UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13D-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO 13D-2(A)
(AMENDMENT NO. 19)*
Avatar Holdings Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $1.00 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
053494 10 0
------------------------------------------------
(CUSIP Number)
Robert Todd Lang, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
February 2, 1998
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
13D
- ----------------------------- --------------------------
CUSIP NO. 053494 10 0 PAGE 2 OF PAGES
- ----------------------------- --------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Odyssey Partners, L.P.
(No. 13-1561475)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) |X|
(B) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 2,107,763
SHARES
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH None.
REPORTING
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
2,107,763
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
None.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,107,763
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
13D
- ----------------------------- --------------------------
CUSIP NO. 053494 10 0 PAGE 3 OF PAGES
- ----------------------------- --------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Leon Levy
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) |X|
(B) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 906,924 (includes 628,930 shares acquirable upon
SHARES conversion of Notes owned by Mr. Levy)
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,107,763
REPORTING
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
906,924 (includes 628,930 shares acquirable upon
conversion of Notes owned by Mr. Levy)
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,107,763
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,014,687 (includes 628,930 shares acquirable upon conversion of
Notes owned by Mr. Levy)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.8% (assuming conversion of all Notes owned by Mr. Levy)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
EXPLANATORY NOTE
This statement constitutes the nineteenth amendment (Amendment No. 19) to
a statement on Schedule 13D previously filed with the Securities and Exchange
Commission, and restates the Schedule 13D pursuant to Rule 13d-2(c) under the
Securities Exchange Act of 1934, as amended.
* * *
ITEM 1. SECURITY AND ISSUER
The title and class of equity security to which this statement on Schedule
13D relates is the common stock, $1.00 par value per share (the "Common Stock"),
of Avatar Holdings Inc., a Delaware corporation (the "Issuer"). The address of
the Issuer's principal executive office is 255 Alhambra Circle, Coral Gables,
Florida 33134.
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed on behalf of Odyssey Partners, L.P., a Delaware
limited partnership ("Odyssey"), and Leon Levy. Odyssey and Leon Levy are
referred to herein collectively as the "Reporting Persons," and may be deemed to
constitute the members of a "group".
Odyssey's principal executive office is located at 31 West 52nd Street,
New York, New York 10019. Odyssey is a private investment partnership, which
announced in January 1997 that it has determined to liquidate and dissolve.
Odyssey has six general partners (individually, a "General Partner" and,
collectively, the "General Partners"): Leon Levy, Jack Nash, Joshua Nash,
Stephen Berger, Brian Wruble and Nash Family Partnership, L.P., a New York
limited partnership. The business address of each General Partner is 31 West
52nd Street, New York, New York 10019. The principal occupations of Leon Levy
and Jack Nash (each of whom is a citizen of the United States) are to serve as
general partners of Odyssey.
The principal occupation of Joshua Nash (who is a citizen of the United
States) is to serve (i) as the sole member and manager of a limited liability
company that is a general partner of Ulysses Partners, L.P. ("Ulysses
Partners"), (ii) as the managing member of two affiliated limited liability
companies, one which provides administrative services to Ulysses Partners and
the other which provides investment advisory services to Ulysses Offshore Fund,
Ltd. ("Ulysses Offshore"), and (iii) as a general partner of Odyssey. The
principal business of each of Ulysses Partners and Ulysses Offshore is
investments. The business address of Ulysses Partners is 31 West 52nd Street,
New York, New York 10019, and the business address of Ulysses Offshore is
Goldman Sachs (Cayman) Trust, Limited, Harbour Center, 2nd Floor, North Church
Street, P.O. Box 896, George Town, Grand Cayman, Cayman Islands. The principal
business of Nash Family Partnership, L.P. is investments.
The general partner of Nash Family Partnership, L.P. is Joshua Nash.
The principal occupations of Stephen Berger and Brian Wruble (who are
citizens of the United States) are to serve (i) as members of a limited
liability company that is the sole general partner of Odyssey Investment
Partners Fund, LP ("Partners Fund"), (ii) as members and employees of a limited
liability company that provides investment management services to Partners Fund
and (iii) as general
4
<PAGE>
partners of Odyssey. The principal business of Partners Fund is investments. The
business address of Partners Fund is 31 West 52nd Street, New York, New York
10019.
During the last five years, neither Odyssey nor any General Partner
(including Leon Levy) has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he or it was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Leon Levy also serves as the Chairman of the Board of Directors of the
Issuer.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On February 2, 1998, Leon Levy used $19,400,000 of his personal funds to
purchase $20,000,000 aggregate principal amount of the Issuer's 7% Convertible
Subordinated Notes due 2005 in an underwritten public offering of the Notes. See
Item 6 hereof.
Odyssey has acquired the shares of Common Stock using its working capital,
and Leon Levy has acquired the shares of Common Stock using his personal funds.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons have acquired the securities of the Issuer for
investment purposes. The Reporting Persons may acquire additional securities of
the Issuer or dispose of securities of the Issuer at any time and from time to
time in the open market or otherwise. Although the foregoing represents the
range of activities presently contemplated by the Reporting Persons with respect
to the Issuer, it should be noted that the possible activities of the Reporting
Persons are subject to change at any time.
Leon Levy is a general partner of Odyssey and the Chairman of the Board of
Directors of the Issuer, and the Reporting Persons beneficially own a
significant percent of the Issuer's Common Stock. Accordingly, the Reporting
Persons will be in a position to influence the management, operations and
activities of the Issuer and may be deemed, collectively, to control the Issuer.
Except as set forth above, the Reporting Persons have no present plans or
intentions which relate to or would result in any of the actions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the close of business on February 2, 1998, and based on the
number of shares of Common Stock reported to be outstanding as of November 30,
1997 (i.e., 9,170,102 shares), as set forth under the heading "Principal
Stockholders" of the prospectus dated January 28, 1998, included in the Issuer's
Registration Statement on Form S-3 (No. 333-41923):
Odyssey beneficially owned 2,107,763 shares of Common Stock,
representing approximately 23.0% of the outstanding shares of Common Stock
of the Issuer; and
5
<PAGE>
Leon Levy beneficially owned 3,014,687 shares of Common Stock
(composed of (i) 277,994 shares of Common Stock owned by him, (ii) 628,930
shares of Common Stock acquirable upon conversion of $20,000,000 aggregate
principal amount of the Issuer's 7% Convertible Subordinated Notes due
2005 owned by him, and (iii) 2,107,763 shares of Common Stock beneficially
owned by Odyssey for which Mr. Levy may be deemed to be the beneficial
owner as described in Item 5(b) hereof), representing approximately 30.8%
of the outstanding shares of Common Stock of the Issuer (assuming
conversion of all Notes owned by Mr. Levy).
