PRINCETON DENTAL MANAGEMENT CORP, 10KSB, 1997-03-31

PRINCETON DENTAL MANAGEMENT CORP
10KSB, 1997-03-31
HEALTH SERVICES

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<PAGE> 1
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

Commission File No. 0-20222

PRINCETON DENTAL MANAGEMENT CORPORATION
(exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 36-3484607
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>

7421 WEST 100TH PLACE, BRIDGEVIEW, ILLINOIS 60455
(Address of principal executive offices, including zip code)

(708) 974-4000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $0.0001 PAR VALUE

Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No __

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

The registrant's revenues for its most recent fiscal year ended December 31,
1996 were $18,044,213.

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 1, 1997 (based upon the average bid and ask prices of
these shares in the over-the-counter market as of March 1, 1997) was
approximately $2,888,357.

As of March 1, 1997 there were 10,122,323 shares of the registrant's Common
Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
NONE

<PAGE> 2
PART I

ITEM 1. BUSINESS.

Overview

Princeton Dental Management Corporation ("Princeton" or the "Company") is
involved in the management of dental practices and laboratories. The market of
general dental practitioners and dental specialists (herein after referred to
as the "dental profession") is characterized as highly fragmented, with,
according to the American Dental Association ("ADA"), more than 100,000
practices in total. The Company's strategy is to acquire and consolidate dental
practices and to increase their profitability by centralizing certain
administrative, purchasing, marketing and other functions and implementing
certain revenue enhancement programs. Ultimately, the Company's goal is to
acquire and consolidate a sufficient number of dental practices to justify the
Company's entry into the dental managed care business and possibly the dental
supply business. This strategy of vertical integration is intended to allow the
Company to capture and manage profits from the full range of revenues available
in the highly fragmented and steadily growing dental profession.

Princeton was incorporated in Delaware in October 1986 and commenced
operations in 1987. Princeton's principal executive offices are located at
7421 West 100th Place, Bridgeview, Illinois 60455.

General Development of Business.

Princeton was organized in October 1986 for the purposes of acquiring
dental practices on a nationwide basis and to provide various services to those
dental practices, including marketing, practice development, management, and
support services. From the date of incorporation through April 1992, the
Company developed and provided marketing and practice enhancement services for
dental practices and conducted demographic research.

As of March 1, 1997, the Company operated ten dental practices and two
dental laboratories, obtained through the acquisitions and sales (the
"Transactions") described below.

In July 1992, the Company acquired all of the issued and outstanding
shares of common stock of American Dental Health-Battle Creek, P.C. ("Battle
Creek"). Battle Creek operates 3 dental practices in Battle Creek, Taylor and
Ypsilanti, Michigan. The acquisition price, which was a total of $2,109,000,
consisted of $500,000 in cash, $1,109,000 in a promissory note and $500,000
worth of Company common stock. With respect to the stock, the Company issued
163,578 shares which equated to $500,000 in market value of the stock at the
time of acquisition.

In March 1993, the Company acquired substantially all of the assets of
Century Dental Centers I, P.C. ("Century"), a dental practice located in
Springfield, Pennsylvania. The acquisition price, which was a total of
$547,000, consisted of $145,000 in cash, $269,000 in a promissory note and
$133,000 worth of Company common stock. With respect to the stock, the Company
issued 26,394 shares which equated to $132,500 in market value of the stock at
the time of acquisition.

In December 1993 the Company acquired all of the issued and outstanding
common stock of Mason Dental Inc. ("Mason"), a dental laboratory located in
Livonia, Michigan. The acquisition price, which was a total of $3,490,000,
consisted of no cash, $1,629,000 in a promissory note (subsequently adjusted
upwards by $316,406.25 due to a post-closing adjustment based on the value of
the Company's common stock), and $1,861,000 worth of Company common stock. With
respect to the stock, the Company issued 462,500 shares which equated to
$1,861,000 in market value of the stock at the time of acquisition.

In February 1994, the Company acquired all of the issued and outstanding
common stock of C.D. Nunnelly, D.D.S. & Associates, Inc., d/b/a Fairfield
Dental Center ("Fairfield"), a dental facility located in Pensacola, Florida.
The acquisition price, which was a total of $1,397,000, consisted of $366,000
in cash, $541,000 in a promissory note and $490,000 worth of Company common
stock. With respect to the stock, the Company issued 166,667 shares which
equated to $490,000 in market value of the stock at the time of acquisition.

<PAGE> 3
In January 1997, the Company sold all of the assets of Fairfield back to
Drs. Payne and Barfield, the individuals from whom the Fairfield practice was
originally purchased (See Exhibit 10.52). The sale price, which was a total of
$885,000, consisted of $475,000 in cash and approximately $410,000 in
forgiveness of debt.

In April 1994, the Company acquired all the issued and outstanding stock
of seven dental practices and one dental laboratory, namely The Dental Team of
Boca Raton, Inc., The Dental Team of Boynton Beach, Inc., The Dental Team of
Coral Springs, Inc., The Dental Team of Deerfield Beach, Inc., The Dental Team
of Delray Beach, Inc., The Dental Team of Pompano Beach, Inc., Palm Beach
Dental Services, Inc. and Pompano Square Dental Lab, Inc. (collectively
referred to as "The Dental Team") located in Palm Beach and Broward counties in
Southeast Florida. The acquisition price, which was a total of $4,611,000,
consisted of $600,000 in cash, $831,000 in promissory notes and $3,180,000
worth of Company common stock. With respect to the stock, the Company issued
1,247,059 shares which equated to $3,180,000 in market value of the stock at
the time of acquisition.

In February 1997, the Company sold all of the assets comprising the Dental
Team of Delray Beach to Dr. Richard Staller, a former director of the Company
and one of the individual dentists from whom the Dental Team was originally
purchased (See Exhibit 10.51). The sale price, which was a total of
approximately $200,000, consisted of approximately $200,000 in forgiveness of
debt resulting from the acquisition notes and Dr. Staller's employment and
management agreements with the Company.

NARRATIVE DESCRIPTION OF BUSINESS.

The Company is involved in the management of dental practices and
laboratories. Dental practices provide routine dental services and, in certain
cases, specialty services such as oral surgery, orthodontics, periodontics, and
endodontics. These services are offered to the general public on either a
fee-for-service basis or through a form of managed care. The dental
laboratories manufacture dental prosthetics (e.g. dentures, bridges, crowns,
etc.) as requested by the dental practices.

The Company's strategy is to acquire and consolidate dental practices and
increase their profitability by centralizing certain administrative,
purchasing, marketing and other functions and by implementing certain revenue
enhancement programs. The Company centers its acquisitions in certain
geographic regions which the Company believes provides the critical mass of
patients necessary to support additional ancillary services such as a dental
laboratory and specialist practitioners (such as oral surgeons, orthodontists,
periodontists, endodontists, etc.). Ultimately, the Company's goal is to
acquire and consolidate a sufficient number of dental practices to justify the
Company's entry into the dental managed care business.

The Company's strategy is to continue to position the Company to
capitalize upon developing trends within the health care industry. Management
believes that involvement with managed care programs will be critical to the
growth of its dental practices as a broader managed care environment develops
over the ensuing years. As such, the Company will continue to target its
acquisitions in geographic areas with demographic compositions most likely to
benefit from increased insurance coverage in the future.

The Company's practices compete with both existing neighborhood general
practices as well as franchises and dental practices located in shopping
centers, malls, etc.

The Company's operations are not significantly dependent on the source or
availability of any materials. Rather, the Company's viability and revenue
production is dependent upon the ability to attract and employ dental
practitioners and specialists. The Company's acquisition strategy typically
includes maintaining the employment of the dentists and specialists within the
acquired practice groups. The Company feels that there is no shortage of
qualified available dental professionals that would impair its ability to
maintain and expand its business.

The Company is not dependent upon any single customer or a few major
customers. However, a significant percentage of the Company's revenues are
generated from managed care agreements. Under customary managed care
agreements, providers agree to accept a reduced fee for service or payment on a
capitation (fixed fee) basis. In return for this concession, under the terms
of such agreements, the practice is a preferred or exclusive provider of
services to a certain population of potential patients. The Company recognizes

<PAGE> 4
that, while these managed care contracts can significantly enhance the revenue
of a given practice, the loss of any of these contracts could likewise be
significant.

The Company believes that in certain circumstances, the trade name of the
practice or group of practices acquired may have value within the area it
services. As part of each acquisition, the Company always acquires the
practices' trade names and trademarks. The Company typically will not change
the name of the acquired practices post-acquisition.

The practice of dentistry is subject to regulation under state laws which,
among other things, govern the ownership and control of dental practices,
advertising, fee splitting, referral fees, and other financial arrangements.
For example, some states may require the dentist's name (or possibly a
corporate name of which the practicing dentist is an officer) to be displayed
clearly on an outside sign or on the door of the practice, while other states
may require the billing for professional services to be made by the dentist who
rendered the services with that dentist's name clearly reflected thereon. No
regulatory authority has formally reviewed or approved Princeton's plan of
operations and no such formal review is presently contemplated or, to
Princeton's knowledge, available. No assurances can be given that, if any such
review was available or occurred, the result would be favorable. In addition,
there can be no assurance that such states will not enact more restrictive
legislation that could require Princeton to modify its operations and possibly
adversely affect its profitability prospects.

As of March 1, 1997, Princeton employed approximately 212 individuals on a
full-time basis, including two executive officers, and 45 on a part-time basis
(defined as less than 32 hours per week). Princeton is not a party to any
collective bargaining agreement and believes its employee relationships are
satisfactory.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's principal executive offices were moved in 1995 from Holiday,
Florida to Hoffman Estates, Illinois, and in 1996 from the Hoffman Estates
location to 7421 West 100th Place, Bridgeview, IL 60455. The Company currently
leases approximately 2,646 square feet at the Bridgeview location on a month to
month basis at a rate of approximately $1,555.00 per month from an entity
controlled by Frank Leonard Laport, Chairman and CEO of Princeton (See Exhibit
10.49). The Company also rents its phone system at the Bridgeview location on a
month to month basis at a rate of approximately $570.00 per month from Mr.
Laport (See Exhibit 10.50). To date, while such rent payments continue to
accrue, Mr. Laport has foregone actual payment of the rent on both the office
lease and the equipment lease.

The lease on the former corporate office located at 2739 U.S. Highway 19,
Holiday, Florida 34691, remains Princeton's obligation. Princeton has sublet
all of the space at this location. The net reduction in rent in 1996 due to the
sublease was $61,940. The minimum lease payments under this operating lease,
net of sublease, for the years subsequent to December 31, 1996 are $27,088 in
1997, $27,089 in 1998, and $12,313 in 1999.

On July 31, 1992, in connection with the Battle Creek Acquisition,
Princeton was assigned the right, pursuant to license agreements to operate
dental facilities in Meijers Thrifty Acres stores located in Battle Creek,
Taylor, and Ypsilanti, Michigan. The license agreements, which terminate on
December 31, 1997 also obligate Princeton to make license payments with respect
to the facilities. Pursuant to these licenses, Princeton will be required to
pay a base license fee of $28,652 and an additional license fee based upon
actual collections received by each facility. For the year ended December 31,
1996, license payments on these facilities included $224,952 determined from
actual collections received in the facilities. Princeton is in the process of
contesting certain of these license fees and, in any event, does not intend to
remain at the Meijer's locations.

On March 31, 1993, in connection with the Century Acquisition, Princeton
was assigned a lease with respect to the facility, which is located in a
shopping center in Springfield, Pennsylvania. The lease, which terminates in
2001 and is subject to renewal, covers approximately 2,820 square feet. For the
year ended December 31, 1996, lease payments on this facility totaled $66,045
including common area maintenance. The future minimum lease payments under this
operating lease for the years subsequent to December 31, 1996 range from
$66,045.00 in 1997 to $66,270 in 2001.

On December 31, 1993, in connection with the Mason Acquisition, Princeton
assumed the triple net lease for $148,200 per year, payable on a monthly basis
to Stark Enterprises, an entity owned by three individuals who are now
shareholders of Princeton as a result of the merger and one of whom, Gary A.

<PAGE> 5
Lockwood, is President and COO of Princeton. The lease, which terminates at
December 31, 2001 and is subject to renewal, covers approximately 18,000 square
feet.

On February 28, 1994, in connection with the Fairfield acquisition,
Princeton assumed a
lease for $102,324 per year, payable on a monthly basis to Fairfield Dental
Building, a partnership
owned by two individuals who are now shareholders of Princeton as a result of
the merger. The
lease, which was due to terminate at February 28, 1999, covered approximately
7,000 square feet. In connection with the sale of Fairfield in 1997, this lease
has been terminated.

On April 1, 1994, in connection with the Dental Team acquisition,
Princeton assumed nine facility leases ranging from $7,200 to $68,125 per year,
payable on a monthly basis with expiration dates ranging from January 1, 1997
to March 1, 2004. The future minimum lease payments under these operating
leases for the years subsequent to December 31, 1996 are $283,652 in 1997,
$236,261 in 1998, $236,261 in 1999, and $172,749 thereafter. In addition, the
Boynton Beach office lease and a storage facility lease are payable to B & S
Properties, a partnership owned by two individuals who are now shareholders of
Princeton as a result of the merger, which requires monthly payments totaling
$3,600 through March 1, 2004. In connection with the sale of the assets of the
Dental Team of Delray Beach, the lease for the Delray Beach location has been
terminated.

In the opinion of management, the Company's facilities are adequately
covered by insurance.

ITEM 3. LEGAL PROCEEDINGS

On June 14, 1995, the Company filed a complaint for declaratory relief
against Messrs. Terry D. Gingle and Oscar L. Hausdorff (the "Gingle Group"),
certain former members of senior management, regarding a pledge of shares of
Company Common Stock by the Gingle Group to the Investor Group (See Item 12).
This matter has been settled on mutually acceptable terms (See Exhibit 10.47),
with the Gingle Group forfeiting an aggregate of 135,000 shares of Company
Common Stock, with 117,450 shares being forfeited to Amsterdam Equities
Limited, a member of the Investor Group (See Item 12), and 17,550 shares being
forfeited to the Company to be held as treasury stock.

On March 8, 1996, a lawsuit was filed against the Company and its officers
and directors by Frank Leonard Laport and the Frank Leonard Laport & Associates
Ltd. Employees' Money Purchase Pension Plan & Trust, in the Circuit Court of
Cook County, Illinois County Department, Chancery Division, Case Number 96 CH
0002379. Mr. Laport is currently an officer and director of the Company, but
was not an officer and director of the Company during the pendency of the suit.
The lawsuit alleged that the Company's failure to close the proposed
convertible debt transaction would cause the Company irreparable injury and
sought an injunction, unspecified compensatory damages and punitive damages in
the amount of $1,000,000. The suit was dismissed upon consummation of the
Financing Arrangement (See Item 12).

On October 16, 1996, the Company was sued for $160,000 by Romajo Partners
Limited Partnership, a Partnership controlled by Dr. Seymour Kessler, a former
officer and director of the Company. The suit seeks to collect on a series of
demand notes issued by the Company in favor of Romajo Partners. The Company is
contesting the suit and has made various counter-claims.

The Company is involved in a number of other legal proceedings related to
malpractice, worker's compensation, general employment, vendor and contract
disputes all in various stages of proceedings. Management believes settlements,
if any, in excess of insurance coverage would be immaterial. There is no other
litigation pending to which Princeton is a party or of which any of its
property is the subject, other than routine litigation incidental to its
business and for which Princeton is insured. Further, there are no proceedings
known to be contemplated by governmental authorities relating to either
Princeton or its properties.

<PAGE> 6
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.
PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The Company's common stock and warrants are traded in the over-the-counter
market and have been quoted on the NASDAQ System under the symbols PDMC and
PDMCW, respectively, since April 15, 1992.

On November 6, 1996, NASDAQ approved, subject to public comment, certain
modifications to the listing criteria on the NASDAQ System. These proposed
modifications were extensive, and included a proposal that a company whose
minimum bid price fell below $1.00 for a period of time could, in certain
circumstances, be delisted. These proposed modifications are currently in the
process of examination by the Securities and Exchange Commission for final
approval. The Company's minimum bid price is currently below $1.00, and the
Company can make absolutely no assurances regarding the final outcome of these
proposed modifications to the listing criteria on the NASDAQ System or the
impact which such modifications could have on the Company's continued listing
on the NASDAQ System.

The following table sets forth the high and low bid quotations for the
Company's common stock and warrants, as reported by the National Association of
Securities Dealers, Inc. for the two most recent fiscal years. Such quotations
reflect inter-dealer quotations, without retail mark-up, mark-downs or
commissions, and may not represent actual transactions.

<TABLE>
<CAPTION>
COMMON STOCK WARRANTS

FISCAL YEAR ENDED
DECEMBER 31, 1996 HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First Quarter $1.69 $0.94 $ N/A $ N/A
Second Quarter 1.50 0.75 N/A N/A
Third Quarter 0.87 0.56 0.06 0.03
Fourth Quarter 0.75 0.31 0.09 0.03

</TABLE>
FISCAL YEAR ENDED
DECEMBER 31, 1995
<TABLE>
<S> <C> <C> <C> <C>
First Quarter $1.63 $ .88 $ .88 $ .25
Second Quarter 1.69 .94 .45 .19
Third Quarter 1.50 .94 .31 .13
Fourth Quarter 1.43 1.00 .25 .13
</TABLE>

As of December 31, 1996, there were 233 and 35 holders of record of the
Company's common stock and warrants, respectively. These numbers include
shareholders and warrant holders of record who may hold stock and warrants for
the benefits of others. The Company does not consider it practical to attempt
to determine the number of individuals who are beneficial owners of its shares
and warrants.

The Company has never paid cash dividends on its common stock and does not
expect to pay such dividends in the foreseeable future. Management currently
intends to retain all available funds for the development of its business and
for use as working capital.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

In 1995 and 1996, the Company continued to incur significant operating
losses and net losses as a result of its overall operations and, in 1996, the
Company also had a one time write down of identifiable goodwill of $3,499,172
to more properly reflect the value of its practices. During this period the
Company made no significant new acquisitions and incurred significant

<PAGE> 7
additional debt, primarily in the form of convertible debt and preferred stock
in connection with the Financing Arrangement (See Item 12). In January and
February of 1997, the Company sold two of its existing dental practices
(Fairfield and the Dental Team at Delray Beach)(See Item 1) in order to provide
working capital and to fund ongoing operations.

RESULTS OF OPERATIONS

Revenues for the year ended December 31, 1996 increased by $1,201,392 as
compared to 1995, to $18,044,213 from $16,842,821. The change in revenue was
due in part to an expanded patient base, an increase in specialty services
provided and fee schedule increases.

Operating expenses increased for the year ended December 31, 1996 as
compared to 1995 by approximately $5,252,423, to $23,126,303 from $17,873,880.
This increase was due primarily to a one-time determination by the Company to
write down goodwill of $3,499,172, but was also due to an increase in payroll
cost as well as the cost of materials and supplies for both the dental
practices and the dental labs. The increase in payroll costs was attributable
to increased costs associated with general practitioners and specialty
providers.

Interest expense increased to $714,997 in 1996 from $475,963 in 1995. The
increase was primarily the result of additional advances during 1995 and 1996
under the Secured Revolving Demand Note which was subsequently incorporated
into the Convertible Debt and Preferred Stock Agreements (See Item 12).

The net operating loss for the year ended December 31, 1996 was
$5,082,090, of which $3,499,172 resulted from a one-time determination by the
Company to write down goodwill to more properly reflect the value of the
Company's practices. The net operating loss for 1996, when compared to 1995,
increased significantly due to the determination to write down goodwill, from
$1,031,059 in 1995 to $5,082,090 in 1996. Without taking into account the write
down of goodwill, the net operating loss increased from $1,031,059 in 1995 to
$1,582,918 in 1996. Aside from the reduction in goodwill, this operating loss
was primarily the result of an increase in the overall cost of providing dental
services and an expansion of the patient base to include more specialty
services as well as the production cost within the laboratory division.

FINANCIAL CONDITION

Changes in the Company's financial condition at December 31, 1996 as
compared with December 31, 1995 resulted primarily from the Company's operating
results during 1996 as well as a significant reduction in the amount of funding
provided by the Investor Group during 1996. The Company's current revenue base
is insufficient to cover the current costs of providing the dental services,
overhead costs, and debt service requirements. During 1995, the Company funded
its losses from operations primarily through advances from the Investor Group
of approximately $1,920,000. During 1996 the advances from the Investor Group
were limited to $200,000, which required the Company to negotiate extended
credit terms with its suppliers in order to fund operations. However, several
of the Company's larger suppliers have ceased extending credit and are filling
orders on a C.O.D. basis or on very limited credit terms.

Given the Company's recurring losses from operations, the significant working
capital deficits, the uncertainty in obtaining additional funding to provide
working capital in the short term, and the current situation with the Company's
vendors, a substantial doubt has been raised as to the entity's ability to
continue as a going concern absent significant improvement in operations or
significant additional funding.

The Company is currently in the process of developing revenue enhancement
programs in both the dental practice segment as well as the laboratory segment.
In addition, the Company is also working to improve the operating results of
the various operations by reducing the costs of patient services including a
reduction in payroll. The Company has taken steps to reduce general and
administrative expenses by eliminating substantially all outside consulting
arrangements. However, the Company can make no assurances in regards to the
results of these programs.

In addition, in order to provide working capital, the Company has sold two of
its practices (i.e. Fairfield and the Dental Team at Delray Beach)(See Item 1)
and is in the process of negotiating the sale of its Century dental practice in
Pennsylvania. However, the Company can make no assurances as to whether or not
this additional sale will be consummated.

<PAGE> 8
During the first and second quarters of 1996, the Company did not deposit
certain state payroll tax liabilities totaling approximately $53,000. The
Company has paid $25,840 towards this amount and is currently negotiating with
the State to pay the remaining payroll tax obligations in monthly installments
and to abate penalties associated with the late payment. In addition, during
1994 the Company did not make certain federal payroll tax deposits on a timely
basis and, while all late payments have now been made, is in the process of
negotiating with the IRS to abate penalties associated with these late filings.
Management has provided a reserve of approximately $25,000 for the state tax
liability and penalties and $70,000 to cover the IRS penalties should the IRS
ruling be unfavorable. Management believes these reserves are sufficient to
cover these obligations.

Liquidity and Capital Resources

As of December 31, 1996, the Company had a working capital deficit of
$4,362,242, and a financial accumulated deficit of $13,731,190 (including a one
time write-down of $3.5 Million of goodwill). Goodwill and other intangibles
comprise approximately 68% of total assets, leaving tangible assets of
approximately $3,280,762 and negative tangible net worth of approximately
$5,953,637.

During the fiscal year ended December 31, 1996, the Company's cash and
cash equivalents increased approximately $60,363. Cash provided by operations
was $225,891 resulting primarily from the Company's one time write-down in
goodwill, an increase in accounts payable and accrued expenses for the period
of $1,073,316 and by depreciation and amortization of $1,076,836. Costs
associated with the issuance and redemption of the Company's common stock
amounted to $70,750, and a slight increase of $32,171 in accounts receivable.

Investing activities utilized $196,559 of cash primarily related to the
acquisition of a small dental lab and property and equipment for $158,706 and
debt issuance costs of $37,853. Cash of $31,031 was provided by financing
activities primarily as a result of proceeds from financing activities of
$409,189, net of debt principal payments of $378,158.

As disclosed in Item 12, the Company's primary source of outside financing
is from the Investor Group. Given the Company's working capital deficit and
negative tangible net worth, the Company is heavily reliant on the Investor
Group's financing to continue any possible expansion plans of the Company and,
to a much larger extent, to provide working capital to fund the operations. The
Company can make no assurances the Company will be able to meet the
requirements needed to obtain the additional financing in the increments
required. In fact, given the performance of the Company for 1996, these
requirements would most likely not be met and additional funding would only be
obtained if the Investor Group waived or restructured certain portions of the
Financing Arrangement (See Item 12).

ITEM 7. FINANCIAL STATEMENTS

The Company's audited financial statements for the fiscal years ended
December 31, 1995 and 1996 accompany this report as Item 13.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

<PAGE> 9
PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT

The following persons are the directors and executive officers of the
Company as of the date of this report:

<TABLE>
<S> <C> <C> <C> <C>
First Became Beneficially Owned Beneficially Owned
Employment Age a Director Number of Shares Percent of Shares
- ---------- --- ------------ ------------------ ------------------
Frank Leonard Laport 56 8/9/96 596,097(1) 5.9%
George B. Collins 65 8/9/96 0(2) 0.0%
Gary A. Lockwood 50 8/9/96 204,061(3) 2.0%
</TABLE>

(1) Does not include full conversion and dilution of Series A stock and
convertible debt currently held by Amsterdam Equities Limited and Mr.
Laport, (See Item 12), Conversion of this Series A Stock and Convertible
Debt could result in Amsterdam Equities and Mr. Laport holding, in the
aggregate, in excess of 50% of the Class.

(2) Does not consider Amsterdam Equities Limited stock for which Mr.
Collins holds a power of attorney.

(3) Total shares held by the Island Group.

In connection with the August 1996 letter agreement, Dr. Charles R.
Mitchell resigned as President of the Company and John H. Hagan resigned as CEO
and Secretary in August 1996 (See Item 12 and Exhibit 10.46). Dr. Mitchell, Mr.
Hagan and Dr. Symour Kessler remained as directors of the Company until
September 1996, at which point they were not reelected as directors at the
Company's Annual Meeting. Dr. Richard Staller, who was elected a director at
the Annual Meeting in September 1996, resigned as a director of the Company
effective as of November 1996.

Frank Leonard Laport. Mr. Laport, born Chicago, Illinois, March 8, 1941,
admitted to the Bar: 1966, Illinois; 1969, Florida; 1974, Indiana; 1966, U.S.
Tax Court; 1967, U.S. District Court, Northern District of Illinois; 1969, U.S.
District, Southern District of Florida; 1974, U.S. District, Southern District
of Indiana; U.S. Supreme Court. Licensed as Illinois Real Estate Broker on
July 1, 1964. Earned the Certified Commercial Investment Member (C.C.I.M.)
Designation of the Realtors National Marketing Institute, an affiliate of the
National Association of Realtors in 1983. Education: Elmhurst College (B.S., in
B.A., 1963); DePaul University, Law School (J.D. 1966).

George B. Collins. Mr. Collins, Born Kansas City, Missouri, April 23, 1931;
admitted to bar, 1953, Arkansas; 1955 Illinois; 1970, U.S. Tax Court; 1972,
U.S. Supreme Court; 1982, U.S. District Court, Northern District of Illinois,
Trial Bar; U.S. Court of Appeals, Second, Seventh and Ninth Circuits.
Education: Arkansas A. & M. College (B.S. 1952); University of Arkansas
(L.L.B., 1954). Omicron Delta Kappa. Associate Editor, Arkansas Law Review,
1951-1952. Author: "Usury," 8 Arkansas Law Review, September 1954. Teaching
Associate, Northwestern University School of Law, 1954-1955. co-author:
"Defending White Collar Crimes," Practicing Law Institute 1976; "White Collar
Crimes; Defense Strategies", Practicing Law Institute, 1977; "White Collar
Crimes:, Practicing Law Institute, 1978; "White Collar Crimes." Practicing Law
Institute, 1980. Member: Chicago (Member, 1955-1978, Vice Chairman, 1967 and
Chairman, 1968, Committee on Legal Education, Member, Committee on Professional
Fees, 1966; Vice Chairman, 1973; 1974-1975; Chairman, 1975, Committees on:
Environmental Law, 1973; Circuit Court Operations, 1976. Member 1976-1986,
Vice Chairman, 1979-1980; 2981 and chairman 1980-1981, Lawyers Referral Plan
Committee), Illinois State, Arkansas and American Bar Associations.

