REGISTRATION RIGHTS AGREEMENT

This  Registration  Rights  Agreement  (this "AGREEMENT")  is entered into as of
August  8,  2002,  by and between SafeGuard Health Enterprises, Inc., a Delaware
corporation  ("SAFEGUARD"),  and  Jack  R.  Anderson  ("HOLDER").

                                   BACKGROUND
                                   ----------

On  the date of this Agreement, Holder acquired a Convertible Promissory Note of
SafeGuard  (the  "NOTE")  in  the  principal  amount  of  $2,000,000,  which  is
convertible  into  Common  Stock  of  SafeGuard.  SafeGuard  agreed  to  grant
registration  rights with respect to the Common Stock of SafeGuard issuable upon
conversion  of  the  Note  on  and  subject  to the terms and conditions of this
Agreement.

                                 OPERATIVE TERMS
                                 ---------------

The  parties  agree  as  follows:

                           ARTICLE 1.     DEFINITIONS
                                          -----------

      1.1   CERTAIN DEFINED TERMS.
             ---------------------

            "Commission"  means  the  Securities  and Exchange Commission or any
             ----------
other  federal  agency  at  the  time  administering  the  Securities  Act.

            "Common Stock"  means the common stock, $.01 par value per share, of
             ------------
SafeGuard.

            "Conversion Shares"  means  any  shares  of Common Stock issuable or
             -----------------
issued  upon  conversion  of  the  Note.

            "Exchange Act"  means  the  Securities  Exchange  Act  of  1934,  as
             ------------
amended.

            "Holder"  means  Jack  R. Anderson and each subsequent holder of the
             ------
Note  (or portion of the Note) or shares of Common Stock issued on conversion of
the  Note.

            "RegistrableSecurities" means (i) any Conversion Shares that  may be
             ---------------------
issued  pursuant to the conversion of the Note, and (ii) any Common Stock issued
as  a  dividend  or  other distribution with respect to or in exchange for or in
replacement  of  the  Conversion  Shares.

            "Securities Act"  means  the  Securities Act of 1933, as amended, or
             --------------
any  similar  federal  statute,  and the rules and regulations of the Commission
thereunder,  in  effect  at  the  time.

            "Underwritten Public Offering"  means  a  public  offering of Common
             ----------------------------
Shares  for  cash that is offered and sold in a registered transaction on a firm
commitment  underwritten basis through one or more underwriters, all pursuant to
an  underwriting  agreement  between  the  Company  and  such  the underwriters.


<PAGE>
            "Underwriters"  means  a  securities  dealer  that  purchases  any
             ------------
Registrable  Securities  as  principal  and  not  as  part  of  such  dealer's
market-making  activities.

                       ARTICLE II.     REGISTRATION RIGHTS
                                       -------------------

     2.1     DEMAND REGISTRATION.
             --------------------

            (a)  Rights to Registration.  On notice (a "DEMAND NOTICE") from all
                ----------------------
      Holders  or  Holders of at least fifty (50%) of the Registrable Securities
      (the "INITIATING HOLDERS"), SafeGuard shall effect one demand registration
      for  those  Holders.  SafeGuard  shall:

                  (1)  promptly  give written notice to all other Holders of the
            proposed  registration,  qualification  or  compliance;  and

                  (2) use its best efforts to promptly effect the registrations,
            qualifications,  and compliances (including, without limitation, the
            execution  of  an  undertaking  to  file  post-effective amendments,
            appropriate  qualifications  under  the applicable blue sky or other
            state  securities  laws,  and  appropriate compliance with exemptive
            regulations  issued  under  the  Securities  Act  and  any  other
            governmental  requirements  or  regulations)  needed  to  permit  or
            facilitate  the  public  sale  and  distribution  of  the requesting
            Holders'  Registrable  Securities  specified  in  the notice and the
            Registrable Securities of any other Holders that notify SafeGuard of
            their  desire  to  join in the request within ten (10) business days
            after  they  receive  SafeGuard's  notice  specified  in  part  (1).
            SafeGuard  shall  use  its best efforts to prepare and file with the
            Commission  a  registration  statement  covering  the  Registrable
            Securities  subject to the registration request within 60 days after
            it  receives  the  Demand  Notice.

            (b) Underwriting. The  Initiating  Holders  shall  include  in their
                ------------
      request  made pursuant to Section 2.1 the name of the managing underwriter
                                -----------
      or  underwriters, if any, that the majority in interest of such Initiating
      Holders  propose  to  underwrite  the  public  offering  pursuant  to  the
      requested  registration. SafeGuard  will include these underwriters' names
      in its written notice to the other Holders pursuant to Section 2.1. If the
                                                             -----------
      sale  proposed  by the requesting Holders is to be effected pursuant to an
      Underwritten Public Offering, each Holder's right to registration pursuant
      to  Section  2.1  will  be  conditioned  on  its  participation  in  the
          -----------
      underwriting  and  inclusion  of  its  Registrable  Securities  in  the
      underwriting  to the extent requested (unless otherwise mutually agreed by
      a  majority  in  interest  of  the  Initiating  Holders and such Holders).
      SafeGuard  shall  (together with all Holders proposing to distribute their
      securities  through  such underwriting) use its best efforts to enter into
      an underwriting agreement in customary form with the underwriters selected
      for  the  underwriting in the manner set forth above. SafeGuard shall take
      the  actions required for compliance with the terms and obligations of the
      underwriting  agreement,  and  shall  furnish  the  underwriters and their
      respective  representatives  reasonable  and  sufficient  access  to  all
      information  requested  for  their "due diligence" review of SafeGuard and
      its  operations,  subject  to  the  terms  of  any  letter  of  intent,
      confidentiality  or  other  agreement  between  SafeGuard  and  the


