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EXHIBIT 10.29
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT ("Agreement") dated as of June 24, 1999, between
Group 1 Automotive, Inc., a Delaware corporation (the "Company") and the
undersigned holder ("Stockholder") of Common Stock of the Company.
WHEREAS, the Company has requested that the Stockholder agree not to
sell any shares of Common Stock of the Company until July 15, 2000, except in an
offering registered with the Securities and Exchange Commission ("SEC")
initiated by the Company; and
WHEREAS, in consideration of Stockholder agreeing not to sell shares of
Common Stock of the Company, the Company has agreed to initiate an offering
registered with the SEC of a portion of the shares of Common Stock of the
Company held by Stockholder.
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows.
1. Stockholder is the beneficial owner of the number of shares of
Common Stock of the Company set forth after his name on Schedule I attached
hereto and desires to sell up to the number of shares of Common Stock of the
Company set forth after his name on Schedule I attached hereto in an offering
registered with the SEC.
2. Stockholder hereby irrevocably agrees, except for the number of
shares of the Company set forth after his name on Schedule I attached hereto to
be included in a registration statement to be filed with the SEC and sold in an
offering registered with the SEC as shall be determined by the Company, that
Stockholder will not, directly or indirectly, sell, lend, offer, contract to
sell, transfer the economic risk of ownership in, make any short sale, pledge or
otherwise dispose of or transfer any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock without the prior written consent of the
Company for a period from the date hereof until the earliest of (i) 60 days
following the death of Stockholder; (ii) 60 days following the time at which
Stockholder is determined to be "permanently disabled" (for purposes of the
immediately preceding sentence, "permanently disabled" shall mean a condition
(certified by a licensed physician, selected by the Company) rendering
Stockholder unable to engage in employment that is substantially similar to
Stockholder's current employment); or (iii) July 15, 2000. Notwithstanding the
foregoing, if Stockholder is an individual, he or she may transfer any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock either during his or her lifetime or on death by will or intestacy
to his or her immediate family or to a trust the beneficiaries of which are
exclusively the undersigned and/or a member or members of his or her immediate
family; provided, however, that prior to any such transfer each transferee shall
execute an agreement, satisfactory to the Company, pursuant to which each
transferee shall agree to receive and hold such
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shares of Common Stock, or securities convertible into or exchangeable or
exercisable for the Common Stock, subject to the provisions hereof, and there
shall be no further transfer except in accordance with the provisions hereof.
For the purposes of this paragraph, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor. The Stockholder
understands that the agreements of the Stockholder are irrevocable and shall be
binding upon the Stockholder's heirs, legal representatives, successors and
assigns.
3. Whether or not the offering registered with the SEC actually occurs
depends on a number of factors, including market conditions. Any offering
registered with the SEC will only be made pursuant to one or more agreements
(each a "Purchase Agreement"), the terms of which are subject to agreement
between the Company and either the underwriters, dealers, agents or direct
purchasers (the "Purchasers"), depending on the type of offering. The
Stockholder agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of Common Stock or other
securities of the Company held by the Stockholder except in compliance with this
Agreement.
4. Attached hereto as Appendix A is a form of Power of Attorney and
Custody Agreement that the Stockholder agrees to execute contemporaneous with
the execution of this Agreement.
5. The Company shall, as expeditiously as reasonably possible, and in
any case prior to August 1, 1999, prepare and file with the SEC a registration
statement with respect to the shares of Common Stock that Stockholder desires to
sell as set forth in paragraph 1 and use its best efforts to cause such
registration statement to become and remain effective; provided, however, that
the Company shall have no obligation to maintain the effectiveness of any
registration statement filed hereunder or to cause the information therein to
remain current for more that such period as is customary and is required by the
Purchaser in the offering registered with the SEC. The Company shall select the
Purchaser or Purchasers, as the case may be, with respect to the offering of the
shares of Common Stock held by the Stockholder. The Company shall cooperate with
the Purchasers as the Purchasers may reasonably request in facilitating the
offering registered with the SEC.
6. All expenses incurred in connection with a registration statement
pursuant to this Agreement, including without limitation all registration and
qualification fees, printing and accounting fees, and fees and disbursements of
counsel for the Company and the Stockholder, shall be borne by the Company. The
Stockholder shall pay the Purchasers' discounts and commissions applicable to
the Common Stock sold by the Stockholder. In addition, the Stockholder shall pay
his or her own costs for experts or professionals (other than counsel) employed
by the Stockholder or on his or her behalf in connection with the registration
of the Common Stock under this Agreement.