Gary A. Lockwood. Mr. Lockwood was named Chief Operating Officer of Princeton
Dental Management Corporation in June, 1996. In this capacity, he is
responsible for all of the Company's operating units in Michigan, Florida,
Pennsylvania, and Illinois. Previously he served as Chief Executive Officer of
the Company's dental laboratories in Michigan and Florida. Mr. Lockwood brings
to his post more than 20 years of dental management experience as owner of
Michigan-based Mason Dental, Inc. one of the nation's largest manufacturers of
dental prosthetics. Prior to Mason's acquisition by the Company, he served as
President and Director of Diversified Dental Services, a wholly owned
subsidiary of Mason Dental. Mr. Lockwood has held executive positions and
directorships with realty, financial management and banking organizations. A
Michigan native, he is a graduate of Northern Michigan University with a degree
in business administration.

<PAGE> 10
Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's Directors and Executive Officers, and persons who own more than 10%
of the Company's Common Stock, to file with the Securities and Exchange
Commission (the "SEC") and the NASDAQ System, initial reports of ownership and
reports of changes in ownership of Common Stock. In addition these individuals
are also required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, during the fiscal
year ended December 31, 1996, all Section 16(a) filing requirements applicable
to its executive officers, directors and greater than 10% beneficial owners
were complied with.

[ TABLE TO FOLLOW ON NEXT PAGE ]

<PAGE> 11
ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth the compensation accrued by the Company for
the last three fiscal years to the Company's Chief Executive Officers and to
those executive officers whose compensation exceeded $100,000 in any of the
last two fiscal years.

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY COMPENSATION TABLE

Other Annual Restricted Options LTIP All Other
Name and Principal Position Year Salary ($) Compensation Stock Awards SARS (#) Payouts (#) Compensation
- --------------------------- ---- ---------- ------------ ------------ -------- ----------- ------------
Terry D. Gingle 1996 0 0 0 0 0 0
Former Chairman of the
Board 1995 0 0 0 0 0 0
and Chief Executive Officer 1994 173,763 0 0 0 0 0
Oscar L. Hausdorff 1996 0 0 0 0 0 0
Former President and Chief 1995 0 0 0 0 0 0
Operating Officer 1994 124,742 0 0 0 0 0
(President through 1/95)
Kurt E. Anderson 1996 0 0 0 0 0 0
Former President 1995 53,717 0 0 0 0 0
(President 1/95 to 10/95) 1994 0 0 0 0 0 0
Charles R. Mitchell 1996 44,000 0 50,000(1) 0 0 0
Former President 1995 0(1) 0 0(1) 0 0 0
(President 10/95 to 8/96) 1994 0 0 0 0 0 0
Gary A. Lockwood 1996 117,000 0 0 100,000 0 0
President and 1995 97,000(2) 3,731(2) 0 0 0 0
Chief Operating Officer 1994 0 0 0 0 0 0
(President 8/96 to Present)
Frank Leonard Laport, Esq. 1996 0(3) 0(3) 0 0 0 0
CEO & Chairman of the Board 1995 0 0 0 0 0 0
1994 0 0 0 0 0 0
</TABLE>

(1) Dr. Mitchell was awarded 50,000 shares of Common Stock in connection
with the execution of his employment contract dated January 1996. Dr.
Mitchell received no direct compensation in the form of salary or
consulting fees directly during 1995. However, Stratum Management Inc.,
a company Dr. Mitchell was affiliated with prior to his appointment as
President, had been paid $35,833 per month in the form of consulting fees
during 1995 and $41,000 per month during 1996. In addition, Stratum
received warrants to purchase 600,000 shares (subsequently reduced to
388,000 shares) of Company common stock at an excercise price of $1.00.
Dr. Mitchell's wife and siblings remained shareholders and employees of
Stratum during Dr. Mitchell's tenure with the Company.

(2) Compensation received was primarily for the management of Dental
Labs. G. Lockwood did not receive compensation in an executive officer
capacity during 1995.

(3) Mr. Laport currently serves without direct compensation. However,
Mr. Laport is a member of the Investor Group (See Item 12).

<PAGE> 12
Compensation of Outside Directors

Each outside director of the Company receives $1,000 for each meeting
attended, and directors are entitled to be reimbursed for all reasonable
out-of-pocket expenses incurred in connection with their duties as directors.
For the year ended December 31, 1995, outside directors' fees and expenses that
were paid amounted to $4,000. Outside director's fees and expenses that were
paid during 1996 amounted to $7,000.

Option Grants in Last Fiscal Year

As of March 1, 1997 options to purchase an aggregate of 412,000 shares of
Common Stock at exercise prices ranging from $4.00 to $0.87 had been granted
and were outstanding under the Company's 1993 Incentive and Non-Statutory Stock
Option Plan. The dates such options were granted range from June 3, 1993 to
June 6, 1996.

As of March 21, 1996, as amended on July 17, 1996, the Company issued to each
of John H. Hagan and Dr. Seymour Kessler options to purchase 81,000 shares each
(reduced from options to purchase 125,000 shares each originally granted). The
options were exercisable at a price of $1.19 per share, and expire in March
1999.

In June 1996, the Company issued to Gary A. Lockwood options to purchase
100,000 shares. The options vest over a 3.5 year period. The options were
exercisable at a price of $0.87 per share, and expire in January 2003.

Effective as of January 1996, as amended on July 17, 1996, the Company issued
Warrants to Purchase up to 388,000 shares of Company common stock (reduced from
600,000 shares originally) to Stratum Management, Inc., a consulting group
affiliated with Dr. Charles R. Mitchell (See Item 12). The Warrants were
exercisable at an exercise price of $1.00. The Warrants expire in 1998.

Effective as of April 1996, the Company issued Warrants to purchase to the
Investor Group for an aggregate of 4,125,000 shares of Company common stock.
The Warrants have an exercise price of $0.10 per share and, due to the failure
by the Company to achieve certain stated financial goals, were exercisable
after January 1, 1997 and are presently exercisable (See Item 12).

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

None

Employment Agreements

Frank Leonard Laport, Chairman and CEO of the Company, currently serves
without compensation or an employment agreement.

Effective as of June 1, 1996, the Company entered into an Amendment to
Employment Agreement with Gary A. Lockwood, President and COO of the Company,
which provided for (i) an increase in annual salary, effective as of June 1,
1996, from $97,000 to $105,469.71 (with subsequent annual increases based on
the Consumer Price Index) for Mr. Lockwood's operation of the Company's Mason
Dental subsidiaries, and (ii) a salary of $12,000 per annum and options to
purchase up to 100,000 shares of Company stock for Mr. Lockwood's services as
President and COO of the Company (See Exhibit 10.48).

Effective as of January 1, 1996, the Company entered into an Employment
Agreement with Dr. Charles R. Mitchell (See Item 12). The Employment Agreement,
which provided for a per annum salary of $96,000 and the outright grant of
50,000 shares of Company common stock, was terminated in all respects effective
August 1, 1996 (See Exhibits 10.37 and 10.46).

<PAGE> 13
ITEM 11. SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership by Certain Beneficial Owners

The following table sets forth the security ownership by certain
beneficial owners for persons owning 5% or more of the Company's Common Stock
as of March 1, 1997.

<TABLE>
<S> <C> <C>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- -------------------------- ----------------------- --------
Amsterdam Equities Limited 1,719,855(1) 16.9%
404 East Bay Street
Nassau, N.P., Bahamas
Frank Leonard Laport 596,097(1) 5.9%
7421 W. 100th Place
Bridgeview, IL 60455
Chairman, CEO
Terry D. Gingle 548,596(2) 5.4%
5226 West Shore Dr.
New Port Richey, FL 34652
</TABLE>

1) Does not include full conversion and dilution of Series A stock and
convertible debt currently held by Amsterdam Equities Limited and Mr.
Laport, (See Item 12), Conversion of this Series A Stock and Convertible
Debt could result in Amsterdam Equities and Mr. Laport holding, in the
aggregate, in excess of 50% of the Class.

(2) Includes 65,000 shares held of record by Vickie Gingle.

<PAGE> 14
Security Ownership by Management

The following table sets forth as of March 1, 1997 the number of shares of
Common Stock of the Company beneficially owned by each named Executive Officer
and Director and by each director and officer as a group. Except as otherwise
indicated all shares are owned directly.

<TABLE>
<S> <C> <C>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- ------------------------ ----------------------- --------
Frank Leonard Laport 596,097(1) 5.9%
7421 W. 100th Place
Bridgeview, IL 60455
Chairman, CEO
Gary A. Lockwood 204,061(2) 2.0%
12752 Stark Road
Livonia, MI 48150
Director, President, COO
George B. Collins 0(3) 0%
One North LaSalle
Chicago, IL 60602
Director
All officers as a group 800,158(1)(2)(3) 7.9%
</TABLE>

(2) Total shares held by the Island Group.

(3) Not included in this number is 1,719,855 shares of 16.7% of the
class held by Amsterdam Equities Limited, which can under certain
circumstances, be voted by George B. Collins as Amsterdam Equities
Limited's Attorney-in-Fact.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FINANCING ARRANGEMENT

1. On April 22, 1996, the Company entered into a financing arrangement
pursuant to which the Company issued Convertible Debt (the Convertible Debt) to
Amsterdam Equities Limited in the amount of $2,483,620 and 3,599.77 shares of
Series A 11.75% Cumulative Convertible Preferred Stock (the Preferred Stock) to
Amsterdam Equities Limited (195 shares), Frank Leonard Laport (1,904.77
shares), and Beverly Trust Company, as custodian for the Frank Leonard Laport
Rollover Individual Retirement Account No. 75-49990 (1,500 shares)
(collectively, the Investor Group). The Convertible Debt and Preferred Stock
replaced indebtedness of the Company at April 22, 1996, in the amount of
$1,976,700 incurred under that certain letter agreement dated December 7, 1994
( the Letter Agreement) and that certain Secured Revolving Demand Note dated
January 27, 1995 (the Secured Note). Under the terms of the Convertible Debt
and Preferred Stock Agreements (also referred to herein collectively as the
Financing Arrangement) the Investor Group may lend additional funds, in
increments to be determined solely by the Investor Group. The funds may be used
by the Company subject to the approval of the Investor Group, to fund certain
acquisitions. The Convertible Debt and Preferred Stock will bear interest and
have a coupon rate, respectively of 11.75%, plus the payment of any withholding
taxes which may be due and owing with respect to any person which is a foreign
entity. Payments on the Convertible Debt/Preferred Stock are interest only due
in quarterly installments which were to begin in September 1996. The
Convertible Debt/Preferred Stock has a maturity of seven years from the date of

<PAGE> 15
closing, subject to acceleration in the event of a default. Subsequent to
September 30, 1996 the Company was unable to pay the interest only requirements
of the Convertible Debt and Preferred Stock Agreements, therefore, effective
October 1, 1996 until the accrued interest is paid or the requirements are
waived, interest will accrue at the default rate of 21.75%. The accrued
interest on the Convertible Debt/Preferred Stock totaled approximately $180,000
at December 31, 1996.

In addition to the amounts owed under the Letter Agreement and the Secured
Note, the terms of the Convertible Debt and Preferred Stock Agreements called
for the conversion of 291,667 shares of the Company's Regulation D stock held
by the Investor Group into $350,000 of Convertible Debt and Preferred Stock.
The shares of common stock redeemed are being held in treasury at December 31,
1996.

An additional provision of the Convertible Debt and Preferred Stock
Agreements included the payment of $300,000 as a closing fee and required the
Company to reimburse the legal fees and out-of-pocket costs and expenses of the
Investor Group in connection with the negotiation and the closing of the
transaction which totaled $216,897. The closing fees and reimbursement of the
costs and expenses were payable in the form of Convertible Debt and Preferred
Stock. In total, the Company incurred costs of $544,716 in connection with the
refinancing which has been capitalized and will be amortized over a period of
seven years.

The terms of the Convertible Debt and Preferred Stock Agreements provided
the Investor Group with certain rights pertaining to the registration of any
common stock to which the Investor Group may convert from Convertible Debt or
Preferred Stock, certain anti-dilution rights, and a right of first refusal on
any future offering of Company securities.

Under the terms of the transaction, the Company also issued a warrant to
purchase 100 shares of Series B Preferred Stock. The Series B Preferred Stock
entitled Amsterdam Equities Limited, after the occurrence of an event of
default, to elect a Class B director who would have super-majority voting
powers on the Company's Board of Directors.

The Convertible Debt and Preferred Stock may be converted into the common
stock of the Company, at the sole option of the Investor Group, at various
conversion rates as set forth in the conversion formula contained in the
Convertible Debt and Preferred Stock Agreements. Conversion pursuant to such
conversion formula would result in a conversion price per share of the
Company's common stock significantly below present market levels. If the
Investor Group were to convert all outstanding Convertible Debt and Preferred
Stock at the present time, the conversion would result in the issuance to the
Investor Group of a majority interest representing in excess of Fifty Percent
(50.0%) of the issued and outstanding shares of the Company's common stock
(assuming full conversion and anti-dilution).

In addition, pursuant to the terms of the Financing Arrangement, the
Company issued to the holders of the Convertible Debt and the Preferred Stock a
warrant to purchase an aggregate of 4,125,000 shares of common stock at an
exercise price of $.10 per share. The Investor Group could exercise the
warrant only upon the occurrence of an event of default under the terms of the
Financing Arrangement or upon the failure by the Company to achieve certain
minimum financial goals of net income of at least one dollar in the fiscal year
ending December 31, 1996, and net income at least equal to 60% of the dollar
amount of Convertible Debt of the Company outstanding at the end of 1997 for
the fiscal year ending December 31, 1997, increased by 10% each year
thereafter, compounded, plus 60% of the additional Convertible debt outstanding
at the end of such year over the immediately preceding year. The Company is in
ongoing default under the Financing Arrangement and the stated financial goals
have not been met, and, accordingly, these default warrants are capable of
being exercised by the Investor Group upon payment of the exercise price of
$412,500 in the aggregate. The cumulative effect of the issuance of shares
pursuant to the default warrant to the Investor Group could result in ownership
by the Investor Group of up to 75% of the Company's total issued and
outstanding common stock. To date, the Investor Group has taken no steps to
exercise these default warrants.

The Convertible Debt and Preferred Stock could be called by the Company
only during the first year of the Financing Arrangement in accordance with the
following schedule: Up to 120 days after the closing, at the principal amount

<PAGE> 16
of the Convertible Debt and liquidation value ($100.00 per share) of the
Preferred Stock, plus $300,000.00; from the 120th day after the closing to the
240th day after closing, at the principal amount of the Convertible Debt and
liquidation value of the Preferred Stock, plus $500,000.00; and, for the 240th
day after closing to the one year anniversary date of the closing at the
principal amount of the Convertible Debt and liquidation value of the Preferred
Stock, plus $750,000.00.

2. In August 1996, the Company entered into a Letter Agreement by and
among the Company; Dr. Charles R. Mitchell, a former President of the Company;
Stratum Management, Inc., a consultant to the Company; John H. Hagan, a former
director of the Company; Dr. Seymour Kessler, a former director of the
Company; and Amsterdam Equities Limited, Frank Leonard Laport, and Beverly
Trust Company, as Custodian of the Frank Leonard Laport Rollover Individual
Retirement Account No. 75-49990, each members of the Investor Group. Under the
Letter Agreement, which became effective on August 9, 1996, the Series B
Preferred Stock previously referred to in the Convertible Debt Agreement
executed by the Company on April 22, 1996 was amended to be immediately
effective and Class B Preferred Stock was immediately issued to Amsterdam.

The Class B Preferred Stock entitled Amsterdam to elect a Director to the
Board of Directors of the Company who would have super majority voting powers.
In effect, the Class B director appointed by Amsterdam shall have the number of
votes on the Board of Directors as the current Board currently holds, plus one
vote. The amendment and activation of the Class B Preferred Stock occurred
upon the satisfaction of the following two conditions: (i) delivery to the
Company of a notice, pursuant to which the Investor Group would convert an
aggregate amount of U.S. $700,000 of currently outstanding Convertible
Debt/Preferred Stock into the Company's Common Stock in accordance with the
contractual terms of the Convertible Debt and Preferred Stock Agreements
executed on April 22, 1996 and (ii) upon the advance to the Company of an
additional $200,000.00 pursuant to the Convertible Debt and the Preferred Stock
Agreements executed April 22, 1996. As of August 9, 1996, the Investor Group
had satisfied these two conditions and the Class B Preferred Stock was issued
to Amsterdam. Frank Leonard Laport, Chairman and CEO of the Company, was
elected as the Series B Director effective as of August 9, 1996. The Series B
Director has not voted on any matters to date or taken any action whatsoever to
date.

In connection with the activation of the Class B Preferred Stock, the
provision of additional funding and conversion of debt, Stratum, Hagan and
Kessler agreed to forfeit, on a pro rata basis, an aggregate amount of 300,000
options/warrants to purchase the Company's Common Stock of the Company.

In connection with the August 1996 letter agreement, Dr. Mitchell resigned
as President of the Company. Dr. Mitchell, Dr. Kessler, and John Hagan
remained as directors until the Company's annual meeting on September 27, 1996.
Gary Lockwood, Dr. Richard Staller, Frank Leonard Laport, Esq. and George
Collins, Esq., who also acts as attorney in fact for Amsterdam Equities
Limited, were appointed to the Board to fill vacancies created by an increase
in the number of directors. Dr. Richard Staller resigned as a director of the
Company effective as of November 20, 1996.

STRATUM/MITCHELL AGREEMENTS

In June 1995, the Company entered into an agreement with Stratum
Management, Inc. and certain individual consultants (collectively, the
"Consultants") for consulting services. The Consultants were to provide the
Company with operations management, provider relations, systems development,
standardization and development of operations manuals, marketing analysis and
development, strategic alliances development and acquisition evaluation
services. In addition to direct consulting fees approximating $41,000 per
month in 1996 and $35,000 per month in 1995, for an aggregate total of
$272,800, the Consultants were issued warrants to purchase up to 600,000 shares
of the Company's common stock at an exercise price of $1 per share expiring
December 31, 1998. Subsequently, in July 1996 the Warrants Agreement was
amended to reduce the number of warrants available from 600,000 to 388,000 as a
condition of the August 1996 letter agreement referenced above. This
consulting agreement was terminated by the Company effective August 1, 1996.

Dr. Charles R. Mitchell, who was appointed as President of the Company
effective October 26, 1995, was originally affiliated with the Consultants. Dr.
Mitchell contracted to sever all direct ties with the Consultants in
conjunction with his appointment as President of the Company and received no
compensation from the Consultants. However, Dr. Mitchell's wife and brothers
remained shareholders in, and employees of, Stratum Management, Inc., which was
directly affiliated with the Consultants. As a condition of the Financing
Arrangement and the August 1996 letter agreement referenced herein, Dr.
Mitchell resigned as President and CEO of the company.

<PAGE> 17
MISCELLANEOUS

In November 1994, Romajo Partners Limited Partnership (the Partnership),
in which Dr. Kessler is a partner, loaned the Company $82,500 under a Demand
Note. During 1995, the Partnership loaned the Company $40,448 under various
demand notes. This matter is currently in litigation (See Item 3).

In December 1996, the Dickerson Investment Group, Inc., a company
affiliated with a shareholder of the Company, loaned the Company $175,000 in
order to meet certain operating expenses (See Exhibit 10.53).

<PAGE> 18
PART IV

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)(1) Financial Statements:

Report of Independent Certified Public Accountants

Consolidated Balance Sheets as of December 31, 1996 and 1995

Consolidated Statements of Operations for the years
ended December 31, 1996 and 1995

Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1996 and 1995

Consolidated Statements of Cash Flows for the years
ended December 31, 1996 and 1995

Notes to Consolidated Financial Statements
<PAGE> 19
INDEPENDENT AUDITORS' REPORT

Board of Directors
Princeton Dental Management Corporation:

We have audited the accompanying consolidated balance sheets of Princeton
Dental Management Corporation as of December 31, 1996 and 1995, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Princeton Dental Management Corporation at December 31, 1996 and 1995, and the
consolidated results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that Princeton Dental Management Corporation will continue as a going concern.
As discussed in Note 14 to the consolidated financial statements, the Company's
recurring losses from operations and its net working capital deficiency raise
substantial doubt about the entity's ability to continue as a going concern.
Management's operational plans in regard to these matters are also described in
Notes 13 and 14. The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of reported asset
amounts or the amounts and classification of liabilities that might result from
the outcome of this uncertainty.

March 14, 1997
Clearwater, Florida
<PAGE> 20

PRINCETON DENTAL MANAGEMENT CORPORATION

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1996 1995

ASSETS

<TABLE>
<S> <C> <C>
Current assets:
Cash and cash equivalents $185,235 124,872
Accounts receivable, net of allowances for doubtful
accounts of $297,000 and $275,000, respectively 1,170,640 1,138,469
Loan receivable - shareholders - 2,190
Current portion of loan receivable - affiliate 9,991 7,272
Inventories 105,193 111,554
Other current assets 95,847 118,901
----------- ----------

Total current assets 1,566,906 1,503,258

Property and equipment, net 1,159,524 1,278,632
Goodwill, net of accumulated amortization of $1,948,760
and $1,293,987, respectively 7,002,192 11,150,730
Loan receivable - affiliate 10,820 12,467
Other assets, net 543,512 51,846
----------- ----------
$10,282,954 13,996,933
=========== ==========
</TABLE>

F-2

DECEMBER 31, 1996 1995
- ---------------------------------------------------- ---------------------------- -----------

LIABILITIES AND SHAREHOLDERS' EQUITY

<S> <C> <C>
Current liabilities:
Notes payable $179,000 18,835
Notes payable to shareholders 122,948 1,935,434
Current portion of capital lease obligations 25,883 27,532
----------------------------- -----------
Current portion of long-term debt 715,806 506,046
Convertible secured debt 2,115,924 -
Accounts payable 1,442,487 671,035
Accrued salaries and wages 743,958 569,383
Other accrued expenses 583,142 455,853
----------------------------- -----------

Total current liabilities 5,929,148 4,184,118

Long-term debt, excluding current portion 3,267,106 3,731,963
Capital lease obligations, excluding current portion 38,145 6,581
----------------------------- -----------

Total liabilities 9,234,399 7,922,662
----------------------------- -----------

Shareholders' equity:
Series A 11.75% Cumulative Convertible Preferred Stock
par value $1.00 per share; authorized shares - 1,000,000;
issued and outstanding - 2,848 at December 31, 1996 2,848 -
Series B Preferred stock, par value $1.00 per share;
authorized shares - 100; issued and outstanding - 100
at December 31, 1996 100 -
Common stock, par value $0.0001 per share; authorized
shares - 25,000,000; issued and outstanding - 10,122,323
and 8,119,870 at December 31, 1996 and 1995 1,012 812
Less: 309,217 shares Common stock held in treasury,
at cost (331,771) -
Additional paid-in capital 15,107,556 14,055,045
Accumulated deficit (13,731,190) (7,981,586)
----------------------------- -----------

Net shareholders' equity 1,048,555 6,074,271
----------------------------- -----------

$10,282,954 13,996,933
============================= ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 22

PRINCETON DENTAL MANAGEMENT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996 1995
------------ -----------
<TABLE>
<S> <C> <C>
Revenue:
Practice revenue $14,109,983 13,383,060
Laboratory revenue 3,934,230 3,459,761
------------ -----------

Total revenue 18,044,213 16,842,821
------------ -----------

Expenses:
Practice compensation and benefits 10,827,174 9,672,643
Other practice expenses 2,745,618 2,722,077
Cost of laboratory revenue and laboratory expenses 3,529,297 2,961,892
General corporate expenses 1,451,227 1,573,304
Depreciation and amortization 1,073,815 943,964
Impairment of long-lived assets 3,499,172 -
------------ -----------

Total operating expenses 23,126,303 17,873,880
------------ -----------

Operating loss (5,082,090) (1,031,059)

Loss on disposal of equipment (3,598) (102,471)
Interest expense (714,997) (475,963)
Other income 51,081 52,284
------------ -----------

Net loss $(5,749,604) (1,557,209)
============ ===========

Net loss per share $(.65) (.19)
============ ===========

Weighted average number of shares outstanding 8,897,873 8,119,870
============ ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 23
PRINCETON DENTAL MANAGEMENT CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Series A 11.75%
Cumulative Convertible Series B
Preferred stock Preferred stock Common stock
------------------------ ------------------ ------------------
Shares Amount Shares Amount Shares Amount
----------- ----------- -------- -------- ---------- ------

Balances at December 31, 1994 - $- - - 8,119,870 812

Net loss - - - - - -
----------- ----------- -------- -------- ---------- ------

Balances at December 31, 1995 - - - - 8,119,870 812
Issuance of common stock at $1.41/
share in lieu of cash bonus - - - - 50,000 5

Issuance of Series A Preferred Stock
in connection with refinancing 3,600 3,600 - - - -

Issuance of common stock at $.36/
share upon conversion of Series A
Preferred Stock and Convertible Debt (882) (882) - - 1,952,453 195

Issuance of Series A Preferred Stock 130 130 - - - -

Issuance of Series B Preferred Stock - - 100 100 - -

Conversion of 291,667 shares of
common stock at $1.14/share into
Series A Preferred Stock and
Convertible Debt and 17,775 shares
surrendered, held in treasury - - - - - -

Net loss - - - - - -
----------- ----------- -------- -------- ---------- ------

Balances at December 31, 1996 2,848 $2,848 100 100 10,122,323 1,012
=========== =========== ======== ======== ========== ======
</TABLE>

See accompanying notes to consolidated financial statements.

<S> <C> <C> <C> <C>
Additional Net
Treasury Paid-in Accumulated Shareholders'
Stock Capital Deficit Equity
--------- ---------- ------------ -------------

Balances at December 31, 1994 - 14,055,045 (6,424,377) 7,631,480

Net loss - - (1,557,209) (1,557,209)
--------- ---------- ------------ -------------

Balances at December 31, 1995 - 14,055,045 (7,981,586) 6,074,271
Issuance of common stock at $1.41/
share in lieu of cash bonus - 70,745 - 70,750

Issuance of Series A Preferred Stock
in connection with refinancing - 356,377 - 359,977

Issuance of common stock at $.36/
share upon conversion of Series A
Preferred Stock and Convertible Debt - 612,519 - 611,832

Issuance of Series A Preferred Stock - 12,870 - 13,000

Issuance of Series B Preferred Stock - - - 100

Conversion of 291,667 shares of
common stock at $1.14/share into
Series A Preferred Stock and
Convertible Debt and 17,775 shares
surrendered, held in treasury (331,771) - - (331,771)

Net loss - - (5,749,604) (5,749,604)
--------- ---------- ------------ -------------

Balances at December 31, 1996 (331,771) 15,107,556 (13,731,190) 1,048,555
========= ========== ============ =============
</TABLE>

See accompanying notes to consolidated financial statements.

F-5

<PAGE> 25

PRINCETON DENTAL MANAGEMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<S> <C> <C>
YEARS ENDED DECEMBER 31, 1996 1995
- ----------------------------------------------------------- ------------- -------------

Operating activities:
Net loss$(5,749,604) (1,557,209)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation and amortization 1,076,836 967,184
Impairment of long-lived assets 3,499,172 -
Loss on sale of equipment 3,598 102,471
Interest expense 236,350 151,853
Provision for bad debts 22,000 100,000
Stock redemption price in excess of market 18,229 -
Issuance of stock under incentive Stock Bonus Plan 70,750 -
Changes in operating assets and liabilities:
Accounts receivable (54,171) 114,874
Inventories 6,361 45,341
Other current assets 23,054 -
Accounts payable 771,452 (559,132)
Accrued expenses 301,864 165,040
------------- -------------

Net cash provided by (used in)
operating activities 225,891 (469,578)
------------- -------------

Investing activities:
Purchase of property and equipment (153,299) (71,901)
Purchases of dental labs (5,407) -
Proceeds from notes receivable 1,118 36,634
Proceeds from sale of equipment - 35,000
Other assets (38,971) 260
------------- -------------

Net cash used in investing activities (196,559) (7)
------------- -------------

Financing activities:
Proceeds from notes payable 179,000 -
Proceeds from notes payable to shareholders - 1,755,434
Proceeds from issuance of Series A preferred stock 13,000 -
Proceeds from convertible debt 187,000 -
Proceeds from issuance of Series B preferred stock 100 -
Principal payments on capital lease obligations (31,489) (45,603)
Proceeds from issuance of long-term debt 30,089 -
Principal payments on notes payable (18,835) (721,704)
Principal payments on long-term debt (312,834) (404,620)
Principal payments on note payable to shareholders (15,000) (15,000)
------------- -------------

Net cash provided by financing activities 31,031 568,507
------------- -------------
</TABLE>

F-6

<PAGE> 26
<TABLE>
<CAPTION>
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

<S> <C> <C>
YEARS ENDED DECEMBER 31, 1996 1995
- ------------------------------------------------ ---------- ----------

Increase in cash and cash equivalents 60,363 98,922

Cash and cash equivalents at beginning of period 124,872 25,950
---------- ----------
Cash and cash equivalents at end of period $185,235 124,872
========== ==========
</TABLE>

Supplemental schedule of non-cash financing and investing activities:

During 1995, the Company incurred an additional $468,259 of long-term debt in
connection with the purchase Mason Dental, Inc. (Note 6). The additional
long-term debt is attributable to additional goodwill and capitalized interest
of $316,406 and $151,853, respectively.

