Document:

Prepared by MERRILL CORPORATION

  

	 	 	AMENDMENT dated as of April 13, 2001 (the "Note Amendment") to the 7% CONVERTIBLE SUBORDINATED NOTES (the "Notes") issued by GENTLE DENTAL SERVICE CORPORATION, a Washington corporation (the "Company"), in the aggregate principal amount of
$30,000,000.

    WHEREAS, Section 9 of the Notes provides, inter alia, that each of the Notes may
be amended by the written consent of the Requisite Holders; and 

    WHEREAS, the Company and the Requisite Holders desire to amend each of the Notes to the extent set forth herein. 

    NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, the Company and the Requisite Holders, on behalf of themselves and each Purchaser and holder of a Note, hereby agree as follows: 

    1.  Each
of the Notes is hereby amended by deleting Section 2 in its entirety and substituting the following therefor: 

"Section 2.
Payments of Interest by Issuance of Additional Notes. .Commencing with the Interest Payment Date occurring on March 31, 2001
and continuing through, and including, the date on which all Senior Debt (as defined in the Purchase Agreement) shall have been paid in full and all commitments to lend under the Senior Credit
Facility (as defined in the Purchase Agreement) shall have been terminated (the "Senior Debt Repayment Date"), the Company shall pay all interest due on this Note in additional Notes ("Additional
Notes") in an aggregate principal amount equal to the amount of such interest that would otherwise be payable in cash. Notwithstanding the foregoing, in the event that the Company pays interest on the
Senior Subordinated Note Due 2005 dated as of June 15, 2000 in the form of "PIK Notes" (as that term is defined in the Allonge to such Senior Subordinated Note), then interest on this Note will
be paid as Non-Cash Interest Additional Notes. Commencing with the first Interest Payment Date following the Senior Debt Repayment Date, the Company may, at its option and in its sole
discretion in lieu of payment of interest in cash on this Note, pay all or a portion of the interest due on this Note in Additional Notes in an aggregate principal amount equal to the amount of such
interest that otherwise would be payable in cash. In the event on any Interest Payment Date the amount of interest to be paid hereunder on such date in the form of Additional Notes shall exceed 60% of
the total interest due on this Note on such Interest Payment Date, then the aggregate principal amount of the Additional Notes to be issued on such Interest Payment Date which exceeds 60% of the
total interest due on this Note on such date shall be issued as Non-Cash Interest Additional Notes. Commencing with the first Interest Payment Date occurring after the Senior Debt
Repayment Date, the Company shall give written notice to the Holder of the Note of its intent to pay such interest in Additional Notes, not less than 5 nor more than 45 days prior to the record
date immediately preceding an Interest Payment Date on which Additional Notes will be issued. Any such Additional Notes (including the Non-Cash Interest Additional Notes) issued by the
Company shall be subject to the same terms (including the interest from time to time payable thereon) as this Note except, as the case may be, with respect to issuance date and the aggregate principal
amount thereof and shall be entitled to the benefits of the Purchase Agreement." 

    2.  All
of the provisions of this Note Amendment shall be deemed to be incorporated in, and made a part of, each of the Notes, and each of the Notes, as supplemented
and amended by this Note 

2

 

Amendment shall be read, taken and construed as one and the same instrument. Except as otherwise expressly provided herein, each of the Notes shall remain in full force and effect and is hereby
ratified. 

    3.  All
of the agreements in this Note Amendment shall bind all successors and assigns, whether so expressed or not. 

3

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

	 	 	GENTLE DENTAL SERVICE CORPORATION
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ MICHAEL T. FIORE
 Name: Michael T. Fiore

Title: President and CEO
	

Aggregate Principal Amount of Notes Held	
 	
REQUISITE PURCHASERS:
	

 	
 	
J.P. MORGAN PARTNERS (23A SBIC), LLC
	
$15,000,000.00	
 	

By:	
 	

J.P. Morgan Partners (23A SBIC Manager), Inc.
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:
	
$209,998.75	
 	
DLJ CAPITAL CORP.
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ ROBERT FINZI
 Name: Robert Finzi

Title: Attorney In Fact

S–1

 

	$1,049,999.70	 	DLJ FIRST ESC L.L.C.
	

 	
 	
By:	
 	

DLJ LBO Plans Management

Corporation, its Manager
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ ROBERT FINZI
 Name: Robert Finzi

Title: Attorney In Fact
	
$5,051,520.90	
 	
SPROUT CAPITAL VII, L.P.
	

 	
 	
By:	
 	

DLJ Capital Corp.

its Managing General Partner
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ ROBERT FINZI
 Name: Robert Finzi

Title: Attorney In Fact
	
$4,129,800.10	
 	
SPROUT GROWTH II, L.P.
	