To the best of Odyssey's knowledge, none of the General Partners (other
than Leon Levy) beneficially own any Common Stock.
(b) The responses of each of the Reporting Persons to (i) Rows (7) through
(10) of the cover page of this statement on Schedule 13D and (ii) Item 5(a)
hereof are incorporated herein by reference. Each General Partner of Odyssey
(including Leon Levy) may be deemed to be the beneficial owner of the shares of
Common Stock beneficially owned by Odyssey for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), because each
shares voting and investment power over such shares with the other General
Partners of Odyssey. Pursuant to Rule 13d-4 under the Exchange Act, each General
Partner (including Mr. Levy) hereby expressly disclaims beneficial ownership of
such shares to the extent such beneficial ownership exceeds such General
Partner's fractional interest therein as a general partner of Odyssey, which
fractional interest is not presently determinable.
(c) Except as described in Item 6 hereof, neither Leon Levy or Odyssey nor
to the best of its knowledge, any other General Partner, has effected any
transaction in the Common Stock during the past 60 days.
(d) Neither Leon Levy or Odyssey nor to the best of its knowledge, any
other General Partner, knows of any other person who has the right to receive or
the power to direct the receipt of dividends from, or proceeds from the sale of,
the shares of Common Stock beneficially owned by the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
On January 28, 1998, Leon Levy purchased $20,000,000 aggregate principal
amount of 7% Convertible Subordinated Notes due 2005 of the Issuer (the
"Notes"), net of underwriting fees and commissions, in an underwritten public
offering of the Notes (the "Offering"). The Notes are convertible, in whole or
from time to time in part (in denominations of $1,000 or integral multiples
thereof), into shares of Common Stock, at the option of the holder, at any time
after 60 days following the original issuance of the Notes, which was on
February 2, 1998, and prior to redemption or final maturity, at a conversion
price of $31.80 per share, subject to adjustment under certain circumstances.
In connection with the Offering and pursuant to a Registration Rights
Agreement, dated as of February 2, 1998, between the Issuer and Leon Levy, the
Issuer agreed to provide Mr. Levy with demand and incidental registration
rights, subject to certain limitations, with respect to "registrable
securities," which includes the Notes issued to Mr. Levy in the Offering, shares
of Common Stock
6
<PAGE>
owned by Mr. Levy as of February 2, 1998 (excluding any shares held, directly or
indirectly, through Odyssey), and any shares of Common Stock issued upon
conversion of the Notes issued to Mr. Levy in the Offering.
In connection with the Offering, Odyssey and Leon Levy entered into
Lock-Up Agreements with the underwriters, each dated January 23, 1998, in which
they agreed, for a period from January 27, 1998, until 180 days thereafter, not
to sell, offer to sell, distribute, pledge, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or encumber, or exercise any
registration rights with respect to, any shares of Common Stock of the Issuer,
or any securities convertible into or exchangeable for shares of Common Stock,
now owned or hereafter acquired directly by them or with respect to which they
have acquired or hereafter acquire the power of disposition, without the prior
written consent of CIBC Oppenheimer Corp.
All or part of the securities of the Issuer beneficially owned by a
Reporting Person may from time to time be pledged with banking institutions or
brokerage firms as collateral for loans made by such banks or brokerage firms to
such Reporting Person.
Leon Levy is a general partner of Odyssey and the Chairman of the Board of
Directors of the Issuer. An agreement among the Reporting Persons with respect
to the filing of this statement is attached hereto as Exhibit D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A. Registration Rights Agreement, dated as of February 2, 1998,
between Avatar Holdings Inc. and Leon Levy. (filed herewith)
Exhibit B. Lock-up Agreement, dated January 23, 1998, among Odyssey
Partners, L.P., CIBC Oppenheimer Corp. and SBC Warburg Dillon
Read Inc. (filed herewith)
Exhibit C. Lock-up Agreement, dated January 23, 1998, among Leon Levy, CIBC
Oppenheimer Corp. and SBC Warburg Dillon Read Inc. (filed
herewith)
Exhibit D. Agreement among the Reporting Persons regarding filing of
Schedule 13D. (filed herewith)
7
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Dated: February 2, 1998
ODYSSEY PARTNERS, L.P.
/s/ Joshua Nash
-------------------------------------
Name: Joshua Nash
Title: General Partner
/s/ Leon Levy
-------------------------------------
Leon Levy
8
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
A. Registration Rights Agreement, dated as of February 2, 1998, between
Avatar Holdings Inc. and Leon Levy. (filed herewith)
B. Lock-up Agreement, dated January 23, 1998, among Odyssey Partners,
L.P., CIBC Oppenheimer Corp. and SBC Warburg Dillon Read Inc. (filed
herewith)
C. Lock-up Agreement, dated January 23, 1998, among Leon Levy, CIBC
Oppenheimer Corp. and SBC Warburg Dillon Read Inc. (filed herewith)
D. Agreement among the Reporting Persons regarding filing of Schedule
13D. (filed herewith)
9
REGISTRATION RIGHTS AGREEMENT, dated as of February 2, 1998, between
AVATAR HOLDINGS INC., a Delaware corporation (the "Company"), and Leon Levy (the
"Initial Holder").
This Agreement is made in connection with the offering (the
"Offering") by the Company of up to $115,000,000 aggregate principal amount
(inclusive of the underwriters' over-allotment option) of 7% Convertible
Subordinated Notes due 2005 (the "Notes"). In order to induce the Initial Holder
to purchase $20,000,000 aggregate principal amount of Notes pursuant to the
Offering, the Company has agreed to provide the registration rights set forth in
this Agreement for the benefit of Holders (as hereinafter defined).
Accordingly, the parties hereto agree as follows:
1. Definitions.
As used herein, unless the context otherwise requires, the following
capitalized terms (in their singular and plural forms, as applicable) have the
following respective meanings:
"Aggregate Value" of Registrable Securities shall mean an aggregate
dollar amount determined on the basis of the principal amount of the Notes and
the average of the closing prices of the Common Stock on the national securities
exchange on which such stock is then listed (or, if the Common Stock is not
listed or admitted to trading on a national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other system then in
use) during the ten (10) consecutive trading days preceding the applicable date
of determination.