During 1996, the President of the Company was issued 50,000 shares of common
stock valued at $70,750.

During 1996, $128,543 of debt, $12,816 of accrued interest, $150,000 of common
stock, and closing costs of $68,617 were converted into Series A Cumulative
Preferred stock.

During 1996, accrued interest of $223,534 and closing costs and fees of
$448,279 were capitalized to the principal balance of the convertible debt.

During 1996, 291,667 shares of Regulation D common stock ($1.14/share) were
converted into $150,000 and $200,000 of Series A Preferred Stock and
Convertible Debt, respectively.

During 1996, $88,168 of Series A Cumulative Preferred stock and $611,832 of
convertible debt were converted into 1,952,453 shares of common stock.

During 1996, the Company incurred $61,404 of capital lease obligations.

Interest paid was approximately $320,000 and $210,000 for the years ended
December 31, 1996 and 1995, respectively.

See accompanying notes to consolidated financial statements.

F-7

<PAGE> 27

PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1995

(1) ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

On October 22, 1986, the Company was organized as Princeton Dental
Management Corporation, a Delaware corporation. The Company had limited
activity up through its first issuances of common stock in June 1987.
The Company was in the development stage from June 1987 through May 1991,
and during that time, devoted its resources to developing and testing its
marketing practice development concepts.

(a) Principles of Consolidation

The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All material intercompany
transactions have been eliminated.

(b) Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
Cash and cash equivalents totaling approximately $98,000 and $139,000
at December 31, 1996 and 1995, respectively were held by a single
financial institution.

Accounts receivable are comprised primarily of receivables from
dental patients and insurance carriers. Credit is extended based on
an evaluation of the customer's financial condition, and generally
collateral is not required.

(d) Inventories

Inventories, consisting principally of dental prosthetics, are
stated at the lower of cost, determined by the first-in, first-out
method, or market.

(e) Property and Equipment

Property and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation is recorded using the
straight-line method over estimated useful lives of five to nine
years. Property and equipment held under capital leases and
leasehold improvements are amortized straight-line over the shorter
of the lease term or the estimated useful life of the asset.

F-8

<PAGE> 28

(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(f) Goodwill

Goodwill represents excess of purchase price over the fair value of
net assets acquired, net of any liabilities assumed, from dental
practices and other operations acquired by the Company. Amortization
of goodwill totaled approximately $654,000 and $606,000 for the years
ended December 31, 1996 and 1995, respectively.

(g) Revenue Recognition

The Company recognizes revenue in the month the related service is
provided. Operating revenues include amounts estimated by management
to be receivable from Medicaid and other third-party programs under
provisions of reimbursement terms in effect. Differences between
estimated payments and final payments are reflected as charges or
credits to operating revenues when the payment is received.

(h) Net Loss Per Share

Net loss per share has been computed by dividing net loss by the
weighted average number of common shares outstanding during the year.
The Company's outstanding common stock warrants and common stock
options, which are considered common stock equivalents, were
antidilutive and, accordingly, were not included in the calculation.

(i) Income Taxes

The Company uses the liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax
bases of assets and liabilities and are measured using the enacted
tax rates and laws that will be in effect as the differences reverse.

(j) Estimates

In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

F-9

<PAGE> 29
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(k) Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of

In March 1995, the Financial Accounting Standards Board issued the
Statement of Financial Accounting Standards 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of (SFAS 121). SFAS 121 requires that long-lived assets and
certain identifiable intangibles held and used by an entity be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
If the sum of the expected future cash flows (undiscounted and
without interest) is less than the carrying amount of the asset, an
impairment loss is recognized. Measurement of that loss would be
based on the fair value of the asset. SFAS 121 also generally
requires long-lived assets and certain identifiable intangibles to be
disposed of to be reported at the lower of the carrying amount or the
fair value less cost to sell. SFAS 121 was effective for the
Company's 1996 fiscal year end.

During 1996, based upon the estimated fair value of certain
practices, the Company wrote down identifiable goodwill of
approximately $3,499,000.

(l) Fair Value of Financial Instruments

At December 31, 1996 and 1995, the carrying value of all financial
instruments approximated their fair values.

(m) Reclassifications

The accompanying consolidated financial statements contain
certain reclassifications of previously reported information. The
reclassifications have been made to more appropriately reflect the
operating results of the Company.

(2) LOANS RECEIVABLE

Loan receivable - shareholders is due from Diversified Dental Services,
Inc. (DDS), formerly a wholly-owned subsidiary of Mason Dental, Inc.
(Mason). DDS is now owned by a shareholder of the Company as a result of
the acquisition of Mason. The loan bears interest and has repayment
terms identical to the terms of the bank note described in Note 6.

Loan receivable - affiliate is due from a general partnership comprised
of shareholders of the Company and results from the acquisition of Mason.
The loan, which began accruing interest at 6.46% on October 30, 1994 and
8% on June 30, 1995, will be repaid over a two year period with monthly
payments of $942 beginning January, 1997.

F-10

<PAGE> 30
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

<TABLE>
<S> <C> <C>
1996 1995
----------- ---------

Dental equipment $1,037,094 938,498
Laboratory and delivery equipment 291,928 218,605
Office furniture and equipment 207,206 202,303
Computer equipment and software 339,786 308,655
Leasehold improvements 334,261 305,286
----------- ---------
2,210,275 1,973,347
Less accumulated depreciation
and amortization (1,050,751) (694,715)
----------- ---------

$1,159,524 1,278,632
=========== =========
</TABLE>

Depreciation and amortization related to property and equipment totaled
approximately $372,000 and $353,000, respectively for the years ended
December 31, 1996 and 1995, including amounts classified within cost of
laboratory revenue.

(4) NOTES PAYABLE TO SHAREHOLDERS

At December 31, 1996, notes payable to shareholders consist of a 13.25%
demand note payable of $82,500 and demand notes totaling $40,448 to a
shareholder's (who is also a former director) partnership. These notes
have terms similar to the Letter Agreement (Note 13). While it was
originally contemplated that these notes would be considered advances
under the Financing Arrangements (Note 13), the partnership subsequently
filed a lawsuit demanding repayment of these notes payable totaling
$122,948 plus accrued interest (Note 12).

During 1996, $1,797,486 of notes payable to shareholders were refinanced
under the terms of the Financing Arrangements (Note 13) and $15,000
was repaid.

(5) NOTES PAYABLE

Notes payable as of December 31 consist of the following:

<TABLE>
<S> <C> <C>
1996 1995
---- ------

Demand note payable to bank, bearing interest at 2% over
the banks prime rate (10.5% at December 31, 1995), requiring
monthly installments of $5,600 plus interest (secured by
substantially all assets of the Company). Repaid during 1996. $ - 18,835
</TABLE>

F-11

<PAGE> 31
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<S> <C> <C>
1996 1995
-------- ------
Demand note payable to Dickerson Investment Group,
Inc. bearing interest at 1% over the prime rate (9.25%
at December 31, 1996). $179,000 -
-------- ------

Total notes payable $179,000 18,835
======== ======
</TABLE>

The Dickerson Investment Group, Inc. is controlled by
a former owner of Mason.

(6) LONG-TERM DEBT

<TABLE>
<S> <C> <C>
Long-term debt as of December 31 consists of the following:
1996 1995
- -------------------------------------------------------------------- --------- ---------

Note payable to shareholders, issued in connection with the
acquisition of Mason. Payments were deferred from October 30,
1994 through June 30, 1995 with additional interest accruing
on the unpaid monthly installments at 6.46%. Payments may be
contractually restricted based on Mason's average monthly cash
flow before intercompany transactions as defined in the purchase
agreement. If restricted, principal and interest payments may be
made in common stock of the Company. On December 31, 1995,
the principal balance was adjusted upward based upon decreases
in the market value of the Company's common stock beyond
certain thresholds. Beginning January, 1997, the Company will
make monthly installments of $21,610 with interest at 8%
through March 2006. $1,787,536 1,787,536

Note payable to shareholder in monthly installments of $12,133,
including interest at 8% through January 1, 1998, with remaining
principal due January 1, 1998, secured by stock of American
Dental Health - Battle Creek, P.C. 537,132 627,235

Non-compete and severance payments of $3,000 monthly through
October 1997 with a balloon payment of $100,000 at that date,
and $6,250 quarterly through October 1995 discounted at 8%
and 7%, respectively, payable to seller of laboratory assets to
Mason in 1992. 122,500 147,599

Promissory notes payable to shareholder and shareholder
affiliate bearing interest at 8% per annum, payable in equal
monthly installments of $3,215 through April 1, 1998, with a
balloon payment of the unpaid principal balance payable with
the 60th payment. $ 189,460 211,731
</TABLE>

F-12

<PAGE> 32
<TABLE>
<CAPTION>
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<S> <C> <C>
1996 1995
- ---------------------------------------------------------------------- ---------- ---------

Notes payable to individual investors, unsecured, bearing interest
at rates ranging from 8% to 10%, requiring various quarterly
installments ranging from $320 to $1,280, including interest,
through October 1997. Balloon payment of $20,000 also due
in October 1997. 34,324 47,309

Notes payable to seller of laboratory assets to Mason with
interest at 8.5% payable monthly on principal of $96,000
due October 1997. 96,000 96,000

Note payable to shareholders in monthly installments of
$6,541 including interest at 8% through February 15, 2004,
secured by all assets transferred in connection with the acquisition
of CDN and by the stock of Fairfield Dental Center, P.A. 426,440 469,511

Note payable to shareholders in monthly installments of
$12,102 including interest at 7.48% through June 30, 2002,
secured by all assets transferred in connection with the
acquisition of The Dental Team and the stock of The Florida
Dental Team P.A. 655,719 745,725

Unsecured note payable to shareholder, interest only due
monthly at 12%. Upon demand of the shareholder, the note will
be paid in 36 equal monthly installments of $2,325 including
interest at 12%. Incurred in connection with the acquisition
of The Dental Team. 70,000 70,000

Notes payable to various sellers of dental laboratory assets
bearing interest at rates ranging from 7% to 8%, payable
in monthly installments totaling $1,275, including interest
through February, 1997, $948 through April, 1998, and
$678 through August, 1999. 24,226 -

Unsecured notes payable to certain shareholders of the Company,
bearing interest at 10%. Payable in monthly installments totaling
$3,510 through October 1997. 13,321 25,273
</TABLE>

F-13

<PAGE> 33
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C> <C>
1996 1995
- ------------------------------------------------------------ ---------- ---------

Notes payable to financial institutions, secured by delivery
equipment, bearing interest ranging from 7.9% to 10.75%,
payable in monthly installments totaling $1,229, including
interest through December 1996, $424 through August 1997,
$1,027 through August 1998, $806 through February, 1999 and
$403 through June, 1999. 26,254 10,090
---------- ---------
3,982,912 4,238,009

Current portion of long-term debt (715,806) (506,046)
---------- ---------

Long-term debt, excluding current portion $3,267,106 3,731,963
========== =========
</TABLE>

Substantially all long-term debt is secured by the assets of the
Company, its subsidiaries, life insurance policies or various other
assets.

Scheduled maturities of long-term debt for the years subsequent to
December 31, 1996 are as follows: 1997 - $715,806; 1998 - $795,357;
1999 - $383,145; 2000 - $377,285; 2001, $407,904; thereafter -
$1,303,415.

(7) CAPITAL LEASE OBLIGATIONS

The Company is obligated under various lease agreements for certain
office equipment. These leases are noncancelable and require monthly
payments through October 1999. Following is a schedule of future
minimum lease payments under capital leases:

<TABLE>
<S> <C>
Year Ended December 31,
----------------------------------------------------------
1997 $34,953
1998 23,571
1999 20,678
--------
Total minimum lease payments 79,202

Less amount representing interest 15,174
--------

Present value of net minimum lease payments 64,028

Less current portion of capital lease obligations (25,883)
--------

Capital lease obligations, excluding current portion $38,145
========
</TABLE>

The amortization of assets recorded under capital leases is included
with depreciation expense.

F-14

<PAGE> 34
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(8) SHAREHOLDERS' EQUITY

(a) Preferred Stock

The Company has authorized 1,000,000 shares of $1.00 par value
Series A 11.75% Cumulative Preferred Stock and 100 shares of
$1.00 par value Series B Preferred Stock. Series of the
Preferred Stock may be created and issued from time to time,
with such designations, preferences, conversion rights
(including voting rights), qualifications, limitations or
restrictions thereof as shall be stated and expressed in the
resolution or resolutions providing for the creation and
issuance of such series of Preferred Stock.

(b) Stock Options and Warrants

During 1993, the Company's Board of Directors adopted an
Incentive and Non-Statutory Stock Option Plan (the 1993 Option
Plan). Options under the 1993 Option Plan are either "incentive
stock options" (ISOs), which are intended to qualify under
Section 422A of the Internal Revenue Code of 1986, as amended,
or "nonstatutory stock options" (NSOs), which are not intended
to qualify. The exercise price of ISOs granted must be at least
100% of the fair market value of the common stock on the grant
date, except that the exercise price of options granted to
shareholders possessing more than 10% of the voting power of the
Company's voting stock must be at least 110% of such fair market
value.

The price of NSOs shall be specified by the Board at the time
the option is granted, and may be less than the fair market
value of the underlying shares of common stock on the date such
NSO is granted, but may not be less than the par value of the
underlying shares of common stock. Each stock option granted
under the 1993 Option Plan expires on the date specified in the
option agreement, which date shall not be later than the tenth
anniversary of the date on which the option was granted (fifth
anniversary in the case of a greater-than-10% shareholder). The
Board of Directors approved 339,499 shares to be reserved for
issuance pursuant to the 1993 Option Plan. The 1993 Option Plan
will terminate in June 2003, or on such earlier date as the
Board of Directors may determine.

During 1996, the Company issued ISO's to two directors to
purchase 250,000 shares of the Company's common stock at $1.19
per share, vesting in equal installments over three years
commencing one year from the date of grant and expiring in March
1999. Subsequent to the initial grant and pursuant to an
agreement with the directors, the ISO grant was reduced to
162,000 shares of the Company's common stock (Note 13).

F-15

<PAGE> 35

(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 1996, the Company issued a warrant to Stratum Management, Inc.
and certain consultants to purchase 600,000 shares of the Company's
common stock at $1.00 per share. The warrant expires December 31,
1998. Subsequent to issuance and pursuant to an agreement with
Stratum Management, Inc. and certain consultants, the warrant was
reduced to 388,000 shares of the Company's common stock (Note 13).

During 1996, the Company issued ISO's to an employee to purchase
100,000 shares of the Company's common stock at $.87 per share
vesting in varying installments over three and one-half years
and expiring in January 2003.

On September 27, 1996, the Board of Directors declared an extension
period of twelve months for the expiration date of the warrants
issued pursuant to the Company's initial public offering on April 15,
1992. Further extensions beyond October 13, 1997 of the expiration
date of these warrants may hereafter be determined by the Board of
Directors up to a total of an additional twelve months or such
additional time in such increments as the Board of Directors may
determine in accordance with the terms of the related Warrant
Agreement.

The Company has adopted the disclosure - only provisions of Statement
of Financial Accounting Standards No. 123, "Accounting for Stock
Based Compensation" (SFAS 123). Accordingly, no compensation cost
has been recognized for the stock option plans. Had compensation and
other cost for the Company's stock option plan for employees or
directors or issued warrants been determined based on the fair value
at the grant date or issuance for awards in 1995 or 1996, consistent
with the provisions of SFAS 123, the impact on net loss would have
been immaterial.

Information regarding the employee option plan for 1995 and 1996 is
as follows:

<TABLE>
<S> <C> <C> <C> <C>
Summary of the Status of the Company's Stock Options and Warrants
- -----------------------------------------------------------------------------------------
1995 1996
------------------------------------ -----------------------------------
Weighted Average Weighted Average

Shares Exercise Price Shares Exercise Price
----------------- ----------------- ----------------- ----------------

Outstanding at the beginning of
the year 165,000 $3.51 60,000 $2.98

Granted (exercise price equals
market) - - 650,000 1.03
Exercised - - - -
Forfeited (105,000) 3.81 (10,000) 2.00
----------------- -----------------

Outstanding at year end 60,000 $2.98 700,000 1.18
================= =================

Options and warrants exercisable
at year end 26,666 421,333
================= =================

Weighted average fair value of
options granted and warrants
issued during the year N/A $.16
</TABLE>

F-16

<PAGE> 36
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Company Stock Options and Warrants Prices

OPTIONS AND WARRANTS OUTSTANDING OPTIONS AND WARRANTS EXERCISABLE
Weighted average

<TABLE>
<S> <C> <C> <C> <C> <C>
Range of Number remaining Number
exercise Outstanding contractual Weighted average exercisable Exercise
price 12/31/96 life (years) exercise price 12/31/96 price
-------- ----------- ------------ ---------------- ----------- --------

$4.00 20,000 2.0 $4.00 20,000 $4.00
2.63 30,000 2.3 2.63 20,000 2.63
1.19 162,000 2.3 1.19 - 1.19
1.00 388,000 2.0 1.00 388,000 1.00
.87 100,000 6.0 .87 - .87
-------- ----------- ------------ ---------------- ----------- --------
$ .87 -
4.00 700,000 3.0 $ 1.18 421,333 $ 1.17
======== =========== ============ ================ =========== ========
</TABLE>

(9) INCOME TAXES

As of December 31, 1996, the Company has approximately $7,300,000 in
tax net operating loss (NOL) carryforwards available to offset future
taxable income through 2012.

For financial statement reporting purposes, a valuation allowance of
approximately $2,712,000 and $1,940,000 has been recognized to offset
net deferred tax assets in 1996 and 1995, respectively. This
valuation allowance increased approximately $800,000 and $200,000
during 1996 and 1995, respectively. The utilization of NOL
carryforwards may be delayed because of ownership changes resulting
from the Company's initial public offering and other issuances of
stock. The maximum amount of loss carryforwards allowed to be
utilized each year is determined by multiplying the value of the
Company at the time of the change in ownership by the federal
long-term tax-exempt rate.

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax
purposes. Significant components of the Company's deferred tax
assets and liabilities as of December 31 are as follows:

<TABLE>
<S> <C> <C>
1996 1995
------------ -----------

Deferred tax assets:
Net operating loss carryforwards$2,555,000 1,839,000
Allowance for doubtful accounts 104,000 96,000
Intangibles 66,000 -
Other 17,000 17,000
------------ -----------

Total deferred tax assets 2,742,000 1,952,000

Valuation allowance for deferred tax assets (2,712,000) (1,940,000)
------------ -----------

Net deferred tax assets 30,000 12,000
------------ -----------

</TABLE>

F-17

<PAGE> 37
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C> <C>
1996 1995
------ -----
Deferred tax liabilities:
Fixed assets 30,000 7,000
Intangibles - 5,000
------ -----

Total deferred tax liabilities 30,000 12,000

Net deferred taxes $ - -
</TABLE> ====== =====
(10) COMMITMENTS AND CONTINGENCIES

(a) Operating Leases

The Company leases office facilities and equipment under various
operating leases. Rent expense under operating leases was
approximately $947,000 and $974,000 for the years ended December
31, 1996 and 1995, respectively.

The Company entered into operating leases for its corporate
office and its telephone system, on a month to month basis, from
its Chairman and Chief Executive Officer in September 1996.
Monthly rent expense under these leases are $1,555 and $570,
respectively.

The future minimum lease payments under these operating leases
for the years subsequent to December 31, 1996 are as follows:
1997; $916,000, 1998; $502,000, 1999; $425,000, 2000; $340,000,
2001; $334,000 and thereafter $284,000.

(b) Consulting and Employment Agreements

During 1995, the Company entered into an agreement with Stratum
Management, Inc. and certain individual consultants
(collectively, the "Consultants") for consulting services
effective June 20, 1995 and continuing through 2006, terminable
by either party at any time. The Consultants will provide the
Company with operations management, provider relations, systems
development, standardization and development of operations
manuals, marketing analysis and development, strategic alliances
development and pre-acquisition evaluation services, although
the board of directors of the Company must approve all actions
of the Consultants. Effective January 1, 1996, ratification and
addendum to the original agreement provided that the Consultants
receive $42,000 per month and a warrant to purchase 600,000
shares (subsequently reduced to 388,000 shares) of common stock
at $1.00 per share. The initial term of the agreement is one
year with automatic one year renewals unless ninety-day notice
is given by either party prior to renewal. The agreement can
immediately terminate under certain conditions, as defined.

F-18

<PAGE> 38
(continued)

PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 1996, the Company entered into an agreement with Dr.
Charles R. Mitchell, who was appointed as President of the
Company during 1995. The agreement provided for an annual
salary of $96,000, issuance of 50,000 shares of the Company's
common stock and certain fringe benefits. The agreement had a
three year term but could be terminated by either party upon
certain conditions.

In September 1996, in connection with the issuance of the Class
B Preferred stock, the aforementioned Consulting and Employment
agreements were terminated. In addition, the Consultants
warrant to purchase common stock was reduced from 600,000 to
388,000 shares (Note 13).

During 1996, the Company amended two employment agreements which
commenced on January 1, 1994 to increase annual
compensation to approximately $106,000 per employee. In
addition, one employee receives an additional $12,000
annually, reimbursement of certain expenses and was granted
incentive stock options (Note 8). The agreements provide
for annual compensation increases and expire in May 2001
although either the employee or the Company may terminate
the agreement upon ninety days written notice.

The Company is insured with respect to medical malpractice risks
up to $1,000,000 per claim with a $3,000,000 annual aggregate
claims limit.

(d) Other

Certain assets acquired in the acquisition of Century Dental
Centers I, P.C. are subject to an outstanding lien of $100,000.
The Company has right of offset against the related acquisition
notes for any amounts expended to cure the lien.

Several note holders claim differences from amounts recorded in
the Company' records. Management believes these claims are
without merit. The aggregate amount of differences are
immaterial to the financial position and operations as of and
for the year ended December 31, 1996.

(11) BUSINESS ACQUISITIONS

During 1996, the Company acquired the assets of two dental
laboratories for $5,407 in cash and promissory notes totaling
$27,645. The excess purchase price over the fair value of the assets
acquired totaled $5,407.

F-19

<PAGE> 39
(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(12) LITIGATION

In October 1996, a lawsuit was filed against the Company by a
partnership, that is controlled by a shareholder, debt holder and a
former director of the Company, demanding repayment of notes payable
and accrued interest. The Company intends to vigorously contest the
suit.

The Company is involved in a number of other legal proceedings
related to malpractice, worker's compensation, general employment and
contract disputes all in various stages of proceedings, most of which
will be covered by insurance. Management believes settlements, if
any, in excess of insurance coverage would be immaterial.

During September 1996, the Company and certain investors prevailed in
a lawsuit against two former officers and shareholders of the
Company. As a result, the former officers and shareholders
surrendered 17,775 shares of common stock to the Company. These
surrendered shares are being held in treasury.

(13) FINANCING AGREEMENT

On April 22, 1996, the Company entered into a financing agreement
pursuant to which the Company issued Convertible Secured Debt
(Convertible Debt) of $2,483,620 and 3,599.77 shares of Series A
11.75% Cumulative Convertible Preferred Stock (Preferred Stock) to
Amsterdam Equities Limited, Frank Leonard Laport and Beverly Trust
Company, as custodian for the Frank Leonard Laport Rollover
Individual Retirement Account No. 75-49990 (Investor Group). The
Convertible Debt and Preferred Stock replaces indebtedness of the
Company at April 22, 1996, in the amount of $1,976,700 incurred under
a letter agreement dated December 7, 1994 (Letter Agreement). Under
the terms of the Convertible Debt and Preferred Stock Agreements
(also referred to herein collectively as the Financing Arrangements)
the Investor Group may lend additional funds, in increments to be
determined solely by the Investor Group. The funds may be used by
the Company subject to the approval of the Investor Group, to fund
certain acquisitions. The Convertible Debt and Preferred Stock bear
interest and have a coupon rate, respectively of 11.75%, plus the
payment of any withholding taxes which may be due and owing with
respect to any person which is a foreign entity. Payments on the
Convertible Debt are interest only due in quarterly installments
beginning September 1996. Interest accrued of $57,136 under the
Financing Arrangements at June 30, 1996 was added to the principal
balance at that date. The Convertible Debt has a maturity of seven
years from the date of closing, subject to acceleration in the event
of a default. Subsequent to September 30, 1996, the Company was
unable to pay the interest only requirements of the Financing
Arrangements, therefore effective October 1, 1996 until the accrued
interest is paid or the requirements are waived, interest will accrue
at the default rate of 21.75%. The accrued interest on the
Convertible Debt totaled $193,600 at December 31, 1996.

F-20
<PAGE> 40

(continued)
PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to the amount owed under the Letter Agreement, the terms
of the Financing Arrangements called for the conversion of 291,667
shares of Regulation D stock held by the Investor Group into $350,000
of Convertible Debt and Preferred Stock. The shares of common stock
redeemed are being held in treasury at December 31, 1996.

An additional provision of the Financing Arrangements included the
payment of $300,000 as a closing fee and required the Company to
reimburse the legal fees and out-of-pocket costs and expenses of the
Investor Group in connection with the negotiation and the closing of
the transaction totaling $216,897. The closing fees and
reimbursement of the costs and expenses were paid in the form of
Convertible Debt and Preferred Stock.

The terms of the Financing Arrangements provide the Investor Group
with certain rights pertaining to the registration of any common
stock to which the Investor Group may convert from Convertible Debt
or Preferred Stock, anti-dilution, and a right of first refusal on
any future offering of the Company's securities.

Under the terms of the transaction, the Company issued a warrant to
purchase 100 shares of Series B Preferred Stock. The Series B
Preferred Stock entitles Amsterdam Equities Limited (Amsterdam),
after the occurrence of an event of default, to elect a Class B
director who will have super-majority voting powers on the Company's
Board of Directors.

The Convertible Debt and Preferred Stock may be converted into common
stock of the Company, at the sole option of the Investor Group, at
various conversion rates as set forth in the conversion formula
contained in the Financing Arrangements. Conversion pursuant to
such conversion formula would result in a conversion price per share
of the Company's common stock significantly below present market
levels. If the Investor Group were to convert the Convertible Debt
and Preferred Stock at December 31, 1996, the conversion would result
in the issuance to the Investor Group of a majority interest
representing in excess of fifty percent (50%) of the issued and
outstanding shares of the Company's common stock (assuming full
conversion and anti-dilution).

In addition, pursuant to the terms of the Financing Arrangements, the
Company has issued to the holders of the Convertible Debt and the
Preferred Stock warrants to purchase shares of common stock at an
exercise price of $.10 per share. The Investor Group may exercise
the warrants only upon the occurrence of an event of default under
the terms of the minimum financial goals of net income of a least one
dollar in the year ending December 31, 1996, and net income of at
least equal to 60% of the dollar amount of Convertible Debt of the
Company outstanding at the end of 1997 for the fiscal year ending
December 31, 1997, increased by 10% each year thereafter, compounded,
plus 60% of the additional Convertible Debt outstanding at the end of
such year over the immediately proceeding year. The Company can make
no assurances that such financial goals can be achieved by the
Company. The cumulative effect of the issuance of shares pursuant to
the default warrant to the Investor Group could result in ownership
by the Investor Group of up to 75% of the Company's total issued and
outstanding common stock.

