EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (hereinafter called this "AGREEMENT"),
dated as of August 28, 2000, between Hovnanian Enterprises, Inc., a Delaware
corporation (the "COMPANY"), and each of the stockholders of WHI (as hereinafter
defined) set forth on the signature pages hereto (each an "INVESTOR").
RECITALS
WHEREAS, the Investors are the beneficial owners of shares of common
stock, par value $.01 per share ("WHI COMMON STOCK"), of Washington Homes, Inc.,
a Maryland corporation ("WHI");
WHEREAS, the Company, WHI Holding Co., Inc., a Delaware corporation
and a wholly owned subsidiary of the Company ("MERGER SUB"), and WHI have
entered into an Agreement and Plan of Merger of even date herewith (the "MERGER
AGREEMENT"), pursuant to which WHI will be merged (the "MERGER") with and into
Merger Sub;
WHEREAS, as a result of the Merger, certain of the shares of WHI
Common Stock beneficially owned by the Investors will be converted at the
effective time of the Merger (the "EFFECTIVE TIME") into the right to receive,
and thereafter the Investors shall become the beneficial owners of, shares of
Class A Common Stock, par value $.01 per share ("CLASS A COMMON STOCK"), of the
Company;
WHEREAS, in connection with the Merger, the Company and certain of the
Investors are contemporaneously entering into Voting Agreements of even date
herewith, pursuant to which each such Investor, as one of a limited number of
related shareholders of WHI, has agreed, among other things, subject to certain
terms and conditions, to vote his, her or its shares of WHI Common Stock for
approval and adoption of the Merger Agreement; and
WHEREAS, the parties hereto desire to enter into this Agreement, which
sets forth certain registration rights applicable to the Registrable Securities
(as hereinafter defined) held from time to time by the Investor.
NOW, THEREFORE, to implement the foregoing and in consideration of the
premises and of the mutual agreements contained herein, the parties hereto agree
as follows:
1. DEFINITIONS.
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below:
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"HOLDER" shall mean each Investor and any holder of Registrable
Securities who agrees in writing to be bound by the provisions of this
Agreement.
"PERSON" shall mean any individual, partnership, firm, corporation,
limited liability company, association, trust, unincorporated organization
or other entity.
"REGISTRABLE SECURITIES" shall mean any Class A Common Stock issued or
issuable to a Holder and any Class A Common Stock which may be issued or
distributed in respect of such Class A Common Stock by way of stock
dividend or stock split or other distribution, recapitalization or
reclassification. As to any particular Registrable Securities, once issued
such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (ii)
they shall have been distributed to the public pursuant to Rule 144 or 144A
(or any successor provisions) under the Securities Act, (iii) they shall
have been otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the
Company and subsequent disposition of them shall not require registration
or qualification of them under the Securities Act or any state securities
or blue sky law then in force, or (iv) they shall have ceased to be
outstanding.
"REGISTRATION EXPENSES" shall mean expenses incident to performance of
or compliance with this Agreement, including, without limitation, (i) all
SEC and stock exchange or National Association of Securities Dealers, Inc.
registration and filing fees, (ii) all fees and expenses of complying with
securities or blue sky laws (including fees and disbursements of counsel
for the underwriters in connection with blue sky qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery
expenses, (iv) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange pursuant
to clause (viii) of Section 4, (v) the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance, (vi) the reasonable fees and
disbursements of one counsel to all Investors participating in the
registration, and (vii) any fees and disbursements of underwriters
customarily paid by the issuers or sellers of securities, including
liability insurance if the Company so desires or if the underwriters so
require, and the reasonable fees and expenses of any special experts
retained in connection with the requested registration, but excluding
underwriting discounts and commissions and transfer taxes, if any.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the Exchange
Act.
"SELLER" shall mean a Holder whose Registrable Securities are included
in a registration statement pursuant to any provision of this Agreement.
