PROCEEDING THEREFOR MAY BE BROUGHT.
(C)
NEITHER THE EXECUTION AND DELIVERY OF THIS AGREEMENT NOR THE
CONSUMMATION BY SUCH STOCKHOLDER OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL
RESULT IN A VIOLATION OF, OR A DEFAULT UNDER, OR CONFLICT WITH, ANY CONTRACT,
TRUST, COMMITMENT, AGREEMENT, UNDERSTANDING, ARRANGEMENT OR RESTRICTION OF ANY
KIND TO WHICH SUCH STOCKHOLDER IS A PARTY OR BY WHICH IT IS BOUND OR TO WHICH
ANY SECURITIES HELD OR CONTROLLED BY SUCH STOCKHOLDER ARE SUBJECT.
EXCEPT FOR
ANY NECESSARY FILINGS UNDER THE SECURITIES ACT AND THE EXCHANGE ACT OR OTHERWISE
DISCLOSED IN THE STOCK PURCHASE AGREEMENT, CONSUMMATION BY SUCH STOCKHOLDER OF
THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT VIOLATE, OR REQUIRE APPROVAL UNDER
ANY APPLICABLE LAW APPLICABLE TO SUCH STOCKHOLDER OR SUCH SECURITIES.
(D)
SUCH SECURITIES AND THE CERTIFICATES REPRESENTING SUCH SECURITIES
(IF ANY) WILL BE HELD BY SUCH STOCKHOLDER, OR BY A NOMINEE OR CUSTODIAN FOR THE
BENEFIT OF SUCH STOCKHOLDER, FREE AND CLEAR OF ALL LIENS (OTHER THAN PERMITTED
LIENS, AND LENDER LIENS), PROXIES, VOTING TRUSTS OR AGREEMENTS, UNDERSTANDINGS
OR OTHER SIMILAR ARRANGEMENTS OTHER THAN PURSUANT TO THIS AGREEMENT AND ANY
TRANSFER RESTRICTIONS SET FORTH IN ANY REGISTRATION RIGHTS AGREEMENTS AND STOCK
PURCHASE AGREEMENTS.
SECTION 2.
WAIVER OF ANTI-DILUTION PROTECTION AND PREEMPTIVE RIGHTS.
THE
SAFEGUARD ENTITIES HEREBY WAIVE ALL RIGHTS TO ANTI-DILUTION PROTECTION AND
PREEMPTIVE RIGHTS (OR SIMILAR RIGHTS) IN CONNECTION WITH THE ISSUANCE OF THE
SERIES A PREFERRED STOCK TO OAK AND THE ISSUANCE OF COMMON STOCK UPON THE
CONVERSION OF SUCH SERIES A PREFERRED STOCK PURSUANT TO THE TERMS OF THE STOCK
PURCHASE AGREEMENT AND/OR THE CERTIFICATE OF DESIGNATIONS, AS APPLICABLE.
THIS
IS A LIMITED WAIVER AND SHALL NOT BE DEEMED TO CONSTITUTE A WAIVER OF ANY OTHER
RIGHTS OR PROTECTIONS OR BE APPLICABLE TO ANY OTHER ISSUANCE OF SECURITIES BY
THE COMPANY.
SECTION 3.
RIGHT OF FIRST OFFER.
(A)
SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED IN THIS SECTION 3,
THE SAFEGUARD ENTITIES HEREBY GRANT TO OAK A LIMITED RIGHT OF FIRST OFFER WITH
RESPECT TO ANY BLOCK TRANSFER PROPOSED TO BE EFFECTED BY THE SAFEGUARD
ENTITIES.
"BLOCK TRANSFER" MEANS A PRIVATELY NEGOTIATED TRANSFER OF COMMON
STOCK AND/OR WARRANTS OWNED BY THE SAFEGUARD ENTITIES OR GROUP OF RELATED
TRANSFERS THAT ARE INTENDED FOR THE SAME PERSON, WHICH REPRESENTS MORE THAN FIVE
PERCENT (5%) OR MORE OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE SERIES A
PREFERRED STOCK).
FOR THE AVOIDANCE OF DOUBT, A BONA FIDE PUBLIC SALE (I.E., A
REGISTERED PUBLIC OFFERING, A SALE EFFECTED IN ACCORDANCE WITH RULE 144 UNDER
THE SECURITIES ACT OR OTHERWISE WHERE PURCHASER AND SELLER DO NOT KNOW EACH
OTHER AND HAVE NO PRIVITY OF CONTRACT, INCLUDING THROUGH ANY BROKER, DEALER OR
UNDERWRITER ACTING IN A CAPACITY AS SUCH, THAT PURCHASE SECURITIES FOR
DISTRIBUTION) SHALL NOT BE CONSIDERED A "BLOCK TRANSFER."
2
(B)
EACH TIME THE SAFEGUARD ENTITIES PROPOSE TO EFFECT A BLOCK
TRANSFER, THE SAFEGUARD ENTITIES SHALL FIRST MAKE AN OFFERING OF SUCH SECURITIES
TO OAK