MANAGEMENT SERVICES AGREEMENT


                                    BETWEEN


                    Clark E. Schneekluth, D.D.S., M.S., Inc.
                                   (the "PC")

                                      AND


                   Omega Orthodontics of Woodland Hills, Inc.
                                  (the "MSO")

                                      AND

                            Omega Orthodontics, Inc.
                                   ("OMEGA")


<PAGE>
                         MANAGEMENT SERVICES AGREEMENT

                               TABLE OF CONTENTS


ARTICLE  1 TERM...............................................................2


ARTICLE  2 DUTIES OF THE MSO..................................................3
2.1 General...................................................................3
2.2 Orthodontic Office Services...............................................3
2.3 Administrative Services...................................................3
2.4 Business Systems, Procedures and Forms....................................4
2.5 Purchasing, Accounts Payable, Supplies and Inventory Control..............4
2.6 Regulatory Compliance Services............................................4
2.7 Billing, Collection.......................................................5
2.8 Disbursement of Funds.....................................................5
2.9 MSO Expenses..............................................................6
2.10 Credit Reports...........................................................6
2.11 Accounting; Bookkeeping and Reports......................................8
2.12 Marketing................................................................8
2.13 Complaints...............................................................8
2.14 Practice Laws............................................................8
2.15 Monthly Meetings.........................................................8
2.16 Maintenance and Cleaning Services........................................8
2.17 Licenses and Permits.....................................................9
2.18 Insurance................................................................9
2.19 Practice Transition and Associate Selection..............................9


ARTICLE  3 DUTIES OF THE PC..................................................10
3.1 General..................................................................10
3.2 Employment of the Orthodontists and Rendering of Patient Care............10
3.3 Professional Services....................................................11
3.4 Records..................................................................11
3.5 Professional Expenses....................................................11
3.6 Professional Liability Insurance.........................................12
3.7 Employment Agreement.....................................................12
3.8 Confidentiality..........................................................13

ARTICLE  4  PROFESSIONAL   SERVICES,   CONTROL  OF  SOLICITATION,   APPROVAL OF
ADVERTISING    MATERIAL    AND   NO    RECIPROCATION.........................13
4.1 Fundamental Understanding................................................13
4.2 No Solicitation; Control.................................................14
4.3 No Advertising...........................................................14
4.4 No Referrals.............................................................14

ARTICLE  5 LEASE OF OFFICE FACILITIES AND EQUIPMENT..........................14
5.1 Office Lease/Sublease....................................................14
5.2 Leasehold Improvements, etc..............................................15
5.3 No Warranty..............................................................16

ARTICLE  6 COMPENSATION......................................................16

ARTICLE  7 SECURITY INTEREST.................................................18

ARTICLE  8 COVENANTS.........................................................18
8.1 PC's Covenants...........................................................18
8.2 MSO's Covenants..........................................................19

ARTICLE 9 INSURANCE AND INDEMNITY............................................20
9.1 Insurance to be Maintained by the PC.....................................20
9.2 Insurance to be Maintained by the MSO....................................20
9.3 Tail Insurance Coverage..................................................20
9.4 Additional Insureds......................................................20
9.5 Indemnification..........................................................21

ARTICLE  10 TERMINATION......................................................21
10.1 Termination by the PC...................................................21
10.2 Termination by MSO......................................................22

ARTICLE  11 AUTHORIZED AGENT AND POWERS OF ATTORNEY..........................23

ARTICLE  12 INDEPENDENT CONTRACTOR RELATIONSHIP..............................24

ARTICLE  13 MISCELLANEOUS....................................................24
13.1 Access to Records.......................................................24
13.2 Patient Records.........................................................24
13.3 The PC's Control Over the Orthodontic Practice..........................25

ARTICLE 14 ALTERNATIVE DISPUTE RESOLUTION....................................25
14.1 Alternative Dispute Resolution..........................................25
14.2 Waiver of Jury..........................................................26

ARTICLE  15 GENERAL PROVISIONS...............................................26
15.2 INTENTIONALLY OMITTED...................................................27
15.3 Contract Modifications for Prospective Legal Events.....................27
15.4 Remedies................................................................27
15.5 No Obligation to Third Parties..........................................27
15.6 Entire Agreement........................................................27
15.7 Assignment..............................................................27
15.8 Attorneys' Fees.........................................................27
15.9 Governing Law...........................................................28
15.10 Events Excusing Performance............................................28
15.11 Compliance with Applicable Laws........................................29
15.12 Language Construction..................................................29
15.13 Amendments.............................................................29
15.14 Severability...........................................................29
15.15 No Waiver..............................................................29
15.16 Captions...............................................................29
15.17 Counterparts...........................................................29

SCHEDULE 1 THE ORTHODONTISTS

SCHEDULE 2 ORTHODONTIC OFFICES AND SERVICES

SCHEDULE 3 COMPENSATION - MANAGEMENT FEES

EXHIBIT A ORTHODONTIC OFFICES - MASTER LEASE

EXHIBIT B PRACTICE PROVIDERS

EXHIBIT C PC'S AFFIDAVIT

EXHIBIT D SECURITY AGREEMENT

<PAGE>
                         MANAGEMENT SERVICES AGREEMENT

THIS  AGREEMENT is made  effective as of this 14th day of August,  1998,  by and
between Clark E.  Schneekluth,  D.D.S.,  M.S., Inc., a professional  corporation
(the "PC") incorporated under the laws of the State of California (the "State"),
and Omega  Orthodontics of Woodland  Hills,  Inc., a Delaware  corporation  (the
"MSO"),  and  Omega  Orthodontics,   Inc.,  a  Delaware  corporation  ("OMEGA").
Collectively the foregoing shall be called the "parties" and individually called
a "party".

WHEREAS,  the  parties  have  previously  entered  into  a  Management  Services
Agreement for the management of Dr.  Schneekluth's  orthodontic practice located
at 511 Warner Avenue,  Suite 104, Huntington Beach,  California 92649 ("Original
Orthodontic Office"); and

WHEREAS,  the parties have determined that it would be to their mutual advantage
to increase Dr.  Schneekluth's  orthodontic  practice by each acquiring  certain
assets of Dr. Richard A. Levin's  orthodontic  practice located at 5251 and 5253
Lampson Ave., Garden Grove,  California ("New Orthodontic  Offices") and merging
the Original Orthodontic Offices and the New Orthodontic Offices into one signal
orthodontic practices with two separate and distinct locations (hereinafter know
as the "Orthodontic Practices"); and

WHEREAS,  the parties desire to enter into a new Management  Services  Agreement
covering the Orthodontic Practices which shall supercede the previous management
services agreement; and

WHEREAS,  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 are  provided  directly or  indirectly  through  management
service organizations such as the MSO; and

WHEREAS, OMEGA and Clark E. Schneekluth,  D.D.S. ("Dr. Schneekluth") who is duly
licensed to practice  orthodontics  in the State have  entered into that certain
Affiliation Agreement and Stock Purchase Agreement (the "Affiliation Agreement")
dated as of August 14, 1998,  pursuant to which OMEGA acquired certain stock and
assets of Dr. Schneekluth; and

WHEREAS, OMEGA and Richard A. Levin, D.D.S. ("Dr. Levin") have entered into that
certain  Affiliation  Agreement and Stock Purchase  Agreement (the  "Affiliation
Agreement")  dated as of August  14,  1998,  pursuant  to which  OMEGA  acquired
certain assets of Dr. Levin; and

WHEREAS,  the PC owns and operates an orthodontic  practice with offices located
in the  facilities  identified  in  Exhibit A (the  "Orthodontic  Offices")  and
furnishes  orthodontic  care to the general  public  through the services of Dr.
Schneekluth  and any and all other  Orthodontists  who are or become  affiliated
with  the  PC  as of or  following  the  date  hereof  and  who  are  or  become
subsequently  named on Schedule 1 hereto  (individually,  an "Orthodontist"  and
collectively, the "Orthodontists");

WHEREAS,  the MSO was formed to provide equipment,  facilities and personnel to,
and to manage the non-orthodontic business affairs of, the PC;

WHEREAS,  the  MSO's  services  are  designed  to  improve  the  efficiency  and
profitability  of the PC while enhancing the ability of Dr.  Schneekluth and the
Orthodontists (if any) to render quality orthodontic care to the patients of the
PC;

WHEREAS, the PC wishes to retain the MSO to perform the functions and to provide
the services  described in this  Agreement to assist the PC to achieve the above
goals.

NOW,  THEREFORE,  IT IS  AGREED  that  the  MSO  shall  perform  managerial  and
administrative  services  for the PC and provide  office  space and  orthodontic
facilities  appropriate  for  rendering  general  orthodontic  treatment  at the
Orthodontic Offices upon the following terms and conditions:

                                   ARTICLE 1
                                      TERM

1.1 The initial term of this  Agreement  shall  commence on the date first above
written and  continue  for a period of twenty (20) years (the  "Initial  Term"),
subject,  however,  to earlier termination in accordance with Article 10 hereof.
This  Agreement  shall continue for two separate and successive ten year periods
(each a "Renewal  Term" and  collectively  with the  Initial  Term,  the "Term")
unless the MSO of the PC otherwise  elects upon six months written notice to the
other prior to  expiration  of the Initial  Term or any then  effective  Renewal
Term.

                                   ARTICLE 2
                               DUTIES OF THE MSO

2.1  General.  The  MSO  shall  provide  the  PC  with  comprehensive   practice
management,  financial and marketing services,  and such facilities,  equipment,
and  support  personnel  as are  reasonably  required  by the PC to operate  its
orthodontic  practice at the  Orthodontic  Offices,  as determined by the MSO in
consultation  with  the PC.  The PC  hereby  appoints  the MSO as the  sole  and
exclusive  business  manager  of the PC and  agrees  that the MSO shall have all
power and authority reasonably necessary to manage the non-orthodontic  business
affairs  of the PC and  carry  out  the  MSO's  orthodontic  duties  under  this
Agreement, subject to the requirements of the applicable provisions of State law
relating to the practice of orthodontics  and subject to  consultation  with the
PC. The MSO may perform some or all of its services at a location  other than at
the Orthodontic Offices.

2.2  Orthodontic  Office  Services.  The MSO shall  provide or  arrange  for the
provision of the services  (collectively,  the  "Orthodontic  Office  Services")
described  in Schedule 2 hereto,  as such  Schedule may be amended by the PC and
the MSO from time to time.

2.3  Administrative Services.

(a) The MSO shall supply  secretarial,  reception,  maintenance,  front  office,
skilled   assistants  and  other  personnel,   except  duly  licensed  "Practice
Providers,"  during normal  office hours as  reasonably  requested by the PC, to
enable the PC to perform effectively orthodontic and treatment services. The MSO
shall be responsible for staff scheduling,  provided, however, that all Practice
Providers including orthodontic  assistants and hygienists shall at all times be
under the direct  supervision  of the PC. The PC shall  have sole  authority  to
employ and terminate the  employment  of all Practice  Providers.  All personnel
placed in the Orthodontic Offices by the MSO shall be subject to the approval of
the PC, which approval shall not be unreasonably withheld, and the PC shall have
the authority to instruct the MSO to terminate the  employment of such personnel
for any lawful  reason.  The MSO shall be responsible  for all personnel  wages,
withholding,  fringe benefits,  bonuses and workers'  compensation  insurance in
connection  with  its  employees;  provided,  however,  that  the PC is in  full
compliance with the compensation provisions of this Agreement.