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" means any shares of Common Stock, par value $1.00 per
share, of the Company now or hereafter authorized to be issued, and any and all
securities of any kind whatsoever of the Company which may be issued on or after
the date hereof in respect of, or in exchange for,
NYFS05...:\38\18838\0081\1948\AGRD117P.58F
<PAGE>
shares of Common Stock pursuant to a merger, consolidation, stock split, stock
dividend, recapitalization of the Company or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar federal statute.
"Holder" or "Holders" means one or more registered holders of
Registrable Securities, as applicable.
"Initial Holder" has the meaning assigned to it in the preamble
hereof.
"Notes" has the meaning assigned to it in the preamble hereof.
"Odyssey" means Odyssey Partners, L.P., a Delaware limited
partnership.
"Offering" has the meaning assigned to it in the preamble hereof.
"Other Holder" means any person or entity to whom the Company has
granted or does grant registration rights, except, to the extent applicable, in
such person's or entity's capacity as a Holder.
"Other Holder Registrable Securities" means any securities of the
Company, whether now or hereafter issued, including Notes and shares of Common
Stock, held by any Other Holder.
"Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
"Registrable Common Stock" means the Registrable Securities other
than the Registrable Notes (as hereinafter defined).
2
<PAGE>
"Registrable Notes" means the Notes issued to the Initial Holder
pursuant to the Offering.
"Registrable Securities" means (i) the Registrable Notes, (ii) the
shares of Common Stock owned by the Initial Holder as of the date hereof,
excluding any such shares held, directly or indirectly, through a limited or
general partnership or other interest in Odyssey or received or receivable upon
liquidation of or distribution by Odyssey, (iii) any shares of Common Stock
issued upon conversion of the Registrable Notes, or (iv) any securities issued
with respect to the Common Stock referred to in clauses (ii) and (iii) hereof by
way of a stock dividend, stock split or reverse stock split or in connection
with a combination of shares, reclassification, recapitalization, merger,
consolidation, spin-off, reorganization or otherwise.
"Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to Section 2
hereof, including, without limitation, all registration, filing and applicable
fees associated with filings to be made with the National Association of
Securities Dealers, Inc. (the "NASD") or any national securities exchange; all
fees and expenses of compliance with state securities or blue sky laws
(including fees and disbursements of counsel to the underwriters or the Holders
in connection with "blue sky" qualification of the Registrable Securities and
determination of their eligibility for investment under the laws of the various
jurisdictions); all duplicating and printing expenses; all messenger and
delivery expenses; the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of "cold comfort"
letters or, in connection with a registration pursuant to Section 2.2 only, any
special audits required by, or incident to, such registration; all fees and
disbursements of underwriters (other than underwriting discounts and commissions
and fees or disbursements of counsel for any underwriter); and all transfer
taxes; provided, however, that Registration Expenses shall exclude, and the
Holders shall pay, underwriting discounts and commissions attributable to the
sale of Registrable Securities by such Holders.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
3
<PAGE>
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar federal statute.
2. Registration Under Securities Act, Etc.
2.1 Registration on Request. (a) Request. Subject to the provisions
of Section 2.1(h) below, at any time or from time to time after the date which
is 180 days from the date hereof and until the date that is 180 days following
the seventh anniversary hereof, the Holders (the "Initiating Holders") shall
have the right to require the Company to effect the registration under the
Securities Act of all or part of the Registrable Securities (having an Aggregate
Value of not less than $5,000,000) held by such Initiating Holders, by
delivering a written request therefor to the Company specifying the aggregate
principal amount and the number of shares of Registrable Securities, as
applicable, and the intended method of distribution.
The Company shall promptly give written notice of such requested
registration to all other Holders, if any, and thereupon the Company shall, as
expeditiously as possible, use its best efforts to (A) effect the registration
under the Securities Act (including by means of a shelf registration pursuant to
Rule 415 under the Securities Act if so requested in such request and if the
Company is then eligible to use such a registration) of the Registrable
Securities which the Company has been so requested to register by the Initiating
Holders, and all other Registrable Securities which the Company has been
requested to register by any other Holder (together with the Initiating Holders,
the "Selling Holders") by written request given to the Company within 10 days
after the giving of written notice by the Company, all to the extent necessary
to permit distribution in accordance with the intended method of distribution
set forth in the written request or requests delivered by the Selling Holders,
and (B) if requested by the Selling Holders, obtain acceleration of the
effective date of the registration statement relating to such registration.
(b) Registration Statement Form. Registrations under this Section
2.1 shall be on such appropriate registration form of the Commission as shall be
selected by the Company and as shall be reasonably acceptable to the Selling
Holders. The Company agrees to include in any such registration statement all
information which, in the opinion
4
<PAGE>
of counsel to the Selling Holders and counsel to the Company, is required to be
included.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with any registration requested pursuant to this Section 2.1.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected
(including for purposes of paragraph (h) of this Section 2.1) (i) unless a
registration statement with respect thereto has become effective and has been
kept continuously effective for a period of at least 120 days (or such shorter
period which shall terminate when all the Registrable Securities covered by such
registration statement have been sold pursuant thereto), (ii) if after it has
become effective, such registration is subject to any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason not attributable to the Selling Holders and has not
thereafter become effective, or (iii) if the conditions to closing specified in
the underwriting agreement, if any, entered into in connection with such
registration are not satisfied for any reason not attributable to the Selling
Holders or waived.
(e) Selection of Managing Underwriters. The managing underwriters of
each underwritten offering of the Registrable Securities to be registered shall
be selected jointly by the Company and the Selling Holders and, if they are
unable to jointly agree on such selection, such managing underwriter shall be
selected by the Company and shall be reasonably satisfactory to the Selling
Holders.
