-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SAv8h8yQuaLowAn6hdNZN1PAA4/ChsbqFNf7VJVUvjlCzbcHN2Kdv+ZjsLKL6ZHM /RZX48SZC+ORycFBrsWhbw== 0000950134-01-001507.txt : 20010223 0000950134-01-001507.hdr.sgml : 20010223 ACCESSION NUMBER: 0000950134-01-001507 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010215 GROUP MEMBERS: CAI CAPITAL PARTNERS & CO II LP GROUP MEMBERS: CAI PARTNERS & CO II LP GROUP MEMBERS: DANIELS LESLIE B SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SAFEGUARD HEALTH ENTERPRISES INC CENTRAL INDEX KEY: 0000727303 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 521528581 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-35501 FILM NUMBER: 1547864 BUSINESS ADDRESS: STREET 1: 95 ENTERPRISE T CITY: ALISO VIEJO STATE: CA ZIP: 92656-2601 BUSINESS PHONE: 9494254110 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DANIELS LESLIE B CENTRAL INDEX KEY: 0001052559 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 757 FIFTH AVENUE, 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2123192525 MAIL ADDRESS: STREET 1: 757 FIFTH AVENUE, 5TH FL CITY: NEW YORK STATE: NY ZIP: 10153 SC 13D/A 1 d84274asc13da.txt AMENDMENT NO. 1 TO SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 AMENDMENT NO. 1 SAFEGUARD HEALTH ENTERPRISES, INC. (Name of Issuer) COMMON STOCK, $.01 PAR VALUE (Title of Class of Securities) 786444109 (CUSIP Number) DAVID K. MEYERCORD, ESQ. STRASBURGER & PRICE, L.L.P. 901 MAIN STREET, SUITE 4300 DALLAS, TEXAS 75202 (214) 651-4300 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) FEBRUARY 8, 2001 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7(b) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP NO. 786444109 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LESLIE B. DANIELS - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 35,155 ------------------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 8,432,078 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 35,155 WITH: ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 8,432,078 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,467,233 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 24.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- Page 2 of 11 3 SCHEDULE 13D CUSIP NO. 786444109 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON CAI Partners & Company II, Limited Partnership - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Canada - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,780,785 ------------------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 5,649,293 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 2,780,785 WITH: ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 5,649,293 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,430,078 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 24.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- Page 3 of 11 4 SCHEDULE 13D CUSIP NO. 786444109 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON CAI Capital Partners & Company II, Limited Partnership - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Canada - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 5,649,293 ------------------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,780,785 OWNED BY ------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 5,649,293 WITH: ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 2,780,785 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,430,078 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 24.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- Page 4 of 11 5 ITEM 1. SECURITY AND ISSUER. Common Stock, $.01 par value. SafeGuard Health Enterprises, Inc. 95 Enterprise Aliso Viejo, California 92656 ITEM 2. IDENTITY AND BACKGROUND. This amendment is filed by Leslie B. Daniels, CAI Partners & Company II, Limited Partnership, an Ontario limited partnership ("Partners"), and CAI Capital Partners & Company II, Limited Partnership, an Ontario limited partnership ("Capital Partners"). Leslie B. Daniels is a principal of Partners and Capital Partners. On March 1, 2000, SafeGuard Health Enterprises, Inc. (the "Issuer") entered into a Term Sheet Agreement, dated March 1, 2000 (the "Term Sheet Agreement") (a copy of which was attached to the previous report filed by the parties to this amendment) with Partners, Capital Partners, Jack R. Anderson ("Anderson"), Silicon Valley Bank ("Bank"), John Hancock Mutual Life Insurance Company and the other holders of the 7.91% Senior Notes of the Issuer due September 30, 2005 (collectively, "Hancock"), and Steven J. Baileys, D.D.S. ("Baileys") (Partners, Capital Partners, Anderson and Baileys being collectively referred to herein as the "Investors") relating to the lending of funds by the Investors to the Issuer and the subsequent conversion of such loans and other loans to the Company into Convertible Preferred Stock and Convertible Notes of the Issuer. On July 24, 2000, Bank agreed to sell the