Exhibit 10.25
WARRANT
2
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR FOREIGN JURISDICTION.
NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS.
---------------------------------------------
dreamlife, inc.
COMMON STOCK PURCHASE WARRANT
---------------------------------------------
This certifies that, for good and valuable consideration,
dreamlife, inc., a Delaware corporation (the "Company"), grants to WEICHERT
ENTERPRISES, LLC, a Delaware limited liability company (the "Warrantholder"),
the right to subscribe for and purchase from the Company, during the Exercise
Period (as hereinafter defined), 1,200,000 validly issued, fully paid and
nonassessable shares, par value $0.01, of Common Stock of the Company (the
"Warrant Shares"), at the exercise price per share of $2.95 per share (the
"Exercise Price"), all subject to the terms, conditions and adjustments herein
set forth. Capitalized terms used herein shall have the meanings ascribed to
such terms in Section 9 below.
1. WARRANT. This Warrant is issued pursuant to, and in
accordance with, the Secured Bridge Loan Promissory Notes, each dated December
14, 2001 (collectively, the "Notes"), issued by the Company to each of DL
Holdings I, L.L.C. and the Warrantholder in the aggregate principal amount of
$6,500,000 and is subject to the terms thereof and the terms of the Registration
Rights Agreement, dated as of December 14, 2001 (the "Registration Rights
Agreement"), among the Company, the Warrantholder and certain other Persons.
2. EXERCISE OF WARRANT; PAYMENT OF TAXES.
2.1 EXERCISE OF WARRANT. Subject to the terms and conditions
set forth herein, this Warrant may be exercised at any time, in whole or in
part, by the Warrantholder during the Exercise Period by:
(a) the surrender of this Warrant to the Company, with a duly
executed Exercise Form, and
(b) subject to Section 2.2 below, the delivery of payment to
the Company, for the account of the Company, by cash, wire transfer, certified
or official bank check or any other means approved by the Company, of the
aggregate Exercise Price in lawful money of the United States of America.
3
The Company agrees that the Warrant Shares shall be deemed to be issued to the
Warrantholder as the record holder of such Warrant Shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid.
2.2 CONVERSION RIGHT.
(a) In lieu of the payment of the aggregate Exercise Price,
the Warrantholder shall have the right (but not the obligation), to require the
Company to convert this Warrant, in whole or in part, into shares of Common
Stock (the "Conversion Right") as provided for in this Section 2.2. Upon
exercise of the Conversion Right, the Company shall deliver to the Warrantholder
(without payment by the Warrantholder of any of the Exercise Price) in
accordance with Section 2.1(b) that number of shares of Common Stock equal to
the quotient obtained by dividing (i) the value of the Warrant or portion
thereof at the time the Conversion Right is exercised (determined by subtracting
the aggregate Exercise Price at the time of the exercise of the Conversion Right
from the aggregate Current Market Price for the shares of Common Stock issuable
upon exercise of the Warrant at the time of the exercise of the Conversion
Right) by (ii) the Current Market Price of one share of Common Stock at the time
of the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the Warrantholder
on any Business Day prior to the end of the Exercise Period by surrender of this
Warrant to the Company, with a duly executed Exercise Form with the conversion
section completed, exercising the Conversion Right and specifying the total
number of shares of Common Stock that the Warrantholder will be issued pursuant
to such conversion.
2.3 WARRANT SHARES CERTIFICATE. A stock certificate or
certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within five (5) Business Days after receipt of
the Exercise Form by the Company and, if the Conversion Right is not exercised,
the payment by the Warrantholder of the aggregate Exercise Price. If this
Warrant shall have been exercised only in part, the Company shall, at the time
of delivery of the stock certificate or certificates, deliver to the
Warrantholder a new Warrant evidencing the right to purchase the remaining
Warrant Shares, which new Warrant shall in all other respects be identical with
this Warrant.
2.4 PAYMENT OF TAXES. The Company will pay all documentary
stamp or other issuance taxes, if any, attributable to the issuance of Warrant
Shares upon the exercise of this Warrant; PROVIDED, HOWEVER, that the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issue or delivery of any Warrants or Warrant
certificates or Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
3. RESTRICTIONS ON TRANSFER; RESTRICTIVE LEGENDS.
4
3.1 This Warrant and the Warrant Shares may not be offered,
sold, transferred, pledged or otherwise disposed of, in whole or in part, to any
Person other than in accordance with applicable federal and state securities
laws.
