Exhibit 10.58
INVESTOR RIGHTS
AGREEMENT
This Investor Rights Agreement is
made and entered into as of March 2, 2006 (this “
Agreement ”), among Antares Pharma, Inc., a Delaware
corporation (the “ Company ”), and each of the
purchasers executing this Agreement and listed on Schedule 1
attached hereto (collectively, the “ Purchasers
”).
This Agreement is being entered into
pursuant to the Common Stock and Warrant Purchase Agreement dated
as of February 27, 2006, by and among the Company and the
Purchasers (the “ Purchase Agreement
”).
The Company and the Purchasers
hereby agree as follows:
1. Certain Definitions
.
Capitalized terms used and not
otherwise defined herein shall have the meanings given such terms
in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
“ Advice ” shall
have the meaning set forth in Section 3(m).
“ Affiliate ”
means, with respect to any Person, any other Person that directly
or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition,
“control,” when used with respect to any Person, means
the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise; and the terms of “affiliated,”
“controlling” and “controlled” have
meanings correlative to the foregoing.
“ Exchange ”
shall have the meaning assigned in Section 7(e).
“ Blackout Period
” shall have the meaning set forth in Section
3(n).
“ Board ” shall
have the meaning set forth in Section 3(n).
“ Business Day ”
means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State
of [State] generally are authorized or required by law or other
government actions to close.
“ Commission ”
means the Securities and Exchange Commission.
“ Common Stock ”
means the Company’s Common Stock, par value $0.01 per
share.
“ Effectiveness Period
” shall have the meaning set forth in Section 2.
“ Event ” shall
have the meaning set forth in Section 7(e).
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended.
“ Filing Date ”
means the 45th day following the Closing Date.
“ Holder ” or
“ Holders ” means the holder or holders, as the
case may be, from time to time of Registrable Securities, including
without limitation the Purchasers and their assignees.
“ Indemnified Party
” shall have the meaning set forth in Section
5(c).
“ Indemnifying Party
” shall have the meaning set forth in Section
5(c).
“ Losses ” shall
have the meaning set forth in Section 5(a).
“ Person ” means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
“ Proceeding ”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or
threatened.
“ Prospectus ”
means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by
such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference in such
Prospectus.
“ Purchased
Shares” means the shares of Common Stock purchased by the
Purchasers pursuant to the Purchase Agreement.
“ Registrable
Securities ” means (a) the Purchased Shares and the
Warrant Shares (without regard to any limitations on beneficial
ownership contained in the Warrants) or other securities issued or
issuable to each Purchaser or its transferee or designee (i) upon
exercise of the Warrants, or (ii) upon any distribution with
respect to, any exchange for or any replacement of such Purchased
Shares, Warrants or Warrant Shares or (iii) upon any conversion,
exercise or exchange of any securities issued in connection with
any such distribution, exchange or replacement; (b) securities
issued or issuable upon any stock split, stock dividend,
recapitalization or similar event with respect to the foregoing;
and (c) any other security issued as a dividend or other
distribution with respect to, in exchange for, in replacement or
redemption of, or in reduction of the liquidation value of, any of
the securities referred to in the preceding clauses; provided,
however, that such securities shall cease to be Registrable
Securities when such securities have been sold to or through a
broker or dealer or underwriter in a public distribution or a
public securities transaction or when such securities may be sold
without any restriction pursuant to Rule 144(k) as determined by
the counsel to the Company pursuant to a written opinion letter,
addressed to the Company’s transfer agent to such effect as
described in Section 2 of this Agreement.
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“ Registration
Statement ” means the registration statements and any
additional registration statements contemplated by Section 2,
including (in each case) the Prospectus, amendments and supplements
to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference in such registration
statement.
“ Rule 144 ”
means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“ Rule 158 ”
means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“ Rule 415 ”
means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“ Securities Act
” means the Securities Act of 1933, as amended.
“ Special Counsel
” means Wiggin and Dana LLP.
“ Warrants ”
means the Common Stock purchase warrants issued pursuant to the
Purchase Agreement, including without limitation the Placement
Agent Warrants.