indebtedness of the Issuer owed to Bank, subject to the terms of the Term Sheet Agreement, to the Investors and certain other parties pursuant to a Loan Document Purchase and Assignment Agreement dated June 30, 2000 (the "Bank Debt Agreement") (a copy of which was attached to the previous report filed by the parties to this amendment). CAI Capital Partners & Company II-C, Limited Partnership, an Ontario limited partnership ("CP II-C") is not included in this amendment because it does not meet the beneficial ownership test detailed in the applicable securities regulations as related to Mr. Daniels, Partners or Capital Partners. This amendment is filed because of the voting securities of the Issuer that certain Investors have now acquired pursuant to the Term Sheet Agreement and Bank Debt Agreement as set forth below in this amendment. (a) Name of Reporting Person -- Leslie B. Daniels (b) Business Address -- 767 Fifth Avenue, 5th Floor New York, NY 10153 (c) Principal occupation -- Principal with CAI Managers & Co., L. P., an investment manager, with offices located at 767 Fifth Avenue, 5th Floor, New York, NY 10153. Page 5 of 11 6 (d) Criminal Convictions -- none (e) Injunctions with respect to federal or state securities laws -- none (f) Citizenship -- U.S.A. (a) Name of Reporting Person -- CAI Partners & Company II, Limited Partnership ("Partners") (b) Business Address -- 767 Fifth Avenue, 5th Floor New York, NY 10153 (c) Principal Business -- Private Investment Fund (d) Criminal Convictions -- None (e) Injunctions with respect to federal or state securities laws -- none (f) Place of Organization -- Ontario limited partnership Partners is an Ontario limited partnership. The sole general partner of Partners is CAI Partners GP & Co., L.P., an Ontario limited partnership (the "Partners General Partner"). The Partners General Partner has five general partners each consisting of corporations controlled by Leslie B. Daniels, Richard J. Schmeelk, Peter M. Gottsegen, Peter G. Restler and Manfred W. Yu, respectively. The Partners General Partner has two limited partners consisting of two corporations controlled by David M. Culver and Mark P. Culver, respectively. (a) Name of Reporting Person -- CAI Capital Partners & Company II, Limited Partnership ("Capital Partners") (b) Business Address -- 767 Fifth Avenue, Fifth Floor New York, NY 10153 (c) Principal Business -- Private Investment Fund (d) Criminal Convictions -- None (e) Injunctions with respect to federal or state securities laws -- none (f) Place of Organization -- Ontario limited partnership Page 6 of 11 7 Capital Partners is an Ontario limited partnership. The sole general partner of Capital Partners is CAI Capital Partners GP & Co., L.P., an Ontario limited partnership (the "Capital Partners General Partner"). The Capital Partners General Partner has five general partners each consisting of corporations controlled by Leslie B. Daniels, Richard J. Schmeelk, Peter M. Gottsegen, Peter G. Restler and Manfred W. Yu, respectively. The Capital Partners General Partner has two limited partners consisting of two corporations controlled by David M. Culver and Mark P. Culver, respectively. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. This amendment is filed because the transactions contemplated by the Term Sheet Agreement and Bank Debt Agreement described in Item 2 above are complete and cover shares of Common Stock of the Issuer (a) beneficially owned by Leslie B. Daniels, (b) issuable upon the full conversion of all loans, preferred stock and notes acquired pursuant to the Term Sheet Agreement and Bank Debt Agreement by Partners, and (c) issuable upon the full conversion of all loans, preferred stock and notes acquired pursuant to the Term Sheet Agreement and Bank Debt Agreement by Capital Partners. See Item 5 below for a complete description of the ownership of the shares currently held and acquired by such parties. The funds used to acquire the shares currently owned by Leslie B. Daniels were personal funds. The funds used to acquire the convertible preferred stock and convertible notes acquired by Partners and Capital Partners pursuant to the Term Sheet Agreement are funds held by such entities for investment. Partners and Capital Partners are private investment funds and were not formed specifically for making the investment in the Issuer. ITEM 4. PURPOSE OF TRANSACTION. The purposes of the transaction are unchanged from the previous filing. Leslie B. Daniels is one of the principals of Partners and Capital Partners (collectively, "CAI"). Mr. Daniels individually will not acquire any voting securities of the Issuer as a result of the transactions contemplated by the Term Sheet Agreement and Bank Debt Agreement. (a) Mr. Daniels does not have any current plans or proposals to acquire any additional securities of the Issuer or to dispose of any securities of the Issuer. (b) CAI and Mr. Daniels do not have any current plans or proposals involving