Document:

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                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                           CASTLE DENTAL CENTERS, INC.

                 PREFERRED STOCK AND SUBORDINATED NOTE PURCHASE
                                    AGREEMENT

                                   Dated as of
                                  May 15, 2003

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                                TABLE OF CONTENTS

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ARTICLE I DEFINITIONS...........................................................................................  1

         1.1      Definitions; Interpretation...................................................................  1

ARTICLE II ISSUANCE AND SALE OF PREFERRED STOCK AND NOTES.......................................................  8

         2.1      Initial Closing...............................................................................  8
         2.2      Subsequent Closing............................................................................  9

ARTICLE III CLOSING; SUBSEQUENT CLOSING......................................................................... 10

         3.1      Closing....................................................................................... 10
         3.2      Subsequent Closing............................................................................ 10
         3.3      Payment for and Delivery of Series B Shares and Notes at Closing.............................. 10
         3.4      Payment for and Delivery of Series B Shares and Notes at Subsequent Closing................... 11

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................ 11

         4.1      Existence; Qualification; Subsidiaries........................................................ 11
         4.2      Authorization, Noncontravention and Enforceability; Issuance of Shares........................ 11
         4.3      Capitalization................................................................................ 12
         4.4      Private Sale; Voting Agreements............................................................... 12
         4.5      SEC Reports; Financial Statements............................................................. 13
         4.6      Absence of Certain Changes.................................................................... 13
         4.7      Litigation.................................................................................... 14
         4.8      Licenses, Compliance with Law, Other Agreements, Etc.......................................... 14
         4.9      Third-Party Approvals......................................................................... 14
         4.10     Disclosure.................................................................................... 15
         4.11     Tangible Assets............................................................................... 15
         4.12     Inventory; Accounts Receivable................................................................ 15
         4.13     Owned Real Property........................................................................... 15
         4.14     Real Property Leases.......................................................................... 16
         4.15     Contracts and Commitments..................................................................... 16
         4.16     Intellectual Property......................................................................... 18
         4.17     Employees..................................................................................... 19
         4.18     ERISA; Employee Benefits...................................................................... 19
         4.19     Environment, Health and Safety................................................................ 20
         4.20     Transactions With Affiliates.................................................................. 20
         4.21     Taxes......................................................................................... 20
         4.22     Investment Company............................................................................ 21
         4.23     Certain Fees.................................................................................. 21

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...................................................... 21

         5.1      Authorization and Enforceability.............................................................. 21
         5.2      Government Approvals.......................................................................... 21
         5.3      Investment Intent of Such Purchaser........................................................... 21
         5.4      Status of Securities.......................................................................... 21
         5.5      Sophistication and Financial Condition of Such Purchaser...................................... 21
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         5.6      Stockholders Agreement........................................................................ 22

ARTICLE VI CONDITIONS PRECEDENT................................................................................. 22

         6.1      Conditions to Obligations of the Purchasers at Closing........................................ 22
         6.2      Conditions to Obligations of the Company at Closing........................................... 24
         6.3      Conditions to Obligations of Sentinel and the Additional Purchasers at Subsequent Closing..... 24
         6.4      Conditions to Obligations of the Company at Subsequent Closing................................ 25

ARTICLE VII COVENANTS........................................................................................... 26

         7.1      Required Actions.............................................................................. 26
         7.2      Use of Proceeds............................................................................... 27
         7.3      Information Rights............................................................................ 27
         7.4      Access Rights................................................................................. 28
         7.5      Certain Actions............................................................................... 29

ARTICLE VIII SURVIVAL........................................................................................... 29

         8.1      Survival...................................................................................... 29

ARTICLE IX INDEMNIFICATION...................................................................................... 29

         9.1      Indemnification............................................................................... 29

ARTICLE X GENERAL PROVISIONS.................................................................................... 30

         10.1     Public Announcements.......................................................................... 30
         10.2     Successors and Assigns........................................................................ 31
         10.3     Entire Agreement.............................................................................. 31
         10.4     Notices....................................................................................... 31
         10.5     Closing Fee; Fees and Expenses................................................................ 33
         10.6     Amendment and Waiver.......................................................................... 33
         10.7     Counterparts.................................................................................. 34
         10.8     Headings...................................................................................... 34
         10.9     Specific Performance.......................................................................... 34
         10.10    Remedies Cumulative........................................................................... 34
         10.11    GOVERNING LAW................................................................................. 34
         10.12    Waiver of Jury Trial.......................................................................... 34
         10.13    No Third Party Beneficiaries.................................................................. 34
         10.14    Severability.................................................................................. 34
         10.15    Time of the Essence; Computation of Time...................................................... 34
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Schedule 4.1          Qualifications, Subsidiaries
Schedule 4.2          Noncontravention
Schedule 4.3          Capitalization
Schedule 4.4          Voting Agreements
Schedule 4.5          SEC Reports
Schedule 4.6          Absence of Certain Changes
Schedule 4.7          Litigation
Schedule 4.9          Third-Party Approvals
Schedule 4.11         Tangible Assets
Schedule 4.13         Owned Real Property
Schedule 4.14         Real Property Leases
Schedule 4.15         Contracts
Schedule 4.16         Intellectual Property
Schedule 4.17         Director and Employee Loans
Schedule 4.21         Taxes
Schedule 4.23         Certain Fees

Exhibit A             Form of Subordinated Promissory Note
Exhibit B             Certificate of Designations
Exhibit C             Certificate of Incorporation and Bylaws
Exhibit D             Amended Series A-1 and A-2 Preferred Stock Terms

                                     -iii-

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            PREFERRED STOCK AND SUBORDINATED NOTE PURCHASE AGREEMENT

                THIS PREFERRED STOCK AND SUBORDINATED NOTE PURCHASE AGREEMENT
(this "Agreement") is dated as of May 15, 2003 between Castle Dental Centers,
Inc., a Delaware corporation (the "Company"), Sentinel Capital Partners II,
L.P., a Delaware limited partnership ("Sentinel"), General Electric Capital
Corporation, a Delaware corporation ("GE"), Midwest Mezzanine Fund II, L.P., a
Delaware limited partnership ("Midwest"), Thomas Fitzpatrick ("Fitzpatrick"),
John M. Slack ("Slack"), and James M. Usdan, an individual ("Usdan" and,
together with Slack, Fitzpatrick, Midwest, GE, Sentinel and the Additional
Purchasers, if any, the "Purchasers").

                Sentinel, Fitzpatrick, Slack and Usdan desire to purchase from
the Company, and the Company desires to sell and issue to Sentinel, Fitzpatrick,
Slack and Usdan, 60,000 shares in the aggregate of the Company's Series B
Convertible Preferred Stock, par value $.000001 per share (the "Series B
Preferred Stock"), and $7,000,000 in aggregate principal amount of Subordinated
Promissory Notes, in the form of Exhibit A hereto (the "Notes"); provided that
it is contemplated that certain other Persons will become party to this
Agreement after the date hereof and purchase a portion of such Series B
Preferred Stock and Notes described above.

                GE desires to purchase from the Company, and the Company desires
to sell and issue to GE, 5,644 shares of Series B Preferred Stock.

                Midwest desires to purchase from the Company, and the Company
desires to sell and issue to Midwest, 5,644 shares of Series B Preferred Stock.

                In addition to his purchase described above, Usdan desires to
purchase from the Company, and the Company desires to sell and issue to Usdan,
7,902 shares of Series B Preferred Stock.

                In consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties
hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

        1.1     DEFINITIONS; INTERPRETATION.

                (a) For purposes of this Agreement, the following terms have the
indicated meanings:

                "Additional Purchasers" has the meaning set forth in Section 2.2
hereof.

                "Affiliate" of a Person means any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with such Person.

                "Agreement" has the meaning set forth in the preamble hereof.

                "Authorized Share Amendment" has the meaning set forth in
Section 4.9 hereof.

                "Audit Date" means December 31, 2002.

                "Board of Directors" means the board of directors of the
Company.

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                "Business Day" means any day excluding Saturday, Sunday, and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close.

                "Certificate" means the Certificate of Designations of the
Company attached hereto as Exhibit B, containing the terms of the Series B
Preferred Stock.

                "Closing" has the meaning set forth in Section 3.1 hereof.

                "Closing Date" has the meaning set forth in Section 3.1 hereof.

                "Code" means the Internal Revenue Code of 1986, as amended.

                "Common Stock" means the Company's common stock, par value
$.000001 per share, and any securities into which such Common Stock is hereafter
converted or exchanged.

                "Company" has the meaning set forth in the preamble hereof.

                "Company Intellectual Property" has the meaning set forth in
Section 4.16(c)(i) hereof.

                "Conversion Shares" means shares of Common Stock issued or
issuable upon conversion of the Series B Preferred Stock.

                "Credit Agreement" means the Credit Agreement, dated as of the
date hereof, by and among the Company, as borrower, and the lenders party
thereto, as lenders as amended, restated, renewed, extended, restructured,
supplemented, or modified from time to time.

                "Creditors Rights Laws" has the meaning set forth in Section
4.2(a) hereof.

                "Current Balance Sheet" has the meaning set forth in Section
4.6(b) hereof.

                "Environmental and Safety Requirements" means all federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations and all common law concerning public health and safety, worker
health and safety, and pollution or protection of the environment, including all
those relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup of any
hazardous materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
by-products, asbestos, polychlorinated biphenyls, noise or radiation.

                "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

                "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                "Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.

                "Financial Statements" has the meaning set forth in Section
4.5(b) hereof.

                "Fitzpatrick" has the meaning set forth in the preamble hereof.

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                "Fitzpatrick B Purchase Price" has the meaning set forth in
Section 2.1(b) hereof.

                "Fitzpatrick B Shares" has the meaning set forth in Section
2.1(b) hereof.

                "Fitzpatrick Note" has the meaning set forth in Section 2.1(b)
hereof.

                "Fitzpatrick Purchase Price" has the meaning set forth in
Section 2.1(b) hereof.

                "GAAP" means United States generally accepted accounting
principles as in effect from time to time, consistently applied.

                "Governmental Agency" means any federal, state, local, foreign
or other governmental agency, instrumentality, commission, authority, board or
body.

                "GE" has the meaning set forth in the preamble hereof.

                "GE B Shares" has the meaning set forth in Section 2.1(c)
hereof.

                "GE Notes" has the meaning set forth in Section 2.1(c) hereof.

                "GE Warrants" has the meaning set forth in Section 2.1(c)
hereof.

                "Indebtedness" of any Person means, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (iii) all
obligations of such Person upon which interest charges are customarily paid
(including margin debt), (iv) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (v) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding accounts payable), (vi) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (vii) all guarantees by such Person of
Indebtedness of others, (viii) all capital lease obligations of such Person,
(ix) all obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty, (x) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances, (xi) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product of the Borrower or any Subsidiary where such transaction
is considered borrowed money indebtedness for tax purposes but is classified as
an operating lease under GAAP, (xii) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted (e.g., take-or-pay obligations) or similar obligations; and (xiii) any
unsatisfied obligation for "withdrawal liability" to a "multiemployer plan" as
such term is defined under ERISA. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

                "Indemnified Liabilities" has the meaning set forth in Section
9.1(a) hereof.

                "Indemnitees" has the meaning set forth in Section 9.1(a)
hereof.

                "Information Statement" means an information statement
containing the information required by Rule 14c-1 describing the Authorized
Share Amendment and the Series A Amendment and

                                      -3-

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Rule 14f-1 describing the change in a majority of directors of the Company as
contemplated hereby, filed with the SEC and mailed to the stockholders of the
Company in accordance with the Exchange Act.

                "Intellectual Property" means all patents, patent applications
and inventions; all trademarks, service marks, trade dress, trade names and
corporate names and all goodwill associated therewith; all registered
copyrights; all registrations, applications and renewals for any of the
foregoing; all trade secrets, know-how, technical and computer data,
documentation and software, financial, business and marketing plans, customer
and supplier lists and all other intellectual property rights; and all copies
and tangible embodiments of the foregoing.

                "knowledge" or "know" when used with respect to the Company
means the actual knowledge of the Company's executive officers after reasonable
investigation.

                "Leased Property" has the meaning set forth in Section 4.14
hereof.

                "Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.

                "Management Agreement" means the Sentinel Management Agreement
dated as of the date hereof by and among the Company and Sentinel.

                "Material Adverse Effect" means, with respect to the Company,
any occurrence, event, or effect that either individually or in the aggregate
with all other such changes or effects is, or could reasonably be expected to be
(whether or not such change, event or effect has, at the time in question,
manifested itself in the Company's historical financial statements), materially
adverse to the business, operations, results of operations, properties,
condition, financial or otherwise, assets or liabilities of the Company and its
Subsidiaries taken as a whole on a consolidated basis.

                "Material Contracts" has the meaning set forth in Section
4.15(b) hereof.

                "Midwest" has the meaning set forth in the preamble hereof.

                "Midwest B Shares" has the meaning set forth in Section 2.1(d)
hereof.

                "Midwest Notes" has the meaning set forth in Section 2.1(d)
hereof.

                "Midwest Warrants" has the meaning set forth in Section 2.1(d)
hereof.

                "Notes" has the meaning set forth in the recitals hereof.

                "Ordinary Course of Business" means the ordinary course of
business consistent with past practice (including with respect to quantity,
quality and frequency).

                "Owned Property" has the meaning set forth in Section 4.13
hereof.

                "Permitted Affiliate Transaction" means any contract, agreement,
arrangement or transaction entered into by the Company or any of its
Subsidiaries in the Ordinary Course of Business with any Affiliate of any such
Person as part of an employment relationship or pursuant to the Stock Option
Plan.

