IDI ACQUISITION CORP. TO BE MERGED WITH AND INTO INTERDENT SERVICE CORPORATION $80,000,000 103/4% SENIOR SECURED NOTES DUE 2011 PURCHASE AGREEMENT

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Exhibit 10.5

IDI ACQUISITION CORP.

TO BE MERGED WITH AND INTO

INTERDENT SERVICE CORPORATION

$80,000,000

10 ³ / 4 % SENIOR SECURED NOTES DUE 2011

PURCHASE AGREEMENT

December 10, 2004

JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard, 10th Floor
Los Angeles, California 90025

Ladies and Gentlemen:

        IDI Acquisition Corp., a Delaware corporation, (the " Company "), which will be merged with and into InterDent Service Corporation, a Washington corporation (" Service " and together with the Company, the " Issuers "), proposes to issue and sell to Jefferies & Company, Inc. (the " Initial Purchaser ") an aggregate of $80,000,000 million principal amount of the Issuers' 10 ³ / 4 % Senior Secured Notes due 2011 (the " Series A Notes "), subject to the terms and conditions set forth herein. The Series A Notes and the Series B Notes (as defined below) (the Series A Notes and the Series B Notes being collectively referred to herein as the " Notes ") will be issued pursuant to an Indenture, dated as of the Closing Date (as defined below) (the " Indenture "), among the Company, Service, the Guarantors (as defined below) and Wells Fargo Bank, National Association, as trustee (the " Trustee ").

        Substantially concurrent with the sale of the Notes, Service proposes to enter into a new or amended senior secured credit facility, by and among Service and Wells Fargo Foothill, Inc. (" Foothill ") initially providing for up to $10.0 million of revolving credit borrowings by Service (the " Credit Facility "). The Issuers have agreed to secure the Notes by granting to Wells Fargo Bank, National Association, as collateral agent (the " Collateral Agent "), for the benefit of the holders of the Notes and the Trustee (collectively, the " Secured Parties "), security interests in or pledges of (the " Security Interests ") the Collateral (as such term is defined in the Description of the Notes section of the Final Offering Circular (as defined below)). In connection with the execution and delivery of the Credit Facility, Service, Foothill, the Trustee and the Collateral Agent will enter into an Intercreditor Agreement, which shall be dated as of the Closing Date (as defined below) (the " Intercreditor Agreement ").

        On November 10, 2004, Levine Leichtman Capital Partners II, L.P. (" Levine "), B III-A Capital Partners, L.P. (" B III-A "), B IV Capital Partners, L.P. (" B IV ") and GMAM Investment Funds Trust II (" GM Account " and collectively with B III-A and B IV, the " Sellers "), InterDent, Inc., a Delaware corporation (" Parent "), and Pleasant Street Investors, LLC entered into a stock purchase agreement (the " Stock Purchase Agreement "). Pursuant to the Stock Purchase Agreement, Levine has the right to designate an affiliate to purchase the capital stock of Parent owned by the Sellers, and will so designate the Company. Substantially concurrent with the issuance of the Series A Notes, the Company will purchase the capital stock of Parent owned by the Sellers pursuant to the Stock Purchase Agreement and substantially concurrently therewith will be merged with and into Service (the " Merger ") pursuant to an Agreement and Plan of Merger, between the Company, Service and Parent (the " Merger Agreement "). Service will survive the Merger and, upon the filing of the appropriate Merger documents with the Delaware Secretary of State and Washington Secretary of State, will assume all of the obligations of the Company under the Indenture, the Notes and the Registration Rights Agreement (as defined below). In addition, substantially concurrent with the closing of the Merger, Parent and Levine will enter into a Securities Purchase Agreement (the " Securities Purchase Agreement ") pursuant to which, among other things, Parent will sell to Levine shares of its preferred stock for $3.5 million,

which proceeds will be contributed to, and accounted for by, Service as common equity. Following the transactions contemplated by the Stock Purchase Agreement, the Merger Agreement, the Credit Facility and the Securities Purchase Agreement (the " Transactions "), all of the capital stock of Parent, except for shares held by Parent's management, will be owned by Levine and its affiliates.

        The Issuers' obligations under the Series A Notes, including the due and punctual payment of principal, premium, interest and liquidated damages, if any, on the Series A Notes, will be unconditionally, jointly and severally guaranteed (the " Series A Guarantees " and together with the Series B Guarantees (as defined below), the " Guarantees ") by Parent, and any future domestic guarantors party to the Indenture (each a " Guarantor " and, collectively the " Guarantors "). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Description of the Notes section of the Final Offering Circular.