2. INCIDENTAL REGISTRATIONS.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at any
time after the Effective Time proposes to register its Class A Common Stock
under the Securities Act (other than a registration of shares in connection with
a sale for its own account, or a registration on Form S-4 or S-8, or any
successor or other forms promulgated for similar purposes, or a registration
statement in connection with an offering to employees of the Company and its
subsidiaries or a registration of shares of Class A Common Stock pursuant to the
terms of any Supplemental Agreement (as hereinafter defined) other than any such
registration resulting from any right of a party to such Supplemental Agreement
to have the Company effect registration under Section 7(a) of this Agreement),
pursuant to a registration statement on which it is permissible to register
Registrable Securities for sale to the public under the Securities Act, it will
each such time give prompt written notice to each Investor of its intention to
do so and of the Investor's rights under this Section 2. Upon the written
request of any Investor made within 15 days after the receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by the Investor), the Company will use its reasonable 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 Investor; PROVIDED, that
(i) 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 proceed with the proposed registration of the securities identified in
such notice to be sold, the Company may, at its election, give written notice of
such determination to the Investor and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and (ii) if such registration involves an underwritten
offering, the Investor must sell his, her or its Registrable Securities to the
underwriters selected by the Company on the same terms and conditions as apply
to the Company, with such differences, including any with respect to
indemnification and liability insurance, as may be customary or appropriate in
secondary offerings. If a registration requested pursuant to this Section 2(a)
involves an underwritten public offering, an Investor may elect, in writing
prior to the effective date of the registration statement filed in connection
with such registration, not to register such securities in connection with such
registration.
(b) EXPENSES. The Company will pay Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 2 to the same extent that the Company is obligated to pay the
registration expenses of any other holders of Class A Common Stock or any
holders of Class B Common Stock, par value $.01 per share ("CLASS B COMMON
STOCK" and, collectively with the Class A Common Stock, "COMMON STOCK"), of the
Company under the registration rights agreement or agreements having the most
favorable terms to holders with respect to payment of such expenses.
(c) PRIORITY IN INCIDENTAL REGISTRATIONS. If a registration pursuant
to this Section 2 involves an underwritten offering and the managing underwriter
in good faith advises the Company in writing that, in its opinion, the total
amount of securities requested to be included in such registration (including
the Registrable Securities which Investors have requested to be included in such
registration pursuant to Section 2(a) hereof) exceeds the amount which can be
sold in such offering without having an adverse effect on such offering as
contemplated by the Company (including the price at which the Company proposes
to sell such securities), then the Company will include in such registration (i)
first, 100% of the securities proposed to be sold in the notice delivered to the
Investors pursuant to Section 2(a) hereof and (ii) second, to the extent of the
number of securities requested to be included in such registration exceed the
number of securities that, in the opinion of such managing underwriter, can be
sold without having the adverse effect referred to above, the amount of
Registrable Securities that Investors have requested to be included in such
registration (and, in the case of more than one Holder having the rights of the
Investors under this Section 2 and requesting pursuant to Section 2(a) hereof to
have Registrable Securities included in such registration, such amount to be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Registrable Securities then held by each such Holder,
provided that any Registrable Securities thereby allocated to any such Holder
that exceed such Holder's request will be reallocated among the remaining
requesting Holders in like manner).
3. REGISTRATION ON REQUEST.
(a) REQUEST BY INVESTORS. After the Effective Time, upon the written
request of an Investor or group of Investors that, as of the date of such
request, hold Registrable Securities equal to at least 50% of the aggregate of
all Registrable Securities then held by all Investors requesting that the
Company effect the registration under the Securities Act of all or part of such
Investor's or Investors' Registrable Securities and specifying the amount and
intended method of disposition thereof, the Company will (i) promptly upon
receipt thereof, give written notice of such request to all other Holders and
(ii) as expeditiously as possible, use its reasonable best efforts to effect the
registration under the Securities Act of the Registrable Securities which the
Company has been so requested to register by such Investor or Investors and any
other Holders so as to permit the disposition (in accordance with the intended
method thereof as aforesaid) of the Registrable Securities so to be registered.
