Exhibit 1
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OPTION AGREEMENT
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THIS OPTION AGREEMENT (this "Agreement") is made as of the 25th day of
September, 2001 (the "Option Date"), between CYL DEVELOPMENT HOLDINGS,
L.L.C., a New Jersey limited liability company (the "Company"), with an
address at 000 Xxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxxxx, Xxx Xxxxxx
00000-0000, and Xxxxxxx X. Xxxxxxx, Xx. (the "Holder"), with an address at
000 Xxxx 00xx Xxxxxx, XX, XX 00000.
WITNESSETH:
WHEREAS, the Company is the owner of certain shares of common stock of
dreamlife, inc., a Delaware corporation ("dreamlife") (such shares being
referred to as the "dreamlife Stock"); and
WHEREAS, the Company desires to afford the Holder the option to purchase
shares of the dreamlife Stock from the Company, on the terms and conditions
as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto
have agreed, and do hereby agree, as follows:
GRANT OF OPTION.
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General. The Company hereby grants to the Holder the irrevocable
right and option (hereinafter called the "Option") to purchase from the
Company one hundred thousand (100,000) shares (the "Option Shares") of the
dreamlife Stock, or any part of such number, on the terms and conditions
herein set forth.
Reservation of Option Shares. The Company shall at all times
during the Term (as defined in Section 3) reserve and keep available such
number of shares of dreamlife Stock as will be sufficient to satisfy the
requirements of this Agreement, shall pay all original issue and transfer
taxes with respect to the issue and transfer of shares pursuant hereto and
all other fees and expenses necessarily incurred by the Company in
connection therewith, and will from time to time use its best efforts to
comply with all laws and regulations which, in the opinion of counsel for
the Company, shall be applicable thereto.
EXERCISE PRICE. THE EXERCISE PRICE OF THE OPTION SHARES SHALL BE $1.00
PER SHARE (THE "EXERCISE PRICE"). THE EXERCISE PRICE SHALL BE PAID ONLY IN
CASH.
TERM OF OPTION. THE TERM OF THE OPTION SHALL BE FOR A PERIOD OF FIVE
(5) YEARS FROM THE OPTION DATE, SUBJECT TO EARLIER TERMINATION AS
HEREINAFTER PROVIDED (THE "TERM").
ADJUSTMENT TO NUMBER OF OPTION SHARES AND EXERCISE PRICE. THE NUMBER
OF OPTION SHARES PURCHASABLE UPON THE EXERCISE OF THE OPTION AND THE
EXERCISE PRICE SHALL BE SUBJECT TO ADJUSTMENT FROM TIME TO TIME UPON THE
OCCURRENCE OF CERTAIN EVENTS, AS FOLLOWS:
Reclassification, Amalgamation, Etc. In the event of (i) any
reclassification, reorganization, change or conversion of securities of the
dreamlife Stock, (ii) any amalgamation of dreamlife with another
corporation (other than a merger or consolidation with another corporation
in which dreamlife is the acquiring and the surviving corporation and which
does not result in any reclassification or change of the dreamlife Stock),
or (iii) any sale of all or substantially all of the assets of dreamlife,
the Company shall duly execute and deliver to the Holder a new Option or a
supplement hereto (in form and substance reasonably satisfactory to the
Holder), so that the Holder shall have the right to receive, at a total
purchase price not to exceed that payable upon the exercise of the
unexercised portion of the Option, and in lieu of the shares of dreamlife
Stock theretofore issuable upon the exercise of the Option, the kind and
amount of shares of stock, other securities, money and property receivable
upon such reclassification, reorganization, change, conversion,
amalgamation or consolidation by a holder of the number of shares of
dreamlife Stock then purchasable under the Option. Such new Option shall
provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 4. The
provisions of this Section 4(a) shall similarly attach to successive
reclassifications, reorganizations, changes, amalgamations, consolidations
and transfers.
