  disease  or  condition,  whether  mental  or  physical,  which,  for  a
continuous period of ninety (90) days, (i) prevents Dr. Holt from performing his
duties   competently   and   adequately  as  determined  by  the  MSO,  or  (ii)
substantially   impairs  the  New  PC's  or  Dr.  Holt's   ability  to  practice
endodontics.

         (c) For purposes  hereof,  "Retirement"  of Dr. Holt shall occur on the
date when Dr. Holt  voluntarily  withdraws  from the practice of  endodontics at
whatever age or for  whatever  reason and notifies the New PC that he desires to
be regarded as "Retired" and fails to have first proposed and obtained the MSO's
approval of a qualified successor endodontist reasonably acceptable to the MSO.

         6. Successor Designation Option Exercise.  Except as otherwise provided
herein,  upon  exercise of the  Successor  Designation  Option,  the  Designated
Successor  may purchase  all, but not less than all, of the Capital  Stock.  The
Successor Designation Option shall also be exercisable by the MSO as provided in
Section 8 below.

         7. Exercise Notice.  Any exercise of the Successor  Designation  Option
shall be accompanied by a written notice (the  "Successor  Designation  Exercise
Notice") to Dr. Holt (or his successor or representative),  specifying the name,
address  and  information  showing the  qualifications  and  suitability  of the
Designated  Successor to conduct or perform  professional  services on behalf of
the New PC and  number of shares of  Capital  Stock of Dr.  Holt as to which the
Successor Designation Option is being exercised.  Upon the MSO's exercise of the
Successor  Designation  Option in  respect  of any event  described  in  Section
5(a)(iii) or (x) as to all of the shares of Capital Stock of Dr. Holt,  Dr. Holt
shall execute a Non-Competition Agreement in the form attached hereto as Exhibit
C. The MSO may, at any time,  cancel any Successor  Designation  Exercise Notice
sent by it hereunder.

         8. Right of First  Refusal and Sale of Stock.  If Dr.  Holt  desires to
sell any of the Capital Stock to another  endodontist (a "Purchaser"),  he shall
first give notice to the MSO of his intent to sell such Capital  Stock  ("Notice
of Sale"),  giving to the MSO such information as shall be reasonably  requested
by it to  ascertain  the  qualifications  and  suitability  of the  Purchaser to
conduct  or to  perform  professional  services  on behalf of the New PC and the
terms and conditions of such proposed sale to the Purchaser. If the sale of such
Capital Stock represents twenty five (25%) percent or less of the Capital Stock,
then,  unless  the  MSO  or  OMEGA  reasonably  believes  such  Purchaser  to be
unacceptable,  such transfer shall not constitute a Transfer Event. If such sale
is greater the twenty five (25%)  percent of the Capital Stock then upon receipt
of such  Notice,  the  Successor  Designation  Option  of the MSO  shall  become
exercisable  for a period  of  three  (3)  months,  provided  however,  that the
exercise  price and terms of  purchase  of the  Capital  Stock  shall be no less
favorable  to Dr. Holt than those set forth in the Notice of Sale.  In the event
the Successor  Designation  Option is not exercised  during such three (3) month
period,  Dr. Holt may sell the Capital Stock to the Purchaser upon the terms and
conditions  set forth in the Notice of Sale,  provided  however,  that such sale
shall be  conditioned:  (i) upon the  Purchaser  joining in this  Agreement  and
entering  into  an  employment  agreement  with  the New PC on  such  terms  and
conditions  as may be  approved by the MSO,  and (ii) upon Dr. Holt  executing a
Non-Competition Agreement in the form attached hereto as Exhibit C.