                                        2
<PAGE>
      underwriter(s).  Notwithstanding  any other provisions of Section 2.1, if,
                                                                -----------
      in  connection  with  an  Underwritten  Public  Offering,  the  managing
      underwriter  advises  SafeGuard  or the Initiating Holders in writing that
      marketing  factors require that the number of shares to be underwritten be
      limited,  the Initiating Holders shall so advise SafeGuard (or vice versa)
      and  Holders  with  shares  that  would  otherwise  be  registered  and
      underwritten  pursuant  to  this  Agreement,  and  the number of shares of
      Registrable Securities to be included in the registration and underwriting
      will  be  allocated  among  all  Holders  in  proportion,  as  nearly  as
      practicable, to the respective amounts of Registrable Securities that were
      proposed  to  be sold by Holders. The Registrable Securities excluded from
      the  underwriting by reason of the underwriter's marketing limitation will
      not  be  included  in the registration. Any Holder that disapproves of the
      terms  of  an Underwritten Public Offering may elect to withdraw therefrom
      by  written  notice  to  SafeGuard,  the  managing  underwriter  and  the
      Initiating  Holders.  The Registrable Securities so withdrawn will also be
      withdrawn  from  registration;  provided, however, if by the withdrawal of
                                      --------  -------
      the Registrable Securities a greater number of Registrable Securities held
      by  other  Holders  may  be  included in such Underwritten Public Offering
      (subject  to  any  limitation imposed by the underwriters), the requesting
      Holders will offer to all Holders who have included Registrable Securities
      in  the  registration  the  right to include additional shares in the same
      proportion  used  in  effecting  the  limitation referred to above in this
      Section 2(b).
      ------------

            (c) Additional Shares to be Registered. SafeGuard may include in any
                ----------------------------------
      registration  statement  described  in  this  Section 2.1,  for  sale  in
                                                    -----------
      accordance  with  the  method  of  disposition specified by the Initiating
      Holders,  Common Shares to be sold by SafeGuard for its own account or the
      other  SafeGuard  shareholders for their own account, except as and to the
      extent that, in the opinion of the managing underwriter (if such method of
      disposition  is  an  Underwritten  Public  Offering), such inclusion would
      result  in  any  of  the  Registrable Securities proposed to be sold being
      excluded  from  the  offering  or  would  materially  adversely affect the
      marketing  of  such  Registrable  Securities  to  be  sold.

            (d) Exceptions  to  Demand  Registration  Rights.  Anything  in this
                --------------------------------------------
      Section 2.1  to  the  contrary  notwithstanding:
      -----------

                  (1) SafeGuard  will  not  be  required to register Registrable
            Securities  pursuant  to  this  Section  2.1  unless  the  aggregate
                                            ------------
            estimated  public  offering  price  of  all  shares  of  Registrable
            Securities,  including,  without limitation, any shares sold for the
            account  of  SafeGuard  or  any  existing  shareholder  of SafeGuard
            (based, in the case of Common Shares, upon the highest closing price
            or bid price, as the case may be, during the 30-day period preceding
            such  request  for  registration in the principal trading market for
            the  Common Shares, or, if there is no active trading market for the
            Common  Shares,  based  upon  the  proposed  public  offering  price
            estimated  in  good  faith  by the requesting holders of Registrable
            Securities), is at least equal to the lesser of (i) $400,000 or (ii)
            The  total value of all shares of Common Stock then owned by Holder;

                  (2)  SafeGuard  will  not  be  required to file a registration
            statement  requested  pursuant  to  this Section 2.1 during the time
                                                     -----------
            period  between the last day of SafeGuard's fiscal year and the date
            on  which  SafeGuard's  audited  financial statements for the fiscal
            year  are  first  available;


                                        3
<PAGE>
                  (3)  SafeGuard will not be obligated to effect, or to take any
            action  to  effect, any registration pursuant to this Section 2.1 in
                                                                  -----------
            any  particular jurisdiction in which SafeGuard would be required to
            execute  a  general  consent to service of process in effecting such
            registration,  qualification,  or  compliance,  unless  SafeGuard is
            already subject to service in such jurisdiction and except as may be
            required  by  the  Securities  Act;