F-21

<PAGE> 41
(continued)

PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Convertible Debt and Preferred Stock may be called by the Company
only during the first year of the Financing Arrangement in accordance
with the following schedule: Up to 120 days after the closing, at
the principal amount of the Convertible Debt and liquidation value
($100 per share) of the Preferred Stock, plus $300,000 from the 120th
day after the closing to the 240th day after closing, at the
principal amount of the Convertible Debt and liquidation value of the
Preferred Stock, plus $500,000 and, for the 240th day after closing
to the one year anniversary date of the closing at the principal
amount of the Convertible Debt and liquidation value of the Preferred
Stock, plus $750,000.

In August 1996, the Company entered into a Letter Agreement by and
among the Company, Dr. Charles R. Mitchell, the President of the
Company; the Consultants, certain directors of the Company and the
Investor Group. Under the Letter Agreement, the Series B Preferred
Stock was amended to be immediately effective and Class B Preferred
Stock was issued to Amsterdam. The Class B Preferred Stock entitled
Amsterdam to elect a Director to the Board of Directors of the
Company who shall have super majority voting powers. In effect, the
Class B director appointed by Amsterdam shall have the number of
votes on the Board of Directors as the current Board currently holds,
plus one vote. The amendment and activation of the Class B Preferred
Stock occurred upon the satisfaction of the following two conditions:
(i) delivery to the Company of a notice, pursuant to which the
Investor Group would convert on a pro rata basis, an aggregate amount
of $700,000 of currently outstanding Convertible Debt and Preferred
Stock into the Company's Common Stock in accordance with the
contractual terms of the Financing Arrangements and (ii) upon the
advance to the Company of an additional $200,000 pursuant to the
Financing Arrangements.

In connection with the issuance of the Class B Preferred Stock, the
provision of additional funding and conversion of debt, the
Consultants and certain directors of the Company agreed to forfeit,
on a pro rata basis, an aggregate amount of 300,000 options and
warrants to purchase the Company's Common Stock. Additionally, Dr.
Mitchell resigned as President of the Company.

The Convertible Debt is secured by substantially all assets of the
Company and requires the Company to comply with certain financial and
non-financial debt covenants.

At December 31, 1996, the Company was in violation of certain debt
covenants. As such, the Company has classified the Convertible
secured debt as a current liability. To date, the Investor Group has
not made formal claim under the debt covenant violation.

(14) GOING CONCERN

As shown in the accompanying consolidated financial statements, the
Company has incurred recurring losses from operations resulting in
cash flow problems. These factors raise doubt about the Company's
ability to continue as a going concern.

F-22

<PAGE> 42
(continued)

PRINCETON DENTAL MANAGEMENT CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Management has instituted a cost reduction program and is emphasizing
operational efficiencies. In addition, the Financing
Arrangements (Note 13), could, at the discretion of the Investor
Group, provide adequate funds for working capital, debt
refinancing and future acquisitions. Additional funding from
the Investor Group, however, cannot be assured.

(15) SUBSEQUENT EVENTS

In January and February 1997, the Company sold two practices for
approximately $475,000 in cash and $660,000 in assumed liabilities.
The sale of these practices did not result in a material gain or
loss to the Company. Revenues for the disposed practices totaled
approximately $3,000,000 during 1996.

During fiscal 1996, the Company failed to meet certain minimum
financial covenants related to the Financing Arrangements which has
resulted in the ability of the Investor Group to exercise warrants to
purchase 4,125,000 shares of common stock at $.10 per share effective
January 1, 1997 (Note 13). To date, the Investor Group has not
formally indicated an intent to exercise these warrants.

<PAGE> 43
(a)(2) Exhibits:

The following documents are filed as exhibits to this Report:

2.1 Agreement and Plan of Reorganization between the Registrant and Dental
Laser Center of the Palm Beaches, Inc., The Dental Team of Boca Raton, Inc.,
The Dental Team of Boynton Beach, Inc., The Dental Team of Coral Springs, Inc.,
The Dental Team of Deerfield Beach, Inc., The Dental Team of Delray Beach,
Inc., The Dental Team of Pompano Beach, Inc., Palm Beach Dental Service, Inc.,
PBD Supply, Inc., and Pompano Square Dental Lab, Inc. (incorporated by
reference to Exhibit 2. 1 to the Registrant's Form 1O-KSB for the fiscal year
ended December 31, 1993 (Registration Number 33-43298-A) filed with the
Commission on April 14, 1994).
2.2 Share Acquisition and Merger Agreement between Registrant and C.D.
Nunnelley, D.D.S. & Associates (incorporated by reference to the Exhibit to the
Company's Form 8-K filed with the Commission on March 15, 1994).

2.3 Agreement and Plan of Reorganization between the Registrant and Mason
Dental, Inc. (incorporated by reference to the Exhibit to the Registrant's
Registration Statement on Form S-4 (Registration No. 33-69406) filed with the
Commission on September 27, 1993).

3.1 Restated Certificate of Incorporation of the Registrant, as restated
through August 19, 1991 (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-18 (Registration No. 33-43298-A)
filed with the Commission on October 10, 1991).

3.2 Amendments to the Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to Amendment No. 3 to the
Registrant's Registration Statement on Form S-18 (Registration No. 33-43298-A)
filed with the Commission on April 10, 1992).

3.3 Bylaws of the Registrant, as amended and restated December 1, 1992
(incorporated by reference to Exhibit 3.2 or the Registrant's Registration
Statement on Form SB-2 (Registration No. 33-57698) filed with the Commission of
February 1, 1993).

<PAGE> 44
4.2 Warrant Agreement between the Registrant and the Warrant Agent
(incorporated by reference to Exhibit 4.4 to the Registrant's Registration
Statement on Form SB-2 (Registration No. 33-57698) filed with the Commission on
February 1, 1993).

4.3 Letter Amendment to Warrant Agreement between the Registrant and the
Warrant Agent (incorporated by reference to Exhibit 4.5 to the Registrant's
Registration Statement on Form SB-2 (Registration No. 33-57698) filed with the
Commission on February 1, 1993).

9.1 Voting Trust Agreement between the Registrant and Jerry I. Bratman, D.D.S.,
Judith K. Bratman, Theodore M. Strauss, D.D.S., Madelyn Strauss, and Richard J.
Staller, D.D.S. (incorporated by reference to Exhibit 9. 1 to the Registrant's
Form 10-KSB for the fiscal year ended December 31, 1993 (Registration Number
33-43298-A) filed with the Commission on April 14, 1994.)

10.1 Registrant's Stock Option Plan, as amended (incorporated by reference to
the exhibit of the same number to the Registration Statement on Form SB-2
(Registration No. 33-57698) filed with the Commission on February 1, 1993).

10.2 Letter Agreement dated December 7, 1994 between an investment group and
the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant's
Form 10-QSB/A (Amendment No. 1) (Registration No. 33-43298-A) filed with the
Commission on December 20, 1994).

10.2/A Amendment to Letter Agreement dated April 10, 1995 between an investment
group and the Registrant (incorporated by reference to the Exhibit to the
Registrant's Form 10-KSB for the fiscal year ended December 31, 1994
(Registration Number 33-43298-A) filed with the Commission on April 14, 1995)

10.3 $300,000 Line of Credit Agreement with First American Bank-Northeast
Illinois, as amended (incorporated by reference to Exhibit 10.4 to the
Registrant's Registration Statement on Form S-18 (Registration No. 33-43298-A)
filed with the Commission on October 10, 1991).

10.3/A Modification Agreement and Installment Note dated February 3, 1995
between First of America Bank-Illinois, N.A. and the Registrant (incorporated
by reference to the Exhibit to the Registrant's Form 10-KSB for the fiscal year
ended December 31, 1994 (Registration Number 3343298-A) filed with the
Commission on April 14, 1995.)

10.4 Secured Revolving Demand Note dated January 27, 1995 between an investment
group and the Registrant (incorporated by reference to the Exhibit to the
Registrant's Form 10-KSB for the fiscal year ended December 31, 1994
(Registration Number 33-43298-A) filed with the Commission on April 14, 1995.)

10.4/A Allonge and Amendment to Secured Revolving Demand Note dated March 9,
1995 between an investment group and the Registrant (incorporated by reference
to the Exhibit to the Registrant's Form 10-KSB for the fiscal year ended
December 31, 1994 (Registration Number 33-43298-A) filed with the Commission on
April 14, 1995.)

10.5 Share Purchase Agreement between Princeton Management and Glenn C. Lehr,
D.D.S.
(incorporated by reference to the Exhibit to Registrant's Form 8-K filed with
the Commission on October 13, 1992).

10.6 Balloon Promissory Note Payable to Glenn C. Lehr, D.D.S. (incorporated by
reference to the Exhibit of the same number to the Registrant's Registration
Statement on Form SB-2 (Registration No. 33-57698) filed with the Commission on
February 1, 1993).

10.7 Installment Promissory Note Payable to Glenn C. Lehr, D.D.S
(incorporated by reference to the Exhibit of the same number to the
Registrant's Registration Statement on Form SB-2 (Registration No. 33-57698)
filed with the Commission on February 1, 1993).

10.8 Stock Pledge and Escrow Agreement between Princeton
Management and Glenn C. Lehr incorporated by reference to the Exhibit of the
same number to the Registrant's Registration Statement on Form SB-2
(Registration No. 33-57698) filed with the Commission on February 1, 1993).

<PAGE> 45
10.9 Sublicense Agreement and Consent between Princeton Management and Amdent,
P.C. (Battle Creek, MI) (incorporated by reference to the Exhibit of the same
number to the Registrant's Registration Statement on Form SB-2 (Registration
No. 33-57698) filed with the Commission on February 1, 1993).

10.10 Sublicense Agreement and Consent between Princeton Management and Amdent,
P.C. (Taylor, MI) (incorporated by reference to the Exhibit of the same number
to the Registrant's Registration Statement on Form SB-2 (Registration No.
33-57698) filed with the Commission on February 1, 1993).

10.11 Sublicense Agreement an Consent between Princeton Management and Amdent,
P.C. (Ypsilanti, MI) (incorporated by reference to the Exhibit of the same
number to the Registrant's Registration Statement on Form SB-2 (Registration
No. 33-57698) filed with the Commission on February 1, 1993).

10.12 Management Agreement between Princeton Dental Management
Corporation and Amdent P.C. (incorporated by reference to the Exhibit of the
same number to the Registrant's Registration Statement on Form SB-2
(Registration No. 33-57698) filed with the Commission on February 1, 1993).

10.13 Dental Equipment Lease between Princeton Management and Amdent, P.C.
(Ypsilanti, MI) (incorporated by reference to the Exhibit of the same number to
the Registrant's Registration Statement on Form SB-2 (Registration No.
33-57698) filed with the Commission on February 1, 1993).

10.14 Dental Equipment Lease between Princeton Management and
Amdent, P.C. (Taylor, MI) (incorporated by reference to the Exhibit of the same
number to the Registrant's Registration Statement on Form SB-2 (Registration
No. 33-57698) filed with the Commission on February 1, 1993).

10.15. Dental Equipment Lease between Princeton Management and
Amdent, P.C. (Battle Creek, MI) incorporated by reference to the Exhibit of the
same number to the Registrant's Registration Statement on Form SB-2
(Registration No. 33-57698) filed with the Commission on February 1, 1993).

10.16 Facilities Management Agreement between Princeton
Management and Glenn C. Lehr, D.D.S. incorporated by reference to the Exhibit
of the same number to the Registrant's Registration Statement on Form SB-2
(Registration No. 33-57698) filed with the Commission on February 1, 1993).

10.17 Management Agreement and Stock Pledge and Escrow Agreement
between Princeton Management, Glenn C. Lehr, D.D.S., and Lebow and Tobin
(incorporated by reference to the Exhibit of the same number to the
Registrant's Registration Statement on Form SB-2 (Registration No. 33-57698)
filed with the Commission on February 1, 1993).

10.18 Assignment and Consent Agreement (Ypsilanti, MI)
(incorporated by reference to the Exhibit of the same number to the
Registrant's Registration Statement on Form SB-2 (Registration No. 33-57698)
filed with the Commission on February 1, 1993).

10.19 Assignment and Consent Agreement (Taylor, Ml) (incorporated
by reference to the Exhibit of the same number to the Registrants Registration
Statement on Form SB-2 (Registration No. 33-57698) filed with the Commission on
February 1, 1993).

10.20 Assignment and Consent Agreement (Battle Creek, Ml)
(incorporated by reference to the Exhibit of the same number to the
Registrant's Registration Statement on Form SB-2 (Registration No. 33-57698)
filed with the Commission on February 1, 1993).

10.21 Asset Purchase Agreement between Princeton Management
Northeast and Century Dental Center 1, P.C. (incorporated by reference to the
Exhibit to the Company's Form 8-K, as filed with the Commission on April 15,
1993).

10.22 The Company's 1993 Incentive and Non-Statutory Stock Option Plan
(incorporated by reference to the Exhibit of the same number to the
Registrant's Registration Statement on Form SB-2 (Registration No. 33-57698)
filed with the Commission on June 18, 1993).

<PAGE> 46
10.23 Installment Promissory Note payable to Mason Dental, Inc.
shareholders (incorporated by reference to Exhibit 10.30 to the Registrant's
Form 10-KSB for the fiscal year ended December 31, 1993 (Registration Number
33-43298-A) filed with the Commission on April 14, 1994).

10.24 Allonge and Amendment to Acquisition Promissory Note dated
April 10, 1995 between Mason Dental, Inc. and the Registrant (incorporated by
reference to the Exhibit to the Registrant's Form 10-KSB for the fiscal year
ended December 31, 1994 (Registration Number 33-43298-A) filed with the
Commission on April 14, 1995.)

10.25 Shareholder Agreement between the Registrant and Mason Dental,
Inc. Affiliate Shareholders (incorporated by reference to Exhibit 10.31 to the
Registrant's Form 10-KSB for the fiscal year ended December 31, 1993
(Registration Number 33-43298-A) filed with the Commission on April 14, 1994).

10.26 Security Agreement between Princeton Medical Management
Southeast, Inc. and Clement W. Barfield, D.D.S., and Philip A. Payne, D.D.S.
(incorporated by reference to Exhibit 10.32 the Registrant's Form 10-KSB for
the fiscal year ended December 31, 1993 (Registration Number 33-43298-A) filed
with the Commission on April 14, 1994).

10.27 Security Agreement between Princeton Medical Management
Southeast, Inc. and Jerry I. Bratman, D.D.S., Theodore M. Strauss, D.D.S., and
Richard J. Staller, D.D.S. (incorporated by reference to Exhibit 10.33 to the
Registrant's Form 10-KSB for the fiscal year ended December 3l, 1993
(Registration Number 33-43298-A) filed with the Commission on April 14, 1994).

10.28 Installment Promissory Notes payable to The Dental Team
Shareholders (incorporated by reference to Exhibit 10.34 to the Registrants's
Form 10-KSB for the fiscal year ended December 31, 1993 (Registration Number
33-43298-A) filed with the Commission on April 14, 1994).

10.28/A Binding letter of agreement dated February 6, 1995 between The
Dental Team Shareholders and the Registrant (incorporated by reference to the
Exhibit to the Registrant's Form 10-KSB for the fiscal year ended December 31,
1995 (Registration Number 33-43299-A) filed with the Commission on April 14,
1995).

10.29 Settlement Agreement and Release between A.S. Goldmen & Co., Inc.
Shoenberg & Hieber, Inc. and the Company, dated April 10, 1995 and effective
May 12, 1995 (incorporated by reference to Exhibit 10.1 to the Registrant's
Form 10-QSB for the quarterly period ended March 31, 1995 (Registration No.
0.20222) filed with the Commission of May 15, 1995.

10.30 Allonge and Amendment to Secured Revolving Demand Note, dated April 15,
1995, between the Investment Group and the Registrant (incorporated by
reference to Exhibit 10.2 to the Registrant's Form 10-QSB/A for the quarterly
period ended March 31, 1995 (Registration No. 0-20222) filed with the
Commission on May 30, 1995).

10.31 Amendment to Letter Agreement, dated May 22, 1995, between the Investor
Group and the Registrant (incorporated by reference to Exhibit 10.3 to the
Registrant's Form 10-QSB/A for the quarterly period ended March 31, 1995
(Registration No. 0-20222) filed with the Commission on May 30, 1995).

10.32 Allonge and Amendment to Secured Revolving Demand Note, dated June 23,
1995, between the Investor Group and the Registrant (incorporated by reference
to Exhibit 10.4 to the Registrant's Form 10-QSB for the quarterly period ended
March 31, 1996 (Registration No. 0-20222) filed with the Commission on June 12,
1996).

10.33 Allonge and Amendment to Secured Revolving Demand Note, dated August 24,
1995, between the Investor Group and the Registrant (incorporated by reference
to Exhibit 10.6 to the Registrant's Form 10-QSB for the quarterly period ended
March 31, 1996 (Registration No. 0-20222) filed with the Commission on June 12,
1996).

10.34 Amendment to Letter Agreement, dated August 24, 1995, between the
Investor Group and the Registrant (incorporated by reference to Exhibit 10.7 to
the Registrant's Form 10-QSB for the quarterly period ended March 31, 1996
(Registration No. 0-20222) filed with the Commission on June 12, 1996).

10.35 Allonge and Amendment to Secured Revolving Demand Note, dated September
8, 1995, between the Investor Group and the Registrant (incorporated by
reference to Exhibit 10.8 to the Registrant's Form 10-QSB for the quarterly
period ended March 31, 1996 (Registration No. 0-20222) filed with the
Commission on June 12, 1996).

<PAGE> 47
10.36 Amendment to Letter Agreement, dated September 8, 1995, between the
Investor Group and the Registrant (incorporated by reference to Exhibit 10.9 to
the Registrant's Form 10-QSB for the quarterly period ended March 31, 1996
(Registration No. 0-20222) filed with the Commission on June 12, 1996).

10.37 Employment Agreement by and between the Company and Dr. Charles R.
Mitchell, D.D.S. dated March 1996, with an effective date of January 1, 1996
(incorporated by reference to the exhibit to the Registrant's Form 10-QSB filed
with the Commission on September 23, 1996).

10.38 Consulting Agreement by and between the Company and Stratum Management,
Inc. dated January 1, 1996 (incorporated by reference to the exhibit to the
Registrant's Form 10-QSB filed with the Commission on September 23, 1996).

10.39 Amendment to the Warrant Agreement by and between the Company and
Stratum Management, Inc., dated July 17, 1996 (incorporated by reference to the
exhibit to the Registrant's Form 10-QSB filed with the Commission on September
23, 1996).

10.40 Non-Statutory Stock option agreement by and between the Company and John
H. Hagan, dated March 21, 1996 (incorporated by reference to the exhibit to
the Registrant's Form 10-QSB filed with the Commission on September 23, 1996).

10.41 Amendment to the Non-Statutory Stock Option Agreement by and between the
Company and John H. Hagan dated July 17, 1996 (incorporated by reference to the
exhibit to the Registrant's Form 10-QSB filed with the Commission on September
23, 1996).
10.42 Non-Statutory Stock Option Agreement by and between the Company and Dr.
Seymour Kessler dated March 21, 1996 (incorporated by reference to the exhibit
to the Registrant's Form 10-QSB filed with the Commission on September 23,
1996).

10.43 Amendment to the Non-Statutory Stock Option Agreement dated July 17,
1996, by and between the Company and Dr. Seymour Kessler (incorporated by
reference to the exhibit to the Registrant's Form 10-QSB filed with the
Commission on September 23, 1996).

10.44 Series A 11.75% Cumulative Convertible Preferred Stock Purchase Agreement
by and between Frank Leonard Laport, Beverly Trust Company, as Custodian of the
Frank Leonard Laport Rollover Individual Retirement Account Number 75-49990,
and Amsterdam Equities Limited, dated April 22, 1996 (incorporated by reference
to the exhibit to the Registrant's Form 10-QSB filed with the Commission on
September 23, 1996).

10.45 Convertible Debt Agreement by and between the Company and Amsterdam
Equities Limited, dated April 22, 1996 (incorporated by reference to the
exhibit to the Registrant's Form 10-QSB filed with the Commission on September
23, 1996).

10.46 Letter of Agreement dated July 15, 1996 and effective August 9, 1996, by
and between the Company, Dr. Charles R. Mitchell, Stratum Management Inc., John
H. Hagan, Dr. Seymour Kessler, Amsterdam Equities Limited, Frank Leonard
Laport, and Beverly Trust Company (incorporated by reference to the exhibit to
the Registrant's Form 10-QSB filed with the Commission on September 23, 1996).

10.47 Settlement Agreement dated as of September 26, 1996, and effective as of
the date of filing, by and between the Gingle Group, the Investor Group and the
Company.

10.48 Amendment to Employment Agreement made as of June 1, 1996 by and among
Gary A. Lockwood, the Company and Mason Dental Midwest, Inc.

10.49 Office Lease dated as of September 13, 1996 between the Company and
EquiVest, Inc., a company owned by Frank Leonard Laport.

<PAGE> 48
10.50 Equipment Lease dated as of September 13, 1996 between the Company and
Frank Leonard Laport.

10.51 Letter Agreement dated February 4, 1996 between Dr. Richard Staller and
the Registrant regarding the sale of the assets of the Dental Team of Delray
Beach.

10.52 Letter Agreement effective as of January 10, 1997 by and among the
Registrant and Drs. Barfield and Payne regarding the sale of the assets of the
Fairfield Dental Center practice.

10.53 Letter Agreement dated as of December 1996 between the Registrant and
Dickerson Investment Group, Inc., an entity affiliated with a shareholder of
the Registrant, regarding the loan of $175,000 to the Registrant.

21.1 Subsidiaries of the Small Business Issuer (incorporated by reference to
Exhibit 22.1 to the Registrant's Form 10-KSB for the fiscal year ended December
31, 1993 (Registration Number 3343298-A) filed with the Commission on April 14,
1994).

27. Financial Data Schedule Pursuant to Article 5 of Regulation 5-X

<PAGE> 49
(b)REPORTS ON FORM 8-K The Registrant filed the following Form 8-K's during
the period from January 1, 1996 through March 30, 1997:

On March 4, 1996, the Registrant filed with the Securities and Exchange
Commission a current report on Form 8-K relating to the extension of warrants
to October 14, 1996; the ratification of an Employment Contract for Dr. Charles
R. Mitchell; the ratification of a Management Consulting Agreement for Stratum
Management; and the lawsuit filed against the Company by Frank Leonard Laport.

On March 21, 1996, the Registrant filed with the Securities and
Exchange Commission a current report on Form 8-K regarding the Board of
Director's ratification of the grant of non-statutory stock options to John
Hagan and Seymour Kessler for past services to the Board of Directors.

On May 9, 1996, the Registrant filed with the Securities and Exchange
Commission a current report on an amemded Form 8-K regarding a financing
arrangement pursuant to which the Company issued Convertible Debt to Amsterdam
Equities Limited in the amount of $2,483,620.15 and 3,599.77 shares of Series A
11.75 Cumulative Convertible Preferred Stock to Amsterdam Equities Limited
(195), to Frank Leonard Laport (1,904.77) and to Beverly Trust Company, as
custodian for the Frank Leonard Laport Rollover Individual Retirement Account
No. 75-4990 (1,500) (the Investor Group).

The Convertible Debt and Preferred Stock replaced indebtedness of the
Company in the amount of $1,976,699.99 incurred under that certain letter
agreement dated December 7, 1994 and the Secured Revolving Demand Note. Under
the terms of the Convertible Debt and Preferred Stock Agreements (also referred
to herein collectively as the Financing Arrangements") the Investor Group may
lend the Company funds in increments to be determined solely by the Group. The
funds may be used by the Company, subject to the approval of the Group, to fund
certain acquisitions. The Convertible Debt and Preferred Stock will bear
interest and have a coupon rate, respectively of 11.75%, plus the payment of
any withholding taxes which may be due and owing with respect to any person
which is a foreign entity. The Convertible Debt/Preferred Stock has a maturity
of seven years from the date of closing, subject to acceleration in the event
of a default.

In addition to the amount owed under the Letter of Agreement and the
Secured Note, the terms of the Convertible Debt and Preferred Stock Agreements
call for the conversion of Regulation D stock held by the Group into $350,000 of
Convertible Debt and Preferred Stock.

In addition to the amount owed to the Group under the Letter Agreement,
the terms of the Convertible Debt and Preferred Stock Agreements include the
payment of $300,000.00 as a closing fee in the form of fully paid Convertible
Debt and Preferred Stock. The terms of the Convertible Debt and Preferred
Stock Agreements also require the Company to reimburse the legal fees and
out-of-pocket costs and expenses of the Group in connection with the
negotiation and the closing of the transaction, payable in the form of
Convertible Debt and Preferred Stock in the aggregate amount of $216,896.74.

On August 15, 1996, The Registrant filed with the Securities and
Exchange Commission current Report on Form 8-K regarding a Letter Agreement by
and among the Company; Dr. Charles R. Mitchell; Stratum Management, Inc.; John
H. Hagan; Dr. Seymour Kessler; and the members of the Investor Group.

Under the Letter Agreement, which became effective on August 9, 1996,
the Series B Preferred Stock referred to in the Convertible Debt Agreement
executed by the Company on April 22, 1996 was to be amended to be immediately
effective and was to be immediately issued to Amsterdam. The Class B Preferred
Stock entitles Amsterdam to elect a Director to the Board of Directors of the
Company who shall have super majority voting powers. In effect, the Class B
Director appointed by Amsterdam shall have the number of votes on the Board of
Directors as the Board currently holds, plus one vote.

<PAGE> 50
The amendment and activation of the Class B Preferred Stock was to occur
upon the satisfaction of the following two conditions: (i) delivery to the
Company of a notice, pursuant to which the Investment Group would convert on a
pro rate basis, an aggregate amount of U.S. $700,000.00 of currently
outstanding convertible debt/preferred stock into the Company's common stock in
accordance with the contractual terms of the Convertible Debt and Preferred
Stock Agreements executed on April 22, 1996, and (ii) upon the advance to the
Company of an additional U.S. $200,000 pursuant to the Convertible Debt and the
Preferred Stock Agreements executed April 22, 1996. As of August 9, 1996, the
Investment Group has satisfied these two conditions and the Class B Preferred
Stock has been issued to Amsterdam.

In connection with the activation of the Class B Preferred Stock, the
provision of additional funding, and conversion of debt, Stratum, Hagan and
Kessler have agreed to forfeit, on a pro rate basis, an aggregate amount of
300,000 options/warrants to purchase the Company's common stock.

In connection with the above, Dr. Mitchell has resigned as Chief
Executive Officer and President of the Company, but will continue to assist the
Company in the transition to a new management team. Dr. Mitchell, Hagan and
Kessler would also continue to serve as directors until the Company's next
annual meeting. Gary Lockwood, Dr. Richard Staller, Frank Leonard Laport, and
George Collins have been appointed to the Board to fill vacancies created by an
increase in the number of directors.

On September 30, 1996 the Registrant filed with the Securities and
Exchange Commission a current report on Form 8-K regarding the extension of the
outstanding warrants to purchase 4,140,000 shares of the Company's Common Stock
traded under the PDMCW symbol. The warrants were extended to October 13, 1997.
In addition, the Company had elected a new Board of Directors during the
September 27, 1996 Annual Stockholder's meeting comprised of Frank Leonard
Laport, Chairman and CEO, Gary Lockwood, President and COO, Richard J. Staller,
D.D.S. and George B. Collins, Esq.

On January 16, 1997 the Registrant filed with the Securities and
Exchange Commission a current report on Form 8-K regarding the sale of the
assets of the Fairfield Dental Center practice to Drs. Barfield and Payne. The
Fairfield practice, with 1995 revenues of approximately $2,000,000, represented
approximately 11.9% of the total revenue of the Company. The Fairfield
practice was sold for a purchase price of approximately $885,000, of which
approximately $410,000 represented forgiveness of debt.

On February 11, 1997, the Registrant filed with the Securities and
Exchange Commission a current report on Form 8-K regarding the sale of the
asssets of the Dental Team of Delray Beach practice to Dr. Richard Staller.
The Delray Beach practice, with 1995 revenues of approximately $859,135,
represented approximately 5.1% of the total revenue of the Company. The Delray
Beach practice was sold for a purchase price of approximately $200,000 in the
form of forgiveness of debt.
<PAGE> 51
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report of Form 10-KSB for the year ended
December 31, 1996, to be signed on its behalf by the undersigned thereunto duly
authorized.