any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries. (c) CAI and Mr. Daniels do not have any current plans or proposals involving the sale or transfer of a material amount of the assets of the Issuer and of its subsidiaries. (d) The board of directors of the Issuer presently consists of seven members, of which four will be individuals designated by the owners of the Investor Senior Loan (as defined in the Term Sheet Agreement), the Series A Preferred Stock and Series A Convertible Notes, as applicable. Page 7 of 11 8 Partners and Capital Partners control collectively more than a majority of such loan/preferred stock/notes. In addition, Mr. Daniels is currently on the Board of Directors of the Issuer. (e) CAI and Mr. Daniels have no current plans or proposals to make any material change in the present capitalization of the Issuer, or the dividend policy of the Issuer. (f) CAI and Mr. Daniels do not have any current plans or proposals to make any other material change in the Issuer's business or corporate structure. (g) CAI and Mr. Daniels do not have any current plans or proposals to make any changes in the Issuer's charter, bylaws or instruments corresponding thereto which may impede the acquisition of control of the Issuer by any person. (h) CAI and Mr. Daniels do not have any current plans or proposals to cause a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association. (i) CAI and Mr. Daniels do not have any current plans or proposals to cause any class of equity securities of the Issuers to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act of 1934. (j) CAI and Mr. Daniels do not have any plans or proposals to take any action similar to any of the items discussed above, except as specifically noted in Items (a) and (d), above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. This amendment covers shares of Common Stock of the Issuer (a) beneficially owned by Leslie B. Daniels, (b) issuable upon the full conversion of all loans, preferred stock and notes acquired pursuant to the Term Sheet Agreement and Bank Debt Agreement by Partners, and (c) issuable upon the full conversion of all loans, preferred stock and notes acquired pursuant to the Term Sheet Agreement and Bank Debt Agreement by Capital Partners. Mr. Daniels is included in this amendment by virtue of his relationship with Partners and Capital Partners. As of December 28, 2000, the Issuer had 4,737,498 shares of Common Stock outstanding. In the transactions contemplated by the Term Sheet Agreement and Bank Debt Agreement, assuming full conversion of the Investor Senior Loan and Series A, B, and D Convertible Notes, the Series A, B, C and D Preferred Stock issued will collectively be convertible into 30,000,000 shares of Common Stock of the Issuer. As a result, assuming the conversion of all such preferred stock issued in the purchase transaction, there will be 34,737,498 shares of Common Stock outstanding (based on the number of shares of common stock of the Issuer outstanding as of December 28, 2000). The current beneficial ownership of securities of the Issuer by Mr. Daniels consists of a total of 37,155 shares of Common Stock held as follows: (a) 14,250 shares held directly by Mr. Daniels and 20,905 shares held by a trust of which Mr. Daniels is a trustee, as to which Mr. Daniels has sole Page 8 of 11 9 voting and dispositive power, and (b) 1,000 shares held by Elizabeth A. Learson, the spouse of Mr. Daniels, and 1,000 shares held by Paul B. Daniels, the brother of Mr. Daniels, as to which Mr. Daniels has shared dispositive power. Such 37,155 shares in the aggregate represent .78% of the shares of common stock of the Issuer currently outstanding and would represent approximately .11% of the shares of common stock of the Issuer outstanding, assuming full conversion of the preferred stock issued pursuant to the Term Sheet Agreement and Bank Debt Agreement as described above. This amendment reflects a total of 8,467,233 shares beneficially owned by Mr. Daniels which represents (a) the 37,155 shares as to which Mr. Daniels currently has beneficial ownership and (b) the 8,430,078 shares issuable upon full conversion of the preferred stock and notes issued to Partners and Capital Partners in the transactions contemplated by the Term Sheet Agreement and Bank Debt Agreement as to which Mr. Daniels will have shared voting and dispositive powers. Mr. Daniels is one of the five principals of Partners and Capital Partners, and as such, has shared voting and dispositive power of the shares acquired by Partners and Capital Partners. Partners now owns Series A, B and C Preferred Stock convertible into a collective 2,780,785 shares of Common Stock of the Issuer. Such shares would represent approximately 8.01% of the outstanding shares of the Common Stock of the Issuer assuming conversion of all the preferred stock and notes issuable pursuant to the Term Sheet Agreement and Bank Debt Agreement. This amendment reflects a