                  (4)  SafeGuard will not be obligated to effect, or to take any
            action  to  effect,  any  registration  pursuant to this Section 2.1
                                                                     -----------
            during  the  period  starting  with  the  date  30  days  prior  to
            SafeGuard's good faith estimate of the date of filing of, and ending
            on  a  date  120  days  after  the  effective  date  of,  a
            SafeGuard-initiated  registration;  provided  that  SafeGuard  is
            actively employing in good faith all reasonable efforts to cause the
            registration  statement  to  become  effective;  and

                  (5)  SafeGuard will not be obligated to effect, or to take any
            action  to  effect, any registration pursuant to this Section 2.1 if
                                                                  -----------
            the  Initiating  Holders propose to dispose of shares of Registrable
            Securities  that  may  be  immediately  registered  on  Form  S-3 in
            accordance  with  Section 2.3.
                              -----------

                  (6) SafeGuard  will be entitled to delay filing a registration
            statement  for up to 90 days upon written notice to all Holders that
            it  is  engaged  in  discussions  regarding  a  material transaction
            concerning  SafeGuard  and  that  it  would  be  disadvantageous  to
            disclose  during  such  period.

     2.2     SAFEGUARD REGISTRATION.
             ----------------------

            (a) Rights to Registration. If SafeGuard registers any of its Common
                ----------------------
      Shares  in  an  Underwritten  Public Offering for its own account (but not
      including:  (i)  an  offering  initiated at a Holder's request pursuant to
      Section 2.1,  or  (ii)  an offering that is registered on Commission Forms
      -----------
      S-4  and S-8 or another form not available for registering the Registrable
      Securities  for  sale  by  SafeGuard),  SafeGuard  shall:

                  (1)  Promptly  notify  each  Holder, at least thirty (30) days
            before  the  anticipated filing date of the registration (including,
            to  the  extent  available,  the  jurisdictions  in  which SafeGuard
            intends to qualify the offer and sale of securities under applicable
            blue  sky  or  other  state  securities  laws);  and

                  (2)  Use  its best efforts to include in the registration (and
            any  related  qualification under blue sky laws or other compliance)
            and in any related Underwritten Public Offering, all the Registrable
            Securities  that the Holder specifies in a written request delivered
            to  SafeGuard  within  20  days  after  SafeGuard's  notice.


                                        4
<PAGE>
            (b) Underwriting.  A  Holder's  right  to  registration  pursuant to
                ------------
      Section 2.2  will  be  conditioned  on  the  Holder's  inclusion  of  its
      -----------
      Registrable  Securities  in  any related Underwritten Public Offering. All
      Holders  proposing  to distribute their securities through an Underwritten
      Public  Offering  (together  with  SafeGuard  and  any  other  shareholder
      distributing  its securities through the underwriting) shall enter into an
      underwriting  agreement  in  customary  form  with  the  underwriter  or
      underwriters  selected  for  the  Underwritten  Public  Offering.

            (c) Certain Underwriter Limitations.  Notwithstanding  any  other
                -------------------------------
      provisions  of  this  Section 2.2,  if the managing underwriter reasonably
                            -----------
      determines  that  marketing  factors require a limitation of the number of
      shares  to  be  underwritten,  the  underwriter  may limit the Registrable
      Securities  to  be  included  in  the registration and Underwritten Public
      Offering.  In  such event, the underwriter will so advise all shareholders
      whose  shares  would  otherwise  be  registered  and underwritten pursuant
      thereto, and the number of shares that may be included in the registration
      and  Underwritten  Public  Offering  will  be  allocated:  (1)  first  to
      SafeGuard;  then (2) to the extent that such securities do not exhaust the
      number  of  shares  determined  by  such  underwriter, among all remaining
      shareholders  of  SafeGuard  (including  the  Holders)  to  whom SafeGuard
      extended  registration rights, in proportion, as nearly as practicable, to
      the  respective  amounts  of Common Shares that are proposed to be sold by
      such  shareholders.

            (d) Certain  Sales  During an Underwritten Public Offering.  In  the
                -------------------------------------------------------
      event  that  there is an Underwritten Public Offering and a selling holder
      of  Registrable  Securities  does  not  elect  to  sell  its Registrable
      Securities  to  the  underwriters  of SafeGuard's securities in connection
      with  such offering, such holder, on request of SafeGuard or the principal
      underwriter  managing  that  public  offering, will not sell, make a short
      sale  of, grant an option for the purchase of, or otherwise dispose of any
      Registrable  Securities  without the prior written consent of SafeGuard or
      such  underwriter  as  the  case  may  be, for up to 90 days or such other
      lesser  time  period  that the underwriter specifies. SafeGuard may impose
      stop  transfer  instructions  with  respect to the Common Shares (or other
      securities)  subject  to  this restriction until the end of these periods.
      Notwithstanding anything to the contrary, the obligations of the holder of
      Registrable  Securities under this section are conditioned on the officers
      and  directors  of SafeGuard entering into similar "lock-up" arrangements.