DATED: Princeton Dental Management Corporation

By: /s/ Gary A. Lockwood
----------------------------------
Gary A. Lockwood
President and Director

SIGNATURE

DATED: Princeton Dental Management Corporation

By: /s/ Frank Leonard Laport
----------------------------------
Frank Leonard Laport
Chairman, CEO, and Director

DATED: Princeton Dental Management Corporation

By: /s/ Gary A. Lockwood
----------------------------------
Gary A. Lockwood
President and Director

DATED: Princeton Dental Management Corporation

By: /s/
----------------------------------
George B. Collins
Director

DATED: Princeton Dental Management Corporation

By: /s/ Christopher D. Carlucci
----------------------------------
Christopher D. Carlucci
Chief Accounting Officer

<PAGE> 1
EXHIBIT 10.47

SETTLEMENT AGREEMENT

THIS SETTLEMENT AGREEMENT ("AGREEMENT") is entered into and effective
as of the 26th day of September, 1996, by and between TERRY D. GINGLE
("GINGLE") and VICKIE GINGLE, his wife ("MRS. GINGLE"); OSCAR L. HAUSDORFF
("HAUSDORFF") and SUSAN HAUSDORFF, his wife ("MRS. HAUSDORFF"); PRINCETON
DENTAL MANAGEMENT CORPORATION, a Delaware corporation ("PRINCETON"); and THE
INVESTOR GROUP, a group comprised of AMSTERDAM EQUITIES LIMITED, a Bahamian
corporation, FRANK LEONARD LAPORT, and BEVERLY TRUST COMPANY, an Illinois
corporation, as Custodian of the FRANK LEONARD LAPORT ROLLOVER INDIVIDUAL
RETIREMENT ACCOUNT NUMBER 72-49990 (hereinafter collectively referred to as
"THE INVESTOR GROUP").

R E C I T A L S

WHEREAS, at all times herein relevant PRINCETON was a Delaware
corporation, whose stock is publicly traded, engaged in the ownership,
management and administration of dental operations located in various parts of
the United States of America;

WHEREAS, GINGLE and HAUSDORFF are former officers and/or directors of
PRINCETON, and warrant and represent that they currently own 776,724 shares of
the common stock of PRINCETON;

WHEREAS, in late 1994, PRINCETON sought additional financing and/or
capital for its operations, and thereby entered into negotiations with various
parties, including THE INVESTOR GROUP;
<PAGE> 2

WHEREAS, on or about December 7, 1994, PRINCETON and THE INVESTOR
GROUP entered into a letter of intent, and pursuant to which THE INVESTOR GROUP
proposed to make a convertible debt financing investment in PRINCETON ("LETTER
OF INTENT");

WHEREAS, certain disputes then arose by and between HAUSDORFF, GINGLE,
PRINCETON and/or THE INVESTOR GROUP;

WHEREAS, on or about January 3, 1995, GINGLE and HAUSDORFF resigned as
officers and directors of PRINCETON, and entered into with PRINCETON and THE
INVESTOR GROUP a resignation agreement dated January 3, 1995 ("RESIGNATION
AGREEMENT");

WHEREAS, the parties' respective performance under the LETTER OF
INTENT and/or the RESIGNATION AGREEMENT ultimately gave rise to certain
litigation encaptioned Princeton v. Gingle and Hausdorff, Case No. 95 CH 5708,
in the Circuit Court of Cook County, Illinois, County Department, Chancery
Division;

WHEREAS, GINGLE and HAUSDORFF thereafter threatened additional
litigation against PRINCETON, THE INVESTOR GROUP, and/or their respective
agents and attorneys, both in their own right and on behalf of all similarly
situated shareholders of PRINCETON;

WHEREAS, PRINCETON and THE INVESTOR GROUP then threatened
counterclaims against GINGLE and HAUSDORFF;

WHEREAS, the parties hereto now desire to fully and finally settle
between themselves all claims and rights that each may have against the other;

WHEREAS, each of the signatory parties have received independent legal
and/or accounting advice as to the nature and obligations of this AGREEMENT,
and each have been fully informed of his or her respective legal rights,
obligations and liabilities as set forth herein;

2
<PAGE> 3

WHEREAS, each of the parties, believing this AGREEMENT to be fair,
just and reasonable, has assented freely and voluntarily to its terms;

NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained herein, and in consideration of the obligations and duties
assumed by each party, as well as other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, it is mutually
covenanted and agreed as follows:

ARTICLE I - INCORPORATION

The foregoing recitals are true and correct, and are incorporated
herein by reference.

ARTICLE II - CONSIDERATION

The consideration for this AGREEMENT is the mutual benefits each
accruing to the other party that presently exist, or are to be obtained by the
parties, and the promises of each to the other. The adequacy of the
consideration for this AGREEMENT is hereby admitted by all parties hereto.

ARTICLE III - CONFIDENTIALITY AND NON-DISPARAGEMENT

Except as expressly set forth herein, or as may be required by any
applicable federal, state or local securities regulations or statutes,
including any exchange rules or regulations, the parties hereby agree that any
and all matters embodied by or encompassed within this AGREEMENT are to be kept
strictly confidential, and are to be governed by the following terms and
conditions which are a material and integral part of this AGREEMENT:

A. All parties hereto agree, covenant and represent that
they will not discuss or disclose their respective claims against each other,
the terms and conditions of this AGREEMENT, or any facts pertaining to either
of the same, whether disputed or not, any oral

3
<PAGE> 4

or written information obtained by them, and/or the contents of any settlement
negotiations, the facts of this settlement, and/or any payment with or to any
person or entity hereunder, and further agree that they shall not, directly or
indirectly, either on their own or through other persons or entities, orally,
in writing, or in any form, disclose, disparage or make comment about their
respective claims or this AGREEMENT, or the conduct or lack of conduct of any
party hereto, to or with any third person, firm, entity, organization,
corporation, government entity, media, or any regulatory, administrative, or
review body, whether private, public, professional, local, county, state, or
federal, or any other entity unless otherwise provided herein or unless
required by lawful process of any court or governmental entity;

B. All parties hereto agree, covenant and represent that
they will not discuss or disclose any evidence or information obtained
regarding their respective claims, including but not limited to any oral or
written information obtained by them, with or to any persons or entities and
further agree that they shall not, directly or indirectly, either on their own
or through other persons or entities, orally, in writing, or in any form,
testify, participate, cooperate or assist the claims of any other persons or
entities who have or may have a claim, action or lawsuit against any other
party hereto, unless otherwise provided, or unless required by lawful process
of any court or governmental entity;

C. All parties hereto agree, covenant, and represent
that they will not consent to be interviewed by the media, nor will they
comment in any manner to the media or others, other than to state that the
matter has been amicably settled. In particular, they will not indicate any
measure of satisfaction or dissatisfaction with the settlement, regardless of
the form of the media communication, regarding the parties' respective claims
or regarding the terms and

4
<PAGE> 5

conditions of this AGREEMENT, any payments given in consideration for this
AGREEMENT, the information protected by this AGREEMENT and/or the existence of
this AGREEMENT, unless otherwise provided or unless required by lawful process
of any court or governmental entity;

D. The parties hereto, agree, covenant and represent
that they shall not disclose, disseminate or reveal, in any way whatsoever, the
original or any copy of any portion of this AGREEMENT, nor any prior memoranda
signed by the parties hereto, nor any other written communication between
counsel or anyone else concerning the parties' respective claims or
disagreement, nor any portion of the AGREEMENT, directly or indirectly, to any
person, firm, corporation or governmental entity, the media, any regulatory,
administrative or review body, whether private, professional, local, county,
state, or federal, or other entity, unless otherwise provided herein or unless
required by lawful process of any court or governmental entity.

E. Notwithstanding the aforesaid confidentiality and
nondisparagement provisions, the parties recognize that PRINCETON is a publicly
traded company, and is subject to disclosure requirements by applicable
regulatory, governmental, administrative or other review bodies. It is
expressly hereby agreed that PRINCETON may make any and all disclosures
required by such applicable entities, including any disclosures necessary of
the volume restrictions hereinafter imposed upon the PRINCETON stock held by
GINGLE and/or HAUSDORFF. Notwithstanding the aforesaid, PRINCETON agrees to
provide to GINGLE and HAUSDORFF, for their inspection and review, any
securities filing contemplated which would make disclosure of this AGREEMENT
and/or the material terms and conditions hereof. GINGLE and HAUSDORFF shall
have five (5) business days from receipt of any such securities filing to

5
<PAGE> 6

provide their comments thereto, and any requested changes, and PRINCETON shall
use reasonable efforts to incorporate any such requested changes which are
deemed reasonable and appropriate by PRINCETON's attorney into the contemplated
securities filing.

ARTICLE IV - RELEASE

A. Except as otherwise expressly provided in this
AGREEMENT, GINGLE, MRS. GINGLE, HAUSDORFF, and MRS. HAUSDORFF, do hereby
remise, release, acquit, satisfy, and forever discharge PRINCETON, AMSTERDAM
EQUITIES LIMITED, a Bahamian corporation, BEVERLY TRUST COMPANY, an Illinois
corporation, as Custodian of the FRANK LEONARD LAPORT ROLLOVER INDIVIDUAL
RETIREMENT ACCOUNT NUMBER 72-49990, MEESPIERSON (BAHAMAS) LIMITED, a Bahamian
corporation, all of the officers and directors of the corporations named in
this sentence, PATRICK H. THOMSON, FRANK LEONARD LAPORT, KEVIN M. CAHILL, the
LAW FIRM OF BROOKS & CAHILL, the FRANK LEONARD LAPORT & ASSOCIATES, LTD.
EMPLOYEES' MONEY PURCHASE PENSION PLAN AND TRUST and the FRANK LEONARD LAPORT &
ASSOCIATES, LTD. EMPLOYEES' PROFIT SHARING PLAN AND TRUST, of and from all
manner of action and actions, cause and causes of actions, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims and demands whatsoever, in law or in equity,
which GINGLE, MRS. GINGLE, HAUSDORFF and/or MRS. HAUSDORFF, ever had, now have,
or which any personal representative, successor, heir or assign of the same
hereafter can, shall or may have, against PRINCETON, AMSTERDAM EQUITIES
LIMITED, a Bahamian corporation, BEVERLY TRUST COMPANY, an Illinois
corporation, as Custodian

6
<PAGE> 7

of the FRANK LEONARD LAPORT ROLLOVER INDIVIDUAL RETIREMENT ACCOUNT NUMBER
72-49990, MEESPIERSON (BAHAMAS) LIMITED, a Bahamian corporation, all of the
officers and directors of the corporations named in this sentence, PATRICK H.
THOMSON, FRANK LEONARD LAPORT, KEVIN M. CAHILL, the LAW FIRM OF BROOKS &
CAHILL, the FRANK LEONARD LAPORT & ASSOCIATES, LTD. EMPLOYEES' MONEY PURCHASE
PENSION PLAN AND TRUST and the FRANK LEONARD LAPORT & ASSOCIATES, LTD.
EMPLOYEES' PROFIT SHARING PLAN AND TRUST for, upon or by reason of any matter,
cause or thing whatsoever, from the beginning of the world to the day of these
presents. Not by way of limitation, GINGLE, MRS. GINGLE, HAUSDORFF and MRS.
HAUSDORFF further agree that they will not, either directly or indirectly, or
through their agents or attorneys, take any action to defeat, impair, impede or
otherwise interfere with the financing transactions existing between PRINCETON
and THE INVESTOR GROUP, and/or any relationship between the same whatsoever.

B. Except as otherwise expressly provided in this
AGREEMENT, PRINCETON, BEVERLY TRUST COMPANY, an Illinois corporation, as
Custodian of the FRANK LEONARD LAPORT ROLLOVER INDIVIDUAL RETIREMENT ACCOUNT
NUMBER 72-49990, all of the officers and directors of the corporations named in
this sentence, and FRANK LEONARD LAPORT do hereby remise, release, acquit,
satisfy, and forever discharge GINGLE, MRS. GINGLE, HAUSDORFF, and MRS.
HAUSDORFF, of and from all manner of action and actions, cause and causes of
actions, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims and demands
whatsoever, in law or in equity, which PRINCETON, BEVERLY TRUST COMPANY, an
Illinois

7
<PAGE> 8

corporation, as Custodian of the FRANK LEONARD LAPORT ROLLOVER INDIVIDUAL
RETIREMENT ACCOUNT NUMBER 72-49990, all of the officers and directors of the
corporations named in this sentence, and FRANK LEONARD LAPORT ever had, now
have, or which any personal representative, successor, heir or assign of the
same hereafter can, shall or may have, against GINGLE, MRS. GINGLE, HAUSDORFF,
and MRS. HAUSDORFF, for, upon or by reason of any matter, cause or thing
whatsoever, from the beginning of the world to the day of these presents.

It is hereby agreed that, while this AGREEMENT is not being executed
by AMSTERDAM EQUITIES LIMITED, PATRICK H. THOMSON, sole shareholder and
director of AMSTERDAM EQUITIES LIMITED, MEESPIERSON (BAHAMAS) LIMITED, the
FRANK LEONARD LAPORT & ASSOCIATES, LTD. EMPLOYEES' MONEY PURCHASE PENSION PLAN
AND TRUST or the FRANK LEONARD LAPORT & ASSOCIATES, LTD. EMPLOYEES' PROFIT
SHARING PLAN AND TRUST, any releases granted by GINGLE, MRS. GINGLE, HAUSDORFF
and/or MRS. HAUSDORFF pursuant to this AGREEMENT shall be rendered null and
void, and any stock (or the equivalent value of such stock) transferred
pursuant to Article VII by GINGLE and HAUSDORFF shall be returned to GINGLE and
HAUSDORFF, in the event that any cause of action regarding the matters
referenced in this AGREEMENT is instituted by AMSTERDAM EQUITIES LIMITED,
PATRICK H. THOMSON, MEESPIERSON (BAHAMAS) LIMITED, the FRANK LEONARD LAPORT &
ASSOCIATES, LTD. EMPLOYEES' MONEY PURCHASE PENSION PLAN AND TRUST and the FRANK
LEONARD LAPORT & ASSOCIATES, LTD. EMPLOYEES' PROFIT SHARING PLAN AND TRUST
against any or all of GINGLE, MRS. GINGLE, HAUSDORFF, and/or MRS. HAUSDORFF.

8
<PAGE> 9

ARTICLE V - GUARANTEE INDEMNIFICATION

PRINCETON has previously obtained institutional financing from the
Bank of Zion n/k/a First of America Bank - Northeast Illinois, N.A. These bank
loans were personally guaranteed by GINGLE and HAUSDORFF. PRINCETON hereby
represents and warrants that all bank loans from this entity have been paid in
full, and that accordingly HAUSDORFF and GINGLE shall have no liability on
their guarantees. Furthermore, PRINCETON represents that there have been no
extensions of these loans utilizing the HAUSDORFF and GINGLE guarantees and
that these guarantees have been terminated with no current or future liability
attendant to them.

ARTICLE VI - HAUSDORFF LOAN

PRINCETON had previously received a $15,000 loan from HAUSDORFF, as
evidenced by PRINCETON's $15,000 Promissory Note to HAUSDORFF. HAUSDORFF
hereby acknowledges payment in full of said Promissory Note, and releases
PRINCETON of any and all liabilities thereunder. PRINCETON acknowledges it has
received the Promissory Note marked "Paid in Full".

ARTICLE VII - STOCK PAYMENT, STOCK RELEASE AND DELEGENDING

A. GINGLE warrants and represents that as of the date of this
AGREEMENT, GINGLE is the owner of 664,005 shares of PRINCETON common stock.
HAUSDORFF warrants and represents, as of the date of this AGREEMENT, that
HAUSDORFF is the owner of 112,719 shares of PRINCETON common stock. Of the
aforesaid amounts, GINGLE and HAUSDORFF hereby agree to make a total stock
payment of 135,000 shares of PRINCETON common stock to THE INVESTOR GROUP and
PRINCETON in accordance with the immediately following paragraph. Such payment
shall be comprised of 115,409 shares from GINGLE and 19,591 shares

9
<PAGE> 10

from HAUSDORFF, all of which shares of stock shall be free and clear of any
liens or encumbrances and all legends and restrictions (the "STOCK PAYMENT").

The aforesaid stock payment shall be made by GINGLE and HAUSDORFF to
the members of THE INVESTOR GROUP and PRINCETON as follows:

<TABLE>
<S> <C>
AMSTERDAM EQUITIES LIMITED . . . . . . . . . . . . . 117,450 shares
PRINCETON . . . . . . . . . . . . . . . . . . . . . . 8,775 shares
PRINCETON . . . . . . . . . . . . . . . . . . . . . . 8,775 shares
</TABLE>

The STOCK PAYMENT shall be made simultaneous with the execution of
this AGREEMENT, and by delivery of written transfer instructions by GINGLE and
HAUSDORFF to PRINCETON's transfer agent and by PRINCETON to PRINCETON's
transfer agent for the release of these 135,000 shares of PRINCETON common
stock, free and clear of all legends and restrictions. Such instructions shall
be in the form, mutually acceptable to all parties hereto, attached hereto and
incorporated herein by reference as Exhibit "A-1". In connection with the STOCK
PAYMENT, the parties hereto acknowledge that PRINCETON is receiving the
above-referenced portion of the STOCK PAYMENT solely due to the assignment by
FRANK LEONARD LAPORT and BEVERLY TRUST COMPANY, an Illinois corporation, as
Custodian of the FRANK LEONARD LAPORT ROLLOVER INDIVIDUAL RETIREMENT ACCOUNT
NUMBER 72-49990, to PRINCETON of their respective rights in such STOCK
PAYMENT.

B. Simultaneous with the stock payment made pursuant to Subparagraph
(A) above, GINGLE and HAUSDORFF shall be entitled to sell 100,000 shares of
PRINCETON common stock free and clear of all legends and restrictions and
without regard to any rights of first refusal or volume restrictions provided
for in this AGREEMENT. Simultaneous with the delivery of the instructions
regarding the stock payment "Exhibit A-1", PRINCETON shall also deliver,
written

10
<PAGE> 11

transfer instructions to PRINCETON's transfer agent for the release of these
100,000 of PRINCETON common stock, free and clear of all legends and
restrictions. Such instructions shall be in the form, mutually acceptable to
all parties hereto, attached hereto and incorporated herein by reference as
"Exhibit A-2". The stock release of 100,000 shares shall be comprised of
83,500 applicable to GINGLE and 16,500 shares applicable to HAUSDORFF. GINGLE
AND HAUSDORFF agree that the sale of these 100,000 shares of PRINCETON common
stock shall only be transacted, placed and/or otherwise consummated through the
registered market maker of the stock. GINGLE and HAUSDORFF shall be
responsible for all normal charges, commissions, fees and/or costs otherwise
incurred in the sale of these 100,000 shares.

C. Following the stock payment and stock release provided for in
Subparagraphs (A) and (B) above, GINGLE shall own a balance of 465,096 shares
of PRINCETON common stock, and HAUSDORFF shall own a balance of 76,628 shares
of PRINCETON common stock. Contemporaneous with this Stock Payment, PRINCETON
shall issue written instructions to PRINCETON's Transfer Agent to remove all
legends and restrictions on the balance of the GINGLE and HAUSDORFF stock.
Such instructions shall be in the form, mutually acceptable to all parties
hereto, attached hereto and incorporated herein by reference as Exhibit "A-3".
No future instructions shall be issued to PRINCETON's transfer agent regarding
the balance of the GINGLE and HAUSDORFF stock by any one party hereto without
the written consent of all parties to this AGREEMENT. PRINCETON shall also
cause its legal counsel to issue any opinion necessary for the delegending of
the balance of the GINGLE and HAUSDORFF stock.

D. All transfer fees and taxes, if any, associated with the stock
payment referenced in Subparagraph (A) above shall be borne by THE INVESTOR
GROUP.

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<PAGE> 12

E. All costs and expenses, if any, associated with the delegending
referenced in Subparagraph (C) above shall be borne by PRINCETON.

ARTICLE VIII - VOTING TRUST

A. GINGLE and HAUSDORFF shall be entitled to sell the balance of
their shares of PRINCETON common stock subject to the volume and right of first
refusal restrictions hereinafter provided. However, the balance of the stock
owned by GINGLE and HAUSDORFF shall be subject to an irrevocable voting trust
pursuant to which THE INVESTOR GROUP shall be fully entitled to vote all such
stock (the "VOTING TRUST"). THE INVESTOR GROUP shall be entitled to vote all
such stock until the later of (a) September 25, 1999 or (b) such time as GINGLE
and HAUSDORFF, including their respective wives, MRS. GINGLE and MRS.
HAUSDORFF, collectively own or hold, directly or indirectly, beneficially or by
nominee, less than 150,000 shares of PRINCETON common stock. Upon the later of
September 25, 1999 or when GINGLE and HAUSDORFF, and their respective spouses
or related entities collectively, own or hold less than 150,000 shares of
PRINCETON common stock, they shall provide written notice thereof to THE
INVESTOR GROUP, and the VOTING TRUST shall immediately terminate. A copy of
this written notice shall also be forwarded to PRINCETON who shall immediately
make the appropriate entry on its books and records reflecting the termination
of the VOTING TRUST and the restoration of all voting rights to GINGLE and
HAUSDORFF.

B. Until the termination of the VOTING TRUST, GINGLE and HAUSDORFF
shall, at all times herein relevant, remain the sole and beneficial owners of
the shares subject to the VOTING TRUST. THE INVESTOR GROUP, shall not be
authorized to sell, encumber, alienate, or otherwise transfer or dispose of
these shares. Further, all dividends or distributions declared on the stock,
whether cash, shares, distributions in liquidation, mixed distributions, or any
other

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<PAGE> 13

form of distribution from PRINCETON to its shareholders, shall be and remain
the sole property of GINGLE and HAUSDORFF. Furthermore, if any shares should
be generally offered to PRINCETON stockholders for subscription, in exercise of
any preemptive rights provided, or otherwise, all of such rights shall inure to
GINGLE and HAUSDORFF. In all respects, GINGLE and HAUSDORFF shall retain their
rights as shareholders of PRINCETON, including all rights provided in this
AGREEMENT, or under applicable federal, state or local laws, except for the
right to vote the shares encompassed hereby and to transfer, sell or otherwise
dispose of the PRINCETON stock other than as set forth herein.

C. Notwithstanding the foregoing, the VOTING TRUST to THE INVESTOR
GROUP shall not be applicable and GINGLE and HAUSDORFF shall, at all times,
retain all voting rights to a proposal to delist PRINCETON from a publicly
traded company on a national stock exchange to a privately held company.

D. Notwithstanding anything herein that may be construed to the
contrary, any failure of all members of THE INVESTMENT GROUP to vote the shares
of common stock subject to the VOTING TRUST shall not interfere with the
remaining member or members from exercising such right to vote the shares of
common stock subject to the VOTING TRUST. In any instance or instances where
all members of THE INVESTMENT GROUP do not exercise the right to vote the
shares of common stock subject to the VOTING TRUST, the remaining member or
members shall have the right to exercise such right to vote the shares of
common stock subject to the VOTING TRUST and in any such instance or instances
terms and conditions relating to the exercise of the right to exercise such
right to vote the shares of common stock subject to the VOTING TRUST shall
apply only to such remaining member or members.

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<PAGE> 14

ARTICLE IX - AUTHORIZED BROKERAGE COMPANIES

GINGLE and HAUSDORFF hereby agree that any and all sales of their
PRINCETON common stock otherwise authorized under this AGREEMENT shall be
transacted, placed and/or otherwise consummated solely through one or more of
the following brokerage houses or their respective affiliates: (1) Charles
Schwab & Company; (2) Merrill Lynch, Pierce, Fenner & Smith; (3) Raymond James,
and/or (4) any registered market maker of the stock. GINGLE and HAUSDORFF
shall be responsible for all normal charges, commissions, fees, and/or costs
otherwise incurred in trading through these brokerage houses.

ARTICLE X - VACATION PAY

On or before December 31, 1996, PRINCETON agrees to pay to GINGLE,
HAUSDORFF and MRS. GINGLE the net aggregate sum of $10,000 for accrued and
unpaid vacation pay. Such payment shall be made by certified check, money
order, attorneys' trust account check payable to the MOSKOWITZ, MANDELL &
SALIM, P.A. TRUST ACCOUNT or by issuing wire transfer instructions to the
financial institution or institutions from which such funds are to be
transferred pursuant to the wire transfer instructions attached hereto as
Schedule 1.

ARTICLE XI - RIGHT OF FIRST REFUSAL

In the event that GINGLE and/or HAUSDORFF, whether individually or
jointly, desire to sell or transfer their PRINCETON shares, whether through a
private sale or a sale on the public market, THE INVESTOR GROUP shall have the
right of first refusal upon the terms and conditions hereinafter set forth
("RIGHT OF FIRST REFUSAL") GINGLE and HAUSDORFF shall deliver written notice
of their intentions to sell, or any offer received, to PRINCETON's CFO, FRANK
LEONARD LAPORT, AMSTERDAM EQUITIES LIMITED and the LAW FIRM OF BROOKS & CAHILL,
hereinafter collectively referred to as the "FIRST REFUSAL TEAM".

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<PAGE> 15

The written notice must include: the name, address and telephone number of the
seller and date the notice is being sent; the name, address and telephone
number of the proposed purchaser and/or transferee; the exact price per share
(if not a sale on the public market); the terms of payment of the sale price,
if any; the number of shares to be transferred; written affirmation by
Affidavit sworn under oath and notarized that such proposed sale or intended
transfer conforms to the volume restrictions hereinafter provided; all other
terms and conditions of the proposed transfer; a hard copy of a spreadsheet
setting forth the formulas and the calculations by which GINGLE and HAUSDORFF
have determined that the proposed transaction complies with the volume
restriction; and a virus free 3.5" high density certified 100% error free
computer floppy disk containing a Lotus 123 Windows (version "123R4W")
spreadsheet setting forth the formulas and the calculations by which GINGLE and
HAUSDORFF have determined that the proposed transaction complies with the
volume restriction ("FIRST REFUSAL NOTICE"). Notwithstanding anything herein
that may be construed to the contrary, the exact price per share of common
stock in a sale proposed in the public market for the purpose of the RIGHT OF
FIRST REFUSAL shall be the closing price from the previous trading day to the
date set forth on the GINGLE and HAUSDORFF FIRST REFUSAL NOTICE and such price
shall be set forth in the GINGLE and HAUSDORFF FIRST REFUSAL NOTICE.

After the date that all members of the FIRST REFUSAL TEAM have
received the FIRST REFUSAL NOTICE ("NOTICE DATE"), THE INVESTOR GROUP shall
have a period of twenty-five (25) trading days, expiring at 5:00 p.m. Central
Standard Time on the 25th trading day after the NOTICE DATE, to exercise their
RIGHT OF FIRST REFUSAL ("EXERCISE DATE") and to tender payment, if required,
for the shares purposed to be sold at the same price and on the same terms and
conditions as set out in the FIRST REFUSAL NOTICE. THE

15
<PAGE> 16

INVESTOR GROUP shall exercise this RIGHT OF FIRST REFUSAL by sending by
facsimile to Michael W. Moskowitz, Esq., if such facsimile is operational, and,
if not, sending a written notice on or before the EXERCISE DATE exercising such
right to the selling shareholder and by delivering a check or issuing wire
transfer instructions to the financial institution or institutions from which
such funds are to be transferred pursuant to the following wire transfer
instructions for the full amount of the sale price. Wire transfer instructions
for funds to be paid pursuant to the exercise of the RIGHT OF FIRST REFUSAL
GINGLE AND HAUSDORFF are attached hereto as Schedule 2.