                                      -4-

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                "Permitted Liens" means:

                (1)     Liens existing on the Closing Date and securing
     indebtedness of the Company and its Subsidiaries to the extent such
     indebtedness is disclosed on the Audit Date or incurred since such date in
     the Ordinary Course of Business, including Liens securing the indebtedness
     of the Company and its Subsidiaries under the Credit Agreement, the
     guarantees thereof and any hedging agreements entered into between the
     Company and any Person;

                (2)     Liens imposed by governmental authorities for taxes,
     assessments or other charges not yet subject to penalty or which are being
     contested in good faith and by appropriate proceedings, if adequate
     reserves with respect thereto are maintained on the books of the Company in
     accordance with GAAP;

                (3)     statutory liens of carriers, warehousemen, mechanics,
     material men, landlords, repairmen or other like Liens arising by operation
     of law in the Ordinary Course of Business; provided, that (A) the
     underlying obligations are not overdue for a period of more than 60 days,
     or (B) such Liens are being contested in good faith and by appropriate
     proceedings and adequate reserves with respect thereto are maintained on
     the books of the Company in accordance with GAAP;

                (4)     Liens securing the performance of bids, trade contracts
     (other than borrowed money), leases, statutory obligations, surety and
     appeal bonds, performance bonds and other obligations of a like nature
     incurred in the Ordinary Course of Business;

                (5)     easements, rights-of-way, zoning, similar restrictions
     and other similar encumbrances or minor imperfections of title which, in
     the aggregate, do not in any case materially detract from the value of the
     property subject thereto (as such property is used by the Company or any of
     its Subsidiaries) or interfere with the ordinary conduct of the business of
     the Company and any of its Subsidiaries taken as a whole;

                (6)     Liens arising by operation of law in connection with
     judgments, only to the extent, for an amount and for a period not resulting
     in an Event of Default (as defined in the Credit Agreement as in effect on
     the date hereof) under the Credit Agreement with respect thereto;

                (7)     pledges or deposits made in the Ordinary Course of
     Business in connection with workers' compensation, unemployment insurance
     and other types of social security legislation;

                (8)     Liens securing indebtedness of a Person existing at the
     time such Person becomes a Subsidiary or is merged with or into the Company
     or a Subsidiary or Liens securing Indebtedness incurred in connection with
     an Acquisition (as defined in the Credit Agreement as in effect on the date
     hereof); provided, that such Liens were in existence prior to the date of
     such Acquisition, were not incurred in anticipation thereof, and do not
     extend to any other assets;

                (9)     leases or subleases granted to other Persons in the
     Ordinary Course of Business not materially interfering with the conduct of
     the business of the Company or any of its Subsidiaries or materially
     detracting from the value of the relative assets of the Company or any
     Subsidiary; and

                                      -5-

<PAGE>

                (10)    Liens arising from precautionary Uniform Commercial Code
     financing statement filings regarding operating leases entered into by the
     Company or any of its Subsidiaries in the Ordinary Course of Business.

                "Person" or "person" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership,
unincorporated association, Governmental Agency, trust or other entity.

                "Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA), subject to Title IV of ERISA or the minimum funding requirements
of Section 412 of the Code, maintained or contributed to by the Company or any
Subsidiary at any time during the 5 calendar years immediately preceding the
date of this Agreement.

                "Purchaser Notes" has the meaning set forth in Section 2.1(e)
hereof.

                "Purchaser Warrants" has the meaning set forth in Section 2.1(e)
hereof.

                "Purchasers" has the meaning set forth in the preamble hereof.

                "Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof by and among the Company and the
Purchasers.

                "Related Documents" means all documents and instruments to be
executed or adopted by the Company in connection herewith, including the
Certificate, the certificates evidencing the Series B Shares, the Notes, the
Stockholders Agreement, the Registration Rights Agreement and the Management
Agreement.

                "SEC" means the Securities and Exchange Commission.

                "SEC Documents" means all reports, schedules, registration
statements, forms and other documents required to be filed by the Company with
the SEC.

                "Securities" means the Series B Shares, the Notes and the
Conversion Shares.

                "Securities Act" means the Securities Act of 1933, as amended.

                "Senior Notes" has the meaning set forth in Section 2.1(c)
hereof.

                "Sentinel" has the meaning set forth in the preamble hereof.

                "Sentinel B Purchase Price" has the meaning set forth in Section
2.1(a) hereof.

                "Sentinel B Shares" has the meaning set forth in Section 2.1(a)
hereof.

                "Sentinel Purchase Price" has the meaning set forth in Section
2.1(a) hereof.

                "Series A Amendment" has the meaning set forth in Section 4.9
hereof.

                "Series A-1 Preferred Stock" has the meaning set forth in
Section 4.3 hereof.

                "Series A-2 Preferred Stock" has the meaning set forth in
Section 4.3 hereof.

                                      -6-

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                "Series B Preferred Stock" has the meaning set forth in the
recitals hereof.

                "Series B Shares" has the meaning set forth in Section 2.2
hereof.

                "Slack" has the meaning set forth in the preamble hereof.

                "Slack B Purchase Price" has the meaning set forth in Section
2.1(f) hereof.

                "Slack B Shares" has the meaning set forth in Section 2.1(f)
hereof.

                "Slack Note" has the meaning set forth in Section 2.1(f) hereof.

                "Slack Purchase Price" has the meaning set forth in Section
2.1(f) hereof.

                "Stockholders Agreement" means the Stockholders Agreement dated
as of the date hereof by and among the Company, the Purchasers and certain other
parties thereto.

                "Stock Option Plan" means any capital stock plan adopted by the
Company for the benefit of the Company's officers, employees, consultants,
agents or directors which has been or is approved by the Board of Directors
including the Company's 2002 Stock Option Plan.

                "Subsequent B Purchase Price" has the meaning set forth in
Section 2.2 hereof.

                "Subsequent B Shares" has the meaning set forth in Section 2.2
hereof.

                "Subsequent Closing" has the meaning set forth in Section 3.2
hereof.

                "Subsequent Closing Date" has the meaning set forth in Section
3.2 hereof.

                "Subsequent Note(s)" has the meaning set forth in Section 2.2
hereof.

                "Subsequent Purchase Price" has the meaning set forth in Section
2.2 hereof.

                "Subsidiary" means any corporation, limited liability company,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by the Company or (ii) if a partnership, limited liability company,
association or other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by the Company. For purposes hereof, the Company shall be deemed
to have a majority ownership interest in a partnership, limited liability
company, association or other business entity if the Company, directly or
indirectly, is allocated a majority of partnership, limited liability company,
association or other business entity gains or losses, or is or controls the
manager, managing member, managing director or general partner of such
partnership, limited liability company, association or other business entity.

                "Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.

                                   -7-

<PAGE>

                "Tax Returns" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.

                (b)     The words "herein", "hereof" and "hereunder" and words
of similar import shall, unless otherwise stated, refer to this Agreement as a
whole (including all schedules and exhibits) and not to any particular article,
section or other subdivision of this Agreement, (ii) words in the singular shall
be held to include the plural and vice versa and words of one gender shall be
held to include the other genders as the context requires, (iii) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless the context otherwise requires or unless
otherwise specified, and (iv) the word "or" shall not be exclusive.

                "Usdan" has the meaning set forth in the preamble hereof.

                "Usdan B Shares" has the meaning set forth in Section 2.1(e)
hereof.

                "Usdan Cash Purchase Price" has the meaning set forth in Section
2.1(e) hereof.

                "Usdan New Note" has the meaning set forth in Section 2.1(e)
hereof.

                "Usdan Notes" has the meaning set forth in Section 2.1(e)
hereof.

                "Usdan Series B Cash Purchase Price" has the meaning set forth
in Section 2.1(e) hereof.

                "Usdan Warrants" has the meaning set forth in Section 2.1(e)
hereof.

                "Warrants" has the meaning set forth in Section 2.1(c) hereof.

                                   ARTICLE II
                 ISSUANCE AND SALE OF PREFERRED STOCK AND NOTES

        2.1     INITIAL CLOSING. On the terms and subject to the conditions of
this Agreement, at the Closing, the Company shall issue and sell to:

                (a)     Sentinel, and Sentinel shall purchase from the Company,
in the aggregate, 55,386 shares of Series B Preferred Stock (the "Sentinel B
Shares"), for an aggregate purchase price of $5,538,600 (the "Sentinel B
Purchase Price"), and a Note having a principal amount of $6,461,700 (the
"Sentinel Note"), for an aggregate purchase price of $6,461,700 (together with
the Sentinel B Purchase Price, the "Sentinel Purchase Price").

                (b)     Fitzpatrick, and Fitzpatrick shall purchase from the
Company, in the aggregate, 1,152 shares of Series B Preferred Stock (the
"Fitzpatrick B Shares"), for an aggregate purchase price of $115,200 (the
"Fitzpatrick B Purchase Price"), and a Note having a principal amount of
$134,400 (the "Fitzpatrick Note"), for an aggregate purchase price of $134,400
(together with the Fitzpatrick B Purchase Price, the "Fitzpatrick Purchase
Price").

                (c)     GE, and GE shall purchase from the Company, in the
aggregate, 5,644 shares of Series B Preferred Stock (the "GE B Shares"), in
exchange for $564,430.00 of principal and accrued interest to date of the
Company's fifteen percent (15%) senior subordinated convertible promissory notes

                                   -8-

<PAGE>

("Senior Notes") issued in GE's name (the "GE Notes"), plus warrants of the
Company ("Warrants") representing the right to acquire 5,286,489 shares of
Common Stock (the "GE Warrants") issued in GE's name.

                (d)     Midwest, and Midwest shall purchase from the Company, in
the aggregate, 5,644 shares of Series B Preferred Stock (the "Midwest B
Shares"), in exchange for $564,430.00 of principal and accrued interest to date
of the Senior Notes issued in Midwest's name (the "Midwest Notes"), plus
Warrants representing the right to acquire 5,286,489 shares of Common Stock (the
"Midwest Warrants") issued in Midwest's name.

                (e)     Usdan, and Usdan shall purchase from the Company, (i) in
the aggregate, 8,022 shares of Series B Preferred Stock (the "Usdan B Shares"),
in exchange for $12,000 cash (such cash, the "Usdan Series B Cash Purchase
Price"), $790,203.00 of principal and accrued interest to date of the Company's
Senior Notes issued in Usdan's name (the "Usdan Notes," and, together with the
GE Notes and the Midwest Notes, the "Purchaser Notes"), plus Warrants
representing the right to acquire 7,401,084 shares of Common Stock (the "Usdan
Warrants," and, together with the GE Warrants and the Midwest Warrants, the
"Purchaser Warrants") issued in Usdan's name, and (ii) a Note having a principal
amount of $14,000 (the "Usdan New Note"), for an aggregate purchase price of
$14,000 (together with the Usdan Series B Cash Purchase Price, the "Usdan Cash
Purchase Price").

                (f)     Slack, and Slack shall purchase from the Company, in the
aggregate, 462 shares of Series B Preferred Stock (the "Slack B Shares"), for an
aggregate purchase price of $46,200 (the "Slack B Purchase Price"), and a Note
having a principal amount of $53,900 (the "Slack Note"), for an aggregate
purchase price of $53,900 (together with the Slack B Purchase Price, the "Slack
Purchase Price").

        2.2     SUBSEQUENT CLOSING. On the terms and subject to the conditions
of this Agreement, at the Subsequent Closing, the Company shall issue and sell
to Sentinel and the Additional Purchasers, if any, and Sentinel and the
Additional Purchasers, if any, shall purchase from the Company, in the
aggregate, 2,880 shares of Series B Preferred Stock (the "Subsequent B Shares"
and, together with the Sentinel B Shares, the Fitzpatrick B Shares, the GE B
Shares, the Midwest B Shares, the Usdan B Shares and the Slack B Shares, the
"Series B Shares"), for an aggregate purchase price of $288,000 (the "Subsequent
B Purchase Price"), and a Note or Notes having an aggregate principal amount of
$336,000 (the "Subsequent Note(s)"), for an aggregate purchase price of $336,000
(together with the Subsequent B Purchase Price, the "Subsequent Purchase
Price"). The Subsequent B Shares and Subsequent Notes shall be sold on the same
terms as the Series B Shares and Notes sold at the Closing. "Additional
Purchasers" shall be such Persons, who shall be reasonably acceptable to the
Company and Sentinel, who execute and deliver to the Company a counterpart of
this Agreement, a joinder to the Stockholders Agreement and a joinder to the
Registration Agreement, and purchase Subsequent B Shares and Subsequent Notes on
the Subsequent Closing Date. Each Additional Purchaser shall purchase such
number of Subsequent B Shares and a Subsequent Note in such principal amount as
agreed to by such Additional Purchaser and Sentinel. Sentinel shall purchase all
Subsequent B Shares which the Additional Purchasers, if any, do not purchase.
Sentinel shall purchase a Subsequent Note having a principal amount equal to
$336,000 minus the aggregate principal amount of the Subsequent Notes, if any,
purchased by the Additional Purchasers, if any. Each Additional Purchaser shall
be deemed a "Purchaser" hereunder. The respective amounts of Subsequent B Shares
and Subsequent Notes purchased by Sentinel and each Additional Purchaser, if
any, shall be set forth on a Schedule of Subsequent Purchase and shall be
attached hereto on the Subsequent Closing Date.

                                      -9-

<PAGE>

                                  ARTICLE III
                           CLOSING; SUBSEQUENT CLOSING

        3.1     CLOSING. Subject to the satisfaction or waiver of the closing
conditions for the Closing set forth in Article VI, the closing of the
transactions contemplated by Section 2.1 above (the "Closing") shall take place
at Haynes and Boone, LLP, 1000 Louisiana Street, Suite 4300, Houston, TX 77002
on the date hereof (the "Closing Date").

        3.2     SUBSEQUENT CLOSING. The closing of the transactions contemplated
by Section 2.2 above (the "Subsequent Closing") shall take place at Haynes and
Boone, LLP, 1000 Louisiana Street, Suite 4300, Houston, TX 77002 on September
30, 2003, or such earlier date as is mutually acceptable to the Company and
Sentinel (the "Subsequent Closing Date").

        3.3     PAYMENT FOR AND DELIVERY OF SERIES B SHARES AND NOTES AT
CLOSING.

                (a)     At the Closing, the Company shall issue and deliver to
Sentinel (i) a stock certificate duly executed and registered in the name of
Sentinel evidencing ownership of the number of Sentinel B Shares to be purchased
by Sentinel at the Closing, and (ii) the Sentinel Note duly executed and
registered in the name of Sentinel, against payment by Sentinel of the Sentinel
Purchase Price by wire transfer of immediately-available funds to the account
designated by the Company in writing.

                (b)     At the Closing, the Company shall issue and deliver to
Fitzpatrick (i) a stock certificate duly executed and registered in the name of
Fitzpatrick evidencing ownership of the number of Fitzpatrick B Shares to be
purchased by Fitzpatrick at the Closing, and (ii) the Fitzpatrick Note duly
executed and registered in the name of Fitzpatrick, against payment by
Fitzpatrick of the Fitzpatrick Purchase Price by wire transfer of
immediately-available funds to the account designated by the Company in writing.

                (c)     At the Closing, the Company shall issue and deliver to
Slack (i) a stock certificate duly executed and registered in the name of Slack
evidencing ownership of the number of Slack B Shares to be purchased by Slack at
the Closing, and (ii) the Slack Note duly executed and registered in the name of
Slack, against payment by Slack of the Slack Purchase Price by wire transfer of
immediately-available funds to the account designated by the Company in writing.