(b) "Practice  Providers"  shall mean the  individuals  who are duly licensed to
practice  dentistry and/or  orthodontics in the State including Dr.  Schneekluth
and the Orthodontists (if any) and other individuals who are employees of the PC
or  otherwise  under  contract  with the PC to  provide  dental or  orthodontic,
services to patients of the PC or otherwise  required by  applicable  "Laws" (as
defined in Section 2.6 below) to be employees  of the PC to provide  services to
patients  of  the  Practice.   A  list  of  all  Practice  Providers  and  their
relationship  to  the  PC  is  set  forth  as  Exhibit  B  attached  hereto  and
incorporated  herein by  reference.  Prior to making any  changes in the list of
Practice  Providers,  the PC shall use its best efforts to consult with the MSO.
The PC also shall use its best  efforts to consult  with the MSO with  regard to
the terms of contracts  entered  into between the PC and the Practice  Providers
and the terms and  conditions of their  employment or engagement as  independent
contractors.

2.4 Business Systems, Procedures and Forms. In consultation with the PC, the MSO
shall  establish  standardized  business  systems  and  procedures  for  the PC,
including,  but not limited to, patient  scheduling  systems,  treatment records
system,   financial   reporting   and  process   control   systems  and  patient
communication  management systems (the "OMEGA Patient  Scheduling  System") that
are designed to improve the PC operating efficiency.  The MSO shall analyze such
information  on an ongoing  basis in order to advise the PC on ways of improving
operating efficiencies. The MSO shall provide training to the staff of the PC in
the  implementation  and  operation of such  standardized  business  systems and
procedures.  The MSO shall  additionally  provide the PC with and train the PC's
staff in the use of standardized clinical forms, including,  without limitation,
forms for patient evaluations and treatment plans. The PC expressly acknowledges
and agrees that it shall have no property rights in the OMEGA Patient Scheduling
System and the other  foregoing  systems,  procedures  and clinical  forms,  and
further  agrees  that such  systems,  procedures,  and forms  shall be deemed to
constitute Confidential Information within the meaning of Section 3.8 hereof and
be subject to the  restrictions on the use,  appropriation,  and reproduction of
such Confidential Information provided for in Section 3.8.

2.5 Purchasing,  Accounts Payable, Supplies and Inventory Control. The MSO shall
be responsible for and shall establish and maintain systems for the handling and
processing of all purchasing and payment  activities and for the  performance of
all payroll and payroll accounting  functions of the PC. The MSO shall order and
purchase and maintain  all  inventory  and  orthodontic  supplies as  reasonably
required by the PC to enable the PC to render  orthodontic  care to its patients
including,  all orthodontic  appliances and other supplies,  laboratory supplies
and sanitation supplies.

2.6  Regulatory  Compliance  Services.  The MSO shall arrange for or cause to be
rendered to the PC such business,  legal and regulatory management  consultation
and advice as may be  reasonably  required or  requested  by the PC and directly
related  to the  non-orthodontic  operations  of the PC or its  compliance  with
Federal, state or local laws, rules, regulations or interpretations governing or
applicable to the PC (collectively,  "Laws");  provided,  however,  that the MSO
shall not be  responsible  for any  services  related  to  malpractice  or other
professional  service  claims or other matters not directly  related to services
provided by the MSO hereunder or its  compliance  with Laws, or for any legal or
tax advice or services or personal financial services to Dr. Schneekluth and the
Orthodontists (if any) or any employee or agent of the PC.

2.7  Billing,  Collection.  The MSO shall be  responsible  for:  (i) billing and
collecting payments for all orthodontic and other professional services rendered
by the PC and the Practice Providers, with all such billing and collecting to be
done in the name of the PC; (ii)  receiving  payments from  patients,  insurance
companies  and all other third party  payors;  (iii)  taking  possession  of and
endorsing  in the name of the PC any  notes,  checks,  money  orders,  insurance
payments and other  instruments  received in payment for services or of accounts
receivable;  and  (iv)  settling  and  compromising  claims  and,  where  deemed
appropriate by the MSO and consented to (which consent shall not be unreasonably
withheld  or  delayed)  by the  Practice  Provider  rendering  the  professional
services which resulted in the applicable  accounts  receivable,  assigning such
accounts  receivable  to a  collection  agency or the bringing of a legal action
against a patient or a payor on the PC's behalf.  In seeking  payments on behalf
of the PC  hereunder,  the MSO  shall  act as the  PC's  agent  in  billing  and
collecting  professional  fees,  charges and other  accounts  owed to the PC and
shall only bill under the PC's provider number. In this regard,  the PC appoints
the MSO for the Term of this  Agreement in  accordance  with the  provisions  of
Article 11 hereof as its true and lawful  attorney-in-fact  for the purposes set
forth  above in this  Section  2.7 and in Section  2.8  below.  The MSO does not
guarantee  collection and is not  responsible for any loss to the PC as a result
of any inability to collect fees and charges.

2.8  Disbursement of Funds.

(a) All monies  collected  for the PC by the MSO  pursuant  to Section 2.7 above
shall be  deposited  into an account  (the "the PC  Account")  with a bank whose
deposits are insured with the Federal  Deposit  Insurance  Corporation and which
bank is  acceptable  to the MSO and the PC (the  "Bank").  The PC Account  shall
contain the name of the PC, however,  only the MSO shall be entitled to make all
disbursements  therefrom. The MSO shall account for all monies so disbursed from
the PC Account.

(b) From the funds collected and deposited by the MSO or Dr.  Schneekluth in the
PC  Account,  the MSO  shall  make  for and on  behalf  of the PC the  following
disbursements promptly, when payable:

         (1) Compensation,  including salaries,  benefits and other direct costs
         payable to Dr. Schneekluth and the Orthodontists (if any) and the other
         Practice Providers of the PC, and all withholding taxes and assessments
         payable to Federal,  state and local governments in connection with the
         employment of such personnel; and

         (2) All compensation payable to the MSO pursuant to Article 6 hereof.

(c) In the event the funds in the PC Account will,  at any time be  insufficient
to cover the current  portion of the foregoing  expenses  when payable,  the MSO
may,  at its option and in  accordance  with the terms set out in Schedule 3. of
this Agreement, advance to the PC the necessary funds to pay the current portion
of such expenses for the benefit of the PC, which  advances will be deemed to be
loans to the PC to be repaid from the PC Account in accordance  with Schedule 3.
of this Agreement or upon such other terms and at such times as agreed to by the
PC and the MSO,  which  indebtedness  shall  not be deemed  an MSO  Expense  for
purposes of Section 2.9.

2.9 MSO Expenses. The MSO shall be responsible for the payment (whether received
pursuant to Section  2.8(b)(2) hereof or from other sources unrelated to the PC)
of all MSO Expenses, as defined below, during the term of this Agreement without
reimbursement by the PC, unless otherwise agreed to by the parties hereto.

(a) "MSO Expenses" shall mean such operating and non-operating expenses incurred
by the MSO,  and  approved by the PC, in  performing  its  services,  including,
without limitation:

         (1)  Salaries,  benefits and other direct costs of all employees of the
         MSO  providing   services  to  the  PC  hereunder  (but  excluding  Dr.
         Schneekluth  and all the  Orthodontists  (if  any) and  other  Practice
         Providers);

         (2) Direct costs  associated  with operating the  Orthodontic  Offices,
         including  without  limitation,  utilities,  cleaning and  maintenance,
         including  maintenance  of the  interior,  exterior  and grounds of the
         Orthodontic offices as provided in the Master Lease;

         (3)  Obligations  of the MSO under leases or subleases  entered into in
         connection  with the  operation of the  Orthodontic  Offices as well as
         utility expenses relating to the Orthodontic Offices;

         (4) Personal  property and intangible  taxes assessed against the MSO's
         assets  used  in  connection  with  the  operation  of the  Orthodontic
         Offices,  including  furnishing of a mutually  agreed upon  orthodontic
         software package to the PC, commencing on the date of this Agreement;

         (5) In the event an opportunity arises for additional  Orthodontists to
         become employed by the PC or other  orthodontic  entities to merge with
         the PC, actual out-of-pocket expenses of the MSO personnel working on a
         specified  employment  arrangement  or  merger,  whether  or  not  such
         employment arrangement or merger is consummated;

         (6) The MSO shall pay for reasonable  practice  promotion(s),  such  as
         advertising, which the MSO and Dr. Schneekluth mutually agree upon;

         (7) Other expenses  incurred by the MSO in carrying out its obligations
         under this Agreement, but excluding any corporate overhead costs of the
         MSO or any corporation  affiliated with the MSO not specifically listed
         above.

"MSO Expenses" shall not include:

         (1) Any Federal, state or local income taxes of the PC, Dr. Schneekluth
         and the Orthodontists (if any) and the other Practice Providers, or the
         costs of preparing Federal, state or local tax returns thereof;

         (2)  Salaries,  benefits  and  other  direct  costs  of  employing  Dr.
         Schneekluth  and the  Orthodontists  (if  any) and the  other  Practice
         Providers;

         (3) Physician  licensure fees,  board  certification  fees and costs of
         membership  in  professional  associations  and  societies for Practice
         Providers;

         (4)  Professional  liability  insurance for  the Practice  Providers as
         provided for under Section 3.6 hereof;

         (5) Costs of continuing  professional education for Practice Providers,
         including travel and related  expenses,  unless such are programs of or
         mandated by OMEGA;

         (6) Costs associated with legal,  accounting and professional  services
         incurred by or on behalf of the PC;

         (7)  Liability  judgments  assessed  against  the  PC or  the  Practice
         Providers in excess of policy limits or within the deductible limits of
         any policy;

         (8) Direct personal expenses of the Practice  Providers of a kind which
         the PC may  have  historically  provided  or  charged  to its  Practice
         Providers  (including,  but not  limited to, car  allowances  and other
         expenses which are personal in nature);

         (9) Charitable contributions by the PC; and

         (10) Any other  expenses  which  are  expressly  designated  herein  as
         expenses or responsibilities of the PC.

2.10     INTENTIONALLY BLANK

2.11 Accounting;  Bookkeeping and Reports.  The MSO shall provide for or arrange
for all  accounting and  bookkeeping  services  related to the PC's  operations,
provided that such services are incurred in the ordinary course of business.  In
addition,  the MSO  shall  provide  the PC with an  unaudited  internal  monthly
statement  within  twenty  (20) days after the end of each month and a quarterly
review within thirty (30) days after the end of each quarter,  respectively,  of
the MSO's internal  statements,  as well as the books and records of the PC, all
prepared by or with the  assistance of an  accountant  chosen by the MSO. At the
end of each  fiscal  year  of the PC,  the MSO  shall  arrange  for a  financial
statement with respect to the PC to be prepared by the MSO's accountant.  At the
PC's  request,  the MSO shall prepare  reports  indicating  the gross  revenues,
number of patients,  type of patients,  and the activity and the productivity of
the PC. The MSO shall assist and advise the PC in the  financial  management  of
the PC.