         9.  Assignment  of  the  Successor  Designation  Option  The  Successor
Designation  Option may be  assigned  by the MSO or any  assignee  of the MSO to
OMEGA or to a duly licensed endodontist, by a written assignment, signed by both
the MSO and the assignee.  When the context so requires in this  Agreement,  the
term "MSO" shall be deemed to refer to an assignee  holding an assignment of the
Successor  Designation  Option with respect to such Capital Stock, and the terms
"party" and "parties" shall be deemed to include

         10.      Purchase Price of the Capital Stock.

                  (a) The purchase price  ("Purchase  Price") due and payable by
the Designated Successor upon exercise of the Successor Designation Option shall
be an amount equal to the product of (a) the  aggregate  net amount  received by
the New PC  pursuant  to  Article 6 and  Schedule 3 of the  Management  Services
Agreement for the twelve (12) calendar months immediately preceding the month in
which the Successor Designation Exercise Notice is delivered to Dr. Holt (or his
successor or  representative)  multiplied  by (b) a fraction,  the  numerator of
which is the  number of  shares of the  Capital  Stock to be  purchased  and the
denominator  of which  is the  total  number  of  shares  of the  Capital  Stock
outstanding at the time of such purchase.

                  (b)  Payment  of  Purchase  Price.  The  Purchase  Price  upon
exercise of the  Successor  Designation  Option shall be paid by the  Designated
Successor  executing a negotiable  promissory note, secured by the Capital Stock
of the New PC. The note shall be for a term of five years, with interest payable
quarterly  in arrears  at the  mid-term  Applicable  Federal  Rate with  monthly
compounding  published  by the  Internal  Revenue  Service  from time to time in
accordance with Section 1274(d) of the Internal Revenue Code of 1986, as amended
(the "Code") or any successor provision of the Code, provided however,  that the
Designated  Successor  shall be  permitted  to  prepay  such  note at any  time.
Principal  shall be payable in five equal  annual  installments  commencing  six
months after the closing date.

                  (c)      Purchase From Dr. Holt's Estate.

                    (i) Upon the death of Dr.  Holt and  receipt  of notice of a
Successor Designation Exercise Notice, Dr. Holt's personal  representative shall
apply for and obtain any necessary court approval or confirmation of the sale of
Dr.   Holt's  shares  of  Capital  Stock   pursuant  to  this   Agreement.   The
representative  of the estate of Dr.  Holt and the  Designated  Successor  shall
complete such sale as soon after the date of death as practicable,  but no later
than 180 days after such event.

                    (ii) The death of Dr. Holt's  spouse,  if any,  shall not be
considered the death of Dr. Holt for purposes of this Agreement.

                    (iii) The estate of Dr. Holt shall bear, and hold the New PC
harmless from, all costs and expenses incurred as a result of securing any court
orders, court decrees, court approvals or inheritance tax clearances required to
enable the estate of Dr. Holt to transfer to the Designated Successor full legal
and equitable tax-free title to the Capital Stock of Dr. Holt.

                  (d) Other  Purchases.  Except for  purchases of Capital  Stock
upon exercise of the Successor  Designation  Option  pursuant to Section 5(a)(i)
hereof, all other purchases of Capital Stock pursuant to such Option shall close
thirty (30) days after the date of any Successor  Designation  Exercise  Notice,
unless extended by the parties.

         11.      Insurance.

                  (a) In order to insure the MSO's  interest  in the  Management
Services  Agreement and under this  Agreement,  Dr. Holt hereby  consents to the
acquisition and maintenance in force of a disability insurance policy and a life
insurance  policy by the MSO and OMEGA on Dr. Holt ("Insurance  Policies").  The
life insurance  policy may be in an aggregate face amount of up to one times Dr.
Holt's  income,  as shown on the W-2  Form  prepared  by the New PC for the most
recent calendar year. Dr. Holt agrees,  at the election of the MSO and OMEGA, to
take  whatever  actions are necessary to assist in the  acquisition  of any such
Insurance Policy by the MSO and OMEGA.

                  (b) The  Insurance  Policies  shall  name the MSO and OMEGA as
sole owner and beneficiary of such policies.

                  (c) As long as the Insurance  Policies provided for herein are
in full force and effect,  the MSO and OMEGA shall pay all premiums  falling due
on all such policies.  Such payments shall be made by the MSO or OMEGA and shall
not be considered MSO expenses pursuant to this Agreement.

                  (d) No  insurance  company  that has issued or shall  issue an
Insurance  Policy or Policies to the MSO as permitted under this Agreement shall
be under  any  obligation  with  respect  to the  performance  of the  terms and
conditions of this Agreement.  Any such company shall be bound only by the terms
of the Insurance Policy or Policies which it has issued or shall hereafter issue
and shall have no liability except as set forth in its policies.