(f) Priority in Requested Registration. If the managing underwriter
of any underwritten offering shall advise the Company in writing (with a copy to
each Selling Holder) that, in its opinion, the aggregate principal amount or the
number of shares of Registrable Securities requested to be included in such
registration exceeds the aggregate principal amount or number of securities
which can be sold in such offering within a price range acceptable to the
Selling Holders of Registrable Securities, the Company will include in such
registration the aggregate principal amount of Registrable Notes and the number
of shares of Registrable Common Stock, as applicable, which the Company is so
advised can be sold in such offering. The Registrable Securities requested to be
included in such registration shall be
5
<PAGE>
reduced pro rata among the Selling Holders requesting such registration of
Registrable Securities on the basis of the Aggregate Value of Registrable
Securities of such Selling Holders requesting such registration. In connection
with any such registration to which this Section 2.1(g) is applicable, no
securities other than Registrable Securities shall be covered by such
registration.
(g) Limitations on Registration on Request. Notwithstanding anything
to the contrary contained herein, the registration rights granted to the Holders
in Section 2.1(a) are subject to the following limitations: (i) the Holders
shall be entitled to require the Company, and the Company shall be required, to
effect no more than three registrations pursuant to Section 2.1(a) hereof, (ii)
the Company shall not be required to effect a registration pursuant to Section
2.1(a) if, with respect thereto, the managing underwriter, the Commission, the
Securities Act or the rules and regulations thereunder, or the form on which the
registration statement is to be filed, would require the conduct of an audit
other than the regular audit conducted by the Company at the end of its fiscal
year, but rather the filing may be delayed until the completion of such regular
audit (unless the Holders agree to pay the expenses of the Company in connection
with such an audit other than the regular audit) and (iii) the Holders shall not
be entitled to require the Company, and the Company shall not be required, to
effect a registration pursuant to Section 2.1(a) within six (6) months following
the termination date of any other registration statement which was filed
pursuant to Section 2.1(a).
(h) Postponement. The Company shall be entitled once in any 12-month
period to postpone for a reasonable period of time (but not exceeding 90 days)
(the "Postponement Period") the filing or the effectiveness of any registration
statement required to be prepared and filed by it pursuant to this Section 2.1
if the Company determines, in its reasonable judgment, that such registration
and offering would materially interfere with any material financing, corporate
reorganization or other material transaction involving the Company or any
subsidiary, or would require premature disclosure thereof, and promptly gives
the Selling Holders written notice of such determination, containing a general
statement of the reasons for such postponement and an approximation of the
anticipated delay. If the Company shall so postpone the filing or the
effectiveness of a registration statement, the
6
<PAGE>
Selling Holders of not less than 50.1% of the Aggregate Value of Registrable
Securities to be registered thereby shall have the right to withdraw the request
for registration in respect of the Registrable Securities by giving written
notice to the Company at any time and, in the event of any such withdrawal, such
request shall not be counted for purposes of the requests for registration to
which the Holders are entitled pursuant to this Section 2.1.
2.2 Incidental Registration. (a) Right to Include Registrable
Securities. If the Company at any time prior to the expiration of the Holders'
right to request the registration of Registrable Securities pursuant to Section
2.1(a) hereof proposes to register any of its securities under the Securities
Act by registration on Form S-1, S-2 or S-3 or any successor or similar form(s)
(except registrations on such Form or similar form(s) solely for registration of
securities in connection with an employee stock option, stock purchase, stock
bonus or similar plan, pursuant to a dividend reinvestment plan, pursuant to a
merger, exchange, offer or transaction of the type specified in Rule 145(a)
under the Securities Act), whether or not for sale for its own account, it will
each such time give prompt written notice to the Holders of its intention to do
so and of the Holders' rights under this Section 2.3 and the Holders shall be
entitled to include, subject to the provisions of this Agreement, Registrable
Securities on the same terms and conditions (if any) as apply to other
comparable securities of the Company sold in connection with such registration.
Upon the written request of any Holder (a "Requesting Holder"), specifying the
maximum principal amount or number of shares of Registrable Securities intended
to be disposed of by such Requesting Holder, made as promptly as practicable and
in any event within 15 days after the receipt of any such notice, the Company
shall use its best efforts to effect the registration under the Securities Act
of all Registrable Securities which the Company has been so requested to
register by the Requesting Holders; provided, however, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company shall give
written notice of such determination and its reasons therefor to the Holders and
(i) in the case of a determination not to register, shall be relieved of its
7
<PAGE>
obligation under this Section 2.2 to register any Registrable Securities in
connection with such registration, without prejudice, however, to the rights of
the Holders to request that such registration be effected as a registration
under Section 2.1, and (ii) in the case of a determination to delay
registration, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such other
securities. No registration effected under this Section 2.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1. The Company will pay all Registration Expenses in connection with any
registration of Registrable Securities requested pursuant to this Section 2.2.
(b) Right to Withdraw. Any Requesting Holder shall have the right to
withdraw its request for inclusion of Registrable Securities in any registration
statement pursuant to this Section 2.2 at any time by giving written notice to
the Company of its request to withdraw.
(c) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform the Company in writing of
its opinion that the Aggregate Value of the Registrable Securities when added to
the aggregate amount of other securities to be offered in such registration,
would materially adversely affect such offering, then the Company shall include
in such registration such amount of each type of Registrable Securities proposed
to be included in such offering which the Company is so advised by the managing
underwriter can be sold in (or during the time of) such offering without
materially adversely affecting such offering in the following order of priority:
First: the holder or holders of securities (including the Company in
the case of a primary offering) originally requesting or initiating such
registration shall be entitled to participate in accordance with the relative
priorities, if any, that shall exist among them; and then
Second: the Holders and all Other Holders of securities having the
right to include securities in such registration shall be entitled to
participate pro rata based upon the amount of the securities proposed to be
registered by them.
8
<PAGE>
(d) Plan of Distribution. Any participation by the Holders in a
registration by the Company shall be in accordance with the Company's plan of
distribution.