2.12 Marketing. The MSO shall design and execute a marketing plan to promote the
PC's  professional  services.  The MSO shall also make  available  to the PC all
brochures, contracts, and other materials reasonably related to the carrying out
of the  business  purposes of the PC,  including  all  stationery,  printing and
postage costs in connection  therewith.  In connection with such marketing plan,
the  MSO  shall  advise  Dr.  Schneekluth  and  the  Orthodontists  (if  any) on
establishing  and  maintaining  a plan for  patients'  payments for  orthodontic
services on an installment plan basis. All marketing  activities hereunder shall
be conducted in compliance with all applicable Laws governing advertising by the
orthodontic profession.

2.13  Complaints.  The MSO  shall  assist  the PC in  handling  all  complaints,
grievances  and disputes  involving  the PC and the Practice  Providers  and any
patients or third parties.  However, the MSO shall have no control over the PC's
patients. All decisions concerning the PC's patients shall be made by the PC and
the Practice Providers.

2.14 Practice Laws.  Notwithstanding  any provision in this  Agreement,  the MSO
shall  not take any  action  in  connection  with the  services  to be  rendered
hereunder that violates any Law, including,  without limitation, the performance
of any  task or the  taking  of any  action  which  violates  the  Business  and
Professions  Code  of  the  State  as it  relates  to  professional  orthodontic
practices.

2.15 Monthly Meetings.  The MSO shall initiate monthly or more frequent meetings
with the PC regarding the policies and procedures for the operation of the PC.

2.16  Maintenance  and Cleaning  Services.  The MSO shall  arrange for security,
maintenance  and cleaning of the Orthodontic  Offices,  including the furniture,
fixtures and equipment therein.

2.17  Licenses and Permits.  The MSO shall  provide and pay for all business and
other  licenses and permits as necessary to operate the PC except those  related
to licensure and certifications of the Practice Providers. The MSO shall prepare
and file all  reports,  forms and  returns  required by Law in  connection  with
workers' compensation, unemployment insurance, social security and other similar
Laws with respect to the MSO's employees.

2.18  Insurance.  The MSO shall  provide and pay for customary  office  property
damage  and  liability,  including  business  interruption  insurance,  but  not
including  professional  liability  insurance  (which  shall be and  remain  the
responsibility of the PC).

2.19  Practice  Transition  and Associate  Selection.  Dr.  Schneekluth  and the
Orthodontists  (if any) shall keep the MSO  informed of  retirement  goals on an
ongoing basis;  provided,  however,  that Dr.  Schneekluth  shall, at a minimum,
continue as a full time employee of the PC, actively  engaged in the practice of
orthodontics,  for a  period  of ten  (7)  years  following  the  date  of  this
Agreement.  Dr.  Schneekluth may, after a period of five (5) years following the
date of this Agreement,  notify the MSO of his intent to retire.  Upon receiving
such  notice,  the MSO shall  have a period of two (2) years to conduct a search
for an appropriate Orthodontist and other professionals (collectively, "Practice
Associates") who will assume the MSO Agreement. Such search shall include use by
the  MSO  of a  national  journal  advertising  program  and  networking  in the
profession to locate appropriate Practice Associates.  If at the end of such two
(2) year period the MSO has been unable to find a replacement who will undertake
the practice and the MSO Agreement,  then the MSO and Dr. Schneekluth shall work
together for a period of one (1) year to find an Orthodontist  who will purchase
the practice  valued as if it were a traditional  (i.e. not operated with a MSO)
practice holding both the clinical and non-clinical  assets.  At the end of such
one (1) year period,  the MSO shall sell the practice to the highest  offer made
by a bona fide purchaser.

The  MSO  will  provide  screening  of all  applicants  and  will  then  present
appropriate  applicants  for  final  selection  by  the  PC.  The  PC  shall  be
responsible for interviewing and selecting each Practice Associate.

After the Practice Associate(s) is (are) selected by the PC, the MSO will assist
the PC with a trial  plan  of  approximately  six  months  for the new  Practice
Associate(s).  It is understood  that at the end of this period either the PC or
the new Practice  Associate may terminate  the  relationship.  All such Practice
Associates  recruited by the MSO as may be accepted by the PC shall be employees
of the Practice  (if so  employed)  and not of the MSO. The MSO will confer with
the  PC on an  appropriate  salary/work-in  arrangement  for  the  new  Practice
Associate and the final arrangements shall be determined by the PC.

2.20 Management  Contract Buy Out Option.  The PC shall be granted the option to
buy out this  Agreement at the  conclusion of the fifth year after the effective
date of this  Agreement  (August  14,  2003)  (hereinafter  known as the "Option
Date").  The PC must give notice of its intent to exercise  such option no later
than six (6) months prior to the Option  Date.  In the event notice is not given
at  such  time,  the  option  shall  lapse  and  become   non-exercisable.   The
aforementioned option shall become effective at the conclusion of the tenth year
after the effective date of this Agreement  (August 14, 2008)  (hereinafter  the
"Second  Option  Date").  The PC must give notice of its intent to exercise such
option no later  than six (6)  months  prior to such  Second  Option  Date.  The
foregoing  process  shall be repeated in five-year  increments  commencing  five
years after the Second Option Date.

In the event the PC validly exercises its option to buy out this Agreement,  the
buy out price for this Agreement shall be the greater of the following:

1. The undepreciated  book value of all of the tangible and intangible assets of
the practices; or

2. Seventy six (76%) percent of the average of the following:

a. The previous  twelve (12) months gross  collection  for the  practices b. The
previous  twelve (12) months  production of the practices.  c. Two hundred fifty
(250%) percent of the net profits of the practices.

                                   ARTICLE 3
                                DUTIES OF THE PC

3.1 General.  The PC shall be responsible  for the operation of its practice and
the Orthodontic  Office,  in accordance with the requirements of the Laws of the
State.

3.2 Employment of the  Orthodontists and Rendering of Patient Care. The PC shall
be  responsible  for  the  employment  and   professional   supervision  of  Dr.
Schneekluth  and all  Orthodontists  and the other  Practice  Providers  and all
orthodontic  care rendered to patients shall be rendered by Dr.  Schneekluth and
such  Orthodontists.  Additionally,  the PC shall be solely  responsible for the
professional  supervision of all other Practice  Providers in their rendering of
patient care.

3.3 Professional  Services.  The PC shall use and occupy the Orthodontic Offices
designated  on Schedule 2 hereof  exclusively  for the practice and rendering of
orthodontic  services,  and  shall  comply  with  all  applicable  Laws  and all
standards of orthodontic care. It is expressly  acknowledged by the parties that
the orthodontic practice conducted at the Orthodontic Offices shall be conducted
solely by Dr. Schneekluth and the Orthodontists and the other Practice Providers
acting  under  the   supervision   and  control  of  Dr.   Schneekluth  and  the
Orthodontists (if any), and no other  Orthodontist  shall be permitted to use or
occupy the Orthodontic Offices.  The PC shall provide  professional  services to
patients  hereunder in compliance  at all times with ethical  standards and Laws
applying to the orthodontic profession. The PC shall ensure that Dr. Schneekluth
and each Orthodontist who provides  orthodontic services to patients is licensed
by the State. In the event that any disciplinary,  medical  malpractice or other
actions are  initiated  against Dr.  Schneekluth  or any  Orthodontist  or other
Practice  Provider,  the PC shall immediately  inform the MSO of such action and
the underlying facts and circumstances subject to such confidentiality agreement
or  arrangements  as the PC and the MSO shall mutually  determine at or prior to
the time of such disclosure.  The PC agrees to cooperate with and participate in
quality assurance/utilization review programs established by the MSO or mandated
by  accreditation  and  licensure  standards   applicable  to  the  practice  of
orthodontics.  Deficiencies discovered in the performance of any personnel or in
the quality of professional  services shall be reported  immediately to the MSO,
and  appropriate  steps  shall  be  taken  by  the PC at  once  to  remedy  such
deficiencies.

3.4 Records. The PC will keep or cause to be kept accurate,  complete and timely
dental  and other  records of all  patients.  The  management  of all dental and
patient files and records shall comply with all applicable  Laws regarding their
confidentiality and retention and all files and records shall be located so that
they are readily  accessible for patient care,  consistent with ordinary records
management  practices.  Such records  shall be  sufficient to enable the MSO, on
behalf of the PC, to obtain  payments for  services  and related  charges and to
facilitate the delivery of quality patient care by the PC.  Notwithstanding  the
foregoing, patient dental records shall be and remain the property of the PC and
the contents thereof shall be solely the responsibility of the PC.

3.5 Professional  Expenses.  The PC shall be solely  responsible for the cost of
professional   licensure  fees  and  board  certification  fees,  membership  in
professional associations and continuing professional education incurred by each
Orthodontist and other Practice Provider employed by the PC. The PC shall ensure
that Dr. Schneekluth and all the Orthodontists employed by the PC participate in
such  continuing  education as is  necessary  for Dr.  Schneekluth  and such the
Orthodontist to remain current.

3.6 Professional  Liability Insurance.  The PC shall provide, or arrange for the
provision of, and maintain  throughout the Term of this Agreement,  professional
liability  insurance  coverage in  accordance  with the  provisions of Article 9
hereof.  The PC shall also  cooperate in any programs  recommended by the MSO to
assure that each of its Orthodontists is insurable, and that Dr. Schneekluth and
each Orthodontist participates in an on-going risk management program.

3.7 Employment Agreement. The parties recognize that the services to be provided
by the MSO are feasible only if the PC operates an active  orthodontic  practice
to which it, Dr. Schneekluth and each Orthodontist associated with the PC devote
their  full time and  attention  (which  shall  mean an average of not less than
sixteen (16) full days per month),  unless other specific provisions are made in
writing  and  mutually  agreed  upon by the MSO and PC.  The PC will  cause  Dr.
Schneekluth and each individual  full-time  Orthodontist who now is or hereafter
becomes affiliated with the PC to enter into a written employment agreement (the
"Employment Agreement")  satisfactory in form and substance to the MSO, pursuant
to which Dr.  Schneekluth  or the  Orthodontist  shall  agree not to  establish,
operate or provide  orthodontic  or dental  services,  without the prior written
consent  of both the PC and the MSO,  at any office or  facility  other than the
Orthodontic Office. In addition,  such Employment Agreement shall provide by its
own  terms  or by a  separate  agreement  that  if  Dr.  Schneekluth's  or  such
Orthodontist's  employment shall terminate for any reason (other than a material
breach of this Agreement by the MSO or OMEGA) during the Term of this Agreement,
for a period of 18 months after the  termination  of Dr.  Schneekluth's  or such
Orthodontist's  Employment  Agreement  with  the  PC,  Dr.  Schneekluth  or such
Orthodontist  shall agree not to establish,  operate or provide  orthodontic  or
dental  services,  without the prior written consent of both the PC and the MSO,
at any office  practice or facility  whatsoever  providing  services  similar to
those  provided  by the PC at any  orthodontic  office  within a ten  (10)  mile
radius.  Such Employment  Agreement (or separate  agreement) shall also provide,
among other things,  that in the event of a breach of Dr.  Schneekluth's  or the
Orthodontist's  agreement  not to  compete  with  the PC  provided  for in  such
Employment  Agreement  (or  separate  agreement),  the MSO shall be  entitled to
receive,  in  addition  to  other  remedies  and  not by way of an  election  of
remedies,  liquidated damages equaling the greater of: (a) Dr.  Schneekluth's or
such Orthodontist's income, as shown on the W-2 form prepared by the PC, for the
most recent  calendar  year; or (b) Thirty (30%) percent of the preceding  years
Gross  Practice  Revenues.  Such  payment  shall  be  made  to the MSO by the PC
immediately  following  receipt  of the  payment  from  Dr.  Schneekluth  or the
breaching  Orthodontist  by the PC. Each of the MSO and OMEGA shall be expressly
named as a third-party  beneficiary  to such  agreements  between the PC and Dr.
Schneekluth  and each  Orthodontist  and the rights and  remedies of the MSO and
OMEGA thereunder or otherwise in respect of the restrictive  covenants set forth
in such agreements shall survive termination of this Agreement.

