EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
among
dreamlife, inc.
DL HOLDINGS, LLC
and
WEICHERT ENTERPRISES, LLC
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Dated: December 14, 2001
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TABLE OF CONTENTS
PAGE
1. Definitions......................................................................................1
2. General; Securities Subject to this Agreement....................................................4
(a) Grant of Rights.......................................................................4
(b) Registrable Securities................................................................4
(c) Holders of Registrable Securities.....................................................4
3. Demand Registration..............................................................................4
(a) Request for Demand Registration.......................................................4
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration..........................................................................5
(c) Effective Demand Registration.........................................................5
(d) Expenses..............................................................................6
(e) Underwriting Procedures...............................................................6
(f) Selection of Underwriters.............................................................6
4. Incidental or "Piggy-Back" Registration..........................................................6
(a) Request for Incidental Registration...................................................6
(b) Expenses..............................................................................7
5. Restrictions on Public Sale by the Company.......................................................7
6. Registration Procedures..........................................................................7
(a) Obligations of the Company............................................................7
(b) Seller Information...................................................................10
(c) Notice to Discontinue................................................................10
(d) Registration Expenses................................................................11
7. Indemnification; Contribution...................................................................11
(a) Indemnification by the Company.......................................................11
(b) Indemnification by Designated Holders................................................12
(c) Conduct of Indemnification Proceedings...............................................12
(d) Contribution.........................................................................13
8. Rule 144 .....................................................................................14
9. Certain rights Relating to the Warrants.........................................................14
(a) Right to Put Warrants................................................................14
(b) Notice and Payment Regarding Put.....................................................14
(c) Right to Call Warrants...............................................................15
(d) Interest on Overdue Amounts..........................................................15
(e) Repurchase Price.....................................................................15
(f) Delivery of Certificates.............................................................15
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(g) Issuance of Additional Warrants......................................................15
10. Miscellaneous...................................................................................16
(a) Recapitalizations, Exchanges, etc....................................................16
(b) No Inconsistent Agreements...........................................................16
(c) Remedies.............................................................................16
(d) Amendments and Waivers...............................................................16
(e) Notices..............................................................................17
(f) Successors and Assigns; Third Party Beneficiaries....................................18
(g) Counterparts.........................................................................18
(h) Headings.............................................................................18
(i) GOVERNING LAW........................................................................18
(j) Severability.........................................................................18
(k) Rules of Construction................................................................18
(l) Entire Agreement.....................................................................18
(m) Further Assurances...................................................................19
(n) Confidentially.......................................................................19
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 14, 2001 (this
"Agreement"), among dreamlife, inc., a Delaware corporation (the "Company"), DL
Holdings, LLC, a Delaware limited company ("DL Holdings"), and Weichert
Enterprises, LLC, a Delaware limited liability company ("Weichert").
WHEREAS, pursuant to the Secured Bridge Loan Promissory Notes dated the
date hereof (the "Notes"), from the Company to DL Holdings and Weichert in the
aggregate principal amount of $6,500,000, the Company issued warrants (the
"Warrants") to purchase an aggregate of 2,600,000 shares, par value $0.01 per
share, of common stock of the Company to DL Holdings and Weichert; and
WHEREAS, in order to induce each of DL Holdings and Weichert to accept
the Warrants under the Note issued to it, the Company has agreed to grant
registration rights and certain other rights with respect to the Warrants and
the Registrable Securities (as hereinafter defined) as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings
indicated:
"AGREEMENT" mean this Agreement as the same may be amended, supplemented
or modified in accordance with the terms hereof.
"APPROVED UNDERWRITER" has the meaning set forth in Section 3(f) of this
Agreement.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"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.
"CALL CLOSING DATE" has the meaning set forth in Section 9(c) of this
Agreement.
"CALL NOTICE" has the meaning set forth in Section 9(c) of this
Agreement.
"CALL PERCENTAGE" has the meaning set forth in Section 9(c) of this
Agreement.
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"COMMISSION" means the Securities and Exchange Commission or any similar
agency then having jurisdiction to enforce the Securities Act.
"COMMON STOCK" means the Common Stock, par value $0.01 per share, of the
Company or any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"COMPANY" has the meaning set forth in the preamble to this Agreement.
"COMPANY UNDERWRITER" has the meaning set forth in Section 4(a) of this
Agreement.
"DEMAND REGISTRATION" has the meaning set forth in Section 3(a) of this
Agreement.