1.     Offering Circular.

        The Series A Notes will be offered and sold to the Initial Purchaser pursuant to one or more exemptions from the registration requirements under the Securities Act of 1933, as amended (the " Act "). The Issuers and the Guarantors have prepared a preliminary offering circular dated December 1, 2004 (the " Preliminary Offering Circular "), and a final offering circular dated December 10, 2004 (the " Final Offering Circular " and, together with the Preliminary Offering Circular, the " Offering Circular "), relating to the Series A Notes.

        Upon original issuance thereof, and until such time as the same is no longer required pursuant to the Indenture, the Series A Notes (and all securities issued in exchange therefor, in substitution thereof or upon conversion thereof) shall bear the following legend (along with such other legends as the Initial Purchaser and their counsel deem necessary in order to comply with applicable securities laws):

        THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.

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PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S, OR TRANSFER AGENT'S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT.

2.     Agreements To Sell And Purchase.

        On the basis of the representations, warranties and covenants contained in this Purchase Agreement (this " Agreement "), and subject to its terms and conditions, the Company agrees to issue and sell to the Initial Purchaser and the Initial Purchaser agrees to purchase from the Company, an aggregate principal amount of $80,000,000 million Series A Notes. The purchase price for the Series A Notes shall be equal to 96.50% of the principal amount thereof (the " Purchase Price ").

3.     Terms of Offering.

        The Initial Purchaser has advised the Issuers that the Initial Purchaser will make offers (the " Exempt Resales ") of the Series A Notes purchased under this Agreement on the terms set forth in the Offering Circular, as amended or supplemented, solely to (i) persons whom the Initial Purchaser reasonably believe to be " qualified institutional buyers " as defined in Rule 144A under the Act (" QIBs "), (ii) a limited number of other institutional " accredited investors, " as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that make certain representations and agreements to the Issuers as set forth in Annex A to the Offering Circular (each, an " Accredited Institution ") and (iii) persons outside the United States in offshore transactions in reliance on Regulation S under the Act (such persons specified in clauses (i), (ii) and (iii) above being referred to as, the " Eligible Purchasers "). The Initial Purchaser will offer the Series A Notes to Eligible Purchasers initially at a price equal to 100.0% of the principal amount thereof. Such price may be changed at any time without notice.

        Holders (including subsequent transferees) of the Series A Notes will have the registration rights set forth in the Registration Rights Agreement (the " Registration Rights Agreement ") to be dated the Closing Date (as defined below), in substantially the form of Exhibit A hereto, for so long as such Series A Notes constitute " Transfer Restricted Securities " (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Guarantors will agree to file with the Securities and Exchange Commission (the " Commission ") under the circumstances set forth therein, (i) a registration statement under the Act (the " Exchange Offer Registration Statement ") relating to the Service's 10 ³ / 4 % Series B Senior Secured Notes due 2011 (the " Series B Notes ") to be offered in exchange for the Series A Notes (the " Exchange Offer ") and the Guarantors' guarantee of the Series B Notes and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the " Shelf Registration Statement " and, together with the Exchange Offer Registration Statement, the " Registration Statements ") relating to the resale by certain holders of the Series A Notes.

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        The Issuers and the Guarantors will enter into, among others, the collateral documents listed on Schedule A attached hereto (all such collateral documents, collectively, the " Collateral Documents ") dated as of the Closing Date in favor of the Collateral Agent for the benefit of the Secured Parties. The Security Interests will secure the payment and performance when due of all the Secured Obligations (used herein as defined in the Collateral Documents). The following documents are hereinafter collectively referred to as " Operative Documents ": (i) this Agreement, (ii) the Indenture, (iii) the Notes, (iv) the Registration Rights Agreement, (v) the Guarantees, (vi) the Collateral Documents, (vii) the Merger Agreement, (viii) the Stock Purchase Agreement, (ix) the Credit Facility and (x) the Securities Purchase Agreement.

4.     Delivery and Payment.

        (a)   Delivery of, and payment of the Purchase Price for, the Series A Notes (the " Closing ") shall be made at 7:00 a.m., Los Angeles time, on December 15, 2004 (the " Closing Date "), at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California 90071, or such other time or place as the Initial Purchaser shall designate.

        (b)   One or more of the Series A Notes in definitive global form (and one or more global notes in temporary form if necessary), registered in the name of Cede & Co., as nominee of The Depository Trust Company (" DTC "), having an aggregate principal amount corresponding to the aggregate principal amount of the Series A Notes (collectively, the " Global Note "), shall be delivered by the Issuers to the Initial Purchaser (or as the Initial Purchaser directs) in each case with any transfer taxes thereon duly paid by the Issuers against payment by the Initial Purchaser of the Purchase Price therefor by wire transfer in same day funds to the order of the Company, provided that the Company shall give at least two business days' prior written notice of the information required to effect such wire transfer. The Global Note shall be made available to the Initial Purchaser for inspection not later than 10:00 a.m., Los Angeles time, on the business day immediately preceding the Closing Date.