“ Warrant Shares
” means the shares of Common Stock issuable upon the exercise
of the Warrants (including, without limitation, the Placement Agent
Warrants) issued or to be issued to the Purchasers or their
assignees or designees in connection with the offering consummated
under the Purchase Agreement.
2. Registration . As soon as
practicable following the Closing Date (but not later than the
Filing Date), the Company shall prepare and file with the
Commission a “shelf” Registration Statement covering
all Registrable Securities for a secondary or resale offering to be
made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (or if such form is not available to
the Company on another form appropriate for such registration in
accordance herewith). The Company shall use its best efforts to
cause the Registration Statement to be declared effective under the
Securities Act not later than ninety (90) days after the Closing
Date (including filing with the Commission a request for
acceleration of effectiveness in accordance with Rule 461
promulgated under the Securities Act within five (5) Business Days
of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration
Statement will not be “reviewed,” or not be subject to
further review) and to keep such Registration Statement
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continuously effective under the Securities Act
until such date as is the earlier of (x) the date when all
Registrable Securities covered by such Registration Statement have
been sold or (y) with respect to any Holder, such time as all
Registrable Securities held by such Holder may be sold without any
restriction pursuant to Rule 144(k) as determined by the counsel to
the Company pursuant to a written opinion letter addressed to the
Company’s transfer agent to such effect (the “
Effectiveness Period ”). For purposes of the
obligations of the Company under this Agreement, no Registration
Statement shall be considered “effective” with respect
to any Registrable Securities unless such Registration Statement
lists the Holders of such Registrable Securities as “Selling
Stockholders” and includes such other information as is
required to be disclosed with respect to such Holders to permit
them to sell their Registrable Securities pursuant to such
Registration Statement, unless any such Holder is not included as a
“Selling Stockholder” pursuant to Section 3(m). Such
Registration Statement also shall cover, to the extent allowable
under the Securities Act and the Rules promulgated thereunder
(including Securities Act Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits,
stock dividends or similar transactions with respect to the
Registrable Securities.
3. Registration Procedures
.
In connection with the
Company’s registration obligations hereunder, the Company
shall:
(a) Prepare and file with the
Commission on or prior to the Filing Date, a Registration Statement
on Form S-3 (or if such form is not available to the Company on
another form appropriate for such registration in accordance
herewith) (which shall include a Plan of Distribution substantially
in the form of Exhibit A attached hereto), and use best
efforts to cause the Registration Statement to become effective and
remain effective as provided herein; provided, however, that not
less than three (3) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment
or supplement thereto, the Company shall (i) furnish to the Special
Counsel, copies of all such documents proposed to be filed, which
documents (other than those incorporated by reference) will be
subject to the review of such Special Counsel, and (ii) at the
request of any Holder cause its officers and directors, counsel and
independent certified public accountants to respond to such
inquiries as shall be necessary, in the reasonable opinion of
counsel to such Holders, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities or the Special Counsel shall
reasonably object within three (3) Business Days after the Special
Counsel’s receipt thereof. In the event of any such
objection, the Holders shall provide the Company with any requested
revisions to such prospectus or supplement within two (2) Business
Days of such objection.
(b) (i) Prepare and file with the
Commission such amendments, including post-effective amendments, to
the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and to the
extent any Registrable Securities are not included in such
Registration Statement for reasons other than the failure of the
Holder to comply with
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Section 3(m) hereof, shall prepare and file with
the Commission such amendments to the Registration Statement or
such additional Registration Statements in order to register for
resale under the Securities Act all Registrable Securities; (ii)
cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended
to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; (iii) respond as
promptly as possible, and in no event later than ten (10) Business
Days to any comments received from the Commission with respect to
the Registration Statement or any amendment thereto and as promptly
as reasonably possible provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by
the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders
thereof set forth in the Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify Holders of Registrable
Securities to be sold and the Special Counsel as promptly as
possible (A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed
to be filed (but in no event in the case of this subparagraph (A),
less than three (3) Business Days prior to date of such filing);
(B) when the Commission notifies the Company whether there will be
a “review” of such Registration Statement and whenever
the Commission comments in writing on such Registration Statement;
and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, and
after the effectiveness thereof: (i) of any request by the
Commission or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or
Prospectus or for additional information; (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose;
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding
for such purpose; and (iv) if the financial statements included in
the Registration Statement become ineligible for inclusion therein
or of the occurrence of any event that makes any statement made in
the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to
the Registration Statement, Prospectus or other documents so that,
in the case of the Registration Statement or the Prospectus, as the
case may be, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Without limitation to any remedies to which the Holders may be
entitled under this Agreement, if any of the events described in
Section 3(c)(C)(i), 3(c)(C)(ii) and 3(c)(C)(iii) occur, the Company
shall use its best efforts to respond to and correct the
event.