"DESIGNATED HOLDER" means each of DL Holdings, Weichert and any
transferee of any of them to whom Registrable Securities have been transferred,
other than a transferee to whom Registrable Securities have been transferred
pursuant to a Registration Statement under the Securities Act or Rule 144 or
Regulation S under the Securities Act (or any successor rule thereto).
"DL HOLDINGS" has the meaning set forth in the preamble to this
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.
"HOLDERS' COUNSEL" has the meaning set forth in Section 6(a)(i) of this
Agreement.
"INCIDENTAL REGISTRATION" has the meaning set forth in Section 4(a) of
this Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7(c) of this
Agreement.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7(c) of this
Agreement.
"INITIATING HOLDERS" has the meaning set forth in Section 3(a) of this
Agreement.
"INSPECTOR" has the meaning set forth in Section 6(a)(vii) of this
Agreement.
"LIABILITY" has the meaning set forth in Section 7(a) of this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
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"NOTES" has the meaning set forth in the preamble to this Agreement.
"PERSON" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, government (or an
agency or political subdivision thereof) or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"PUT CLOSING DATE" has the meaning set forth in Section 9(b) of this
Agreement.
"PUT NOTICE" has the meaning set forth in Section 9(b) of this Agreement.
"RECORDS" has the meaning set forth in Section 6(a)(vii) of this
Agreement.
"REGISTRABLE SECURITIES" means each of the following: (a) any and all
shares of Common Stock owned by the Designated Holders or issued or issuable
upon the exercise of the Warrants and any shares of Common Stock issued or
issuable upon conversion of any shares of preferred stock or exercise of any
warrants acquired by any of the Designated Holders after the date hereof and (b)
any shares of Common Stock issued or issuable to any of the Designated Holders
with respect to the Registrable Securities by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise and any shares of Common
Stock or voting common stock issuable upon conversion, exercise or exchange
thereof.
"REGISTRATION EXPENSES" has the meaning set forth in Section 6(d) of this
Agreement.
"REGISTRATION STATEMENT" means a Registration Statement filed pursuant to
the Securities Act.
"REPURCHASE PRICE" has the meaning set forth in Section 9(e) of this
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SELLING HOLDER" has the meaning set forth in Section 9(b) of this
Agreement.
"VALID BUSINESS REASON" has the meaning set forth in Section 3(a) of this
Agreement.
"WARRANTS" has the meaning set forth in the preamble to this Agreement
and shall also include for all purposes hereof, upon issuance, any warrants
issued pursuant to Section 9(g) of this Agreement.
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"WEICHERT" has the meaning set forth in the preamble to this Agreement.
2. GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT.
(a) GRANT OF RIGHTS. The Company hereby grants registration
rights to the Designated Holders upon the terms and conditions set forth in this
Agreement.
(b) REGISTRABLE SECURITIES. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such Registrable Securities has been declared
effective under the Securities Act by the Commission and such Registrable
Securities have been disposed of pursuant to such effective Registration
Statement, (ii) (x) the entire amount of the Registrable Securities owned by a
Designated Holder may be sold in a single sale, in the opinion of counsel
satisfactory to the Company and such Designated Holder, each in their reasonable
judgment, without any limitation as to volume pursuant to Rule 144 (or any
successor provision then in effect) under the Securities Act and (y) such
Designated Holder owning such Registrable Securities owns less than one percent
(1%) of the outstanding shares of Common Stock on a fully diluted basis, or
(iii) the Registrable Securities are proposed to be sold or distributed by a
Person not entitled to the registration rights granted by this Agreement.
(c) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option to purchase, or a security convertible into or
exercisable or exchangeable for, Registrable Securities whether or not such
acquisition or conversion has actually been effected. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
