REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is entered into as of
August 8, 2002, by and between SafeGuard Health Enterprises, Inc., a Delaware
corporation ("SAFEGUARD"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("HOLDER").
BACKGROUND
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On the date of this Agreement, Holder acquired a Convertible Promissory Note of
SafeGuard (the "NOTE") in the principal amount of $2,000,000, which is
convertible into Common Stock of SafeGuard. SafeGuard agreed to grant
registration rights with respect to the Common Stock of SafeGuard issuable upon
conversion of the Note on and subject to the terms and conditions of this
Agreement.
OPERATIVE TERMS
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The parties agree as follows:
ARTICLE 1. DEFINITIONS
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1.1 CERTAIN DEFINED TERMS.
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"Commission" means the Securities and Exchange Commission or any
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other federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share, of
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SafeGuard.
"Conversion Shares" means any shares of Common Stock issuable or
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issued upon conversion of the Note.
"Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
"Holder" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and each subsequent holder of the
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Note (or portion of the Note) or shares of Common Stock issued on conversion of
the Note.
"RegistrableSecurities" means (i) any Conversion Shares that may be
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issued pursuant to the conversion of the Note, and (ii) any Common Stock issued
as a dividend or other distribution with respect to or in exchange for or in
replacement of the Conversion Shares.
"Securities Act" means the Securities Act of 1933, as amended, or
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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
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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
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Registrable Securities as principal and not as part of such dealer's
market-making activities.
ARTICLE II. REGISTRATION RIGHTS
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2.1 DEMAND REGISTRATION.
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(a) Rights to Registration. On notice (a "DEMAND NOTICE") from all
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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
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request made pursuant to Section 2.1 the name of the managing underwriter
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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
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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
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underwriting and inclusion of its Registrable Securities in the
underwriting to the extent requested (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holders).
SafeGuard shall (together with all Holders proposing to distribute their
securities through such underwriting) use its best efforts to enter into
an underwriting agreement in customary form with the underwriters selected
for the underwriting in the manner set forth above. SafeGuard shall take
the actions required for compliance with the terms and obligations of the
underwriting agreement, and shall furnish the underwriters and their
respective representatives reasonable and sufficient access to all
information requested for their "due diligence" review of SafeGuard and
its operations, subject to the terms of any letter of intent,
confidentiality or other agreement between SafeGuard and the
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underwriter(s). Notwithstanding any other provisions of Section 2.1, if,
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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
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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).
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(c) Additional Shares to be Registered. SafeGuard may include in any
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registration statement described in this Section 2.1, for sale in
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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
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Section 2.1 to the contrary notwithstanding:
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(1) SafeGuard will not be required to register Registrable
Securities pursuant to this Section 2.1 unless the aggregate
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estimated public offering price of all shares of Registrable
Securities, including, without limitation, any shares sold for the
account of SafeGuard or any existing shareholder of SafeGuard
(based, in the case of Common Shares, upon the highest closing price
or bid price, as the case may be, during the 30-day period preceding
such request for registration in the principal trading market for
the Common Shares, or, if there is no active trading market for the
Common Shares, based upon the proposed public offering price
estimated in good faith by the requesting holders of Registrable
Securities), is at least equal to the lesser of (i) $400,000 or (ii)
The total value of all shares of Common Stock then owned by Holder;
(2) SafeGuard will not be required to file a registration
statement requested pursuant to this Section 2.1 during the time
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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;
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(3) SafeGuard will not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 2.1 in
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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
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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
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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.
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(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.
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(a) Rights to Registration. If SafeGuard registers any of its Common
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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
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S-4 and S-8 or another form not available for registering the Registrable
Securities for sale by SafeGuard), SafeGuard shall:
(1) Promptly notify each Holder, at least thirty (30) days
before the anticipated filing date of the registration (including,
to the extent available, the jurisdictions in which SafeGuard
intends to qualify the offer and sale of securities under applicable
blue sky or other state securities laws); and
(2) Use its best efforts to include in the registration (and
any related qualification under blue sky laws or other compliance)
and in any related Underwritten Public Offering, all the Registrable
Securities that the Holder specifies in a written request delivered
to SafeGuard within 20 days after SafeGuard's notice.