     2.3     REGISTRATION ON FORM S-3.  At  such time as SafeGuard has qualified
             -------------------------
for  the  use  of  Form  S-3 (or any similar form or forms promulgated under the
Securities  Act), Holders will have the right to request up to two registrations
(but no more than one registration each 12 months) on Form S-3 (which request or
requests will be in writing, will specify the Registrable Securities intended to
be  sold or disposed of by the Holder thereof, will state the intended method of
disposition  of  such  Registrable  Securities  by  the  Holder  requesting such
registration,  and  will  relate  to  Registrable  Securities  having a proposed
aggregate  gross  offering price (before deduction of underwriting discounts and
expenses  of  sale) of at least $100,000 based on the current market price), and
SafeGuard  will  be obligated to use its best efforts to effect the registration
or  registrations  on  Form  S-3.  Any  such  registration  shall  satisfy  the
obligations of SafeGuard with respect to a demand registration underSection 2.1.


                                        5
<PAGE>
     2.4     REGISTRATION EXPENSES.  SafeGuard  shall  pay all  expenses  of any
             ----------------------
registrations  permitted  pursuant to this Agreement (including, but not limited
to,  the expenses of any interim audit required by any underwriters in the event
of an offering requested pursuant toSection 2.1 hereof, any qualifications under
the  blue-sky  or  other  state  securities  laws,  compliance with governmental
requirements  of preparing and filing any post-effective amendments required for
the  lawful  distribution  of  any  securities  to the public in connection with
registration,  of  supplying prospectuses, offering circulars or other documents
and  the  reasonable fees and disbursements of a single special counsel retained
by  a  majority in interest of the Holders, but excluding underwriting discounts
and  selling  commissions  applicable to the sale of the Registrable Securities,
which  are payable by the Holders, pro rata on the basis of the number of shares
registered).

     2.5     REGISTRATION PROCEDURES.  In  the  case  of  a  registration,
             ------------------------
qualification or compliance effected by SafeGuard pursuant to this Article Il in
which  any Holder's Registrable Securities are included, SafeGuard shall, at its
expense:

            (a)  Prepare  and  file with the Commission a registration statement
      with  respect to the Common Shares, and use its best efforts to cause such
      registration  statement to become and remain effective for the period that
      is  reasonably  necessary  to effect the sale of the Common Shares, not to
      exceed  nine  (9)  months or, if sooner, upon completion by Holders of the
      contemplated  distribution;

            (b)  Prepare  and  file  with  the Commission such amendments to the
      registration statement and supplements to the prospectus contained therein
      as may be necessary to keep such registration statement effective for such
      period  as  may  be reasonably necessary to effect the sale of such Common
      Shares,  not  to  exceed nine (9) months or, if sooner, upon completion by
      Holders  of  the  contemplated  distribution;

            (c) Furnish to the Holders participating in such registration and to
      the  underwriters of Common Shares being registered such reasonable number
      of  copies  of  the  registration statement, preliminary prospectus, final
      prospectus  and  such  other documents as such underwriters may reasonably
      request  in  order to facilitate the public offering of the Common Shares;

            (d)  Use  its diligent good faith efforts to register or qualify the
      Common  Shares  covered  by  such  registration statement under such state
      securities  or  blue  sky laws of such jurisdictions as such participating
      Holders  may  reasonably  request  in writing within 20 days following the
      original  filing of such registration statement; provided, however, in the
                                                       --------  -------
      case of an Underwritten Public Offering, the managing underwriter will (to
      the  exclusion  of the participation of the Holders) advise SafeGuard with
      respect  to  blue  sky  qualification  and  related  matters;

            (e)  Notify  counsel  for  the  Holders  participating  in  such
      registration,  promptly after it receives notice thereof, of the time when
      such  registration  statement  has become effective or a supplement to any
      prospectus  forming  a part of such registration statement has been filed;


                                        6
<PAGE>
            (f)  Notify  counsel for such Holders promptly of any request by the
      Commission for the amending or supplementing of the registration statement
      or  prospectus  or  for  additional  information;

            (g)  Prepare and file with the Commission, promptly upon the request
      of  any  Holders,  any  amendments  or  supplements  to  the  registration
      statement  or prospectus which, in the opinion of counsel for such Holders
      (and  concurred  in  by  counsel  for  SafeGuard),  is  required under the
      Securities  Act or the rules and regulations thereunder in connection with
      the  distribution  of  the  Common  Shares,  other  than  an  amendment or
      supplement  required solely as a result of a change by such Holders in the
      method  of  distribution  of  the  Common  Shares;

            (i)  Prepare  and  promptly  file  with  the Commission and promptly
      notify  counsel  for  the  Holders  of  the  filing  of  such amendment or
      supplement to the registration statement or prospectus as may be necessary
      to  correct  any statements or omissions if, at the time when a prospectus
      relating  to  such  Common  Shares  is  required to be delivered under the
      Securities  Act,  any  event  other  than  a  change  in  the  method  of
      distribution  of  the  Common Shares selected by a Holders has occurred as
      the result of which any such prospectus or any other prospectus as then in
      effect  would include any untrue statement of a material fact or omit to '
      state  any  material fact necessary to make the statements therein, in the
      light  of  the  circumstances in which they were made, not misleading; and

            (j)  Not  file  any  amendment  or  supplement  to  the registration
      statement  or  prospectus  if, in the opinion of counsel for such Holders,
      the  amendment or supplement does not comply in all material respects with
      the  requirements  of  the  Securities  Act  or  the rules and regulations
      thereunder,  after  having been furnished with a copy substantially in the
      form  thereof  at  least  two  business  days prior to the filing thereof,
      provided, however,  if in the opinion of counsel for SafeGuard, the filing
      --------  -------
      of  the  amendment  or  supplement  is  reasonably  necessary  to  protect
      SafeGuard  from  any liabilities under any applicable federal or state law
      and  the  filing  will not violate applicable law, SafeGuard may make such
      filing.