3.2 Except as otherwise permitted by this Section 3, each
Warrant (and each Warrant issued in substitution for any Warrant pursuant to
Section 6) shall be stamped or otherwise imprinted with a legend in
substantially the form as set forth on the cover of this Warrant.
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or a certificate for Warrant Shares, in each case without a
legend, if either (i) such Warrant or such Warrant Shares, as the case may be,
have been registered for resale under the Securities Act, (ii) the Warrantholder
has delivered to the Company an opinion of legal counsel (from a firm reasonably
satisfactory to the Company) which opinion shall be addressed to the Company and
be reasonably satisfactory in form and substance to the Company's counsel, to
the effect that such registration is not required with respect to such Warrant
or such Warrant Shares, as the case may be or (iii) such Warrant or Warrant
Shares may be sold pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act.
4. RESERVATION AND REGISTRATION OF SHARES. The Company
covenants and agrees as follows:
(a) All Warrant Shares that are issued upon the exercise of
this Warrant shall, upon issuance, be validly issued, not subject to any
preemptive rights, and be free from all taxes, liens, security interests,
charges, and other encumbrances with respect to the issuance thereof, other than
taxes in respect of any transfer occurring contemporaneously with such issue.
(b) The Company shall at all times have authorized and
reserved, and shall keep available and free from preemptive rights, a sufficient
number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.
(c) The Company shall not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, spin-off,
consolidation, merger, dissolution, issue or sale of securities or any other
action or inaction, seek to avoid the observance or performance of any of the
terms of this Warrant, and shall at all times in good faith assist in performing
and giving effect to the terms hereof and in the taking of all such actions as
may be necessary or appropriate in order to protect the rights of the
Warrantholder against dilution or other impairment.
5. ANTI-DILUTION ADJUSTMENTS. The Exercise Price and the
number of Warrant Shares to be received upon exercise of this Warrant shall be
subject to adjustment as follows:
5.1 DIVIDEND, SUBDIVISION, COMBINATION OR RECLASSIFICATION OF
COMMON STOCK. In the event that the Company shall at any time or from time to
time, after the issuance of this Warrant but prior to the exercise hereof, (w)
make a dividend or
5
distribution on the outstanding shares of Common Stock payable in Capital Stock,
(x) subdivide the outstanding shares of Common Stock into a larger number of
shares, (y) combine the outstanding shares of Common Stock into a smaller number
of shares or (z) issue any shares of its Capital Stock in a reclassification of
the Common Stock (other than any such event for which an adjustment is made
pursuant to another clause of this Section 5), then, and in each such case, (A)
the aggregate number of Warrant Shares for which this Warrant is exercisable
(the "Warrant Share Number") immediately prior to such event shall be adjusted
(and any other appropriate actions shall be taken by the Company) so that the
Warrantholder shall be entitled to receive upon exercise of this Warrant the
number of shares of Common Stock or other securities of the Company that it
would have owned or would have been entitled to receive upon or by reason of any
of the events described above, had this Warrant been exercised immediately prior
to the occurrence of such event and (B) the Exercise Price payable upon the
exercise of this Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, the numerator of which shall
be the number of Warrant Shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, and the denominator of which shall be the
number of Warrant Shares issuable immediately thereafter. An adjustment made
pursuant to this Section 5.1 shall become effective retroactively (x) in the
case of any such dividend or distribution, to a date immediately following the
close of business on the record date for the determination of holders of shares
of Common Stock entitled to receive such dividend or distribution or (y) in the
case of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes effective.
5.2 ISSUANCE OF COMMON STOCK OR COMMON STOCK EQUIVALENTS BELOW
EXERCISE PRICE OR THE FAIR MARKET VALUE.