         12. Representations. The New PC and Dr. Holt each represent and warrant
to the MSO and OMEGA that as of the day and year first above  written and during
the term of this  Agreement,  Exhibit A is a true and  complete  listing  of the
Capital Stock, as revised from time to time pursuant to this Agreement.

         13.      Restriction on Transfer.

                  (a) Except to the extent  and in the manner  provided  in this
Agreement  or with the  express  prior  written  consent of the MSO which may be
granted or withheld in its absolute discretion, Dr. Holt shall not sell, assign,
transfer, pledge or otherwise dispose (including by gift or otherwise) of any of
his shares of the Capital Stock.

                  (b)  Issuance  of Stock;  Change  in  Ownership;  Mergers  and
Consolidation.  Without the prior written consent of the MSO, Dr. Holt shall not
permit  the  New PC to,  and the  New PC  shall  not,  during  the  term of this
Agreement,  issue any stock,  other  equity,  or debt of the New PC;  permit any
change in the  composition  or  respective  percentage  ownership of the New PC;
merge,  consolidate or otherwise  reorganize with or into any other corporation,
partnership,  trade,  business,  or the  like;  amend or  otherwise  modify  its
articles of incorporation or bylaws;  dissolve; or enter into any agreement with
any person to do any of the foregoing  without the prior written  consent of the
MSO.

         14. Delivery of Stock Power. Upon execution of this Agreement, Dr. Holt
shall  execute and deliver to [Insert  Name of Dr.'s  counsel],  as escrow agent
(the  "Escrow  Agent"),  a  sufficient  number  of  assignments   separate  from
certificates,  endorsed in blank to cover all of the Stock (the  "Stock  Power")
held of  record  or  beneficially  owned by Dr.  Holt.  Upon  execution  of this
Agreement,  Dr.  Holt  shall  deliver  to  the  Escrow  Agent  all  certificates
heretofore issued representing all of the shares of Capital Stock held of record
or beneficially  owned by Dr. Holt. Each such certificate  shall have affixed to
the back of the certificate a legend substantially as follows:

         "The rights of any holder of any share  evidenced by this  certificate,
         including the right to dispose of the  securities  represented  by this
         certificate or any interest therein, are subject to and restricted by a
         certain  Stock  Put/Call  Option and Successor  Designation  Agreement,
         dated as of  ______________,  1998, among the New PC, the holder hereof
         and  the MSO and  OMEGA  (as  defined  therein).  The New PC will  mail
         without  charge to any holder of these shares a copy of such  agreement
         within  five (5) days of  receipt  by the New PC of a  written  request
         therefor."

         Upon any exercise of the Successor  Designation  Option by the MSO, the
Escrow Agent shall  deliver the Stock Powers and the  certificates  representing
all of the shares of Capital Stock held of record or  beneficially  owned by Dr.
Holt to the  MSO  and  the  MSO  (and/or  the  Designated  Successor)  shall  be
authorized to complete the Stock  Powers,  attach them to the  certificates  and
tender the same to the transfer  agent for the New PC for reissuance in the name
of the Designated  Successor.  Upon any  termination  of this Agreement  without
exercise of the Successor  Designation Option, the Escrow Agent shall return all
such Stock Powers and certificates to Dr.
Holt.

         15.  Confidentiality.  The parties  shall use all good faith efforts to
keep the contents of this  Agreement and all other  aspects of the  negotiations
preceding execution of this Agreement confidential.  Unless required by law, the
New PC, Dr. Holt,  and the MSO and OMEGA shall not disclose the contents of this
Agreement or the negotiations leading to this Agreement to third parties without
the prior written consent of the other parties. The MSO shall ensure that all of
the assignees likewise comply with the obligations of confidentiality imposed by
this Section, except that the MSO and the assignees may disclose the contents of
such to the extent  required by law or  otherwise  to their  respective  agents,
representatives,  contractors, and employees to the extent necessary to exercise
their respective rights or perform their respective obligations hereunder.