     2.6     RELATED REGISTRATION MATTERS.  SafeGuard shall use its best efforts
             -----------------------------
to  enter  into  an  underwriting  agreement in connection with any registration
subject  to the provisions of thisArticle II in which any Holder's Common Shares
is  included, which agreement will contain such terms, provisions and agreements
as  are  customary and appropriate for such registration. In connection with any
Underwritten  Public  Offering in which any Holder's Common Shares are included,
to  the  extent  not  provided  in  the  underwriting, agreement related to such
offering,  SafeGuard  will  use  its  best  efforts  to:


            (a)  List  the  shares of Common Shares included in such offering on
      any  national  securities  exchange  or  stock  market on which the Common
      Shares  is  approved  for  listing;

            (b)  Engage  a  bank  or  other company to act as transfer agent and
      registrar  for  the  Common  Shares;


                                        7
<PAGE>
            (c)  Cause  customary  opinions  of  counsel,  comfort  letters  of
      accountants,  and  other  appropriate  documents  to  be  delivered  by
      representatives  of  SafeGuard;  and

            (d)  As  soon  as  practicable  after  "the  effective  date  of the
      registration  statement"  (within  the  meaning  of  Rule  158  under  the
      Securities  Act),  and,  in  any  event, within 16 months thereafter, make
      "generally  available  to  its  securities holders" (within the meaning of
      Rule  158  under the Securities Act) an earnings statement (which need not
      be  audited)  complying  with  Section  II(a)  of  the  Securities Act and
      covering  a  period  of at least 12 consecutive months beginning after the
      effective  date  of  the  registration  statement.

     2.7     INDEMNIFICATION AND CONTRIBUTION.
             ---------------------------------

            (a)  In the case of each registration effected by SafeGuard pursuant
      to  this  Agreement  in  which  any  Holder's  Common  Shares is included,
      SafeGuard agrees to indemnify and hold harmless such Holder, including its
      Officers  and partners, each underwriter of the shares of Common Shares so
      registered  and  each  person who controls any such underwriter within the
      meaning  of  Section 15 of the Securities Act, against any and all losses,
      claims,  damages  or  liabilities  to which they or any of them may become
      subject  under  the  Securities  Act  or  any other statute or common law,
      including  any  amount  paid in settlement of any litigation, commenced or
      threatened,  and  to  reimburse  them  for  any  reasonable legal or other
      reasonable  expenses incurred by them in connection with the investigation
      of  any  claims  and defenses of any actions (subject to subsection (c) of
      this  Section  2.7  ,  insofar  as  any  such  losses,  claims,  damages,
            ------------
      liabilities  or  actions  arise  out  of  or  are  based  upon: any untrue
      statement  or alleged untrue statement of a material fact contained in the
      registration  statement,  any  preliminary  prospectus or final prospectus
      contained therein, or any amendment or supplement thereto, or the omission
      or alleged omission to state therein a material fact required to be stated
      therein  or  necessary  to  make  the  statements  therein not misleading;
      provided, however,  notwithstanding  the foregoing, SafeGuard may agree to
      --------  -------
      indemnify  each  such  underwriter  and  person  who  so  controls  such
      underwriter  to  such  other extent as SafeGuard and such underwriter will
      agree;  and  provided further, however, that the indemnification agreement
                   -------- -------  -------
      contained  in  this  subsection  (a)  will  not  (1) apply to such losses,
      claims, damages, liabilities or actions arising out of, or based upon, any
      such untrue statement or alleged untrue statement, or any such omission or
      alleged  omission, if such statement or omission was made in reliance upon
      and  in conformity with information furnished to SafeGuard in writing by a
      Holder  or such underwriter claiming rights of indemnification pursuant to
      this Section 2.7 for use in connection the preparation of the registration
           -----------
      statement  or  any preliminary prospectus or final prospectus contained in
      the  registration  statement  or  any such amendment thereof or supplement
      thereto; (2) inure to the benefit of any underwriter (or to the benefit of
      any  person  controlling  such underwriter) from whom the person asserting
      any  such  losses,  claims, damages, expenses or liabilities purchased the
      securities  which  are  the subject thereof, if such underwriter failed to
      send  or  give  a  copy  of  the  final  prospectus,  as  then  amended or
      supplemented,  to  such  person  and  if  the untrue statement or omission
      alleged  had  been corrected in such final prospectus; or (3) inure to the
      benefit  of  any  person  to  the  extent  such  person's.  claim  for
      indemnification  hereunder  arises  out of or is based on any violation by
      such  person  of  applicable  law.