3. DEMAND REGISTRATION.
(a) REQUEST FOR DEMAND REGISTRATION. At any time, commencing on
the date the Warrant is exercisable in accordance with its terms, any Designated
Holder (the "Initiating Holders"), may make a written request to the Company to
register, and the Company shall register, under the Securities Act (other than
pursuant to a Registration Statement on Form S-4 or S-8 or any successor
thereto) (a "Demand Registration"), the number of Registrable Securities stated
in such request; PROVIDED, HOWEVER, that the Company shall not be obligated to
effect more than two such Demand Registrations for DL Holdings and more than two
such Demand Registrations for Weichert. For purposes of the preceding sentence,
two or more Registration Statements filed in response to one demand shall be
counted as one Demand Registration. If the Board of Directors, in its good faith
judgment, determines that any registration of Registrable Securities should not
be made or continued because it would materially
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interfere with any material financing, acquisition, corporate reorganization or
merger or other material transaction involving the Company (a "Valid Business
Reason"), the Company may postpone filing a Registration Statement relating to a
Demand Registration until such Valid Business Reason no longer exists, but in no
event for more than ninety (90) days. The Company shall give written notice of
its determination to postpone a Registration Statement and of the fact that the
Valid Business Reason for such postponement no longer exists, in each case,
promptly after the occurrence thereof. Notwithstanding anything to the contrary
contained herein, the Company may not postpone a filing under this Section 3(a)
more than once in any twelve (12) month period. Each request for a Demand
Registration by the Initiating Holders shall state the amount of the Registrable
Securities proposed to be sold and the intended method of disposition thereof.
(b) INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO A DEMAND
REGISTRATION. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) may offer its or his
Registrable Securities under any Demand Registration pursuant to this Section
3(b). Within five (5) days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) and (ii) subject to
Section 3(e), include in such registration all of the Registrable Securities
held by such Designated Holders from whom the Company has received a written
request for inclusion therein within ten (10) days of the receipt by such
Designated Holders of such written notice referred to in clause (i) above. Each
such request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered. The failure of any Designated Holder to
respond within such 10-day period referred to in clause (ii) above shall be
deemed to be a waiver of such Designated Holder's rights under this Section 3
with respect to such Demand Registration. Any Designated Holder may waive its
rights under this Section 3 prior to the expiration of such 10-day period by
giving written notice to the Company, with a copy to the Initiating Holders.
(c) EFFECTIVE DEMAND REGISTRATION. The Company shall use its best
efforts to cause any such Demand Registration to become and remain effective not
later than sixty (60) days after it receives a request under Section 3(a)
hereof. A registration shall not constitute a Demand Registration until it has
become effective and remains continuously effective for the lesser of (i) the
period during which all Registrable Securities registered in the Demand
Registration are sold and (ii) 120 days; PROVIDED, HOWEVER, that a registration
shall not constitute a Demand Registration if (x) after such Demand Registration
has become effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder is interfered with by 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 Initiating
Holders and such interference is not thereafter eliminated or (y) the conditions
specified in the underwriting agreement, if any, entered into in connection with
such Demand Registration are not satisfied or waived, other than by reason of a
failure by the Initiating Holder.
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(d) EXPENSES. The Company shall pay all Registration Expenses in
connection with a Demand Registration, whether or not such Demand Registration
becomes effective.
(e) UNDERWRITING PROCEDURES. If the Company or the Initiating
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders so elect, the Company shall use its best efforts to cause
such Demand Registration to be in the form of a firm commitment underwritten
offering and the managing underwriter or underwriters selected for such offering
shall be the Approved Underwriter selected in accordance with Section 3(f). In
connection with any Demand Registration under this Section 3 involving an
underwritten offering, none of the Registrable Securities held by any Designated
Holder making a request for inclusion of such Registrable Securities pursuant to
Section 3(b) hereof shall be included in such underwritten offering unless such
Designated Holder accepts the terms of the offering as agreed upon by the
Company, the Initiating Holders and the Approved Underwriter, and then only in
such quantity as will not, in the opinion of the Approved Underwriter,
jeopardize the success of such offering by the Initiating Holders. If the
Approved Underwriter advises the Company that the aggregate amount of such
Registrable Securities requested to be included in such offering is sufficiently
large to have a material adverse effect on the success of such offering, then
the Company shall include in such registration only the aggregate amount of
Registrable Securities that the Approved Underwriter believes may be sold
without any such material adverse effect and shall reduce the amount of
Registrable Securities to be included in such registration, FIRST as to the
Company, SECOND as to the Designated Holders (who are not Initiating Holders and
who requested to participate in such registration pursuant to Section 3(b)
hereof) as a group, if any, and THIRD as to the Initiating Holders as a group,
pro rata within each group based on the number of Registrable Securities owned
by each such Designated Holder or Initiating Holder, as the case may be.
(f) SELECTION OF UNDERWRITERS. If any Demand Registration of
Registrable Securities is in the form of an underwritten offering, the Company
shall select and obtain an investment banking firm of national reputation to act
as the managing underwriter of the offering (the "Approved Underwriter");
PROVIDED, HOWEVER, that the Approved Underwriter shall, in any case, also be
approved by the Initiating Holders.