2.3 Registration Procedures. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 and 2.2 hereof, the Company
shall as expeditiously as possible:
(a) prepare and file with the Commission as soon as practicable the
requisite registration statement to effect such registration (and shall include
all financial statements required by the Commission to be filed therewith) and
thereafter use its best efforts to cause such registration statement to become
effective; provided, however, that before filing such registration statement
(including all exhibits) or any amendment or supplement thereto or comparable
statements under securities or blue sky laws of any jurisdiction, the Company
shall furnish such documents to each Holder selling Registrable Securities
covered by such registration statement and each underwriter, if any,
participating in the offering of the Registrable Securities and their respective
counsel, which documents will be subject to the review and comments of each such
Holder, each underwriter and their respective counsel; and provided further,
that (i) as to registration pursuant to Section 2.1 hereof, the Company may
discontinue any registration of its securities which are not Registrable
Securities and (ii) as to registration pursuant to Section 2.2 hereof, the
Company may discontinue any registration of its securities, in each case, at any
time prior to the effective date of the registration statement relating thereto;
(b) notify each Holder selling Registrable Securities covered by
such registration statement of the Commission's requests for amending or
supplementing the registration statement and the prospectus, and prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement for such period as shall be required for
the disposition of all of such Registrable Securities in accordance with the
intended method of distribution thereof;
9
<PAGE>
provided, however, that such period need not exceed 120 days;
(c) furnish, without charge, to each Holder selling Registrable
Securities covered by such registration statement and each underwriter such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such Holders
and such underwriters may reasonably request;
(d) use its best efforts (i) to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such securities or blue sky laws of such States of the United States of America
where an exemption is not available and as any Holder or Holders selling
Registrable Securities covered by such registration statement or any managing
underwriter shall reasonably request, (ii) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and (iii) to take any other action which may be reasonably necessary or
advisable to enable the Holders to consummate the disposition in such
jurisdictions of the securities to be sold by such Holder or Holders; provided,
however, that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified;
(e) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to any Holder or Holders selling
Registrable Securities covered by such registration statement to consummate the
disposition of such Registrable Securities;
(f) furnish to each Holder selling Registrable Securities covered by
such registration statement and each underwriter, if any, participating in the
offering of the securities covered by such registration statement, a signed
10
<PAGE>
counterpart of (i) an opinion of counsel for the Company, and (ii) a "comfort"
letter signed by the independent public accountants who have certified the
Company's financial statements included or incorporated by reference in such
registration statement, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and, in the
case of the accountants' comfort letter, with respect to events subsequent to
the date of such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' comfort letters delivered to the
underwriters in underwritten public offerings of securities (and dated the dates
such opinions and comfort letters are customarily dated) and, in the case of the
legal opinion, such other legal matters, and, in the case of the accountants'
comfort letter, such other financial matters, as such Holder or Holders, or the
underwriters, may reasonably request;
(g) promptly notify the Holders selling Registrable Securities
covered by such registration statement and each managing underwriter, if any,
participating in the offering of the securities covered by such registration
statement (i) when such registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to such registration statement has been filed, and, with respect to
such registration statement or any post-effective amendment, when the same has
become effective; (ii) of any request by the Commission for amendments or
supplements to such registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or the
initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any of the Registrable Securities for sale under the securities or blue sky
laws of any jurisdiction or the initiation of any proceeding for such purpose;
and (v) at any time when a prospectus relating thereto is required to be
delivered under the Securities Act upon discovery that, or upon the happening of
any event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the circumstances
under which they were made, and in the case of
11
<PAGE>
this clause (v), at the request of any Holder or Holders selling Registrable
Securities covered by such registration statement promptly prepare and furnish
to such Holder or Holders and each managing underwriter, if any, participating
in the offering of the Registrable Securities, a reasonable number of copies of
a supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such securities, such prospectus
shall not include 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 not misleading in the light of the circumstances under which they were
made.
(h) otherwise comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder, and promptly furnish to the Holders a copy of any amendment or
supplement to such registration statement or prospectus;
(i) cause to be maintained a transfer agent and registrar (which, in
each case, may be the Company) for each of the Notes and Common Stock from and
after the date of such registration;
(j) use its commercially reasonable efforts to cause all Registrable
Common Stock covered by such registration statement to be (i)(x) listed on a
national securities exchange, if the Common Stock is then so listed, or (y)
quoted on the National Market System ("National Market System") of the NASD
Automated Quotation System ("NASDAQ") within the meaning of Rule 11Aa2-1 of the
Commission if the quotation of such Registrable Common Stock is then permitted
under NASDAQ rules; or (ii) if no similar securities of the Company are then so
listed or quoted, use its best efforts to (x) secure designation of all such
Registrable Common Stock as a NASDAQ National Market System security or (y)
failing that, cause all such Registrable Common Stock to be listed on a national
securities exchange or (z) failing that, to secure NASDAQ authorization for such
shares;
12
<PAGE>
(k) deliver promptly to counsel to the Holders selling Registrable
Securities covered by such registration statement and each underwriter, if any,
participating in the offering of the Registrable Securities, copies of all
correspondence between the Commission and the Company, its counsel or auditors;
(l) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities no later
than the effective date of the registration statement;
(n) make available its employees and personnel and otherwise provide
reasonable assistance to the underwriters (taking into account the needs of the
Company's businesses) in their marketing of Registrable Securities.
(o) in the case of a Registration Statement filed pursuant to Rule
415, upon the occurrence of any event or the discovery of any facts, each as
contemplated by Section 2.3(g)(v) hereof, use its best efforts to prepare a
supplement or post-effective amendment to the registration statement or the
related prospectus or any document incorporated therein by reference or file any
other required documents so that, thereafter, such prospectus will not contain
at the time of such delivery any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The Company may require the Holders selling Registrable Securities
covered by such registration statement to furnish the Company such information
regarding the Holders and the distribution of the Registrable Securities as the
Company may from time to time reasonably request in writing. In the event of a
registration effected pursuant to Section 2.1 or 2.2(a) hereof, if a Holder
fails to provide such information and the failure by such Holder to furnish such
information would prevent or unreasonably delay the registration statement
relating to such registration from being declared effective by the Commission,
the Company may exclude such Holder's Registrable Securities from such
registration, which right of the Company shall, in the case of a registration
effected pursuant to Section 2.1(a) hereof, be subject to the consent
13
<PAGE>
of the Holders (if any) of not less than 50.1% of the Aggregate Value of the
Registrable Securities to be included in such registration (other than such
Holder's Registrable Securities).
The Holders agree that upon receipt of any notice from the Company
of the happening of any event of the kind described in paragraph (g)(iii) or (v)
of this Section 2.3, each of the Holders will discontinue its disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until, in the case of paragraph (g)(v) of this Section
2.3, its receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (g)(v) of this Section 2.3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in its possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. If the disposition by the Holders of their securities is discontinued
pursuant to the foregoing sentence, the Company shall extend the period of
effectiveness of the registration statement by the number of days during the
period from and including the date of the giving of notice to and including the
date when the Holders shall have received copies of the supplemented or amended
prospectus contemplated by paragraph (g)(v) of this Section 2.3; and, if the
Company shall not so extend such period, the Holders' request pursuant to which
such registration statement was filed shall not be counted for purposes of the
requests for registration to which the Holders are entitled pursuant to Section
2.1 hereof.