Notwithstanding the foregoing, upon delivery to the requesting Investor or
Investors of written notice and a brief statement of the reason for the
Company's action, the Company shall be entitled to postpone filing of the
registration statement otherwise properly requested to be filed pursuant to this
Section 3 for a period not to exceed 60 days if, in the reasonable judgment of
the Board of Directors of the Company, such registration would materially
interfere with or materially adversely affect any then existing negotiations for
financing or any other arrangement, agreement or plan then pending or being
negotiated in good faith, provided that the duration of such postponement does
not exceed the number of days required to avoid such material interference or
material adverse effect. Notwithstanding anything to the contrary in this
Agreement, the Company need only effect a total of two registrations requested
under this Section 3 for all of the Investors as a whole, and following such two
registrations no Investor shall have any rights under this Section 3.
(b) REGISTRATION STATEMENT FORM. Registration under this Section 3
shall be on such appropriate registration form prescribed by the SEC under the
Securities Act (i) as shall be selected by the Company and as shall be
reasonably acceptable to the Investor and (ii) as shall permit the disposition
of the Registrable Securities pursuant to the intended method of disposition
thereof specified in accordance with Section 3(a) hereof. The Company agrees to
include in such registration statement filed pursuant to this Section 3 all
information that the participating Investors, upon advice of counsel, shall
reasonably request. The Company may, if permitted by law, effect any
registration requested under this Section 3 by the filing of a registration
statement on Form S-3 (or any successor or similar short form registration
statement). If the managing underwriter shall advise the Company in writing
that, in its opinion, the use of a form of registration statement other than
Form S-3 is of material importance to the success of such proposed offering,
then such registration shall be effected on such other form.
(c) EXPENSES. The Company will pay Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 3 to the same extent that the Company is obligated to pay the
registration expenses of any other holders of Class A Common Stock or any
holders of Class B Common Stock under the registration rights agreement or
agreements having the most favorable terms to holders with respect to payment of
such expenses.
(d) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 3 will not be deemed to have been effected unless it
has become effective; provided, that if, within 180 days after it has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court, such registration will be
deemed not to have been effected.
(e) SELECTION OF UNDERWRITERS. If a requested registration pursuant to
this Section 3 involves an underwritten offering, the requesting Investor or
Investors shall have the right to select the investment banker or bankers and
managers to administer the offering; provided, however, that such investment
banker or bankers and managers shall be reasonably satisfactory to the Company.
(f) PRIORITY IN REQUESTED REGISTRATIONS. If a requested registration
pursuant to this Section 3 involves an underwritten offering and the managing
underwriter in good faith advises the Company in writing that, in its opinion,
the number of securities requested to be included in such registration
(including any Registrable Securities which any other Holder has requested to be
included in such registration pursuant to Section 3(a) hereof) exceeds the
amount which can be sold in such offering without having an adverse effect on
such offering as contemplated by the requesting Investor or Investors (including
the price at which the Investor or Investors propose to sell such securities),
then the Company will include in such registration (i) first, 100% of the
securities the requesting Investor or Investors propose to sell and (ii) second,
to the extent of the number of securities requested to be included in such
registration exceed the number of securities that, in the opinion of such
managing underwriter, can be sold without having the adverse effect referred to
above, the amount of Registrable Securities that the other Holders have
requested to be included in such registration, such amount to be allocated pro
rata among all requesting Holders on the basis of the relative number of shares
of Registrable Securities then held by each such Holder, provided that any
Registrable Securities thereby allocated to any such Holder that exceed such
Holder's request will be reallocated among the remaining requesting Holders in
like manner). In the event that the number of Registrable Securities requested
to be included in such registration (consisting of the sum of the number of
Registrable Securities that the Investor or Investors have requested to be
included in such registration pursuant to Section 3(a) hereof and the number of
Registrable Securities which any other Holder has requested to be included in
such registration pursuant to Section 3(a)) is less than the amount of
Registrable Securities that, in the opinion of the managing underwriter, can be
sold without having the adverse effect referred to above, the Company may
include in such registration the securities the Company proposes to sell up to
the number of securities that, in the opinion of such managing underwriter, can
be so sold.
(g) OFFERINGS WITHOUT REGISTRATION. Notwithstanding anything to the
contrary in this Section 3, if counsel for the Company shall determine that
registration under the Securities Act is not required for the amount and/or
intended method of disposition of the Registrable Securities specified in the
Investor's or Investors' request for registration pursuant to Section 3(a)
hereof, the Company shall not be required to effect such requested registration.