5.     Agreements of the Issuers and Parent.

        The Issuers and Parent hereby jointly and severally agree with the Initial Purchaser as follows:

        (a)   To advise the Initial Purchaser promptly and, if requested by the Initial Purchaser, confirm such advice in writing, (i) of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of any Series A Notes for offering or sale in any jurisdiction designated by the Initial Purchaser pursuant to Section 5(e), or the initiation of any proceeding by any state securities commission or other federal or state regulatory authority for such purpose and (ii) of the happening of any event during the period referred to in Section 5(c) that makes any statement of a material fact made in the Preliminary Offering Circular or the Final Offering Circular untrue or that requires the making of any additions to or changes in the Preliminary Offering Circular or the Final Offering Circular in order to make the statements therein not misleading. The Issuers and Parent shall use their best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption of any of the Series A Notes under any state securities or Blue Sky laws, and if at any time any state securities commission or other federal or state regulatory authority shall issue an order suspending the qualification or exemption of any Series A Notes under any state securities or Blue Sky laws, the Issuers and Parent shall use their best efforts to obtain the withdrawal or lifting of such order at the earliest possible time.

        (b)   To furnish the Initial Purchaser and those persons identified by the Initial Purchaser to the Issuers as many copies of the Preliminary Offering Circular and the Final Offering Circular, and any amendments or supplements thereto, as the Initial Purchaser may reasonably request. Subject to the compliance by the Initial Purchaser with its representations and warranties and agreements set forth in Section 7, the Issuers and Parent consent to the use of the Preliminary Offering Circular and the Final

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Offering Circular, and any amendments and supplements thereto required pursuant hereto, by the Initial Purchaser in connection with Exempt Resales.

        (c)   During such period as, in the opinion of counsel for the Initial Purchaser, an Offering Circular is required by law to be delivered in connection with Exempt Resales by the Initial Purchaser and in connection with market-making activities of the Initial Purchaser, for so long as any Series A Notes are outstanding, (i) subject to Section 5(d) below, not to make any amendment or supplement to the Offering Circular of which the Initial Purchaser shall not previously have been advised or to which the Initial Purchaser shall reasonably object after being so advised and (ii) to prepare promptly upon the Initial Purchaser's reasonable request, any amendment or supplement to the Offering Circular which may be necessary or advisable in connection with such Exempt Resales or such market-making activities.

        (d)   If, during the period referred to in Section 5(c), any event shall occur or condition shall exist as a result of which, in the judgment of Service or Parent or in the reasonable judgment of counsel to the Initial Purchaser, it becomes necessary to amend or supplement the Offering Circular in order to make the statements therein, in the light of the circumstances when the Offering Circular is delivered to an Eligible Purchaser, not misleading, or if, in the reasonable judgment of counsel to the Initial Purchaser, it is necessary to amend or supplement the Offering Circular to comply with any applicable law, Service will promptly notify the Initial Purchaser and prepare an appropriate amendment or supplement to the Offering Circular so that the statements therein, as so amended or supplemented, will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Offering Circular will comply with applicable law, and to furnish to the Initial Purchaser and such other persons as the Initial Purchaser may designate such number of copies thereof the Initial Purchaser may reasonably request.

        (e)   Prior to the sale of all Series A Notes pursuant to Exempt Resales as contemplated by this Agreement, to cooperate with the Initial Purchaser and counsel to the Initial Purchaser in connection with the registration or qualification of the Series A Notes for offer and sale to the Initial Purchaser and pursuant to Exempt Resales under the securities or Blue Sky laws of such jurisdictions as the Initial Purchaser may request and to continue such qualification in effect so long as required for Exempt Resales and to file such consents to service of process or other documents as may be necessary in order to effect such registration or qualification; provided , however , that the Issuers or Parent shall not be required in connection therewith to register or qualify as a foreign corporation or other organization, as the case may be, in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or taxation, other than as to matters and transactions relating to the Offering Circular or Exempt Resales, in any jurisdiction in which it is not now so subject.

        (f)    To apply the proceeds from the sale of the Series A Notes as set forth under the caption "Use of Proceeds" in the Offering Circular.