 	
 	
By:	
 	

DLJ Capital Corp.

its Managing General Partner
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ ROBERT FINZI
 Name: Robert Finzi

Title: Attorney In Fact
	
$58,680.55	
 	
THE SPROUT CEO FUND, L.P.
	
 	
 	

By:	
 	

DLJ Capital Corp.

its Managing General Partner
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ ROBERT FINZI
 Name: Robert Finzi

Title: Attorney In Fact

S–2

	 	 	 	 	 Title: Attorney In FactPrepared by MERRILL CORPORATION

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STEVEN R. MATZKIN, D.D.S. OPTION AMENDMENT    
  

    THIS FIRST AMENDMENT (the "Amendment Agreement") is made as of      , 2001 by and between INTERDENT, INC., a Delaware corporation
("InterDent"), and Steven R. Matzkin ("Holder") to (i) April 20, 1999 Stock Option Award Agreement ("Option Agreement No. 1") under the InterDent 1999 Stock Incentive Plan (the
"1999 Plan"), (ii) May 23, 2000 Stock Option Award Agreement ("Option Agreement No. 2") under the 1999 Plan and (iii) May 23, 2000 Stock Option Award Agreement
("Option Agreement No. 3" and, collectively with Option Agreements No. 1 and 2, the "Option Agreements") under the InterDent 2000 Key Executive Stock Incentive Plan (the "2000 Plan"). 

    WHEREAS,
Holder is the holder of (i) an option to acquire 75,000 shares of Common Stock at an exercise price of $6.06 per share of Common Stock issued pursuant to Option
Agreement No. 1, of which 39,062 are vested as of the date hereof, (ii) an option to acquire 175,000 shares of Common Stock at an exercise price of $4.00 per share of Common Stock issued
pursuant to Option Agreement No. 2, of which 43,750 are vested as of the date hereof, and (iii) an option to acquire 1,000,000 shares of Common Stock at an exercise price of $4.00 per
share of Common Stock issued pursuant to Option Agreement No. 3, none of which are vested as of the date hereof; 

    WHEREAS,
InterDent and Holder wish to reduce the number of shares subject to Option Agreements; 

    WHEREAS,
for good and adequate consideration Holder agrees to the amendment and modification of the Option Agreements as provided herein on the terms and conditions contained herein; 

    NOW,
THEREFORE, it is agreed as follows: 

	1.
	Holder
acknowledges that he has reviewed in full the Option Agreements and the amendment and modification set forth below.

	2.
	The
total number of shares subject to Option Agreement No. 1 shall be reduced from 75,000 shares to 39,062 shares; provided, that such reduction shall first be with respect
to any unvested shares.

	3.
	The
total number of shares subject to Option Agreement No. 2 shall be reduced from 175,000 shares to 43,750 shares; provided, that such reduction shall first be with respect
to any unvested shares.

	4.
	The
total number of shares subject to Option Agreement No. 3 shall be reduced from 1,000,000 shares to 500,000 shares; provided, that such reduction shall first be with
respect to any unvested shares.

	5.
	Holder
represents and warrants: (a) that he is the owner of the Option Agreements and (b) that he has full power to enter into this Amendment Agreement.

	6.
	Holder
further acknowledges and agrees that, except for the amendment and modification set forth in Sections 2, 3 and 4 hereof, the Option Agreements will be governed by the terms
and conditions of the Option Agreements.

	7.
	This
Amendment Agreement and the Option Agreements constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of InterDent and Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder's interest except by means of a writing signed by
InterDent and Holder. Nothing in this Amendment Agreement (except as expressly provided herein) is intended to confer any rights or remedies on any persons other than the parties. This Amendment
Agreement is to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code, or any similar
successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the 

internal
laws of the State of California to the rights and duties of the parties. Should any provision of this Amendment Agreement be determined by a court of law to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. 

	8.
	This
Amendment Agreement shall be binding upon InterDent and its successors and assigns (if any), and Holder and his or her successors and assigns (if any).

	9.
	This
Amendment Agreement may be executed in counterparts which together shall constitute a single agreement. 

[Signature
Pages Follow] 

    IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be executed and delivered as of the date set forth beside such party's signature. 

	

 	

 	

INTERDENT, INC.

By: /s/ NORMAN R. HUFFAKER
Name: NORMAN R. HUFFAKER
Title: CEO

	

 	
 	

/s/ STEVEN R. MATZKIN

	 	 	STEVEN R. MATZKIN, D.D.S.

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STEVEN R. MATZKIN, D.D.S. OPTION AMENDMENT

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