4. INCIDENTAL OR "PIGGY-BACK" REGISTRATION.
(a) REQUEST FOR INCIDENTAL REGISTRATION. At any time, commencing
on the date the Warrant is exercisable in accordance with its terms, if the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering by the Company for its own account (other than a
Registration Statement on Form S-4 or S-8 or any successor thereto) or for the
account of any stockholder of the Company other than the Designated Holders,
then the Company shall give written notice of such proposed filing to each of
the Designated Holders at least twenty (20)-days before the anticipated filing
date, and such notice shall describe the proposed registration and distribution
and offer such Designated Holders the opportunity to register the number of
Registrable Securities as each Such Designated Holder may request (an
"Incidental
7
Registration"). The Company shall use its best efforts (within twenty (20) days
of the notice provided for in the preceding sentence) to cause the managing
underwriter or underwriters in the case of a proposed underwritten offering (the
"Company Underwriter") to permit each of the Designated Holders who have
requested in writing to participate in the Incidental Registration to include
its or his Registrable Securities in such offering on the same terms and
conditions as the securities of the Company or the account of such other
stockholder, as the case may be, included therein. In connection with any
Incidental Registration under this Section 4(a) involving an underwritten
offering, the Company shall not be required to include any Registrable
Securities in such underwritten offering unless the designated Holders thereof
accept the terms of the underwritten offering as agreed upon between the
Company, such other stockholders, if any, and the Company Underwriter, and then
only in such quantity as the Company Underwriter believes will not jeopardize
the success of the offering by the Company. If the Company Underwriter
determines that the registration of all or part of the Registrable Securities
which the Designated Holders have requested to be included would materially
adversely affect the success of such offering, then the Company shall be
required to include in such Incidental Registration, to the extent of the amount
that the Company Underwriter believes may be sold without causing such adverse
effect, FIRST, all of the securities to be offered for the account of the
Company; SECOND, the Registrable Securities to be offered for the account of the
Designated Holders pursuant to this Section 4, pro rata based on the number of
Registrable Securities owned by each such Designated Holder; and THIRD, any
other securities requested to be included in such offering.
(b) EXPENSES. The Company shall bear all Registration Expenses in
connection with any Incidental Registration pursuant to this Section 4, whether
or not such Incidental Registration becomes effective.
5. RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees not to
effect any public sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on form S-4 or S-8 or any successor thereto),
during the period beginning on the effective date of any Registration Statement
in which the Designated Holders of Registrable Securities are participating and
ending on the earlier of (i) the date on which all Registrable Securities
registered on such Registration Statement are sold and (ii) 120 days after the
effective date of such Registration Statement (except as part of such
registration).
6. REGISTRATION PROCEDURES.
(a) OBLIGATIONS OF THE COMPANY. Whenever registration of
Registrable Securities has been requested pursuant to Section 3 or Section 4 of
this Agreement, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request, the Company shall, as expeditiously as
possible:
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(i) prepare and file with the Commission a Registration Statement
on any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the sale of
such Registrable Securities in accordance with the intended method of
distribution thereof, and cause such Registration Statement to become effective;
PROVIDED, HOWEVER, that (x) before filing a Registration Statement or prospectus
or any amendments or supplements thereto, the Company shall provide counsel
selected by the Designated Holders holding a majority of the Registrable
Securities being registered in such registration ("Holders' Counsel") and any
other Inspector with an adequate and appropriate opportunity to review and
comment on such Registration Statement and each prospectus included therein (and
each amendment or supplement thereto) to be filed with the Commission, and (y)
the Company shall notify the Holders' Counsel and each seller of Registrable
Securities of any stop order issued or threatened by the Commission and take all
action required to prevent the entry of such stop order or to remove it if
entered;
(ii) 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 for
the lesser of (x) 120 days and (y) such shorter period which will terminate when
all Registrable Securities covered by such Registration Statement have been
sold; and 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 sellers
thereof set forth in such Registration Statement;
(iii) furnish to each seller of Registrable Securities, prior to
filing a Registration Statement, at least one copy of such Registration
Statement as is proposed to be filed, and thereafter such number of copies of
such Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
Registration Statement (including each preliminary prospectus) and any
prospectus filed under Rule 424 under the Securities Act as each such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(iv) register or qualify such Registrable Securities under such
other securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may request, and to continue such qualification in effect
in such jurisdiction for as long as permissible pursuant to the laws of such
jurisdiction, or for as long as any such seller requests or until all of such
Registrable Securities are sold, whichever is shortest, and do any and all other
acts and things which may be reasonably necessary or advisable to enable any
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; PROVIDED, HOWEVER, that the Company
shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;
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(v) notify each seller of Registrable Securities 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 contains 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, in light of the
circumstances under which they were made, not misleading and the Company shall