Subdivision or Combination of Option Shares. If dreamlife at any
time during the Term shall subdivide or combine the dreamlife Stock: (i) in
the event of a subdivision, the Exercise Price shall be proportionately
decreased and the number of Option Shares purchasable hereunder shall be
proportionately increased, and (ii) in the event of a combination, the
Exercise Price shall be proportionately increased and the number of Option
Shares purchasable hereunder shall be proportionately decreased.
Stock Dividends; Etc. If dreamlife at any time during the Term
shall (i) pay a dividend with respect to dreamlife Stock payable in
dreamlife Stock (or rights, options or warrants in respect thereof
(collectively, "Warrants")), or (ii) issue any warrants or options, other
than those currently outstanding or which dreamlife, prior to the date
hereof, has obligated itself to issue to officers, directors, employees or
consultants, having an exercise price (on a per-share basis) below the fair
market value of a share of dreamlife Stock on the date of authorization or
grant of such Warrants, or (iii) make any other distribution with respect
to dreamlife Stock (except any distribution specifically provided for in
Sections 4(a) and (b) above), the price at which the Holder shall be able
to purchase Option Shares shall be adjusted by multiplying the Exercise
Price in effect immediately prior to such date of determination of the
holders of securities entitled to receive such distribution, by a fraction
(A) the numerator of which shall be the total number of shares of dreamlife
Stock outstanding immediately prior to such dividend or distribution, and
(B) the denominator of which shall be the total number of shares of
dreamlife Stock outstanding immediately after such dividend or
distribution, as if all of such Warrants had been exercised and the Holder
received the consideration payable in respect thereof. Upon each adjustment
in the Exercise Price pursuant to this Section 4(c), the number of Option
Shares of dreamlife Stock purchasable hereunder shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number of
Option Shares purchasable immediately prior to such adjustment by a
fraction, the numerator of which shall be the Exercise Price immediately
prior to such adjustment and the denominator of which shall be the Exercise
Price immediately thereafter.
Limitation to Adjustment. The adjustment of the number of shares
of dreamlife Stock purchasable under Section 4(a), (b), or (c) above shall
take place only in the event that the number of shares of dreamlife Stock
owned by the Company, or the number of shares of dreamlife Stock issuable
to the Company upon the conversion, exercise or exchange of any security
into shares of dreamlife Stock, shall be so adjusted, due to the occurrence
of an event described in Section 4(a), (b), or (c), and only to the extent
that the Company has participated in such event.
Notice of Adjustments. Whenever the Exercise Price or the number
of Option Shares purchasable hereunder shall be adjusted pursuant to this
Section 4, the Company shall prepare and deliver to the Holder a notice
setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment and the method by which such adjustment was
calculated.
Fractional Shares. No fractional shares of dreamlife Stock will
be issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Purchase Price payable hereunder by the Holder shall
be reduced by the dollar amount of such fractional share based on the fair
market value thereof.
PROCEDURE FOR EXERCISE OF THE OPTION. SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, THE OPTION MAY BE EXERCISED DURING THE TERM
BY WRITTEN NOTICE TO THE COMPANY AT THE ADDRESS SET FORTH ABOVE IN A FORM
SUBSTANTIALLY SIMILAR TO THE NOTICE ATTACHED HERETO AS EXHIBIT A. SUCH
NOTICE SHALL STATE THE HOLDER'S ELECTION TO EXERCISE THE OPTION AND THE
NUMBER OF OPTION SHARES IN RESPECT OF WHICH IT IS BEING EXERCISED, AND
SHALL BE SIGNED BY THE PERSON SO EXERCISING THE OPTION. SUCH NOTICE SHALL
BE ACCOMPANIED BY PAYMENT IN FULL OF THE EXERCISE PRICE, WHICH PAYMENT
SHALL BE MADE IN CASH OR OTHER IMMEDIATELY AVAILABLE FUNDS. THE CERTIFICATE
OR CERTIFICATES FOR THE SHARES AS TO WHICH THE OPTION SHALL HAVE BEEN SO
EXERCISED SHALL BE REGISTERED IN THE NAME OF THE PERSON SO EXERCISING THE
OPTION, OR IF THE HOLDER SO ELECTS, IN THE NAME OF THE HOLDER OR ONE OTHER
PERSON AS JOINT TENANTS, AND SHALL BE DELIVERED TO THE HOLDER AS SOON AS
PRACTICABLE AFTER THE NOTICE SHALL HAVE BEEN RECEIVED.