         16. Term. The term of this  Agreement  shall commence as of the day and
year  first  above  written  and shall  terminate  upon the  termination  of the
Management   Services  Agreement  or  the  exercise  (and  consummation  of  the
transaction  provided for upon such exercise) of the Put Option, the Call Option
or the Successor  Designation Option as to all of the Capital Stock, as the case
may be (the "Term").

         17.      General

                  (a) Compliance  with Law. The New PC and Dr. Holt shall comply
with all applicable  requirements of applicable state law and  regulations,  and
other licensing and accreditation authorities.

                  (b)  Relationship  of  Parties.   In  the  exercise  of  their
respective rights and the performance of their respective obligations under this
Agreement, the New PC and Dr. Holt on the one hand and OMEGA and the MSO (or any
assignee of the MSO) on the other hand are acting in the capacity of the grantor
and grantee of an option to purchase or to  designate  the purchase of shares of
Capital  Stock and nothing in this  Agreement is intended nor shall be construed
to create an employer/employee,  partnership, joint venture or a landlord/tenant
relationship between or among the parties.

                  (c)  Assignment.  The rights and duties of the  parties  under
this  Agreement  may not be assigned or  transferred  without the prior  written
consent of the  non-assigning  party,  which consent  shall not be  unreasonably
withheld; provided, however, that the MSO and OMEGA shall be permitted to assign
its and their respective  rights and duties hereunder without the consent of Dr.
Holt or the New PC to any person,  firm or corporation  controlled by the MSO or
OMEGA,  controlling  the MSO or OMEGA or under  common  control  with the MSO or
OMEGA or to such  financing  institutions  as may be  required  by the  terms of
credit  agreements  which may be entered into from time to time by Omega for the
obtaining of addition financing for Omega.

                  (d) Counterparts.  This Agreement, and any amendments thereto,
may be executed in  counterparts,  each of which  shall  constitute  an original
document, but which together shall constitute one and the same instrument.

                  (e) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  (f) 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 NE Williamson Boulevard
                  Bend, Oregon 97701

                  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.

                  (g)  Governing  Law. This  Agreement  shall be governed by and
construed in accordance with the laws of the State of Oregon.

                  (h)  Amendment.  This  Agreement may be amended at any time by
agreement of the parties,  provided that any  amendment  shall be in writing and
executed by the parties.

                  (i)  Severability.  If any provision of this Agreement is held
by a court of competent  jurisdiction  to be invalid or  unenforceable,  (i) the
parties  shall  amend  this  Agreement  in  order to carry  out the  intent  and
essential  business  purposes of this Agreement as closely  possible  within the
requirements of applicable  provisions of Law as determined by such a court, and
(ii) the  remaining  provisions  will  nevertheless  continue  in full force and
effect.

                  (j) Fees and  Expenses.  The New PC, Dr.  Holt and the MSO and
OMEGA  each  shall  bear  their own  expenses,  including,  without  limitation,
attorneys' and accountants' fees, incurred in connection with the preparation of
this Agreement and the transactions contemplated hereby.

                  (k) Exhibits and  Schedules.  All  attachments  and  schedules
attached to this  Agreement are  incorporated  herein by this  reference and all
references  herein to "Agreement"  shall mean this  Agreement  together with all
such exhibits and schedules.

                  (l) Time of Essence.  Time is expressly made of the essence of
this Agreement in each and every  provision  hereof of which time of performance
is a factor.

                  (m)  Attorneys'  Fees.   Should  any  of  the  parties  hereto
institute any action or  proceeding  to enforce this  Agreement or any provision
hereof (including without limitation,  arbitration), or for damages by reason of
any  alleged  breach of this  Agreement  or of any  provision  hereof,  or for a
declaration of rights  hereunder  (including,  without  limitation,  by means of
arbitration),  the  prevailing  party in any such action or proceeding  shall be
entitled  to receive  from the other  party all costs and  expenses,  including,
without limitation, reasonable attorneys' fees, incurred by the prevailing party
in connection with such action or proceeding.

                  (n) Further  Assurances.  The parties  shall take such actions
and execute and deliver such further documentation as may reasonably be required
in order to give effect to the  transactions  contemplated by this Agreement and
the intentions of the parties hereto.