7. The Company agrees to indemnify the Stockholder with respect to the
offering registered with the SEC of Common Stock pursuant to this Agreement as
set forth in Appendix B attached hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
STOCKHOLDER GROUP 1 AUTOMOTIVE, INC.
/s/ Robert E. Howard II By: /s/ B. B. Hollingsworth, Jr.
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Robert E. Howard II, Individually B. B. Hollingsworth, Jr.
Chairman, President and
/s/ Robert E. Howard II Chief Executive Officer
-----------------------
Robert E. Howard II, Manager
Howard Investments LLC
an Oklahoma Limited Liability Company
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APPENDIX A
CUSTODY AGREEMENT AND POWER OF ATTORNEY
FOR SALE OF COMMON STOCK OF
GROUP 1 AUTOMOTIVE, INC.
B.B. Hollingsworth, Jr.
Scott L. Thompson
As Attorneys-in-Fact
c/o Group 1 Automotive, Inc.
950 Echo Lane, Suite 350
Houston, Texas 77024
Scott L. Thompson
As Custodian
c/o Group 1 Automotive, Inc.
950 Echo Lane, Suite 350
Houston, Texas 75024
Gentlemen:
Group 1 Automotive, Inc., a Delaware corporation (the "Company"), the
undersigned and certain other stockholders of the Company (the undersigned and
such other stockholders being hereinafter referred to as the "Selling
Stockholders") may sell certain shares of Common Stock, par value $.01 per
share, of the Company ("Common Stock") covered by a Registration Statement on
Form S-3, as amended from time to time filed with the Securities and Exchange
Commission (the "Registration Statement") through underwriters, dealers, agents
or directly to one or more purchasers (collectively, the "Purchasers") as
contemplated by the Registration Statement. It is understood that at this time
there is no commitment on the part of any Purchaser to purchase any shares of
Common Stock and the undersigned acknowledges that no assurance can be given
that an offering of Common Stock will take place. The number of shares of Common
Stock that the undersigned proposes to sell to the Purchasers (the "Shares") are
set forth on Schedule I hereto. This Custody Agreement and Power of Attorney is
referred to herein as this "Agreement."
1. APPOINTMENT AND POWERS OF ATTORNEYS-IN-FACT.
(a) The undersigned hereby irrevocably constitutes and
appoints B.B. Hollingsworth, Jr. and Scott L. Thompson (the
"Attorneys-in-Fact"), and each of them, his agent and attorney-in-fact, with
full power of substitution, with respect to all matters arising in connection
with the public offering and sale of the Shares, including, but not limited to,
the power and authority on behalf of the undersigned to do or cause to be done
any of the following things:
(i) determine whether the Purchasers will be
underwriters, dealers, agents or direct purchasers and select the
particular Purchasers to act in such capacity;
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(ii) negotiate, determine and agree upon (a) the
price at which the Shares will be initially offered to the public by
the Purchasers pursuant to the applicable Purchase Agreement, as
hereinafter defined, (b) the underwriting discount with respect to the
Shares and (c) the price at which the Shares will be sold to the
Purchasers by the Selling Stockholders pursuant to the applicable
Purchase Agreement; provided, however, that in no event may the Shares
be sold to the Purchasers at a price per share less than $20;
(iii) prepare, execute and deliver one or more
agreements with one or more Purchasers (each, a "Purchase Agreement"),
the terms of which are subject to agreement between the Company and the
Purchasers, including the making of all representations and agreements
provided in the applicable Purchase Agreement to be made by, and the
exercise of all authority thereunder vested in, the undersigned;
(iv) sell, assign, transfer and deliver the Shares to
the Purchasers pursuant to the applicable Purchase Agreement and
deliver to the Purchasers certificates for the Shares so sold;
(v) take any and all steps deemed necessary or
desirable by the Attorneys-in-Fact in connection with the registration
of the Shares under the Securities Act of 1933, as amended (the
"Securities Act" ), the Securities Exchange Act of 1934, as amended,
and under the securities or "blue sky" laws of various states and
jurisdictions, including, without limitation, the giving or making of
such undertakings, representations and agreements and the taking of
such other steps as the Attorneys-in-Fact may deem necessary or
advisable;
(vi) instruct the Company and the Custodian, as
hereinafter defined, on all matters pertaining to the sale of the
Shares and delivery of certificates therefor;
(vii) provide, in accordance with the applicable
Purchase Agreement, for the payment of underwriting discounts and
commissions, transfer taxes and other expenses, if any, in connection
with the offering and sale of the undersigned's Shares covered by the
Registration Statement;
(viii) retain such legal counsel as the
Attorneys-in-Fact or any of them in their sole discretion deem
appropriate (which may be the same as the Company's counsel), to act as
counsel for the undersigned in connection with the sale of the Shares,
such counsel being hereby authorized to rely upon the representations
and warranties of the undersigned contained in the applicable Purchase
Agreement and in Section 4 of this Agreement in acting in such
capacity; and
(ix) otherwise take all actions and do all things
necessary or proper, required, contemplated or deemed advisable or
desirable by the Attorneys-in-Fact in their discretion, including the
execution and delivery of any documents, and generally act for and in
the name of the undersigned with respect to the sale of the Shares to
the Purchasers and the reoffering of the Shares by the Purchasers as
fully as could the undersigned if then personally present and acting.