                                        8
<PAGE>
            (b)  In the case of each registration effected by SafeGuard pursuant
      to  this  Agreement  in which any Holder's Common Shares is included, such
      Holder will be obligated, and will cause each underwriter of the shares of
      Common  Shares  to be registered on behalf of such person (each Holder and
      such  underwriters  being  referred to severally in this subsection (b) as
      the  "INDEMNIFYING PERSON") to be obligated, in the same manner and to the
      same  extent  as  set  forth  in  subsection  (a)  of this Section 2.7. to
                                                                 -----------
      indemnify  and  hold  harmless  SafeGuard  and  each  person,  if any, who
      controls SafeGuard within the meaning of Section 15 of the Securities Act,
      its  directors,  officers,  partners,  accountants and legal counsel, with
      respect  to  any  statement or alleged untrue statement in, or omission or
      alleged  omission  from, such registration statement or any post-effective
      amendment  thereof  or  any preliminary prospectus or final prospectus (as
      amended  or  supplemented,  if  amended  or  supplemented  as  aforesaid)
      contained  in  such  registration statement, if such statement or omission
      was  made in reliance upon and in conformity with information furnished in
      writing  to  SafeGuard  by  such indemnifying person for use in connection
      with  the  preparation  of  such registration statement or any preliminary
      prospectus or final prospectus contained in such registration statement or
      any  such  amendment thereof or supplement thereto; provided, however, the
                                                          --------  -------
      liability  of  each  Holder  hereunder  is  limited  to the gross proceeds
      received  by  each  Holder  from the sale of Common Shares covered by such
      registration  statement,  amendment, supplement or prospectus, as the case
      may  be.

            (c) Each person to be indemnified pursuant to this Section 2.7 will,
                                                               -----------
      promptly  after  its  receipt of written notice of the commencement of any
      action  against  such indemnified person in respect of which indemnity may
      be  sought  from an indemnifying person under this Section 2.7, notify the
                                                         -----------
      indemnifying  person  in  writing  of  the  commencement  thereof.  The
      indemnifying  person  will  assume  the  defense  thereof  with  counsel
      reasonably  satisfactory to such indemnified person and assume the payment
      of  all  fees  and expenses. In any such proceeding, the indemnified party
      may  retain its own counsel, but the fees and expenses of the counsel will
      be  at  the  indemnified party's expense, unless (1) the indemnified party
      has  employed  counsel  in  an  action  in which the indemnified party and
      indemnifying party are both defendants and there is a conflict of interest
      between  such  parties  that  would  prevent  counsel  from  adequately
      representing  both  parties,  as  determined by counsel to the indemnified
      person,  (2)  the indemnifying party has not employed counsel satisfactory
      within  the  exercise  of  reasonable judgment of the indemnified party to
      represent  the indemnified party within a reasonable time after the notice
      of  the  commencement  of  the  action,  or (3) the indemnifying party has
      authorized  the  employment  of  counsel  for the indemnified party at the
      expense  of  the  indemnifying  party.  The  undertaking contained in this
      Section 2.7 is in addition to any liabilities that the indemnifying person
      -----------
      might  have pursuant to law. No indemnifying party will, without the prior
      written  consent  of  the  indemnified party, effect any settlement of any
      pending or threatened proceeding in respect of which any indemnified party
      is  or  could have been a party and indemnity could have been sought under
      this Agreement by the indemnified party, unless the settlement includes an
      unconditional  release of the indemnified party from all liability arising
      from  the  proceeding.


                                        9
<PAGE>
            (d)  If the indemnification provided for in this Section 2.7 is held
                                                             -----------
      by  a  court of competent jurisdiction to be unavailable to an indemnified
      party  with  respect  to  any  loss,  liability, claim, damage, or expense
      referred  to therein, then the indemnifying party, in lieu of indemnifying
      such  indemnified  party  hereunder, will contribute to the amount paid or
      payable  by  such  indemnified  party as a result of such loss, liability,
      claim,  damage, or expense in such proportion as is appropriate to reflect
      the  relative  fault  of the indemnifying party on the one hand and of the
      indemnified  party  on  the  other  in  connection  with the statements or
      omissions that resulted in such loss, liability, claim, damage, or expense
      as well as any other relevant equitable considerations. The relative fault
      of  the indemnifying party and of the indemnified party will be determined
      by  reference to, among other things, whether the untrue or alleged untrue
      statement  of  a  material  fact  or the omission to state a material fact
      relates  to  information  supplied  by  the  indemnifying  party or by the
      indemnified  party  and the parties' relative intent, knowledge, access to
      information,  and  opportunity  to  correct  or  prevent such statement or
      omission.

            (e) Notwithstanding the foregoing, to the extent that the provisions
      on indemnification and contribution contained in an underwriting agreement
      entered  into  in  connection with the underwritten public offering are in
      conflict with the foregoing provisions, the provisions of the underwriting
      agreement will control.

     2.8     INFORMATION BY HOLDERS.  Each Holder requesting Registrable
             -----------------------
Securities  to  be  included in any registration shall furnish to SafeGuard such
information  regarding  such Holder and the distribution proposed by such Holder
as  SafeGuard  may  request and as is reasonably required in connection with any
registration,  qualification  or  compliance  described  in  this  Article  II.

2.9     RULE 144 REPORTING.  With  a  view to making available to the Holder the
        -------------------
benefits  of certain rules and regulations of the Commission that may permit the
sale of the Registrable Securities to the public without registration, SafeGuard
will:

            (a) Commission Reports.  File with the Commission in a timely manner
                ------------------
      all  reports  and  other  documents  thereafter  required  of SafeGuard if
      SafeGuard  is  or becomes subject to the reporting requirements of Section
      13  or  15(d)  of  the  Exchange  Act;  and

            (b) Other Information.  Furnish  to  each  Holder  promptly upon its
                -----------------
      request  the  following  information:

                  (1)  A  written  statement  by  SafeGuard  as  to  SafeGuard's
            compliance  with  the  public information requirements of Commission
            Rule  144 (at any time after 90 days after SafeGuard becomes subject
            to the reporting requirements of Section 13 or 15(d) of the Exchange
            Act),

                  (2)  A  copy  of the most recent annual or quarterly report of
            SafeGuard,  and


                                       10
<PAGE>
                  (3)  Such  other reports and documents filed by SafeGuard with
            the Commission as may be reasonably requested in availing any Holder
            of  any  rule or regulation of the Commission permitting the sale of
            any  such  securities  without  registration.

     2.10     TRANSFER OF REGISTRATION RIGHTS.  The rights to cause SafeGuard to
              --------------------------------
register  securities  under this Article II may be assigned following receipt by
                                 ----------
SafeGuard  of  notice  of the proposed transfer by any Holder to any assignee or
transferee  of  the  Common  Shares  issued upon conversion of the Note who also
qualifies  as a Holder; provided that: (a) the transfer is otherwise be effected
in  accordance  with  registration requirements imposed by applicable securities
laws,  and  (b)  the  transferee  agrees  to  be  bound  by  this  Agreement.

     2.11     NOTICE OF SALE INFORMATION.Any notice from a Holder of Registrable
              ---------------------------
Securities requesting registration of some or all of such Registrable Securities
pursuant  to  this  Article  II  will:

            (a)  Specify the number of shares of Registrable Securities intended
      to  be  included  in  such  registration;

            (b)  Describe  the  nature  and  method of the proposed offering and
      sale;

            (c)  Include an undertaking to provide all information and materials
      concerning  such  Holder  and  the  method of distribution and to take any
      other  actions  reasonably  requested  by SafeGuard to enable SafeGuard to
      comply  with  the  Securities  Act,  any  state  securities law and/or the
      applicable  requirements  of  the  Commission  or  any  state  securities
      commissioner  or  similar  agency  or  official;  and

            (d) If such Holder is not a party to this Agreement, include such
      Holder's  agreement  to  be  bound  by  the  provisions  of this Agreement
      applicable  to  Holders  of  Registrable  Securities.

     2.12     SUSPENSION.   SafeGuard  may  suspend  the  Holders'  further
              -----------
disposition  of  Registrable  Securities  by notifying the Holders of a state of
facts or the occurrence of any event (including pending negotiations regarding a
transaction  that  might  require SafeGuard's disclosure of additional material,
non-public  information  in  its  registration  statement,  for  which SafeGuard
believes  in  good  faith  it  has  a  bona fide business purpose for preserving
confidentiality  or  circumstances  which render SafeGuard unable to comply with
the  published  rules and regulations of the Commission under the Securities Act
or  the  Exchange  Act)  which  might reasonably cause a legal deficiency in the
registration  statement  or  the  prospectus  issued  under  the  registration
statement.  SafeGuard  shall deliver amended disclosure materials to the Holders
within  15 days following this notice. At its request, the Holders shall deliver
to  SafeGuard  all  copies  in  their possession of the prospectus covering such
Registrable Securities that was current when they received the notice. SafeGuard
may  not,  without  the  Holders'  consent,  suspend  disposition of Registrable
Securities  for  more  than  90  calendar  days in any rolling twelve (12) month
period.


                                       11
<PAGE>
                         ARTICLE III.     MISCELLANEOUS
                                          -------------

     3.1     REMEDIES. Each  party  hereto acknowledges that a remedy at law for
             ---------
any breach or attempted breach of this Agreement will be inadequate, agrees that
each  other  party hereto is entitled to specific performance and injunctive and
other  equitable  relief  in  case  of  any such breach or attempted breach, and
further  agrees to waive any requirement for the securing or posting of any bond
in  connection  with the obtaining of any such injunctive or any other equitable
relief.

     3.2     EFFECT  OF  SALE.  Any  Holder  who  sells  all  of  his  Note  and
             -----------------
Registrable  Securities pursuant to the terms of this Agreement will cease to be
a  party  to  this  Agreement  and  will  have  no further rights or obligations
hereunder.