                  (o) Remedies. The remedies specified in this Agreement are the
exclusive  remedies for liabilities of the parties arising under this Agreement.
The limitations on liability,  releases from liability, and waiver and indemnity
provisions  expressed in this Agreement shall apply to the full extent permitted
by law, even in the event of a parties' fault, negligence (in whole or in part),
strict liability, or other basis of liability,  and whether liability is founded
in  contract,  tort,  or  otherwise,  and shall  extend to the  parties  and its
affiliated  companies and its and their  shareholders,  directors,  officers and
employees.

         18.      Alternative Dispute Resolution.

         18.1     General.

         (a) If during the term of this  Agreement a dispute  arises between the
parties, or one party perceives the other as acting unfairly or unreasonably, or
a question of interpretation arises hereunder,  then the parties' shall promptly
confer and exert  their best  efforts  in good faith to reach a  reasonable  and
equitable resolution of the issue.

If  resolution  cannot be reached by the parties  within thirty (30) days as set
forth above,  then any  controversy or claim arising out of this Agreement of an
aggregate amount less than $250,000 not resolved  pursuant to the above shall be
settled by arbitration under the rules or the American Arbitration Association's
Rules.  Judgment upon any award rendered by the  arbitrator(s) may be entered in
any court having  jurisdiction  thereof.  Any arbitration  decision  awarding an
amount less than  $250,000  shall be final and binding upon the parties.  Amount
awarded in excess of $250,000 shall be appealable to a court in accordance  with
Article 15.9 hereof. Any arbitration  proceeding shall be filed in the office of
the  American  Arbitration  Association  located  in  Portland,  Oregon and such
arbitration shall be conducted in Bend, Oregon. Judgment upon the award rendered
by the  arbitrator  may  be  entered  in  any  court  having  jurisdiction.  The
arbitrator,  shall be bound by the terms and  conditions  of this  Agreement and
shall  not have the  authority  to award  multiple,  punitive  or  consequential
damages under any circumstances.

For claims exceeding  $250,000,  either Party may, at its option,  elect to have
any dispute  adjudicated by either  arbitration in accordance  with Article 15.9
hereof.

(b) In the event of a  disagreement  concerning  the  calculation of any fees by
either  party,  the parties agree to accept as correct,  final and binding,  the
determination of an independent  certified  public  accountant (CPA) selected by
the mutual  agreement  of the  parties.  If the  parties  cannot  agree upon the
selection of a CPA within  thirty (30) days after a written  request for a CPA's
selection,  then the requesting party shall deliver a list of five (5) CPAs ( at
least two of which are a member of the "Big Six" accounting firms). Upon receipt
of such list, the other party shall select one of such five firms as the CPA. If
no selection is made, the requesting  party may select one from the list of five
and notify the other party of such choice. The cost of the CPA's review shall be
born by the requesting party unless the CPA determines that the requesting party
was under paid by more than two (2%)  percent in which event the  parties  shall
split such  cost.  In the event  such  under  payment is greater  than ten (10%)
percent, the other party shall pay all CPA costs. Each party agrees to cooperate
fully with the CPA in connection with its review.

                  18.2 Waiver of Jury. With respect to any dispute arising under
or in connection with this Agreement or any related agreement, as to which legal
action  nevertheless  occurs, each party hereby irrevocably waives all rights it
may have to demand a jury trial.  This waiver is  knowingly,  intentionally  and
voluntarily  made by the  parties  and each  party  acknowledges  that no person
acting  on behalf of the  other  party  has made any  representation  of fact to
induce this  waiver of trial by jury or in any way  modified  or  nullified  its
effect.  The parties each further  acknowledge  that it has been represented (or
has had the  opportunity to be represented) in the signing of this Agreement and
in the making of this waiver by independent  legal counsel,  selected of its own
free will,  and that it has had the  opportunity  to discuss  this  waiver  with
counsel.  Each party further  acknowledges  that it has read and understands the
meaning and ramifications of this waiver provision.
<PAGE>

         IN WITNESS  WHEREOF,  the New PC, Dr. Holt, MSO and OMEGA have executed
this  Agreement  as of the date first  above  written  by their duly  authorized
representatives as set forth below.