In any such instance involving a proposed underwritten offering of such
Registrable Securities, however, the Company shall use its reasonable best
efforts to assist the Investor or Investor in consummating the transaction or
transactions contemplated in such request, including, without limitation, the
preparation of appropriate offering or sale documents, and shall pay
Registration Expenses in connection with such offering to the same extent as the
Company would be obligated to pay Registration Expenses pursuant to Section 3(c)
hereof.
4. REGISTRATION PROCEDURES. If and whenever the Company is required to
use its reasonable best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
the Company will, as expeditiously as possible:
(i) prepare and, in any event within 120 days after the end of the
period within which a request for registration may be given to the Company,
file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective; provided, however, that the Company may discontinue any
registration of its securities which is being effected pursuant to Section
2 hereof at any time prior to the effective date of the registration
statement relating thereto;
(ii) prepare and file with the SEC 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 for a
period not in excess of 180 days (or such period as may be permitted under
the Securities Act) and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the Seller or Sellers thereof set forth in such
registration statement; provided, that before filing a registration
statement or prospectus, or any amendments or supplements thereto, the
Company will furnish to counsel for the Investor or Investors copies of all
documents proposed to be filed, which documents will be subject to the
review of such counsel and no such registration statement or prospectus, or
any amendment or supplement thereto, shall be filed to which such counsel
shall have reasonably objected on the grounds that such registration
statement or prospectus, or amendment or supplement (with respect to
disclosures or omissions in the case of a registration under Section 3
hereof relating to the Holders of Registrable Securities), does not comply
in all material respects with the requirements of the Securities Act or the
rules or regulations thereunder and shall have specified the basis for such
objection in reasonable detail;
(iii) furnish to each Seller of such Registrable Securities such
number of copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement (including
each preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as such Seller
may reasonably request in order to facilitate the disposition of the
Registrable Securities by such Seller;
(iv) use its reasonable best efforts to register or qualify such
Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as each Seller
shall reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Seller to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Seller, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
clause (iv), it would not be obligated to be so qualified, to subject
itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(v) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Seller or Sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) notify each Seller of any such Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act within the appropriate
period mentioned in clause (ii) of this Section 4, of the Company's
becoming aware that the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits
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
then existing, and at the request of any such Seller, prepare and furnish
to such Seller a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable 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 then existing;
(vii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable (but not more than 18
months) after the effective date of the registration statement, an earnings
statement which shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations promulgated thereunder;
(viii) use its reasonable best efforts to list such Registrable
Securities on any securities exchange on which the Class A Common Stock is
then listed, if such Registrable Securities are not already so listed and
if such listing is then permitted under the rules of such exchange, and to
provide a transfer agent and registrar for such Registrable Securities
covered by such registration statement not later than the effective date of
such registration statement;
(ix) enter into such customary agreements (including an underwriting
agreement in customary form) and take such other actions as requesting
Investor or Investors, the Seller or Sellers of a majority of the
Registrable Securities being sold by other Holders or the underwriters, if
any, reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities;
(x) obtain a "cold comfort" letter or letters from the Company's
independent public accountants in customary form and covering matters of
the type customarily covered by "cold comfort" letters as the Investor or
the Seller or Sellers of a majority of the Registrable Securities being
sold by other Holders (provided that such Registrable Securities constitute
at least 25% of the securities covered by such registration statement)
shall reasonably request; and
(xi) make available for inspection by any Seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent
retained by any such Seller or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties
of the Company, and cause all of the Company's officers, directors and
employees to supply all information reasonably requested by any such
Seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
The Company may require each Seller to furnish the Company with such
information regarding such Seller and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each Seller agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in clause (vi) of this
Section 4, such Seller will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Seller's receipt of the copies of the supplemented or
amended prospectus contemplated by clause (vi) of this Section 4, and, if so
directed by the Company, such Seller will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Seller's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in clause (ii) of this Section 4
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to clause (vi) of this Section 4 and
including the date when each Seller shall have received the copies of the
supplemented or amended prospectus contemplated by clause (vi) of this Section
4.