On or before the EXERCISE DATE, PRINCETON and/or any member of THE
INVESTOR GROUP may object to any computational mistakes contained in the FIRST
REFUSAL NOTICE regarding the volume restrictions provided herein, payment to be
made upon the exercise of the RIGHT OF FIRST REFUSAL pursuant to the terms
hereof or otherwise. In the event of any such objection, written notice
("NOTICE OF OBJECTION") thereof shall be provided to GINGLE and HAUSDORFF by
sending by facsimile to Michael W. Moskowitz, Esq., if such facsimile is
operational, and, if not, sending a written notice on or before the EXERCISE
DATE. If GINGLE and HAUSDORFF agree with the asserted computational mistake,
then they shall revise their FIRST REFUSAL NOTICE accordingly so as to correct
the same. Upon correction, GINGLE and/or HAUSDORFF shall deliver a corrected
FIRST REFUSAL NOTICE to all members of THE INVESTOR GROUP, and THE INVESTOR
GROUP shall have fourteen (14) days after the date that delivery of the
corrected FIRST REFUSAL NOTICE has been made to all members of THE INVESTOR
GROUP to exercise their RIGHT OF FIRST REFUSAL. If GINGLE and HAUSDORFF should
disagree with the alleged computational mistake, then they shall so notify
PRINCETON and THE INVESTOR

16
<PAGE> 17

GROUP within five (5) days after delivery of the NOTICE OF OBJECTION. In that
event, PRINCETON and THE INVESTOR GROUP shall then have an additional fourteen
(14) days to determine whether to exercise the RIGHT OF FIRST REFUSAL provided,
or to further contest the same by providing GINGLE and HAUSDORFF with written
notice of further objection. If further objected, the matter shall be referred
to PRINCETON's current auditing firm or NASDAQ (the choice of which shall be at
the sole discretion of THE INVESTOR GROUP), whose determination as to the
application of the volume restrictions shall be final and binding.

The failure of THE INVESTOR GROUP to exercise their RIGHT OF FIRST
REFUSAL in the manner and within the time periods provided herein shall
constitute a waiver of the RIGHT OF FIRST REFUSAL as to the offered shares. In
the event that THE INVESTOR GROUP shall fail, for any reason, to exercise any
RIGHT OF FIRST REFUSAL pursuant to a FIRST REFUSAL NOTICE delivered to THE
INVESTOR GROUP, then GINGLE and/or HAUSDORFF shall have the right to sell or
transfer such number of shares of common stock set forth in such FIRST REFUSAL
NOTICE, reduced by any applicable correction.

On or before the EXERCISE DATE, the FIRST REFUSAL TEAM may verify any
information provided in the FIRST REFUSAL NOTICE provided by GINGLE and
HAUSDORFF, including contacting any proposed transferee (in the event of a
private sale), but cannot otherwise interfere in the transfer or proposed sale.

The RIGHT OF FIRST REFUSAL provided herein for THE INVESTOR GROUP
shall inure to their respective heirs, successors, assigns and transferees, and
shall be freely assignable and/or transferable.

Notwithstanding anything herein that may be construed to the contrary,
any failure of all members of THE INVESTMENT GROUP to exercise the RIGHT OF
FIRST REFUSAL shall

17
<PAGE> 18
not interfere with the remaining member or members from exercising such RIGHT
OF FIRST REFUSAL. In any instance or instances where all members of THE
INVESTMENT GROUP do not exercise the RIGHT OF FIRST REFUSAL, the remaining
member or members shall have the right to exercise such RIGHT OF FIRST REFUSAL
and in any such instance or instances terms and conditions relating to the
exercise of the RIGHT OF FIRST REFUSAL shall apply only to such remaining
member or members.

The rights and obligations of the parties to exercise this RIGHT OF
FIRST REFUSAL shall be further subject to all applicable federal, state and
local laws, including securities and exchange rules. Each party shall be
solely and exclusively responsible for his/its own compliance with such laws.

The price per share for the purposes of this RIGHT OF FIRST REFUSAL
for any sale proposed on the open public market shall be the closing price from
the trading day previous to the date of the FIRST REFUSAL NOTICE. The closing
price published in the Wall Street Journal shall control, but if not published
in the Wall Street Journal, the Investors Business Daily or the Chicago
Tribune, but if not published in the Investors Business Daily or the Chicago
Tribune, a fax copy of the closing price from the market maker, if any, for
PRINCETON shall apply. Alternatively, a computer print-out from Prodigy,
CompuServe, Quicken or America On-Line reflecting the closing price for the
previous day may be utilized. If still not available, then the final closing
price shall be that certified in a written Affidavit sworn under oath and
notarized obtained by GINGLE and HAUSDORFF from the selling agent to be
utilized in accomplishing the desired trade, provided that such agent is one of
the brokerage houses identified in ARTICLE IX above, and delivered to THE
INVESTOR GROUP by GINGLE and HAUSDORFF. Upon compliance with all of the
terms of this RIGHT OF FIRST REFUSAL, any shares of common

18
<PAGE> 19

stock sold pursuant to the conditions hereof, whether to PRINCETON, THE
INVESTOR GROUP, or any third party, whether by public or private sale, shall be
forever free and clear of this RIGHT OF FIRST REFUSAL.

The parties hereto agree that this RIGHT OF FIRST REFUSAL will apply
as to every proposed transfer, sale or other disposition of PRINCETON stock by
GINGLE and HAUSDORFF, except that their stock interests may be placed in a
trust and disposed of pursuant to its terms, gifted, or, in the event of their
deaths, may pass pursuant to their wills or by operation of law, it being fully
understood and agreed that a transfer in trust, by gift, by will or by
operation of law does not constitute a transfer necessitating any right of
first refusal nor is such a transfer limited by the volume restrictions,
although the transferee of such stock shall receive the stock, subject to the
RIGHT OF FIRST REFUSAL and the volume restrictions provided in this AGREEMENT.
The foregoing notwithstanding, any transfer pursuant to the first sentence of
this paragraph shall not be subject to the RIGHT OF FIRST REFUSAL only if such
transfer is made without any direct or indirect consideration whatsoever
including, without limitation, a loan, forgiveness of indebtedness, payment of
money, provision of materials or services to GINGLE, HAUSDORFF, a person,
persons, an entity or entities related thereto and, if such transfer is made
with any consideration, GINGLE and HAUSDORFF agree that all such consideration
shall be immediately paid to THE INVESTOR GROUP as liquidated damages and not
as a penalty or forfeiture and, further, agree and acknowledge that such
damages are fair and reasonable.

Notwithstanding the foregoing, the RIGHT OF FIRST REFUSAL shall not be
applicable to any offer made to purchase any and all outstanding shares of
PRINCETON stock for good and valuable consideration ("TENDER OFFER"). In that
event, all terms and conditions of the

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<PAGE> 20

TENDER OFFER shall similarly be applicable to the balance of the stock held by
GINGLE and HAUSDORFF.

ARTICLE XII - VOLUME RESTRICTIONS

A. Aside from the restrictions otherwise provided in this AGREEMENT,
GINGLE and HAUSDORFF agree that their rights to sell, transfer, assign,
hypothecate or in any way alienate any of their shares shall be subject to the
volume restrictions hereinafter provided. GINGLE and HAUSDORFF further agree
that the volume restrictions imposed are to be determined on a pro rata basis,
on the basis of the daily average of the number of shares of PRINCETON common
stock sold over the period of twenty-five (25) days of trading for PRINCETON
stock immediately prior to the date of the FIRST REFUSAL NOTICE (the "DAILY
VOLUME AVERAGE"), which date shall be the same date upon which such FIRST
REFUSAL NOTICE is sent by GINGLE or HAUSDORFF.

B. The aggregate amount of stock permitted to be sold shall be
considered the "allowable volume". The pro rata allocation of the allowable
volume shall be 83.5% for GINGLE and 16.5% for HAUSDORFF. Each shall be
permitted to sell only their pro rata share of the allowable volume during any
seven (7) day period as provided herein. During seven (7) day periods, of
which the first shall commence at 12:00 a.m. on September 26, 1996 and end at
11:59 p.m. on October 2, 1996 and the second shall commence at 12:00 a.m. on
October 3, 1996 and end at 11:59 p.m. on October 9, 1996 and, thereafter,
continue for successive seven (7) day periods, GINGLE or HAUSDORFF can sell,
transfer, and/or alienate, no more than their pro rata portion of twenty-five
percent (25%) of the DAILY VOLUME AVERAGE. However, the aggregate volume shall
be reduced by a formula set forth herein which considers the price
differential, if any. Price differential is the difference, if any, calculated
in a percent between the

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<PAGE> 21

high and low of the stock price over the twenty-five (25) day trading period.
If the price differential of PRINCETON common stock over the relevant
twenty-five (25) day trading period is equal to or greater than ten percent
(10%), then the allowable volume shall be further reduced by the product of (i)
four (4) and (ii) the amount by which the price differential exceeds 10% [i.e.,
if price differential is 15% (e.g. assume the low was $1.00 and the high was
$1.15, the spread, $1.15 - $1.00 = $0.15, is 15% higher than the low, 0.15 / 1
= 15%), than allowable volume is reduced by an additional 20% (i.e. 15% - 10% =
5% x 4 = 20%. 25% - (25% x 20%) = 20% of the DAILY VOLUME AVERAGE)].
Notwithstanding the foregoing, if the average stock price over the twenty-five
(25) day trading period exceeds (is higher) than the proposed sales price of
the GINGLE or HAUSDORFF stock to be sold (in other words, on the average, the
price of PRINCETON stock over the 25 day trading period has increased instead
of decreased) and the price differential is attributable to this upward trend
and increase in the price of the PRINCETON common stock, GINGLE/HAUSDORFF
volume restriction shall not go below 2.5% of the DAILY VOLUME AVERAGE in any
one week [i.e. in such an instance in an upward market GINGLE/HAUSDORFF shall
be entitled to an allowable volume no less than 10% of the 25% of the DAILY
VOLUME AVERAGE (10% x 25% = 2.5%)].

C. GINGLE or HAUSDORFF shall utilize the form attached hereto as
Exhibit B, for purposes of calculating the allowable volume and their pro rata
share thereof. This form shall be completed each time GINGLE or HAUSDORFF
desire to sell stock and shall be delivered to PRINCETON and each member of THE
INVESTOR GROUP contemporaneous with the FIRST REFUSAL NOTICE provided by
Article XI of this AGREEMENT.

D. Price Differential and volume calculations for the twenty-five
(25) day trading period contained in this Article XII shall be determined by
reference to the closing prices and volume

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<PAGE> 22

published in the Wall Street Journal. If not published in the Wall Street
Journal, a fax copy of this closing information for the market maker, if any,
for PRINCETON shall apply. Alteratively, a computer print-out from Prodigy,
CompuServe, Quicken or America On-Line reflecting the closing prices and volume
for the twenty-five (25) trading period may be utilized. If still not
available, then this information shall be obtained from the selling agent to be
utilized in accomplishing the desired trade, provided that such agent is one of
the brokerage houses identified in Article IX above.

E. Notwithstanding the foregoing volume restrictions, in the event
(i) PRINCETON is delisted as a publicly traded company on a national stock
exchange (NASDAQ, NYSE or AMEX), and (ii) in addition to such a delisting,
PRINCETON stock is no longer traded on the "Bulletin Board" or in the "Pink
Sheets", then the foregoing volume restrictions shall no longer be applicable.

F. Notwithstanding the foregoing volume restrictions, if the shares
are being sold to PRINCETON and/or THE INVESTOR GROUP, then and only then, at
the sole and exclusive discretion of PRINCETON and/or THE INVESTOR GROUP, no
matter how arbitrary, PRINCETON and/or THE INVESTOR GROUP shall be empowered to
reduce volume restrictions to any extent or degree, no matter how arbitrary.

ARTICLE XIII - LIQUIDATED DAMAGES

If GINGLE and/or HAUSDORFF should sell or otherwise transfer, or any
broker utilized by GINGLE or HAUSDORFF should sell any stock in excess of their
pro rata share of the allowable volume contained in the Volume Restrictions in
Article XII herein, then the violating party/parties (GINGLE and/or HAUSDORFF)
shall pay to THE INVESTOR GROUP, as liquidated damages, the excess gross
proceeds (the total sales price of all shares sold in excess

22
<PAGE> 23

of their pro rata share of the allowable volume under the Volume Restrictions
without deduction for any expense associated with such sale). If the violation
occurs by a transfer other than by sale, then the liquidated damages shall be
the gross market value (determined by utilizing the closing price for the stock
on the day of the transfer) of all stock transferred in excess of the allowable
volume under the Volume Restrictions.

Notwithstanding the foregoing, no liquidated damages shall be payable
for an error in the computation contained in the FIRST REFUSAL NOTICE of the
number of shares allowed to be sold where PRINCETON and/or THE INVESTOR GROUP
fails to correct the computation within the twenty-five (25) trading day
period to exercise the RIGHT OF FIRST REFUSAL.

ARTICLE XIV - CONSULTING AGREEMENT

Commencing January 1, 1997, GINGLE agrees to perform consulting
services for PRINCETON for a period of three (3) months through March 31, 1997.
These consulting services shall be performed without compensation except that
GINGLE shall be entitled to be paid and/or reimbursed by PRINCETON for expenses
which are pre-approved by PRINCETON in writing. PRINCETON shall have the
option of extending the consulting agreement for an additional three (3) months
on terms to be agreed upon between PRINCETON and GINGLE. PRINCETON shall
notify GINGLE no later than March 17, 1997 in the event PRINCETON desires to
exercise its option and the agreed upon terms shall be completed between the
parties no later than March 31, 1997.

ARTICLE XV - MISCELLANEOUS

1. Default. If any party hereto defaults on the performance of
any non-monetary obligations of this AGREEMENT, and fails to cure said default
within five (5) days of delivery of written notice thereof, then the parties
agree that the non-defaulting party may seek the specific

23
<PAGE> 24

performance of the defaulting party's obligations in a court of equity in Cook
County, Illinois, and without regard to the adequacy of any legal remedy. In
all other respects, the parties shall also have such other and further rights
and remedies as are provided under applicable law.

2. Taxes. The parties hereto shall each be responsible for the
payment of their own respective tax obligations created as a result of the
terms and conditions of this AGREEMENT, or performance hereunder. Without
limiting the generality of the foregoing, the parties specifically acknowledge
that GINGLE and HAUSDORFF may claim a capital loss for their respective
portions of the stock payment to THE INVESTOR GROUP herein provided.

3. Governing Law. This AGREEMENT has been entered into in the
State of Illinois, and it is the intention of the parties that all questions as
to performance, interpretation, validity, legal effect and enforceability of
this AGREEMENT, including, without limitation, Article XV, Section 1, shall be
determined in accordance with the laws of the State of Illinois. The parties
hereby further agree that the exclusive venue for any action under this
AGREEMENT shall be the courts of Cook County, Illinois, state and federal, and
all parties hereby waive any objections which they may have to the personal
jurisdiction of such courts. Such personal jurisdiction is hereby conferred
without regard to the actual locus or residence of the parties at the present
time, or regardless of any change of residence of any of the parties that may
occur hereafter.

4. Entire Agreement. This AGREEMENT sets forth the entire
understanding of the parties hereto, and supersedes all previous oral and
written agreements, if any, between the parties, and may not be amended,
altered or modified except by written document signed by all of the parties
hereto.

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<PAGE> 25

5. Headings. The headings used in this AGREEMENT are used for
reference purposes only, and are not deemed controlling with respect to the
meaning, construction or effect of the contents thereof.

6. Severability. The invalidity or unenforceability of any
particular provision of this AGREEMENT shall not affect the other provisions
hereof, and this AGREEMENT shall be construed in all respects as if such
invalid or unenforceable provision were omitted.

7. Binding Effect. This AGREEMENT shall be binding upon and
inure to the benefit of, and shall be enforceable by, the respective
successors, assigns, heirs, beneficiaries and personal representatives of the
parties hereto.

8. Gender. Wherever the context shall so require, all words
herein any gender shall be deemed to include the masculine, feminine or neuter
gender; all singular words shall include the plural and all plural shall
include the singular.

9. Waiver of Breach. The waiver of any party of a breach of any
provision of this AGREEMENT by the other shall not operate or be construed as a
waiver of any subsequent breach.

10. Attorneys' Fees and Costs. In the event that any party shall
be required to enforce this AGREEMENT through litigation, the prevailing party
shall be entitled to recover its reasonable attorneys' fees and all costs and
expenses incurred in connection with such enforcement, including fees, costs
and expenses incurred upon any appeal or in any bankruptcy proceedings.

11. Counterparts. This AGREEMENT may be executed in any number of
counterparts, and each such counterpart shall for all purposes be deemed to be
an original.

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<PAGE> 26

12. Further Cooperation. Each of the parties hereto agrees to
execute whatever additional documentation or instruments as are necessary to
carry out the intents and purposes of this AGREEMENT.

13. Joint Agreement. This AGREEMENT shall be considered the joint
product of all parties hereto, and in the event of any controversy as to the
construction of any provision hereof, such controversy shall not be construed
against any party as the alleged drafter of this AGREEMENT.

14. Notice. Any and all notices, consents, offers, acceptances,
or any other communications provided for herein shall be given in writing and
shall be effective upon delivery as evidenced by a receipt executed by or for
the party to whom such notice, consent, offer, acceptance, or any other
communication provided for herein is addressed; which delivery shall occur upon
facsimile transmission, as evidenced by such facsimile transmission
verification report and upon delivery by (i) certified or registered mail as
evidenced by a return receipt executed by or for the party to whom such mail is
addressed, or (ii) courier service, including, without limitation, United
Parcel Service, Federal Express, Purolator, Airborne Express, or U.S. Postal
Service Express Mail, as evidenced by a receipt executed by or for the party to
whom such courier package is addressed. Notices shall be given to the
following:

If to GINGLE or 5226 West Shore Drive
MRS. GINGLE: New Port Richey, FL 34652

If to HAUSDORFF or 2501 Pinebrook Hollow
MRS. HAUSDORFF: Sarasota, FL 34235

With a copy to: Michael W. Moskowitz, Esquire

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<PAGE> 27

Moskowitz, Mandell & Salim, P.A.
800 Corporate Drive, Suite 510
Fort Lauderdale, FL 33334
(954) 491-2000
FAX (954) 491-2051

If to PRINCETON: Steven Sierakowski, CFO
Princeton Dental Management
Corporation
7421 West 100th Place
Bridgeview, IL 60455
FAX (708) 430-8031

If to THE INVESTOR GROUP: Amsterdam Equities Limited
75 Frederick Street
P.O. Box N-3813
Nassau, N.P., Bahamas
FAX (809) 325-1340

FRANK LEONARD LAPORT
7421 West 100th Place
Bridgeview, IL 60455-2442
(708) 599-9000
FAX (708) 599-9300

Beverly Trust Company, as Custodian
of the Frank Leonard Laport Rollover
Individual Retirement Account Number
75-49990
10312 S. Cicero Ave.
Oak Lawn, IL 60453
FAX (708) 499-4849

With a copy to: Kevin M. Cahill, Esquire
Brooks & Cahill
208 South LaSalle Street, Suite 1855
Chicago, IL 60604
(312) 641-6100
FAX (312) 641-6116

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<PAGE> 28

The parties shall provide notice, in writing, of any changes to the aforesaid
notice addresses.

14. Time. Time shall be of the essence in the performance of any
obligation or the sending of any notice under this AGREEMENT.

ARTICLE XIV - DISMISSAL WITH PREJUDICE

Upon execution of this AGREEMENT, PRINCETON agrees to execute and file
a voluntary dismissal with prejudice of its action against GINGLE, HAUSDORFF
and MRS. GINGLE, pending in the Circuit Court of Cook County, Illinois, County
Department, Chancery Division, Case No. 95 CH 5708. Such dismissal shall be in
the form attached hereto and incorporated herein by reference as Exhibit "C".
All parties shall bear their own costs and attorneys' fees incurred in such
proceeding.

END OF TEXT ON THIS PAGE

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<PAGE> 29

IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT,
with the intent to be legally bound, on the day and year written below:

Kaylin Pace
- -----------------------------------
Nancy A. Strout Terry D. Gingle
- ----------------------------------- ------------------------------------
TERRY D. GINGLE

Kaylin Pace
- -----------------------------------
Nancy A. Strout Vickie Gingle
- ----------------------------------- ------------------------------------
VICKIE GINGLE

Kathryn O'Donnell
- -----------------------------------
M. Elizabeth Johnson Oscar Hausdorff
- ----------------------------------- ------------------------------------
OSCAR HAUSDORFF

Kathryn O'Donnell
- -----------------------------------
M. Elizabeth Johnson Susan Hausdorff
- ----------------------------------- ------------------------------------
SUSAN HAUSDORFF

PRINCETON DENTAL MANAGEMENT
CORPORATION

Lesley Pickard Caves
- -----------------------------------
??? By: Gary A. Lockwood
- ----------------------------------- ------------------------------------

SIGNATURES CONTINUED ON NEXT PAGE

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<PAGE> 30

- -----------------------------------

- ----------------------------------- ------------------------------------
FRANK LEONARD LAPORT

BEVERLY TRUST COMPANY, as Custodian
of the FRANK LEONARD LAPORT ROLLOVER
INDIVIDUAL RETIREMENT ACCOUNT NUMBER
75-49990.

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

The following parties are joining in this AGREEMENT solely for
purposes of Article IV regarding the Releases that each party hereto is giving
and receiving.

??? Kevin Cahill
- ----------------------------------- ------------------------------------
KEVIN CAHILL, individually

LAW FIRM OF BROOKS & CAHILL

??? By: Kevin Cahill, partner
- ----------------------------------- ------------------------------------

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<PAGE> 31

STATE OF FLORIDA )
) SS:
COUNTY OF Pcisco )

The foregoing instrument was acknowledged before me this 11th day of
October, 1996, by TERRY D. GINGLE, who [ ] is personally known to me, or
[ X ] produced FL DL G524 804 0030 as identification.

Nancy A. Strout
------------------------------------
NOTARY PUBLIC
My Commission Expires: Print Name:
-------------------------
Commission No.:
---------------------

NANCY A. STROUT
[SEAL] MY COMMISSION # CC 362614
EXPIRES: February 27, 1997
Bonded Thru Notary Public Underwriters

STATE OF FLORIDA )
) SS:
COUNTY OF Pcisco )

The foregoing instrument was acknowledged before me this 11th day of
October, 1996, by VICKIE GINGLE, who [ ] is personally known to me, or [ X ]
produced FL DL G524 872 51 8010 as identification.

Nancy A. Strout
------------------------------------
NOTARY PUBLIC
My Commission Expires: Print Name:
-------------------------
Commission No.:
---------------------

NANCY A. STROUT
[SEAL] MY COMMISSION # CC 362614
EXPIRES: February 27, 1997
Bonded Thru Notary Public Underwriters

31
<PAGE> 32

STATE OF FLORIDA )
) SS:
COUNTY OF SARASOTA )

The foregoing instrument was acknowledged before me this 10th day of
October, 1996, by OSCAR HAUSDORFF, who [ X ] is personally known to me, or
[ ] produced Drivers License as identification.

Esther Davis
------------------------------------
NOTARY PUBLIC
My Commission Expires: Print Name:
-------------------------
Commission No.:
---------------------

Esther Davis
[SEAL] MY COMMISSION # CC540269 EXPIRES
May 28, 2000
BONDED THRU TROY FAIN INSURANCE, INC.

STATE OF FLORIDA )
) SS:
COUNTY OF SARASOTA )

The forgoing instrument was acknowledged before me this 10th day of
October, 1996, by SUSAN HAUSDORFF, who [ X ] is personally known to me, or
[ ] produced Drivers License as identification.

Esther Davis
------------------------------------
NOTARY PUBLIC
My Commission Expires: Print Name:
-------------------------
Commission No.:
---------------------

Esther Davis
[SEAL] MY COMMISSION # CC540269 EXPIRES
May 28, 2000
BONDED THRU TROY FAIN INSURANCE, INC.

32
<PAGE> 33

STATE OF MICHIGAN )
) SS:
COUNTY OF WAYNE )

The forgoing instrument was acknowledged before me this 5th day of
November, 1996, by Gary A. Lockwood, of PRINCETON DENTAL MANAGEMENT
CORPORATION. He/She [ X ] is personally known to me, or [ ] produced
________________ as identification.

Lesley Pickard Caves
------------------------------------
NOTARY PUBLIC
My Commission Expires: Print Name: Lesley Pickard Caves
8-21-00 -------------------------
LESLEY PICKARD CAVES Commission No.:
Notary Public, Wayne County, MI ---------------------
My Commission Expires Aug. 21, 2000

STATE OF )
) SS:
COUNTY OF )

The forgoing instrument was acknowledged before me this day of
, 1996, by FRANK LEONARD LAPORT, who [ ] is
personally known to me, or [ ] produced as
identification.

------------------------------------
NOTARY PUBLIC
My Commission Expires: Print Name:
-------------------------
Commission No.:
---------------------

33
<PAGE> 34

SCHEDULE 1

Moskowitz, Mandell & Salim, P.A.
Regular Trust Account
800 Corporate Drive, Suite 510
Fort Lauderdale, FL 33334
(954) 491-2000

Capital Bank - ABA #067008414
1666 Kennedy Causeway
North Bay Village, FL 33141

For further credit to:

Capital Bank
600 SE 3rd Avenue
Fort Lauderdale, FL 33301

Credit to: Moskowitz, Mandell & Salim, P.A.
Trust Account
Account No. 3400005002

With telephone confirmation to:

Linda A. Willever (954) 491-2000

34
<PAGE> 35

SCHEDULE 2

GINGLE:

Barnett Bank 051-007
6128 U.S. Highway 19
New Port Richey, FL 34652-2526
Route #0631073935020
For credit to the account of:
Terry D. Gingle or Vickie L. Gingle
Account #1517253782

HAUSDORFF:

Barnett Bank 062-003
935 N. Beneva Road
Sarasota, FL 34232
Route #0631090581248
For credit to the account of:
Oscar L. Hausdorff or Susan Hausdorff
Account #1627526196

35
<PAGE> 36
EXHIBIT ___

___________________________________________

PRINCETON DENTAL MANAGEMENT CORPORATION,
a Delaware Corporation,

Plaintiff, Case No. 95 CH 5708
In Chancery
v.
NOTICE OF DISMISSAL
TERRY D. GINGLE, DR. OSCAR L.
HAUSDORFF and VICKY GINGLE,

Defendants.
___________________________________________

Plaintiff Princeton Dental Management Corporation, by and through its
counsel hereby dismiss with prejudice the above-captioned proceeding against
defendants Terry D. Gingle, Dr. Oscar L. Hausdorff and Vicky Gingle and all
claims stated therein pursuant to Illinois Code of Civil Procedure 2-1009, with
each party bearing his or its own costs.

Dated: October __, 1996
Chicago, Illinois

___________________________________

_______________________
Attorneys for Plaintiff
Princeton Dental Management
Corporation
<PAGE> 37
[PDMC LETTERHEAD]

October , 1996

VIA TELECOPY AND REGULAR MAIL

Continental Stock
Transfer & Trust Company
2 Broadway
New York, NY 10004

Re: PRINCETON DENTAL MANAGEMENT CORPORATION ("PDMC")
TERRY D. GINGLE, VICKY L. GINGLE, OSCAR L. HAUSDORFF
(THE "STOCKHOLDERS")

Dear Sir or Madam:

We have been provided with instruction letters from the Stockholders
regarding their shares of PDMC common stock (copies of letters attached). In
these letters the Stockholders request that new, legend-free PDMC stock
certificates be issued in accordance with the terms of such instruction letters.
We have also been provided with Rule 144 Affidavits from each of the
Stockholders and an opinion of counsel from Brooks & Cahill.

Accordingly, we instruct you to cancel and reissue the PDMC stock
certificates in strict accordance with the terms of the attached instruction
letters. The new certificates need not contain any restrictive legends.

Thank you for your cooperation and please feel free to call if you have any
questions.

Sincerely,

PRINCETON DENTAL MANAGEMENT CORPORATION

By:
------------------------------------
Its:
-----------------------------------
<PAGE> 38
[BROOKS & CAHILL LETTERHEAD]

October , 1996

VIA TELECOPY AND REGULAR MAIL

Continental Stock
Transfer & Trust Company
2 Broadway
New York, NY 10004

Re: PRINCETON DENTAL MANAGEMENT CORPORATION ("PDMC")
TERRY D. GINGLE, VICKY L. GINGLE, OSCAR L. HAUSDORFF
(THE "STOCKHOLDERS")

Dear Sir or Madam:

This firm represents PDMC, and we have been requested to issue our opinion
with respect to the removal of all legends from the shares of PDMC common stock
currently held by the Stockholders and referenced in the attached instruction
letters ("Stock").