"NEW PC"

Dennis E. Holt, P.C.
an Oregon corporation


By: ______________________________
         Dennis E. Holt, D.D.S., M.S., President


DR. HOLT


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


"MSO"

OMEGA ORTHODONTICS OF WOODLAND HILLS, INC.
a Delaware corporation


By: ______________________________
      Robert J. Schulhof, President

"OMEGA"
OMEGA ORTHODONTICS, INC.,
a Delaware corporation

By:_______________________________
   Robert J. Schulhof, President and
     Chief Executive Officer


<PAGE>
                          SPOUSAL JOINDER AND CONSENT


         I am the spouse of Dennis E. Holt,  D.D.S.,  M.S., the sole Stockholder
of Dennis E. Holt,  P.C..  To the extent that I have any  interest in any of the
Capital  Stock  (as that  term is  defined  in the  Stock  Put/Call  Option  and
Successor Designation  Agreement),  I hereby join in such Agreement and agree to
be bound by its terms and  conditions  to the same  extent as my spouse.  I have
read the Stock Put/Call Option and Successor Designation  Agreement,  understand
its terms and  conditions,  and to the extent that I have felt it  necessary,  I
have retained independent legal counsel to advise me concerning the legal effect
of this Stock Put/Call Option Agreement and this Spousal Joinder and Consent.

I understand  and  acknowledge  that each of the MSO and OMEGA is  significantly
relying on the  validity  and  accuracy of this  Spousal  Joinder and Consent in
entering  into this Stock  Put/Call  Option  and  Successor  Designation  Option
Agreement.

Executed this         day of ____________, 1998.



Signature:                                    


Printed or Typed Name:




<PAGE>
                                   EXHIBIT A

                               ENDODONTIC OFFICES

The offices and  related  leasehold  improvements  constituting  the  Endodontic
Offices are located at 1590 NE Williamson Boulevard, Bend, Oregon 97701.


<PAGE>
                                   EXHIBIT B

                                     STOCK

     The authorized capital stock of the New PC is ____________ shares of common
stock, $______ par value per share. ___________shares of the common stock of the
New PC are issued and are  outstanding,  all of which  shares are  evidenced  by
Certificate No. 1 issued in the name of Dennis E. Holt, D.D.S., M.S.


<PAGE>
                                   EXHIBIT C

                           NON-COMPETITION AGREEMENT

THIS NON-COMPETITION AGREEMENT ("Agreement") is made as of this ____ day of May,
1998 by and between Denis Holt, D.D.S.,  M.S. ("Dr. Holt"), who is duly licensed
to practice  orthodontics  in the state of Oregon,  and Dennis E. Holt,  P.C., a
professional  corporation  (the  "New  PC")  incorporated  under the laws of the
State.

         All capitalized  terms used herein and not otherwise  expressly defined
shall have the same meanings set forth in that certain Stock Put/Call Option and
Successor Designation Agreement ("Stock Agreement") dated ____________,  1998 by
and among Dr. Holt, the New PC, Omega Orthodontics, Inc., a Delaware corporation
("Omega") and Omega Orthodontics of Woodland Hills, Inc., a Delaware corporation
(the "MSO") which is a wholly owned subsidiary of Omega.

                                    RECITALS

         A. Dr.  Holt is the sole owner of the  Capital  Stock of the New PC and
desires to transfer all of his right,  title and interest in and to such Capital
Stock pursuant to Section 8 of the Stock Agreement to the Purchaser.

         B. The  Purchaser  has agreed to join the Stock  Agreement and to enter
into an employment agreement with the New PC on terms and conditions  acceptable
to and approved by the MSO.

         C. As a condition to the  transfer by Dr. Holt of his Capital  Stock to
the Purchaser pursuant to Section 8 of the Stock Agreement,  Dr. Holt has agreed
to enter into an agreement in the form of this  Agreement to be delivered to the
New PC upon the closing of the transfer of his Capital Stock pursuant to Section
8 of the Stock Agreement.

         NOW,  THEREFORE,  in consideration of the foregoing  promises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.