3.8  Confidentiality.  The PC agrees and acknowledges that all materials defined
as  "Confidential  Information" in paragraph 10.7 of the  Affiliation  Agreement
constitute  "Confidential  Information" and are disclosed in confidence and with
the understanding that it constitutes valuable business information developed by
the MSO with the assistance of OMEGA at great  expenditures of time,  effort and
money. The PC further agrees that it shall not, directly or indirectly,  without
the express prior written consent of the MSO, use or disclose such  Confidential
Information  for any purpose  other than in  connection  with the services to be
rendered hereunder.  The PC further agrees (i) to keep strictly confidential and
hold in trust all  Confidential  Information and not disclose such  Confidential
Information  to any  third  party  (except  Dr.  Schneekluth  and his  partners,
employees  and  professional  advisors  on a "need to know"  basis)  without the
express prior written  consent of the MSO; and (ii) to impose this obligation of
confidentiality on Dr. Schneekluth and his partners,  employees and professional
advisors. The PC acknowledges that the disclosure of Confidential Information to
it by the MSO is done in reliance upon its representations and covenants in this
Agreement.  Upon expiration or termination of this Agreement by either party for
any reason  whatsoever,  the PC shall  immediately  return  and shall  cause Dr.
Schneekluth and his partners, employees and professional advisors to immediately
return to the MSO all  Confidential  Information,  and the PC will not, and will
cause Dr. Schneekluth and his partners,  employees and professional advisors not
to, thereafter use, appropriate, or reproduce such Confidential Information. The
PC further expressly acknowledges and agrees that any such use, appropriation or
reproduction of any such Confidential  Information by any of the foregoing after
the  expiration or  termination  of this  Agreement  will result in  irreparable
injury to the MSO and OMEGA,  that the remedy at law for the foregoing  would be
inadequate,  and  that  in  the  event  of  any  such  use,  appropriation,   or
reproduction  of any such  Confidential  Information  after the  termination  or
expiration  of this  Agreement,  the MSO and  OMEGA,  in  addition  to any other
remedies or damages  available  to either or both of them,  shall be entitled to
injunctive or other  equitable  relief  without the necessity of proving  actual
damages  but such  rights to relief  shall not  preclude  the MSO and OMEGA from
other remedies which may be available to either or both of them hereunder.

                                   ARTICLE 4
                PROFESSIONAL SERVICES, CONTROL OF SOLICITATION,
             APPROVAL OF ADVERTISING MATERIAL AND NO RECIPROCATION

4.1 Fundamental  Understanding.  A fundamental understanding between the parties
hereto is that the  rendering  of  orthodontic  services  shall be separate  and
independent  from  the  provision  of  administrative,  management  and  support
services by the MSO.  Thus,  the PC shall have sole and absolute  control of the
delivery of all professional  services and treatment rendered to patients at the
Orthodontic Offices.

4.2 No Solicitation;  Control.  No employee or other  representative  of the MSO
shall be engaged  in, or allowed to solicit  patients  on behalf of, the PC, nor
shall the MSO have any control over the PC's patients.

4.3 No Advertising.  No advertising or promotional materials, or other materials
of any nature,  including  billing and collection  forms,  reports,  agreements,
correspondence,  or similar  materials,  used in connection with the PC shall be
used or distributed without having first been approved by the PC.

4.4 No Referrals.  The parties  hereby  acknowledge  and agree that the benefits
conferred  upon  each  of  them  hereunder  neither  require  nor are in any way
contingent  upon  the  admission,   recommendation,   referral,   or  any  other
arrangement  for the provision of any item or service  offered by the MSO to any
patients  of  the  PC  or  its  shareholders,  officers,  directors,  employees,
contractors  or agents,  nor are such  benefits in any way  contingent  upon the
recommendation,  referral or any other arrangement for the provision of any item
or  service  offered  by the PC or any  of its  Practice  Providers,  employees,
contractors or agents.

                                   ARTICLE 5
                    LEASE OF OFFICE FACILITIES AND EQUIPMENT

5.1 Office  Lease/Sublease.  In  consideration of the sums to be paid to the MSO
under the terms of this  Agreement,  the MSO  hereby  leases or  sub-leases,  as
applicable, to the PC during the Term of this Agreement the Orthodontic Offices,
and the  leasehold  improvements  and  fixtures,  furniture and equipment at the
Orthodontic  Offices as listed from time to time on  Schedule 2 attached  hereto
and  incorporated  herein  by this  reference,  under  the  following  terms and
conditions:

                  (a) The MSO is the lessee by  assignment  under the leases for
the premises  occupied by the PC  (collectively,  the "Master Leases") a copy of
which is attached hereto as Exhibit A and incorporated herein by this reference.
The PC hereby  acknowledges that the premises  described under the Master Leases
are suitable for the PC's  orthodontic  practice.  Based and contingent upon the
PC's promise to timely pay all amounts due under this Agreement,  the MSO hereby
agrees to sublease the leased  premises to the PC upon the  following  terms and
conditions:

                    (i) This sublease between the MSO and the PC of the premises
shall be subject to all of the terms and conditions of the Master Lease.  In the
event of the  termination of the MSO's interest as lessee under the Master Lease
for any reason, then the sublease created hereby shall simultaneously terminate,
unless the PC assumes the obligations under the Master Lease in question and the
Lessor consents thereto.

                    (ii) All of the terms and conditions contained in the Master
Lease are incorporated herein as terms and conditions of the sublease (with each
reference therein to "Lessor" and "Lessee," to be deemed to refer to the MSO and
the PC,  respectively) and, along with the provisions of this Section 5.1(b) and
Exhibit "A," shall be the complete terms and conditions of the sublease  created
hereby.

                    (iii) Notwithstanding the foregoing,  as between the MSO and
the PC, the MSO shall remain responsible for meeting the obligations of "Lessee"
under the sections  entitled  Rent,  Additional  Rent  Adjustment,  Insurance on
Fixtures,  Liability  Insurance,  Repairs, and Taxes of the Master Lease, all of
which  obligations  shall be considered MSO Expenses  hereunder and the PC shall
have no monetary obligation in that regard. In addition,  as between the MSO and
the PC, the MSO shall  retain the right to exercise  any options to purchase the
premises,  or other  similar  rights of  ownership or  possession,  which may be
granted under the Master Lease, and the PC shall have no rights in that regard.

                    (iv) In the event this Agreement is terminated  according to
its terms, this sublease shall also terminate automatically.

                    (v) If the  Master  Lease  contains  an  option to Renew the
terms  thereof,  the MSO  shall  notify  the PC,  at least 30 days  prior to the
expiration of the time for  exercising  such option,  of the MSO's  intention to
Renew or not to Renew such term. If the MSO  determines  not to Renew such term,
the MSO shall provide or arrange for the  provision of  comparable  office space
(the  "Substitute  Orthodontic  Office")  within  a  radius  of 15  miles of the
Orthodontic Office, which Substitute  Orthodontic Office shall be subject to the
approval  of the PC  (which  approval  shall  not be  unreasonably  withheld  or
delayed).  The lease or sublease  for such  Substitute  Orthodontic  Office,  as
applicable, shall be substituted for the lease described on Exhibit A hereto and
all references to the "Master Lease" shall thereafter be applicable to the lease
or  sublease  for  the  Substitute  Orthodontic  Office  for  purposes  of  this
Agreement, ab initio.

                    (vi) INTENTIONALLY OMITTED.

5.2 Leasehold Improvements,  etc. In accordance with Article 2.2 hereof, the MSO
shall  provide  the PC at the  Orthodontic  Offices  such  additional  leasehold
improvements,  fixtures, furniture, furnishings and equipment as may be mutually
agreed  to with  the PC and  reflected  from  time to  time on a  supplement  to
Schedule 2 hereto.  The use by the PC of all leasehold  improvements,  fixtures,
furniture,  furnishings and equipment provided hereunder shall be subject to the
following conditions:

(a) Subject to the terms of the lease, title to all such leasehold improvements,
fixtures, furnishings,  furniture and equipment shall remain in the MSO and upon
termination of this Agreement, the PC shall immediately return and surrender all
such leasehold improvements,  fixtures, furniture,  furnishings and equipment to
the MSO in as good condition as when received, normal wear and tear excepted.

(b)  Subject  to the terms of the  lease,  the MSO  shall be fully and  entirely
responsible for all repairs and maintenance of all such leasehold  improvements,
fixtures, furniture,  furnishings and equipment;  provided, however, that the PC
agrees that it will use its best efforts to prevent damage,  excessive wear, and
breakdown of all such leasehold improvements,  fixtures, furniture,  furnishings
and  equipment,  and shall  advise  the MSO of any and all  needed  repairs  and
equipment failures.

(c) The obligation of the MSO to provide the leasehold  improvements,  fixtures,
furniture,  furnishings  and equipment  stated  herein shall be  concurrent  and
co-extensive with the Term of this Agreement.

5.3.      No Warranty.

(a) THE PC  ACKNOWLEDGES  THAT THE MSO MAKES NO WARRANTIES  OR  REPRESENTATIONS,
EXPRESS  OR  IMPLIED,  AS TO  THE  SUITABILITY  OR  ADEQUACY  OF  ANY  LEASEHOLD
IMPROVEMENTS, FIXTURES, FURNITURE, FURNISHINGS, EQUIPMENT, INVENTORY OR SUPPLIES
PROVIDED OR LEASED OR SUBLEASED PURSUANT TO THIS AGREEMENT FOR THE CONDUCT OF AN
ORTHODONTICS PRACTICE OR FOR ANY OTHER PARTICULAR PURPOSE.

(b) Nothing in this  Agreement  shall be construed to affect or limit in any way
the  professional  discretion  of the  Practice  Providers  to  select  and  use
fixtures, furniture, furnishings and equipment, inventory and supplies purchased
or provided  by the MSO in  accordance  with the  provisions  of this  Agreement
insofar as such selection or use constitutes or might constitute the practice of
dentistry or orthodontics.

