SECOND AMENDMENT TO RIGHTS AGREEMENT
This SECOND AMENDMENT TO RIGHTS AGREEMENT (the "Amendment") is entered into
as of March 9, 2000 by and between SAFEGUARD HEALTH ENTERPRISES, INC., a
Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent (in such capacity, the "Rights Agent").
RECITALS:
A. The Company and the Rights Agent are parties to that certain Rights
Agreement, dated as of March 22, 1996, as amended (the "Rights Agreement").
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings ascribed thereto in the Rights Agreement.
B. The Company has entered into a Term Sheet Agreement, dated as of
March 1, 2000 (the "Term Sheet Agreement"), by and among the Company, CAI
Partners and Company II, L.P., CAI Capital Partners and Company II, L.P. Xxxx X.
Xxxxxxxx, Silicon Valley Bank, Xxxx Xxxxxxx Mutual Life Insurance Company and
other holders of Senior Notes of the Company and Xxxxxx X. Xxxxxxx, DDS (the
"Investors" and individually, an "Investor"), pursuant to which, among other
things, certain Investors have loaned an aggregate of $8,000,000 to the Company
(the "Loan"). In addition, the Investors agreed to purchase from the Company,
and the Company agreed to sell, subject to certain conditions, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock (the "Preferred Stock") for an aggregate of $20,000,000 and
Series A Convertible Notes, Series B Convertible Notes, Series C Convertible
Notes and Series D Convertible Notes (the "Convertible Notes") an aggregate
principal amount of $5,000,000. The Preferred Stock and the Convertible Notes
shall be subject to certain conditions, convertible into Common Stock.
C. In addition, pursuant to the Term Sheet, the Investors agreed to vote for
certain matters facilitating the effectuation of the Term Sheet Agreement and
for certain designees to the Board of Directors of the Company.
D. The Board of Directors of the Company has unanimously approved the
execution and delivery of the Term Sheet and the transactions contemplated
thereby, including, without limitation, Loan, the issuance of the Preferred
Stock and Convertible Notes to the Investors and the issuance of the shares of
Common Stock issuable upon the exercise or conversion thereof;
NOW, THEREFORE, in consideration of the premises, the parties hereby agree as
follows:
"Section 36. Xxx Xxxxx 0, 0000 Xxxx Sheet Agreement. Notwithstanding any
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provision of this Agreement to the contrary, none of the Investors under that
certain Term Sheet Agreement dated March 2, 2000, of the Company shall be deemed
to become an Acquiring Person and no Distribution Date or Stock Acquisition Date
shall occur or be deemed to occur, in any case, solely by reason of:
(i) the execution or delivery by the Company of the Term Sheet Agreement or
the performance by the Company of its obligations thereunder;
(ii) issuance by the Company to the Investors under the Term Sheet Agreement
of the securities described therein;
(iii) the issuance to, or the acquisition by, any of such Investors or any
of their respective Affiliates or Associates of shares of common stock of the
Company issued or issuable upon securities; or
(iv) the announcement, commencement or consummation of any of the foregoing.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day
and year first above written.
SAFEGUARD HEALTH ENTERPRISES, INC.,
a Delaware corporation
By:____________________________________
Name:__________________________________
Title:_________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By::___________________________________
Authorized Officer