     1. Dr. Holt's  Covenants.  During the term of this Agreement in the Service
Area  described in Section 4 below,  Dr. Holt shall not  (directly or indirectly
through any business, enterprise, venture, partnership, corporation or any other
entity  controlled  directly or  indirectly  by Dr. Holt,  whether alone or as a
partner, stockholder, creditor or otherwise):

                  (a) Provide  orthodontic or other dental services,  or engage,
participate,  aid, assist, or hold any interest in any business or the provision
of any managed care plan service  which is, or as of Dr.  Holt's  engagement  or
participation,  would become, competitive with the New PC's orthodontic practice
business;

                  (b) Engage or contract  (other than with the MSO or any of the
MSO's  affiliates) for the provision of any management  services for Dr. Holt or
any person employed or under contract to Dr. Holt (as applicable)  which are the
same as or  substantially  similar to any of the services that the MSO or any of
the MSO's affiliates furnishes;

                  (c) Solicit or assist any other person to solicit any business
relating  to a competing  line of business  (other than for the New PC or any of
its affiliates) from any present or potential patient,  customer  (including all
third  party  payors)  of Dr.  Holt,  the  New PC or  any  of  their  respective
affiliates;

                  (d) Commit any other act or assist  others to commit any other
act which  might  injure  the  business  of the New PC,  the MSO or any of their
respective affiliates;

                  (e)  Directly  or  indirectly  employ,  contract,  solicit  or
encourage  any employee or other person under  contract with the New PC, the MSO
or any of their  respective  affiliates  to leave the employ of any such entity;
and

                  (f)  Directly  or  indirectly  solicit,  request,  advise,  or
encourage any present or future supplier,  patient,  customer or employee of the
New PC, the MSO or their  respective  affiliates to withdraw,  curtail or cancel
its business  dealings with the New PC, the MSO or their respective  affiliates,
or take any actions  that might  impair the  relations of the New PC, the MSO or
any of their  respective  affiliates and their respective  suppliers,  patients,
customers, employees or others.

     2.  Dr.  Holt's  Representations.   Dr.  Holt  specifically   acknowledges,
represents, and warrants that: (i) his covenants set forth in this Agreement are
being given in  connection  with the sale of the Capital  Stock to the Purchaser
pursuant to Section 8 of the Stock Agreement; (ii) such covenants are reasonable
and  necessary  to protect the  legitimate  interests of the New PC, the MSO and
Omega;  and (iii) the New PC, the MSO and Omega would not have consented to such
sale in the  absence  of such  restrictions.  Dr.  Holt  acknowledges  that this
Agreement is subject to all  representations,  warranties  and  covenants of Dr.
Holt in the Stock Agreement.

     3. Service Area. The Service Area to which Dr. Holt's  covenants in Section
1 apply is defined as the area within a fifteen (15) mile radius (or the maximum
radius permitted by law, if less) of each  orthodontic  office or other facility
owned,  operated  or managed by Dr.  Holt,  the New PC, the MSO,  Omega or their
respective affiliates now existing or hereafter established.

     4. Term. The term of this Agreement  commences as of the day and year first
above written and continues for twenty-four (24) months.

     5. Payment.  As  consideration  for Dr. Holt's agreement not to compete and
other covenants herein, the New PC shall pay Dr. Holt upon the execution of this
Agreement by the New PC the amount of One Thousand Dollars ($1,000).

     6. Remedies.  In the event of a breach by Dr. Holt of this  Agreement,  the
New PC shall be entitled to receive,  on behalf of the MSO,  from Dr.  Holt,  in
addition to other remedies and not by way of an election of remedies, liquidated
damages equal in amount to the greater of (a) Dr.  Holts's  income,  as shown on
the W-2 form  prepared  by the New PC for the most recent  calendar  year or (b)
Thirty five (35%) percent of the preceding  years Gross Practice  Revenues.  Any
amounts  received by the New PC pursuant to the prior  sentence shall be paid to
the MSO by the New PC  immediately  following  receipt  by the New PC.  Should a
court fail to enforce the  liquidated  damages  provision set forth in the first
sentence of this Section 6, the parties  acknowledge and agree that, absent such
liquidated  damages,  a  breach  by  Dr.  Holt  of  this  Agreement  will  cause
irreparable damage to the New PC, the exact amount of which will be difficult to
ascertain,  and that  remedies at law for any such  breach  will be  inadequate.
Accordingly,  Dr. Holt agrees that in such case, the New PC shall be entitled to
injunctive  relief and Dr. Holt agrees not to assert in any proceeding  that the
New PC has an adequate remedy at law. Dr. Holt shall pay the reasonable fees and
expenses,  including  attorneys fees, incurred by the New PC or any successor or
assign in enforcing this Agreement.