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration
of any securities of the Company under the Securities Act pursuant to Section 2
or 3, the Company will, and it hereby does, indemnify and hold harmless, to the
extent permitted by law, the Seller of any Registrable Securities covered by
such registration statement, each affiliate of such Seller and their respective
directors and officers or general and limited partners (and the directors,
officers, affiliates and controlling Persons thereof), 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 Seller or any such underwriter
within the meaning of the Securities Act (collectively, the "INDEMNIFIED
PARTIES"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses to which such Seller, any such director or officer or
general or limited partner or affiliate or any such underwriter or controlling
Person may become subject under the Securities Act, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such Indemnified Party is a party
thereto) 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, final or summary prospectus contained therein, or any amendment or
supplement thereto, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and the
Company will reimburse such Indemnified Party for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided, that the
Company shall not be liable to any Indemnified Party 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 any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information with respect to such Seller furnished to the Company by such
Seller for use in the preparation thereof; and provided, further, that the
Company will 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, under the
indemnity agreement in this Section 5(a) with respect to any preliminary
prospectus or the final prospectus or the final prospectus as amended or
supplemented, as the case may be, to the extent that any such loss, claim,
damage or liability of such underwriter or controlling Person results from the
fact that such underwriter sold Registrable Securities to a Person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the final prospectus (including any documents incorporated by reference
therein) or of the final prospectus as then amended or supplemented (including
any documents incorporated by reference therein), whichever is most recent, if
the Company has previously furnished copies thereof to such underwriter. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Seller or any Indemnified Party and shall survive
the transfer of such securities by such Seller.
(b) INDEMNIFICATION BY THE SELLER. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed in accordance with Section 4 herein, that the Company shall have received
an undertaking reasonably satisfactory to it from the prospective Seller of such
Registrable Securities or any underwriter to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 5(a) hereof) the
Company and all other prospective Sellers or any underwriter, as the case may
be, with respect to any statement or alleged statement in or omission or alleged
omission from such registration statement, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement, if such statement
or alleged statement or omission or alleged omission was made in reliance upon
and in conformity with written information with respect to such Seller or
underwriter furnished to the Company by such Seller or underwriter for use in
the preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference
into any of the foregoing. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any of
the prospective Sellers, or any of their respective affiliates, directors,
officers or controlling Persons and shall survive the transfer of such
securities by such Seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an Indemnified
Party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 5, such Indemnified Party will, 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; provided, that the failure of the
Indemnified Party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Section 5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, unless in such Indemnified Party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, the indemnifying party will be
entitled to participate in and 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, and after notice from
the indemnifying party to such Indemnified Party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party will 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, without the
prior written consent of the Indemnified Party.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding subdivisions of this Section 5 (with appropriate modifications)
shall be given by the Company and each Seller with respect to any required
registration or other qualification of securities under any federal or state law
or regulation or governmental authority other than the Securities Act.
(e) NON-EXCLUSIVITY. The obligations of the parties under this Section
5 shall be in addition to any liability which any party may otherwise have to
any other party.
6. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of the Investor, make
publicly available such information), and it will take such further action as
the Investor may reasonably request, all to the extent required from time to
time to enable Investors to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Investor, the Company will deliver to the
Investor a written statement as to whether he, she or it has complied with such
requirements. Notwithstanding anything contained in this Section 6, the Company
may deregister under Section 12 of the Exchange Act if it then is permitted to
do so pursuant to the Exchange Act and the rules and regulations thereunder.
7. MISCELLANEOUS.
(a) HOLDBACK AGREEMENT. If any such registration shall be in
connection with an underwritten public offering, the Holders agree not to effect
any public sale or distribution, including any sale pursuant to Rule 144 under
the Securities Act, of any equity securities of the Company, or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten public offering),
within 7 days before or 180 days (or such lesser period as the managing
underwriters may permit) after the effective date of such registration if, and
to the extent, the Company or any managing underwriter of any such offering
determines such action is necessary or desirable in order to effect such
offering, and the Company hereby also so agrees and agrees to cause each other
holder of any equity security, or of any security convertible into or
exchangeable or exercisable for any equity security, of the Company purchased
from the Company (at any time other than in a public offering) to so agree.