total of 8,430,078 shares beneficially owned by Partners which represents the shares issuable upon conversion of all the Series A, B and C Preferred Stock issued to Partners and Capital Partners pursuant to the Term Sheet Agreement and Bank Debt Agreement. Capital Partners now owns Series A, B and C Preferred Stock convertible into a collective 5,649,293 shares of Common Stock of the Issuer. Such shares would represent approximately 16.26% of the outstanding shares of the Common Stock of the Issuer assuming conversion of all the preferred stock and notes issuable pursuant to the Term Sheet Agreement and Bank Debt Agreement. This amendment reflects a total of 8,430,078 shares beneficially owned by Capital Partners which represents the shares issuable upon conversion of all the Series A, B and C Preferred Stock issued to Partners and Capital Partners pursuant to the Term Sheet Agreement and Bank Debt Agreement. Mr. Daniels, Partners and Capital Partners have not effected any transaction involving shares of common stock of the Issuer at any time since more than 60 days prior to the date of this amendment. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Other than the Term Sheet Agreement and Bank Debt Agreement and the relationship of Mr. Daniels as a principal of Partners and Capital Partners, there are no contracts, agreements, understandings or relationships between Mr. Daniels, Partners and Capital Partners except for an Agreement Among Stockholders executed by the Investors, the parties acquiring the Bank's indebtedness pursuant to the Bank Debt Agreement, Hancock, and the Issuer upon consummation of the transactions contemplated by the Term Sheet Agreement and Bank Debt Agreement. The Page 9 of 11 10 Agreement Among Stockholders relates to a voting agreement consistent with the terms of the Term Sheet Agreement and certain drag-along rights for Partners, Capital Partners, CP II-C and Anderson. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following documents are filed as exhibits to this amendment. 1. Written agreement of Leslie B. Daniels, CAI Partners & Company II, Limited Partnership, and CAI Capital Partners & Company II, Limited Partnership with respect to the joint filing of this amendment. 2. Agreement Among Stockholders dated as of January 31, 2001, by and among the Issuer, the Investors, Hancock and others. Page 10 of 11 11 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date February 15, 2001 /s/ Leslie B. Daniels --------------------- Signature Leslie B. Daniels --------------------- Name/Title Page 11 of 11 12 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1. Written agreement of Leslie B. Daniels, CAI Partners & Company II, Limited Partnership, and CAI Capital Partners & Company II, Limited Partnership with respect to the joint filing of this amendment. 2. Agreement Among Stockholders dated as of January 31, 2001, by and among the Issuer, the Investors, Hancock and others.
EX-99.1 2 d84274aex99-1.txt JOINT FILING AGREEMENT 1 EXHIBIT 1 JOINT FILING AGREEMENT In accordance with the rules under Regulation 13d of the General Rules and Regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the undersigned agrees to the joint filing on behalf of each of them to this statement and any subsequent amendments thereto. Date February 15, 2001 /s/ Leslie B. Daniels ---------------------------------------- Signature Leslie B. Daniels ---------------------------------------- Name/Title CAI PARTNERS AND COMPANY II, L.P. By: CAI PARTNERS GP & CO., L.P., the General Partner By: /s/ Leslie B. Daniels --------------------------------- Leslie B. Daniels, President of CLEA II Co., a General Partner CAI CAPITAL PARTNERS AND COMPANY II, L.P. By: CAI CAPITAL PARTNERS GP & CO., L.P., the General Partner By: /s/ Leslie B. Daniels --------------------------------- Leslie B. Daniels, President of CLEA II Co., a General Partner EX-99.2 3 d84274aex99-2.txt AGREEMENT AMONG STOCKHOLDERS 1 EXHIBIT 2 SAFEGUARD HEALTH ENTERPRISES, INC. AGREEMENT AMONG STOCKHOLDERS This Agreement Among Investors (this "Agreement") is entered into this 31st day of January, 2001, by and among those certain parties listed in Schedule 1 attached hereto (individually an "Investor," collectively the "Investors"). WHEREAS, the Investors are stockholders of SafeGuard Health Enterprises, Inc., a Delaware corporation (the "Company"); and WHEREAS, the Investors hold certain shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock of the Company (the "Preferred Stock") issued pursuant to that certain Term Sheet Agreement, dated as of March 1, 2000, by and among the Company and the Investors (the "Term Sheet Agreement"); and WHEREAS, certain of the Investors also hold shares of Common Stock, per value $.01 per share, of the Company (the "Common Stock"); and WHEREAS, pursuant to the Term Sheet Agreement, the Investors desire to enter into this Agreement to set forth certain understandings regarding the transfer and voting