     7. Third Party  Beneficiaries.  The parties expressly  understand and agree
that the MSO and Omega are third party beneficiaries of this Agreement and shall
be entitled to all of the rights and remedies  provided herein to the New PC and
shall be entitled to enforce the terms of this Agreement.

     8. Miscellaneous.

                  (a)  Successors and Assigns.  This Agreement  shall be binding
upon and shall inure to the benefit of the  parties and their  respective  heirs
(as applicable), legal representatives, and permitted successors and assigns. No
party  may  assign  this  Agreement  or the  rights,  interests  or  obligations
hereunder;  provided,  however, that the New PC may assign its rights, interests
and  obligations to the MSO, Omega and their  affiliates  without the consent of
Dr. _____________. Any assignment or delegation in contravention of this Section
shall be null and void.

                  (b) Counterparts.  This Agreement, and any amendments thereto,
may be executed in  counterparts,  each of which  shall  constitute  an original
document, but which together shall constitute one and the same instrument.

                  (c) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  (d)  Amendment.  This  Agreement  may not be  amended  except
in a writing executed by all parties --------- parties.

                  (e) Time of Essence.  Time is expressly made of the essence of
this Agreement and each and every provision  hereof of which time of performance
is a factor.

                  (f)  Notices.  Any notices  required or  permitted to be given
hereunder  by any party to the  other  shall be in  writing  and shall be deemed
delivered upon personal delivery;  twenty-four (24) hours following deposit with
a courier for overnight delivery; or seventy-two (72) hours following deposit in
the U.S. Mail,  registered or certified mail,  postage  prepaid,  return-receipt
requested,  addressed to the parties at the following addresses or to such other
addresses as the parties may specify in writing:


If to Dr. Holt:                     Dr. Dennis E. Holt, D.D.S., M.S.
                                        1590 NE Williamson Boulevard
                                        Bend, Oregon 97701

If to the New PC:                   Dr. Dennis E. Holt, D.D.S., M.S.
                                        1590 NE Williamson Boulevard
                                        Bend, Oregon 97701

                  (g)  Governing  Law. This  Agreement  shall be governed by and
construed in accordance  with the laws of the State of Oregon

                  (h)  Severability.   If  any  provision  or  portion  of  this
Agreement  is  held  by a court  of  competent  jurisdiction  to be  invalid  or
unenforceable,  the remainder of this  Agreement will  nevertheless  continue in
full force and effect and shall not be invalidated or rendered  unenforceable or
otherwise adversely affected,  unless such invalidity or unenforceability  would
defeat an essential  business  purpose of this Agreement.  Without  limiting the
generality of the foregoing, if the provisions of this Agreement shall be deemed
to  create a  restriction,  which  is  unreasonable  as to  either  duration  or
geographical  area or  both,  the  parties  agree  that the  provisions  of this
Agreement shall be enforced for such duration and in such geographic area as any
court of competent jurisdiction on may determine to be reasonable.

                  (i)  Attorneys'  Fees.  Should  either the New PC or Dr.  Holt
institute  any action or procedure to enforce  this  Agreement or any  provision
hereof,  or for damages by reason of any alleged  breach of this Agreement or of
any  provision  hereof,  or for a  declaration  of rights  hereunder  (including
without  limitation  arbitration),  the  prevailing  party in any such action or
proceeding  shall be  entitled  to  receive  from the other  party all costs and
expenses,  including without limitation  reasonable attorneys' fees, incurred by
the prevailing party in connection with such action or proceeding.

<PAGE>
         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement of
the day and year first written above.

"DR. Holt"                                  "NEW PC"


___________________                         By: ___________________________
                                                President