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(b) Underwriting. A Holder's right to registration pursuant to
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Section 2.2 will be conditioned on the Holder's inclusion of its
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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
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provisions of this Section 2.2, if the managing underwriter reasonably
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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
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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
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for the use of Form S-3 (or any similar form or forms promulgated under the
Securities Act), Holders will have the right to request up to two registrations
(but no more than one registration each 12 months) on Form S-3 (which request or
requests will be in writing, will specify the Registrable Securities intended to
be sold or disposed of by the Holder thereof, will state the intended method of
disposition of such Registrable Securities by the Holder requesting such
registration, and will relate to Registrable Securities having a proposed
aggregate gross offering price (before deduction of underwriting discounts and
expenses of sale) of at least $100,000 based on the current market price), and
SafeGuard will be obligated to use its best efforts to effect the registration
or registrations on Form S-3. Any such registration shall satisfy the
obligations of SafeGuard with respect to a demand registration underSection 2.1.
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2.4 REGISTRATION EXPENSES. SafeGuard shall pay all expenses of any
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registrations permitted pursuant to this Agreement (including, but not limited
to, the expenses of any interim audit required by any underwriters in the event
of an offering requested pursuant toSection 2.1 hereof, any qualifications under
the blue-sky or other state securities laws, compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of any securities to the public in connection with
registration, of supplying prospectuses, offering circulars or other documents
and the reasonable fees and disbursements of a single special counsel retained
by a majority in interest of the Holders, but excluding underwriting discounts
and selling commissions applicable to the sale of the Registrable Securities,
which are payable by the Holders, pro rata on the basis of the number of shares
registered).
2.5 REGISTRATION PROCEDURES. In the case of a registration,
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qualification or compliance effected by SafeGuard pursuant to this Article Il in
which any Holder's Registrable Securities are included, SafeGuard shall, at its
expense:
(a) Prepare and file with the Commission a registration statement
with respect to the Common Shares, and use its best efforts to cause such
registration statement to become and remain effective for the period that
is reasonably necessary to effect the sale of the Common Shares, not to
exceed nine (9) months or, if sooner, upon completion by Holders of the
contemplated distribution;
(b) Prepare and file with the Commission such amendments to the
registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such Common
Shares, not to exceed nine (9) months or, if sooner, upon completion by
Holders of the contemplated distribution;
(c) Furnish to the Holders participating in such registration and to
the underwriters of Common Shares being registered such reasonable number
of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably
request in order to facilitate the public offering of the Common Shares;
(d) Use its diligent good faith efforts to register or qualify the
Common Shares covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating
Holders may reasonably request in writing within 20 days following the
original filing of such registration statement; provided, however, in the
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case of an Underwritten Public Offering, the managing underwriter will (to
the exclusion of the participation of the Holders) advise SafeGuard with
respect to blue sky qualification and related matters;
(e) Notify counsel for the Holders participating in such
registration, promptly after it receives notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
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(f) Notify counsel for such Holders promptly of any request by the
Commission for the amending or supplementing of the registration statement
or prospectus or for additional information;
(g) Prepare and file with the Commission, promptly upon the request
of any Holders, any amendments or supplements to the registration
statement or prospectus which, in the opinion of counsel for such Holders
(and concurred in by counsel for SafeGuard), is required under the
Securities Act or the rules and regulations thereunder in connection with
the distribution of the Common Shares, other than an amendment or
supplement required solely as a result of a change by such Holders in the
method of distribution of the Common Shares;
(i) Prepare and promptly file with the Commission and promptly
notify counsel for the Holders of the filing of such amendment or
supplement to the registration statement or prospectus as may be necessary
to correct any statements or omissions if, at the time when a prospectus
relating to such Common Shares is required to be delivered under the
Securities Act, any event other than a change in the method of
distribution of the Common Shares selected by a Holders has occurred as
the result of which any such prospectus or any other prospectus as then in
effect would include any untrue statement of a material fact or omit to '
state any material fact necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading; and
(j) Not file any amendment or supplement to the registration
statement or prospectus if, in the opinion of counsel for such Holders,
the amendment or supplement does not comply in all material respects with
the requirements of the Securities Act or the rules and regulations
thereunder, after having been furnished with a copy substantially in the
form thereof at least two business days prior to the filing thereof,
provided, however, if in the opinion of counsel for SafeGuard, the filing
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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
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to enter into an underwriting agreement in connection with any registration
subject to the provisions of thisArticle II in which any Holder's Common Shares
is included, which agreement will contain such terms, provisions and agreements
as are customary and appropriate for such registration. In connection with any
Underwritten Public Offering in which any Holder's Common Shares are included,
to the extent not provided in the underwriting, agreement related to such
offering, SafeGuard will use its best efforts to:
(a) List the shares of Common Shares included in such offering on
any national securities exchange or stock market on which the Common
Shares is approved for listing;
(b) Engage a bank or other company to act as transfer agent and
registrar for the Common Shares;
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(c) Cause customary opinions of counsel, comfort letters of
accountants, and other appropriate documents to be delivered by
representatives of SafeGuard; and
(d) As soon as practicable after "the effective date of the
registration statement" (within the meaning of Rule 158 under the
Securities Act), and, in any event, within 16 months thereafter, make
"generally available to its securities holders" (within the meaning of
Rule 158 under the Securities Act) an earnings statement (which need not
be audited) complying with Section II(a) of the Securities Act and
covering a period of at least 12 consecutive months beginning after the
effective date of the registration statement.
