-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O8zsMq5pnoFFNsDNUj+hGscJKTaRISXO4oOLxaYUeFK+VmvFeVLx1pAaw+pigkF1 y/gDWQN7ygir70t9FsO5Vg== 0000950123-03-007761.txt : 20030630 0000950123-03-007761.hdr.sgml : 20030630 20030630172948 ACCESSION NUMBER: 0000950123-03-007761 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20030630 GROUP MEMBERS: DAVID S LOBEL GROUP MEMBERS: SENTINEL MANAGING COMPANY II LLC GROUP MEMBERS: SENTINEL PARTNERS II LP FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SENTINEL CAPITAL PARTNERS II LP CENTRAL INDEX KEY: 0001064576 IRS NUMBER: 134008603 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 777 THIRD AVE 32ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CASTLE DENTAL CENTERS INC CENTRAL INDEX KEY: 0001018152 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 760486898 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52917 FILM NUMBER: 03765682 BUSINESS ADDRESS: STREET 1: 1360 POST OAK BLVD STREET 2: STE 1300 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7134798000 SC 13D/A 1 y88073a1sc13dza.txt AMENDMENT TO SCHEDULE 13D OMB APPROVAL OMB Number: 3235-0145 Expires: December 31, 2005 Estimated average burden hours per response........ 11 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1) CASTLE DENTAL CENTERS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK $.000001 PAR VALUE - -------------------------------------------------------------------------------- (Title of Class of Securities) 14844P105 - -------------------------------------------------------------------------------- (CUSIP Number) David S. Lobel Sentinel Capital Partners II, L.P. 777 Third Avenue, 32nd floor New York, NY 10017 (212) 688-3100 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) COPY TO: Frederick Tanne, Esq. Kirkland & Ellis 200 E. Randolph Drive Chicago, Illinois 60601 (312) 861-2000 June 20, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 9 Pages - ------------------ ----------------- CUSIP No. ________ 13D Page 2 of 9 Pages - ------------------ ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Sentinel Capital Partners II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 194,115,351(1) PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 132,134,987(2) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 194,115,351 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 96.9% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- (1) Sentinel Capital Partners II, L.P. may be deemed a member of a "group" with General Electric Capital Corporation, Midwest Mezzanine Fund II, L.P. and certain of its affiliates, Thomas Fitzpatrick and John M. Slack for purposes of Section 13(d) of the Securities and Exchange Act of 1934, as amended, because of the existence of an agreement amongst Sentinel Capital Partners II, L.P. and such parties listed in this sentence to vote their shares of capital stock of the Issuer in favor of certain designees to the Issuer's board of directors. The Reporting Persons in this Schedule 13D disclaim beneficial ownership of (i) 35,602,366 of such shares, which shares are held in the name of General Electric Capital Corporation, (ii) 22,678,609 of such shares, which shares are held in the name of Midwest Mezzanine Fund II, L.P., (iii) 2,400,635 of such shares, which shares are held in the name of Thomas Fitzpatrick and (iv) 1,298,754 of such shares, which shares are held in the name of John M. Slack. Sentinel Capital Partners II, L.P. is including the foregoing as shares beneficially owned because of the existence of an agreement amongst General Electric Capital Corporation, Sentinel Capital Partners II, L.P., Midwest Mezzanine Fund II, L.P., Thomas Fitzpatrick and John M. Slack to vote their shares of capital stock of the Issuer in favor of certain designees to the Issuer's board of directors. Please see Items 3, 4, 5 and 6 below for additional explanation. (2) These shares are held in the name of Sentinel Capital Partners II, L.P., and shared dispositive power is being disclosed solely because of the affiliation of Sentinel Capital Partners II, L.P. with its direct and indirect owners. - ------------------ ----------------- CUSIP No. ________ 13D Page 3 of 9 Pages - ------------------ ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Sentinel Partners II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 194,115,351 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 132,134,987 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 194,115,351 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 96.9% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- - ------------------ ----------------- CUSIP No. ________ 13D Page 4 of 9 Pages - ------------------ ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Sentinel Managing Company II, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 194,115,351 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 132,134,987 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 194,115,351 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 96.9% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- - ------------------ ----------------- CUSIP No. ________ 13D Page 5 of 9 Pages - ------------------ ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS / I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) David S. Lobel - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 194,115,351 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 132,134,987 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 194,115,351 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 96.9% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IN - -------------------------------------------------------------------------------- SCHEDULE 13D This Amendment No. 1 amends and supplements the Statement on Schedule 13D (this "Statement"), previously filed by Sentinel Capital Partners II, L.P., a Delaware limited partnership and certain of its affiliates ("Sentinel"), relating to the beneficial ownership of shares of Common Stock, par value $0.000001 per share (the "Common Stock"). Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to them in the Statement. Except as specifically provided herein, this Amendment does not modify any of the information previously reported in the Statement. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is hereby amended by adding the following: On June 13, 2003, James Usdan, Sentinel Capital and Castle, entered into a Securities Purchase Agreement (the "Securities Purchase Agreement"), included as Exhibit 8 to this Statement, whereby Mr. Usdan sold to (a) Castle, 90,000 shares of Common Stock in exchange for $11,780 in cash and (b) Sentinel Capital, 8,022 shares of Series B Preferred Stock and a Note having a principal amount of $14,000 in exchange for $726,000 in cash. The closing of Sentinel Capital's purchase of Mr. Usdan's shares occurred on June 20, 2003. All of the funds required for Sentinel Capital's purchase were obtained from the general funds of Sentinel Capital. The convertible securities acquired by Sentinel Capital pursuant to the terms of the Securities Purchase Agreement are convertible into 16,716,926 shares of Castle's Common Stock. Pursuant to the Securities Purchase Agreement, Mr. Usdan transferred all of his rights, title and interest, along with his sale of Common Stock and Series B Preferred Stock, in and under: (i) the Series B Purchase Agreement, (ii) the Stockholders Agreement, and (iii) the Registration Rights Agreement. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is hereby amended by adding the following: (a) - (b) As a result of the consummation of the transactions contemplated by the Securities Purchase Agreement, (i) the Reporting Persons may be deemed to be the beneficial owners of the 16,716,926 shares of Common Stock issuable upon conversion of the Series B Preferred Stock (the "Sentinel Shares"), which represent 8.2% of the shares of Common Stock in addition to the 115,418,061 shares of Common Stock issuable upon the conversion of the Series B Preferred Stock previously held by Sentinel. Collectively, the 194,115,351 shares of Common Stock which may be deemed to be beneficially owned by the Reporting Persons, Midwest, GE Capital, Fitzpatrick and Slack after the closing referred to in the Securities Purchase Agreement, represent 96.9% of the shares of Common Stock. All of the above ownership percentages are based on the 6,312,706 shares of Common Stock issued and outstanding as of May 15, 2003 (other than the shares of Common Stock included in the Usdan Shares and the Slack Shares), the Midwest Shares, the GE Shares, the Sentinel Shares, the Usdan Shares (now owned of record by Sentinel Capital), the Fitzpatrick Shares and the Slack Shares. (c) Other than as set forth in this Statement, to the knowledge of the Reporting Persons, no transactions in the class of securities reported have been effected during the past sixty (60) days by any person named pursuant to Item 2. Page 6 of 9 Pages ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is hereby amended by adding the following: Pursuant to the Securities Purchase Agreement, Mr. Usdan transferred all of his rights, title and interest, along with his sale of Common Stock and Series B Preferred Stock, in and under: (i) the Series B Purchase Agreement, (ii) the Stockholders Agreement, and (iii) the Registration Rights Agreement. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 is hereby amended by adding the following: Exhibit 8 - Securities Purchase Agreement, dated as of June 13, 2003, by and among Castle, Sentinel Capital and Usdan. Page 7 of 9 Pages SIGNATURES After reasonable inquiry and to the best of each of the undersigned's knowledge and belief, each of the undersigned certify that the information set forth in this statement is true, complete and correct. Date: June 30, 2003 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: /s/ David S. Lobel ----------------------------------- Name: David S. Lobel Title: Managing Member SENTINEL PARTNERS II, L.P. By: Sentinel Managing Company II, LLC Its: General Partner By: /s/ David S. Lobel ----------------------------------- Name: David S. Lobel Title: Managing Member SENTINEL MANAGING COMPANY II, LLC By: /s/ David S. Lobel ----------------------------------- Name: David S. Lobel Title: Managing Member /s/ David S. Lobel -------------------------------------------- David S. Lobel Page 8 of 9 Pages EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION 1 Joint Filing Agreement, dated as of the date hereof by and among Sentinel Capital, Sentinel Partners, SMC and David S. Lobel.* 2 Preferred Stock and Subordinated Note Purchase Agreement, dated as of May 15, 2003, by and among Castle, GE Capital, Midwest, Sentinel, Usdan, Fitzpatrick and Slack. (previously filed by Heller Financial Inc.)* 3 Certificate of Designations, Rights and Preferences of the Series B Convertible Preferred Stock. (previously filed by Heller Financial Inc.)* 4 Registration Rights Agreement, dated as of May 15, 2003, by and among Castle, GE Capital, Midwest, Sentinel, Usdan, Fitzpatrick and Slack. (previously filed by Heller Financial Inc.)* 5 Stockholders Agreement, dated as of May 15, 2003, by and among Castle, GE Capital, Midwest, Sentinel, Usdan, Fitzpatrick and Slack. (previously filed by Heller Financial Inc.)* 6 Management Agreement, dated as of May 15, 2003, between Castle and Sentinel (incorporated by reference to Exhibit 10.6 of Castle's 8-K dated May 15, 2003).* 7 Credit Agreement dated as of May 15, 2003 among Castle, Castle Dental Centers of Florida, Inc., Castle Dental Centers of Tennessee, Inc., Castle Texas Holdings, Inc., Castle Dental Centers of Texas, Inc., CDC of California, Inc., the lenders party thereto, and GE Capital, as agent for the Lenders (incorporated by reference to Exhibit 10.1 of Castle's 8-K dated May 15, 2003).* 8 Securities Purchase Agreement dated as of June 13, 2003 among Castle, Sentinel Capital and Usdan.
*Previously filed. Page 9 of 9 Pages EX-99.8 3 y88073a1exv99w8.txt SECURITIES PURCHASE AGREEMENT Exhibit A SECURITIES PURCHASE AGREEMENT THIS AGREEMENT dated as of June 13, 2003 between James M. Usdan, an individual (the "Seller"), Castle Dental Centers, Inc., a Delaware corporation (the "Company"), and Sentinel Capital Partners II, L.P., a Delaware limited partnership ("Sentinel"). The Seller, the Company and Sentinel hereby agree as follows: 1. Purchase and Sale of Securities. (a) The Seller hereby agrees to sell to Sentinel: (x) 8,022 shares of Series B Convertible Preferred Stock, par value $.000001 per share ("Series B Preferred Stock"), of the Company; and (y) the Company's 20% Subordinated Promissory Note in the original principal amount of $14,000 (the "Subordinated Note"); and and Sentinel hereby agrees to purchase from the Seller the Series B Preferred Stock and the Subordinated Note, free and clear of all liens, security interests and other encumbrances, in consideration for the payment by Sentinel to the Seller of $726,000 in cash. (b) The Seller hereby agrees to sell to the Company 90,000 shares of the Company's common stock, $.000001 par value ("Common Stock"), and the Company hereby agrees to purchase from the Seller the Common Stock, free and clear of all liens, security interests and other encumbrances, in consideration for the payment by the Company to the Seller of $11,780 in cash. 2. Closing. The purchase and sale of the Securities (the "Closing") shall take place on June 20, 2003 (the "Closing Date"). On the Closing Date, the Seller shall deliver to Sentinel (a) stock certificates representing the Series B Preferred Stock, accompanied by duly executed stock powers and (b) the Subordinated Note, endorsed or otherwise assigned to Sentinel, against the payment by Sentinel of the consideration set forth above. On the Closing Date, the Seller shall deliver to the Company stock certificates representing the Common Stock, accompanied by duly executed stock powers against the payment by the Company of the consideration set forth above. 