(a) Except in the circumstances contemplated by Section 5.1,
if the Company shall at any time or from time to time, after the issuance of
this Warrant but prior to the exercise hereof, issue or sell (such issuance or
sale, a "New Issuance") any shares of Common Stock or Common Stock Equivalents
(which, for purposes hereof, shall include any security issued as part of a
"PIPES" financing) at a price per share of Common Stock (the "New Issue Price")
that is less than the Exercise Price or the Fair Market Value then in effect as
of the record date or Issue Date (as defined below), as the case may be (the
"Relevant Date") (treating the price per share of Common Stock, in the case of
the issuance of any Common Stock Equivalent, as equal to (x) the sum of the
price for such Common Stock Equivalent plus any additional consideration payable
(without regard to any anti-dilution adjustments) upon the conversion, exchange
or exercise of such Common Stock Equivalent divided by (y) the number of shares
of Common Stock initially underlying such Common Stock Equivalent), other than
(i) issuances or sales for which an adjustment is made pursuant to another
subsection of this Section 5 and (ii) issuances in connection with an Excluded
Transaction, THEN, and in each such case, (A) the Exercise Price then in effect
shall be adjusted to equal the new Issue Price and (B) the Warrant Share Number
shall be increased to equal the product of (i) the aggregate number of Warrant
Shares for which this Warrant is exercisable immediately prior to the New
Issuance multiplied by (ii) a
6
fraction, the numerator of which shall be the Exercise Price in effect on the
day immediately prior to the Relevant Date and the denominator of which shall be
the Exercise Price in effect immediately after such adjustment.
Such adjustment shall be made whenever such shares of Common Stock or Common
Stock Equivalents are issued, and shall become effective retroactively (x) in
the case of an issuance to the stockholders of the Company, as such, to a date
immediately following the close of business on the record date for the
determination of shareholders entitled to receive such shares of Common Stock or
Common Stock Equivalents and (y) in all other cases, on the date (the "Issue
Date") of such issuance; PROVIDED, HOWEVER, that the determination as to whether
an adjustment is required to be made pursuant to this Section 5.2 shall be made
only upon the issuance of such shares of Common Stock or Common Stock
Equivalents, and not upon the issuance of any security into which the Common
Stock Equivalents convert, exchange or may be exercised.
(b) In case at any time any shares of Common Stock or Common
Stock Equivalents or any rights or options to purchase any shares of Common
Stock or Common Stock Equivalents shall be issued or sold for other than cash,
the consideration received therefor shall be deemed to be the amount received by
the Company therefor, without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions or discounts paid or allowed by the
Company in connection therewith, as determined mutually by the Board of
Directors and the Majority Warrantholders or, if the Board of Directors and the
Majority Warrantholders shall fail to agree, at the Company's expense by an
appraiser chosen by the Board of Directors and reasonably acceptable to the
Majority Warrantholders.
(c) If any Common Stock Equivalents (or any portions thereof)
which shall have given rise to an adjustment pursuant to this Section 5.2 shall
have expired or terminated without the exercise thereof and/or if by reason of
the terms of such Common Stock Equivalents there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon the
exercise or conversion thereof, then the Exercise Price hereunder shall be
readjusted (but to no greater extent than originally adjusted) in order to (i)
eliminate from the computation any additional shares of Common Stock
corresponding to such Common Stock Equivalents as shall have expired or
terminated, (ii) treat the additional shares of Common Stock, if any, actually
issued or issuable pursuant to the previous exercise of such Common Stock
Equivalents as having been issued for the consideration actually received and
receivable therefor and (iii) treat any of such Common Stock Equivalents which
remain outstanding as being subject to exercise or conversion on the basis of
such exercise or conversion price as shall be in effect at the time.
5.3 CERTAIN DISTRIBUTIONS. In case the Company shall at any
time or from time to time, after the issuance of this Warrant but prior to the
exercise hereof, distribute to all holders of shares of Common Stock (including
any such distribution made as a rights offering or in connection with a merger
or consolidation in which the Company is the resulting or surviving Person and
shares of Common Stock are not changed or exchanged) cash, evidences of
indebtedness of the Company or another
7
issuer, securities of the Company or another issuer or other assets (excluding
dividends or distributions payable in shares of Common Stock for which
adjustment is made under Section 5.1) or rights or warrants to subscribe for or
purchase any of the foregoing, THEN, and in each such case, (A) the Exercise
Price then in effect shall be adjusted (and any other appropriate actions shall
be taken by the Company) by being multiplied by the Exercise Price in effect
prior to the date of distribution by a fraction (i) the numerator of which shall
be such Current Market Price of Common Stock immediately prior to the date of
distribution less the then fair market value (as determined by the Board of
Directors in the exercise of their fiduciary duties) of the portion of the cash,
evidences of indebtedness, securities or other assets so distributed or of such
rights or warrants applicable to one share of Common Stock and (ii) the
denominator of which shall be the Current Market Price of the Common Stock
immediately prior to the date of distribution (but such fraction shall not be
greater than one) and (B) the number of Warrant Shares issuable hereunder shall
be increased by being multiplied by a fraction (i) the numerator of which shall
be the Current Market Price of one share of Common Stock immediately prior to
the record date for the distribution of such cash, evidences of indebtedness,
securities, other assets or rights or warrants and (ii) the denominator of which
shall be the Current Market Price of one share of Common Stock immediately prior
to such record date less the fair market value (as determined by the Board of
Directors in the exercise of their fiduciary duties) of the portion of such
cash, evidences of indebtedness, securities, other assets or rights or warrants
so distributed. Such adjustment shall be made whenever any such distribution is
made and shall become effective retroactively to a date immediately following
the close of business on the record date for the determination of stockholders
entitled to receive such distribution.