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(b) Each Attorney-in-Fact may act alone or in concert in
exercising the rights and powers conferred on the Attorneys-in-Fact by this
Custody Agreement and Power of Attorney, and the act of any Attorney-in-Fact
shall be the act of the Attorneys-in-Fact. Each Attorney-in-Fact is hereby
empowered to determine, in his sole and absolute discretion, the time or times
when, the purposes for which, and the manner in which, any power herein
conferred upon the Attorneys-in-Fact shall be exercised.
(c) The Custodian, the Purchasers, the Company and all other
persons dealing with the Attorneys-in-Fact as such may rely and act upon any
writing believed in good faith to be signed by one or more of the
Attorneys-in-Fact.
(d) The Attorneys-in-Fact shall not receive any compensation
for their services rendered hereunder, except that they shall be entitled to
cause the Custodian to pay, from the proceeds payable to the undersigned, the
undersigned's proportionate share of any out-of-pocket expenses incurred under
this Agreement and similar instruments executed by other Selling Stockholders.
2. APPOINTMENT OF CUSTODIAN; DEPOSIT OF SHARES.
(a) In connection with and to facilitate the sale of the
Shares to the Purchasers, the undersigned hereby appoints Scott L. Thompson, as
custodian (the "Custodian") and herewith deposits with the Custodian one or more
certificates for Common Stock. The certificate(s) for Shares deposited hereunder
represent currently owned Shares at least equal in number in the aggregate to
the total number of Shares to be sold by the undersigned to the Purchasers,
which number is set forth on Schedule I hereto. Each such certificate for Shares
so deposited hereunder is in negotiable and proper deliverable form endorsed in
blank with the signature of the undersigned thereon guaranteed by a commercial
bank or trust company in the United States or by a member firm of the New York
Stock Exchange, or is accompanied by a duly executed stock power or powers in
blank, bearing the signature of the undersigned so guaranteed. The Custodian is
hereby authorized and directed, subject to the instructions of the
Attorneys-in-Fact, (a) to hold in custody any certificates for Shares deposited
herewith, (b) to deliver or to authorize the Company's Transfer Agent to deliver
the certificates for Shares deposited hereunder (or replacement certificate(s)
for the Shares) to or at the direction of the Attorneys-in-Fact in accordance
with the applicable Purchase Agreement and (c) to return or cause the Company's
Transfer Agent to return to the undersigned new certificate(s) for the shares of
Common Stock represented by any certificate for Common Stock deposited hereunder
which are not sold pursuant to the applicable Purchase Agreement.
(b) Until the Shares have been delivered to the Purchasers
against payment therefor in accordance with the applicable Purchase Agreement,
the undersigned shall retain all rights of ownership with respect to the Shares
deposited hereunder, including, if applicable, the right to vote and to receive
all dividends and payment thereon, except the right to retain custody of or
dispose of such Shares (but only to the extent provided herein), which right is
subject to this Agreement.
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3. SALE OF SHARES; REMITTING NET PROCEEDS.