                (d)     At the Closing, the Company shall issue and deliver to
GE a stock certificate duly executed and registered in the name of GE evidencing
ownership of the number of GE B Shares to be purchased by GE at the Closing
against delivery by GE of the original GE Notes and GE Warrants together with
any instruments of assignment thereof reasonably requested by the Company
transferring ownership of such securities back to the Company.

                (e)     At the Closing, the Company shall issue and deliver to
Midwest a stock certificate duly executed and registered in the name of Midwest
evidencing ownership of the number of Midwest B Shares to be purchased by
Midwest at the Closing against delivery by Midwest of the original Midwest Notes
and Midwest Warrants together with any instruments of assignment thereof
reasonably requested by the Company transferring ownership of such securities
back to the Company.

                (f)     At the Closing, the Company shall issue and deliver to
Usdan (i) a stock certificate duly executed and registered in the name of Usdan
evidencing ownership of the number of Usdan B Shares to be purchased by Usdan at
the Closing, and (ii) the Usdan New Note duly executed and registered in the
name of Usdan, against (x) payment by Usdan of the Usdan Cash Purchase Price by
wire transfer of immediately-available funds to the account designated by the
Company in writing, and (y)

                                      -10-

<PAGE>

delivery by Usdan of the original Usdan Notes and Usdan Warrants together with
any instruments of assignment thereof reasonably requested by the Company
transferring ownership of such securities back to the Company.

        3.4     PAYMENT FOR AND DELIVERY OF SERIES B SHARES AND NOTES AT
SUBSEQUENT CLOSING.

                (a)     At the Subsequent Closing, the Company shall issue and
deliver to Sentinel (i) a stock certificate duly executed and registered in the
name of Sentinel evidencing ownership of the number of Subsequent B Shares to be
purchased by Sentinel at the Subsequent Closing, and (ii) the Subsequent Note to
be purchased by Sentinel at the Subsequent Closing duly executed and registered
in the name of Sentinel, against payment by Sentinel of the applicable purchase
price by wire transfer of immediately-available funds to the account designated
by the Company in writing.

                (b)     At the Subsequent Closing, the Company shall issue and
deliver to each Additional Purchaser, if any, (i) a stock certificate duly
executed and registered in the name of such Additional Purchaser evidencing
ownership of the number of Subsequent B Shares to be purchased by such
Additional Purchaser at the Subsequent Closing, and (ii) the Subsequent Note to
be purchased by such Additional Purchaser at the Subsequent Closing duly
executed and registered in the name of Sentinel, against payment by such
Additional Purchaser of the applicable purchase price by wire transfer of
immediately-available funds to the account designated by the Company in writing.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                As a material inducement to the Purchasers to enter into this
Agreement and to consummate the transactions contemplated hereby, the Company
hereby represents and warrants to the Purchasers as follows:

        4.1     EXISTENCE; QUALIFICATION; SUBSIDIARIES. Each of the Company and
each Subsidiary is duly organized, validly existing and in good standing under
the laws of its applicable jurisdictions of organization and has full corporate
power and authority to conduct its business and own and operate its properties
as now conducted, owned and operated. The copies of the Certificate of
Incorporation and By-laws of the Company and all amendments thereto are attached
hereto as Exhibit C, and are true, correct and complete copies of such
documents. Each of the Company and each Subsidiary is licensed or qualified as a
foreign corporation or company and is in good standing in all jurisdictions
where it is required to be so licensed or qualified except where failure to be
licensed or qualified would not have Material Adverse Effect. Schedule 4.1 lists
all Subsidiaries and their respective jurisdictions of incorporation or
organization. Except as set forth on Schedule 4.1, the Company has no
Subsidiaries and owns no capital stock or other securities of, and has not made
any other investment in, any other entity. All of the issued shares of capital
stock of each Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all Liens other than Liens securing the Indebtedness
represented by the Credit Agreement.

        4.2     AUTHORIZATION, NONCONTRAVENTION AND ENFORCEABILITY; ISSUANCE OF
SHARES.

                (a)     The Company has full power and authority and has taken
all required corporate and other action necessary to permit it to execute and
deliver this Agreement and the Related Documents and to carry out the terms
hereof and thereof and to issue and deliver the Securities, and none of such
actions will (i) violate or conflict with any provision of the Certificate of
Incorporation of the Company, the By-laws of the Company or of any applicable
law, regulation, order, judgment or decree or rule of the

                                      -11-

<PAGE>

stock exchange where the Common Stock is listed, or (ii) except as set forth on
Schedule 4.2, result in the breach of or constitute a default (or an event
which, with notice or lapse of time or both would constitute a default) under
any agreement, instrument or understanding to which the Company is a party or by
which it is bound. This Agreement and the Related Documents each constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application related to the enforcement of creditor's rights generally
(collectively "Creditors Rights Laws") and except as rights to indemnity
thereunder may be limited by applicable federal or state laws.

                (b)     The Series B Shares, when issued and delivered in
accordance with this Agreement, and following the filing of the Authorized Share
Amendment, the Conversion Shares, when issued upon conversion of the Series B
Shares, will be duly authorized, validly issued, fully paid and nonassessable,
and will be free of any and all Liens (other than any restrictions on transfer
under state and/or federal securities laws, this Agreement and the Related
Documents). The Notes, when issued and delivered in accordance with this
Agreement, will be duly authorized, validly issued, and will be free of any and
all Liens (other than any restrictions on transfer under state and/or federal
securities laws, this Agreement and the Related Documents). Following the filing
of the Authorized Share Amendment, the Conversion Shares will be duly reserved
for issuance upon conversion of the Series B Shares. The issuance and delivery
of the Securities is not subject to any preemptive right, right of first
refusal, antidilution provision or other similar right in favor of any Person
which has not been waived.

        4.3     CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of: 100,000,000 shares of Common Stock; 1,000,000
shares of Class B Nonvoting Common Stock, par value $.000001 per share; and
1,000,000 shares of Preferred Stock, par value $.000001 per share, which
Preferred Stock consists of 214,000 shares of Series A-1 Convertible Preferred
Stock ("Series A-1 Preferred Stock"), 62,000 shares of Series A-2 Convertible
Preferred Stock ("Series A-2 Preferred Stock"), and 80,000 shares of Series B
Preferred Stock. As of the date hereof, and following the consummation of the
transactions contemplated herein, the Company's equity capitalization is set
forth on Schedule 4.3, and except as set forth on Schedule 4.3 there will be no
outstanding capital stock of the Company. At the time of the Closing, all of the
outstanding capital stock will be validly issued, fully paid and nonassessable
and will have been issued in compliance with all applicable securities laws
(including the provisions of the Securities Act and the rules and regulations
promulgated thereunder). Except as set forth on Schedule 4.3, neither the
Company nor any of its Subsidiaries has granted or issued any options,
convertible securities, warrants, calls, pledges, phantom stock, stock
appreciation rights, transfer restrictions (except restrictions imposed by
federal and state securities laws), Liens, rights of first offer, rights of
first refusal, antidilution provisions or commitments of any character relating
to any issued or unissued shares of capital stock of the Company. As of the date
hereof there have been no dividends declared or otherwise accrued with respect
to any of the Company's capital stock.

        4.4     PRIVATE SALE; VOTING AGREEMENTS.

                (a)     The Company has not violated any applicable federal or
state securities laws in connection with the offer sale and issuance of any of
its capital stock. Assuming the accuracy of the Purchasers' representations
contained herein, none of the offer, sale or issuance of the Securities requires
registration under the Securities Act or any state securities laws.

                (b)     To the Company's knowledge, except as set forth on
Schedule 4.4, there are no agreements obligating any of its stockholders to vote
as directed by another Person or any proxies granted by any stockholder other
than proxies submitted in connection with the Company's meetings of
shareholders.

                                      -12-

<PAGE>

        4.5     SEC REPORTS; FINANCIAL STATEMENTS.

                (a)     The Company has filed all SEC Documents required to be
filed as of the date hereof. Other than as set forth on Schedule 4.5, the SEC
Documents (i) were filed on a timely basis, (ii) were prepared in compliance in
all material respects with the applicable requirements of the Securities Act and
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such SEC Documents, and (iii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated in such SEC Documents or necessary in order to make the statements in
such SEC Documents, in the light of the circumstances under which they were
made, not misleading.

                (b)     Each of the financial statements (including, in each
case, any notes thereto) contained in the SEC Documents and the financial
statements (including any notes thereto) required to be delivered to Sentinel by
the Company pursuant to Section 6.1(u)(iv) (collectively, the "Financial
Statements") complies as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto and was prepared in all material respects in accordance with
GAAP applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto or, in the case of unaudited statements,
as permitted by Rule 10-01 of Regulation S-X promulgated by the SEC) and each
fairly presented in all material respects (subject to, in the case of the
unaudited statements, normal, recurring audit adjustments, none of which are
material) the consolidated financial position, results of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries as at
the respective dates thereof and for the respective periods indicated therein.
As of the dates of the Financial Statements, the Company had no material
obligation, indebtedness or liability (whether accrued, absolute, contingent or
otherwise, known or unknown, and whether due or to become due), which was not
reflected or reserved against in the balance sheets or the notes thereto which
are part of the Financial Statements, except for those incurred in the Ordinary
Course of Business.

        4.6     ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule 4.6,
since the Audit Date, neither the Company nor any Subsidiary has:

                (a)     incurred any liabilities other than current liabilities
incurred, or obligations under contracts entered into, in the Ordinary Course of
Business and for individual amounts not greater than $25,000;

                (b)     paid, discharged or satisfied any claim, Lien or
liability, other than any claim, Lien or liability (A) reflected or reserved
against on the balance sheet contained in the Financial Statements as of the
Audit Date (the "Current Balance Sheet") and paid, discharged or satisfied in
the Ordinary Course of Business or (B) incurred since the Audit Date and paid,
discharged or satisfied, in each case in the Ordinary Course of Business;

                (c)     sold, leased, assigned or otherwise transferred any of
its assets, tangible or intangible (other than sales of inventory in the
Ordinary Course of Business and use of supplies in the Ordinary Course of
Business);

                (d)     permitted any of its assets, tangible or intangible, to
become subject to any Lien (other than any Permitted Lien);

                (e)     written off as uncollectible any accounts receivable not
fully reserved as of the Audit Date other than (i) in the Ordinary Course of
Business, or (ii) for an aggregate amount not greater than $50,000;

                                      -13-

<PAGE>

                (f)     terminated or amended or suffered the termination or
amendment of, other than in the Ordinary Course of Business, or failed to
perform in all material respects all of its obligations or suffered or permitted
any material default to exist under, any material agreement, license or permit;

                (g)     suffered any damage, destruction or loss of tangible
property (whether or not covered by insurance) which in the aggregate exceeds
$25,000;

                (h)     made any loan (other than intercompany advances) to any
other Person (other than advances to employees in the Ordinary Course of
Business which do not exceed $10,000 individually or $25,000 in the aggregate);

                (i)     canceled, waived or released any debt, claim or right in
an amount or having a value exceeding $10,000;

                (j)     other than a Permitted Affiliate Transaction, paid any
amount to or entered into any agreement, arrangement or transaction with any
Affiliate (including its officers, directors and employees) outside the Ordinary
Course of Business and which was not approved by a majority of the Company's
disinterested directors;

                (k)     declared, set aside, or paid any dividend or
distribution with respect to its capital stock or redeemed, purchased or
otherwise acquired any of its capital stock;

                (l)     other than in the Ordinary Course of Business, granted
any increase in the compensation of any officer or made any other favorable
change in employment terms of any officer;

                (m)     made any change in any method of accounting or
accounting practice;

                (n)     suffered or caused any other occurrence, event or
transaction which, individually or together with each other occurrence, event or
transaction, has had or could reasonably be expected to have a Material Adverse
Effect; or

                (o)     agreed, in writing or otherwise, to any of the
foregoing.

        4.7     LITIGATION. Except as set forth on Schedule 4.7, as of the date
of this Agreement, no claim, suit, proceeding or investigation is pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any officer or director thereof or the Company's and the
Subsidiaries' business which if decided adversely to any such Person could
result in a material liability of the Company or a Subsidiary.

        4.8     LICENSES, COMPLIANCE WITH LAW, OTHER AGREEMENTS, ETC. The
Company and each Subsidiary have all material franchises, permits, licenses and
other rights to allow it to conduct its business and is not in violation in any
material respects of any order or decree of any court, or of any law, order or
regulation of any Governmental Agency, or of the provisions of any contract or
agreement to which it is a party or by which it is bound, and neither this
Agreement nor the Related Documents nor the transactions contemplated hereby or
thereby will result in any such violation. The Company and each Subsidiary's
businesses have been conducted in material compliance with all applicable
federal, state and local laws, ordinances, rules and regulations.

        4.9     THIRD-PARTY APPROVALS. Assuming the accuracy of the
representations and warranties of the Purchasers contained in this Agreement,
except as set forth on Schedule 4.9, the Company is not required to obtain any
order, consent, approval or authorization of, or to make any declaration or
filing

                                      -14-

<PAGE>

with, any Governmental Agency or other third party (including under any state
securities or "blue sky" laws) in connection with the execution and delivery of
this Agreement or the Related Documents, or the consummation of the transactions
contemplated hereby or thereby to occur on the Closing Date, except for (a)
filings on Form D under the Securities Act, (b) the filing with the Secretary of
State of Delaware of a certificate of amendment to the certificate of
incorporation of the Company which increases the number of authorized shares of
the Common Stock of the Company to a total of 250,000,000 (the "Authorized Share
Amendment"), and (c) the filing with the Secretary of State of Delaware of a
certificate of amendment to the certificate of incorporation of the Company
which amends the terms of the Series A-1 Preferred Stock and the Series A-2
Preferred Stock as set forth on Exhibit D (the "Series A Amendment").

        4.10    DISCLOSURE. This Agreement, together with all exhibits and
schedules hereto, and the agreements, certificates and other documents furnished
to the Purchasers by the Company and its Subsidiaries in connection with the
transactions contemplated under this Agreement, do not contain any untrue
statement of a material fact or, as supplemented by the SEC Documents filed by
the Company in the past 12 months, omit to state a material fact necessary in
order to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading.

        4.11    TANGIBLE ASSETS. Except as set forth on Schedule 4.11, (i) the
Company and its Subsidiaries own or lease all tangible assets used or reasonably
necessary in connection with the conduct of its business, and (ii) all material
tangible assets are free from any Liens (other than Permitted Liens), are free
from any material defects, have been maintained in accordance with normal
industry practice and any regulatory standard or procedure to which such assets
are subject, are in good operating condition and repair in all material respects
(subject to normal wear and tear) and are suitable in all material respects for
the purposes for which such assets are used or proposed to be used.

