Common Stock Escrow Agreement Dated 10/11/96

EXHIBIT 10.26


GMS DENTAL GROUP, INC.
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COMMON STOCK ESCROW AGREEMENT
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THIS COMMON STOCK AGREEMENT, dated as of October 11, 1996 between GMS
--- DENTAL GROUP, INC., a Delaware corporation (the "Corporation"), and GRANT M. - ------------------ -------- SADLER and KENNETH J. DAVIS. (each a "Purchaser," collectively, the - ---------------------------- "Purchasers"),


W I T N E S S E T H:


WHEREAS, the Corporation has issued to Purchasers certain shares of the Corporation as herein described; and


WHEREAS, the Corporation has issued the shares to Purchasers on the terms and conditions hereinafter set forth:


NOW, THEREFORE, it is agreed between the parties as follows:


1. The Corporation issued 1,367,201 shares of the Corporation's common stock to Purchasers (the "Stock"), at a purchase price of $.10 per share of which 393,250 shares of common stock issued to Mr. Sadler and 211,750 shares of common stock issued to Mr. Davis (the "vesting Stock") are subject to a four (4) year vesting schedule as follows:


(i) One-quarter (1/4) (which vested on the date of issuance);


(ii) One-quarter (1/4) of the balance which vests on the first
anniversary of the date hereof; and


(iii) The remainder of the Vesting Stock vests in equal amounts
monthly for the remaining term of the vesting schedule.


2. In addition to the Vesting Stock, 495,431 shares of the Corporation's common stock issued to Mr. Sadler and 266,770 shares of the Corporation's common stock issued to Mr. Davis (the "Repurchase Right Stock"), are not subject to the four (4) year vesting described above in Section 1 but are subject to the right of the corporation to repurchase the Repurchase Stock at a price of $.10 per share (the "Repurchase Right") which Repurchase Right expires on the earlier of: (a) the achievement by the Company of certain performance milestones over a two (2) year period described in Exhibit A attached hereto and made a part hereof or (b) nine (9) years and nine (9) months from the date of issuance.


3. The Repurchase Right shall be exercised by written notice signed by an officer of the Corporation and delivered or mailed as provided in Section 11 of this Agreement to the Escrow Agent and the Purchasers.


4. (a) To ensure the availability for delivery of Purchasers' shares upon exercise of the Repurchase Right herein provided for, Purchaser agrees at the Closing hereunder, to


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deliver to and deposit with the Secretary of the Corporation acting as escrow agent (the "Escrow Agent"), the certificate or certificates evidencing the Vesting Stock and the Repurchase Right Stock and Assignments Separate from Certificate duly executed (with date and number of shares in blank) by the Purchasers. Such documents are to be held by the Escrow Agent and delivered by the Escrow Agent in accordance with the terms ...