(b) AMENDMENTS AND WAIVERS. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of each Investor
who is then a party hereto. Each Holder of any Registrable Securities at the
time or thereafter outstanding shall be bound by any consent authorized by this
Section 7(c), whether or not such Registrable Securities shall have been marked
to indicate such consent.
(c) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the parties hereto other than the Company shall also be for the
benefit of and enforceable by any subsequent Holder of any Registrable
Securities, subject to the provisions contained herein.
(d) NOTICES. All notices and other communications provided for
hereunder shall be in writing and shall be sent by first class mail, telex,
facsimile or hand delivery:
(i) if to the Company, to:
Hovnanian Enterprises, Inc.
00 Xxxxxxx 00, X.X. Xxx 000
Xxx Xxxx, Xxx Xxxxxx 00000
Attention:
With a copy to:
Hovnanian Enterprises, Inc.
00 Xxxxxxx 00, X.X. Xxx 000
Xxx Xxxx, Xxx Xxxxxx 00000
Attention:
(ii) if to any Investor, to him, her or it at the address set forth
below his or her signature or otherwise designated by such Investor:
(iii) if to any other Holder, to the address of such other holder as
shown in the books and records of the Company, or to such other
address as any of the above shall have designated in writing to
all of the other above.
All such notices and communications shall be deemed to have been given or made
(1) when delivered by hand, (2) five business days after being deposited in the
mail, postage prepaid, (3) when telexed, answer-back received or (4) when sent
by facsimile, receipt acknowledged.
(e) DESCRIPTIVE HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
(f) SEVERABILITY. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired, it
being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
(h) EFFECTIVENESS; TERMINATION. This Agreement shall not become
effective until the Effective Time. This Agreement shall terminate, and shall
cease to be of any further force or effect, with respect to any Investor or any
other Holder at such time as such person beneficially owns shares of Class A
Common Stock representing less than 1% of the issued and outstanding shares of
Common Stock of the Company.
(i) GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein. The parties to this Agreement hereby
agree to submit to the jurisdiction of the courts of the State of New Jersey in
any action or proceeding arising out of or relating to this Agreement.
(j) SPECIFIC PERFORMANCE. The parties hereto acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, it is agreed that they shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of competent jurisdiction in the United States or any state thereof, in
addition to any other remedy to which they may be entitled at law or equity.
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
HOVNANIAN ENTERPRISES, INC.
By: /s/ J. Xxxxx Xxxxxx
----------------------
Name: J. Xxxxx Xxxxxx
Title: Senior Vice-President and CFO
------------------
Investor
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
HOVNANIAN ENTERPRISES, INC.
By: ______________________
Name:
Title:
Investors:
/s/ Geaton X. XxXxxxxxx, Xx.*
----------------------------------------
Geaton X. XxXxxxxxx, Xx.
/s/ Xxxx X. Xxxxxx*
---------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxxxx X. XxXxxxxxx* /s/ Xxx X. Xxxxxx*
---------------------------------------- --------------------------------
Xxxxxxxxx X. XxXxxxxxx Xxx X. Xxxxxx
/s/ Xxxxx X. XxXxxxxxx* /s/ Xxxxxx Xxxxxxxxx*
---------------------------------------- --------------------------------
Xxxxx X. XxXxxxxxx Xxxxxx Xxxxxxxxx
/s/ Xxxxxx X. XxXxxxxxx* /s/ Xxxxxxxxx X. XxXxxxxxx*
---------------------------------------- --------------------------------
Xxxxxx X. XxXxxxxxx Xxxxxxxxx X. XxXxxxxxx
/s/ Xxxxx X. XxXxxxxxx* /s/ Geaton X. XxXxxxxxx, Xx.
---------------------------------------- --------------------------------
Xxxxx X. XxXxxxxxx Geaton X. XxXxxxxxx, Xx.
/s/ A. Xxxx XxXxxxxxx*
----------------------------------------
A. Xxxx XxXxxxxxx
Xxxxx X. XxXxxxxxx*
----------------------------------------
Xxxxx X. XxXxxxxxx
*PURSUANT TO A POWER OF ATTORNEY ATTACHED HERETO.