        4.12    INVENTORY; ACCOUNTS RECEIVABLE. All inventory of the Company and
its Subsidiaries, whether reflected on the Current Balance Sheet or otherwise,
consists of a quality and quantity usable or salable in the Ordinary Course of
Business, subject to the reserves set forth on the Current Balance Sheet and
subject to normal rates of defect or obsolescence not inconsistent with the
Company's historical experience. All accounts receivable of the Company and its
Subsidiaries, whether reflected on the Current Balance Sheet or otherwise, are
valid receivables collectible in the Ordinary Course of Business subject to the
reserves set forth on the Current Balance Sheet.

        4.13    OWNED REAL PROPERTY. Schedule 4.13 sets forth the address and
description of each parcel of real property owned by the Company or any of its
Subsidiaries (the "Owned Property"). The Company or its applicable Subsidiary
has good and marketable fee simple title in and to all of the Owned Property,
subject to no Liens, encroachments, claims, leases, rights of possession or
other defects in title, except (i) Liens for Taxes not yet due and payable, (ii)
covenants, conditions and restrictions of record and minor title defects none of
which individually or collectively could reasonably be expected to interfere
with the Company's business as presently conducted or as planned to be conducted
and (iii) as described on Schedule 4.13. Other than the Company and its
Subsidiaries, there are no parties in possession or parties having any current
or future right to occupy any of the Owned Property. The Owned Property is in
good condition and repair and is sufficient for the conduct of the business of
the Company and its Subsidiaries as currently conducted. The Owned Property and
all buildings and improvements located thereon conform in all material respects
to all applicable building, zoning and other laws, ordinances, rules and
regulations. All permits, licenses and other approvals necessary to the current
occupancy and use of the Owned Property have been obtained, are in full force
and effect and have not been violated, except where the failure to obtain,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. There exists no violation of any covenant,
condition, restriction, easement, agreement or order affecting any portion of
the Owned Property. All

                                      -15-

<PAGE>

improvements located on the Owned Property have direct access to a public road
adjoining such Owned Property. No such improvements or accessways encroach on
land not included in the Owned Property and no such improvement is dependent for
its access, operation or utility on any land, building or other improvement not
included in the Owned Property, except for those that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
There is no pending or, to the knowledge of the Company or any of its
Subsidiaries, any threatened condemnation proceeding affecting any portion of
the Owned Property. There are no outstanding options, rights of first offer or
rights of first refusal to purchase the Owned Property or any portion thereof or
interest therein.

        4.14    REAL PROPERTY LEASES. Schedule 4.14 sets forth the address and
description of each parcel of real property leased by the Company or any of its
Subsidiaries (the "Leased Property"). Except as set forth on Schedule 4.14,
other than the Company and the Subsidiaries, there are no parties in possession
or parties having any current or future right to occupy any of the Leased
Property. The Leased Property is in good condition and repair and is sufficient
and appropriate for the conduct of the business of the Company and the
Subsidiaries as currently conducted. Except as set forth on Schedule 4.14, there
exists no material event of default (nor, to the Company's knowledge, any event
which with notice or lapse of time would constitute an event of default) with
respect to the Company, any Subsidiary and, to the Company's knowledge, with
respect to any other party thereto under any agreement pursuant to which the
Company is the lessee or lessor of any real property, and all such agreements
are in full force and effect.

        4.15    CONTRACTS AND COMMITMENTS.

                (a)     Except as expressly contemplated by this Agreement or as
set forth on Schedule 4.15 attached hereto, the Company is not a party to or
bound by any written or oral:

                        (i)     pension, profit sharing, stock option, employee
        stock purchase or other plan or arrangement providing for deferred or
        other compensation to its current or former directors, officers or
        employees or any other employee benefit plan, arrangement or practice,
        whether formal or informal;

                        (ii)    collective bargaining agreement or any other
        contract with any labor union, or severance agreements with executives;

                        (iii)   management agreement or contract for the
        employment of any executive officer, including regional dental
        directors and regional operations directors, (B) providing for the
        payment of any cash or other compensation or benefits upon the
        consummation of the transactions contemplated hereby or (C) otherwise
        restricting its ability to terminate the employment of any employee at
        anytime for any lawful reason or for no reason without penalty or
        liability;

                        (iv)    contract or agreement involving any Governmental
        Agency involving more than $25,000 other than in the Ordinary Course
        of Business;

                        (v)     agreement or indenture relating to borrowed
        money or other Indebtedness or the mortgaging, pledging or otherwise
        placing a Lien on any material asset or material group of assets of
        the Company or any letter of credit arrangements;

                        (vi)    guarantee, other than endorsements made for
        collection in the Ordinary Course of Business consistent with past
        custom and practice;

                                      -16-

<PAGE>

                        (vii)   lease or agreement under which the Company is
        (A) lessee of or holds or operates any personal property, owned by any
        other party, except for any lease of personal property under which the
        aggregate annual rental payments do not exceed $10,000 or (B) lessor
        of or permits any third party to hold or operate any property, real or
        personal, owned or controlled by the Company;

                        (viii)  contract or group of related contracts with the
        same party or group of Affiliated parties for the purchase or sale of
        raw materials, commodities, supplies, products, equipment or other
        personal property or services under which the undelivered balance
        since the Audit Date of such products and services has a selling price
        in excess of $50,000;

                        (ix)    contract relating to the marketing, advertising
        or promotion of its products or services involving more than $25,000;

                        (x)     agreement under which it has granted any Person
        any registration rights (including demand and piggyback registration
        rights);

                        (xi)    agreements relating to the ownership of,
        investments in or loans and advances to any Person, including
        investments in joint ventures and minority equity investments;

                        (xii)   license, royalty, indemnification or other
        agreement with respect to any intangible property (including any
        Intellectual Property), including any agreements that prohibit or
        limit the ability of the Company to use or disclose any Intellectual
        Property or to engage in any line of business, or to compete with any
        Person or to carry on its business or any other business anywhere in
        the world other than in the Ordinary Course of Business;

                        (xiii)  broker, agent, sales representative, sales or
        distribution agreement other than in the Ordinary Course of Business;

                        (xiv)   power of attorney or other similar agreement or
        grant of agency;

                        (xv)    contract or agreement prohibiting it from freely
        engaging in any business or competing anywhere in the world, including
        any nondisclosure or confidentiality agreements; or

                        (xvi)   other agreement which involves a consideration
        in excess of $50,000 annually, other than in the Ordinary Course of
        Business.

                (b)     The Company has delivered or made available to Sentinel
a correct and complete copy (as amended to date) of each contract, agreement,
and instrument set forth on Schedule 4.15 (collectively, the "Material
Contracts"). With respect to each Material Contract: (i) such Material Contract
is legal, valid and binding, enforceable against the Company in accordance with
its terms (except to the extent required by Creditors Rights Laws), and in full
force and effect; (ii) such Material Contract will continue to be legal, valid
and binding, enforceable against the Company in accordance with the terms
(except to the extent required by Creditors Rights Laws), and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (iii) to the Company's knowledge no party to such Material
Contract is in breach or default of the terms thereof, and to the Company's
knowledge no event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or
acceleration, under such Material Contract; and (iv) no party to such Material
Contract has repudiated any provision thereof.

                                      -17-

<PAGE>

                (c)     Except as specifically set forth on Schedule 4.15, the
Company is not a party to any contract, agreement, instrument or understanding
that contains a "change in control," "potential change in control," or similar
provision, in each case, that would be triggered by the transactions
contemplated hereunder.

        4.16    INTELLECTUAL PROPERTY.

                (a)     Schedule 4.16(a) sets forth a true, complete and correct
list of all of the following that are owned or used by the Company in the
conduct of its business:

                        (i)     patented or registered Intellectual Property and
        pending patent applications or other applications for registrations of
        Intellectual Property;

                        (ii)    material unregistered trademarks, material
        unregistered service marks, trade names and corporate names;

                        (iii)   material unregistered copyrights, excluding
        copyrights relating to business records maintained in the Ordinary
        Course of Business; and

                        (iv)    any other material Intellectual Property.

                (b)     Schedule 4.16(b) sets forth a true, complete and correct
list of material Intellectual Property that the Company has licensed from or to
a third party, along with a list of all such licenses.

                (c)     Except as set forth on Schedule 4.16(c):

                        (i)     the Company owns and possesses all right, title,
        and interest in and to, or has a valid and enforceable written license
        to use, all of the Intellectual Property set forth on Schedule 4.16(a)
        and all other material Intellectual Property necessary for the
        operation of the business of the Company as presently conducted and as
        presently proposed to be conducted (collectively, the "Company
        Intellectual Property");

                        (ii)    the Company Intellectual Property is not subject
        to any Liens (other than Permitted Liens), and is not subject to any
        restrictions or limitations regarding use or disclosure;

                        (iii)   the Company has not infringed or misappropriated
        or otherwise violated, and the operation of the business, will not
        infringe, misappropriate or otherwise violate any material Intellectual
        Property of any third party. To the knowledge of the Company, the
        Company has not been threatened with any of the foregoing and is not
        aware of any facts which indicate a likelihood of any of the
        foregoing. The Company has not received any notices regarding any of
        the foregoing (including any demands or offers to license any
        Intellectual Property from any third party);

                        (iv)    the Company has taken commercially reasonable
        actions to maintain and protect all of the Company Intellectual
        Property so as not to adversely affect the ownership, validity or
        enforceability thereof;

                        (v)     immediately subsequent to the Closing, the
        Company Intellectual Property will be owned by or available for use by
        the Company on terms and conditions identical

                                      -18-

<PAGE>

        to those under which the Company owned or used the Company Intellectual
        Property immediately prior to the Closing;

                        (vi)    no material claim by any third party contesting
        the validity, enforceability, use or ownership of any of the Company
        Intellectual Property has been made, is currently outstanding, or, to
        the knowledge of the Company, is threatened, and there are no grounds
        for the same;

                        (vii)   no loss or expiration of any of the Company
        Intellectual Property is threatened, pending or reasonably
        foreseeable, except for patents and copyrights expiring at the end of
        their statutory terms (and not as a result of any act or omission by
        the Company, including a failure by the Company to pay any required
        maintenance fees); and

                        (viii)  to the knowledge of the Company, no third party
        has infringed or misappropriated any of the Company Intellectual
        Property owned by the Company and the Company is not aware of any
        facts that indicate a likelihood of any of the foregoing.

        4.17    EMPLOYEES. Since the Audit Date, no key employees and no group
of employees has terminated, or to the knowledge of the Company plans to
terminate, employment with the Company or any Subsidiary, as applicable. The
Company is not a party to or bound by any collective bargaining agreement, nor
has it experienced any strike, material grievance, material claim of unfair
labor practice or other collective bargaining dispute. To the knowledge of the
Company there is no organizational effort being made or threatened by or on
behalf of any labor union with respect to its employees. To the Company's
knowledge, the Company has not committed any unfair labor practice or materially
violated any federal, state or local law or regulation regulating employers or
the terms and conditions of its employees' employment, including laws regulating
employee wages and hours, employment discrimination, employee civil rights,
equal employment opportunity and employment of foreign nationals. Schedule 4.17
describes each loan or other extension of credit made by the Company or any of
its Subsidiaries to or for the account of any director, executive officer or
employee of the Company or any of its Subsidiaries in excess of $5,000.

        4.18    ERISA; EMPLOYEE BENEFITS. Each Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service or has timely filed for a
favorable determination letter from the Internal Revenue Service and no event
has occurred since the date of the last determination letter that could
reasonably be expected to materially adversely affect the qualified status of
such Plan. Each Plan is in full force and effect and has been administered in
accordance with its terms and is and has been, and each plan administrator and
fiduciary of a Plan is acting and has been acting, in compliance with all
applicable requirements of the Code and ERISA (including the funding, reporting
and disclosure and prohibited transaction provisions thereof) and other
applicable laws, regulations and rulings in connection with each such Plan. No
Plan has been terminated or partially terminated. The Company has no Plan which
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA. The
Company or one of its Subsidiaries has made, accrued or provided for all
contributions required under each Plan. To the knowledge of the Company, no
event has occurred or is reasonably expected to occur with respect to any
employee pension benefit plan of the Company or any member of the Company's
controlled group (within the meaning of Section 414 of the Code), which could
reasonably be expected to directly or indirectly result in any material
liability (other than liability arising in the Ordinary Course of Business) to
the Company or any member of its controlled group pursuant to Title IV of ERISA
or Section 412 of the Code. No Plan has incurred an "accumulated funding
deficiency" within the meaning of Section 412 of the Code or Section 302 of
ERISA.

                                      -19-

<PAGE>

        4.19    ENVIRONMENT, HEALTH AND SAFETY.

                (a)     The Company (as used in this Section 4.19, Company shall
include the Company's Subsidiaries) has complied and is in compliance in all
material respects with all Environmental and Safety Requirements that are
applicable to the Company's business;

                (b)     The Company has not treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any
substance (including any hazardous substance) or owned, occupied or operated any
facility or property (and no such property or facility is contaminated by any
such substance) in a manner that has given or could give rise to any material
liabilities (including any liability for response costs, corrective action
costs, personal injury, natural resource damages, property damage or attorneys
fees or any investigative, corrective or remedial obligations) pursuant to any
Environmental and Safety Requirements;

                (c)     The Company has not received any written notice, report
or other information regarding any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to the Company or
its facilities and arising under Environmental and Safety Requirements; and

                (d)     Other than pursuant to publicly announced acquisitions,
the Company has not, either expressly or by operation of law, assumed or
undertaken any liability, including any obligation for corrective or remedial
action, of any other Person relating to Environmental and Safety Requirements.

        4.20    TRANSACTIONS WITH AFFILIATES. Except as specifically set forth
on Schedule 4.15 and for Permitted Affiliate Transactions, neither the Company
nor any Subsidiary is party to any agreement, arrangement or transaction with
any Affiliate.

        4.21    TAXES. EXCEPT AS SET FORTH ON SCHEDULE 4.21:

                (a)     each of the Company and its Subsidiaries has filed all
Tax Returns that it was required to file, and has paid all Taxes shown thereon
as owing;

                (b)     all such Tax Returns are true, correct and complete in
all respects;

                (c)     none of the Company and its Subsidiaries (A) has been a
member of an Affiliated group filing a consolidated federal Tax Return (other
than a group the common parent of which is the Company) or (B) has any liability
for the Taxes of any Person (other than any of the Company and its Subsidiaries)
under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise;

                (d)     each of the Company and its Subsidiaries has withheld
and paid in all material respects all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party; and

                (e)     there is no dispute or claim concerning any Tax
Liability of any of the Company and its Subsidiaries either (A) claimed or
raised by any authority in writing or (B) as to which any of the directors and
officers (and employees responsible for Tax matters) of the Company and its
Subsidiaries has knowledge based upon personal contact with any agent of such
authority and which is material to the Company and its Subsidiaries taken as a
whole.