of the shares of Common Stock and Preferred Stock now or hereafter owned by the Investors; NOW, THEREFORE, in consideration of the premises and the mutual terms and conditions set forth in this Agreement, the parties hereto hereby agree as follows: ARTICLE I AGREEMENT STOCK 1.1 Securities Subject Hereto. The provisions of this Agreement shall, except as hereinafter specifically provided, apply to: (a) All shares of Common Stock of the Company now owned or hereafter acquired by any Investor including, without limitation, shares of Common Stock of the Company issued upon conversion of the Preferred Stock and shares of Common Stock of the Company issued upon the exercise of any stock options or warrants; (b) All shares of Preferred Stock of the Company now owned or hereafter acquired by any Investor including, without limitation, shares of Preferred Stock of the Company issued upon conversion of those certain Series A, B, C and D Convertible Notes issued to the Investors pursuant to the Term Sheet Agreement; -1- 2 (c) All shares of capital stock of the Company hereafter acquired by an Investor in respect of, in lieu of or in exchange for the shares of Common Stock referred to in Section 1.1(a) above or for the shares of Preferred Stock referred to in Section 1.1(b) above, whether by reason of any stock split, stock dividend, reverse split, recapitalization, merger, exchange or otherwise; and (d) All shares of capital stock of the Company hereafter acquired by any Investor pursuant to any subscription or rights to acquire additional shares of capital stock of the Company which subscription or other right to acquire capital stock of the Company is measured by or attributable to the ownership of any shares of capital stock made subject to this Agreement by the foregoing provisions of this Section 1.1. All the shares of capital stock of the Company described above in this Section 1.1 are hereinafter referred to as "Agreement Stock." ARTICLE II PROVISIONS APPLICABLE TO TRANSFERS 2.1 Transfers Subject to Agreement. No Investor shall transfer, assign, convey, pledge or otherwise encumber any shares of Agreement Stock, whether voluntarily, involuntarily or by operation of law, except subject to and bound by the provisions of this Agreement. Any transfer of Agreement Stock must be conditioned upon the transferor or assignee expressly agreeing in writing to the terms of this Agreement and acknowledging that the Agreement Stock is subject to and bound by the provisions of this Agreement. Any certificate evidencing shares of Agreement Stock transferred by an Investor shall have placed thereon the restrictive legend described in Article V of this Agreement. ARTICLE III VOTING AGREEMENT 3.1 Voting Agreement. (a) Each Investor hereby agrees to vote all shares of Agreement Stock held by such Investor to approve an amendment to the Certificate of Incorporation of the Company increasing the authorized number of shares of Common Stock of the Company to 40 million or more shares in order to have sufficient authorized and unissued shares of Common Stock reserved for issuance upon the conversion of the Preferred Stock issuable to the Investors upon conversion of the Convertible Notes. (b) Each Investor hereby agrees not to vote any shares of Agreement Stock to approve any change in the size of the Board of Directors of the Company from its current number of seven, whether to increase or decrease such size. -2- 3 (c) Each Investor hereby agrees to take all actions necessary, including, without limitation, voting all shares of Agreement Stock held by the Investor to cause Steven C. Blewitt to be appointed or elected to the Board of Directors of the Company as the director elected by the Series B, C and D Preferred Stock, voting together as a single class, effective as of the date of this Agreement. ARTICLE IV REQUIRED SALE 4.1 Required Sale. In the event that certain of the Investors consisting of CAI Partners and Company II, L.P., CAI Capital Partners and Company II, L.P. and Jack R. Anderson (the "Selling Investors") shall determine to sell or exchange (whether in a business combination or some other form of transaction) all, but not less than all, of the shares of Agreement Stock held by such Selling Investors in a bona fide arms-length transaction to a third party and such transaction satisfies the following conditions: (a) The proposed transferee has offered to acquire all the outstanding shares of capital stock of the Company in the transaction; (b) The transaction has been approved by the Board of Directors of the Company; and (c) If the total consideration payable by the proposed transferee for the acquisition of all the outstanding shares of capital stock of the Company is less than $30 million, the Company has received a fairness opinion from an investment banker that the transaction is fair to the stockholders of the Company from a financial standpoint; then, upon the written request of the Selling Investors, all