                                   ARTICLE 6
                                  COMPENSATION

As  consideration  for the  performance of all of its duties and  obligations as
provided in this Agreement, including but not limited to, the costs and expenses
associated  with  furnishing  the  services,  personnel,  facilities,  leasehold
improvements,  fixtures,  furniture,  furnishings,  equipment,  inventories  and
supplies provided for herein, the MSO shall receive  compensation in the form of
monthly  management  fees (the  "Management  Fees")  based upon a  predetermined
percentage of the "Practice  Revenues",  as defined and determined in accordance
with the  provisions  set forth in Schedule 3 attached  hereto and  incorporated
herein  by this  reference.  The  MSO's  compensation  shall  include  a minimum
management  fee which shall be paid to the MSO prior to any other  disbursal  of
funds.  It is acknowledged by and between the parties hereto that the MSO and/or
its affiliates has (have) incurred  substantial  expenses and future obligations
in acquiring the capital stock of the MSO,  acquiring or otherwise  establishing
the  Orthodontic   Offices,   establishing  its  systems,   including  fees  for
consultants and other professionals,  interest expense,  lease obligations,  and
costs of  furnishing  or  refurbishing  the  premises  at which the  Orthodontic
Offices are located. The MSO has also assumed substantial obligations associated
with the continuing  operation of the  Orthodontic  Offices,  including those of
lessee,  obligor and guarantor and obligor on loans to establish and operate the
Orthodontic   Offices.  The  parties,   therefore,   having  considered  various
compensation  formulae,  acknowledge  and  agree  that in  order  for the MSO to
receive a fair and  reasonable  return for its expenses and  obligations,  and a
fair return for the lease of the premises and  equipment  and for  providing the
services contemplated hereunder,  that the agreed compensation is not excessive.
The PC acknowledges  that the  compensation  arrangement is reasonable under the
circumstances  noted herein and has executed an Affidavit attesting to this fact
which  is  attached  hereto  and  incorporated  herein  as  Exhibit  C.  The  PC
specifically agrees that the MSO may defer actual receipt of its Management Fees
and/or  advance  monies for purposes of managing the PC's cash flow, and the MSO
may  repay  itself,  without  interest,  such  advances  or  pay  said  deferred
Management Fees when it deems appropriate. The advancement of funds to the PC or
Dr.  Schneekluth  shall be subject to the restrictions set forth in Schedule 3B.
hereof  and the PC and Dr.  Schneekluth  agree  that  Schedule  3B.  fairly  and
accurately sets forth the compensation arraignments reached between the parties.

                                   ARTICLE 7
                               SECURITY INTEREST

As assurance and collateral  security for the payment of the monthly  Management
Fees owed to the MSO pursuant to this  Agreement  and any funds  advanced by the
MSO to or on behalf of the PC pursuant to this  Agreement  and for the  faithful
and timely  performance  of all the covenants and  conditions to be performed by
the PC under this Agreement, the PC hereby pledges,  grants,  bargains,  assigns
and transfers to the MSO a security interest, pursuant to the Uniform Commercial
Code of the State,  in and to all Practice  Revenue and accounts  receivable  of
patients  of the PC,  together  with all  proceeds  thereof  (collectively,  the
"Collateral"),  and further agrees not to pledge, assign, transfer or convey any
of the Collateral or any proceeds  therefrom,  without the prior written consent
of the MSO,  except to affiliates of the MSO.  Concurrent  with the execution of
this Agreement,  the PC shall execute the Security  Agreement attached hereto as
Exhibit D and  incorporated  herein by this  reference in order that the MSO may
perfect its interest in the Collateral.  The PC expressly  agrees to execute any
appropriate UCC-1 Financing Statement and UCC-1 Fixture filings, if so requested
in writing by the MSO.

                                   ARTICLE 8
                                   COVENANTS

8.1 PC's Covenants.  As further  consideration  for the MSO's performance of the
terms  and  conditions  of this  Agreement,  the PC  covenants,  represents  and
warrants as follows  (which  covenants,  representations  and  warranties  shall
survive the execution of this Agreement):

(a) The PC shall  comply with all Laws and ethical  and  professional  standards
applicable to the practice of orthodontics  and to cause all of its employees to
do the same.

(b) The PC shall provide  quality  services and shall cause Dr.  Schneekluth and
the Orthodontists (if any) to serve the orthodontic needs of the patients of the
PC. The PC covenants to monitor  rigorously  utilization and quality of services
provided at the Orthodontic Offices and shall take all steps necessary to remedy
any and all  deficiencies  in the efficiency or the quality of orthodontic  care
provided.

(c) During the Term of this Agreement, the PC shall not, directly or indirectly,
own an interest in, operate,  join,  control,  participate in or be connected in
any manner with any corporation, partnership, proprietorship, firm, association,
person or entity providing  orthodontic care in competition with the practice at
the Orthodontic  Offices, or any other orthodontic  practice managed by the MSO,
within  a  radius  of 10  miles  of the  Orthodontic  Office  or of  such  other
orthodontic practice, without the MSO's prior written consent.

(d) The PC  recognizes  the  proprietary  interest  of OMEGA in and to its OMEGA
Patient  Scheduling  System and the MSO in its systems for managing the delivery
of orthodontic  care and all policies,  procedures,  operating  manuals,  forms,
contracts and other information (collectively,  the "MSO Information") regarding
such system. The PC acknowledges and agrees that all information relating to the
OMEGA  Patient  Scheduling  System  and the MSO  Information  constitutes  trade
secrets of OMEGA and/or the MSO. The PC hereby  waives any and all right,  title
and  interest  in and to such trade  secrets  and agrees to return all copies of
such trade  secrets and  information  relating  thereto,  at its  expense,  upon
termination of this Agreement.

(e) The PC  acknowledges  and  agrees  that  OMEGA and the MSO are  entitled  to
prevent  their  respective   competitors  from  obtaining  and  utilizing  their
respective  trade  secrets.  The PC agrees to hold  OMEGA'S  and the MSO's trade
secrets in  strictest  confidence  and not to disclose  them or allow them to be
disclosed  directly or indirectly to any person or entity other than persons who
are engaged by the PC to perform duties in connection with the PC and who have a
need to know such trade secrets in the  performance  of their duties for the PC,
without OMEGA's or the MSO's prior written  consent,  as the case may be. The PC
acknowledges   its  fiduciary   obligations   to  OMEGA  and  the  MSO  and  the
confidentiality  of  its  relationships  with  OMEGA  and  the  MSO  and  of any
information  relating to the services and business  methods of OMEGA and the MSO
which it may obtain during the term of this Agreement.  The PC shall not, either
during the term of this  Agreement or at any time after the expiration or sooner
termination  hereof,  disclose to anyone,  other than  employees or  independent
contractors  of OMEGA and the MSO who use  OMEGA's  and the MSO's  system in the
course of the  performance  of their duties,  any  confidential  or  proprietary
information or trade secrets obtained by the PC. The PC also agrees to place any
persons to whom said  information  is disclosed  for the purpose of  performance
under legal obligation to treat such information as strictly confidential.

8.2 MSO's Covenants.  As further  consideration  for the PC's performance of the
terms and  conditions  of this  Agreement,  the MSO  covenants,  represents  and
warrants  (which  covenants,  representations  and warranties  shall survive the
execution of this  Agreement)  that during the Term of this  Agreement,  the MSO
agrees not to  establish,  develop or open any  offices in  affiliation  with an
Orthodontist  for the provision of orthodontic  services within a 10 mile radius
of the Orthodontic Offices, without the express written consent of the PC.

                                   ARTICLE 9
                            INSURANCE AND INDEMNITY

9.1 Insurance to be Maintained by the PC. Throughout the Term of this Agreement,
the PC shall  maintain  in full  force  and  effect  comprehensive  professional
liability  insurance  with limits of not less than $500,000 per  occurrence  and
$1,000,000  annual aggregate per Dr.  Schneekluth and each of the  Orthodontists
providing  services for the PC and a separate  limit for the PC. The PC shall be
responsible  for all liabilities  within  deductibles and for all liabilities in
excess of the limits of such policies.  Premiums and deductibles with respect to
such policies shall not be MSO Expenses.  The PC also agrees to name the MSO and
OMEGA as co-insureds  and provided for waivers of insurers rights of subrogation
in favor of the MSO and  OMEGA.  The PC agrees to deliver to the MSO and OMEGA a
certificate of insurance indicating such coverage.  In the event that naming the
MSO as an additional insured results in extra cost to the PC, then the MSO shall
reimburse the PC for such cost.

9.2  Insurance  to be  Maintained  by the  MSO.  Throughout  the  Term  of  this
Agreement, the MSO will use reasonable efforts to provide and maintain, as a MSO
Expense, (a) comprehensive professional liability insurance for all professional
employees of the MSO with limits as  determined  reasonable  by the MSO; and the
MSO shall provide (b)  comprehensive  general  liability and property  insurance
covering the Orthodontic  Office premises and operations.  Such insurances shall
provide  for  waivers  of  insurers  rights  of  subrogation  in  favor  of  Dr.
Schneekluth and each of the Orthodontists providing services for the PC.

9.3  Tail  Insurance  Coverage.  The PC will  cause  Dr.  Schneekluth  and  each
Orthodontist (if any) providing  services to enter into an agreement with the PC
that upon termination of Dr.  Schneekluth's or such Orthodontist's  relationship
with the PC, for any reason,  tail  insurance  coverage will be purchased by Dr.
Schneekluth  or  such  Orthodontist.  Such  provisions  may be  contained  in an
employment agreement,  restrictive covenant agreement or other agreement entered
into by the PC and  Dr.  Schneekluth  or the  Orthodontist,  and  the PC  hereby
covenants with the MSO to enforce such provisions relating to the tail insurance
coverage or to provide such coverage at the expense of the PC or Dr.
Schneekluth or each such Orthodontist.

9.4  Additional  Insureds.  The PC and the MSO  agree  to use  their  reasonable
efforts  to have  each  other  named as an  additional  insured  on the  other's
respective  liability  insurance  policies  and  obtain  appropriate  waivers of
insurers  rights  of  subrogation.  In  the  event  that  naming  the  MSO as an
additional insured results in extra cost to the PC, then the MSO shall reimburse
the PC for such cost.

9.5  Indemnification.  The PC shall indemnify,  hold harmless and defend the MSO
and OMEGA and their respective officers, directors, shareholders,  employees and
representatives,  from  and  against  any and all  liability,  losses,  damages,
claims,  causes  of  action,  expenses  judgments,   settlements,  lawsuits  and
obligations  (including  reasonable  attorneys' fees), whether or not covered by
insurance, caused or asserted to have been caused, directly or indirectly, by or
as a result of the performance of orthodontic services or the performance of any
intentional  acts,  negligent acts or omissions by the PC and/or its affiliates,
its shareholders, agents, the Practice Providers, its other employees and/or its
subcontractors  (other  than the MSO)  during  the Term  hereof.  The MSO  shall
indemnify,   hold  harmless  and  defend  the  PC,  its   officers,   directors,
shareholders  and  employees,  from and against such  liability,  loss,  damage,
claim, causes of action, and expenses (including reasonable attorneys' fees), to
the extent caused, directly or indirectly,  by or as a result of the performance
of any  intentional  acts,  negligent  acts or  omissions  by the MSO and/or its
shareholders, agents, employees and/or subcontractors (other than the PC) during
the Term hereof.