promptly prepare a supplement or amendment to such prospectus and furnish to
each seller of Registrable Securities a reasonable number of copies of such
supplement to or an amendment of such prospectus as may be necessary so that,
after delivery to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(vi) enter into and perform customary agreements (including an
underwriting agreement in customary form with the approved Underwriter or
Company Underwriter, if any, selected as provided in Section 3 or Section 4, as
the case may be) and take such other actions as are prudent and reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities, including causing its officers to participate in "road shows" and
other information meetings organized by the Approved Underwriter or Company
Underwriter;
(vii) make available at reasonable times for inspection by any
seller of Registrable Securities, any managing underwriter participating in any
disposition of such Registrable Securities pursuant to a Registration Statement,
Holders' Counsel and any attorney, accountant or other agent retained by any
such seller or any managing underwriter (each, an "Inspector" and collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries (collectively, the
"Records") as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (and the
Inspectors shall confirm their agreement in writing in advance to the Company if
the Company shall so request) unless (x) the disclosure of such Records is
necessary, in the Company's judgment, to avoid or correct a misstatement or
omission in the Registration Statement, (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction after exhaustion of all appeals therefrom or (z) the information in
such Records was known to the Inspectors on a non-confidential basis prior to
its disclosure by the Company or has been made generally available to the
public. Each seller of Registrable Securities agrees that it shall, upon
learning that disclosure of such records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
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(viii) if such sale is pursuant to an underwritten offering,
obtain a "cold comfort" letters dated the effective date of the Registration
Statement and the date of the closing under the underwriting agreement from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by "cold comfort" letters as Holders'
Counsel or the managing underwriter reasonably requests;
(ix) furnish, at the request of any seller of Registrable
Securities on the date such securities are delivered to the underwriters for
sale pursuant to such registration or, if such securities are not being sold
through underwriters, on the date the Registration Statement with respect to
such securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the seller making such request, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as the underwriters, if any, and such seller may reasonably request
and are customarily included in such opinions;
(x) comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable but no later than fifteen (15) months after the effective date of
the Registration Statement, an earnings statement covering a period of twelve
(12) months beginning after the effective date of the Registration Statement, in
a manner which satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;
(xi) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, PROVIDED that the applicable listing requirements are satisfied;
(xii) keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Section 3 or Section 4
hereunder;
(xiii) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be made
with the NASD; and
(xiv) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
(b) SELLER INFORMATION. The Company may require each seller of
Registrable Securities as to which any registration is being effected to
furnish, and such seller shall furnish, to the Company such information
regarding the distribution of such securities as the Company may from time to
time reasonably request in writing.
(c) NOTICE TO DISCONTINUE. Each Designated Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 6(a)(v), such Designated Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such
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Registrable Securities until such Designated Holder's receipt of the copies of
the supplemented or amended prospectus contemplated by Section 6(a)(v) and, if
so directed by the Company, such Designated Holder shall deliver to the Company
(at the Company's expense) all copies, other than permanent file copies then in
such Designated Holder's possession, of the prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the
Company shall give any such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement (including, without limitation, the period referred to in Section
6(a)(ii)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(a)(v) to and including the date
when sellers of such Registrable Securities under such Registration Statement
shall have received the copies of the supplemented or amended prospectus
contemplated by and meeting the requirements of Section 6(a)(v).
(d) REGISTRATION EXPENSES. The Company shall pay all expenses arising
from or incident to its performance of, or compliance with, this Agreement,
including, without limitation, (i) Commission, stock exchange and NASD
registration and filing fees, (ii) all fees and expenses incurred in complying
with securities or "blue sky" laws (including reasonable fees, charges and
disbursements of counsel to any underwriter incurred in connection with "blue
sky" qualifications of the Registrable Securities as may be set forth in any
underwriting agreement), (iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and expenses of counsel to the Company and of its
independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification) and any legal fees, charges and
expenses incurred, in the case of a Demand Registration, the Initiating Holders
and (v) any liability insurance or other premiums for insurance obtained in
connection with any Demand Registration or piggy-back registration thereon or
Incidental Registration pursuant to the terms of this Agreement, regardless of
whether such Registration Statement is declared effective. All of the expenses
described in the preceding sentence of this Section 6(d) are referred to herein
as "Registration Expenses." The Designated Holders of Registrable Securities
sold pursuant to a Registration Statement shall bear the expense of any broker's
commission or underwriter's discount or commission relating to registration and
sale of such Designated Holders' Registrable Securities and, subject to clause
(iv) above, shall bear the fees and expenses of their own counsel.