2.4 Underwritten Offerings. (a) Requested Underwritten Offerings. If
requested by the underwriters for any underwritten offering by the Selling
Holders pursuant to a registration requested under Section 2.1, the Company
shall enter into a customary underwriting agreement with such underwriter or
underwriters. Such underwriting agreement shall be reasonably satisfactory in
form and substance to the Holders of not less than 50.1% of the Aggregate Value
of the Registrable Securities to be included in such registration and shall
contain such representations and warranties by, and such other agreements on the
part of, the Company and such other terms as are generally prevailing in
agreements of that type, including, without limitation, such customary
provisions relating to indemnification and contribution by the Company. The
Selling Holders shall be parties to such underwriting agreement and may, at
their
14
<PAGE>
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Selling Holders
and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of the Selling Holders. No Selling Holder shall be required to make
any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Selling Holder, its ownership of and title to the Registrable Securities, and
its intended method of distribution; and any liability of any Selling Holder to
any underwriter or other Person under such underwriting agreement shall be
limited to liability arising from misstatements in or omissions from its
representations and warranties and shall be limited to an amount equal to the
net proceeds that it derives from such registration.
(b) Incidental Underwritten Offerings. In the case of a registration
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into any underwriting agreements in connection therewith, all of the Requesting
Holders' Registrable Securities to be included in such registration shall be
subject to such underwriting agreements. The Requesting Holders may, at their
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Requesting Holders
and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of the Requesting Holders. No Requesting Holder shall be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Requesting Holder, its ownership of and title to the Registrable Securities, and
its intended method of distribution; and any liability of any Requesting Holder
to any underwriter or other Person under such underwriting agreement shall be
limited to liability arising from misstatements in or omissions from its
representations and warranties and shall be limited to an amount equal to the
net proceeds that it derives from such registration.
15
<PAGE>
2.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the participating Holders,
their underwriters, if any, and their respective counsel, accountants and other
representatives and agents the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and, to the extent practicable, each amendment thereof or supplement
thereto, and give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and
employees and the independent public accountants who have certified its
financial statements, and supply all other information reasonably requested by
each of them, as shall be necessary or appropriate, in the opinion of the
participating Holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
2.6 Indemnification. (a) Indemnification by the Company. The Company
agrees that in the event of any registration of any securities of the Company
under the Securities Act, the Company shall, and hereby does, indemnify and hold
harmless each Holder, its respective directors, officers, partners, agents and
affiliates and each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls
such Holder or any such underwriter within the meaning of the Securities Act,
against any losses, claims, damages, or liabilities, joint or several, to which
such Holder or any such director, officer, partner, agent or affiliate or
underwriter or controlling Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities, joint or
several (or actions or proceedings, whether commenced or threatened, in respect
thereof), arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, or (iii) any violation by the Company of any
federal, state or common law rule or regulation
16
<PAGE>
applicable to the Company and relating to action required of or inaction by the
Company in connection with any such registration, and the Company shall
reimburse such Holder and each such director, officer, partner, agent or
affiliate, underwriter and controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by or on behalf of the Holders or underwriter, as the case may be,
specifically stating that it is for use in the preparation thereof; and
provided, further, that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or any other Person, if any, who controls such underwriter within the meaning of
the Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force regardless of any investigation made
by or on behalf of either Holder or any such director, officer, partner, agent
or affiliate or controlling Person and shall survive the transfer of such
securities by such Holder.
(b) Indemnification by the Holders. As a condition to including any
Registrable Securities in any registration statement, the Company shall have
received an undertaking reasonably satisfactory to it from each Holder so
including any Registrable Securities to indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.6)
the Company, and each director of the Company, each officer of the Company and
each other Person, if any, who controls the
17
<PAGE>
Company within the meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, but only to the
extent such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by such Holder specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, however, that the liability of such indemnifying party
under this Section 2.6(b) shall be limited to the amount of net proceeds
received by such indemnifying party in the offering giving rise to such
liability. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this Section 2.6, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action or proceeding; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 2.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
or proceeding include both the
18
<PAGE>
indemnified party and the indemnifying party and if in the opinion of outside
counsel to the indemnified party there may be legal defenses available to such
indemnified party and/or other indemnified parties which are different from or
in addition to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to defend such action
or proceeding on behalf of such indemnified party or parties and the
indemnifying party shall be obligated to pay the fees and expenses of such
separate counsel or counsels. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation (unless the proviso in the preceding sentence shall be
applicable). No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent which shall not be
unreasonably withheld. No indemnifying party shall, without the consent of the
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.
(d) Contribution. If the indemnification provided for in this
Section 2.6 shall for any reason be held by a court to be unavailable to an
indemnified party under subsection (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subsection (a) or (b) hereof, the indemnified
party and the indemnifying party under subsection (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the allocation
provided in this clause (ii) provides a greater
19
<PAGE>
amount to the indemnified party than clause (i) above, in such proportion as
shall be appropriate to reflect not only the relative fault but also the
relative benefits received by the indemnifying party and the indemnified party
from the offering of the securities covered by such registration statement as
well as any other relevant equitable considerations. The parties hereto agree
that it would not be just and equitable if contributions pursuant to this
Section 2.6(d) were to be determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable
considerations referred to in the preceding sentence of this Section 2.6(d). No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person's
fraudulent misrepresentation. The Holders' obligations to contribute as provided
in this subsection (d) are several and not joint and shall be in proportion to
the relative value of their respective Registrable Securities covered by such
registration statement. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld. Notwithstanding anything in this subsection (d) to the contrary, no
indemnifying party (other than the Company) shall be required to contribute any
amount in excess of the net proceeds received by such party from the sale of the
Registrable Securities in the offering to which the losses, claims, damages or
liabilities of the indemnified parties relate.
(e) Other Indemnification. Indemnification and contribution similar
to that specified in the preceding subsections of this Section 2.6 (with
appropriate modifications) shall be given by the Company and the Holders with
respect to any required registration or other qualification of securities under
any federal, state or blue sky law or regulation of any governmental authority
other than the Securities Act. The indemnification agreements contained in this
Section 2.6 shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the transfer of any of the Registrable Securities by any of the Holders.