(d) Use its best efforts to avoid
the issuance of, or, if issued, use best efforts to obtain the
withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification
(or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest
practicable time.
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(e) If requested by any Holder of
Registrable Securities, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration
Statement such information as the Company reasonably agrees should
be included therein and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(f) Furnish to each Holder and the
Special Counsel, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto, including
financial statements and schedules, and all exhibits to the extent
requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such
documents with the Commission.
(g) Promptly deliver to each Holder
and the Special Counsel, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably
request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment
or supplement thereto.
(h) Prior to any public offering of
Registrable Securities, use its best efforts to register or qualify
or cooperate with the selling Holders and the Special Counsel in
connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder
requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall
not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process in any
jurisdiction where it is not then so subject or subject the Company
to any material tax in any such jurisdiction where it is not then
so subject.
(i) Cooperate with the Holders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates shall be free, to the
extent permitted by applicable law and the Purchase Agreement, of
all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any
Holder may request at least two (2) Business Days prior to any sale
of Registrable Securities. In connection therewith, the Company
shall promptly after the effectiveness of the Registration
Statement cause an opinion of counsel to be delivered to and
maintained with its transfer agent, together with any other
authorizations, certificates and directions required by the
transfer agent, which authorize and direct the transfer agent to
issue such Registrable Securities without legend upon sale by the
Holder of such shares of Registrable Securities under the
Registration Statement.
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(j) Following the occurrence of any
event contemplated by Section 3(c)(C)(iv), as promptly as possible,
prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration
Statement nor such Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(k) Cause all Registrable Securities
relating to such Registration Statement to be listed on the
American Stock Exchange and any other United States securities
exchange, quotation system, market or over-the-counter bulletin
board, if any, on which similar securities issued by the Company
are then listed.
(l) Comply in all material respects
with all applicable rules and regulations of the Commission and
make generally available to its security holders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of
any 3-month period (or 90 days after the end of any 12-month period
if such period is a fiscal year) commencing on the first day of the
first fiscal quarter of the Company after the effective date of the
Registration Statement, which statement shall conform to the
requirements of Rule 158.
(m) Request each selling Holder to
furnish to the Company information regarding such Holder and the
distribution of such Registrable Securities as is required by law
or the Commission to be disclosed in the Registration Statement,
and the Company may exclude from such registration the Registrable
Securities of any such Holder who fails to furnish such information
within a reasonable time prior to the filing of each Registration
Statement, supplemented Prospectus and/or amended Registration
Statement.
If the Registration Statement refers
to any Holder by name or otherwise as the holder of any securities
of the Company, then such Holder shall have the right to require
(if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then
in force) the deletion of the reference to such Holder in any
amendment or supplement to the Registration Statement filed or
prepared subsequent to the time that such reference ceases to be
required.
Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a
notice from the Company of the occurrence of any event of the kind
described in Section 3(c)(C)(i), 3(c)(C)(ii), 3(c)(C)(iii),
3(c)(C)(iv), or 3(n), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration
Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing
(the “ Advice ”) by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement.
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(n) If (i) there is material
non-public information regarding the Company which the
Company’s Board of Directors (the “ Board
”) reasonably determines not to be in the Company’s
best interest to disclose and which the Company is not otherwise
required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other
similar transaction) available to the Company which the Board
reasonably determines not to be in the Company’s best
interest to disclose and which the Company would be required to
disclose under the Registration Statement, then the Company may
postpone or suspend filing or effectiveness of a registration
statement for a period not to exceed 30 consecutive days, provided
that the Company may not postpone or suspend its obligation under
this Section 3(n) for more than 90 days in the aggregate during any
12 month period unless, in each case, SDS Capital Group SPC, Ltd.
consents in writing to a longer period (each, a “ Blackout
Period ”).
