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 Xxxxxxxx X. Xxxxxxxxx, DMD, a Florida resident
("HOLDER").
BACKGROUND
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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
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The parties agree as follows:
ARTICLE I. DEFINITIONS
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1.1 CERTAIN DEFINED TERMS.
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"Commission" means the Securities and Exchange Commission or any other
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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 amended.
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"Holder" means Xxxxxxxx X. Xxxxxxxxx, DMD, and each subsequent holder
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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
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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.
"Securities Act" means the Securities Act of 1933, as amended, or any
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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
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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
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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 sale
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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
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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 underwriter(s).
Notwithstanding any other provisions of Section 2.1, if, in connection with
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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
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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
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any registration statement described in this Section 2.1, for sale in accordance
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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 estimated
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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;
(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
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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
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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
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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
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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
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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.
(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
under Section 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 to Section 2.1 hereof, any qualifications
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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 II in
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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;
(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,
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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
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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
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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;
(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.
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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, liabilities
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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,
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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,
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however, that the indemnification agreement contained in this subsection
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(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
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for use in connection the preparation of the registration statement or any
preliminary prospectus or final prospectus contained in the registration
statement or any such amendment thereof or supplement thereto; (2) inure to
the benefit
of any underwriter (or to the benefit of any person controlling such
underwriter) from whom the person asserting any such losses, claims,
damages, expenses or liabilities purchased the securities which are the
subject thereof, if such underwriter failed to send or give a copy of the
final prospectus, as then amended or supplemented, to such person and if
the untrue statement or omission alleged had been corrected in such final
prospectus; or (3) inure to the benefit of any person to the extent such
person's claim for indemnification hereunder arises out of or is based on
any violation by such person of applicable law.
(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 liability of each
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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
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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
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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
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addition to any
liabilities that the indemnifying person might have pursuant to law. No
indemnifying party will, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought under this Agreement by the
indemnified party, unless the settlement includes an unconditional release
of the indemnified party from all liability arising from the proceeding.
(d) If the indemnification provided for in this Section 2.7 is
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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
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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.
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2.9 RULE 144 REPORTING. With a view to making available to the Holder
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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
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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
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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
(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 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
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Registrable Securities requesting registration of some or all of such
Registrable Securities pursuant to this Article II will:
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(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.
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 00 Xxxxxxxxxx, Xxxxx 000, Xxxxx Xxxxx,
Xxxxxxxxxx 00000-0000, 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
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)
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/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx
Senior Vice President and Secretary
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/ Xxxxxxxx X. Xxxxxxxxx, DMD
-------------------------------------
Xxxxxxxx X. Xxxxxxxxx, DMD
0000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