the other Investors (the "Required Sellers") shall (a) sell, transfer and deliver, or cause to be sold, transferred and delivered, to the proposed transferee, on the same financial terms and conditions as applicable to the Selling Investors, all shares of Agreement Stock held by the Required Sellers and (b) if stockholder approval of the transaction is required, vote all shares of Agreement Stock held by the Required Sellers to approve the transaction. In the event of a sale pursuant to this Section 4.1, the transferee shall not be required to acquire the shares of Agreement Stock subject to the terms of this Agreement and this Agreement shall terminate upon the consummation of the transaction. The provisions of this Section 4.1 shall terminate and have no further force or effect whatsoever from and after six (6) years after the date of this Agreement. -3- 4 ARTICLE V RESTRICTIVE LEGEND 5.1 Restrictive Legend. Each certificate representing Agreement Stock shall have placed thereon a legend in substantially the following form: THE VOTING AND TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT AMONG STOCKHOLDERS DATED ____________, 2000, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY, AND SUCH SHARES MAY NOT BE VOTED OR SOLD OR OTHERWISE DISPOSED OF EXCEPT IN STRICT ACCORDANCE WITH THE TERMS OF THAT AGREEMENT. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON RECEIPT BY THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE OF A WRITTEN REQUEST FROM THE HOLDER REQUESTING SUCH COPY. ARTICLE VI SPECIFIC PERFORMANCE AND OTHER REMEDIES 6.1 Remedies. The parties hereby declare that it is impossible to measure in money the damages which will accrue to a party hereto by reason of a failure of any party hereto to perform any of its obligations under this Agreement. Therefore, if any party hereto shall institute any action or proceeding to enforce the provisions hereof, each party hereto against whom such action or proceeding is brought hereby waives the claim or defense therein that such party has an adequate remedy of law, and no party shall urge in any such action or proceeding the claim or defense that such remedy at law exists. Each party hereby acknowledges that the shares of Agreement Stock are unique chattels and each party to this Agreement shall be entitled to exercise any and all available remedies for a violation of any of the terms of this Agreement, including, but not limited to, the equitable remedy of specific performance as specified above and injunctive relief. ARTICLE VII TERMINATION 7.1 Termination as to an Investor. Notwithstanding anything herein to the contrary, this Agreement shall terminate as to any Investor effective as of the date and the time such Investor ceases to own any shares of Agreement Stock. Upon any such termination, such Investor shall have no further rights or obligations hereunder except that rights or remedies of such Investor arising out of the breach of this Agreement by any other party hereto prior to the date and time of such termination shall not be affected by such termination. -4- 5 ARTICLE VIII MISCELLANEOUS 8.1 Notices. All notices, claims, demands and other communications hereunder shall be in writing and shall be deemed given upon (a) confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a standard overnight carrier (c) when delivered by hand or (d) the expiration of five business days after the day when mailed by registered or certified mail (postpaid prepaid, return receipt requested), addressed to the Investors at their respective addresses as shown on the books of the Company. 8.2 Entire Agreement; Amendments. This Agreement sets forth the entire understanding of the parties and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof. No terms, conditions, or warranties, other than those contained herein, and no amendments or modifications hereto, shall be valid unless made in writing and signed by all parties hereto. 8.3 Binding Effect/Assignability. This Agreement shall extend to and be binding upon and inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and assigns. 8.4 Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provisions shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof with the remaining provisions remaining in full force and effect and not affected by the illegal, invalid or unenforceable provision or by severance here from. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and still be legal, valid and enforceable. 8.5 Headings/Captions. The captions to sections and subsections of this Agreement have been inserted solely for convenience and reference, and shall not control or effect the meaning or construction of any of the provisions of this Agreement. 