                                      -20-

<PAGE>

        4.22    INVESTMENT COMPANY. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

        4.23    CERTAIN FEES. Other than any fees or expenses to be paid in
accordance with Section 10.5 and other than fees to be paid to Burnham
Securities Inc. (which are set forth on Schedule 4.23), no fees or commissions
will be payable by the Company to any broker, financial advisor, finder,
investment banker, or bank with respect to the transactions contemplated by this
Agreement. The Purchasers shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of any Persons for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.

                                   ARTICLE V
                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

                Each Purchaser hereby, severally and not jointly, represents and
warrants to the Company as follows:

        5.1     AUTHORIZATION AND ENFORCEABILITY. Such Purchaser has full power
and authority and has taken all action necessary to permit it to execute and
deliver this Agreement and the other documents and instruments to be executed by
it pursuant hereto and to carry out the terms hereof and thereof. This Agreement
and such other documents and instruments each constitutes a legal, valid and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms, except to the extent limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application related to the enforcement of creditor's rights generally and except
as rights to indemnity thereunder may be limited by applicable federal
securities laws.

        5.2     GOVERNMENT APPROVALS. Such Purchaser is not required to obtain
any order, consent, approval or authorization of, or to make any declaration or
filing with, any Governmental Agency in connection with the execution and
delivery of this Agreement and the other documents and instruments to be
executed by it pursuant hereto or the consummation of the transactions
contemplated hereby and thereby (other than Midwest's obligations to file
certain notices with the U.S. Small Business Administration), except for such
order, consent, approval, authorization, declaration or filing as which has been
or will be obtained or made.

        5.3     INVESTMENT INTENT OF SUCH PURCHASER. Such Purchaser is acquiring
the Securities for its own account, with no present intention of selling or
otherwise distributing the same to the public.

        5.4     STATUS OF SECURITIES. Such Purchaser has been informed by the
Company that the Securities have not been and will not be registered under the
Securities Act or under any state securities laws and are being offered and sold
in reliance upon federal and state exemptions for transactions not involving any
public offering.

        5.5     SOPHISTICATION AND FINANCIAL CONDITION OF SUCH PURCHASER. Such
Purchaser represents and warrants to the Company that it is an "Accredited
Investor" as defined in Regulation D under the Securities Act and that it
considers itself to be an experienced and sophisticated investor and to have
such knowledge and experience in financial and business matters as are necessary
to evaluate the merits and risks of an investment in the Securities. Such
Purchaser has been given access to such information regarding the Company and
its Subsidiaries as it has requested and has had the opportunity to obtain
additional information as desired and to ask questions and has received answers
regarding such information in order to evaluate the merits and the risks
inherent in holding the Securities. The facts set

                                      -21-

<PAGE>

forth in the preceding sentence, shall not affect any representation or warranty
in this Agreement of any party hereto or any condition to the obligations of the
parties hereto, nor shall it affect the Company's indemnification obligations
arising under Article IX hereof.

        5.6     STOCKHOLDERS AGREEMENT.

        Such Purchaser has been informed by the Company and hereby agrees
that the (i) Series B Shares and Conversion Shares may be transferred only in
accordance with the terms set forth in the Stockholders Agreement and are
otherwise subject to the Stockholders Agreement, and (ii) the Notes may be
transferred only in accordance with the terms set forth in the Notes.

                                   ARTICLE VI
                              CONDITIONS PRECEDENT

        6.1     CONDITIONS TO OBLIGATIONS OF THE PURCHASERS AT CLOSING. The
obligation of the Purchasers to purchase the Series B Shares and the Notes to be
purchased at the Closing in accordance with Section 3.3 shall be subject to the
satisfaction or waiver by the Purchasers of the following conditions precedent
on or prior to the Closing Date:

                (a)     the Certificate shall have been filed with the Secretary
of State of the State of Delaware and shall be in full force and effect as of
the Closing Date and shall not have been modified in any manner;

                (b)     as of the Closing Date the representations and
warranties made by the Company in Article IV hereof and in any Related Document
shall be true and correct in all respects to the extent they are qualified by
materiality or Material Adverse Effect, and to the extent not so qualified shall
be true and correct in all material respects;

                (c)     as of the Closing Date the Company shall have received
all consents and approvals, including, Board of Director, governmental and
material third party consents or approvals that are required to be obtained in
connection with the transactions contemplated under this Agreement and the
Related Documents;

                (d)     David S. Lobel, Paul F. Murphy and Fitzpatrick shall
have been duly nominated and elected to serve as members of the Board of
Directors, effective as of the tenth day following mailing of the Information
Statement to the stockholders of the Company;

                (e)     the following individual shall have resigned his
position on the Board of Directors, effective as of the Closing Date, Paul
Kreie;

                (f)     as of the Closing Date neither the Company nor any
Subsidiary shall have suffered or caused to have been suffered since the Audit
Date, any occurrence, event or transaction which, individually or together with
each other occurrence, event or transaction, shall have had or could reasonably
be expected to have had a Material Adverse Effect;

                (g)     the Stockholders Agreement shall have been duly executed
and delivered by the parties thereto and shall be in full force and effect;

                (h)     the Registration Rights Agreement shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect;

                                      -22-

<PAGE>

                (i)     the Management Agreement shall have been duly executed
and delivered by the parties thereto and shall be in full force and effect;

                (j)     the Company shall have entered into an employment
agreement with James M. Usdan in substitution of his current employment
agreement, on terms acceptable to Sentinel;

                (k)     the Company shall have restructured its senior credit
financing on terms acceptable to Sentinel;

                (l)     the Company shall have paid the fees and expenses owed
to Sentinel pursuant to Section 10.5 hereof;

                (m)     the filing of the Authorized Share Amendment shall have
been approved by the holders of securities entitled to cast a majority of the
votes entitled to be cast at any meeting of the stockholders of the Company;

                (n)     the filing of the Series A Amendment shall have been
approved by the holders of at least 75% of the outstanding Series A-1 Preferred
Stock and the holders of warrants to purchase at least 66-2/3% of the Series A-2
Preferred Stock issuable upon exercise of all such warrants;

                (o)     the Holders of at least 75% of the outstanding Series
A-1 Preferred Stock and the holders of warrants to purchase at least 66-2/3% of
the Series A-2 Preferred Stock issuable upon exercise of all such warrants shall
have approved the filing of the Certificate;

                (p)     the Stockholders Agreement dated as of July 19, 2002, by
and among the Company, Bank of America Strategic Solutions, Inc., a Delaware
corporation ("BofA"), FSC Corp., a Massachusetts corporation ("FSC"), and
Amsouth Bank, a national banking association ("Amsouth," and collectively with
BofA and FSC, the "Sellers"), GE, Midwest and Usdan shall have been terminated;

                (q)     the Company shall have agreed to purchase 49,875
Warrants from the Sellers for an aggregate purchase price of $625,000, and shall
have made an initial payment of $450,000 with respect thereto;

                (r)     the Registration Rights Agreement dated as of July 19,
2002, by and among the Company, the Sellers, GE, Midwest and Usdan shall have
been terminated as to the Sellers, GE, Midwest and Usdan;

                (s)     the Investors Agreement dated as of July 19, 2002, by
and among the Company, GE, Midwest and Usdan shall have been terminated;

                (t)     the Company shall have duly completed, executed and
delivered to Midwest such SBA Forms and a letter agreement concerning SBA
matters as Midwest may reasonably request; and

                (u)     the following documents and items shall have been
delivered to the Purchasers at the Closing:

                        (i)     the written opinion of Haynes and Boone, LLP,
        counsel to the Company, dated as of the Closing Date and satisfactory
        in form and substance to the Purchasers;

                                      -23-

<PAGE>

                        (ii)    certificates evidencing ownership of the Series
        B Shares and the Notes purchased at the Closing by the Purchasers, in
        each case duly executed and delivered by the Company;

                        (iii)   a certificate of a duly authorized officer of
        the Company dated as of the Closing Date certifying that (A) the
        closing conditions described in Section 6.1(a) through Section 6.1(v)
        have been satisfied, and (B) the resolutions of the Board of Directors
        attached thereto (which resolutions shall have, among other things,
        authorized all of the transactions contemplated by this Agreement and
        the Related Documents, and approved this Agreement and the Related
        Documents (including the Certificate);

                        (iv)    a copy of the unaudited consolidated financial
        statements of the Company and its Subsidiaries for the three-month
        period ended March 31, 2003 form and substance to the Purchasers in
        their sole discretion; and

                        (v)     such other documents relating to the
        transactions contemplated hereby as the Purchasers may reasonably
        request.

        6.2     CONDITIONS TO OBLIGATIONS OF THE COMPANY AT CLOSING. The
obligation of the Company to sell and issue the Series B Shares and the Notes to
the Purchasers at the Closing in accordance with Section 3.3 shall be subject
to:

                (a)     the delivery by the Purchasers of the Sentinel Purchase
Price, the Fitzpatrick Purchase Price, the Slack Purchase Price, the Usdan Cash
Purchase Price, the Purchaser Warrants and the Purchaser Notes in accordance
with Section 3.3;

                (b)     as of the Closing Date, the Purchasers having received
all consents and approvals, including governmental and third party consents or
approvals that are required to be obtained in connection with the transactions
contemplated under this Agreement and the Related Documents;

                (c)     as of the Closing Date, the representations and
warranties made by the Purchasers in Article V hereof being true and correct in
all respects to the extent they are qualified by materiality or Material Adverse
Effect, and to the extent not so qualified shall be true and correct in all
material respects; and

                (d)     a certificate of a duly authorized officer of each
Purchaser dated as of the Closing Date certifying that the closing conditions
described in Sections 6.2(b) and 6.2(c), as they pertain to such Purchaser, have
been satisfied.

        6.3     CONDITIONS TO OBLIGATIONS OF SENTINEL AND THE ADDITIONAL
PURCHASERS AT SUBSEQUENT CLOSING. The obligation of Sentinel and the Additional
Purchasers to purchase the Subsequent B Shares and the Subsequent Notes at the
Subsequent Closing in accordance with Section 3.4 shall be subject to the
satisfaction or waiver by Sentinel of the following conditions precedent on or
prior to the Subsequent Closing Date:

                (a)     the Certificate shall have been filed with the Secretary
of State of the State of Delaware and shall be in full force and effect as of
the Subsequent Closing Date and shall not have been modified in any manner;

                (b)     as of the Subsequent Closing Date the Company shall have
received all consents and approvals, including, Board of Director, governmental
and material third party consents or approvals

                                      -24-

<PAGE>

that are required to be obtained in connection with the transactions
contemplated under this Agreement and the Related Documents;

                (c)     four individuals designated by Sentinel shall have been
duly nominated and elected to serve as members of the Board of Directors,
effective prior to the Subsequent Closing Date;

                (d)     as of the Subsequent Closing Date neither the Company
nor any Subsidiary shall have suffered or caused to have been suffered since the
Closing Date, any occurrence, event or transaction which, individually or
together with each other occurrence, event or transaction, shall have had or
could reasonably be expected to have had a Material Adverse Effect;

                (e)     the Company shall have paid the fees and expenses owed
to Sentinel pursuant to Section 10.5 hereof;

                (f)     the Authorized Share Amendment shall have been filed
with the Secretary of State of the State of Delaware and shall be in full force
and effect as of the Subsequent Closing Date and shall not have been modified in
any manner;

                (g)     the Series A Amendment shall have been filed with the
Secretary of State of the State of Delaware and shall be in full force and
effect as of the Subsequent Closing Date and shall not have been modified in any
manner; and

                (h)     the following documents and items shall have been
delivered to Sentinel and the Additional Purchasers, if any, at the Subsequent
Closing:

                        (i)     certificates evidencing ownership of the
        Subsequent B Shares and the Subsequent Notes purchased by Sentinel and
        the Additional Purchasers, if any, in each case duly executed and
        delivered by the Company;

                        (ii)    a certificate of a duly authorized officer of
        the Company dated as of the Subsequent Closing Date certifying that
        (A) the closing conditions described in Section 6.3(a) through Section
        6.3(g) have been satisfied, and (B) the resolutions of the Board of
        Directors attached thereto (which resolutions shall have, among other
        things, authorized all of the transactions contemplated by this
        Agreement and the Related Documents, and approved this Agreement and
        the Related Documents (including the Certificate); and

                        (iii)   such other documents relating to the
        transactions contemplated hereby as Sentinel may reasonably request.

        6.4     CONDITIONS TO OBLIGATIONS OF THE COMPANY AT SUBSEQUENT CLOSING.
The obligation of the Company to sell and issue the Subsequent B Shares and the
Subsequent Notes to the Purchasers at the Subsequent Closing in accordance with
Section 3.4 shall be subject to:

                (a)     the delivery by Sentinel and each Additional Purchaser,
if any, of the applicable purchase price in accordance with Section 3.4;

                (b)     as of the Closing Date, Sentinel and the Additional
Purchasers, if any, having received all consents and approvals, including
governmental and third party consents or approvals that are required to be
obtained in connection with the transactions contemplated under this Agreement
and the Related Documents;

                                      -25-

<PAGE>

                (c)     as of the Subsequent Closing Date, the representations
and warranties made by Sentinel and the Additional Purchasers, if any, in
Article V hereof being true and correct in all respects to the extent they are
qualified by materiality or Material Adverse Effect, and to the extent not so
qualified shall be true and correct in all material respects; and

                (d)     a certificate of a duly authorized officer of Sentinel
and each Additional Purchaser, if any, dated as of the Subsequent Closing Date
certifying that the closing conditions described in Sections 6.4(b) and 6.4(c),
as they pertain to such Purchaser, have been satisfied.