7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless each Designated Holder, its partners, directors, officers,
affiliates and each Person who controls (within the meaning of Section 15 of the
Securities Act) such Designated Holder from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) (each, a "Liability" and collectively, "Liabilities"), arising
out of or based upon any untrue, or allegedly untrue, statement of a material
fact contained in any Registration Statement, prospectus or preliminary
prospectus or notification or offering circular (as amended or
12
supplemented if the Company shall have furnished any amendments or supplements
thereto) or arising out of or based upon 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 under the circumstances such statements
were made, except insofar as such Liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
contained in such Registration Statement, preliminary prospectus or final
prospectus in reliance and in conformity with information concerning such
Designated Holder furnished in writing to the Company by such Designated Holder
expressly for use therein, including, without limitation, the information
furnished to the Company pursuant to Section 7(b). The Company shall also
provide customary indemnities to any underwriters of the Registrable Securities,
their officers, directors and employees and each Person who controls such
underwriters (within the meaning of Section 15 of the Securities Act) to the
same extent as provided above with respect to the indemnification of the
Designated Holders of Registrable Securities.
(b) INDEMNIFICATION BY DESIGNATED HOLDERS. In connection with any
Registration Statement in which a Designated Holder is participating pursuant to
Section 3 or Section 4 hereof, each such Designated Holder shall promptly
furnish to the Company in writing such information with respect to such
Designated Holder as the Company may reasonably request or as may be required by
law for use in connection with any such Registration Statement or prospectus and
all information required to be disclosed in order to make the information
previously furnished to the Company by such Designated Holder not materially
misleading or necessary to cause such Registration Statement not to omit a
material fact with respect to such Designated Holder necessary in order to make
the statements therein not misleading. Each Designated Holder agrees to
indemnify and hold harmless the Company, any underwriter retained by the Company
and each Person who controls the Company or such underwriter retained by the
Company and each Person who controls the Company or such underwriter (within the
meaning of Section 15 of the Securities Act) to the same extent as the foregoing
indemnity from the Company to the Designated Holders, but only if such statement
or alleged statement or omission or alleged omission was made in reliance upon
and in conformity with information with respect to such Designated Holder
furnished in writing to the Company by such Designated Holder expressly for use
in such Registration Statement or prospectus, including, without limitation, the
information furnished to the Company pursuant to this Section 7(b); PROVIDED,
HOWEVER, that the total amount to be indemnified by such Designated Holder
pursuant to this Section 7(b) shall be limited to the net proceeds (after
deducting the underwriters' discounts and commissions) received by such
Designated Holder in the offering to which the Registration Statement or
prospectus relates.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder (the "Indemnified Party") agrees to give prompt
written notice to the indemnifying party (the "Indemnifying Party") after the
receipt by the Indemnified Part of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; PROVIDED, HOWEVER, that the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any Liability
that it may have to the Indemnified Party
13
hereunder (except to the extent that the Indemnifying Party is materially
prejudiced or otherwise forfeits substantive rights or defenses by reason of
such failure). If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be paid by the Indemnified Party unless (i)
the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails
to assume the defense of such action with counsel reasonably satisfactory to the
Indemnified Party or (iii) the named parties to any such action (including any
impleaded parties) include both the Indemnifying Party and the Indemnified Party
and such parties have been advised by such counsel that either (x)
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct or (y) there may be one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party. In any of such cases, the Indemnifying Party shall not
have the right to assume the defense of such action on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Indemnified Parties. No
Indemnifying Party shall be liable for any settlement entered into without its
written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the consent of such Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is a party and indemnity has been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability for claims that are the subject matter
of such proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this Section 7
from the Indemnifying Party is unavailable to an Indemnified Party hereunder in
respect of any Liabilities referred to herein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such Liabilities, as well as any other relevant equitable considerations. The
relative faults of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the Liabilities referred to above shall be deemed to include, subject
to the limitations set forth in Section 7(a), 7(b) and 7(c), any legal or other
fees, charges or expenses reasonably incurred by such party in connection with
any investigation or proceeding; PROVIDED that the total amount to be
contributed by
14
such Designated Holder shall be limited to the net proceeds (after deducting the
underwriters' discounts and commissions) received by such Designated Holder in
the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
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
who was not guilty of such fraudulent misrepresentation.