(a) The Attorneys-in-Fact are hereby authorized and directed
to deliver or cause the Custodian or the Company's Transfer Agent to deliver
certificates for the Shares to the Purchasers, in accordance with the applicable
Purchase Agreement, against delivery to the Attorneys-in-Fact for the account of
the undersigned of the purchase price of the Shares, at the time and in the
funds specified in the applicable Purchase Agreement. The Attorneys-in-Fact are
authorized, on behalf of the undersigned, to accept and acknowledge receipt of
the payment of the purchase price for the Shares and shall promptly deposit such
proceeds with the Custodian. After reserving an amount of such proceeds for
expenses as provided below, the Custodian shall promptly remit to the
undersigned his proportionate share of the proceeds.
(b) Before any proceeds of the sale of the Shares are remitted
to the undersigned, the Attorneys-in-Fact are authorized and empowered to direct
the Custodian to reserve from the proceeds an amount determined by the
Attorneys-in-Fact to be sufficient to pay the undersigned's proportionate share
of all expenses to be paid by the Selling Stockholders. The Custodian is
authorized to pay all of the Selling Stockholders' expenses relating to the
offering from the amount reserved for that purpose pursuant to the direction of
the Attorneys-in-Fact. After payment of expenses, the Custodian will remit to
the undersigned his proportionate share of any balance. To the extent expenses
exceed the amount reserved, each Selling Stockholder shall remain liable for his
proportionate share of such expenses. The Selling Stockholders' expenses shall
include all discounts and commissions applicable to the sale of the Shares and,
to the extent applicable to such Selling Stockholder, all costs for experts or
professionals (other than counsel) employed by or on behalf of such Selling
Stockholder in connection with the registration and sale of the Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The undersigned
represents and warrants to, and agrees with, the other Selling Stockholders, the
Company, the Attorneys-in-Fact, the Custodian and the Purchasers as follows:
(a) The undersigned has and, on each date on which the
undersigned consummates the sale of any Shares as contemplated herein, will have
full legal right, power and authority to enter into and perform this Agreement
and the applicable Purchase Agreement. If the undersigned is acting as a
fiduciary, officer, partner, or agent, the undersigned is enclosing with this
Agreement certified copies of the appropriate instruments pursuant to which the
undersigned is authorized to act hereunder. If the undersigned is an individual
and is married, the undersigned is enclosing with this Agreement a duly
completed and executed consent of his spouse, in the form attached to this
Agreement as Annex A.
(b) The undersigned has reviewed a draft of the applicable
Purchase Agreement, including without limitation the agreements and
representations and warranties to be made by the undersigned as a Selling
Stockholder and the indemnification and contribution provisions contained
therein insofar as such provisions relate to the undersigned. The undersigned
hereby represents, warrants and covenants that each of the representations and
warranties of the Selling Stockholders contained in the applicable Purchase
Agreement is true and correct with respect to the undersigned as of the date
hereof and, except as the undersigned shall have notified the Attorneys-in-Fact
pursuant to
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paragraph I of the attached instructions, will be true and correct at all times
from the date hereof through and including each Time of Delivery (as such terms
are defined in the applicable Purchase Agreement). The undersigned will promptly
notify the Attorneys-in-Fact of any development that would make any such
representation and warranty untrue.
(c) The undersigned has read Schedule II and Schedule III
attached hereto and has supplied the information called for therein, and the
information contained in Schedule II and Schedule III attached hereto supplied
by the undersigned is true, complete and correct.
(d) Upon execution and delivery of the applicable Purchase
Agreement by the Attorneys-in-Fact on behalf of the undersigned, the undersigned
agrees to be bound by and to perform each of the covenants and agreements
(including, without limitation, those relating to indemnification and
contribution, as well as the "lockup" provisions contained therein) of the
undersigned as a Selling Stockholder in the applicable Purchase Agreement.
(e) The undersigned agrees to deliver to the Attorneys-in-Fact
such documentation as the Attorneys-in-Fact, the Company, the Selling
Stockholders or the Purchasers or any of their respective counsel may reasonably
request in order to effectuate any of the provisions hereof or of the applicable
Purchase Agreement, all of the foregoing to be in form and substance
satisfactory in all respects to the Attorneys-in-Fact.
The foregoing representations, warranties and agreements are made for the
benefit of, and may be relied upon by, the other Selling Stockholders, the
Attorneys-in-Fact, the Company, the Custodian, the Purchasers and their
respective representatives, agents and counsel and are in addition to, and not
in limitation of, the representations, warranties and agreements of the Selling
Stockholders in the applicable Purchase Agreement.