                                   ARTICLE VII
                                    COVENANTS

        7.1     REQUIRED ACTIONS. For so long as any of the Series B Shares or
the Notes remain outstanding, the Company shall and, where applicable, shall
cause each Subsidiary to:

                (a)     maintain and keep its properties in good repair, working
order and condition, and from time to time make all necessary or desirable
repairs, renewals and replacements, so that its businesses may be properly and
advantageously conducted in all material respects at all times;

                (b)     maintain or cause to be maintained with financially
sound and reputable insurers that have a rating of "A" or better as established
by Best's Rating Guide (or an equivalent rating with such other publication of a
similar nature as shall be in current use), (i) public liability and property
damage insurance with respect to their respective businesses and properties
against loss or damage of the kinds and in amounts customarily carried or
maintained by companies of established reputation engaged in similar businesses,
and (ii) unless the Board of Directors decides in exercising their fiduciary
duties that such directors' and officers' liability coverage is not prudent,
directors' and officers' liability insurance providing at least the same
coverage and amounts and containing terms and conditions which are not less
advantageous in any material respect, in each case than the directors' and
officers' liability insurance maintained by the Company as of the Closing Date;

                (c)     pay and discharge when due all tax liabilities,
assessments and governmental charges or levies imposed upon its properties or
upon the income or profits therefrom (in each case before the same become
delinquent and before penalties accrue thereon), unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP, consistently applied, are being maintained by the Company;

                (d)     at all times cause to be done all things necessary to
maintain, preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary to the conduct of its businesses; provided,
that the Company may liquidate, merge out of existence or otherwise dissolve
immaterial Subsidiaries;

                (e)     comply with all applicable laws, rules and regulations
of all Government Agencies and material contracts of the Company, the violation
of which could reasonably be expected to have a Material Adverse Effect;

                (f)     maintain proper books of record and account which
present fairly in all material respects its financial condition and results of
operations and make provisions on its financial statements for all such proper
reserves as in each case are required in accordance with GAAP, consistently
applied;

                                      -26-

<PAGE>

                (g)     following filing of the Authorized Share Amendment with
the Delaware Secretary of State, reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purposes of
issuance upon conversion of the Series B Shares, such number of shares of Common
Stock as are issuable upon the conversion of all outstanding Series B Shares.
During the period while the Series B Shares are outstanding, the Company will at
all times have authorized and reserved at least 100% of the number of Conversion
Shares needed to provide for the conversion of the Series B Shares (and if there
is ever an insufficient amount of Conversion Shares to provide for the
conversion of the Series B Shares, the Company shall immediately take all action
necessary to cause the number of Company's authorized shares of Common Stock to
be sufficient to accomplish the conversion rights of the Series B Shares). All
shares of Common Stock which are so issuable shall, when issued, be duly and
validly issued, fully paid and nonassessable and free from all Taxes, liens and
charges. The Company shall take all such actions as may be necessary to assure
that all such shares of Common Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which shares of Common Stock may be listed (except for
official notice of issuance which shall be immediately transmitted by the
Company upon issuance);

                (h)     use its reasonable best efforts to at all times file all
reports (including annual reports, quarterly reports and the information,
documentation and other reports) required to be filed by the Company under the
Exchange Act and Sections 13 and 15 of the rules and regulations adopted by the
SEC thereunder, and the Company shall use its reasonable best efforts to file
each of such reports on a timely basis, and take such further action as any
holder or holders of Securities may reasonably request, all to the extent
required to enable such holders to sell Securities pursuant to Rule 144 adopted
by the SEC under the Securities Act (as such rule may be amended from time to
time) or any similar rule or regulation hereafter adopted by the SEC and to
enable the Company to register securities with the SEC on Form S-3 or any
similar short-form registration statement and upon the filing of each such
report deliver a copy thereof to each holder of the Series B Shares.

        7.2     USE OF PROCEEDS. The proceeds from the issuance of the Series B
Preferred Stock and the Notes will be used by the Company (i) to repay
outstanding indebtedness (ii) to repurchase warrants, (iii) to pay the costs of
the transactions contemplated by this Agreement, and (iv) for working capital
and general corporate purposes.

        7.3     INFORMATION RIGHTS. The Company shall furnish to each Purchaser
who holds at least 5% of the Common Stock on a fully diluted as if converted
basis (and regardless to each of GE and Midwest if such Purchaser holds at least
a majority of the Series B Shares such Purchaser purchased hereunder):

                (a)     within 105 days after the end of each fiscal year (or,
if required to be filed with the SEC sooner, then concurrently with such
filing), its Form 10-K containing its audited consolidated balance sheet and
related statements of income, stockholders' equity and cash flows as of the end
of and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by PriceWaterhouseCoopers or other
independent public accountants of recognized national standing (without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;

                (b)     within 105 days after the end of each fiscal year (or,
if required to be filed with the SEC sooner, then concurrently with such
filing), its consolidated balance sheets and related statements of income,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all certified by one of its Financial

                                      -27-

<PAGE>

Officers as presenting fairly in all material respects the results of operations
of the Company on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

                (c)     within 60 days after the end of each of the first three
fiscal quarters of each fiscal year (or, if required to be filed with the SEC
sooner, then concurrently with such filing), its Form 10-Q containing its
consolidated balance sheet and related statements of income, stockholders'
equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year;

                (d)     within 60 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders' equity and cash flows as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
budget and previous fiscal year, all certified by one of its Financial Officers
as presenting fairly in all material respects the results of operations of the
Company on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes;

                (e)     within 30 days after the end of each month which is
neither a fiscal year end nor a fiscal quarter end, its consolidated balance
sheet and related statements of income, stockholders' equity and cash flows as
of the end of and for such month and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the results of operations
of the Company on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

                (f)     by no later than December 15 of each fiscal year, a
budget and business plan for the immediately succeeding fiscal year in the form
approved by the Company's board of directors, in form, scope and detail
satisfactory to the Purchasers and on a quarterly basis for each fiscal quarter
of such succeeding fiscal year;

                (g)     promptly after the same become publicly available, (to
the extent not available through electronic means) copies of all periodic and
other reports, proxy statements and other materials filed by the Company or any
Subsidiary with the SEC, or any Governmental Agency succeeding to any or all of
the functions of the SEC, or with any national securities exchange, or
distributed by the Company to its stockholders generally, as the case may be;

                (h)     promptly after the same are delivered to the members of
the Board of Directors, copies of all business plans and other financial plans
relating to the Company and/or its Subsidiaries; and

                (i)     promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Company or any Subsidiary, or compliance with the terms of the this
Agreement or any Related Document, as the Purchasers may reasonably request.

        7.4     ACCESS RIGHTS. The Company shall permit the Purchasers, their
agents and representatives to have reasonable access to the management
personnel, premises, contracts, books and records of the Company and its
Subsidiaries upon reasonable notice during regular business hours.

                                      -28-

<PAGE>

        7.5     CERTAIN ACTIONS. As soon as practicable after the Closing Date
but in any event by May 23, 2003, the Company shall file the preliminary
Information Statement with the SEC, which shall be in a form reasonably
acceptable to the Purchasers. As soon as reasonably practicable after receiving
SEC approval with respect to such preliminary Information Statement, the Company
shall mail the Information Statement to the stockholders of the Company. On the
10th day after mailing the Information Statement to the stockholders of the
Company, the Company shall cause the change to the Board of Directors
contemplated by Section 6.1(d) to take effect. Within 21 days of mailing the
Information Statement to the stockholders of the Company, the Company shall
cause the Authorized Share Amendment to be filed with the Delaware Secretary of
State. On the day the Information Statement is mailed to the stockholders of the
Company, the Company shall cause the Series A Amendment to be filed with the
Secretary of State of Delaware.

                                  ARTICLE VIII
                                    SURVIVAL

        8.1     SURVIVAL. The representations and warranties of the Purchasers
and the Company contained herein shall survive the Closing and expire on the
date that is 90 days after the date on which the Company files with the SEC its
Form 10-K for the fiscal year ending on December 31, 2003; provided, that (i)
the representations and warranties made by the Company in Sections 4.1, 4.2,
4.3, 4.20, and 4.23 shall survive indefinitely, (ii) the representations and
warranties made by the Company in Sections 4.18 and 4.19 shall survive until the
fourth anniversary of the Closing Date, and (iii) the representations and
warranties made by the Company in Section 4.21 shall survive for the duration of
any applicable statute of limitations (including any extensions thereof).

                                   ARTICLE IX
                                 INDEMNIFICATION

        9.1     INDEMNIFICATION.

                (a)     In consideration of the Purchasers' execution and
delivery of this Agreement and acquiring the Series B Shares and the Notes
hereunder and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless the
Purchasers and all of their respective Affiliates, officers, managers, advisors,
directors, employees and agents (including those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims (including
actions, causes of action, suits and claims brought by or against Person,
including stockholders of the Company on behalf of themselves and their
respective subsidiaries), losses, costs, penalties, fees, liabilities and
damages, and expenses (including costs of suit and all reasonable attorneys'
fees and expenses incurred in connection with investigating, preparing for and
responding to third party subpoenas or enforcing this Agreement) in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought) or other liabilities, losses or,
in the case of clauses (i) and (ii) below, diminution in value (the "Indemnified
Liabilities"), incurred by the Indemnitees or any of them as a result of, or
arising out of, or relating to (i) the breach of any representation or warranty
contained in this Agreement or in any Related Document, or (ii) the breach of
any promise, agreement or covenant contained in this Agreement or in any Related
Document.

                (b)     The Company shall reimburse the Indemnitees for the
Indemnified Liabilities as such Indemnified Liabilities are incurred. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment

                                      -29-

<PAGE>

and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnitee or any officer, director or controlling Person of such
Indemnitee and will survive the transfer of securities.

                (c)     Any Person entitled to indemnification hereunder (i)
will give prompt written notice to the Company of any claim with respect to
which it seeks indemnification and (ii) if the Indemnified Liability arises from
a third party claim, unless in such Indemnitee's reasonable judgment a conflict
of interest between the Company and such Indemnitee may exist with respect to
such third party claim, will permit the Company to assume the defense of such
claim with counsel reasonably satisfactory to the Indemnitee. If such defense is
assumed, the Company will not be subject to any liability for any settlement
made by the Indemnitee without its consent (but such consent will not be
unreasonably withheld). If the Company is not entitled to, or elects not to,
assume the defense of a claim hereunder, the Company will not be obligated to
pay the fees and expenses of more than one counsel for all Indemnitees with
respect to such claim, unless in the reasonable judgment of any Indemnitee a
conflict of interest may exist between such Indemnitee and any other of such
Indemnitees with respect to such claim. In such instance, the conflicting
Indemnitees shall have the right to obtain one separate counsel, chosen by the
majority of each separate group of conflicting Indemnitees, at the expense of
the Company.

                (d)     Payments by the Company pursuant to Section 9.1(a) shall
be limited to the amount of any liability or damage that remains after deducting
therefrom any insurance proceeds and any indemnity, contribution or other
similar payment recovered by the Indemnitees from any third party with respect
thereto.

                (e)     Notwithstanding anything to the contrary set forth
herein, no Indemnitee shall be entitled to be indemnified pursuant to this
Article IX for any Indemnified Liability that arises as a result of the
Indemnitee's gross negligence or willful misconduct; provided, however, that the
Company shall pay the expenses incurred by any such Indemnitee hereunder, as
such expenses are incurred, in connection with any proceeding in advance of the
final disposition, so long as the Company receives an undertaking by such
Indemnitee to repay the full amount advanced if there is a final determination
that such Indemnitee failed the standards set forth above or that such
Indemnitee is not entitled to indemnification as provided herein for other
reasons; and provided, further, that the termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
such Indemnitee was either grossly negligent or engaged in willful misconduct.

                (f)     Notwithstanding anything to the contrary set forth
herein, no Purchaser shall pursue any claim for indemnification hereunder unless
Sentinel agrees in writing to pursue such claim as well.

                                   ARTICLE X
                               GENERAL PROVISIONS

        10.1    PUBLIC ANNOUNCEMENTS. Neither Sentinel nor the Company shall
make, or permit any agent or Affiliate to make, any public statements, including
any press releases, with respect to this Agreement and the transactions
contemplated hereby without the prior written consent of the other, except as
may be required by law or the rules of any exchange on which the Company's
securities may be listed or any inter-dealer quotation system in which the
Company's securities may be authorized to be quoted; provided that the Company's
consent will not be necessary with respect to statements (not including the
initial press release regarding the transactions contemplated herein made on or
about the

                                      -30-

<PAGE>

Closing Date) contained in or on, as the case may be, Sentinel's and its
Affiliates' marketing materials or websites, provided that Sentinel shall not
mention GE, Midwest or their respective Affiliates (which shall not include the
Company and its Subsidiaries for this purpose) by name without their consent.

        10.2    SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns,
including each subsequent holder of Series B Shares, Notes or Conversion Shares.
Except as otherwise specifically provided herein, this Agreement shall not be
assignable by any party without the prior written consent of the other parties
hereto; provided, that the Purchasers shall be entitled to assign their rights
and obligations under this Agreement to any transferee of Series B Shares or
Notes without the consent of the Company so long as (i) the transfer of such
Series B Shares is made in accordance with the Stockholders Agreement, and (ii)
the transfer of such Notes is made in accordance with the terms of the Notes.

        10.3    ENTIRE AGREEMENT. This Agreement and the Related Documents and
each other writing referred to herein or delivered pursuant hereto constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior arrangements or understandings.

        10.4    NOTICES. All notices, requests, consents and other
communications provided for herein shall be in writing and shall be (i)
delivered in person, (ii) transmitted by telecopy, (iii) sent by first-class,
registered or certified mail, postage prepaid, or (iv) sent by reputable
overnight courier service, fees prepaid, to the recipient at the address or
telecopy number set forth below, or such other address or telecopy number as may
hereafter be designated in writing by such recipient. Notices shall be deemed
given upon personal delivery, seven days following deposit in the mail as set
forth above, upon acknowledgment by the receiving telecopier or one day
following deposit with an overnight courier service.

              To the Company, to:

                        Castle Dental Centers, Inc.
                        3701 Kirby Drive
                        Suite 550
                        Houston, TX 77098
                        Attention: James M. Usdan
                        Facsimile: (713) 490-8420

                        With a copy, which shall not constitute notice to the
                        Company, to:

                        Haynes and Boone, LLP
                        1000 Louisiana Street
                        Suite 4300
                        Houston, TX  77002
                        Attention:  John W. Menke
                        Facsimile:  (713) 236-5560

                                      -31-

<PAGE>

              To Sentinel, to:

                        Sentinel Capital Partners
                        777 Third Avenue
                        32nd Floor
                        New York, NY 10017
                        Attention: David S. Lobel
                                   Paul F. Murphy
                        Facsimile: (212) 688-6513

                        With a copy, which shall not constitute notice to
                        Sentinel, to:

                        Kirkland & Ellis
                        Citigroup Center
                        153 East 53rd Street
                        New York, NY  10022-4675
                        Attention: Frederick Tanne, Esq.
                        Facsimile: (212) 446-4900

              To GE, to:

                        GENERAL ELECTRIC CAPITAL CORPORATION
                        c/o Heller Healthcare Financial Services
                        500 West Monroe Street
                        Chicago, IL  60661
                        Attention:    Jay Sepanski
                        Facsimile:    (312) 441-7598

                        With a copy, which shall not constitute notice to GE,
                        to:

                        GENERAL ELECTRIC CAPITAL CORPORATION
                        c/o Heller Healthcare Financial Services
                        2 Wisconsin Circle, 4th Floor
                        Chevy Chase, MD  20815
                        Attention:    Katherine R. Lofft, Esq.
                        Facsimile:    (301) 664-9866

              To Midwest, to:

                        Midwest Mezzanine Fund II, L.P.
                        135 South LaSalle Street, Suite 2040
                        Chicago, IL  60603
                        Attention:    Paul Kreie
                        Facsimile:    (312) 992-4595

              To Usdan, to:

                        c/o Castle Dental Centers, Inc.
                        3701 Kirby Drive, Suite 550

                                      -32-

<PAGE>

                        Houston, TX  77098
                        Facsimile:    (713) 490-8420

              To Slack, to:

                        c/o Castle Dental Centers, Inc.
                        3701 Kirby Drive, Suite 550
                        Houston, TX  77098
                        Facsimile:    (713) 490-8420

              To Fitzpatrick, to:

                        c/o Sentinel Capital Partners
                        777 Third Avenue
                        32nd Floor
                        New York, NY 10017
                        Attention: David S. Lobel
                                   Paul F. Murphy
                        Facsimile: (212) 688-6513

or, in each case, to such other address or to the attention of such other person
as the recipient party shall have specified by prior written notice to the
sending party.