5.4 OTHER CHANGES. In case the Company at any time or from
time to time, after the issuance of this Warrant but prior to the exercise
hereof, shall take any action affecting its Common Stock similar to or having an
effect similar to any of the actions described in any of Sections 5.1, 5.2, 5.3
or 5.8 (but not including any action described in any such Section) and the
Board of Directors in good faith determines that it would be equitable in the
circumstances to adjust the Exercise Price and number of Warrant Shares issuable
hereunder as a result of such action, then, and in each such case, the Exercise
Price and number of Warrant Shares issuable hereunder shall be adjusted in such
manner and at such time as the Board of Directors in good faith determines would
be equitable in the circumstances (such determination to be evidenced in a
resolution, a certified copy of which shall be mailed to the Warrantholder).
5.5 NO ADJUSTMENT; PAR VALUE MINIMUM. Notwithstanding anything
herein to the contrary, no adjustment under this Section 5 need be made to the
Exercise Price or number of Warrant Shares issuable hereunder if the Company
receives written notice from the Warrantholder that no such adjustment is
required. Notwithstanding any other provision of this Warrant, the Exercise
Price shall not be adjusted below the par value of a share of Common Stock.
5.6 ABANDONMENT. If the Company shall take a record of the
holders of shares of its Common Stock for the purpose of entitling them to
receive a
8
dividend or other distribution, and shall thereafter and before the distribution
to stockholders thereof legally abandon its plan to pay or deliver such dividend
or distribution, then no adjustment in the Exercise Price or number of Warrant
Shares issuable hereunder shall be required by reason of the taking of such
record.
5.7 CERTIFICATE AS TO ADJUSTMENTS. Upon any adjustment in the
Exercise Price or number of Warrant Shares issuable hereunder, the Company shall
within a reasonable period (not to exceed ten (10) days) following any of the
foregoing transactions deliver to the Warrantholder a certificate, signed by (i)
the Chief Executive Officer of the Company and (ii) the Chief Financial Officer
of the Company, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and specifying
the adjusted Exercise Price and number of Warrant Shares issuable hereunder then
in effect following such adjustment.
5.8 SPIN-OFF; REORGANIZATION, RECLASSIFICATION, MERGER OR SALE
TRANSACTION.
(a) In case of any spin-off by the Company of another Person
(the "Spin-off Entity") at any time after the issuance of this Warrant but prior
to the exercise hereof, the Company shall issue to the Warrantholder a new
warrant, in form and substance satisfactory to the Company and the Majority
Warrantholders, entitling the Warrantholder to purchase, at the exercise price
determined by the Board of Directors and reasonably acceptable to the Majority
Warrantholders, the number of shares of common stock or other proprietary
interest in the Spin-off Entity that the Warrantholder would have owned had the
Warrantholder, immediately prior to such spin-off, exercised this Warrant.
(b) In case of any capital reorganization, reclassification,
Sale Transaction, merger or consolidation (other than a Sale Transaction or a
merger or consolidation of the Company in which the Company is the surviving
corporation and there has been no change in the terms of the Common Stock) of
the Company or other change of outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value) (each, a "Transaction") at any time after the issuance of this
Warrant but prior to the exercise hereof, the Company shall execute and deliver
to the Warrantholder at least twenty (20) Business Days prior to effecting such
Transaction a certificate stating that the Warrantholder shall have the right
thereafter to exercise this Warrant for the kind and amount of shares of stock
or other securities, property or cash receivable upon such Transaction by a
holder of the number of shares of Common Stock pursuant to the Certificate of
Incorporation of the Company into which this Warrant could have been exercised
immediately prior to such Transaction, and provision shall be made therefor in
the agreement, if any, relating to such Transaction. The provisions of this
Section 5.2 and any equivalent thereof in any such certificate similarly shall
apply to successive transactions.