In connection with the preparation of this opinion, we have been provided
with certain information by the Stockholders and PDMC, and this opinion is being
issued in reliance upon such information. Without limitation, PDMC and the
Stockholders have each advised us that (i) none of the Stockholders has, during
the last three months, been an "affiliate" of PDMC, and (ii) each of the
Stockholders has owned the Stock attributed to them in the attached instruction
letters for a period of at least three (3) years.

Based on the foregoing, and pursuant to Rule 144(k) of the General Rules and
Regulations promulgated under the Securities Act of 1933, it is our opinion
that the legends may be removed on the Stock in strict accordance with the
terms of the attached instruction letters.

Sincerely,

BROOKS & CAHILL

<PAGE> 1
EXHIBIT 10.48

AMENDMENT
TO
EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement ("Amendment") is made as of the
1st day of June, 1996 by and among Gary A. Lockwood (the "Employee"), Mason
Dental Midwest, Inc., a Michigan corporation (the "Company"), and Princeton
Dental Management Corporation, a Delaware corporation ("Princeton"). The
Employee, the Company and Princeton are herein collectively referred to as the
"Parties".

RECITALS

A. The Parties have previously entered into that certain Employment
Agreement dated December 31, 1993 (the "Employment Agreement").

B. The Parties desire to amend the Employment Agreement to reflect
certain agreements among the Parties.

AGREEMENTS

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

1. Unless otherwise defined herein, all capitalized terms used
herein which are defined in the Employment Agreement shall have the meanings
assigned to them in the Employment Agreement.

2. The Employment Agreement is amended as follows:

A. Term of Agreement. Section 1 of the Employment
Agreement is deleted in its entirety and replaced by the following:

" 1. Term of Agreement. Subject to the terms and conditions hereof,
this Agreement shall commence as of January 1, 1994 and shall continue in
effect until May 30, 2001."

B. Compensation. Subsections (i), (ii) and (iv) of
Section 3 are deleted in their entirety and replaced by the following:

" 3. Compensation. (i) Base Salary. As compensation for Employee's
services under this Agreement, Employee shall be entitled to receive a base
salary of $97,000.00 per
<PAGE> 2

annum, to be paid in accordance with the current payroll practices of the
Company. Effective June 1, 1996, Employee's base salary shall be increased to
$106,150.18 [BASED ON CPI INCREASES OF 2.6% IN '94, 2.8% IN '95, 1.8% FOR THE
FIRST FIVE MONTHS OF '96 AND $2,000 FOR PAYMENT OF WHOLE LIFE PREMIUMS.]
Beginning January 1, 1997, Employee shall be entitled to annual increases in
such base salary equal to the average annual increase in the Consumer Price
Index [INSERT SPECIFIC CPI INDICATOR], as determined by the United States
Department of Labor; provided, however, that any such increase for 1997 shall
be pro-rated to account for the fact that Employee has, effective June 1, 1996,
been granted such an increase through May 31, 1996.

(ii) Bonuses and Stock Options. The Company may, at its sole
discretion, pay Employee an annual performance award ("Annual Performance
Award") during each year of the Term as determined by the Board of Directors at
its sole and exclusive discretion from time to time. As of the date hereof,
Princeton has also agreed to grant Employee a stock option as set forth on
Exhibit A. Effective June 1, 1996, the Employee shall also be entitled to
receive, pursuant to the provisions of Princeton's 1993 Incentive and
Non-Statutory Stock Option Plan, options to purchase up to 50,000 shares of
Princeton common stock as set forth on Exhibit B attached hereto and
incorporated herein.

(iv) Reimbursement of Expenses. In addition to compensation,
Employee shall be entitled to reimbursement of ordinary and necessary
out-of-pocket trade or business expenses reasonably incurred in the ordinary
course of employment duties and paid by Employee on behalf of the Company. Such
reimbursement shall not constitute compensation. Reimbursement shall be made
following submission by the Employee to the Company of such vouchers as may be
reasonably satisfactory to the Company and as may be in compliance with
Internal Revenue Service guidelines, rulings and requirements regarding valid
business expenses. Princeton shall acquire for Employee a credit card having a
$10,000.00 credit limit, which credit card Employee shall use for Company and
Princeton business purposes only, and not for any other use whatsoever. All
expenses charged to such credit card must be in compliance with nternal
Revenue Service guidelines, rulings and requirements regarding valid business
expenses. If Employee breaches this Agreement and uses a Company credit card
for personal use then the Company shall have the right to withhold such amount
from the Employee's paycheck as an offset. Notwithstanding anything contained
in this Section 3(iv) to the contrary, Employee shall be required to submit a
written budget on a monthly basis of anticipated expenses to the Board of
Directors of Princeton for its approval and Employee shall adhere to such
approved budget.

C. Termination of Employment. Section 4 of the Employment Agreement is
deleted in its entirety and replaced by the following:

" 4. Termination of Employment. This Agreement may be terminated
by either the Employee, the Company or Princeton upon ninety (90) days written
notice."

-2-
<PAGE> 3

D. Compensation Upon Termination or During Disability. Section 5 of
the Employment Agreement is deleted in its entirety and replaced by the
following:

" 5. Compensation Upon Termination or During Disability. Upon
termination of Employee's employment with the Company for any reason other than
for cause, Employee shall be entitled to receive a severance allowance equal to
ninety (90) days of Employee's base compensation, payable in accordance with
the payroll practices of the Company."

E. Chief Operating Officer. The following new Section 16 is added to
the Employment Agreement:

" 16. Chief Operating Officer. Notwithstanding anything in this
Agreement to the contrary, effective June 1, 1996, the Employee is appointed as
the Chief Operating Officer of Princeton, with such duties and responsibilities
as are customary with respect to such position and as may be determined by the
Board of Directors of Princeton. As full compensation for Employee's fulfilling
the duties of Chief Operating Officer, in addition to any other compensation
provided for in this Agreement, Employee shall receive the sum of $12,000.00
per annum, to be paid in accordance with the current payroll practices of
Princeton. Effective June 1, 1996, the Employee shall also be entitled to
receive, pursuant to the provisions of Princeton's 1993 Incentive and
Non-Statutory Stock Option Plan, options to purchase up to 50,000 shares of
Princeton common stock as set forth on Exhibit C attached hereto and
incorporated herein." [YOU INDICATED YOU ARE CONSIDERING A MORE AGGRESSIVE,
PERFORMANCE-BASED, OPTION PROGRAM, BUT WE HAVE NOT YET DISCUSSED WHAT THAT
MIGHT BE.]

Except as specifically amended by this Amendment, the Employment
Agreement shall remain in full force and effect.

END OF TEXT ON THIS PAGE

-3-
<PAGE> 4

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

PRINCETON DENTAL MANAGEMENT CORPORATION

By:
-----------------------------------
Printed Name:
-------------------------
Its:
----------------------------------

MASON DENTAL MIDWEST, INC.

By:
-----------------------------------

Printed Name:
-------------------------

Its:
----------------------------------

- ----------------------------------
Gary A. Lockwood, individually

-4-
<PAGE> 5

EXHIBIT B

STOCK OPTION AGREEMENT

This Stock Option Agreement ("Agreement") is made this 1st day of
June, 1996 by and among Princeton Dental Management Corporation, a Delaware
corporation (the "Company"), and Gary A. Lockwood, an employee of the Company
or a subsidiary thereof (the "Employee").

The Company and the Employee agree as follows:

1. 1993 Incentive and Non-Statutory Stock Option Plan. This Agreement,
executed on behalf of the Company by its President, evidences the grant of an
Incentive Stock Option to purchase Common Stock of the Company (the "Option")
for services anticipated to be rendered by Employee. The Option is subject in
its entirety to the terms and conditions of the Princeton Dental Management
Corporation 1993 Incentive and Non-Statutory Stock Option Plan (the "Plan")
adopted by the Board of Directors June 3, 1993 and approved by the Shareholders
on July 12, 1993. A copy of the Plan is annexed to this Agreement.

2. Date of Grant. The date of the grant of the Option is June 1, 1996.

3. Number and Price of Shares. The total number of shares granted is
50,000. The purchase price per share shall be the average Company trading price
based on the trading days contained in the 61 day period beginning on June 1,
1996 and running through July 31, 1996.

4. Option Period and Time of Exercise. The number of shares specified
in Paragraph 3 above are divided into four parts which may be exercisable
within the Option period as follows:

<TABLE>
<CAPTION>
Part No. of Shares Date Exercisable Expiration Date
- ---- ------------- ---------------- ---------------
<S> <C> <C> <C>
1 15,000 1/1/97 1/1/2003
2 15,000 1/1/98 1/1/2003
3 10,000 1/1/99 1/1/2003
4 10,000 1/1/2000 1/1/2003
</TABLE>

(i) The Board may, in its sole discretion, cancel Options granted to
the Employee if the employment of Employee is terminated for cause. Upon the
termination of employment other than for cause, Options granted under the Plan
shall be cancelled only to the extent that such Options were not exercisable as
of the date of such termination.

-5-
<PAGE> 6

(ii) In no event shall the Options be exercisable after the expiration
date of the Option period.

5. Manner of Exercise. Subject to the conditions and restrictions
contained in the Plan and Paragraph 6 below, the Options shall be exercised by
delivering written notice of exercise to the Secretary of the Company.

6. Non-Transferability. This Agreement and Option granted may not be
assigned or transferred by the Employee except as provided in the Plan.

7. Amendment. Neither this Agreement or the Option may be amended or
modified or revoked except by agreement in writing and signed by the Company
and the Employee.

8. Interpretation. The Board has the sole power to interpret the Plan
and to resolve any questions arising under the Plan or this Agreement.

9. Entire Agreement. Except as specifically referenced in Employee's
Employment Agreement, this Agreement constitutes the entire agreement under the
Plan between the Company and the Employee and supersedes all other agreements
under the Plan heretofore entered into.

IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the 1st day of June, 1996.

PRINCETON DENTAL MANAGEMENT CORPORATION

By:
-----------------------------------

Printed Name:
-------------------------

Its:
----------------------------------

- ----------------------------------
Gary A. Lockwood, individually

-6-
<PAGE> 7

EXHIBIT C

STOCK OPTION AGREEMENT

The Company and the Employee agree as follows:

1. 1993 Incentive and Non-Statutory Stock Option Plan. This Agreement,
executed on behalf of the Company by its President, evidences the grant of an
Incentive Stock Option to purchase Common Stock of the Company (the "Option")
for services anticipated to be rendered by the Employee. The Option is subject
in its entirety to the terms and conditions of the Princeton Dental Management
Corporation 1993 Incentive and Non-Statutory Stock Option Plan (the "Plan")
adopted by the Board of Directors June 3, 1993 and approved by the Shareholders
on July 12, 1993. A copy of the Plan is annexed to this Agreement.

2. Date of Grant. The date of the grant of the Option is June 1, 1996.

4. Option Period and Time of Exercise. The number of shares specified
in Paragraph 3 above are divided into four parts which may be exercisable
within the Option period as follows:

<TABLE>
<CAPTION>
Part No. of Shares Date Exercisable Expiration Date
- ---- ------------- ---------------- ---------------
<S> <C> <C> <C>
1 10,000 1/1/97 1/1/2003
2 10,000 1/1/98 1/1/2003
3 15,000 1/1/99 1/1/2003
4 15,000 1/1/2000 1/1/2003
</TABLE>

-7-
<PAGE> 8

(ii) In no event shall the Options be exercisable after the expiration
date of the Option period.

6. Non-Transferability. This Agreement and Option granted may not be
assigned or transferred by the Employee except as provided in the Plan.

7. Amendment. Neither this Agreement or the Option may be amended or
modified or revoked except by agreement in writing and signed by the Company
and the Employee.

8. Interpretation. The Board has the sole power to interpret the Plan
and to resolve any questions arising under the Plan or this Agreement.

IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the 1st day of June, 1996.

PRINCETON DENTAL MANAGEMENT CORPORATION

By:
-----------------------------------

Printed Name:
-------------------------

Its:
----------------------------------

- ----------------------------------
Gary A. Lockwood, individually

-8-

<PAGE> 1
EXHIBIT 10.49

OFFICE LEASE

This Office Lease ("Lease"), is made as of the 13th day of September,
1996, by and between EquiVest, Inc., an Illinois corporation, whose address is
7421 West 100th Place, Bridgeview, IL 60455-2442 (together with any successors
and assigns, "Landlord"), and Princeton Dental Management Corporation, a
Delaware corporation, whose address is 7421 West 100th Place, Bridgeview, IL
60455-2442 ("Tenant").

For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the space as specifically set forth on Exhibit A attached hereto and
incorporated herein (the "Premises") in the building located at 7421 West 100th
Place, Bridgeview, IL 60455-2442, for a term ("Term") to commence on September
13, 1996, and to continue on a month-to-month basis until terminate on not less
than thirty (30) days prior written notice, or on such earlier date as this
Lease may terminate as herein provided, except that, if any such date falls on
a Sunday or a holiday, then this Lease shall end at 12 o'clock noon on the
business day next preceding the aforementioned date, at the annual rental rate
as set forth on Exhibit A hereto, payable in equal monthly installments, in
advance, on the first day of each calendar month during the Term.

The parties further agree as follows:

1. Tenant shall use and occupy the premises as Tenants national
office headquarters, and for no other purpose. Landlord represents that the
Premises may lawfully be used for such purpose.

2. Tenant shall pay rent and additional rent to Landlord at
Landlord's address or at such other place as Landlord may designate in writing,
without demand and without counterclaim, deduction or setoff.

3. Tenant shall commit no act of waste and shall take good care of
the Premises and the fixtures and appurtenances therein, and shall, in the use
and occupancy of the Premises, conform to all laws, orders and regulations of
the federal, state and municipal governments, or any of their departments, as
may be applicable to the Premises. All improvements made by Tenant to the
Premises which are so attached to the Premises that they cannot be removed
without material injury to the Premises, shall become the property of Landlord
upon installation. Not later than the last day of the Term Tenant shall, at
Tenant's expense, remove all of Tenant's personal property and those
improvements made by Tenant which have not become the property of Landlord,
including trade fixtures, cabinetwork, movable paneling, partitions and the
like, repair all

1
<PAGE> 2

injury done by or in connection with the installation or removal of such
property and improvements, and surrender the Premises in as good condition as
they were at the beginning of the Term, reasonable wear, and damage by fire,
the elements, casualty or other cause not due to the misuse or neglect by
Tenant or Tenant's agents, servants, visitors or licensees, excepted. All
property of Tenant remaining on the Premises after the last day of the Term of
this Lease shall conclusively be deemed abandoned and may be removed by
Landlord, and Tenant shall reimburse Landlord for the cost of such removal.
Landlord may have any such property stored at Tenant's risk and expense.

4. Tenant shall not, without Landlord's written consent: (a) make any
alterations, additions or improvements in, to or about the Premises; (b) do or
suffer anything to be done on the Premises which will increase the rate of fire
insurance on the building in which the Premises are located ("Building"); (c)
permit the accumulation of waste or refuse matter; (d) abandon the Premises or
suffer the Premises to become vacant or deserted; or (e) assign, mortgage,
pledge or encumber this Lease, in whole or in part, or sublet or underlet the
Premises or any part thereof. Covenant (e) above shall be binding upon the
legal representatives of Tenant, and upon every person to whom Tenant's
interest under this Lease passes by operation of law, but shall not apply to
assignment or subletting to the parent or subsidiary of a corporate Tenant or
to consolidation or merger of such Tenant.

5. Tenant shall observe and comply with the rules and regulations
attached hereto as Exhibit B and incorporated herein, and with such further
reasonable rules and regulations as Landlord may prescribe, on written notice
to Tenant, for the safety, care and cleanliness of the Building and the
comfort, quiet and convenience of other occupants of the Building.

6. Landlord shall furnish the following services: (a) heat when and
as required by law, on business days; (b) hot and cold water for lavatory
purposes without charge, but if a further supply of water is required by
Tenant, Tenant shall, at Tenant's expense, install (and shall thereafter
maintain at Tenant's expense) a water meter to register such consumption, and
Tenant shall pay as additional rent, when and as bills are rendered, for water
consumed, at the cost to Landlord, and for sewer rents and all other rents and
charges based upon such consumption of water; (c) cleaning services customary
in the Building from time to time, if the Premises are used exclusively as
offices; (d) subject to the provisions of Section 7 hereof, electricity for
usual office requirements; and (e) air conditioning, during the appropriate
season, on business days, except Saturdays, from 9:00 a.m. to 5:00 p.m. Tenant
shall be required to pay to Landlord, as additional rent hereunder, Tenant's
pro-rata share of any of the services provided to Tenant pursuant to this
Section 6.

2
<PAGE> 3

7. Tenant shall not use any electrical equipment which, in Landlord's
reasonable opinion, will overload the wiring installations or interfere with
the reasonable use thereof by Landlord or other tenants in the Building.

8. If the Building is damaged by fire or any other cause to such
extent that the cost of restoration, as reasonably estimated by Landlord, will
equal or exceed 30% of the replacement value of the Building (exclusive of
foundations) just prior to the occurrence of the damage, then Landlord may, no
later than the 60th day following the damage, give Tenant a notice of election
to Terminate this Lease, or if the cost of restoration will equal or exceed 50%
of the replacement value and if the Premises shall not be reasonably usable for
the purposes for which they are Leased hereunder, then Tenant may, no later
than the 60th day following the damage, give Landlord a notice of election to
Terminate this Lease. In the event of either of such elections this Lease shall
be deemed to Terminate on the 3rd day after the giving of such notice, and
Tenant shall surrender possession of the Premises within a reasonable time
thereafter, and the rent and additional rent shall be apportioned as of the
date of surrender and any rent paid for any period beyond that date shall be
repaid to Tenant. If the cost of restoration as estimated by Landlord shall
amount to less than 30% of the placement value of the Building, or if despite
the cost Landlord does not elect to Terminate this Lease, Landlord shall
restore the Building and the Premises with reasonable promptness, subject to
delays beyond Landlord's control and delays in the making of insurance
adjustments by Landlord, and Tenant shall have no right to Terminate this Lease
except as provided herein. Landlord need not restore fixtures and improvements
owned by Tenant.

In any case in which use of the Premises is affected by any damage to
the Building, there shall be either an abatement or an equitable reduction in
rent depending on the period for which and the extent to which the Premises are
not reasonably usable for the purposes for which they are Leased hereunder. The
words "restoration" and "restore" as used in this article shall include
repairs. If the damage results from the fault of Tenant, or Tenant's agents,
servants, visitors or licensees, Tenant shall not be entitled to any abatement
or reduction of rent, except to the extent, if any, that Landlord receives the
proceeds of rent insurance in lieu of such rent.

9. If the Premises or any part thereof or any estate therein, or any
other part of the Building materially affecting Tenant's use of the Premises,
be taken by virtue of eminent domain, this Lease shall Terminate on the date
when title vests pursuant to such taking, the rent and additional rent shall be
apportioned as of that date and any rent paid for any period beyond that date
shall be repaid to Tenant. Tenant shall not be entitled to any part of the
award or any payment in lieu thereof; but Tenant may file a

3
<PAGE> 4

claim for any taking of fixtures and improvements owned by Tenant, and for
moving expenses.

10. If Tenant defaults in the payment of rent or additional rent or
defaults in the performance of any of the covenants or conditions hereof,
Landlord may give to Tenant notice of such default and if Tenant does not cure
any rent or additional rent default within 5 days, or other default within 10
days, after the giving of such notice (or, if such other default is of such
nature that it cannot be completely cured within such 10 days, if Tenant does
not commence such curing within such 10 days and thereafter proceed with
reasonable diligence and in good faith to cure such default), then Landlord may
Terminate this Lease on not less than 3 days notice to Tenant, and on the date
specified in such notice the Term of this Lease shall Terminate, and Tenant
shall then quit and surrender the Premises to Landlord, but Tenant shall remain
liable as herein provided. If this Lease shall have been so Terminated by
Landlord, Landlord may at any time thereafter resume possession of the Premises
by any lawful means and remove Tenant or other occupants and their effects.

In any case where Landlord has recovered possession of the Premises by
reason of Tenant's default, Landlord may at, Landlord's option, occupy the
Premises or cause the Premises to be redecorated, altered, divided,
consolidated with other adjoining Premises, or otherwise changed or prepared
for reletting, and may relet the Premises or any part thereof as agent of
Tenant or otherwise, for a Term or Terms to expire prior to, at the same time
as, or subsequent to, the original expiration date of this Lease, at Landlord's
option, and receive the rent therefor, applying the same first to the payment
of such expenses as Landlord may have incurred in connection with the recovery
of possession, redecorating, altering, dividing, consolidating with other
adjoining Premises, or otherwise changing or preparing for reletting, and the
reletting, including brokerage and reasonable attorneys' fees, and then to the
payment of damages in amounts equal to the rent hereunder and to the cost and
expense of performance of the other covenants of Tenant as herein provided; and
Tenant agrees, whether or not Landlord has relet, to pay to Landlord damages
equal to the rent and other sums herein agreed to be paid by Tenant, less the
net proceeds of the reletting, if any, as ascertained from time to time, and
the same shall be payable by Tenant on the several rent days above specified.
In reletting the Premises as aforesaid, Landlord may grant rent concessions,
and Tenant shall not be credited therewith. No such reletting shall constitute
a surrender and acceptance or be deemed evidence thereof. If Landlord elects,
pursuant hereto, actually to occupy and use the Premises or any part thereof
during any part of the balance of the Term as originally fixed or since
extended, there shall be allowed against Tenant's obligation for rent or
damages as herein defined, during the period of Landlord's occupancy, the
reasonable value of such occupancy, not to exceed in any event the

4
<PAGE> 5

rent herein reserved and such occupancy shall not be construed as a release of
Tenant's liability hereunder.

Tenant hereby waives all right of redemption to which Tenant or any
person claiming under Tenant might be entitled by any law now or hereafter in
force.

Landlord's remedies hereunder are in addition to any remedy allowed by
law.

11. The failure of either party to insist on strict performance of
any covenant or condition hereof, or to exercise any option herein contained,
shall not be construed as a waiver of such covenant, condition or option in any
other instance. This Lease cannot be changed or Terminated orally.

12. If (a) the Premises are underlet, sublet or occupied by anybody
other than Tenant and Tenant is in default hereunder, or (b) this Lease is
assigned by Tenant, then, Landlord may collect rent from the assignee,
undertenant, sublessor or occupant, and apply the net amount collected to the
rent herein reserved; but no such collection shall be deemed a waiver of the
covenant herein against assignment and underletting, or the acceptance of such
assignee, undertenant or occupant as Tenant, or a release of Tenant from
further performance of the covenants contained herein.

13. This Lease shall be subject and subordinate to all underlying
leases and to mortgages which may now or hereafter affect such Leases or the
real property of which the Premises form a part, and also to all renewals,
modifications, consolidations and replacements of such underlying leases and
such mortgages. Although no instrument or act on the part of Tenant shall be
necessary to effectuate such subordination, Tenant will, nevertheless, execute
and deliver such further instruments confirming such subordination of this
Lease as may be desired by the holders of such mortgages or by any of the
lessors under such underlying leases. Tenant hereby appoints Landlord
attorney-in-fact, irrevocably, to execute and deliver any such instrument for
Tenant.

14. Tenant shall deposit with Landlord, within six (6) months of the
signing of this Lease, the sum of $1,555.00 as security for the performance of
Tenant's obligations under this Lease, including without limitation the
surrender of possession of the Premises to Landlord as herein provided. If
Landlord applies any part of the deposit to cure any default of Tenant, Tenant
shall upon demand deposit with Landlord the amount so applied so that Landlord
shall have the full deposit on hand at all times during the Term of this Lease.

15. If Tenant breaches any covenant or condition of this Lease,
Landlord may, on reasonable notice to Tenant (except that no notice need be
given in case of emergency), cure such breach at the

5
<PAGE> 6

expense of Tenant and the reasonable amount of all expenses, including
attorneys' fees, incurred by Landlord in doing so (whether paid by Landlord or
not) shall be deemed additional rent payable on demand.

16. Tenant shall, within 10 days after notice from Landlord,
discharge any mechanic's lien for materials or labor claimed to have been
furnished to the Premises on Tenant's behalf.

17. Any notice by either party to the other shall be in writing and
shall be deemed to be duly given only if delivered personally or mailed by
registered or certified mail in a postpaid envelope addressed (a) if to Tenant,
at the Building and (b) if to Landlord, at Landlord's address first above set
forth, or at such other addresses as Tenant or Landlord, respectively, may
designate in writing. Notice shall be deemed to have been duly given, if
delivered personally, upon delivery thereof.

18. Landlord may, but shall not be obligated to, enter the Premises
at any reasonable time, on reasonable notice to Tenant (except that no notice
need be given in case of emergency) for the purposes of inspection or the
making of such repairs, replacements and additions in, to, on and about the
Premises or the Building, as Landlord deems necessary or desirable. Landlord,
or any other tenant or party as may be designated by Landlord from time to
time, shall retain the unconditional right to use the Premises at any time to
access other parts of the property located at 7421 West 100th Place,
Bridgeview, IL 60455-2442. Tenant shall have no claim or cause of action
against Landlord by reason thereof except as provided in Section 19 hereof.

19. Interruption or curtailment of any service maintained in the
Building if caused by strikes, mechanical difficulties, or any causes beyond
Landlord's control whether similar or dissimilar to those enumerated, shall not
entitle Tenant to any claim against Landlord or to any abatement in rent, nor
shall the same constitute constructive or partial eviction, unless Landlord
fails to take such measures as may be reasonable in the circumstances to
restore the service without undue delay. If the Premises are rendered
untenantable in whole or in part, for a period of over 3 business days, by the
making of repairs, replacements or additions, other than those made with
Tenant's consent or caused by misuse or neglect by Tenant or Tenant's agents,
servants, visitors or licensees, there shall be a proportionate abatement of
rent during the period of such untenantability.

20. Tenant shall not be entitled to claim a constructive eviction
from the Premises unless Tenant shall have first notified Landlord in writing
of the condition or conditions giving rise thereto, and, if the complaints be
justified, unless Landlord shall have failed within a reasonable time after
receipt of notice to remedy such conditions.

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<PAGE> 7

21. Landlord may show the Premises to prospective purchasers,
mortgagees and prospective tenants, during business hours upon reasonable
notice to Tenant.

22. The terms and conditions of this Lease supersede those of all
previous agreements between the parties with respect to the Premises.

23. Landlord covenants that if and so long as Tenant pays the rent
and additional rent and performs the covenants hereof, Tenant shall peaceably
and quietly have, hold and enjoy the Premises for the Term herein mentioned,
subject to the provisions of this Lease.

24. Tenant shall from time to time, upon not less than 10 days prior
written request by Landlord, execute, acknowledge and deliver to Landlord a
written statement certifying that this Lease is unmodified and in full force
and effect (or that the same is in full force and effect as modified, listing
the instruments of modification), the dates to which the rent and other charges
have been paid, and whether or not to the best of Tenant's knowledge Landlord
is in default hereunder (and if so, specifying the nature of the default), it
being intended that any such statement delivered pursuant to this article may
be relied upon by a prospective purchaser of Landlord's interest or mortgagee
of Landlord's interest or assignee of any mortgage upon Landlord's interest in
the Building.

25. To the extent such waiver is permitted by law the parties waive
trial by jury in any action or proceeding brought in connection with this Lease
or the Premises.

26. The provisions of this Lease shall apply to, bind and enure to
the benefit of Landlord and Tenant, and their respective successors, legal
representatives and assigns; it being understood that the term "Landlord" as
used in this Lease means only the owner, or the mortgagee in possession, or the
lessee for the time being of the Building, so that in the event of any sale or
sales of the Building or of any Lease thereof or if the mortgagee, or anyone by
virtue of or through the mortgage, if any, directly or indirectly, shall take
possession of the Premises, the Landlord named herein shall be and hereby is
entirely freed and relieved of all covenants and obligations of Landlord
hereunder accruing thereafter, and it shall be deemed without further agreement
that the purchaser, the lessee or the mortgagee in possession has assumed and
agreed to carry out any and all covenants and obligations of Landlord
hereunder.

