166
Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx
REGISTRATION RIGHTS AGREEMENT, dated as of
February 2, 1998, between AVATAR HOLDINGS INC., a Delaware
corporation (the "Company"), and Xxxx Xxxx (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,
shares of Common Stock pursuant to a merger, consolidation,
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx
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).
"Registrable Notes" means the Notes issued to the
Initial Holder pursuant to the Offering.
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
"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
particular section of the Securities Act shall include a
reference to the comparable section, if any, of any such
similar federal statute.
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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 X-0, X-0 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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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.
(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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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;
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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.
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
(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;
(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;
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
(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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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.
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.
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Exhibit 10 (C) - Registration Rights Agreement between
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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
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,
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Exhibit 10 (C) - Registration Rights Agreement between
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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
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.
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Exhibit 10 (C) - Registration Rights Agreement between
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(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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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:
Xx. Xxxx Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
(b) if to the Company to:
Avatar Holdings Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Secretary
Telecopier: (000) 000-0000
(c) in case of either (a) or (b) above, with a
copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx Xxxx, Esq.
Telecopier: (000) 000-0000
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
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
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.
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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
in New York County, New York in respect of the
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
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.
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Exhibit 10 (C) - Registration Rights Agreement between
Avatar Holdings Inc. and Xxxx Xxxx - continued
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first above written.
AVATAR HOLDINGS INC.
By:
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
------------------------------
Xxxx Xxxx
191