5.9 NOTICES. In case at any time or from time to time:
9
(a) the Company shall declare a dividend (or any other
distribution) on its shares of Common Stock;
(b) the Company shall authorize the granting to the holders of
shares of its Common Stock rights or warrants to subscribe for or purchase any
shares of Capital Stock or any other rights or warrants;
(c) there shall occur a spin-off or Transaction; or
(d) the Company shall take any other action that would require
a vote of the Company's stockholders;
then the Company shall mail to the Warrantholder, as promptly as possible but in
any event at least ten (10) days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such vote or dividend, distribution or granting of rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution or granting
of rights or warrants are to be determined, or (B) the date on which such
spin-off or Transaction is expected to become effective and the date as of which
it is expected that holders of Common Stock of record shall be entitled to
exchange their Common Stock for shares of stock or other securities or property
or cash deliverable upon such spin-off or Transaction. Notwithstanding the
foregoing, in the case of any event to which Section 5.8 is applicable, the
Company shall also deliver the certificate described in such Section 5.8 to the
Warrantholder at least ten (10) Business Days prior to effecting such
reorganization or reclassification as aforesaid.
6. LOSS OR DESTRUCTION OF WARRANT. Subject to the terms and
conditions hereof, upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of such bond or indemnification
as the Company may reasonably require, and, in the case of such mutilation, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor.
7. OWNERSHIP OF WARRANT. The Company may deem and treat the
Person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of
transfer.
8. AMENDMENTS. Any provision of this Warrant may be amended
and the observance thereof waived only with the written consent of the Company
and the Warrantholder.
9. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
10
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of such Person's capital stock and
any and all rights, warrants or options exchangeable for or convertible into
such capital stock (but excluding any debt security whether or not it is
exchangeable for or convertible into such capital stock).
"COMMON STOCK" means the Common Stock, par value $0.01 per
share, of the Company.
"COMMON STOCK EQUIVALENT" means any security or obligation
which is by its terms convertible into or exercisable into shares of Common
Stock, including, without limitation, any option, warrant or other subscription
or purchase right with respect to Common Stock.
"COMPANY" has the meaning set forth in the first paragraph of
this Warrant.
"CONVERSION RIGHT" has the meaning set forth in Section 2.2(a)
of this Warrant.
"CURRENT MARKET PRICE" means, as of the date of determination,
(a) the average of the daily Market Price under clause (a), (b) or (c) of the
definition thereof of the Common Stock during the immediately preceding thirty
(30) trading days ending on such date, and (b) if the Common Stock is not then
listed or admitted to trading on any national securities exchange or quoted in
the over-the-counter market, then the Market Price under clause (d) of the
definition thereof on such date.
"EXCLUDED TRANSACTION" means (a) any issuance of up to an
aggregate of 250,000 shares of restricted stock or options to purchase shares of
Common Stock (subject to adjustment in the event of stock splits, combinations
or similar occurrences) to employees, officers or directors of the Company
pursuant to a stock option plan or other employee benefit plan approved by the
Board of Directors or (b) any issuance of Warrant Shares.
"EXERCISE FORM" means an Exercise Form in the form annexed
hereto as EXHIBIT A.
"EXERCISE PERIOD" means the period from April 14, 2002 to
April 14, 2007.
"EXERCISE PRICE" has the meaning set forth in the first
paragraph of this Warrant.
11
"FAIR MARKET VALUE" means on any date of determination with
respect to any shares of Common Stock, an amount equal to the product of (i) the
fair market value on such date of the consolidated net worth of the Company, as
determined in good faith by the Board of Directors and (ii) the percentage such
shares of Common Stock represent of all the then outstanding shares of Common
Stock.
"ISSUE DATE" has the meaning set forth in Section 5.2 of this
Warrant.
"MARKET PRICE" means, as of the date of determination, (a) if
the Common Stock is listed on a national securities exchange, the closing price
per share of Common Stock on such date published in THE WALL STREET JOURNAL
(NATIONAL EDITION) or, if no such closing price on such date is published in THE
WALL STREET JOURNAL (NATIONAL EDITION), the average of the closing bid and asked
prices on such date, as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading; or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the National Association of Securities Dealers, Inc., the last trading price of
the Common Stock on such date; or (c) if there shall have been no trading on
such date or if the Common Stock is not designated as a national market system
security by the National Association of Securities Dealers, Inc., the average of
the reported closing bid and asked prices of the Common Stock on such date as
shown by the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System and reported by any member firm of the
New York Stock Exchange selected by the Company; or (d) if none of (a), (b) or
(c) is applicable, a market price per share determined mutually by the Board of
Directors and the Majority Warrantholders or, if the Board of Directors and the
Majority Warrantholders shall fail to agree, at the Company's expense by an
appraiser chosen by the Board of Directors and reasonably acceptable to the
Majority Warrantholders. Any determination of the Market Price by an appraiser
shall be based on a valuation of the Company as an entirety without regard to
any discount for minority interests or disparate voting rights among classes of
capital stock.