8. RULE 144. The Company covenants that from and after the date hereof it
shall (a) file any reports required to be filed by it under the Exchange Act and
(b) take such further action as each Designated Holder may reasonably request
(including providing any information necessary to comply with Rule 144 under the
Securities Act), all to the extent required from time to time to enable such
Designated Holder to sell Registration 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
Regulation S under the Securities Act or (ii) any similar rules or regulations
hereafter adopted by the Commission. The Company shall, upon the request of any
Designated Holder, deliver to such Designated Holder a written statement as to
whether it has complied with such requirements.
9. CERTAIN RIGHTS RELATING TO THE WARRANTS.
(a) RIGHT TO PUT WARRANTS. At any time and from time to time after
the date upon which all amounts owing under the Notes have been paid in full,
each Designated Holder shall have the right to sell to the Company (and the
Company hereby agrees to purchase), at the Repurchase Price specified in Section
9(e) all or a portion of the Warrants held by such Designated Holder.
(b) NOTICE AND PAYMENT REGARDING PUT. Each selling holder (each, a
"Selling Holder") of Warrants pursuant to Section 9(a)(i) shall give the Company
at least ten (10) days' prior written notice (which notice shall be irrevocable)
of its intention to exercise any right of sales set forth in Section (9)(a) (the
"Put Notice") and shall specify in such notice the Warrants or portion thereof
to be sold and shall specify in such notice a proposed date of sale. The closing
of any repurchase of the Warrants pursuant to Section (9) (a) shall take place
at the offices of the Selling Holder at 10:00 a.m. local time on a Business Day
(the "Put Closing Date") which shall not be later than the date specified in the
Put Notice. On the Put Closing Date, the Company shall pay to such Selling
Holder the applicable Repurchase Price for the Warrants being repurchased from
such Selling Holder by wire transfer of immediately available funds to any
account specified writing by such Selling Holder to the Company, without offset
or deduction of any kind.
15
(c) RIGHT TO CALL WARRANTS. At any time during the 90-day period
commencing on the date upon which the amounts owing under the Notes have been
paid in full, the Company shall have the right (exercisable on one occasion) to
repurchase from each Designated Holder of Warrants at the Repurchase Price
specified in Section 9(e), Warrants to purchase a number of shares of Common
Stock equal to (i) 75% of the total number of shares of Common stock into which
such Designated Holder's Warrants were exercisable on the date of their issuance
minus (ii) the number of shares of Common Stock into which the Warrants of such
Designated Holder that have been repurchased pursuant to Section 9(a) were
exercisable. The Company shall give each Designated Holder at least ten (10)
days' prior written notice (which notice shall be irrevocable) of its intention
to exercise its repurchase right set forth in this Section 9(c) (the "Call
Notice"), specifying the repurchase date which in no event shall be less than
ten (10) nor more than thirty (30) days after the date of the Call Notice (the
"Call Closing Date"). On the Call Closing Date, the Company shall pay to each
Designated Holder the aggregate Repurchase Price for the Warrants being
repurchased and held by such holder by write transfer of immediately available
funds to any account specified in writing by such Designated Holder to the
Company, without offset or deduction of any kind.
(d) INTEREST ON OVERDUE AMOUNTS. In the event that any or all of
the Repurchase Price is not paid to the Selling Holder or Designated Holder on
the Put Closing Date or the Call Closing Date, as applicable, interest shall
accrue on such unpaid Repurchase Price at the rate of 15% per annum. Such
interest shall become due and payable on the date when the Repurchase Price is
paid.
(e) REPURCHASE PRICE. Subject to the provisions of Section 9(g),
the repurchase price (the "Repurchase Price") for the Warrants which is to be
repurchased by the Company pursuant to Section 9(a) or Section 9(c) shall be (i)
$0.15 per share, if the repurchase occurs prior to Xxxxx 00, 0000, (xx) $0.45
per share, if the repurchase occurs after April 14, 2002 but prior to August 14,
2002 and (iii) $0.90 per share, if the repurchase occurs after August 14, 2002.
(f) DELIVERY OF CERTIFICATES. Upon the timely receipt of the
Repurchase Price (plus interest, if applicable) for the Warrants purchased by
the Company pursuant to Section 9(a), each Selling Holder shall deliver the
Warrants so sold to the Company.