9.6 Notwithstanding anything to the contrary contained in this Agreement, or any
Schedule  or  Exhibit  hereto,  in no  event  shall  the  MSO  or  OMEGA  or Dr.
Schneekluth  or the PC or their  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 10
                                  TERMINATION

10.1     Termination by the PC.

(a)      Termination by the PC. The PC may terminate this Agreement as  follows:

         (1) In the event of the filing of a petition in voluntary bankruptcy or
         an  assignment  for the benefit of  creditors by the MSO, or upon other
         action  taken or  suffered,  voluntarily  or  involuntarily,  under any
         federal or state law for the benefit of debtors by the MSO,  except for
         the filing of a petition  in  involuntary  bankruptcy  against  the MSO
         which is dismissed within sixty (60) days  thereafter,  the PC may give
         written notice of the immediate termination of this Agreement.

         (2) In the event the MSO shall materially default in the performance of
         any  duty or  obligation  imposed  upon it by this  Agreement  and such
         default  shall  continue for a period of sixty (60) days after  written
         notice  thereof  has  been  given  to the  MSO by  the  PC,  the PC may
         terminate this Agreement.

Upon  termination  of this  Agreement  by the  Orthodontic  Practice  under this
Section 10.1, the PC shall be entitled to exercise the "Call Option," as defined
in and on the terms and  conditions set forth in Section 3 of the Stock Put/Call
Option and  Successor  Designation  Agreement  and recover  such direct  damages
actually incurred by Dr. Schneekluth as a result of such termination.

10.2     Termination by MSO.  MSO may terminate this Agreement as follows:

(a) In the event of the  filing of a  petition  in  voluntary  bankruptcy  or an
assignment for the benefit of creditors by the PC or any  shareholders  thereof,
or upon other action taken or suffered, voluntarily or involuntarily,  under any
federal or state law for the  benefit  of debtors by the PC or any  shareholders
thereof,  except for the filing of a petition in involuntary  bankruptcy against
the PC or any  shareholder  thereof  which is  dismissed  within sixty (60) days
thereafter,  MSO may give written  notice of the immediate  termination  of this
Agreement; or

(b) In the event the PC fails to perform  orthodontic  services  on a  full-time
basis  consistent  with its  pattern of practice  in the  immediately  preceding
calendar  year  (other  than as a  result  of the  death  or  disability  of Dr.
Schneekluth)  and such  default  shall  continue for a period of sixty (60) days
after  written  notice  thereof has been given to the PC by the MSO, the MSO may
terminate this Agreement; or

(c) In the event the PC shall materially default in the performance of any other
duty or  obligation  imposed upon it by this  Agreement,  and such default shall
continue for a period of ninety (90) days after written  notice thereof has been
given to the PC by the MSO, the MSO may terminate this Agreement; or

(d) In the event Dr. Schneekluth or any Orthodontist  breaches or defaults under
his or her  Employment  Agreement and the PC does not cause Dr.  Schneekluth  or
such  Orthodontist  to cure such breach or default within any  applicable  grace
period  therefor  but not less than sixty (60)  days,  the MSO may give  written
notice of the immediate termination of this Agreement; or

(e) In the event the PC fails for three consecutive months to make repayments to
the MSO of any amounts due as a result of advances  made by the MSO to the PC or
Dr. Schneekluth; or

(f) In the event that for a period of six consecutive  months the Gross Revenues
of the Garden Grove practice decrease by more than twenty percent (20%) from the
original  Gross Revenues for six months of the practice when first acquired from
Dr. Levin in August, 1998.

Upon  termination  of this  Agreement by the MSO under this Section 10.2 or upon
expiration  of the Term of this  Agreement,  the MSO and  OMEGA  shall  have the
option to either (1) exercise the "Put Option" and/or the "Successor Designation
Option," as defined in and on the terms and subject to the  conditions set forth
in Sections 2 and 5, respectively,  of the Stock Put/Call Option and Designation
Agreement or (2) Omega may terminate  this Agreement by paying to the PC the sum
of $1,000 and Omega may then bring in a replacement to take over the practice or
(3) in the event of (e) and (f) above,  OMEGA may, at its option,  remove the PC
and Dr.  Schneekluth  from the Garden Grove practice by paying to the PC the sum
of $500 and replace the PC and Dr.  Schneekluth  with another  orthodontist.  If
this Agreement is terminated by the MSO or Omega, Dr. Schneekluth shall be bound
by the terms of the  non-compete  agreement  attached  as Exhibit C to the Stock
Put/Call Agreement.  In addition, upon any termination of this Agreement or upon
expiration of the Term of this  Agreement,  the MSO shall be entitled to receive
the  Management  Fees  collected to the effective  date of such  termination  or
expiration, the amounts of any loans or advances and, if applicable,  such other
sums  accrued  or  related  to  occurrences  arising  at or prior to the date of
termination  and recover such direct damages  actually  incurred by OMEGA or the
MSO as a result of such termination.

                                   ARTICLE 11
                    AUTHORIZED AGENT AND POWERS OF ATTORNEY

The PC hereby  designates the MSO (and its  designees) its authorized  agent and
lawful  attorney-in-fact  for purposes of depositing  payments,  paying accounts
payables,  signing  checks,  negotiating  and signing  contracts for services or
goods,  securing loans or incurring  obligations on behalf of the PC;  provided,
however, that all contracts or fees set for services on behalf of the PC will be
subject to final approval and acceptance by the PC. Additionally,  the PC hereby
irrevocably appoints the MSO (and its designees) its authorized agent and lawful
attorney-in-fact  to collect all bills and accounts  receivable for professional
fees,  charges and other amounts and authorizes the MSO through its designees to
take possession of all checks,  money orders and similar instruments received as
payment  of  receivables  to be  deposited  into the PC  Account.  The PC hereby
irrevocably appoints the MSO as the PC's  attorney-in-fact,  with full power and
authority in the place and stead of the PC, in the MSO's discretion,  to endorse
in the name of the PC any checks, payments,  notes, insurance payments and money
orders,  to withdraw funds for payments of expenses,  including  Management Fees
and other sums  payable to the MSO,  to open and close the PC Account  and other
bank accounts,  to take any action and to execute any other instrument which the
MSO may deem  necessary or  advisable to  accomplish  the purposes  hereof.  The
powers  of  attorney  granted  herein  are  coupled  with  an  interest  and are
irrevocable.  Third  parties  and  entities  and  persons  not a  party  to this
Agreement  are  entitled  to  rely  on the  foregoing  attorneys-in-fact  and an
affidavit of the MSO attesting  thereto.  The acceptance of this  appointment by
the MSO shall not  obligate it to perform  any duty or  covenant  required to be
performed by the PC under or by virtue of this  Agreement.  Notwithstanding  the
foregoing  powers of attorney,  the PC shall at any time,  on the request of the
MSO,  sign  financing  statements,   security  agreements  or  other  agreements
necessary or advisable to  accomplish  the purpose of this  Agreement.  Upon the
PC's failure to sign said  financing  statements,  security  agreements or other
agreements,  the MSO is  authorized  as the  agent  of the PC to sign  any  such
instruments. The PC may review all deposits and expenses upon request.

                                   ARTICLE 12
                      INDEPENDENT CONTRACTOR RELATIONSHIP

Neither the PC nor its  employees  shall have any claim under this  Agreement or
otherwise against the MSO for worker's compensation,  unemployment compensation,
sick leave, vacation pay, retirement benefits,  Social Security benefits, or any
other employee  benefits,  all of which shall be the sole  responsibility of the
PC. Since  neither the PC nor its  employees  are  employees of the MSO, the MSO
shall not withhold on behalf of the PC unemployment insurance,  Social Security,
or otherwise pursuant to any law or requirement of any governmental  agency, and
all such withholding,  if any is required,  shall be the sole  responsibility of
the PC.

                                   ARTICLE 13
                                 MISCELLANEOUS

13.1 Access to Records. From and after any termination, each party shall provide
the other party with 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.

13.2 Patient Records.  Upon  termination of this Agreement,  the PC shall retain
all patient  dental  records  maintained by the PC or the MSO in the name of the
PC. During the term of this Agreement,  and  thereafter,  the PC or its designee
shall have  reasonable  access during normal  business hours to the PC's and the
MSO's records,  including, but not limited to, records of collections,  expenses
and  disbursements as kept by the MSO in performing the MSO's  obligations under
this Agreement, and the PC may copy any or all such records.

13.3 The  PC's  Control  Over  the  Orthodontic  Practice.  Notwithstanding  the
authority  granted  to the MSO  herein,  the MSO and the PC  agree  that the PC,
personally or through Dr.  Schneekluth or any of its  Orthodontists (if any) and
other Practice  Providers,  shall have complete control and supervision over the
professional  aspects  of the PC's  practice,  as well as the  provision  of all
professional services,  including, without limitation, the selection of a course
of treatment for a patient,  the procedures or materials to be used as a part of
such course of  treatment,  and the manner in which such course of  treatment is
carried out by the PC. The PC shall have sole  authority to direct the business,
professional,  and ethical  aspects of the PC. The MSO shall have no  authority,
directly or  indirectly,  to perform,  and shall not  perform,  any  orthodontic
function,  or to influence or otherwise  interfere with the exercise of the PC's
professional  judgment.  The  MSO  may,  however,   advise  the  PC  as  to  the
relationship  between its  performance of orthodontic  functions and the overall
administrative and business functioning of the PC.

                                   ARTICLE 14
                               DISPUTE RESOLUTION

14.1 Dispute Resolution.

(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 Los Angeles,  California  and
conducted in Los Angeles,  California.  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.

14.2 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.

                                   ARTICLE 15
                               GENERAL PROVISIONS

15.1  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. Schneekluth, to:

Clark E. Schneekluth, D.D.S.
511 Warner Avenue, Suite 104
Huntington Beach, California 92649

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.

15.2     INTENTIONALLY OMITTED.

15.3 Contract Modifications for Prospective Legal Events. In the event any state
or federal Laws, now existing or enacted or promulgated after the effective date
of this Agreement,  are interpreted by judicial decision, a regulatory agency or
legal  counsel  for  both  parties  in such a  manner  as to  indicate  that the
management  structure of this Agreement may be in violation of such Laws, the PC
and the MSO shall amend this  Agreement  as  necessary.  To the  maximum  extent
possible,  any  such  amendment  shall  preserve  the  underlying  economic  and
financial arrangements between the PC and the MSO. Neither party shall be deemed
to be in breach of this  agreement  by  reason  of a  violation  of such Laws as
described  above unless such party had actual  knowledge of such violation as of
the effective date of this Agreement.

15.4  Exclusive  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,
employees, agents, subcontractors, and suppliers.

15.5 No Obligation to Third Parties.  None of the  obligations and duties of the
MSO or the PC under this  Agreement  shall in any way or in any manner be deemed
to create  any  obligation  of the MSO or of the PC to, or any  rights  in,  any
person or entity not a party to this  Agreement  other than OMEGA which shall be
deemed a party for limited purposes as set forth in this Agreement.

15.6 Entire  Agreement.  This  Agreement  including  the  Schedules and Exhibits
hereto,  together  with the Stock  Put/Call  Option  and  Successor  Designation
Agreement of even date herewith and the Employment  Agreement(s)  (including the
related  non-competition  agreements  or  covenants),   constitutes  the  entire
agreement between the parties concerning this subject matter, and supersedes all
prior and contemporaneous agreements,  representations and understandings of the
parties  concerning  the  contents  hereof.  No  supplement,   modification,  or
amendment to this Agreement  shall be binding unless  executed in writing by all
of the parties hereto,  except as otherwise provided herein. No waiver of any of
the provisions of this  Agreement  shall be deemed to constitute a waiver of any
other provision, whether similar or not similar, nor shall any waiver constitute
a continuing  waiver.  No waiver shall be binding unless  executed in writing by
the party making the waiver.