8.6 Waiver; Remedies. Waiver by any party hereto of any breach of or exercise of any rights under this Agreement shall not be deemed to be a waiver of similar or other breaches or rights or a future breach of the same duty. The failure of a party to take any action by reason of any such breach or to exercise any such right shall not deprive any party of the right to take any action at any time while such breach or condition giving rise to such right continues. Except as expressly limited by this Agreement, the parties shall have all remedies permitted to them by this Agreement or law, and all such remedies shall be cumulative. 8.7 Attorneys' Fees. If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of its alleged dispute, breach, default, or -5- 6 misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs incurred in that action or proceeding, in addition to any other relief to which it may be entitled. 8.8 Further Assurances. The parties hereto agree to execute, acknowledge and deliver to the other any further instruments that may be reasonably required to give full force and effect to the provisions of this Agreement; provided, however, that neither party shall be required to deliver any other instrument which expands its duties, obligations or representations and warranties, or which diminishes its rights under this Agreement. 8.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. 8.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same agreement. (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK) -6- 7 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement Among Stockholders as of the day and year first written above. SAFEGUARD HEALTH ENTERPRISES, INC. CAI CAPITAL PARTNERS AND COMPANY II-C, L.P. By: /s/ James E. Buncher ----------------------------------- By: /s/ Manfred W. Yu James E. Buncher, President ---------------------------------------- Manfred W. Yu By: /s/ Ronald I. Brendzel Assistant Secretary ----------------------------------- Ronald I. Brendzel, Secretary JOHN HANCOCK LIFE INSURANCE COMPANY f/k/a JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY THE BAILEYS FAMILY TRUST By: /s/ Stephen J. Blewitt By: /s/ Steven J. Baileys, D.D.S. ---------------------------------------- ----------------------------------- Name: Stephen J. Blewitt Steven J. Baileys, D.D.S., Trustee -------------------------------------- Title: Managing Director ------------------------------------- THE BURTON PARTNERSHIP, LIMITED PARTNERSHIP JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY By: /s/ Donald W. Burton ----------------------------------- By: /s/ Stephen J. Blewitt Donald W. Burton, General Partner ---------------------------------------- Name: Stephen J. Blewitt -------------------------------------- CAI PARTNERS AND COMPANY II, L.P. Title: Authorized Signatory ------------------------------------- By: CAI PARTNERS GP & CO., L.P., GENERAL PARTNER INVESTORS PARTNER LIFE INSURANCE COMPANY By: /s/ Leslie B. Daniels ------------------------------- By: /s/ Stephen J. Blewitt Leslie B. Daniels, President of ---------------------------------------- CLEA II Co., a General Partner Name: Stephen J. Blewitt -------------------------------------- Title: Authorized Signatory CAI CAPITAL PARTNERS AND ------------------------------------- COMPANY II, L.P. MELLON BANK, N.A., solely in its capacity as By: CAI Capital Partners GP & Co., L.P., Trustee for Bell Atlantic Master Trust (as General Partner directed by John Hancock Financial Services, Inc.), and not in its individual capacity By: /s/ Leslie B. Daniels ------------------------------- By: /s/ Carole Bruno Leslie B. Daniels, President of ---------------------------------------- CLEA II Co., a General Partner Name: Carole Bruno -------------------------------------- Its: Authorized Signatory --------------------------------------- THE BURTON PARTNERSHIP (QP), LIMITED PARTNERSHIP By: /s/ Donald W. Burton ---------------------------------------- Donald W. Burton, General Partner
-7- 8 /s/ Jack R. Anderson /s/ Rose-Marie Anderson - -------------------------------- ----------------------- Jack R. Anderson, Individually Rose-Marie Anderson /s/ James E. Buncher - -------------------------------- James E. Buncher, Individually /s/ Ronald I. Brendzel - -------------------------------- Ronald I. Brendzel, Individually /s/ Dennis L. Gates - -------------------------------- Dennis L. Gates, Individually -8- 9 SCHEDULE 1 Investors The Baileys Family Trust Jack R. Anderson Rose-Marie Anderson The Burton Partnership, Limited Partnership The Burton Partnership (QP), Limited Partnership CAI Partners and Company II, L.P. CAI Capital Partners and Company II, L.P. CAI Capital Partners and Company II-C, L.P. James E. Buncher Ronald I. Brendzel Dennis L. Gates John Hancock Life Insurance Company (f/k/a John Hancock Mutual Life Insurance Company) John Hancock Variable Life Insurance Company Investors Partner Life Insurance Company (f/k/a John Hancock Life Insurance Company of America) Mellon Bank, N.A., solely in its capacity as Trustee for Bell Atlantic Master Trust, (as directed by John Hancock Financial Services, Inc.) and not in its individual capacity -----END PRIVACY-ENHANCED MESSAGE-----