"MAJORITY WARRANTHOLDERS" means the holders of a majority of
Warrant Shares issuable upon exercise of all of the Warrants issued pursuant to
the Notes or the Registration Rights Agreement assuming the exercise of all such
warrants.
"PERSON" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, governmental body or other entity of any
kind.
"NEW ISSUANCE" has the meaning set forth in Section 5.2 of
this Warrant.
"NEW ISSUE PRICE" has the meaning set forth in Section 5.2 of
this Warrant.
"RELEVANT DATE" has the meaning set forth in Section 5.2 of
this Warrant.
12
"SALE TRANSACTION" shall mean (a) (i) the merger or
consolidation of the Company into or with one or more Persons, (ii) the merger
or consolidation of one or more Persons into or with the Company or (iii) a
tender offer or other business combination if, in the case of (i), (ii) or
(iii), the stockholders of the Company prior to such merger or consolidation do
not retain at least a majority of the voting power of the surviving Person or
(b) the voluntary sale, conveyance, exchange or transfer to another Person of
(i) the voting Capital Stock of the Company if, after such sale, conveyance,
exchange or transfer, the stockholders of the Company prior to such sale,
conveyance, exchange or transfer do not retain at least a majority of the voting
power of the Company or (ii) all or substantially all of the assets of the
Company.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange Commission
thereunder.
"SPIN-OFF ENTITY" has the meaning set forth in Section 5.8 of
this Warrant.
"TRANSACTION" has the meaning set forth in Section 5.8 of this
Warrant.
"WARRANT SHARES" has the meaning set forth in the first
paragraph of this Warrant.
"WARRANT SHARE NUMBER" has the meaning set forth in Section
5.1 of this Warrant.
"WARRANTHOLDER" has the meaning set forth in the first
paragraph of this Warrant.
10. MISCELLANEOUS.
10.1 ENTIRE AGREEMENT. This Warrant, the Registration Rights
Agreement and the Notes constitutes the entire agreement between the Company and
the Warrantholder with respect to this Warrant and supersedes all prior
agreements and understanding with respects to the subject matter of this
Warrant.
10.2 BINDING EFFECT; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and their
respective permitted successors and assigns. Nothing in this Warrant, expressed
or implied, is intended to or shall confer on any person other than the Company
and the Warrantholder, or their respective permitted successors or assigns, any
rights, remedies, obligations or liabilities under or by reason of this Warrant.
10.3 HEADINGS. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of this Warrant.
10.4 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or
13
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to the Company:
dreamlife, inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxxx Xxxxxxx,
Chief Executive Officer
with a copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx LLP
Park Avenue at Xxxxxx County
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(b) if to the Warrantholder, at its
address as it appears on the record
books of the Company.
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
All such notices, demands and other communications shall be
deemed to have been duly given when delivered by hand, if personally delivered;
when delivered by courier, if delivered by commercial courier service; five (5)
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 10.4 designate another address or
Person for receipt of notices hereunder.
10.5 SEVERABILITY. Any term or provision of this Warrant which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
14
10.6 GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF.
10.7 NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. Nothing
contained in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.
[Remainder of this page intentionally left blank]
15
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
DREAMLIFE, INC.
By:
------------------------
Xxxxx Xxxx
Chairman
Dated: December 14, 2001
EXHIBIT A
EXERCISE FORM
-------------
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant, to purchase [INSERT NUMBER] shares of Common
Stock and herewith tenders payment for such shares to the order of the Company
in the amount of $[INSERT NUMBER] [hereby exercises its Conversion Right] in
accordance with the terms of this Warrant. The undersigned requests that a
certificate for such Warrant Shares be registered in the name of the undersigned
and that such certificates be delivered to the undersigned's address below.
The undersigned represents that it is acquiring such shares
for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition thereof shall at all times be within its control).
Dated:
Signature
---------------------------------------
(Print Name)
---------------------------------------
(Street Address)
---------------------------------------
(City) (State) (Zip Code)