NON-TRANSFERABILITY; RESTRICTIONS ON DISPOSITION.
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Transfer of the Option. The Option shall not be transferable
other than by will or the laws of descent and distribution, and the Option
may be exercised, during the lifetime of the Holder, only by the Holder.
More particularly (but without limiting the generality of the foregoing),
the Option may not be assigned, transferred (except as provided above),
pledged or hypothecated in any way, nor shall it be assignable by operation
of law or subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition
of the Option contrary to the provisions hereof, and the levy of any
execution, attachment, or similar process upon the Option, shall be null
and void and without effect.
Transfer of the Option Shares. All Option Shares acquired by the
Holder pursuant to this Agreement shall be subject to the restrictions on
sale, encumbrance and other disposition provided by federal and state
securities laws and as noted in Section 9.
Restrictive Legend. Each certificate for the Option Shares issued
to the Holder pursuant to this Agreement may bear a restrictive legend
summarizing any restrictions on transferability applicable thereto,
including those imposed by federal and state securities laws and by this
Agreement.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. THE COMPANY HEREBY
REPRESENTS AND WARRANTS TO THE HOLDER, KNOWING AND INTENDING THAT THE
HOLDER IS ENTERING INTO THIS AGREEMENT AND PERFORMING THE OBLIGATIONS ON
HIS PART IN RELIANCE HEREON, THAT:
Ownership of Shares. Except as described in Section 9, (i) the
Company owns the Option Shares legally and beneficially, free and clear of
any and all liens, security interests, pledges, restrictions, charges,
encumbrances and claims of any nature whatsoever; (ii) the Option Shares
have been duly authorized and validly issued, fully paid and nonassessable
and not issued in violation of any preemptive rights of others; and (iii)
the Company has the absolute and unrestricted right to sell, transfer and
assign the Option Shares to the Holder upon the exercise of the Option.
Authority. The Company has the legal right, power and capacity to
enter into this Agreement and to carry out the transactions herein
contemplated. This Agreement, and all other documents executed by the
Company in connection herewith, constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their terms.
No Violations. Except as described in Section 9, the execution,
delivery and performance by the Company of this Agreement does not
contravene any law, governmental rule, regulation or order applicable to
the Company; does not and will not contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument or order, writ, injunction or decree to which the Company is a
party or by which it or any of its assets are bound; and will not result in
the imposition of a lien upon any assets of the Company pursuant to the
terms of any agreement or instrument to which the Company is a party or by
which it or its assets are bound.
HOLDER'S REPRESENTATIONS AND WARRANTIES. THE HOLDER HEREBY REPRESENTS
AND WARRANTS TO THE COMPANY, KNOWING AND INTENDING THAT THE COMPANY IS
ENTERING INTO THIS AGREEMENT AND PERFORMING THE OBLIGATIONS ON ITS PART IN
RELIANCE HEREON, THAT:
Authority. The Holder has the legal right and power to enter into
this Agreement and to carry out the transactions herein contemplated. This
Agreement and all other documents executed by the Holder in connection
herewith constitute the legal, valid and binding obligations of the Holder,
enforceable in accordance with their terms.
Consents. To the best of his knowledge, no consent, approval or
authorization of any third party is required in connection with the
execution, delivery and performance of this Agreement.
No Violations. The execution, delivery and performance by the
Holder of this Agreement does not contravene any law, governmental rule,
regulation or order applicable to the Holder, does not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument or order, writ, injunction or decree
to which the Holder is a party or by which he or any of his assets are
bound.
Exercise Price. The Holder is satisfied that the Exercise Price
is fair and just. The Holder acknowledges that any risks involved in the
valuation of the Option Shares were taken into account in the determination
of the Exercise Price.
Investment. The Option and the Option Shares to be issued
hereunder are being acquired for investment purposes only and not with a
view to the distribution thereof. Prior to the receipt of the certificates
pursuant to the exercise of the Option granted hereunder, the Holder shall,
if required in the Company's discretion, demonstrate this intention by
delivering to the Company an investment certificate or letter in such form
as the Company may require.