4. Registration Expenses
.
All fees and expenses incident to
the performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not the Registration
Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the American
Stock Exchange and each other securities exchange, quotation
system, market or over-the-counter bulletin board on which
Registrable Securities are required hereunder to be listed, (B)
with respect to filings required to be made with the Commission,
and (C) in compliance with state securities or Blue Sky laws, (ii)
printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing or
photocopying prospectuses), (iii) messenger, telephone and delivery
expenses, (iv) Securities Act liability insurance, if the Company
so desires such insurance, (v) fees and expenses of all other
Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement, including,
without limitation, the Company’s independent public
accountants (including, in the case of an underwritten offering,
the expenses of any comfort letters or costs associated with the
delivery by independent public accountants of a comfort letter or
comfort letters) and legal counsel, and (vi) the reasonable and
documented fees and expenses and disbursements (in an aggregate
amount not to exceed $10,000) of the Special Counsel in connection
with any Registration Statement hereunder and in connection with
Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for
investment under the laws of such jurisdictions as the Holders of a
majority of Registrable Securities may reasonably designate. In
addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as
required hereunder.
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5. Indemnification
.
(a) Indemnification by the
Company . The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer
and sell Registrable Securities as principal as a result of a
pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of each of them, each
Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and reasonable
attorneys’ fees) and expenses (collectively, “
Losses ”), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained
or incorporated by reference in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of
prospectus or amendment or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that (i) such untrue statements
or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly
for use therein, which information was reasonably relied on by the
Company for use therein or to the extent that such information
relates to (x) such Holder and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of prospectus or in any
amendment or supplement thereto or (y) such Holder’s proposed
method of distribution of Registrable Securities as set forth in
Exhibit A (or as such Holder otherwise informs the Company
in writing); or (ii) in the case of an occurrence of an event of
the type described in Section 3(c)(C)(ii), 3(c)(C)(iii),
3(c)(C)(iv) or 3(n), the use by a Holder of an outdated or
defective Prospectus after the delivery to the Holder of written
notice from the Company that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice
contemplated in Section 3(m); provided, however, that the indemnity
agreement contained in this Section 5(a) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected
without the prior written consent of the Company, which consent
shall not be unreasonably withheld. The Company shall notify the
Holders promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement. Such indemnity shall
remain in full force and effect regardless of any investigation
made by or on behalf of an Indemnified Party (as defined in Section
5(c) to this Agreement) and shall survive the transfer of the
Registrable Securities by the Holders.
(b) Indemnification by
Holders . Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents and
employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and
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against all Losses, as incurred, arising solely
out of or based solely upon any untrue statement of a material fact
contained in the Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or
arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in the light of the circumstances
under which they were made) not misleading, to the extent, but only
to the extent, that (i) such untrue statement or omission is
contained in or omitted from any information so furnished in
writing by such Holder to the Company specifically for inclusion in
the Registration Statement or such Prospectus and that such
information was reasonably relied upon by the Company for use in
the Registration Statement, such Prospectus, or in any amendment or
supplement thereto, or to the extent that such information relates
to (x) such Holder and was reviewed and expressly approved in
writing by such Holder expressly for use in the Registration
Statement, such Prospectus, or such form of prospectus or in any
amendment or supplement thereto or (y) such Holder’s proposed
method of distribution of Registrable Securities as set forth in
Exhibit A (or as such Holder otherwise informs the Company
in writing) or (ii) in the case of an occurrence of an event of the
type described in Section 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv) or
3(n), the use by a Holder of an outdated or defective Prospectus
after the delivery to the Holder of written notice from the Company
that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 3(m);
provided, however, that the indemnity agreement contained in this
Section 5(b) shall not apply to amounts paid in settlement of any
Losses if such settlement is effected without the prior written
consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained
herein, the Holder shall be liable under this Section 5(b) for only
that amount as does not exceed the net proceeds to such Holder as a
result of the sale of Registrabl