3. Representations and Warranties of the Seller. The Seller represents and warrants to and agrees with the Sentinel and the Company (each, a "Purchaser") that: (a) Title to Securities. The Seller has valid and marketable title to the Series B Preferred Stock, the Common Stock and the Subordinated Note (collectively, the "Securities"), free and clear of any security interests, liens, pledges, encumbrances or other adverse claims, and has full right, power, and authority to sell, transfer and deliver the Securities to the Purchasers; provided, however, that the Securities are subject to the provisions of the Purchase Agreement, the Stockholders Agreement and the Registration Rights Agreement (each as defined below). (b) Authority of the Seller. This Agreement, upon execution and delivery in accordance with its terms, will represent the valid, binding and enforceable obligations of the Seller in accordance with its terms. (c) No Conflict. The consummation of the transactions contemplated by this Agreement will not result in the breach of or constitute a default under any agreement, instrument, law or court decree to which the Seller is a party or by which the Seller is bound. 4. Representations and Warranties of each Purchaser. Each Purchaser represents and warrants to the Seller that: (a) Corporate Authority. This Agreement, upon execution and delivery in accordance with its terms, will represent the valid, binding and enforceable obligations of such Purchaser in accordance with its terms. (b) No Conflict. The consummation of the transactions contemplated by this Agreement will not result in the breach of or constitute a default under the constituent documents of such Purchaser or any agreement, instrument or court decree to which such Purchaser is a party or by which it is bound; provided that the Company may require the consent of the holders of its Series B Convertible Preferred Stock, the holders of its Convertible Preferred Stock, Series A-1, and/or the lender under its senior credit facility, which consents the Company will use its best efforts to acquire prior to the Closing. 5. Miscellaneous. (a) Transfer of all Rights. To the extent permitted by law, upon delivery of the Securities to the Purchasers at the Closing, the Seller hereby transfers all of Seller's rights, title and interest in and under: (i) The Preferred Stock and Subordinated Note Purchase Agreement, dated May 15, 2003, between the Company, Sentinel, General Electric Capital Corporation ("GECC"), Midwest Mezzanine Fund II, L.P. ("Midwest"), Thomas P. Fitzpatrick ("Fitzpatrick"), John M. Slack ("Slack") and the Seller ("Purchase Agreement"); (ii) The Stockholders Agreement dated May 15, 2003, between the Company, Sentinel, GECC, Midwest, Fitzpatrick, Slack and the Seller ("Stockholders Agreement"); (iii) Registration Rights Agreement, dated May 15, 2003, between the Company, Sentinel, GECC, Midwest, Fitzpatrick, Slack and the Seller ("Registration Rights Agreement"). (c) Termination of Rights. Seller's rights and obligations under the Purchase Agreement, the Stockholders Agreement and the Registration Rights Agreement will be terminated in their entirety with no liability to the Company, the Seller or Sentinel upon consummation of the transactions contemplated herein. 2 (d) Successors Bound. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. (e) Amendment. This Agreement may be amended only by an instrument in writing executed by the parties hereto. (f) Governing Law. This Agreement shall be construed and enforced under and in accordance with and governed by the law of the State of New York. (g) Counterparts. This Agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement. (h) Acknowledgement. Sentinel acknowledges that the Securities will be subject to the provisions of the Purchase Agreement, the Stockholders Agreement and the Registration Rights Agreement and agrees to execute any additional documents required by the Company or the other parties to such agreements to acknowledge Sentinel's agreement to the terms thereof. (i) Separate Closings. In the event that the Company cannot obtain the consents necessary for it to purchase the Common Stock on the Closing Date, the Closing with respect to the Series B Preferred Stock and the Subordinated Notes shall not be effected thereby and shall occur regardless of such event. The Company shall remain obligated following the Closing Date to obtain the consents required and shall be obligated to purchase the Common Stock as soon as possible after such consents are received thereafter. 3 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written. SELLER: ----------------------------------------- JAMES M. USDAN PURCHASERS: 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: CASTLE DENTAL CENTERS, INC. By: ----------------------------------- John M. Slack, Senior Vice President 4 -----END PRIVACY-ENHANCED MESSAGE-----