15.7  Assignment.  The rights and the 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 shall be permitted  to assign its rights and  obligations
hereunder without the consent of the PC or Dr.  Schneekluth to any person,  firm
or  corporation  controlled  by the MSO,  controlling  the MSO or  under  common
control with the MSO or to any financing institutions as may be required by such
financing  institutions or required by the terms of credit  agreements which may
be  entered  into  from time to time by Omega for the  obtaining  of  additional
financing for Omega.

15.8  Attorneys'  Fees. If any mediation or arbitration or other legal action or
proceeding is brought to enforce this  Agreement,  because of any alleged breach
hereof,  or for a  declaration  of any rights  and  obligations  hereunder,  the
prevailing party in such mediation or arbitration, action or proceeding shall be
entitled  to  recover  its costs  incurred  therein,  including  but  reasonable
attorneys'  fees,  in addition to any other  relief to which it may be entitled,
all as  determined  and  warded  by the  parties  in  such  mediation  or by the
arbitrator or court as part of its judgment or decision therein, as the case may
be.

15.9  Governing  Law.  This  Agreement  shall be  governed by and  construed  in
accordance  with  the  laws of the  State  of  California,  irrespective  of its
conflict of laws rules.  The parties agree to submit to the  jurisdiction of any
state  or  federal  court  located  in  Los  Angeles,  California.  The  parties
acknowledge  that  the MSO is not  authorized  or  qualified  to  engage  in any
activity  which may be  construed  or  deemed  to  constitute  the  practice  of
dentistry or orthodontics.  To the extent any act or service required of the MSO
in this Agreement should be construed or deemed, by any governmental  authority,
agency or court to  constitute  the practice of dentistry or  orthodontics,  the
performance of said act or service by the MSO shall be deemed waived and forever
unenforceable and the provisions of Section 15.14 shall be applicable.

15.10 Events  Excusing  Performance.  Neither party shall be liable to the other
party for failure to perform any of the services required herein in the event of
strikes, lock-outs, calamities, acts of God, unavailability of supplies or other
events over which that party has no control for so long as such events continue,
and for a reasonable period of time thereafter.

15.11  Compliance  with  Applicable  Laws.  Both  parties  shall comply with all
applicable  Laws and  restrictions  imposed  thereunder  in the conduct of their
obligations under this Agreement.

15.12 Language  Construction.  The parties  acknowledge  that each party and its
counsel have  reviewed and revised  this  Agreement  and that the normal rule of
construction to the effect that any  ambiguities are to be resolved  against the
drafting party shall not be employed in the interpretation of this Agreement.

15.13  Amendments.  This Agreement may be amended only by the written consent of
both parties.

15.14  Severability.  In the event any provision of this  Agreement is held by a
court of competent jurisdiction to be illegal 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 of this Agreement  shall continue in full force and effect
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.

15.15 No Waiver. The waiver by either party to this Agreement of any one or more
defaults,  if any, on the part of the other  party,  shall not be  construed  to
operate as a waiver of the other or future defaults under this Agreement.

15.16  Captions.  Captions  to  paragraphs  in this  Agreement  are for  ease of
reference, and shall not be considered an interpretation of the paragraph.

15.17 Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original.

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
agreement as of the day and year first above written.

         PC:

         Clark E.  Schneekluth, D.D.S., M.S., Inc.



         By:_______________________________
         Name: Clark E..  Schneekluth, D.D.S.
         Title:   President


         MSO:

         OMEGA ORTHODONTICS OF WOODLAND HILLS, INC.



         By:_______________________________
         Name:  Robert J. Schulhof
         Title: President


         OMEGA:
         OMEGA ORTHODONTICS, INC.



         By:_______________________________
         Name:  Robert J. Schulhof
         Title: President

<PAGE>
                                   SCHEDULE 1

                               THE ORTHODONTISTS

Name and Address

Clark E. Schneekluth, D.D.S.
511 Warner Avenue, Suite 104
Huntington Beach, California 92649


<PAGE>
                                   SCHEDULE 2

                        ORTHODONTIC OFFICES AND SERVICES

The office space and related leasehold  improvements  which the MSO will provide
to the PC pursuant to Section 2.2 of the Management  Services Agreement to which
this  Schedule  2 is  attached  are  located at 511  Warner  Avenue,  Suite 104,
Huntington  Beach,  California  92649  ("Huntington  Beach")  and  5251 and 5253
Lampson Ave., Garden Grove,  California ("Garden Grove").  The related fixtures,
furniture,  furnishings  and equipment are set forth on the attached asset list.
The services to be provided by the MSO to the PC in relation to the  Orthodontic
Offices are the repair,  maintenance and replacement of the Orthodontic Offices,
including such leasehold  improvements,  fixtures,  furniture,  furnishings  and
equipment,  except for repairs,  maintenance and replacement necessitated by the
negligence  of the PC, its  employees  and agents (not  including the MSO or its
employees  or  agents).   The  MSO  shall  also  provide  telephone,   facsimile
transmission, printing, duplicating and transcribing services as needed, as well
as all laundry, linen and uniforms.

<PAGE>
                                   SCHEDULE 3

                         COMPENSATION & MANAGEMENT FEES

A. The MSO shall  receive,  as  compensation  for the  performance of all of its
obligations and duties  contained in the Agreement,  (a) during the Term of this
Agreement,  monthly  Management  Fees in an amount  equal to Sixty Seven and One
Half Percent (67.5%) of the Practice Revenues,  plus (b) during the first twenty
four (24) months of this  Agreement  only, a additional  amount  representing  a
start up fee of five (5%)  percent of the  Practice  Revenues  ("Start Up Fee"),
commencing on the effective date of this Agreement.  The PC shall be entitled to
Twenty Seven and One Half Percent  (32.5%) of such  monthly  Practice  Revenues,
less  the  start up fee  during  the  first  twenty  four  (24)  months  of this
Agreement.

Notwithstanding  anything  in  this  Agreement  or  any  other  document  to the
contrary, in no event shall the MSO during the first two years of this Agreement
receive  less than One  Hundred  Six  Thousand  Seven  Hundred  Sixteen  Dollars
($106,716) per year [Eight  Thousand Eight Hundred Ninety Three Dollars  ($8893)
per month] in Management Fees ("Minimum Management Fee") (including the Start Up
Fee during the first  twenty four (24) months of this  Agreement)  annually  and
such Minimum  Management  Fee shall be disbursed  prior to  disbursement  of any
other funds.  At the end of the initial two years of this Agreement such Minimum
Management Fee shall decrease to Eighty Thousand Thirty Three Dollars  ($80,030)
per year [Six Thousand Six Hundred Sixty Nine Dollars ($6669) per month] for the
remaining term of this Agreement.

Each  financial  quarter  during the Term,  the MSO shall provide the PC with an
unaudited  internal  accounting of the MSO Expenses  actually  incurred for such
quarter,  prepared in accordance  with the accrual method of accounting.  If the
MSO Expenses as reflected in such  accounting as having been paid by the MSO are
less than  Sixty  (60%)  percent of the  Practice  Revenues  for such  financial
quarter,  Sixty (60%) percent of such difference shall be returned by the MSO to
the PC as a profit  incentive  rebate (the "Rebate").  Commencing only after the
first quarter in which the PC is entitled to a Rebate,  if such MSO Expenses are
more than  sixty  (60%)  percent of the  Practice  Revenues  for such  financial
quarter,  fifty  (50%)  percent of such excess will be charged to the PC and set
off against  payments due to the PC  hereunder.  If the  Agreement to which this
Schedule 3 is attached is terminated or expires,  the foregoing  Management Fees
(including  any start up  management  fees) shall be payable to the MSO based on
all Practice Revenue collected as of the date of termination or expiration.

Payment to the MSO shall be made in monthly  installments  based on the Practice
Revenues  realized by the MSO for  services  rendered  hereunder.  The MSO shall
distribute  the  proceeds in equal  amounts from the PC Account and allocate the
proceeds  between the MSO and the PC as described  above,  on or before the 15th
day of the  succeeding  month.  In the event the 15th day falls on a weekend  or
holiday,  then said  distribution  shall be made on the next  business  day. The
parties hereto may agree to handle such matters in a different manner.

For purposes of this Agreement, "Practice Revenues" shall mean gross collections
of  all  revenues  generated  by  or  on  behalf  of  the  PC  (whether  through
subsidiaries or affiliates), including, but not limited to, all fees and charges
collected as a result of professional orthodontic services furnished to patients
by the PC and for any other goods or services sold or provided to such patients.

B. Dr.  Schneekluth and the PC acknowledge,  pursuant to a separate agreement of
even date herewith and in this  Agreement  that they have, as of the date of the
execution  of this been loaned by OMEGA cash  advances  against the PC's earning
for the Huntington Beach practice totaling $84,078.  As of the date of execution
of this  Agreement,  a net  amount  of  $48,490  is owed to OMEGA as a result of
offsets made against the $84,078  during year  preceding the  effective  date of
this Agreement.  The parties agree that if after payment of all MSO expenses and
payment of the Minimum Management Fees stated above, the gross, combined, income
to the PC from both the Huntington  Beach practice and the Garden Grove practice
equal less than $10,000 per month,  than the MSO and OMEGA shall  advance to the
PC, on the terms stated in A. above,  such sum as to bring the PC's gross income
up to $10,000.

Notwithstanding  anything in this  Agreement to the contrary,  in no event shall
OMEGA or the MSO be  obligated  to loan to the PC or Dr.  Schneekluth  more than
$26,510 or any amounts which would make the total  outstanding  indebtedness  of
Dr. Schneekluth or the PC to the MSO or OMEGA greater than $75,000 including the
$48,490 already owing to OMEGA and the MSO.

<PAGE>
                                   EXHIBIT A

                      ORTHODONTIC OFFICES - MASTER LEASES

<PAGE>
                                   EXHIBIT B

                               PRACTICE PROVIDERS

Clark E. Schneekluth, D.D.S.
511 Warner Avenue, Suite 104
Huntington Beach, California 92649

<PAGE>
                                   EXHIBIT C

                                 PC'S AFFIDAVIT

<PAGE>
                                   AFFIDAVIT

     I, Clark E. Schneekluth, D.D.S., declare:

     I am an  Orthodontist,  duly  licensed  in the  State of  California  and I
practice through a professional corporation under the name Clark E. Schneekluth,
D.D.S., M.S., Inc. (the "PC").

     I have had substantial  experience in the practice of  orthodontics  and in
managing and operating an orthodontic office.

     In the course of operating orthodontic offices, I have acquired significant
knowledge as to the overhead  costs  incurred  and gross  receipts  generated by
similar  types  of  orthodontic  offices.  Further,  I am  fully  aware  of  the
non-orthodontic,  operational,  accounting,  billing, financing,  management and
personnel requirements of an orthodontic office and the cost factors involved in
providing  such  management,   personnel,  accounting,  billing,  financing  and
operation.