        (g)   So long as any Notes are outstanding, (i) to mail and make generally available as soon as practicable after the end of each fiscal year to the record holders of the Notes a financial report of Parent and its subsidiaries on a consolidated basis (and similar financial report of all unconsolidated subsidiaries, if any), including a footnote with condensed, consolidating financial information for the Issuers, all such financial reports to include an audited consolidated balance sheet, an audited consolidated statement of operations, an audited consolidated statement of cash flows and an audited consolidated statement of shareholders' equity as of the end of and for such fiscal year, together with comparable information as of the end of and for the preceding year, each prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the period involved (except as may be expressly stated in the notes thereto) certified by Parent's independent public accountants and (ii) to mail and make generally available as soon as practicable after the end of each

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quarterly period (except for the last quarterly period of each fiscal year) to such holders, a consolidated balance sheet, a consolidated statement of operations and a consolidated statement of cash flows (and similar financial reports of all unconsolidated subsidiaries, if any) as of the end of and for such period, and for the period from the beginning of such year to the close of such quarterly period, each prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the period involved (except as may be expressly stated in the notes thereto) together with comparable information for the corresponding periods of the preceding year. All reports or other communications filed by means of the Commission's EDGAR system shall be deemed to have been mailed and made generally available to the record holders of the Notes as required by subparagraphs (g)(i) and (g)(ii) above.

        (h)   So long as the Notes are outstanding, to furnish to the Initial Purchaser as soon as available copies of all reports or other communications furnished by the Issuers and Parent to its security holders or furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Issuers or Parent is listed and such other publicly available information concerning the Issuers or Parent as the Initial Purchaser may reasonably request. All reports or other communications filed by means of the Commission's EDGAR system shall be deemed to have been mailed and made generally available to the record holders of the Notes as required by this Section.

        (i)    So long as any of the Series A Notes remain outstanding and during any period in which the Issuers are not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), to make available to any holder of Series A Notes in connection with any sale thereof and any prospective purchaser of such Series A Notes from such holder, the information (" Rule 144A Information ") required by Rule 144A(d)(4) under the Act.

        (j)    Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of the obligations of the Issuers, Parent and the Subsidiaries and affiliates under this Agreement, including: (i) the fees, disbursements and expenses of counsel to the Issuers and Parent and accountants of the Issuers and Parent in connection with the sale and delivery of the Series A Notes and the Guarantees to the Initial Purchaser and pursuant to Exempt Resales, and all other fees or expenses in connection with the preparation, printing, filing and distribution of the Preliminary Offering Circular, the Final Offering Circular and all amendments and supplements to any of the foregoing (including financial statements) specified in Section 5(c) and 5(d) prior to or during the period specified in Section 5(c), including the mailing and delivering of copies thereof to the Initial Purchaser and persons designated by them in the quantities specified herein, (ii) all costs and expenses related to the transfer and delivery of the Series A Notes and the Guarantees to the Initial Purchaser and pursuant to Exempt Resales, including any transfer or other taxes payable thereon, (iii) all costs of printing or producing this Agreement, the other Operative Documents and any other agreements or documents in connection with the offering, purchase, sale or delivery of the Series A Notes and the Guarantees, (iv) all costs and expenses related to the performance by the Issuers and Parent of their other obligations under this Agreement and the other Operative Documents, (v) all expenses in connection with the registration or qualification of the Series A Notes for offer and sale under the securities or Blue Sky laws of the several states and all costs of printing or producing any preliminary and supplemental Blue Sky memoranda in connection therewith (including the filing fees and fees and disbursements of counsel for the Initial Purchaser in connection with such registration or qualification and memoranda relating thereto in an amount not to exceed $12,500), (vi) the cost of printing certificates representing the Series A Notes and the Guarantees, (vii) all expenses (excluding the fees and disbursements of counsel for the Initial Purchaser) and listing fees in connection with the application for quotation of the Series A Notes on the Private Offerings, Resales and Trading through Automated Linkages (" PORTAL ") system of the National Association of Securities Dealers, Inc. (" NASD "), (viii) the fees and expenses of the Trustee and the Trustee's counsel in connection with the Indenture, the Notes and

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the Guarantees, (ix) the fees and expenses of the Collateral Agent and the Collateral Agent's counsel in connection with the Security Interests, the Collateral, the Indenture, the Notes and the Guarantees, (x) the costs and charges of any transfer agent, registrar or depositary (including DTC), (xi) any fees charged by rating agencies for the rating of the Notes, (xii) all costs and expenses of the Exchange Offer and any Registration Statement, as set forth in the Registration Rights Agreement, (xiii) " roadshow " travel and other expenses incurred in connection with the marketing and sale of the Notes, (xiv) the disbursements and out-of-pocket expenses incurred by the Initial Purchaser in an amount up to $500,000 (including, without limitation, the fees, expenses and disbursements of counsel for the Initial Purchaser, travel and lodging expenses, word processing charges, messenger and duplicating services, facsimile expenses and other customary expenditures), and (xv) and all other costs and expenses incident to the performance of the obligations of the Issuers and Parent hereunder for which provision is not otherwise made in this Section.

        (k)   To use commercially reasonable efforts to effect the inclusion of the Series A Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL for so long as any Series A Notes are outstanding.