        10.5    CLOSING FEE; FEES AND EXPENSES.

                (a)     On the Closing Date, in consideration for the services
Sentinel or its Affiliates performed in structuring and arranging the
transactions contemplated by this Agreement and the Related Documents, the
Company will pay to Sentinel Capital Partners, LLC (or its Affiliate) a
transaction fee equal to $485,000 (the "Closing Fee"), by wire transfer of
immediately available funds to an account indicated to the Company by Sentinel.
In addition, on the Closing Date the Company shall reimburse Sentinel for (i)
the reasonable fees and expenses of Kirkland & Ellis, Fulbright & Jaworski LLP
and PriceWaterhouseCoopers LLP incurred by Sentinel in connection with the
documentation, negotiation and consummation of the transactions contemplated by
this Agreement and the Related Documents, and (ii) all other reasonable fees and
out-of-pocket expenses incurred by Sentinel in connection with the transactions
contemplated hereunder (including fees and expenses of legal counsel,
accountants, investment bankers, brokers or other representatives). In addition,
on the Closing Date the Company shall reimburse GE and Midwest for the
reasonable fees and out-of-pocket expenses incurred by them in connection with
the documentation, negotiation and consummation of the transactions contemplated
by this Agreement and the Related Documents. After the Closing, the Company
agrees to reimburse Sentinel, GE and Midwest for all reasonable fees and
expenses (including reasonable legal fees) incurred in connection with the
Subsequent Closing, and any future amendment to, waiver of or the enforcement by
such Purchaser of any of its rights arising under this Agreement or any of the
Related Documents. After the Closing, the Company shall reimburse those
observers appointed pursuant to Section 2(e)(ii) of the Stockholders Agreement
for the reasonable out-of-pocket expenses incurred by each such observer in
connection with attending the meetings of the Board of Directors

        10.6    AMENDMENT AND WAIVER. No amendment or waiver of any provision of
this Agreement shall be effective, unless the same shall be in writing and
signed by the Company, Sentinel and the holders of a majority of the Series B
Shares purchased hereunder other than those purchased by Sentinel; provided,
however, no amendment or waiver can be effected if, by its terms, such amendment
or

                                      -33-

<PAGE>

waiver adversely affects one Stockholder without having the same relative
adverse effect on all Stockholders without the prior written consent of such
adversely affected Stockholder. No such waiver shall operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. No failure by any
party to take any action against any breach of this Agreement or default by any
other party shall constitute a waiver of such party's right to enforce any
provision hereof or to take any such action.

        10.7    COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.

        10.8    HEADINGS. The headings of the various sections of this Agreement
have been inserted for reference only and shall not be deemed to be a part of
this Agreement.

        10.9    SPECIFIC PERFORMANCE. The Company, on the one hand, and each
Purchaser, on the other hand, acknowledges that money damages may not be a
sufficient remedy for any breach of this Agreement. It is accordingly agreed
that the parties shall be entitled to seek specific performance and injunctive
relief as remedies for any such breach, these remedies being in addition to any
of the remedies to which they may be entitled at law or equity.

        10.10   REMEDIES CUMULATIVE. Except as otherwise provided herein, the
remedies provided herein shall be cumulative and shall not preclude the
assertion by any party hereto of any other rights or the seeking of any other
remedies against any other party hereto.

        10.11   GOVERNING LAW. ALL ISSUES AND QUESTIONS RELATING TO THE
CONSTRUCTION, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE OF LAW OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD RESULT IN THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

        10.12   WAIVER OF JURY TRIAL.

        Each of the parties hereto waives any right it may have to trial by
jury in respect of any litigation based on, arising out of, under or in
connection with this Agreement or any course of conduct, course of dealing,
verbal or written statement or action of any party hereto.

        10.13   NO THIRD PARTY BENEFICIARIES. Except as specifically set forth
or referred to herein, nothing herein is intended or shall be construed to
confer upon any person or entity other than the parties hereto and their
successors or assigns, any rights or remedies under or by reason of this
Agreement.

        10.14   SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

        10.15   TIME OF THE ESSENCE; COMPUTATION OF TIME. Time is of the essence
for each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge or any duty hereunder shall fall upon
a non-Business Day, the party having such privilege or duty may exercise such
privilege or discharge such duty on the next succeeding Business Day.

                                   * * * * *

                                      -34-

<PAGE>

                IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Preferred Stock and Subordinated Note
Purchase Agreement as of the date first above written.

                            CASTLE DENTAL CENTERS, INC.

                            By:
                               -----------------------------------
                               Name:
                               Title:

                            SENTINEL CAPITAL PARTNERS II, L.P.
                            By   Sentinel Partners II, L.P.
                            Its: General Partner

                            By:  Sentinel Managing Company II, LLC
                            Its: General Partner

                            By:
                               -----------------------------------
                               Name:
                               Title:

<PAGE>

                            MIDWEST MEZZANINE FUND II, L.P.

                            By:  ABN AMRO Mezzanine Management II, L.P.
                                 Its:  General Partner
                                 By:   ABN AMRO Mezzanine Management II, Inc.
                                 Its:  General Partner

                            By:
                               -----------------------------------
                                 Name:  Paul Kreie
                                 Title:  Vice President

                            GENERAL ELECTRIC CAPITAL CORPORATION

                            By:
                               -----------------------------------
                               Name:
                               Title:

                            -------------------------------------
                                  JAMES M. USDAN

                            -------------------------------------
                                  THOMAS FITZPATRICK

                            -------------------------------------
                                  JOHN M. SLACK<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

               THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as
of May 15, 2003, by and among Castle Dental Centers, Inc., a Delaware
corporation (the "Company"), Sentinel Capital Partners II, L.P., a Delaware
limited partnership ("Sentinel"), General Electric Capital Corporation, a
Delaware corporation ("GE"), Midwest Mezzanine Fund II, L.P., a Delaware limited
partnership ("Midwest"), James M. Usdan ("Usdan"), Thomas Fitzpatrick
("Fitzpatrick"), and John M. Slack ("Slack").

               Sentinel, Fitzpatrick, GE, Midwest, Usdan, Slack and the Company
are parties to a Preferred Stock and Subordinated Note Purchase Agreement dated
as of the date hereof (the "Purchase Agreement"). In order to induce Sentinel,
Fitzpatrick, GE, Midwest, Usdan and Slack to enter into the Purchase Agreement,
the Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
Closing under the Purchase Agreement. It is acknowledged that certain other
parties shall become a party to this agreement following the date hereof in
conjunction with such parties' execution of a joinder to the Purchase Agreement
and their purchase of certain securities of the Company thereunder.

               GE, Midwest, Usdan and the Company are parties to a Registration
Rights Agreement dated as of July 19, 2002 (the "Existing Registration Rights
Agreement"). By entering into this Agreement, GE, Midwest and Usdan are
terminating their rights under the Existing Registration Rights Agreement.

               Unless otherwise provided in this Agreement, capitalized terms
used herein shall have the meanings set forth in Section 9 hereof.

               NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:

               1.   Demand Registrations.

               (a)  Requests for Registration. Subject to the terms of this
Section 1, at any time and from time to time, the holders of a majority of the
Sentinel Registrable Securities may request registration under the Securities
Act of all or any portion of their Registrable Securities. All registrations
requested pursuant to this Section 1(a) are referred to herein as "Demand
Registrations". Each request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be registered, the
anticipated per share price range for such offering and the intended method of
distribution. Within ten days after receipt of any such request, the Company
shall give written notice of such requested registration to all other holders of
Registrable Securities and, subject to the terms of Section 1(d) hereof, shall
include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable

<PAGE>

Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company's notice.

               (b)  Long-Form Registrations. The holders of a majority of the
Sentinel Registrable Securities shall be entitled to request 2 registrations
under the Securities Act on Form S-1 or any similar long-form registrations (the
"Long-Form Registrations") in which the Company shall pay all Registration
Expenses. A registration shall not count as one of the permitted Long-Form
Registrations until it has become effective and the holders of Registrable
Securities are able to register at least 90% of the Registrable Securities
requested to be included in such registration; it being understood and agreed
that the requisite holders of Registrable Securities making a request for a
Demand Registration hereunder may withdraw from such registration at any time
prior to the effective date of such Demand Registration, in which case such
request will not count as one of the permitted Demand Registrations for such
holders. All Long Form Registrations shall be underwritten registrations.

               (c)  Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to Section 1(b), the holders of a majority of
the Sentinel Registrable Securities shall be entitled to request 2 registrations
under the Securities Act on Form S-2 or S-3 or any similar short-form
registrations (the "Short-Form Registrations") in which the Company shall pay
all Registration Expenses. Demand Registrations shall be Short-Form
Registrations whenever the Company is permitted to use any applicable short form
and if the managing underwriters (if any) agree to the use of a Short-Form
Registration. The Company shall use its best efforts to make Short-Form
Registrations available for the sale of Registrable Securities. A registration
shall not count as one of the permitted Short-Form Registrations until it has
become effective and the holders of Registrable Securities are able to register
at least 90% of the Registrable Securities requested to be included in such
registration.

               (d)  Priority on Demand Registrations. The Company shall not
include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of at least a
majority of the Registrable Securities initially requesting such registration.
If a Demand Registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the number of
Registrable Securities and, if permitted hereunder, other securities requested
to be included in such offering exceeds the number of Registrable Securities and
other securities, if any, which can be sold therein without adversely affecting
the marketability of the offering, the Company shall include in such
registration the number which can be sold which in the opinion of such
underwriters can be sold without adversely affecting the marketability of the
offering, in the following order of priority: (i) first, the Registrable
Securities requested to be included, pro rata among the respective holders
thereof on the basis of the number of Registrable Securities owned by each such
holder, and (ii) second, other securities requested to be included by holders
having registration rights with respect to the Company's securities (including
those holders who are granted rights that are subordinate to the rights set
forth herein, as described in Section 1(f) below), pro rata among the respective
holders thereof on the basis of the number of other securities owned by each
such holder.

                                        2

<PAGE>

               (e)  Selection of Underwriters. In the case of an underwritten
Demand Registration, the holders of a majority of the Registrable Securities
initially requesting such Demand Registration hereunder shall have the right to
select the investment banker(s) and manager(s) to administer the offering, so
long as such firms are reasonably acceptable to the Company.

               (f)  Other Registration Rights. Except as provided on Exhibit A
hereto, the Company represents and warrants that it is not a party to, or
otherwise subject to, any other agreement granting registration rights to any
Person with respect to any securities of the Company. Except as provided in this
Agreement, the Company shall not grant to any Persons the right to request or
require the Company to register any equity securities of the Company, or any
securities convertible or exchangeable into or exercisable for such securities,
without the prior written consent of the holders of a majority of the
Registrable Securities, unless such registration rights are expressly made
subordinate to the rights set forth herein.

               (g)  Registration Deferral Right. Notwithstanding the foregoing,
if the Company shall furnish to holders requesting a registration statement
pursuant to this Section 1, a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, the Company shall have the
right to defer such filing for a period of not more than 60 days after receipt
of the request of the holders; provided, however, that the Company may not
utilize this right more than once in any twelve-month period.

               2.   Piggyback Registrations.

               (a)  Right to Piggyback. Whenever the Company proposes to
register any of its securities under the Securities Act (other than pursuant to
a Demand Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice (in any event within three business days after
its receipt of notice of any exercise of demand registration rights other than
under this Agreement) to all holders of Registrable Securities of its intention
to effect such a registration and, subject to the terms of Sections 2(c) and
2(d) hereof, shall include in such registration (and in all related
registrations or qualifications under blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 20 days after the giving of the Company's notice.

               (b)  Piggyback Expenses. The Registration Expenses of the holders
of Registrable Securities shall be paid by the Company in all Piggyback
Registrations.

               (c)  Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company shall include in such

                                        3

<PAGE>

registration the number which can be sold which in the opinion of such
underwriters can be sold without adversely affecting the marketability of the
offering, in the following order of priority: (i) first, the securities the
Company proposes to sell, (ii) second, the Registrable Securities requested to
be included and other securities requested to be included by holders having
registration rights with respect to the Company's securities (not including
those holders who are granted rights that are subordinate to the rights set
forth herein, as described in Section 1(f) above), pro rata among the respective
holders thereof on the basis of the number of securities owned by each such
holder, and (iii) third, securities requested to be included by holders having
registration rights with respect to the Company's securities that are
subordinate to the rights set forth herein, as described in Section 1(f) above.

               (d)  Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the Company shall
include in such registration the number which can be sold which in the opinion
of such underwriters can be sold without adversely affecting the marketability
of the offering, in the following order of priority: (i) first, the Registrable
Securities requested to be included and other securities requested to be
included by holders having registration rights with respect to the Company's
securities (not including those holders who are granted rights that are
subordinate to the rights set forth herein, as described in Section 1(f) above),
pro rata among the respective holders thereof on the basis of the number of
securities owned by each such holder, and (ii) second, securities requested to
be included by holders having registration rights with respect to the Company's
securities that are subordinate to the rights set forth herein, as described in
Section 1(f) above.

               (e)  Selection of Underwriters. If any Piggyback Registration is
an underwritten offering, the selection of investment banker(s) and manager(s)
for the offering will be selected by the Company and shall be reasonably
acceptable to holders of a majority of the Sentinel Registrable Securities.

               (f)  Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company shall not file or cause to be
effected, any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-4, Form S-8 or any successor form), whether
on its own behalf or at the request of any holder or holders of such securities,
until a period of at least 180 days has elapsed from the effective date of such
previous registration.