     I  have  thoroughly   reviewed  the  Management   Services  Agreement  (the
"Agreement"),  which is  effective  as of August ___,  1998,  between the PC and
Omega  Orthodontics of Woodland Hills,  Inc. (the "MSO")  concerning the duties,
responsibilities and obligations undertaken by the MSO in managing and operating
all  non-orthodontic  aspects of the  Orthodontic  Office as contemplated by the
Agreement.

     I have reviewed the prior operating financial statements of the orthodontic
office located at 511 Warner Avenue,  Suite 104,  Huntington  Beach,  California
92649  ("Huntington  Beach")  and 5251  and 5253  Lampson  Ave.,  Garden  Grove,
California  ("Garden Grove") and an operating budget and estimated income of the
orthodontic  offices,  which, in my opinion, can reasonably be expected from the
operation of said office.

     In my opinion, based upon my experience, the Management Fees of Sixty Seven
and One Half Percent (67.5%) of "Practice  Revenues" to be charged by the MSO as
contemplated by the Agreement,  but not less than One Hundred Six Thousand Seven
Hundred  Sixteen  Dollars  $106,716 a year (plus the monthly start up management
fee of 5% payable during each of the twenty four months of the Agreement),  will
afford it a reasonable  but not excessive  return for its services  rendered and
obligations incurred. In addition, the Twenty Seven and One Half Percent (27.5%)
of  "Practice  Revenues"  (the 5% start up  management  fees only due during the
first twenty four (24) months of this Agreement) retained by the PC will provide
reasonable earnings for the performance of orthodontic services.

I declare  under  penalty of perjury  that the  foregoing  statement is true and
correct to the best of my knowledge and belief.

         Executed at Los Angeles, California this ____  day of ________ 1998.


                                     ---------------------------
                                     Clark E. Schneekluth, D.D.S.

                               STATE OF CALIFORNIA

___________________, ss.                                      August ___, 1998


     Then personally  appeared the above-named Clark E. Schneekluth,  D.D.S. and
acknowledged the foregoing Affidavit to be his free act and deed.


[SEAL]                                         ____________________________
                                                              Notary Public
                                               My Commission Expires:


<PAGE>
                                   EXHIBIT D

                               SECURITY AGREEMENT


<PAGE>
                               SECURITY AGREEMENT

THIS  SECURITY  AGREEMENT is  effective as of the 1st day of August __ 1998,  by
Clark E. Schneekluth,  D.D.S., M.S., Inc., an California corporation (the "PC"),
and Clark E.  Schneekluth,  D.D.S.  ("Dr.  Schneekluth") who is duly licensed to
practice  orthodontics  in the State and Omega  Orthodontics  of Woodland Hills,
Inc., a Delaware corporation (the "MSO") with reference to the following facts:

WHEREAS, pursuant to a Management Services Agreement (the "Agreement"), dated as
of the date  hereof,  between the PC and the MSO, as  assurance  and  collateral
security for the payment of the monthly Management Fees owed to the MSO pursuant
to the  Agreement  and any funds  advanced  by the MSO to or on behalf of the PC
pursuant to the Agreement and for the faithful and timely performance of all the
covenants  and  conditions  to be  performed  by  the  PC  under  the  Agreement
(collectively,  the  "Obligations")  the PC agreed to  pledge,  grant,  bargain,
assign and  transfer  to the MSO a security  interest,  pursuant  to the Uniform
Commercial  Code of the State,  in and to all Practice  Revenue and the accounts
receivable  of  patients  of  the  PC,   together  with  all  proceeds   thereof
(collectively, the "Collateral");

WHEREAS,  the PC is obligated as a condition to the MSO's  performance under the
Agreement to execute and deliver this Security Agreement;

NOW,  THEREFORE,  in  consideration  of the  foregoing  and of the covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

1. Grant of Security Interest. As and for collateral security for payment by the
PC of the  Obligations  and any and all  amounts  payable  under  this  Security
Agreement  (collectively,  the "Secured  Obligations"),  the PC hereby  pledges,
grants,  bargains,  assigns and  transfers  to the MSO,  and grants to the MSO a
security  interest in, the  Collateral.  Dr.  Schneekluth  shall cause the PC to
perform  fully and on a timely  basis  all of the PC's  obligations  under  this
Security  Agreement.  The MSO may at its option file a financing statement (Form
UCC-1) in order to perfect its security interest hereunder.

2.  Representations  and  Warranties.  The PC represents and warrants all of the
accounts  receivable  constituting a portion of the Collateral of the PC pledged
to the MSO are and will be validly  created  obligations of each of the obligors
who incurred  same for  services  actually  rendered in the  ordinary  course of
business of the PC. Further,  the PC represents and warrants that the Collateral
is not subject to any lien, pledge, charge,  encumbrance or security interest or
right or option on the part of any third person.

3. Release of Security  Interest.  Upon the  termination  of the  Agreement  and
payment in full of the accrued  Management Fees thereunder and any and all other
Secured Obligations,  the MSO shall release its security interest hereunder, and
will deliver to the PC any property forming part of the Collateral  delivered to
the MSO and then held by the MSO hereunder.

4.  Realization  of  Collateral.  The  MSO  shall  have,  with  respect  to  the
Collateral,  the rights and  obligations  of a secured  party  under the Uniform
Commercial Code as adopted in the state of California (the "State"). Such rights
shall include, without limitation, the following:

     A. The right,  upon default,  to have the Collateral,  or any part thereof,
     transferred to its own name or to the name of its nominee;

     B. The  right,  upon  default,  to sell,  assign or  deliver as much of the
     Collateral as is reasonably  necessary to repay the defaulted  indebtedness
     (together with expenses attendant upon such sale and repayment),  at public
     or  private  sale,  as the MSO may  elect,  either  for cash or on  credit,
     without  assumption of any credit risk and without demand or  advertisement
     (unless otherwise required by law).

     C. The PC hereby irrevocably  authorizes the MSO to sign and file financing
     statements naming the PC as the debtor and the MSO as the secured party, at
     any time with respect to any  Collateral,  without the signature of the PC.
     The PC hereby  irrevocably  appoints the MSO as the PC's  attorney-in-fact,
     with full authority in the place and stead of the PC and in the name of the
     PC,  from time to time in the MSO's  discretion,  to take any action and to
     execute any  instrument  which the MSO may deem  necessary  or advisable to
     accomplish  the purposes  hereof.  The  attorney-in-fact  granted herein is
     coupled with an interest and is irrevocable. Third parties and entities and
     persons not a party to this Security Agreement are entitled to rely on this
     attorney-in-fact  and  an  affidavit  of the  MSO  attesting  thereto.  The
     acceptance of this  appointment by the MSO shall not obligate it to perform
     any duty or covenant  required to be performed by the PC under or by virtue
     of the Collateral.  Notwithstanding the foregoing power of attorney, the PC
     shall at any time on the  request of the MSO,  sign  Financing  Statements,
     security  agreements or other  agreements  with respect to any  Collateral.
     Upon  the  PC's  failure  to  sign  said  Financing  Statements,   security
     agreements or other  agreements,  the MSO is authorized as the agent of the
     PC to sign any such instruments. Upon the request of the MSO, the PC agrees
     to pay all filing fees and to reimburse the MSO on demand for all costs and
     expenses of any kind (including,  without limitation,  legal fees) incurred
     in any way in connection with the Collateral.

5. Purchase of Collateral.  At any such private or public sale of the Collateral
or part thereof,  the MSO may purchase and pay for the same by  cancellation  of
such portion of the  Obligations,  equal to the  purchase  price and free of any
right of redemption on the part of the PC. The MSO agrees,  however, that the PC
shall have all  rights,  including  rights of notice,  provided  by the  Uniform
Commercial  Code as adopted in the State.  In any case where notice is required,
five days' notice shall be deemed  reasonable  notice.  In the event of any sale
hereunder,  the MSO shall  apply the  proceeds  in the order set forth  below in
Paragraph  6 hereof.  The MSO may have resort to the  Collateral  or any portion
thereof with no requirements on the part of the MSO to proceed first against any
other person or property.

6.  Application of  Collateral.  Proceeds from the sale of the Collateral or any
part thereof shall be applied by the MSO in the following order:

     A. To the payment of the costs and expenses of  collection  incurred by the
     MSO,  including,   without  limitation,   attorneys'  fees  and  all  other
     reasonable  expenses,   liabilities  and  costs  incurred  by  the  MSO  in
     connection therewith;

     B. To the payment of the whole  amount  then owing and unpaid for  advances
     and/or Management Fees;

     C. To the  payment  in full of all  other  Obligations  of the PC under the
     Agreement; and

     D.  To the  payment  to the PC of any  surplus  then  remaining  from  such
     proceeds.

7. Extension of Agreement.  No Renewal or extension of the Agreement, no release
or surrender of any Collateral given as security in connection therewith, and no
delay in  enforcement  thereof or in exercising  any right or power with respect
thereto or  hereunder  shall  affect  the rights of the MSO with  respect to the
Collateral or any part thereof.

8. Notices.  Any notice to be given pursuant to this  Agreement  shall be deemed
effective the same day when such notice is given personally,  or by telegram, or
electronic  transmission  to the  President of the party to whom notice is being
given.  Notice by mail shall be deemed effective three days after deposit in the
United States mail, and properly addressed with postage prepaid.

                  Notices to the MSO shall be given at:

                  Omega Orthodontics of Woodland Hills, Inc.
                  c/o Omega Orthodontics, Inc.
                  3621 Silver Spur Lane
                  Acton, CA 93510
                  Attn: Robert Schulhof

or other such  addresses  as may be  delivered by the MSO to the PC from time to
time in writing.

                  Notices to the PC shall be given at:

                  Clark E. Schneekluth, D.D.S.
                  511 Warner Avenue, Suite 104
                  Huntington Beach, California 92649

or other such  addresses  as may be  delivered by the PC to the MSO from time to
time in writing.

9. Waiver.  The waiver by either party to this Security  Agreement of any one or
more defaults, if any, on the part of the other party, shall not be construed to
operate as a waiver of the other or future defaults under this  Agreement.  This
Security  Agreement  may be amended or modified  only by the written  consent of
both parties.

10. Additional Documents. The PC agrees that it will duly execute and deliver to
the MSO any  additional  documents  which may be  reasonably  necessary  to give
effect fully to the security  interest granted to the MSO hereunder,  including,
without limitation, a financing statement on Form UCC-1.

11. Benefit.  This Security Agreement shall inure to the benefit of and shall be
binding upon the respective heirs, successors and assigns of the parties hereto.

12.  Applicable  Law.  This  Agreement  shall be  governed by and  construed  in
accordance with the laws of the State.

13. Defined Terms.  Capitalized terms used in this Security  Agreement which are
not  defined  herein  but which are  defined  in the  Agreement,  shall have the
respective meanings ascribed therein.

14. Counterparts.  This Security Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original.

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be duly
executed, as of the day and year first hereinabove written.

PC:                                               MSO:

Clark E.  Schneekluth, D.D.S., M.S., INC.         OMEGA ORTHODONTICS OF
                                                  WOODLAND HILLS, INC.


By:____________________________                   By:_______________________
Name: Clark E.  Schneekluth, D.D.S.                  Name:  Robert J. Schulhof
Title:  President                                    Title:  President


DR. SCHNEEKLUTH


____________________________
Clark E. Schneekluth, D.D.S.