THE XxXXXXXXX FAMILY
WASHINGTON HOMES STOCK
GRAT TRUST
By: /s/ Geaton X. Xxxxxxxxx, Xx.*
----------------------------------
Geaton X. XxXxxxxxx, Xx., Trustee
THE XXXXXX X. AND XXXXX
X. XxXXXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx*
----------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx*
----------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
THE GEATON A. AND XXXXXXXXX X.
XxXXXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx*
----------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx*
---------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
*PURSUANT TO A POWER OF ATTORNEY ATTACHED HERETO.
THE XXXXX X. XxXXXXXXX
FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx*
------------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx*
-----------------------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
THE GEATON A. AND XXXXXXXXX X.
XxXXXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx*
------------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx*
-----------------------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
THE A. HUGO AND XXXXX X.
XxXXXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx*
------------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx*
-----------------------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
*PURSUANT TO A POWER OF ATTORNEY ATTACHED HERETO.
AGREEMENT
AND
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint Geaton X.
XxXxxxxxx, Xx. his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and in his name, place and xxxxx, in any and all
capacities, to execute and deliver to Hovnanian Enterprises, Inc. (hereinafter
referred to a "Hovnanian") (i) the respective forms of Voting Agreement to which
the undersigned and Hovnanian Enterprises, Inc. ("Hovnanian"), dated as of
August 28, 2000, are parties, (ii) that certain Sale Participation Agreement,
dated as of August 28, 2000, between Xxxxxx X. Xxxxxxxxx and Xxx X. Xxxxxxxxx,
on the one hand, and each of the undersigned, on the other hand, are parties,
and (iii) that certain Registration Rights Agreement, dated as of August 28,
2000, between Hovnanian and each of the undersigned. The undersigned further
grants unto said attorney-in -fact and agent full power and authority to do and
perform each and every act and thing requisite or necessary to be done in
connection with the execution and delivery of the foregoing agreements to
Hovnanian, as fully to all intents and purposes as he, she or it might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his/her substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
This Power of Attorney may be executed in two or more counterparts,
each of which shall be deemed to constitute one and the same instrument or
document.
IN WITNESS WHEREOF, the undersigned has executed this power of
attorney on this 28th day of August, 2000.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
/s/ Geaton X. XxXxxxxxx, Xx. THE XxXXXXXXX FAMILY
--------------------------------- WASHINGTON HOMES STOCK
Geaton X. XxXxxxxxx, Xx. GRAT TRUST
/s/ Xxxxxxxxx X. XxXxxxxxx By: /s/ Geaton X. XxXxxxxxx
--------------------------------- ----------------------------------
Xxxxxxxxx X. XxXxxxxxx Geaton X. XxXxxxxxx, Xx., Trustee
/s/ Xxxxx X. XxXxxxxxx THE XXXXXX X. AND XXXXX
--------------------------------- X. XxXXXXXXX FAMILY TRUST
Xxxxx X. XxXxxxxxx
/s/ Xxxxxx X. XxXxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ----------------------------------
Xxxxxx X. XxXxxxxxx Xxxxx X. Xxxxxxx, Trustee
/s/ Xxxxx X. XxXxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------- ----------------------------------
Xxxxx X. XxXxxxxxx Xxxxxx X. Xxxxxxxxx, Trustee
/s/ A. Xxxx XxXxxxxxx THE GEATON A. AND XXXXXXXXX X.
--------------------------------- XxXXXXXXX FAMILY TRUST
A. Xxxx XxXxxxxxx
/s/ Xxxxx X. XxXxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------- ----------------------------------
Xxxxx X. XxXxxxxxx Xxxxx X. Xxxxxxx, Trustee
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Xxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx, Trustee
/s/ Xxx X. Xxxxxx
---------------------------------
Xxx X. Xxxxxx
/s/ Xxxxxx Xxxxxxxxx
---------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxxxxx XxXxxxxxx
---------------------------------
Xxxxxxxxx XxXxxxxxx
THE GEATON A. AND XXXXXXXXX X. THE XXXXX X. XxXXXXXXX
XxXXXXXXX FAMILY TRUST FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------- By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Trustee --------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------- By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx, Trustee --------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
THE A. HUGO AND XXXXX X.
XxXXXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxxx, Trustee
*PURSUANT TO A POWER OF ATTORNEY ATTACHED HERETO.