7
<PAGE> 8

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

PRINCETON DENTAL MANAGEMENT CORPORATION

By:
-----------------------------------
Gary A. Lockwood, President

EQUIVEST, INC.

BY:
-----------------------------------
Frank Leonard Laport, President

State of
--------
County of
-------

On , before me personally came Gary A. Lockwood to me known, who being by
me duly sworn, did depose and say that he is the President of Princeton Dental
Management Corporation, the corporation described in and which executed the
foregoing instrument and that he signed his name thereto with due authorization
of the Board of Directors of said corporation.

- -----------------------------------

- -------------------------------------------------------------------------------

State of
--------
County of
-------

On , before me personally came Frank Leonard Laport to me known, who
being by me duly sworn, did depose and say that he is the President of
EquiVest, Inc., the corporation described in and which executed the foregoing
instrument and that he signed his name thereto with due authorization of the
Board of Directors of said corporation.

- -----------------------------------

8
<PAGE> 9

EXHIBIT B

Rules and Regulations Referred to in the Foregoing Lease

1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors and public parts of the Building shall not be obstructed
or encumbered by Tenant or used by Tenant for any purpose other than ingress
and egress to and from the Premises. If the Premises are situated on the ground
floor with direct access to the street, then Tenant shall, at Tenant's expense,
keep the sidewalks and curbs directly in front of the Premises clean and free
from ice, snow and refuse.

2. No awnings, air-conditioning units or other projections shall be attached
to the outside walls or windowsills of the Building or otherwise project from
the Building, without the prior written consent of Landlord.

3. No sign or lettering shall be affixed by Tenant on any part of the outside
of the Premises, or on any part of the inside of the Premises so as to be
clearly visible from the outside of the Premises, without the prior written
consent of Landlord. However, Tenant shall have the right to place its name on
any door leading into the Premises, the size, color and style thereof to be
subject to Landlord's approval, which approval shall not be unreasonably
withheld. Landlord shall place Tenant's name on the directory in the lobby of
the Building. Tenant shall not have the right to have additional names placed
on the directory without Landlord's prior written consent, which consent shall
not be unreasonably withheld.

4. The windows in the Premises shall not be covered or obstructed by Tenant,
nor shall any bottles, parcels or other articles be placed on the windowsills
or in the halls or in any other part of the Building, nor shall any article be
thrown out of the doors or windows of the Premises.

5. Tenant shall not lay linoleum or other similar floor covering so that the
same shall come in direct contact with the floor of the Premises, and if
linoleum or other similar floor covering is desired to be used, an interlining
of builder's deadening felt shall be first fixed to the floor by a paste or
other material that may easily be removed with water, the use of cement or
other similar adhesive material being expressly prohibited.

6. Tenant shall not make, or permit to be made, any unseemly or disturbing
noises or interfere with other tenants or those having business with them.

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<PAGE> 10

7. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by Tenant, and Tenant shall, upon the Termination of this
tenancy, deliver to Landlord all keys to any space within the Building, either
furnished to, or otherwise procured by, Tenant, and in the event of the loss of
any keys so furnished, Tenant shall pay to Landlord the cost thereof.

8. The carrying in or out of freight, furniture or bulky matter of any
description must take place during such hours as Landlord may from time to time
reasonably determine. The installation and moving of such freight, furniture or
bulky matter shall be made upon previous notice to the superintendent of the
Building and the persons employed by Tenant for such work must be reasonably
acceptable to Landlord. Tenant may, subject to the provisions of the
immediately preceding sentence, move freight, furniture, bulky matter and other
material into or out of the Premises on Saturday between the hours of 8:30 a.m.
and 6:00 p.m. provided Tenant pays the additional costs, if any, incurred by
Landlord for elevator operators, security guards and other expenses arising by
reason of such move by Tenant and if, at least 2 days prior to such move,
Landlord requests that Tenant deposit with Landlord, as security for Tenant's
obligation to pay such additional costs, a sum which Landlord reasonably
estimates to be the amount of such additional costs, then Tenant shall deposit
such sum with Landlord as security for such costs.

9. Landlord reserves the right to prescribe the weight and position of all
safes and other heavy equipment so as to distribute properly the weight thereof
and to prevent any unsafe condition from arising. Business machines and other
equipment shall be placed and maintained by Tenant at Tenant's expense in
settings sufficient in Landlord's reasonable judgment to absorb and prevent
unreasonable vibration, noise and annoyance.

10. Tenant shall not clean or permit the cleaning of any window in the
Premises from the outside, except in strict conformity with law of any body
having jurisdiction thereof.

11. Landlord shall not be responsible to Tenant for the nonobservance or
violation of any of these rules and regulations by any other tenants.

<PAGE> 1
EXHIBIT 10.50

EQUIPMENT LEASE AGREEMENT

This Equipment Lease Agreement ("Agreement") is made as of September
13, 1996, by and between Frank Leonard Laport, an individual having his
principal place of business at 7421 West 100th Place, Bridgeview, IL 60455 (the
"Lessor"), and Princeton Dental Management Corporation, a Delaware corporation
having its principal place of business at 7421 West 100th Place, Bridgeview, IL
60455-2422 (the "Lessee").

NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration, it is agreed
between the parties as follows:

(1) Agreement to Lease. Lessor agrees to lease to the Lessee, and the
Lessee agrees to lease from the Lessor, the equipment and personal property
specified on Exhibit A attached hereto and incorporated herein (the
"Equipment") for the monthly rental of Five Hundred and Sixty-Nine Dollars and
Fifty-Six Cents ($569.56). The parties hereto understand that certain items of
the Equipment are intended for multiple use, and are to be used by both Lessor,
or such other parties as Lessor may designate from time to time, and Lessee,
and Lessee hereby agrees and acknowledges that it shall not be entitled to
exclusive use of the Equipment.

(2) Term of Agreement. This Agreement is effective from the date
hereof (the "Commencement Date"), and shall continue until terminated by either
party upon not less than thirty (30) days' prior written notice ("Term").

(3) Monthly Rental Charge. The monthly rental charges set forth in
Section 1 hereof shall begin on the Commencement Date and be due and payable in
advance on the first day of each month during the Term.

The monthly rental charges set forth in Section 1 hereof are those in
effect on the Commencement Date and are subject to change by Lessor, effective
at the end of the initial Term, or at any time thereafter, upon thirty (30)
days' prior written notice.

(4) Usage of Equipment. Lessor will make no extra charge for machine
usage, Lessee being entitled to unlimited and unobstructed use of Equipment by
payment of monthly rental charges.

(5) Payment of Taxes. There shall be added to the monthly rental
charge an amount equal to any taxes (other than taxes based on Lessor's net
income) paid, payable or required to be collected by Lessor however designated,
which are levied or based on such charges, on this Agreement, on the machines
or their use or value for tax purposes, including but not limited to state and
local personal property taxes or privilege or excise taxes based on gross
revenue.

1
<PAGE> 2

(6) Maintenance. Lessee shall keep the Equipment in good operating
condition and will make all necessary adjustments and repairs at its usual and
customary rates. Lessee shall not permit persons other than authorized
representatives to effect adjustments or repairs to the Equipment and Lessor
shall in no way be responsible to Lessee for loss of the use of the Equipment
occasioned by adjustments and repairs.

The required suitable electric current to operate the Equipment and a
suitable place of installation will be furnished by the Lessee. Lessee may
only store and use the Equipment at 7421 West 100th Place, Bridgeview, IL
60455-2442 ("Premises"), and the Equipment may not be moved from such location.
Lessee will also provide all facilities required for the proper operation of
the Equipment and its facilities must meet at all times the manufacturer's
minimum standards for the operation of the Equipment.

(7) Insurance and Indemnification. Lessee shall indemnify and hold
Lessor harmless from any loss, claim or damage to persons or property arising
out of Lessee's use or possession of the Equipment, which indemnity shall
survive the termination of this Agreement, provided that the loss, claim or
damage was not caused by the fault or negligence of Lessor or the fault or
negligence of its employees or representatives.

(8) Alterations and Additions and/or Programming. Alterations and/or
additions and/or programming to the Equipment may be made solely with the prior
written consent of Lessor. This written consent may be withdrawn by Lessor if
the Equipment operation or maintenance is impaired.

If the alterations, attachments, field modifications, programming and
additional or replacement Equipment are obtained by Lessee directly from an
equipment manufacturer, Lessee will be responsible for all initial and
continuing costs incidental to the alterations, attachments, field
modifications, programming and additional or replacement Equipment. Lessee will
also be responsible for any costs of detaching and/or changing the alterations,
attachments, field modifications, programming and additional or replacement
Equipment, if necessary, including in the case of replacement Equipment, the
detaching of and reprogramming of the Equipment to be replaced.

(9) Operating Supplies. All supplies for use with the Equipment are
to be provided by Lessee and are to meet the specifications set forth by
Lessor.

(10) Warranty. There are no warranties, express or implied including,
but not limited to, the implied warranties of merchantability and fitness for a
particular purpose, not specified in this Agreement, respecting this Agreement
or the Equipment

2
<PAGE> 3

leased under this Agreement, or services, if any, furnished under this
Agreement. Lessor shall not be liable for any failure or delay in performance
under this Agreement. In no event will Lessor be liable for any indirect,
special or consequential damages, in connection with or arising out of the
furnishing, performance, or use of any item of Equipment or services provided
for in this Agreement.

(11) Disclaimer of Liability. Lessee agrees that Lessor shall not be
liable to Lessee for (i) any liability, claim, loss, damage (consequential or
otherwise) or expense of any kind caused, directly or indirectly, by the
inadequacy of the Equipment or its programming for any purpose or by any
deficiency or defect or by any delay in providing Equipment or failure to
provide the Equipment, or (ii) any interruption or loss of service or use of
the Equipment or any of them, any loss of business or for other consequential
damage, howsoever caused, and Lessee agrees to indemnify and hold Lessor
harmless against any such liabilities, claims, losses, damages (consequential
or otherwise) or expenses, or actions in respect thereof, asserted or brought
against Lessor by or in right of third persons.

(12) Performance by Lessor. Should Lessor default in the performance
of any of its obligations under this Agreement for a continuous period of
thirty (30) days after receipt by both Lessor and its assignee if notice of
assignment has been given to Lessee of written notice from Lessee, Lessee may
at its option terminate this Agreement at the end of such default by Lessor;
provided, however, that Lessor's assignee, if any, shall have the option during
the 30-day period to perform any of Lessor's obligations under this Agreement,
to the extent necessary to cure any such default by Lessor.

(13) Performance by Lessee. Should Lessee default (a) in the payment
of any sum of money due under this Agreement beyond the thirtieth (30th) day
after receipt by Lessee of a bill or statement for money due or other written
notice from Lessor, or (b) in the performance of any other of its obligations
under this Agreement for a continuous period of thirty (30) days after receipt
by Lessee of written notice from Lessor, then and in any such event Lessor may
at its option: (i) terminate this Agreement, (ii) whether or not this Agreement
is terminated, take immediate possession of any or all of the Equipment,
wherever situated, and for such purpose, enter upon any premises without
liability for so doing, and (iii) sell, dispose of, hold, use or lease any
Equipment as Lessor in its sole discretion may decide, without any duty to
account to Lessee, and Lessee shall remain liable for the remaining unpaid rent
for the balance of the initial term of this Agreement.

(14) Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and (to the extent
specified in any assignment) assigns. Lessee,

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<PAGE> 4

however, shall not assign this Agreement or sublet any Equipment without first
obtaining the written consent of Lessor.

(15) General. (a) The terms and conditions of this Agreement
supersede those of all previous Agreements between the parties with respect to
the use of the Equipment.

(b) Lessee and Lessor each warrant and represent that their
respective signatures set forth below have been and are on the date of this
Agreement duly authorized by all necessary and appropriate corporate action to
execute this Agreement.

(c) All Equipment shall be removed by Lessor from the portion of the
Premises, if any, which may be occupied by Lessee within a reasonable time
after termination of this Agreement in accordance with its terms.

(d) This Agreement shall be governed by the laws of the State of
Illinois.

IN WITNESS WHEREOF, the parties have set their hands as of the first
day written above.

PRINCETON DENTAL MANAGEMENT CORPORATION

By:
---------------------------------
Gary A. Lockwood, President

- -------------------------------------
Frank Leonard Laport

<PAGE> 1
EXHIBIT 10.51

Via Facsimile - 313/525-7804 February 4, 1997
- ----------------------------

Mr. Gary Lockwood
President
Princeton Dental Management Group
c/o Mason Dental Laboratories
12752 Stark Road
Livonia, Michigan 48150

Re: Sale of Assets of Dental Team of Delray Beach

Dear Mr. Lockwood

The purpose of this letter is to outline the terms and conditions under
which I or my P.A. will purchase and Princeton Medical Management Southeast,
Inc., Princeton Dental Management Corporation, and Florida Dental Team, Inc.,
will sell all of the dental practice assets of the business know as "Dental
Team of Delray Beach." The following represents our agreement and final offer
which must be accepted by you in writing no later than 5:00 p.m. eastern time,
February 5, 1997. If not accepted by you by that time, this offer is revoked.

I. ASSETS. All tangible and intangible assets of Dental Team of
Delray Beach dental practice, including but not limited to, equipment,
supplies, inventory, patient lists, patient records, insurance contracts,
accounts receivable, business records, employment agreements, furniture,
fixtures and supplies all as a going concern. Accounts receivables collected
by you after closing and related to the practice shall be immediately turned
over to us. All assets shall be sold free and clear of all liens, claims and
encumbrances. You will release me from the post-employment restrictions on my
right to practice contained in my Employment Agreement. The parties
acknowledge that Drs. Braiman and Strauss and
<PAGE> 2
Mr. Gary Lockwood
February 4, 1997
Page 2

Amsterdam Equities Limited have security interests in the assets. All parties
agree to cooperate in obtaining the removal of these liens.

You agree, that within 24 hours of your acceptance of this
offer, you will transfer Jayne Kaplan back to the Delray office, and she will
remain there until the closing performing all duties in her job description, at
which time she will be employed by me. Also, I will have a right, but no
obligation, to employ the following current staff at the Delray office:

Theresa Toth
Dawn Tinari
Tammy Brammer
Pam Mendenhall
Dorothy Wenger
Senovio Mendoza
Desmond Salmon
Laura Demsky
Constanea Rios
Valerie Fortjon
Eileen Strong
Jane Krason
David Pyner - Part-Time
Robert Demick - Part-Time

Upon closing, Princeton intends to terminate all listed employees except those
with part-time employment relationships at other Princeton offices.

2. LIABILITIES. Except as specified below, we will assume no
liabilities of the dental practice. We will assume obligations accruing after
the closing date under executory contracts with personnel, and will assume
obligations to personnel for paid time off accrued prior to closing. All debts
and liabilities of the practice accrued as of the closing date will be assumed
and paid by you, except I shall be responsible for paying no more than
$32,282.31 to Henry Schein Dental Supply and $20,166.70 to A&C Dental
Laboratories and I shall be responsible for completing all pre-paid cases that
the office was handling. As quickly as collections permit, but in no event
later than 90 days of closing, I will place the funds for Schein and A&C in
escrow with my attorney who will coordinate with yours to arrange a payment
plan or settlement. No funds will be removed from escrow without our mutual
<PAGE> 3
Mr. Gary Lockwood
February 4, 1997
Page 3

consent. If a pay-out plan on these liabilities that incorporates a discount
is negotiated, we will share in that discount on an equal basis.

3. CERTAIN TAXES. You will pay current as of the date of closing
all tangible and intangible taxes related to the dental practice and its
assets. You will also pay current as of the date of closing, all state and
federal payroll taxes, including but not limited to, Medicare, unemployment,
and Social Security.

4. FRINGE BENEFITS. You will pay current through the date of
closing all accrued but unpaid 401(K) deposits for all employees in the dental
practice. All employment agreements with you will be paid current in all
respects as of closing date, and will be terminated at closing.

5. INSURANCE. You will pay current through the date of closing
all insurance premiums, if any, for worker's compensation insurance,
disability and medical insurance for personnel, and overhead contribution
insurance. You will similarly pay current through the date of closing all
premiums related to the building occupied by the practice.

6. BUILDING RENT. All rent will be paid by you through the date
of closing. I will assume all obligations for rent payments thereafter.

7. RECORD KEEPING. We will maintain in the ordinary course of
business all prior business records of the practice and provide access to you.
If after closing, you require access to such records for any purpose, you shall
pay to us the sum of Fifteen and No/100 Dollars ($15.00) per hour per person
employed by us to assist you in compiling, duplicating, and mailing said
records, plus out-of-pocket duplication or mailing costs. Likewise, you may
impose the same charges for providing me with business records which I request
from you.

8. LEGAL FEES. We will each pay our own legal fees incurred by us
in this transaction.

9. PURCHASE PRICE. The purchase price for this transaction shall
be One Hundred Sixty-Five Thousand and No/100 Dollars ($165,000.00). It shall
be paid as follows: month to month forgiveness of your obligations to pay me
Four Thousand Thirty-Three Dollars and Eighty-Five Cents ($4,033.85) per month
pursuant to the acquisition promissory note and any novation thereof for a
period of 41 months beginning February 28, 1997 through July 30, 2000.
Interest on those notes will not accumulate during this period. Thereafter and
only
<PAGE> 4
Mr. Gary Lockwood
February 4, 1997
Page 4

thereafter, your obligation to pay on the acquisition promissory note will be
reinstated. The purchase price represents the following with respect to
respective values:

Equipment - $60,000.00
Patient Files - $20,000.00
Release from Non-Compete - $20,000.00
Phone Number - $10,000.00
Supplies & Inventory - $20,000.00
Good Will - $30,000.00

I agree to cooperate in any future sales of Dental Team assets and to deliver
the appropriate security releases without demand for additional payment so long
as the balance due on my acquisition promissory note remains adequately secured.

10. INDEMNIFICATION. You agree to indemnify and hold me and my
P.A. harmless from and against any and all liabilities, claims, obligations,
debts and accounts payable related to the practice with the exception of those
liabilities expressly assumed by me in this Agreement, and any and all costs or
expenses, including reasonable attorney's fees, including those incurred by us
in enforcing this indemnification obligation, as may be incurred by us as a
result of any breach by you of this Agreement. I agree to indemnify you for
any action or inaction by me which is a breach of this Agreement. Nothing in
this Agreement is intended to release us from our mutual obligations to
indemnify each other as set forth in my Employment Agreement and Management
Agreement. However, I release you from any claims for back wages pursuant to
my Employment and Management Agreement. Neither party will be indemnified or
held harmless for actions caused by their wilful misconduct or gross
negligence. The release for back wages pursuant to the Employment and
Management Agreements includes all claims for any monies which may be due
under those agreements, regardless of whether characterized as wages.

11. DUE DILIGENCE. You shall immediately provide us with such
information and records as we shall reasonably request to determine accounts
payable, accounts receivable, liabilities, and other expenses of the practice,
and to determine the nature and existence of the practice assets, executory
contracts, financial affairs and related matters.

12. BOCA OFFICE. I agree to work as an independent contractor in
your Boca office, and to execute a separate agreement to that effect so long as
the following terms are included:
<PAGE> 5
Mr. Gary Lockwood
February 4, 1997
Page 5

a) work on Mondays subject to change or additional days if mutually
agreed;

b) compensation formula of collections minus 35% of associated lab
fees, multiplied by 35%;

c) I will agree to use your lab so long as it is less expensive
than others available to me; and

d) no restriction on my right to continue practicing in Delray, but
I agree not to actively solicit employees or patients of the
Boca office to move to the Delray office.

13. CLOSING. Closing shall occur on February 5, 1997, in Palm
Beach County, Florida. Time is of the essence. Failure to close by said date
shall render this Agreement null and void, and of no further force or effect.

If these terms are acceptable to you, please indicate your acceptance
by signing this letter below and returning it to us. Once signed, this letter
shall be legally binding on each of us.

Thank you for your consideration.

Sincerely,

Richard J. Staller
------------------------------
Richard J. Staller

ACCEPTED BY:

Gary Lockwood
- ----------------------------------
Gary Lockwood, as President of the
aforesaid Princeton entities

Dated: 2/5/97

<PAGE> 1
EXHIBIT 10.52

December 11, 1996

Mr. Gary Lockwood
President
PDMC
12752 State Road
Livonia, Michigan 48150

RE: Sale of Assets of Fairfield Dental Center, P.A.

Dear Gary:

The purpose of this letter is to outline the terms and conditions under
which we, or our assigns, will purchase and Princeton Medical Management
Southeast, Inc., Princeton Dental Management Corporation, and Fairfield Dental
Center, P.A., will sell all of the dental practice assets of the business known
as "Fairfield Dental Center". The following represents our agreement and final
offer which must be accepted by you in writing no later than 3:00 p.m. central
time, December 12, 1996. If not accepted by you by that time, this offer is
revoked:

1. ASSETS. All tangible and intangible assets of the Fairfield
Dental Center dental practice, including but not limited to, equipment,
supplies, inventory, patient lists, patient records, accounts receivable,
business records, employment agreements, furniture, fixtures and supplies all
as a going concern. Accounts receivables collected by you after closing and
related to the practice shall be immediately turned over to us. The executory
contracts included as assets shall all be paid current as of the closing date
and all assets shall be sold free and clear of all liens, claims and
encumbrances. All amounts due and outstanding for the dental laser and
photocopier, and related to periods of time up to and including the closing
date, including but not limited to, all lease payments for said items of
equipment shall be paid in full on or before closing.

2. LIABILITIES. Except as specified below, we will assume no
liabilities of the practice. We will assume obligations accruing after the
closing date under executory contracts with personnel, and will assume
obligations to personnel for paid time off accrued prior to closing. We will
assume lease payment obligations accruing after closing for the dental laser
and photocopier. All debts and liabilities of the practice accrued as of the
closing date will be assumed and paid by you.

4. FRINGE BENEFITS. You will pay current through the date of
closing all accrued but unpaid 401(k) deposits for all employees in the dental
practice. All employment agreements with you will be paid current in all
respects as of closing date, and will be terminated at closing.

5. INSURANCE. You will pay current through the date of closing
all insurance premiums for worker's compensation insurance, disability and
medical insurance for personnel, and overhead
<PAGE> 2
Mr. Gary Lockwood
December 11, 1996
Page 2

contribution insurance. You will similarly pay current through the date of
closing all premiums related to the building occupied by the practice.

6. BUILDING LEASE. All amounts due under the building lease
currently in existence will be paid current through the date of closing. At
closing, the lease will be terminated.

7. RECORD KEEPING. We will maintain in the ordinary course of
business all prior business records of the practice and provide access to you.
If, after closing, you require access to such records for any purpose, you
shall pay to us the sum of Fifteen and No/100 Dollars ($15.00) per hour per
person employed by us to assist you in compiling, duplicating, and mailing said
records, plus out of pocket duplication or mailing costs.

8. LEGAL FEES. We will each pay our own legal fees incurred by us
in this transaction.

9. PURCHASE PRICE. The purchase price to acquire the assets shall
be a maximum of Four Hundred Seventy-Five Thousand and No/100 Dollars
($475,000.00) in cash or certified funds. In addition, the outstanding amount
of all indebtedness due to Drs. Barfield and Payne by you under that certain
acquisition promissory note in the original principal amount of $560,000.00
dated February 28, 1994 (said debt was $441,581.40 as of 8/15/96) shall be
forgiven at closing.

10. ESCROW. The sum of One Hundred Seventy-Five Thousand and No/100
Dollars ($175,000.00), from the purchase price will be placed in escrow with our
attorney, Daniel R. Lozier, P.A. The escrow agent will hold said sum in an
interest bearing account, and all interest will accrue to the benefit of the
escrow account. For tax and banking purposes, you shall be deemed the owner of
the account. Before closing, Buyer and Seller shall reach agreement on a
detailed listing of all accounts payable and debts related to the practice which
are to be paid from the escrow account. The escrow agent shall promptly make
payments of all of said accounts in accordance with the agreed upon listing.
The account payable for Schein shall not be paid by the escrow agent until
authorized by you. After payment of said agreed upon listed debts and accounts
payable, any remaining balance of the escrow account shall continue to be held
in escrow for a period of ninety (90) days following the date of closing. The
purpose of said account will be to secure your obligations under this Agreement,
including but not limited to your indemnification obligations set forth below.
On expiration of said ninety (90) day period, any funds remaining in the escrow
account, less retained funds to meet any then existing claims against the escrow
account, shall be refunded to you.

11. INDEMNIFICATION. You agreed to indemnify and hold us harmless
from and against any and all liabilities, claims, obligations, debts and
accounts payable related to the practice, and any and all costs or expenses,
including reasonable attorney's fees, including those incurred by us in
enforcing this indemnification obligation, as may be incurred by us as a result
of any breach by you of this Agreement. This indemnification obligation shall
be secured by the aforesaid escrow account
<PAGE> 3
Mr. Gary Lockwood
December 11, 1996
Page 3

12. HOUSE ACCOUNT. Between the date hereof and closing, that
certain account at First of America Bank, Account No. 71921833-4330062334 shall
remain open, and you shall make no withdrawals from said account, but rather,
shall continue to fund said account as required to meet drafts against said
account outstanding as of the closing date. All such drafts shall be approved
in advance by you.

13. DUE DILIGENCE. You shall immediately provide us with such
information and records as we shall reasonably request to determine accounts
payable, accounts receivable, liabilities, and other expenses of the practice,
and to determine the nature and existence of the practice assets, executory
contracts, financial affairs and related matters.

14. FINANCING. We are seeking a commitment to borrow from a local
lender the cash portion of the aforesaid purchase price, and this offer is
contingent upon us receiving said commitment. We will apply for and diligently
pursue the acquisition of said financing from a lender of our choosing.

15. CLOSING. Closing shall occur on or before December 20, 1996,
in Pensacola, Florida. Time is of the essence. Failure to close by said date
shall render this Agreement null and void, and of no further force or effect.

If these terms are acceptable to you, please indicate your acceptance
by signing this letter below and returning it to us. Once signed, this letter
shall be legally binding on each of us.

Thank you for your consideration.

Sincerely,

Clem Barfield, D.D.S.
------------------------------
Clem Barfield, D.D.S.

Philip Payne, D.D.S.
------------------------------
Philip Payne, D.D.S.

ACCEPTED BY:

- -------------------------------------
Gary Lockwood, as President of
the aforesaid Princeton entities

Date:
--------------------------------

<PAGE> 1
EXHIBIT 10.53

Princeton Dental Management Corporation
7421 West 100th Place
Bridgeview, IL 60455

Re: LOAN TO COVER OPERATING EXPENSES

Gentlemen:

As discussed, the undersigned has agreed to make a loan to Princeton
Dental Management Corporation ("PDMC") on the following terms:

1. Principal Amount of Loan. The loan shall be in a principal amount
of not less than $175,000.00 and not more than $200,000.00, it being the
intention of the parties that the undersigned shall loan PDMC the amount
necessary to cover certain PDMC operating expenses through December 31, 1996.

2. Interest Rate. 1.0% over the Prime Rate, as such rate may be set by
NBD/First National Bank of Chicago.

3. Fees. There shall be a fee of $4,000.00 added to the principal
amount of the loan as a fee.

4. Term. The parties understand that it is essential that PDMC have
readily available funds in place in order to pay certain operating expenses
prior to the December 31, 1996 deadline, and the parties agree to structure the
timing of the loan accordingly. The loan shall be repaid upon receipt from
Southland Life Insurance Company ("Southland") of certain reinsurance proceeds.

5. Security. PDMC shall use its best efforts and cooperate in every
regard to consent to and facilitate an assignment of certain reinsurance
proceeds from Southland to the undersigned as security for the loan.

If this reflects your understanding please sign where indicated.

Dickerson Investment Group, Inc.

By:
----------------------------
Its:
-------------------------

AGREED AND ACCEPTED:

Princeton Dental Management Corporation

By:
----------------------------------
Frank Leonard Laport, CEO

<ARTICLE> 5

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<PERIOD-END> DEC-31-1996
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