(f) Indemnification Payments. The indemnification
and contribution required by this Section 2.6 shall be made
20
<PAGE>
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred; provided, however, that such periodic payments
shall only be made upon delivery to the indemnifying party of an agreement by
the indemnified party to repay the amounts advanced to the extent it is
ultimately determined that the indemnified party is not entitled to
indemnification pursuant to this Section 2.6 or otherwise. The parties hereto
agree that for each of them such agreement shall be deemed to be contained
herein.
2.7 Limitation on Sale of Securities. (a) If any registration of
Registrable Securities or Other Holder Registrable Securities shall be in
connection with an underwritten public offering, each of the Holders or the
Other Holders, as the case may be, and the Company agrees (x) not to effect any
public sale or distribution of any issue of the same class or series as the
Registrable Securities or Other Holder Registrable Securities being registered
in an underwritten public offering (other than pursuant to an employee stock
option, stock purchase or similar plan, pursuant to a dividend reinvestment
plan, pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) under the Securities Act), any securities of the
Company similar to any such issue or any securities of the Company or of any
security convertible into or exchangeable or exercisable for any such issue of
the Company during the 15 days prior to, and during the 45 day period (or such
longer period, not in excess of 90 days, as may be reasonably requested by the
underwriter of such offering) beginning on the effective date of such
registration statement (except as part of such registration) and (y) that any
agreement entered into after the date of this Agreement pursuant to which the
Company issues or agrees to issue any privately placed securities shall contain
a provision under which holders of such securities agree not to effect any
public sale or distribution of any such securities during the period referred to
in the foregoing clause (x), including any sale pursuant to Rule 144 under the
Securities Act (except as part of such registration, if permitted).
(b) Notwithstanding the other provisions of this Agreement, the
Company shall not be obligated to register the Registrable Securities of any
Holder if, in the opinion of counsel to Company reasonably satisfactory to the
Holder and its counsel (or, if the Holder has engaged an investment
21
<PAGE>
banking firm, to such investment banking firm and its counsel reasonably
satisfactory to the Company and its counsel), the sale or other disposition of
such Holder's Registrable Securities, in the manner proposed by such Holder (or
by such investment banking firm), may be effected without registering such
Registrable Securities under the Securities Act.
2.8 No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any of the Holders to sell any
Registrable Securities pursuant to any effective registration statement.
3. Amendments and Waivers.
This Agreement may not be modified or amended, or any of the
provisions hereof waived, temporarily or permanently, except pursuant to the
written consent of the Company and the Holders of not less than 50.1% of the
Aggregate Value of Registrable Securities.
4. Adjustments.
In the event of any change in the capitalization of the Company as a
result of any stock split, stock dividend, reverse split, combination,
recapitalization, merger, consolidation, or otherwise, the provisions of this
Agreement shall be appropriately adjusted.
5. Notice.
Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telecopied,
sent by certified, registered or express mail, postage prepaid or sent by
next-day delivery service and shall be deemed given when so delivered personally
or telecopied, or if mailed, two days after the date of mailing, or if by
next-day delivery service, on the business day following delivery thereto, as
follows or to such other location as any party notifies any other party:
(a) if to the Initial Holder to:
Mr. Leon Levy
31 West 52nd Street
New York, New York 10019
Telecopier: (212) 265-0305
22
<PAGE>
(b) if to the Company to:
Avatar Holdings Inc.
255 Alhambra Circle
Coral Gables, Florida 33134
Attention: Secretary
Telecopier: (305) 441-7876
(c) in case of either (a) or (b) above, with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Robert Todd Lang, Esq.
Telecopier: (212) 310-8007
6. Assignment.
This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns; provided, however, that successors and
permitted assigns shall have no rights under this Agreement unless such
successors and permitted assigns shall furnish written notice to the Company
containing (A) the name and address to which notices shall be delivered in
accordance with Section 5 and (B) the written agreement of such successor or
permitted assign to be bound by all the provisions of this Agreement. This
Agreement may not be assigned by the Company. Any Holder may, at its election,
at any time or from time to time, assign its rights under this Agreement, in
whole or in part, to any transferee of Registrable Securities.
7. Remedies.
The parties hereto agree that money damages or any other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including, without
limitation, specific performance, without bond or other security being
23
<PAGE>
required. In any action or proceeding brought to enforce any provision of this
Agreement (including the indemnification provisions thereof), the successful
party shall be entitled to recover reasonable attorneys' fees in addition to its
costs and expenses and any other available remedy.
24
<PAGE>
8. No Inconsistent Agreements.
The Company will not, on or after the date of this
Agreement, enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, other than any customary lock-up
agreement with the underwriters in connection with any registration and offering
by the Company of its securities to the public (a "Distribution") effected
hereunder, pursuant to which the Company shall agree not to register for sale,
and the Company shall agree not to sell or otherwise dispose of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
as applicable, for a specified period following such Distribution. The Company
hereby represents and warrants that the rights granted to the Holders hereunder
do not in any way conflict with and are not inconsistent with any other
agreements to which the Company is a party or by which it is bound. The Company
further agrees that if any other registration rights agreement entered into
after the date of this Agreement with respect to any of its securities contains
terms which are more favorable to, or less restrictive on, the other party
thereto than the terms and conditions contained in this Agreement are (insofar
as they are applicable) to the Holders, then the terms and conditions of this
Agreement shall immediately be deemed to have been amended without further
action by the Company or the Holders so that the Holders shall be entitled to
the benefit of any such more favorable or less restrictive terms or conditions.
9. Headings.
Headings of the sections and paragraphs of this Agreement
are for convenience only and shall be given no substantive or interpretive
effect whatsoever.
10. Governing Law; Jurisdiction.
(a) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
(b) Each of the parties hereto irrevocably and
unconditionally consents to the jurisdiction of the federal courts and courts of
the state of New York situated
25
<PAGE>
in New York County, New York in respect of the interpretation and enforcement of
the provisions of this Agreement, and hereby agrees that service of process in
any such action, suit or proceeding against the other party with respect to this
Agreement may be made upon it in any manner permitted by the laws of New York or
the federal laws of the United States.
11. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
12. Invalidity of Provision.
The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction. If any restriction or provision of this Agreement is held
unreasonable, unlawful or unenforceable in any respect, such restriction or
provision shall be interpreted, revised or applied in a manner that renders it
lawful and enforceable to the fullest extent possible under law.
13. Further Assurances.
Each party hereto shall do and perform or cause to be done
and performed all further acts and things and shall execute and deliver all
other agreements, certificates, instruments, and documents as any other party
hereto reasonably may request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.
14. Entire Agreement; Effectiveness.
This Agreement and the other writings referred to herein or
delivered in connection herewith contain the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.
26
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
AVATAR HOLDINGS INC.
By: /s/ Gerald D. Kelfer
------------------------------------
Name: Gerald D. Kelfer
Title: Chief Executive Officer
/s/ Leon Levy
------------------------------------
Leon Levy
27
AVATAR HOLDINGS INC.
LOCK-UP AGREEMENT
JANUARY 23, 1998
CIBC Oppenheimer Corp.
SBC Warburg Dillon Read Inc.
c/o CIBC Oppenheimer Corp.
CIBC Oppenheimer Tower
World Financial Center
200 Liberty Street
39th Floor
New York, New York 10281
Ladies and Gentlemen:
The undersigned understands that you, as underwriters (the
AUnderwriters@), propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Avatar Holdings Inc. (the "Company") providing
for the offering (the "Public Offering") by the Underwriters, of $100,000,000
aggregate principal amount of the Company's Convertible Subordinated Notes due
2005, pursuant to the Company's Registration Statement on Form S-3 (No.
333-41923) which was filed with the Securities and Exchange Commission on
December 10, 1997 (as amended, the "Registration Statement").
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Notes, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the undersigned hereby agrees, for a
period from the date of the Underwriting Agreement until 180 days thereafter
(the "Lock-Up Period"), not to sell, offer to sell, distribute, pledge, grant
any option for the sale of, or otherwise dispose of, directly or indirectly, or
encumber, or exercise any registration rights with respect to (collectively, a
"Disposition"), any shares of common stock of the Company, par value $1.00 per
share (the "Common Stock"), any options or warrants to purchase any shares of
Common Stock or any securities convertible into or exchangeable for shares of
Common Stock (collectively, "Securities"), now owned or hereafter acquired
directly by the undersigned or with respect to which the undersigned has
acquired or hereafter acquires the power of disposition, without the prior
written consent of CIBC Oppenheimer Corp. The foregoing restriction is expressly
agreed to preclude the holder of the Securities from engaging in any hedging or
other transaction which is designed to or is reasonably expected to lead to or
result in a Disposition of Securities during the Lock-Up Period even if such
Securities would be disposed of by someone other than the undersigned. Such
prohibited hedging or other transactions would
<PAGE>
include without limitation any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any put
or call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from Securities.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ODYSSEY PARTNERS, L.P.
By: /s/ Leon Levy
----------------------------
Leon Levy, General Partner
Address: 31 W. 52nd Street
New York, NY 10019
Confirmed:
CIBC OPPENHEIMER CORP.
SBC WARBURG DILLON READ INC.
By CIBC Oppenheimer Corp.
By: /s/ J. T. Atkins
------------------------------
Name: J. T. Atkins
Title: Managing Director
AVATAR HOLDINGS INC.
LOCK-UP AGREEMENT
JANUARY 23, 1998
CIBC Oppenheimer Corp.
SBC Warburg Dillon Read Inc.
c/o CIBC Oppenheimer Corp.
CIBC Oppenheimer Tower
World Financial Center
200 Liberty Street
39th Floor
New York, New York 10281
Ladies and Gentlemen:
The undersigned understands that you, as underwriters (the
"Underwriters"), propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Avatar Holdings Inc. (the "Company") providing
for the offering (the "Public Offering") by the Underwriters, of $100,000,000
aggregate principal amount of the Company's Convertible Subordinated Notes due
2005, pursuant to the Company's Registration Statement on Form S-3 (No.
333-41923) which was filed with the Securities and Exchange Commission on
December 10, 1997 (as amended, the "Registration Statement").
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Notes, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the undersigned hereby agrees, for a
period from the date of the Underwriting Agreement until 180 days thereafter
(the "Lock-Up Period"), not to sell, offer to sell, distribute, pledge, grant
any option for the sale of, or otherwise dispose of, directly or indirectly, or
encumber, or exercise any registration rights with respect to (collectively, a
"Disposition"), any shares of common stock of the Company, par value $1.00 per
share (the "Common Stock"), any options or warrants to purchase any shares of
Common Stock or any securities convertible into or exchangeable for shares of
Common Stock (collectively, "Securities"), now owned or hereafter acquired
directly by the undersigned or with respect to which the undersigned has
acquired or hereafter acquires the power of disposition, without the prior
written consent of CIBC Oppenheimer Corp. The foregoing restriction is expressly
agreed to preclude the holder of the Securities from engaging in any hedging or
other transaction which is designed to or is reasonably expected to lead to or
result in a Disposition of Securities during the Lock-Up Period even if such
Securities would be disposed of by someone other than the undersigned. Such
prohibited hedging or other transactions would
<PAGE>
include without limitation any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any put
or call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from Securities.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
/s/ Leon Levy
-----------------------------
(signature)
Name: Leon Levy
Address: One Sutton Place South
Apartment 3A
New York, NY 10022
Confirmed:
CIBC OPPENHEIMER CORP.
SBC WARBURG DILLON READ INC.
By CIBC Oppenheimer Corp.
By: /s/ J. T. Atkins
------------------------------
Name: J. T. Atkins
Title: Managing Director
AGREEMENT REGARDING FILING OF SCHEDULE 13D
------------------------------------------
This will confirm the agreement by an among all of the undersigned that
the Schedule 13D filed on or about this date with respect to the beneficial
ownership of the undersigned of shares of common stock, par value $1.00 per
share, of Avatar Holdings Inc. is being filed, and all further amendments
thereto will be filed, jointly on behalf of each of the undersigned for all
purposes specified in such Schedule 13D, as so amended. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Dated: February 2, 1998
ODYSSEY PARTNERS, L.P.
/s/ Joshua Nash
-------------------------------------
Name: Joshua Nash
Title: General Partner
/s/ Leon Levy
-------------------------------------
Leon Levy
NYFS04...:\28\66228\0233\2286\AGR1318U.260
