-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DRgU27h9vuEaI2wqf0/hWQ7q3JweJFaYwLLr6naY/tRjnXyH9Mki1Mj3oKeNL+C/ Ff3qzpIPrt2wn1DILuTHdg== 0000909518-98-000067.txt : 19980205 0000909518-98-000067.hdr.sgml : 19980205 ACCESSION NUMBER: 0000909518-98-000067 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980204 SROS: NONE GROUP MEMBERS: LEON LEVY GROUP MEMBERS: ODYSSEY PARTNERS LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AVATAR HOLDINGS INC CENTRAL INDEX KEY: 0000039677 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 231739078 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-18713 FILM NUMBER: 98521871 BUSINESS ADDRESS: STREET 1: 255 ALHAMBRA CIRCLE CITY: CORAL GABLES STATE: FL ZIP: 33134 BUSINESS PHONE: 3054427000 MAIL ADDRESS: STREET 1: 255 ALHAMBRA CIRCLE CITY: CORAL GABLES STATE: FL ZIP: 33134 FORMER COMPANY: FORMER CONFORMED NAME: GAC CORP /DE/ DATE OF NAME CHANGE: 19801023 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL ACCEPTANCE CORP DATE OF NAME CHANGE: 19710208 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ODYSSEY PARTNERS LP CENTRAL INDEX KEY: 0000709936 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 135614745 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 31 WEST 52ND STREET CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 4142411810 MAIL ADDRESS: STREET 1: 31 WEST 52ND STREET CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 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). 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. 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. 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 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 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 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 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 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 EX-99 2 EXHIBIT A 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 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 "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 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 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 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 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 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 (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 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 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 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 (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 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 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 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 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 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 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 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 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 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 (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 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 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 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 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 EX-99 3 EXHIBIT B 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 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 EX-99 4 EXHIBIT C 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 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 EX-99 5 EXHIBIT D 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 -----END PRIVACY-ENHANCED MESSAGE-----