        (l)    To obtain the approval of DTC for "book-entry" transfer of the Notes, and to comply with all agreements set forth in the representation letters of the Issuers to DTC relating to the approval of the Notes by DTC for "book-entry" transfer.

        (m)  During the period beginning on the date of this Agreement and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise transfer or dispose of any debt securities of the Issuers or Parent or any warrants, rights or options to purchase or otherwise acquire debt securities of the Issuers or Parent substantially similar to the Notes (other than the Notes), without the prior written consent of the Initial Purchaser.

        (n)   Not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Act) that would be integrated with the sale of the Series A Notes to the Initial Purchaser or pursuant to Exempt Resales in a manner that would require the registration of any such sale of the Series A Notes under the Act.

        (o)   To the extent it may lawfully do so, not to voluntarily claim, and to actively resist any attempts to claim, the benefit of any usury laws against the holders of any Notes.

        (p)   To cause the Exchange Offer to be made in the appropriate form to permit the Series B Notes registered pursuant to the Act to be offered in exchange for the Series A Notes and to comply with all applicable federal and state securities laws in connection with the Exchange Offer.

        (q)   To comply with all of their agreements set forth in the Stock Purchase Agreement and to cause the consummation of the transactions contemplated by the Stock Purchase Agreement substantially concurrent with the issuance of the Series A Notes.

        (r)   To comply with all of their agreements set forth in the Merger Agreement and to cause the consummation of the Merger and the assumption by Service of all of the obligations of the Company under the Indenture, the Notes and the Registration Rights Agreement substantially concurrent with the issuance of the Series A Notes.

        (s)   To comply with all of their agreements set forth in the Securities Purchase Agreement and to cause the consummation of the transactions contemplated by the Securities Purchase Agreement, including the receipt by Service of $3,500,000 as an investment in its common equity as a result therefrom, substantially concurrent with the issuance of the Series A Notes.

        (t)    To cause the consummation of the transactions contemplated by the Credit Facility substantially concurrent with the issuance of the Series A Notes and to ensure that there are no borrowings under the Credit Facility as of the Closing Date.

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        (u)   To use their best efforts to do and perform all things required or necessary to be done and performed under this Agreement prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Series A Notes.

        (v)   To comply with all of their agreements set forth in the Registration Rights Agreement.

6.     Representations and Warranties of the Issuers and Parent.

        As of the date hereof, the Issuers and Parent each represents and warrants jointly and severally to, and agrees with, the Initial Purchaser that:

        (a)   The Preliminary Offering Circular as of its date did not and the Final Offering Circular as of its date and the date of this Agreement does not and as of the Closing Date will not, and any supplement or amendment to either of them will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties contained in this paragraph (a) shall not apply to statements in or omissions from the Preliminary Offering Circular or the Final Offering Circular (or any supplement or amendment thereto) made in reliance upon and in conformity with information relating to the Initial Purchaser furnished to the Issuers by the Initial Purchaser expressly for use therein, it being expressly understood and agreed that the only such information furnished by the Initial Purchaser to the Issuers consists of the information described in Section 8(b). No stop order preventing the use of the Preliminary Offering Circular or the Final Offering Circular, or any amendment or supplement thereto, or any order asserting that any of the transactions contemplated by this Agreement are subject to the registration requirements of the Act, has been issued and no proceeding for that purpose has commenced or is pending or, to the knowledge of the Issuers or Parent, is contemplated.

        (b)   Each of the Issuers, Parent and the Subsidiaries (as defined below) is duly organized, validly existing as a corporation or other organization, as the case may be, and in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be, and has all requisite power and authority to enter into and perform its obligations under this Agreement and each of the Operative Documents to which it is a party and any and all other agreements and instruments ancillary to or entered into in connection with the transactions contemplated by the Operative Documents to which it is a party, carry on its business as described in the Offering Circular and to own, lease, license and operate its properties, and is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification (a list of which jurisdictions is set forth on Exhibit B hereto), except where failure to be so qualified and in good standing would not, individually or in the aggregate, have a material adverse effect on (i) the properties, contractual rights, business, prospects, operations, earnings, assets, liabilities or condition (financial or otherwise) of the Issuer, Parent and the Subsidiaries, taken as a whole, (ii) the ability of the Issuer to perform its obligations under any of the Operative Documents or (iii) the validity of any of the Operative Documents to which it is a party or the consummation of any of the transactions contemplated in the Operative Documents to which it is a party (each, a " Material Adverse Effect ").

        (c)   On the Closing Date, after the consummation of the Transactions, (i) there will be no direct or indirect subsidiaries of Service other than Capitol Dental Care, Inc., an Oregon corporation, Managed Dental Care of Oregon, Inc., an Oregon corporation, and Dedicated Dental Systems, Inc., a California corporation (together, the " Subsidiaries ") and (ii) there will be no direct subsidiaries of Parent other than Service.