(g) ISSUANCE OF ADDITIONAL WARRANTS. If all amounts owing under
the Notes have not been paid in full on or prior to December 9, 2002, the
Company absolutely, unconditionally and irrevocably promises to authorize,
issue, sell and deliver to the Designated Holders on such date, and on each 30th
day thereafter that such payment has not occurred, warrants to purchase an
aggregate of 16,667 shares of Common Stock (with 53.8461% of such warrants being
issued to DL Holdings, and the balance being issued to Weichert) for each day
after December 9, 2002 that all amounts owing under the Notes remain unpaid. The
warrants so issued shall be in the form of the Warrants, except that (i) the
exercise price per shall of all such warrants shall be equal to the par value of
the Common Stock on the date hereof, (ii) such warrants shall be dated the date
of their issuance and shall be immediately exercisable and (iii) the Xxxxxxxxxx
00
Price applicable thereto shall be $0.50 per share. Upon issuance of any warrants
pursuant to this Section 9(g), the Company shall deliver to each Designated
Holder at its address set forth herein, a certificate for such warrant issuable
to it. The Company covenants and agrees to maintain in its treasury a sufficient
number of shares of Common Stock to enable it to issue such shares upon the
exercise of all warrants issued pursuant to this Section 9(g).
10. MISCELLANEOUS.
(a) RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of voting common stock of
the Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of
assets or otherwise) to enter into a new
registration rights agreement with the
Designated Holders on terms substantially the same as this Agreement as a
condition of any such transaction.
(b) NO INCONSISTENT AGREEMENTS. The Company has not entered into
and shall not enter into, any agreement with respect to its securities that is
inconsistent with the rights granted to the Designated Holders in this Agreement
or grant any additional registration rights to any Person or with respect to any
securities which are not Registrable Securities which are prior in right to or
inconsistent with the rights granted in this Agreement.
(c) REMEDIES. The Designated Holders, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of their rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for specific performance the
defense that a remedy at law would be adequate.
(d) AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless consented to in writing by (i) the Company and (ii) holders of
Registrable Securities representing (after giving effect to any adjustments) at
least a majority of the aggregate number of Registrable Securities owned by all
of the Designated Holders (but shall always include DL Holdings and Weichert as
long as they hold any Registrable
17
Securities). Any such written consent shall be binding upon the Company and all
of the Designated Holders.
(e) NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be made
by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:
(i) 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.
(ii) if to DL Holdings, 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.
(iii) if to Weichert, at its address as it appears
on the record books of the Company.
(iv) if to any other Designated Holder, at its
address as it appears on the record books of
the Company.
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
18
acknowledged, if telecopied. Any party may by notice given in accordance with
this Section 10(e) designate another address or Person for receipt of notices
hereunder.
(f) SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto as hereinafter provided. The Demand
Registration rights contained in Section 3 hereof, the incidental or
"piggy-back" registration rights of the Designated Holders contained in Sections
3(b) and 4 hereof and the rights contained in Section 9 hereof and the other
rights of the Designated Holders with respect thereto shall be, with respect to
any Warrant and Registrable Security, automatically transferred to any Person
who is the transferee of such Warrant and Registrable Security. All of the
obligations of the Company hereunder shall survive any such transfer. Except as
provided in Section 7, no Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(j) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
(k) RULES OF CONSTRUCTION. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
with respect to the subject matter contained herein. There are no restrictions,
promises, representations, warranties or undertakings with respect to the
subject matter contained herein, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties with respect to such subject matter.
19
(m) FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
(n) CONFIDENTIALITY. The Company covenants and agrees with each
Designated Holder that, except as may be required to be disclosed on the advice
of counsel by applicable laws, rules or regulations, it will not (and will cause
its officers, directors, shareholders, employees, agents and representatives to
not) disclose to any Person in any circumstances (whether or not related to a
financing by the Company) the terms, conditions or provisions of the Documents
(as such term is defined in the Notes) or the identity of the Designated
Holders, without the prior written consent of the Designated Holders.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have executed, or have caused
to be executed, this
Registration Rights Agreement on the date first written
above.
dREAMLIFE, iNC.
By:
-----------------------------------
Xxxxx Xxxx
Chairman
DL HOLDINGS I, L.L.C.
By:
-----------------------------------
Name:
Title:
WEICHERT ENTERPRISES, LLC
By:
-----------------------------------
Name:
Title:
