Document:

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this "AGREEMENT") is entered into as of
August  30,  2002, by and between SafeGuard Health Enterprises, Inc., a Delaware
corporation  ("SAFEGUARD"),  and  Nicholas M. Kavouklis, DMD, a Florida resident
("HOLDER").

                                   BACKGROUND
                                   ----------

     On  the  date  of  this Agreement, Holder acquired 769,231 shares of Common
Stock  of SafeGuard pursuant to a Stock Purchase Agreement dated as of April 24,
2002,  among  SafeGuard,  Holder,  and  Paramount  Dental  Plan, Inc., a Florida
corporation  (the "STOCK PURCHASE AGREEMENT").  In addition, on the date of this
Agreement,  Holder  acquired  a Secured Convertible Promissory Note of SafeGuard
(the  "NOTE")  in  the principal amount of $2,625,000, which is convertible into
Common  Stock  of SafeGuard.  SafeGuard agreed to grant registration rights with
respect  to  the  Common  Stock  of  SafeGuard owned by Holder and 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 I.  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 Nicholas M. Kavouklis, DMD, and each subsequent holder
           ------
of  the  Note (or portion of the Note) or shares of Common Stock issued pursuant
to  the  Stock  Purchase  Agreement  or  on  conversion  of  the  Note.

          "Registrable  Securities" means (i) the 769,231 shares of Common Stock
           -----------------------
of  SafeGuard held by Holder on the date hereof (the "EXISTING SHARES") (ii) any
Conversion Shares that may be issued pursuant to the conversion of the Note, and
(iii)  any  Common Stock issued as a dividend or other distribution with respect
to  or  in  exchange  for or in replacement of the Existing Shares or Conversion
Shares.

<PAGE>
          "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.

          "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

<PAGE>
     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  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

<PAGE>
          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)     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

<PAGE>
          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.

          (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

<PAGE>
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
under  Section  2.1.
       ------------

     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  to Section 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 II 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;

<PAGE>
          (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;

          (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;

          (h)     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

          (i)     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 this Article 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:

<PAGE>
          (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;

          (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 11(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

<PAGE>
     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.

          (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

<PAGE>
     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.

          (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

<PAGE>
          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

               (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  Holder's  Common Shares or or 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

<PAGE>
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.

     2.13     OTHER REGISTRATION RIGHTS.  SafeGuard represents and warrants that
              -------------------------
it  is  not  a  party  to, or otherwise subject to, any other agreement granting
registration  rights  to  any  other  person  with  respect to any securities of
SafeGuard,  other  than that certain Registration Rights Agreement dated January
31,  2002,  between  SafeGuard  and  certain of its stockholders listed therein.
SafeGuard  shall not grant to any other person the right to request SafeGuard to
register  any  equity  securities  of  SafeGuard,  or  securities convertible or
exchangeable for such securities that are superior in rights to the registration
rights  granted  to  the  Holders  under  this  Agreement.

                              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 Florida 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. The exclusive venue for all actions to

<PAGE>
     enforce or interpret the provisions of this Agreement will be courts of the
     State  of  Florida  or  of  the  United  States  having  jurisdiction  over
     Hillsborough  County,  Florida. All parties irrevocably waive any objection
     they  may  have  to  the  laying of venue of any suit, action or proceeding
     arising  out  of  or relating hereto brought in any such court, irrevocably
     waives  any  claim  that any such suit, action or proceeding so brought has
     been  brought  in  an  inconvenient  forum, and further waives the right to
     object that such court does not have jurisdiction over such party. No party
     will bring a suit, action or proceeding in respect of this Agreement in any
     other  jurisdiction.

          (b)     WAIVER  OF  JURY  TRIAL.  SAFEGUARD  AND  HOLDER  KNOWINGLY,
                  -----------------------
     VOLUNTARILY,  AND  INTENTIONALLY  WAIVE  ALL  RIGHTS TO A JURY TRIAL IN ANY
     LAWSUIT,  PROCEEDING,  COUNTERCLAIM,  OR  OTHER LITIGATION ARISING UNDER OR
     RELATING  TO  THIS  AGREEMENT.

          (c)     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.

     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)

<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

<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/ Nicholas M. Kavouklis, DMD
                                           -------------------------------------
                                           Nicholas  M.  Kavouklis,  DMD
                                           1102  West  Cass  Street
                                           Tampa,  Florida  33606

<PAGE>EMPLOYMENT AGREEMENT

     This Employment Agreement ("AGREEMENT") is effective as of the Closing Date
of  the  Stock  Purchase Agreement ("PURCHASE AGREEMENT") among Paramount Dental
Plan,  Inc.,  a Florida corporation ("PARAMOUNT"), SafeGuard Health Enterprises,
Inc.,  a  Delaware  corporation  ("SAFEGUARD"),  and  Nicholas M. Kavouklis, DMD
("EMPLOYEE")  which date shall be inserted into this Agreement at the end hereof
(the  "EFFECTIVE  DATE").  Capitalized  terms  not  otherwise  defined  in  this
Agreement  correspond  to  the  defined  terms  in  the  Purchase  Agreement.

     SafeGuard  desires the benefits of Employee's knowledge and experience as a
full-time  employee  of  SafeGuard. Employee desires to be employed full time by
SafeGuard.  SafeGuard  and Employee desire to enter into an agreement reflecting
the terms under which SafeGuard will employ Employee as President and a Director
of  SafeGuard  Health  Plans,  Inc.,  a  Florida  corporation and a wholly-owned
subsidiary  of  SafeGuard  ("SAFEGUARD  FLORIDA")  responsible  for  the Florida
Market,  as  defined  in Section 3.2. Therefore, SafeGuard and Employee agree to
                         -----------
the  following  terms  and  conditions:

1.     EMPLOYMENT  SERVICES  AND  DUTIES.  SafeGuard agrees to employ and retain
the  full-time  services  of  Employee  and  Employee  hereby  agrees  to accept
full-time  employment with SafeGuard as President of SafeGuard Florida under the
terms  of  this  Agreement.  Employee will also serve as a Director of SafeGuard
Florida.  Employee  agrees  to  faithfully perform his duties as President and a
Director  of  SafeGuard  Florida,  to  the  best  of his ability and in the best
interests of SafeGuard Florida.  Employee's duties and responsibilities shall be
commensurate with those customarily associated with the other vice presidents of
SafeGuard  responsible  for  its  other  target  markets.

2.     TERM  OF  EMPLOYMENT.  The  term  of this Agreement shall commence on the
Effective  Date and shall continue until the earlier of the third anniversary of
the  Effective  Date,  the  date of Employee's death or Permanent Disability (as
defined  in  Section 6.2.3), or the date of termination pursuant to Section 6 or
             -------------                                          --------
7.
-

3.     COMPENSATION  TERMS.  SafeGuard  agrees  to  compensate  Employee for his
services  rendered  under  this  Agreement  as  follows:

     3.1     Base Salary.  As of the Effective Date and for the remainder of the
             ------------
term  of  employment, Employee shall receive a base salary of Two Hundred Thirty
Thousand  Dollars ($230,000) per year, payable in equal periodic installments in
accordance  with  SafeGuard's  normal  payroll  policy  (the  "BASE  SALARY").

     3.2     Florida  Market.  For  purposes  of  this  Agreement,  the "Florida
             ----------------
Market"  means  the  members  of  any  of  SafeGuard's  dental HMO subsidiaries,
including Paramount, that are enrolled with a general dentist located in Florida
or  Illinois,  or who have not selected a general dentist, but reside in Florida
or  Illinois,  and  all of the groups written by SafeGuard's indemnity insurance
subsidiary  whose  contracts  are  based  in  the  states  of Delaware, Georgia,
Florida,  Illinois,

<PAGE>
Kentucky,  Maryland,  Ohio,  South  Carolina,  Pennsylvania,  and  Wisconsin.
Additional  states  may  be added to the Florida Market from time to time at the
sole  discretion  of  SafeGuard.

     3.3     Bonuses.
             -------

          3.3.1     Employee  shall  be entitled to an annual bonus of up to Two
     Hundred  Seventy  Thousand Dollars ($270,000) each calendar year. The bonus
     earned  shall  be equal to Twenty Percent (20%) of the increase, if any, in
     the  Florida  Market's  earnings  before  interest and income and franchise
     taxes  ("EBIT") (with each component of EBIT to be calculated in accordance
     with  U.S.  generally  accepted accounting principles consistently applied)
     for  the  current  calendar  year  compared  to the prior calendar year. An
     example  of  the methodology to be used by the parties to calculate EBIT is
     set  forth on Exhibit A to this Agreement. The bonus determined pursuant to
                   ---------
     this  Section  3.3  shall  be  payable  as  provided  in  this Section 3.3.
           ------------                                             -----------

          3.3.2     For  purposes  of  this  Agreement,  EBIT  shall include all
     revenue  and  direct  health  care  expenses  directly  attributable to the
     members  enrolled  in plans in the Florida Market and all other expenses of
     SafeGuard  that  are incurred solely for the benefit of the Florida Market,
     including  but  not  limited to, any salary, bonus, and other benefits paid
     pursuant  to this Section 3.3. The calculation of EBIT for any period prior
                       -----------
     to  the Effective Date shall include the operations of Paramount, excluding
     any  extraordinary  bonuses  paid  to  Employee  in  such  period, any note
     forgiveness  provided  to  Employee  in  such period, and any out-of-pocket
     expenses  directly related to the transactions contemplated by the Purchase
     Agreement,  including  but  not  limited  to,  the  Stay Bonuses, severance
     payments,  and  legal  fees.

          3.3.3     In  the  event  an  administrative  function is performed by
     SafeGuard Florida or Paramount for the Florida Market on the Effective Date
     but  is  thereafter  transferred  to SafeGuard's corporate services center,
     SafeGuard  will  charge  to  the  Florida  Market  an  administrative  fee
     attributable  to  such  function  that will not exceed the cost incurred by
     SafeGuard  to  perform  such function. SafeGuard will allocate costs to the
     Florida Market in good faith and in a manner consistent with the allocation
     of  costs  for  purposes  of  the  audited  financial  statements  of  its
     subsidiaries  and  regulatory  purposes.

          3.3.4     EBIT  for  2001  shall be prorated over the number of months
     this  Agreement is in effect for the 2002 calendar year. If the transaction
     represented by the Purchase Agreement closes by November 30, 2002, the base
     for determining the increase in EBIT subject to bonus for the 2002 calendar
     year,  shall  be  1/12th of the combined Paramount and SafeGuard's EBIT for
     the  Florida Market for the 2001 calendar year (as adjusted by this Section
                                                                         -------
     3.3)  times  the  number of full months remaining in the 2002 calendar year
     ---
     after  the  Closing  Date.  Actual EBIT for the Florida Market for the same
     remaining months of the 2002 calendar year will be compared for purposes of
     this  partial  year  calculation.  The same concept will apply in the final
     year  if  a  partial  calendar year under the Agreement. The annual maximum
     bonus  will  also  be  so prorated, based on the number of months worked by
     Employee  in  the  calendar  year.

<PAGE>
          3.3.5     For  purposes  of  computing any bonus to be paid under this
     Section  3.3,  unless SafeGuard and Employee agree otherwise, EBIT shall be
     ------------
     adjusted  for  any  acquisitions or divestitures that occur. Any adjustment
     for  an  acquisition  shall  be  made  by  combining  the operations of the
     acquisition  that  relate  to the Florida Market with the operations of the
     Florida Market for purposes of determining EBIT for the calendar year prior
     to  the  calendar  year  in  which  the transaction occurs and EBIT for the
     calendar  year  in  which  the  transaction  occurs.  Any  adjustment for a
     divestiture shall be made by disregarding the operations of the divestiture
     that  relate to the Florida Market for purposes of determining EBIT for the
     calendar  year  prior  to the calendar year in which the transaction occurs
     and  the  EBIT  for  the  calendar  year  in  which the transaction occurs.

          3.3.6     SafeGuard  shall  pay  the  bonus  to Employee within thirty
     (30)  days  after  the issuance of SafeGuard's audited financial statements
     for  the  prior  year  (but in any event, not later than one hundred twenty
     (120)  days  after  SafeGuard's  year-end),  subject  to applicable federal
     income  tax  withholding,  and shall deliver to Employee with the payment a
     complete  and  accurate  statement  showing how EBIT was calculated for the
     year  (the  "EBIT  STATEMENT").  Employee  shall have the right, at its own
     expense, upon reasonable notice and during normal business hours, to have a
     representative  examine  SafeGuard's  and  SafeGuard  Florida's  books  and
     records  for  the  purpose of verifying the accuracy of the EBIT Statement.

     3.4     Benefits.  Subject  to satisfaction of all eligibility requirements
             ---------
that  are  applicable  to  executive  employees  of  SafeGuard, Employee and his
dependents shall be entitled to and shall receive any and all benefits generally
available  to  executive  employees  of  SafeGuard,  including  participation in
health,  dental,  vision,  life  insurance  and  retirement  plans.

     3.5     Indemnification.  SafeGuard  shall  indemnify  Employee to the same
             ----------------
extent  as  SafeGuard  indemnifies  its  officers  and directors, as provided in
SafeGuard's  by-laws  on  the  date  of  this Agreement.  This Section 3.5 shall
                                                               -----------
survive  a  termination  of  this  Agreement.

4.     EXPENSES.  SafeGuard  authorizes  Employee  to  incur  reasonable  and
necessary  expenses for promoting the business of SafeGuard Florida according to
the policies of SafeGuard  applicable to executives of SafeGuard.  Such expenses
will  be  reimbursed upon submission of properly supported expense reports which
are  subject to the approval of SafeGuard's Chief Operating Officer (the "COO"),
which  approval  will  not  be  unreasonably  withheld.

5.     EXTENT  OF  SERVICES;  VACATION.

     5.1     During  the  term  of  Employee's  employment under this Agreement,
except  during customary vacation periods and periods of illness, Employee shall
devote  full-time  energy  and  attention  during  regular business hours to the
benefit  and  business  of  SafeGuard  Florida as may be reasonably necessary in
performing  the  Employee's  duties pursuant to this Agreement.  Notwithstanding
the  foregoing,  the  Employee  may  (i)  serve on corporate, trade association,
civic,  religious  or  charitable  boards  or committees, (ii) deliver lectures,
fulfill  speaking  engagements  or  teach at educational institutions, and (iii)
manage  personal  investments,  so long as such activities do not interfere with
the  performance  of  the  Employee's  duties  and  responsibilities  and do not

<PAGE>
create  a  conflict  of  interest.  Employee  shall  pre-clear  with the COO any
speaking  engagements  that  will  discuss SafeGuard or SafeGuard Florida in any
respect.

     5.2     Employee  shall  be  entitled  to  four  (4) weeks of paid vacation
during  any  calendar year and a pro rata portion in the initial and final years
if  partial  years.  Such  vacation shall be taken at such times as are mutually
agreed  upon  by  Employee and the COO.  It is agreed by the parties hereto that
there  shall be no carry-over of unused vacation in excess of two (2) weeks from
any  calendar  year to the next calendar year while this Agreement is in effect.

6.     TERMINATION  BY  SAFEGUARD.

     6.1     SafeGuard may terminate Employee and this Agreement at any time for
any  reason Without Cause upon sixty (60) days advance written notice.  Employee
shall  be  entitled  to  continue  to  receive  his base salary for one (1) year
following the effective date of termination or the remainder of the term of this
Agreement,  whichever  is  less,  paid  in  accordance with SafeGuard's standard
payroll polices and procedures, if (a) Employee is terminated Without Cause, (b)
the  Employee  resigns  his  employment because the Employee is demoted from his
position  as  president of SafeGuard Florida or his responsibilities are reduced
significantly  without  his  prior  consent,  or  (c)  the  Employee resigns his
employment  because  SafeGuard  violates  this  Agreement  and fails to cure the
violation  within  thirty (30) days after notice from Employee.  In addition, in
any  of  such  events, Employee shall be entitled to receive (i) a bonus for the
part of a calendar year up to the effective date of termination if any is earned
under  the  plan  described  in Section 3.3 which shall be paid at the time such
                                -----------
bonus  would  normally  be  paid;  (ii)  any  reimbursement of expenses properly
submitted  pursuant  to Section 4; and (iii) the benefits referred to in Section
                        ---------                                        -------
3.4  to  which Employee has a vested right under the terms and conditions of the
---
benefit  plans  pursuant  to  which  such  benefits  were  granted.

     6.2     SafeGuard  may  terminate  Employee  for  "Cause" which shall mean:

          6.2.1     (a)  Employee's continuing and willful refusal or failure to
     perform any material duty with SafeGuard to the extent of his ability to do
     so  (other  than  any  failure  due to physical or mental incapacity) after
     Employee  has been given (i) written notice specifying in reasonable detail
     the  nature  of  the  duty  that  he failed to perform and referencing this
     provision  of  this  Agreement, and (ii) a reasonable opportunity to comply
     with  such  duty  on  a  going  forward  basis;

          6.2.2     The  commission  by  Employee  of  an  act  of  fraud  or
     embezzlement  or an act in material violation of his duties to SafeGuard or
     the  conviction  of  Employee  of  a  felony;  or

          6.2.3     The  death  or  "Permanent  Disability"  of  Employee.  For
     purposes  of  this  agreement,  Permanent Disability means Employee becomes
     physically  or  mentally  disabled  such that he is substantially unable to
     perform  his  duties under this Agreement and such disability continues for
     three  (3)  consecutive  months.

<PAGE>
Upon a termination under this Section 6.2, Employee shall be entitled to receive
                              -----------
(i)  his  Base  Salary  through  the  effective  date  of  termination; (ii) any
reimbursement  of  expenses  properly submitted pursuant to Section 4; and (iii)
                                                            ---------
the  benefits  referred  to  in Section 3.4 to which Employee has a vested right
                                -----------
under  the  terms  and  conditions  of  the benefit plans pursuant to which such
benefits  were  granted.   No  bonus will be paid for the calendar year in which
the termination occurs, unless such termination is as a result of Section 6.2.3,
                                                                  -------------
in  which  case  Employee shall be entitled to receive a bonus for the part of a
calendar year up to the effective date of the termination if any is earned under
the  plan  described  in Section 3.3, which shall be paid at the time such bonus
                         -----------
would  normally  be  paid.  Termination  of  Employee by SafeGuard other than as
expressly set forth in Section 6.2 for Cause shall be deemed to be a termination
                       -----------
of  employment  by  SafeGuard  "Without  Cause."

     6.3     Notice  of  Termination.  SafeGuard's termination of Employee shall
             ------------------------
be  communicated  by a written notice of termination delivered to Employee.  For
purposes  of  this  Agreement,  the  notice  of  termination  shall  specify the
termination  provision  of this Agreement relied upon to effect such termination
and  shall  set  forth in reasonable detail the specific facts and circumstances
claimed  to provide a basis for termination of Employee as well as the effective
date  of  termination.

     6.4     No  Duty  to  Mitigate.  Employee shall not be required to mitigate
             -----------------------
the  amount  of  any  payment  provided  for  in this Agreement by seeking other
employment  or  otherwise,  and  any  payments  due Employee upon termination of
employment  shall not be reduced in respect of any other employment compensation
received  by  Employee  following such termination; provided, however, that such
                                                    --------  -------
payments  may  be  terminated if SafeGuard shall have provided written notice to
Employee  of his violation of any provision of Section 8 or 9 and such violation
                                               ---------    -
caused  material  damage  to  SafeGuard's  or  SafeGuard  Florida's  business.

7.     TERMINATION  BY  EMPLOYEE.  At  any  time,  upon  sixty (60) days advance
written  notice of termination delivered to SafeGuard's Chief Operating Officer,
Employee  may  voluntarily  terminate  his  employment  with  SafeGuard and this
Agreement.  If  Employee terminates his employment and this Agreement under this
Section  7,  he  will  be  entitled  to  receive (i) his Base Salary through the
----------
effective  date  of  termination;  (ii)  any  reimbursement of expenses properly
submitted  pursuant  to Section 4; and (iii) the benefits referred to in Section
                        ---------                                        -------
3.4  to  which Employee has a vested right under the terms and conditions of the
---
benefit  plans  pursuant to which such benefits were granted.  No prorated bonus
will  be  paid.

8.     CONFIDENTIAL  INFORMATION.  Employee agrees that he shall not, during the
term  of  this  Agreement,  and  for  a  period of three (3) years following its
termination,  absent  SafeGuard's  written  consent,  disclose to any person, or
otherwise  use or exploit any non-public proprietary or confidential information
of SafeGuard  and/or its affiliates, including without limitation trade secrets,
customer  lists,  records  of  research, memoranda, proposals, reports, methods,
processes,  techniques,  non-public  financial  information,  contracts,
negotiations,  business plans and strategies, marketing data or other non-public
information  regarding  SafeGuard  and/or any of its affiliates, their business,
properties  or  affairs ("CONFIDENTIAL INFORMATION") obtained by him at any time
prior  to or subsequent to the execution of this Agreement, except to the extent
required by his performance of his assigned duties for SafeGuard , including its
affiliates.  Upon  termination  of  employment,  Employee  shall  surrender

<PAGE>
all  Confidential  Information and all other property belonging to SafeGuard and
its  subsidiaries,  it  being understood by Employee that such documents are the
sole  property of SafeGuard and that Employee shall not make any copies thereof.
Additionally,  the  terms  and  conditions  of  this  Agreement shall constitute
Confidential  Information  and  shall  not  be  disclosed  by Employee except in
accordance  with  this  Section 8.
                        ---------

9.     NON-COMPETITION  AND  CONFLICTS  OF  INTEREST.

          9.1     Employee.  During  the  term of this Agreement and for two (2)
                  --------
     years  after termination of this Agreement, Employee shall not work for, be
     a  consultant to or provide any direct or indirect services to, nor make or
     cause  to  be made on his behalf, or maintain an investment in any business
     which  is  engaged,  either  in  whole or in part, in any business which is
     competitive  with  or  detrimental  to  any businesses of SafeGuard, or its
     subsidiaries, except that Employee may make or maintain an investment of no
     more than one percent (1%) of any outstanding class of capital stock of any
     publicly  traded  corporation,  provided  such  class  of  capital stock is
     regularly  traded  by  the  public  without  prior  written  permission  of
     SafeGuard. The Non-Competition provisions of this Section 9 shall terminate
                                                       ---------
     immediately  upon  a  default on the Convertible Note issued in conjunction
     with  the  Purchase  Agreement that is not cured within any applicable cure
     period  and  be  of  no  further  force  or  effect  at  any time after the
     expiration  of  the  cure  period  applicable  to  such  default.

          9.2     SafeGuard  and  its  Subsidiaries.  During  the  term  of this
                  ---------------------------------
     Agreement,  SafeGuard  and  its  subsidiaries  other than SafeGuard Florida
     shall  not  directly  or  indirectly  engage  in  a  business similar to or
     competitive with the business of SafeGuard Florida in the State of Florida,
     except  through  SafeGuard  Florida.

10.     TAMPA  RESIDENCE.  The  parties  acknowledge  that  Employee  resides in
Tampa,  Florida.  SafeGuard  agrees  that the principal executive offices of the
Florida  Market  will  be  based  in  Tampa,  Florida  during  the  term of this
Agreement.  Employee  shall  not  be obligated to move his residence from Tampa,
Florida  or  to  travel from Tampa, Florida for extended time periods during the
term  of  this  Agreement.

11.     FACILITIES.  SafeGuard  shall  provide  Employee  with a fully-furnished
office  in  Tampa,  Florida.  The  facilities  shall  be  generally available to
Employee  in the performance of Employee's duties pursuant to this Agreement, it
being  understood  and  contemplated by the parties that all equipment, supplies
and office personnel required in the performance of Employee's duties under this
Agreement  shall  be  provided  by  and  at  the sole expense of SafeGuard.  The
expenses  incurred  in providing such facilities and personnel shall be expenses
of  the  Florida  Market  for purposes of determining EBIT of the Florida Market
pursuant  to  Section  3.
              ----------

12.     SEVERABILITY.  The  provisions  of  this  Agreement are severable.  If a
court  of  competent  jurisdiction determines that any one or more provisions of
this  Agreement is invalid, void, or unenforceable, in whole or in part, it will
be  severed  therefrom.  The  remaining

<PAGE>
provisions  of  this  Agreement  shall then continue in full force without being
impaired  or  invalidated  in  any  way.

13.     ASSIGNMENT;  BINDING  EFFECT.

     13.1     Assignability.  This Agreement may be assigned by SafeGuard to any
              --------------
successor to all or substantially all of the business and/or assets of SafeGuard
or  to  a  wholly-owned  subsidiary  of  SafeGuard,  although an assignment to a
wholly-owned subsidiary will not relieve SafeGuard of its obligations under this
Agreement.  This  Agreement,  intending  to  secure  the  personal  service  of
Employee,  may  not be assigned nor its duties delegated by Employee without the
written  consent  of  SafeGuard.

     13.2     SafeGuard's  Obligation  Upon Assignment or Succession.  SafeGuard
              -------------------------------------------------------
shall  require  any  successor, whether direct or indirect, by purchase, merger,
consolidation  or  otherwise, to all or substantially all of the business and/or
assets of SafeGuard or assignee of this Agreement, to expressly assume and agree
to  perform  this  Agreement  in  the  same  manner  and to the same extent that
SafeGuard would be required to perform it if no such succession had taken place.

14.     SUCCESSORS  AND  ASSIGNS.  This  Agreement shall inure to the benefit of
and  be  binding on the parties and their respective successors and assigns.  If
Employee  should  die,  any  amounts  payable to him hereunder, unless otherwise
provided  for  herein,  shall  be  paid  in  accordance  with  the terms of this
Agreement  to  Employee's devisee, legatee, or other designee or, if there be no
such  designee,  to  Employee's  estate.

15.     ENTIRE  AGREEMENT.  This  Agreement constitutes the entire understanding
between  the  parties  concerning  the  subject  matter  hereof.  This Agreement
supersedes  all  negotiations,  prior  discussions,  and preliminary agreements.
This  Agreement  may not be amended except in a writing executed by Employee and
SafeGuard.

16.     GOVERNING  LAW.  This  Agreement  shall  be governed by and construed in
accordance  with the laws of the State of Florida, regardless of the application
of  conflicts  of  laws  principles.

17.     NOTICES.  All  notices,  requests,  demands  and  other  communication
required  or contemplated under this Agreement, shall be in writing and shall be
deemed  to  have been duly given when delivered personally or when enclosed in a
properly  sealed and addressed envelope, registered or certified, return receipt
requested,  and  deposited,  postage prepaid, in the United States mail, or sent
via  a  recognized overnight delivery service.  Any notice to be given to either
party shall be addressed to the parties' address as set forth herein, or at such
other  address  as  either party may hereafter designate in writing to the other
from  time  to  time.

18.     WAIVER.  No  waiver  of any of the provisions of this Agreement shall be
deemed,  or  shall  constitute,  a waiver of any other provision, whether or not
similar,  nor  shall any waiver constitute a continuing waiver.  No waiver shall
be  binding  unless  executed  in  writing  by  the  party  making  the  waiver.

<PAGE>
19.     CONSTRUCTION.  Whenever  herein  the  singular  number is used, the same
shall  include  the  plural, and the masculine gender shall include the feminine
and  neuter  genders.  The captions, section numbers, article numbers, and index
appearing  in this Agreement are inserted only as a matter of convenience and in
no way define, limit, construe, or describe the scope or intent of such sections
or  articles  of  this  Agreement  nor  in  any  way  affect  this  Agreement.

20.     ARBITRATION.  Any  dispute regarding any aspect of this Agreement or any
act  that allegedly has or would violate any provision of this Agreement must be
submitted to arbitration in Hillsborough County, Florida, in accordance with the
rules  of  the  Judicial  Arbitration  and  Mediations  Service  ("JAMS") as the
exclusive remedy for such claim or dispute.  Either party may invoke this clause
by serving on the other, in writing, a request to arbitrate.  Within thirty (30)
days  thereafter,  either  party  may institute proceedings in superior court to
enforce this clause. If the parties cannot mutually select a judge from the JAMS
panel,  the  superior court shall make the selection.  The decision of JAMS will
be  final  and  binding.  The  prevailing party in any such arbitration shall be
entitled  to  reimbursement  by  the  losing  party for all reasonable costs and
expenses  incurred  in  enforcing  this  Agreement, including but not limited to
reasonable  attorneys'  fees  and  expenses.

                      [SIGNATURES APPEAR ON THE NEXT PAGE.]

<PAGE>
                              EMPLOYMENT AGREEMENT

                                 SIGNATURE PAGE

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

Executed as of August 30, 2002

                                        "SAFEGUARD"

                                        SAFEGUARD HEALTH ENTERPRISES, INC.,
                                        a Delaware corporation

                                        By:  /s/  Stephen  J.  Baker
                                             -----------------------------------
                                             Stephen  J.  Baker
                                             Executive Vice President and Chief
                                             Operating  Officer

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

                                        Address:

                                        95  Enterprise,  Suite  100
                                        Aliso  Viejo,  California  92656-2605
                                        Attention: Executive Vice President and
                                        Chief  Operating  Officer

<PAGE>
                              EMPLOYMENT AGREEMENT

                                 SIGNATURE PAGE

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

Executed as of August 30, 2002

                                             "EMPLOYEE"

                                             /s/  Nicholas M. Kavouklis, DMD
                                             -----------------------------------
                                             Nicholas M. Kavouklis, DMD

                                             -----------------------------------
                                             Address

                                             -----------------------------------
                                             City, State, Zip Code

                                             -----------------------------------
                                             Employee's Social Security Number

<PAGE>
                              EMPLOYMENT AGREEMENT

                                    EXHIBIT A

                          EBIT CALCULATION METHODOLOGY

Attachment  A  is an example of the EBIT calculation for the 2001 calendar year.
The  methodology  used in this example will be used in calculating EBIT for each
subsequent  calendar  year.

<PAGE>

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