        (d)   Pursuant to the Transactions, the Company will merge with and into Service. After giving effect to the Transactions, (i) all of the capital stock of Parent will be owned by Levine except for securities held by Parent's management, (ii) all of the issued equity interests of Parent and Service will

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be duly authorized and validly issued, and fully paid and non-assessable, (iii) all of the equity interests of the Subsidiaries will be owned directly or indirectly by Service, free and clear of all liens, encumbrances, equities or claims, except for such liens, encumbrances, equities or claims that are disclosed in the Offering Circular and (iv) all of the equity interests of Service will be owned directly or indirectly by Parent, free and clear of all material liens, encumbrances, equities or claims, except for such liens, encumbrances, equities or claims that are disclosed in the Offering Circular.

        (e)   Neither the Issuer nor Parent have issued or granted any outstanding options to purchase, or any preemptive rights or other rights to subscribe for or purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, equity interests or any such options, rights, convertible securities or obligations, except as described in the Offering Circular.

        (f)    This Agreement has been duly authorized, executed and delivered by each of the Issuers and Parent.

        (g)   The Indenture has been duly authorized by each of the Issuers and Parent and, on the Closing Date, will have been validly executed and delivered by each of the Issuers and Parent. When the Indenture has been duly executed and delivered by each of the Issuers and Parent and assuming due authorization, execution and delivery by the Trustee, the Indenture will be a valid and binding agreement of each of the Issuers and Parent, enforceable against each of the Company and Parent, and after giving affect to the Merger against Service, in accordance with its terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. On the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the " TIA "), and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. The Offering Circular contains a summary of the material terms of the Indenture which, on the Closing Date, will conform in all material respects to the description thereof in the Offering Circular.

        (h)   The Registration Rights Agreement and each of the Collateral Documents has been duly and validly authorized by the Issuers and Parent, as applicable, and upon its execution and delivery will constitute a valid and binding obligation of the Issuers and Parent, as the case may be, enforceable against the Company and Parent, and after giving affect to the Merger against Service, as the case may be, in accordance with their terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

        (i)    The Credit Facility has been duly and validly authorized by Service and Parent and upon its execution and delivery will constitute a valid and binding obligation of Service and Parent, enforceable against each of Service and Parent, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

        (j)    The Series A Notes have been duly authorized and, on the Closing Date, will have been validly executed and delivered by the Issuers. When the Series A Notes have been issued, executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchaser in accordance with the terms of this Agreement, the Series A Notes will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Issuers, enforceable against the Company, and after giving affect to the Merger against Service, in accordance with their terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable

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principles of general applicability. On the Closing Date, the Series A Notes will conform in all material respects to the description thereof contained in the Offering Circular.

        (k)   The Series B Notes have been duly authorized by the Issuers. When the Series B Notes are issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the Series B Notes will be entitled to the benefits of the Indenture and will be valid and binding obligations of Service, enforceable against Service in accordance with their terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

        (l)    The Merger Agreement has been duly and validly authorized by the Issuers and Parent, and is a valid and binding agreement of the Issuers and Parent and immediately following the issuance of the Notes, will be enforceable against the Issuers and Parent in accordance with its terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), and except as rights to indemnification and contribution may be limited by federal or state securities laws or principles of public policy.

        (m)  The Stock Purchase Agreement has been duly and validly authorized by Parent and constitutes a valid and binding agreement of Parent, enforceable against it in accordance with its terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), and except as rights to indemnification and contribution may be limited by federal or state securities laws or principles of public policy.

        (n)   The Securities Purchase Agreement has been duly and validly authorized by Parent and constitutes a valid and binding agreement of Parent, enforceable against it in accordance with its terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), and except as rights to indemnification and contribution may be limited by federal or state securities laws or principles of public policy.

        (o)   Parent has all the requisite power to offer and sell the Series A Guarantees. The Series A Guarantees have been duly and validly authorized by Parent and when duly executed and delivered by Parent in accordance with the terms of the Indenture and upon the due execution, authentication and delivery of the Series A Notes in accordance with the Indenture and the issuance of the Series A Notes and the sale to the Initial Purchaser contemplated by this Agreement, will constitute valid and binding obligations of Parent, enforceable against Parent in accordance with their terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

        (p)   Parent has all the requisite power to offer and sell the unconditional guarantee of the Issuers' obligations under the Series B Notes, including the due and punctual payment of principal, premium, interest and liquidated damages, if any, on the Series B Notes (the " Series B Guarantees "). The Series B Guarantees have been duly and validly authorized by Parent and when duly executed and delivered by Parent in accordance with the terms of the Indenture and upon the due execution and authentication of the Series B Notes in accordance with the Indenture and the issuance and delivery of the Series B Notes in the circumstances contemplated by the Registration Rights Agreement, will

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constitute valid and binding obligations of Parent, enforceable against Parent in accordance with their terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

        (q)   When issued, the Notes will rank equally in right of payment with all of the Issuers' existing and future senior indebtedness and senior in right of payment to the Issuers' existing and future subordinated indebtedness. The Notes will be secured by a second-priority lien on substantially all of the Issuers' assets, including the capital stock of the Subsidiaries but excluding certain excluded assets described in the Offering Circular. The Notes will be effectively subordinated to the Issuers' secured indebtedness under the Credit Facility.