     3.3     AMENDMENT.  This  Agreement  may be amended from time to time by an
             ----------
instrument  in writing signed by SafeGuard and Holders of a majority of the then
outstanding  Registrable  Securities.

     3.4     NOTICES.  Any  notice,  request,  reply  instruction  or  other
             --------
communication  (herein  severally  and  collectively  called  "NOTICE")  in this
Agreement  provided  or permitted to be given to SafeGuard or to any Holder must
be  given  in  writing and may be given or served by overnight delivery service,
depositing  the  same in the United States mail, in certified or registered form
postage  fully  prepaid,  addressed to the party or parties to be notified, with
return  postage  fully  requested,  or  by delivering the same in person to such
party  or  parties.  Notice  deposited  in the United States mail, mailed in the
manner  hereinabove  described,  will be effective upon deposit. Notice given in
any  other manner will be effective only if and when received by the party to be
notified.  For purpose of notice hereunder, until notice is given of a change of
address, the address of SafeGuard will be 95 Enterprise, Suite 100, Aliso Viejo,
California 92656-2605, and the address of Holder will be the address hereinafter
set  forth  on  the  signature  page.

     3.5     LEGAL MATTERS.
             --------------

            (a) Jurisdiction; Venue.  The  laws of the State of Delaware and the
                -------------------
      federal  laws of the United States of America, excluding the laws of those
      jurisdictions  pertaining to the resolution of conflict with laws of other
      jurisdictions,  govern  the  validity,  construction,  enforcement,  and
      interpretation  of  this  Agreement.

            (b) Costs.  In  any  legal  proceeding  between SafeGuard and Holder
                -----
      arising  out  of  this  Agreement,  the  losing  party shall reimburse the
      prevailing  party,  on  demand,  for  all reasonable costs incurred by the
      prevailing  party  in enforcing, defending, or prosecuting this Agreement.

     3.6     SUCCESSORS AND ASSIGNS.  This  Agreement is binding upon and inures
             -----------------------
to  the  parties  contained  in  this  Agreement  and  their  respective  heirs,
executors,  distributees,  successors  (including  successors  by  merger)  and
permitted  assigns.

     3.7     INVALID PROVISIONS.   Should  any  portion  of  this  Agreement  be
             -------------------
adjudged  or  held  to  be invalid, unenforceable or void, such holding will not
have  the  effect of invalidating or voiding the remainder of this Agreement and
the parties hereby agree that the portion so held invalid, unenforceable or void
will,  if  possible,  be  deemed amended or reduced in scope, or to otherwise be
stricken from this Agreement to the extent required for the purposes of validity
and  enforcement  thereof.


                                       12
<PAGE>
     3.8     SECTION HEADINGS.  The  section  and  paragraph  headings contained
             -----------------
herein  are  for  reference  purposes  only  and  will not in any way affect the
meaning  and  interpretation  of  this  Agreement.

     3.9     EXECUTION IN COUNTERPARTS.  This  Agreement  may be executed in any
             --------------------------
number  of  counterparts,  each  of which when so executed and delivered will be
deemed  an  original,  and  such  counterparts together will constitute only one
instrument.

     3.10     ADJUSTMENTS.  In the event SafeGuard declares a stock split, stock
              ------------
dividend or other distribution of capital stock in respect of, or issues capital
stock  in  replacement  of or exchange for, shares of Common Shares, such shares
will  be  subject  to  this  Agreement,  and  the  provisions  of this Agreement
providing  for  calculations based on the number of shares of Common Shares will
include  the  shares  issued  in  respect  of  the  Common Shares and the shares
converted  into  Common  Shares  from  the  Note.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)


                                       13
<PAGE>
                          REGISTRATION RIGHTS AGREEMENT

                                 SIGNATURE PAGE

The  undersigned  execute  the  Registration Rights Agreement and authorize this
signature  page  to  be  attached  to  a  counterpart of the Registration Rights
Agreement  executed  by  the other parties to the Registration Rights Agreement.

Executed as of the day and year first above written.


                                "SAFEGUARD"

                                SAFEGUARD HEALTH ENTERPRISES, INC.,
                                a Delaware corporation




                                By:  /s/ James E. Buncher
                                     --------------------
                                     James E. Buncher
                                     President and Chief Executive Officer




                                By:  /s/ Ronald I. Brendzel
                                     ----------------------
                                     Ronald I. Brendzel
                                     Senior Vice President and Secretary


                                       14
<PAGE>
                          REGISTRATION RIGHTS AGREEMENT

                                 SIGNATURE PAGE

The  undersigned  executes  the Registration Rights Agreement and authorize this
signature  page  to  be  attached  to  a  counterpart of the Registration Rights
Agreement  executed  by  the other parties to the Registration Rights Agreement.

Executed  as  of  the  day  and  year  first  above  written.

                                "HOLDER"



                                /s/ Jack R. Anderson
                                ------------------------------------------------
                                Jack R. Anderson
                                16495 Dallas Parkway
                                Suite 735
                                Addison, TX  75001


                                       15
<PAGE>