5. IRREVOCABILITY OF INSTRUMENTS; TERMINATION OF THIS AGREEMENT.
(a) This Agreement, the deposit of certificates pursuant
hereto and all authority hereby conferred, is granted, made and conferred
subject to and in consideration of (i) the interests of the Attorneys-in-Fact,
the Purchasers, the Company and the other Selling Stockholders who may become
parties to the applicable Purchase Agreement in and for the purpose of
completing the transactions contemplated hereunder and by the applicable
Purchase Agreement and (ii) the completion of the registration of Common Stock
pursuant to the Registration Statement and the other acts of the above-mentioned
parties from the date hereof to and including the execution and delivery of the
applicable Purchase Agreement in anticipation of the sale of Common Stock,
including the Shares, to the Purchasers; and the Attorneys-in-Fact are hereby
further vested with an estate, right, title and interest in and to the
certificates deposited herewith for the purpose of irrevocably empowering and
securing to them authority sufficient to consummate said transactions.
Accordingly, this Agreement shall be irrevocable prior to the earliest of (b) 60
days following the death of Stockholder, (a) 60 days following the time at which
Stockholder is determined to be "permanently disabled" (for purposes of the
immediately preceding sentence, "permanently disabled" shall mean a condition
(certified by a licensed physician, selected by the Company) rendering
Stockholder unable to engage in employment that is substantially similar to
Stockholder's current employment), or (c) July 15, 2000,
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(the "Termination Date"); this Agreement shall remain in full force and effect
until the Termination Date, unless prior to such date the applicable Purchase
Agreement has been terminated by the Purchasers due to the failure of a
condition precedent to the closing of the transactions contemplated thereby, in
which case this Agreement shall cease to remain in full force and effect as of
such time. The undersigned further agrees that this Agreement shall not be
terminated by operation of law or upon the occurrence of any event whatsoever,
including the death, disability or incompetence of the undersigned or any other
Selling Stockholder or, if the undersigned or any other Selling Stockholder is
not a natural person, upon any dissolution, winding up, distribution of assets
or other event affecting the legal existence of the undersigned or such Selling
Stockholder. If any event referred to in the preceding sentence shall occur,
whether with or without notice thereof to the Attorneys-in-Fact, any of the
Purchasers or any other person, the Attorneys-in-Fact shall nevertheless be
authorized and empowered to deliver and dispose of the certificates deposited
under the Agreement by the undersigned in accordance with the terms and
provisions of the applicable Purchase Agreement and this Agreement as if such
event had not occurred.
(b) If the sale of the Shares contemplated by this Agreement
is not completed by the Termination Date, this Agreement shall terminate
(without affecting any lawful action of the Attorneys-in-Fact or the Custodian
prior to such termination), and the Attorneys-in-Fact shall cause the Custodian
to return to the undersigned all certificates deposited hereunder representing
Shares on or prior to such date, but only after having received payment of the
undersigned's proportionate part of any expenses to be paid or borne by the
Selling Stockholders. The undersigned hereby covenants with the
Attorneys-in-Fact and with all other Selling Stockholders that if for any reason
the sale of the Shares contemplated hereby shall not be consummated, the
undersigned shall pay the undersigned's proportionate share of all expenses
payable by the Selling Stockholders hereunder or under the applicable Purchase
Agreement.
6. LIABILITY AND INDEMNIFICATION OF THE ATTORNEYS-IN-FACT AND
CUSTODIAN. The Attorneys-in-Fact and the Custodian assume no responsibility or
liability to the undersigned or to any other person, other than to hold and
dispose of the certificates and Shares, the other documents deposited hereunder,
the proceeds from the sale of the Shares and any other shares of Common Stock
deposited with the Custodian pursuant to the terms of this Agreement in
accordance with the provisions hereof. The undersigned hereby agrees to
indemnify and hold harmless the Attorneys-in-Fact and the Custodian, and their
respective officers, agents, successors, assigns and personal representatives
with respect to any act or omission of or by any of them in good faith in
connection with any and all matters contemplated by this Agreement or the
applicable Purchase Agreement. THIS SECTION 6 SHALL BE ENFORCEABLE
NOTWITHSTANDING THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE OF ANY
INDEMNIFIED PARTY.
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7. INTERPRETATION.
(a) The representations, warranties and agreements of the
undersigned contained herein and in the applicable Purchase Agreement shall
survive the sale and delivery of the Shares and the termination of this
Agreement.