               3.   Holdback Agreements.

               (a)  Each holder of Registrable Securities shall not effect any
public sale or distribution (including sales pursuant to Rule 144 of the
Securities Act) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities,

                                        4

<PAGE>

during the seven days prior to and the 180-day period beginning on the effective
date of any underwritten public offering of the Company's equity securities
(except as part of such underwritten registration), unless the underwriters
managing the registered public offering otherwise agree.

               (b)  The Company (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 180-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-4, Form S-8 or any successor form), unless the underwriters managing
the registered public offering otherwise agree, and (ii) shall use its best
efforts to cause each officer and director of the Company to agree not to effect
any public sale or distribution (including sales pursuant to Rule 144 of the
Securities Act) of any such securities during such period (except as part of
such underwritten registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.

               4.   Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:

               (a)  prepare and file with the Securities and Exchange Commission
a registration statement, and all amendments and supplements thereto and related
prospectuses as may be necessary to comply with applicable securities laws, with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the holders of a majority
of the Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed, which documents shall be subject to the
review and comment of such counsel);

               (b)  notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 90 days and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;

               (c)  furnish to each seller of Registrable Securities such number
of copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as

                                        5

<PAGE>

such seller may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such seller;

               (d)  use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary to enable such seller to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such seller
(provided that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);

               (e)  notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;

               (f)  cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing
that, to secure NASDAQ authorization for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable Securities
with the NASD;

               (g)  provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;

               (h)  enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split or a combination of
shares);

               (i)  make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information

                                        6

<PAGE>

reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;

               (j)  otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

               (k)  permit any holder of Registrable Securities which holder, in
its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included;

               (l)  If any such registration or comparable statement refers to
any holder by name or otherwise as the holder of any securities of the Company
and if in its sole and exclusive judgment, such holder is or might be deemed to
be an underwriter or a controlling person of the Company, such holder shall have
the right to require (i) the insertion therein of language, in form and
substance satisfactory to such holder and presented to the Company in writing,
to the effect that the holding by such holder of such securities is not to be
construed as a recommendation by such holder of the investment quality of the
Company's securities covered thereby and that such holding does not imply that
such holder shall assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such holder by name or
otherwise is not required by the Securities Act or any similar Federal statute
then in force, the deletion of the reference to such holder; provided that with
respect to this clause (ii) such holder shall furnish to the Company an opinion
of counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Company;

               (m)  in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;

               (n)  use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;
and

               (o)  obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the holders of a majority of the
Registrable Securities being sold reasonably request (provided that such
Registrable Securities constitute at least 10% of the securities covered by such
registration statement).

                                       7

<PAGE>

               5.   Registration Expenses.

               (a)  All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration,
qualification and filing fees, fees and expenses of compliance with securities
or blue sky laws, printing expenses, messenger and delivery expenses, fees and
disbursements of custodians, and fees and disbursements of counsel for the
Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called "Registration Expenses"), shall be borne
as provided in this Agreement, except that the Company shall, in any event, pay
its internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any annual audit or quarterly review, the expense of any liability
insurance and the expenses and fees for listing the securities to be registered
on each securities exchange on which similar securities issued by the Company
are then listed or on the NASD automated quotation system.

               (b)  In connection with each Demand Registration and each
Piggyback Registration, the Company shall reimburse the holders of Registrable
Securities included in such registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities included in such registration.

               6.   Indemnification.

               (a)  The Company agrees to indemnify, to the extent permitted by
law, each holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, actions, damages, liabilities and expenses caused by
(i) any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (ii) any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and to pay to each holder of
Registrable Securities, its officers and directors and each Person who controls
such holder (within the meaning of the Securities Act), as incurred, any legal
and any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, except
insofar as the same are caused by or contained in any information furnished in
writing to the Company by such holder expressly for use therein or by such
holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto. In connection with an underwritten
offering, the Company shall indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.

               (b)  In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing

                                        8

<PAGE>

such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from (i)
any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such
holder, or (ii) by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto; provided that
the obligation to indemnify shall be individual, not joint and several, for each
holder and shall be limited (except in the case of willful fraud by such holder)
to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement.

               (c)  Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt
notice shall not impair any Person's right to indemnification hereunder to the
extent such failure has not prejudiced the indemnifying party) and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicting indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of a majority of the
Registrable Securities included in the registration, at the expense of the
indemnifying party. No indemnifying party, in the defense of such claim or
litigation, shall, except with the consent of each indemnified party, consent to
the entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.

               (d)  The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities.

               (e)  If the indemnification provided for in this Section 6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable

                                        9

<PAGE>

by such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by a holder
under this Section 6(e) exceed the net proceeds from the offering received by
such holder, except in the case of willful fraud by such holder. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of competent jurisdiction.

               (f)  Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.

               7.   Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided, that (a)
the holders of Registrable Securities to be distributed by such underwriters
shall be parties to such underwriting agreement and may, at their option,
require that any or all of the representations and warranties by the Company to
and for the benefit of such underwriters shall also be made to and for the
benefit of such holders of Registrable Securities and (b) no holder of
Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder,
such holder's ownership of securities being included in the registration, and
related customer matters, and such holder's intended method of distribution) or
to undertake any indemnification obligations to the Company with respect
thereto, except as otherwise provided in Section 6(b) hereof.

               8.   Rule 144 Reporting. With a view to making available to the
holders of Registrable Securities the benefits of certain rules and regulations
of the Securities and Exchange Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its reasonable best efforts to:

               (a)  make and keep current public information available, within
the meaning of Rule 144 or any similar or analogous rule promulgated under the
Securities Act;

               (b)  file with the Securities and Exchange Commission, in a
timely manner, all reports and other documents required of the Company under the
Securities Act and Exchange Act; and

               (c)  so long as any party hereto owns any Registrable Securities,
furnish to such party forthwith upon request, a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144, the
Securities Act and the Exchange Act; a copy of

                                       10

<PAGE>

the most recent annual or quarterly report of the Company; and such other
reports and documents as such Person may reasonably request in availing itself
of any rule or regulation of the Securities and Exchange Commission allowing it
to sell any such securities without registration.

               9.   Definitions. As used in this Agreement, the following terms
shall have the following meanings:

               "Business Day" means any day excluding Saturday, Sunday, and any
day which is a legal holiday under the laws of the State of New York or
California or is a day on which banking institutions located in such states are
authorized or required by law or other governmental action to close.

               "Common Stock" means the Company's Common Stock, par value
$0.000001 per share.

               "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               "Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

               "Registrable Securities" means (i) any of the Common Stock issued
or issuable upon the exercise or conversion of any Series B Stock, Series A-1
Stock, Series A-2 Stock or Warrants issued to or held by the Stockholders, and
(ii) any Common Stock issued or issuable with respect to the securities referred
to in clause (i) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when they have been
distributed to the public pursuant to a offering registered under the Securities
Act or sold to the public through a broker, dealer or market maker in compliance
with Rule 144 under the Securities Act (or any similar rule then in force),
repurchased by the Company or any subsidiary of the Company. For purposes of
this Agreement, a Person shall be deemed to be a holder of Registrable
Securities, and the Registrable Securities shall be deemed to be in existence,
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Person shall be entitled to exercise the
rights of a holder of Registrable Securities hereunder.

               "Securities Act" means the Securities Act of 1933, as amended.

               "Sentinel Registrable Securities" means the Registrable
Securities initially issued to or held by Sentinel.

               "Series A-1 Stock" means the Convertible Preferred Stock, Series
A-1, of the Company, par value $0.000001 per share.

                                       11

<PAGE>

               "Series A-2 Stock" means the Convertible Preferred Stock, Series
A-2, of the Company, par value $0.000001 per share.

               "Series B Stock" means the Company's Series B Convertible
Preferred Stock, par value $0.000001 per share.

               "Stockholders" means Sentinel, GE, Midwest, Usdan, Fitzpatrick,
Slack and their respective transferees and any other Person becoming party to
this Agreement.

               "Warrants" means the warrants to purchase Series A-2 Stock issued
to GE.

               10.  Miscellaneous.

               (a)  No Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable Securities in
this Agreement.

               (b)  Adjustments Affecting Registrable Securities. The Company
shall not take any action with respect to its securities which would adversely
affect the ability of the holders of Registrable Securities to include such
Registrable Securities in a registration undertaken pursuant to this Agreement
or which would materially and adversely affect the marketability of such
Registrable Securities in any such registration.

               (c)  Remedies. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that, in addition to any other rights and
remedies existing in its favor, any party shall be entitled to specific
performance and/or other injunctive relief from any court of law or equity of
competent jurisdiction (without posting any bond or other security) in order to
enforce or prevent violation of the provisions of this Agreement.

               (d)  Amendments, Waivers and Terminations. Except as otherwise
provided herein, the provisions of this Agreement may be amended, waived or
terminated, on behalf of all holders of Registrable Securities, only upon the
prior written consent of the Company, the holders of a majority of the Sentinel
Registrable Securities, and the holders of a majority of all Registrable
Securities other than Sentinel Registrable Securities; provided, however, no
amendment or waiver can be effected if, by its terms, such amendment or waiver
adversely affects one Stockholder without having the same relative adverse
effect on all Stockholders without the prior written consent of such adversely
affected Stockholder. The failure of any party to enforce any of the provisions
of this Agreement shall in no way be construed as a waiver of such provisions
and shall not affect the right of such party thereafter to enforce each and
every provision of this Agreement in accordance with its terms.

               (e)  Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective

                                       12

<PAGE>

successors and assigns of the parties hereto whether so expressed or not. In
addition, whether or not any express assignment has been made, the provisions of
this Agreement which are for the benefit of purchasers or holders of Registrable
Securities are also for the benefit of, and enforceable by, any subsequent
holder of Registrable Securities.

               (f)  Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

               (g)  Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.

               (h)  Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

               (i)  Governing Law. All issues and questions relating to the
construction, interpretation and enforcement of this Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of laws or choice of law of the
State of New York or any other jurisdiction which would result in the
application of the law of any jurisdiction other than the State of New York.

               (j)  Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable overnight courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the Company and Sentinel at the address
indicated below:

               To the Company, to:

                    Castle Dental Centers, Inc.
                    3701 Kirby Drive
                    Suite 550
                    Houston, TX 77098
                    Attention: James M. Usdan
                    Facsimile: (713) 490-8420

                                       13

<PAGE>

                    With a copy, which shall not constitute notice to the
                    Company, to:

                    Haynes and Boone, LLP
                    1000 Louisiana Street
                    Suite 4300
                    Houston, TX 77002
                    Attention: John W. Menke
                    Facsimile: (713) 236-5560

               To Sentinel, to:

                    Sentinel Capital Partners
                    777 Third Avenue
                    32nd Floor
                    New York, NY 10017
                    Attention: David S. Lobel
                               Paul F. Murphy
                    Facsimile: (212) 688-6513

                    With a copy, which shall not constitute notice to Sentinel,
                    to:

                    Kirkland & Ellis
                    Citigroup Center
                    153 East 53rd Street
                    New York, NY 10022
                    Attention: Frederick Tanne, Esq.
                    Facsimile: (212) 446-4900

                                       14

<PAGE>

               To GE, to:

                    General Electric Capital Corporation
                    c/o Heller Healthcare Financial Services
                    500 West Monroe Street
                    Chicago, IL 60661
                    Attention: Jay Sepanski
                    Facsimile: (312) 441-7598

                    With a copy to:

                    General Electric Capital Corporation
                    c/o Heller Healthcare Financial Services
                    2 Wisconsin Circle, 4th Floor
                    Chevy Chase, MD 20815
                    Attention: Katherine R. Lofft, Esq.
                    Facsimile: (301) 664-9866

               To Midwest, to:

                    Midwest Mezzanine Fund II, L.P.
                    135 South LaSalle Street, Suite 2040
                    Chicago, IL 60603
                    Attention: Paul Kreie
                    Facsimile: (312) 992-4595

               To Usdan, to:

                    c/o Castle Dental Centers, Inc.
                    3701 Kirby Drive, Suite 550
                    Houston, TX 77098
                    Facsimile: (713) 490-8420

               To Fitzpatrick, to:

                    c/o Sentinel Capital Partners
                    777 Third Avenue
                    32nd Floor
                    New York, NY 10017
                    Attention: David S. Lobel
                               Paul F. Murphy
                    Facsimile: (212) 688-6513

               To Slack, to:

                    c/o Castle Dental Centers, Inc.
                    3701 Kirby Drive, Suite 550

                                       15

<PAGE>

                    Houston, TX 77098
                    Facsimile: (713) 490-8420

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

               (k)  Waiver of Jury Trial Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on,
arising out of, under or in connection with this Agreement or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.

               (l)  Time of the Essence; Computation of Time. Time is of the
essence for each and every provision of this Agreement. Whenever the last day
for the exercise of any privilege or other discharge or any duty hereunder shall
fall upon a Non-Business Day, the party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding day which
is a regular Business Day.

               (m)  Termination. GE, Midwest, Usdan and the Company hereby agree
that all registration and other rights granted to Heller Financial, Inc. (or GE
as successor to Heller), Midwest and Usdan under the Existing Registration
Rights Agreement are hereby terminated.

               (n)  Rights Transfer. If at any time Sentinel and its affiliates
no longer hold any Sentinel Registrable Securities, any and all rights hereunder
which may be exercised by the holders of a majority of the Sentinel Registrable
Securities, will thereafter be exercisable by the holders of a majority of the
Registrable Securities.

                                    * * * * *

                                       16

<PAGE>

               IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.

                                  CASTLE DENTAL CENTERS, INC.

                                  By:
                                     -------------------------------------------
                                     Name:    James M. Usdan
                                     Title:   President and CEO

                                  SENTINEL CAPITAL PARTNERS II, L.P.

                                  By   Sentinel Partners II, L.P.
                                  Its: General Partner

                                  By:  Sentinel Managing Company II, LLC
                                  Its: General Partner

                                  By:
                                     -------------------------------------------
                                     Name:
                                     Title:

                                  MIDWEST MEZZANINE FUND II, L.P.

                                  By:  ABN AMRO Mezzanine Management II, L.P.
                                  Its: General Partner
                                  By:  ABN AMRO Mezzanine Management II, Inc.
                                  Its: General Partner

                                  By:
                                     -------------------------------------------
                                     Name:  Paul Kreie
                                     Title: Vice President

<PAGE>
                                  GENERAL ELECTRIC CAPITAL CORPORATION

                                  By:
                                     -------------------------------------------
                                     Name:
                                     Title:

                                  ----------------------------------------------
                                  JAMES M. USDAN

                                  ----------------------------------------------
                                  THOMAS FITZPATRICK

                                  ----------------------------------------------
                                  JOHN M. SLACK

                                        2

<PAGE>

                                    Exhibit A

                                        3

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