2.7 INDEMNIFICATION AND CONTRIBUTION.
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(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,
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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
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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
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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
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statement or any preliminary prospectus or final prospectus contained in
the registration statement or any such amendment thereof or supplement
thereto; (2) inure to the benefit of any underwriter (or to the benefit of
any person controlling such underwriter) from whom the person asserting
any such losses, claims, damages, expenses or liabilities purchased the
securities which are the subject thereof, if such underwriter failed to
send or give a copy of the final prospectus, as then amended or
supplemented, to such person and if the untrue statement or omission
alleged had been corrected in such final prospectus; or (3) inure to the
benefit of any person to the extent such person's. claim for
indemnification hereunder arises out of or is based on any violation by
such person of applicable law.
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(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
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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
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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,
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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
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indemnifying person in writing of the commencement thereof. The
indemnifying person will assume the defense thereof with counsel
reasonably satisfactory to such indemnified person and assume the payment
of all fees and expenses. In any such proceeding, the indemnified party
may retain its own counsel, but the fees and expenses of the counsel will
be at the indemnified party's expense, unless (1) the indemnified party
has employed counsel in an action in which the indemnified party and
indemnifying party are both defendants and there is a conflict of interest
between such parties that would prevent counsel from adequately
representing both parties, as determined by counsel to the indemnified
person, (2) the indemnifying party has not employed counsel satisfactory
within the exercise of reasonable judgment of the indemnified party to
represent the indemnified party within a reasonable time after the notice
of the commencement of the action, or (3) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. The undertaking contained in this
Section 2.7 is in addition to any liabilities that the indemnifying person
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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.
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(d) If the indemnification provided for in this Section 2.7 is held
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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
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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
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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
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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
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request the following information:
(1) A written statement by SafeGuard as to SafeGuard's
compliance with the public information requirements of Commission
Rule 144 (at any time after 90 days after SafeGuard becomes subject
to the reporting requirements of Section 13 or 15(d) of the Exchange
Act),
(2) A copy of the most recent annual or quarterly report of
SafeGuard, and
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(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
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register securities under this Article II may be assigned following receipt by
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SafeGuard of notice of the proposed transfer by any Holder to any assignee or
transferee of the Common Shares issued upon conversion of the Note who also
qualifies as a Holder; provided that: (a) the transfer is otherwise be effected
in accordance with registration requirements imposed by applicable securities
laws, and (b) the transferee agrees to be bound by this Agreement.
2.11 NOTICE OF SALE INFORMATION.Any notice from a Holder of Registrable
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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
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disposition of Registrable Securities by notifying the Holders of a state of
facts or the occurrence of any event (including pending negotiations regarding a
transaction that might require SafeGuard's disclosure of additional material,
non-public information in its registration statement, for which SafeGuard
believes in good faith it has a bona fide business purpose for preserving
confidentiality or circumstances which render SafeGuard unable to comply with
the published rules and regulations of the Commission under the Securities Act
or the Exchange Act) which might reasonably cause a legal deficiency in the
registration statement or the prospectus issued under the registration
statement. SafeGuard shall deliver amended disclosure materials to the Holders
within 15 days following this notice. At its request, the Holders shall deliver
to SafeGuard all copies in their possession of the prospectus covering such
Registrable Securities that was current when they received the notice. SafeGuard
may not, without the Holders' consent, suspend disposition of Registrable
Securities for more than 90 calendar days in any rolling twelve (12) month
period.
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ARTICLE III. MISCELLANEOUS
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3.1 REMEDIES. Each party hereto acknowledges that a remedy at law for
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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
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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
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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
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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 ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and the address of Holder will be the address hereinafter
set forth on the signature page.
3.5 LEGAL MATTERS.
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(a) Jurisdiction; Venue. The laws of the State of Delaware and the
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federal laws of the United States of America, excluding the laws of those
jurisdictions pertaining to the resolution of conflict with laws of other
jurisdictions, govern the validity, construction, enforcement, and
interpretation of this Agreement.
(b) Costs. In any legal proceeding between SafeGuard and Holder
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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
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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
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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.
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3.8 SECTION HEADINGS. The section and paragraph headings contained
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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
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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)
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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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and Secretary
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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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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