(b) The validity, enforceability, interpretation and
construction of this Agreement shall be determined in accordance with the laws
of the State of New York applicable to contracts made and to be performed within
the State of New York, and this Agreement shall inure to the benefit of, and be
binding upon, the undersigned and the undersigned's heirs, executors,
administrators, successors and assigns, as the case may be.
(c) Wherever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any such provision shall be prohibited by or invalid under applicable
law, it shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(d) The use of the masculine gender in this Agreement includes
the feminine and neuter, and the use of the singular includes the plural,
wherever appropriate.
8. NOTICES. Any notice or communication shall be in writing and shall
be delivered (i) if to the Company, at the office of the Company, at 950 Echo
Lane, Suite 350, Houston, Texas 77024, Attention: B.B. Hollingsworth, Jr.,
President and Chief Executive Officer; (ii) if to the Purchasers, at their
customary business address, (iii) if to the Attorneys-in-Fact, c/o the Company,
950 Echo Lane, Houston, Texas 77024, (iv) if to the Custodian, Scott L.
Thompson, c/o the Company, 950 Echo Lane, Houston, TX 77024; and (v) if to the
undersigned, at the address set forth on the signature page.
IN WITNESS WHEREOF, the undersigned has executed this Custody Agreement
and Power of Attorney this 30th day of June, 1999.
/s/ Robert E. Howard II
-----------------------
(Please sign exactly as your name
appears on your stock certificate(s))
Name and address to which notices and
funds shall be sent.
Robert E. Howard II
-------------------
(NAME)
P.O. Box 14508
--------------
(STREET)
Oklahoma City, OK 73113
-----------------------
(CITY) (STATE) (ZIP)
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ACCEPTED by the Attorneys-in-Fact ACCEPTED by the Custodian as
as of the date above set forth: of the date above set forth:
- ----------------------------------- ------------------------------------
- -----------------------------------
By
- ----------------------------------- ----------------------------------
- -----------------------------------
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APPENDIX B
INDEMNIFICATION
(a) The Company will, if Common Stock held by a Stockholder is
included in the securities as to which such registration, qualification
or compliance is being effected, indemnify such Stockholder, each of
its officers and directors, and each person controlling such
Stockholder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each
Purchaser, if any, and each person who controls any Purchaser, against
all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statements not misleading, or any
violation by the Company of any rule or regulation promulgated under
the Securities Act of 1933, as amended (the "Act"), or of any other
federal, state or common law applicable to the Company and relating to
any action or inaction required of the Company in connection with any
such registration, qualification or compliance, and will reimburse each
such Stockholder, each of its officers and directors, and each person
controlling such Stockholder, each such Purchaser and each person who
controls any such Purchaser, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability. or action, provided that the
Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information
furnished to the Company by an instrument duly executed by such
Stockholder or Purchaser and stated to be specifically for use therein.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such party and shall survive the
subsequent transfer of shares of Common Stock by the seller thereof and
the transfer of any shares of Common Stock of the Company which were
the subject of such registration, qualification or listing.
(b) Each Stockholder will, if Common Stock held by such
Stockholder is included in the securities as to which such
registration, qualification or compliance is being effected, indemnify
the Company, each of its directors and officers, each legal counsel and
independent accountant of the Company, each Purchaser, if any, of the
Company's securities covered by such a registration statement, each
person who controls the Company or such Purchaser within the meaning of
the Act, and each other Stockholder registering Common Stock, each of
its officers and directors and each person controlling such
Stockholder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to
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make the statements therein not misleading, and will reimburse the
Company, such Stockholders, such directors, officers, persons,
Purchasers or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by such Stockholder and
stated to be specifically for use therein; provided, however, that (i)
the obligations of such Stockholders hereunder shall be limited to an
amount equal to the proceeds to each such Stockholder of Common Stock
sold as contemplated herein and (ii) the indemnity for untrue
statements or omissions described above shall not apply if the
Stockholder providing such written information provides the Company
with such additional written information prior to the effectiveness of
the registration as is required to make the previously supplied written
information true and complete, together with a description in
reasonable detail of the information previously supplied which was
untrue or incomplete.
(c) Each party entitled to indemnification hereunder (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at
such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Agreement. After
notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or litigation, the
Indemnifying Party will not be liable to such Indemnified Party for any
legal or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the Indemnifying Party abandons the defense of
such claim or litigation. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. No
Indemnified Party shall consent to the entry of any judgment or enter
into any settlement without the prior written consent of the
Indemnifying Party.