        (r)   When issued, the Guarantees will rank pari passu in rights of payment with all of the Guarantors' other senior indebtedness and will rank senior in right of payment to all subordinated indebtedness of the Guarantors.

        (s)   The execution, delivery and performance by the Issuer and Parent of the Operative Documents to which the Issuer and Parent is a party, compliance by the Issuer and Parent with all provisions thereof and the consummation of the transactions contemplated thereby do not and will not (i) require any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency, except (A) with respect to the transactions contemplated by the Registration Rights Agreement, as may be required under the Act and the qualification of the Indenture under the TIA, (B) such consents, approvals, authorizations, registrations or qualifications as may be required under the Act and applicable state securities laws in connection with the purchase and distribution of the Series A Notes and the Series A Guarantees by the Initial Purchaser, (C) filings contemplated to be made pursuant to the express terms of the Operative Documents, including the filing of the Articles of Merger contemplated by the Merger Agreement with the Secretary of State of the State of Washington and the filing of the Certificate of Merger contemplated by the Merger Agreement with the Secretary of State of the State of Delaware, (D) filings to be made upon consummation of the Transactions with the California Department of Managed Health Care, (E) the filing of Parent's amended and restated certificate of incorporation with the Secretary of State of the State of Delaware and (F) for such consents, approvals, authorizations, orders, filings or registrations as have been obtained or made prior to the date hereof, (ii) conflict with or constitute a breach of any of the terms or provisions of, or a default under, the charter or bylaws of the Issuer, Parent or any of the Subsidiaries, or any indenture, loan agreement, mortgage, lease, license or other agreement or instrument to which the Issuer, Parent or any of the Subsidiaries is a party or by which the Issuer, Parent or any of the Subsidiaries or any of their properties are bound, except to the extent such conflict, breach or default has been waived or will not have a Material Adverse Effect, (iii) violate or conflict with any applicable law or any rule, regulation, judgment, order or decree of any court or any governmental body or agency having jurisdiction over the Issuer, Parent or any of the Subsidiaries or any of their properties, except to the extent such violation or conflict will not have a Material Adverse Effect, (iv) result in the imposition or creation of (or the obligation to create or impose) a Lien under, any agreement or instrument to which the Issuer, Parent or any of the Subsidiaries is a party or by which the Issuer, Parent or any of the Subsidiaries or any of their properties are bound, except (A) as contemplated by the Operative Documents or (B) to the extent such imposition or creation will not have a Material Adverse Effect or (v) result in the termination or revocation of any Authorization (as defined below) of the Issuer, Parent or any of the Subsidiaries or result in any other impairment of the rights of the holder of any such Authorization, except to the extent such termination, revocation or impairment could not be reasonably expected to have a Material Adverse Effect.

        (t)    Each of the Issuers, Parent and the Subsidiaries is not (i) in violation of its charter or bylaws or similar organizational documents, (ii) in default in the performance of any obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease, license or other

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agreement or instrument that is material to the Issuers, Parent or the Subsidiaries to which the Issuers, Parent or the Subsidiaries is a party or by which the Issuers, Parent or the Subsidiaries or its property is bound or (iii) in violation of any local, state, federal or foreign law, statute, ordinance, rule, regulation, requirement, judgment or court decree (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, judgments or court decrees) applicable to it or any of its assets or properties (whether owned or leased), except with respect to clauses (ii) and (iii) for such defaults and violations which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. There does not exist any state of facts which constitutes an event of default on the part of the Issuers, Parent or the Subsidiaries as defined in such documents or which, with notice or lapse of time or both, would constitute such an event of default, except under agreements related to debt which will be paid off in its entirety from the proceeds from the sale of the Series A Notes and, with respect to documents described in clauses (ii) and (iii) other than those that have not resulted, or would not result, singly or in the aggregate, in a Material Adverse Effect.

        (u)   Immediately after the consummation of the Transactions and immediately following the offering of the Series A Notes and after giving effect to the application of the proceeds of the Series A Notes and after taking into account any rights to contribution, (a) the fair value of the assets of each of Parent, Service and the Subsidiaries will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of each of Parent, Service and the Subsidiaries will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each of Parent, Service and the Subsidiaries will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) each of Parent, Service and the Subsidiaries will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted as set forth in the Offering Circular following the Closing Date.

        (v)   The Company had no assets and has conducted no business prior to the date hereof other than in connection with the transactions contemplated by the Operative Documents.

        (w)  There are no legal, governmental or arbitration proceedings pending or threatened to which any of Service, Parent or the Subsidiaries is or could be a party or to which any of their property is or could be subject, which could reasonably be expected to result in a Material Adverse Effect.

        (x)   Service, Parent or the Subsidiaries and each "employee benefit plan" (as defined in Section 3(3) of ERISA) established, maintained or contributed to by any of them (each, a " Company Benefit Plan ") are in compliance in all material respects with all provisions of the Employee Retirement Income Security Act of 1974, as amended (and the regulations and published interpretations thereunder) (" ERISA "), and the Internal Revenue Code (the " Code "). Neither Service, Parent or the Subsidiaries nor any entity which is (or at any relevant time was) a member of a "controlled group of corporations" with or under "common control" (as defined in Section 414(b), (c), (m) or (o) of the Code) with Service, Parent or the Subsidiaries (an " ERISA Affiliate ") sponsors, maintains, contributes to or has an obligation to contribute to, or has sponsored, maintained, contributed to or had an obligation to contribute to, any "pension plan" (as defined in Section 3(2) of ERISA) that is (or was at any relevant time) subject to Title IV of ERISA or any "multiemployer plan" (as defined in Section 3(37) of ERISA) for which Service, Parent or the Subsidiaries would have any liability that could reasonably be expected to result in a Material Adverse Effect. The Internal Revenue Service has issued a determination letter that each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code is so qualified. With respect to each Company Benefit Plan, no event has occurred and, to the knowledge of Service, Parent or the Subsidiaries, there exists no condition or set of circumstances in connection with which Service, Parent or the Subsidiaries could be subject to any

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material liability (other than for routine benefit liabilities) under the terms of, or with respect to, such Company Benefit Plans, ERISA, the Code or any other applicable law.

        (y)   Service, Parent and the Subsidiaries have not violated any foreign, federal, state or local law or regulation relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (" Environmental Laws "), except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect, and there exists no fact, and no event has occurred, which has or is reasonably likely to result in material liability (including, without limitation, alleged or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries or penalties) of Service, Parent or the Subsidiaries arising out of, based on or resulting from the presence or release into the environment of any hazardous material (including without limitation any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any Environmental Law) or any violation of any Environmental Law, except such as could not reasonably be expected to have a Material Adverse Effect.

        (z)   To Service's knowledge, Service, Parent and the Subsidiaries have such permits, registrations, licenses, consents, exemptions, franchises, authorizations and other approvals (each, an " Authorization ") of, and have made all recordations, registrations, filings with and notices to, all governmental or regulatory authorities and self-regulatory organizations and all courts and other tribunals, including, without limitation, under any applicable Environmental Laws or intellectual property or industrial property laws, as are necessary to own, lease, license and operate its properties and to conduct its business in the manner described in the Offering Circular, except (A) for the necessary filings to be made after the consummation of the Transactions by Parent, Service and the Subsidiaries with the California Department of Managed Health (" CDMH ") pursuant to the undertakings entered into between Parent, Service and the Subsidiaries with the CDMH in connection with the transactions contemplated herein or (B) where the failure to have any such Authorization or to make any such recordation, registration, filing or notice would not have a Material Adverse Effect. Each such Authorization is valid and in full force and effect and Service, Parent and the Subsidiaries are in material compliance with all the terms and conditions thereof and with the rules and regulations of the authorities and governing bodies having jurisdiction with respect thereto. No event has occurred (including, without limitation, the receipt of any notice from any authority or governing body) which allows or, after notice or lapse of time or both, would allow, revocation, suspension or termination of any such Authorization or results or, after notice or lapse of time or both, would result in any other material impairment of the rights of the holder of any such Authorization except to the extent that such revocation, suspension or other impairment could not be reasonably expected to have a Material Adverse Effect. Service, Parent and the Subsidiaries have no reason to believe that any governmental body or agency is considering limiting, suspending or revoking any such Authorization.

        (aa) Grant Thornton LLP, and Ernst & Young, the accountants that have certified the financial statements and supporting schedules included in the Preliminary Offering Circular and the Final Offering Circular are independent registered public accounting firms with respect to Parent as required by the Act, the Exchange Act and the rules and regulations of the Public Company Accounting Oversight Board (the " PCAOB "). Each of Grant Thornton LLP, and Ernst & Young LLP is a registered public accounting firm as defined by the PCAOB whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn. To Service's knowledge, no person who has been suspended or barred from being