Compliance with Laws. The Holder shall not offer, sell or
otherwise dispose of the Option or any Option Shares to be issued hereunder
except under circumstances which will not result in a violation of
applicable federal or state securities laws.
Due Diligence. The Holder has had the opportunity to conduct due
diligence to become familiar with dreamlife, its assets, liabilities,
fiscal affairs, operations and value. The Holder, prior to executing this
Agreement, has had adequate opportunity to show this Agreement to, and
consult with, independent legal counsel of his own choosing.
INTENTIONALLY OMITTED
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RIGHTS AS SHAREHOLDER OF DREAMLIFE. THE HOLDER SHALL NOT BE ENTITLED
TO VOTE OR RECEIVE DIVIDENDS OR BE DEEMED A HOLDER OF DREAMLIFE STOCK OR
ANY OTHER SECURITIES OF DREAMLIFE WHICH MAY AT ANY TIME BE ISSUABLE ON THE
EXERCISE OF THE OPTION FOR ANY PURPOSE, AND NOTHING CONTAINED HEREIN SHALL
BE CONSTRUED TO CONFER UPON THE HOLDER ANY RIGHTS OR PRIVILEGES OF A
SHAREHOLDER OF DREAMLIFE, INCLUDING THE RIGHT TO VOTE FOR THE ELECTION OF
DIRECTORS OR ANY OTHER MATTER SUBMITTED TO SHAREHOLDERS OF DREAMLIFE AT ANY
MEETING THEREOF, OR TO RECEIVE NOTICE OF MEETINGS, OR TO RECEIVE DIVIDENDS
OR SUBSCRIPTION RIGHTS OR OTHERWISE UNLESS AND UNTIL THE OPTION SHALL HAVE
BEEN EXERCISED AND CERTIFICATES REPRESENTING THE OPTION SHARES SHALL BE
ENDORSED, TRANSFERRED AND DELIVERED TO THE HOLDER AND THE HOLDER'S NAME HAS
BEEN ENTERED AS A SHAREHOLDER OF RECORD ON THE BOOKS OF DREAMLIFE. THE
EXISTENCE OF THE OPTION HEREIN GRANTED SHALL NOT AFFECT IN ANY WAY THE
RIGHT OR POWER OF DREAMLIFE OR ITS SHAREHOLDERS TO MAKE OR AUTHORIZE ANY OR
ALL ADJUSTMENTS, RECAPITALIZATIONS, REORGANIZATIONS OR OTHER CHANGES IN
DREAMLIFE'S CAPITAL STRUCTURE OR ITS BUSINESS, OR ANY MERGER OR
CONSOLIDATION OF DREAMLIFE, OR ANY ISSUE OF BONDS, DEBENTURES, PREFERRED OR
PRIOR PREFERENCE STOCK AHEAD OF OR AFFECTING THE OPTION SHARES OR THE
RIGHTS THEREOF, OR DISSOLUTION OR LIQUIDATION OF DREAMLIFE, OR ANY SALE OR
TRANSFER OF ALL OR ANY PART OF ITS ASSETS OR BUSINESS, OR ANY OTHER
CORPORATE ACT OR PROCEEDING, WHETHER OF A SIMILAR CHARACTER OR OTHERWISE.
EXERCISABILITY OF OPTION UPON DEATH OF HOLDER. IF THE HOLDER DIES
DURING THE TERM, THE OPTION MAY THEREAFTER BE IMMEDIATELY EXERCISED, TO THE
EXTENT THE HOLDER SHALL HAVE BEEN ENTITLED TO DO SO AT THE DATE OF HIS
DEATH PURSUANT TO SECTION 5 HEREOF, BY THE LEGAL REPRESENTATIVE OF THE
ESTATE OR BY THE LEGATEE OF THE HOLDER UNDER THE WILL OF THE HOLDER, FOR A
PERIOD OF ONE YEAR FROM THE DATE OF SUCH DEATH OR UNTIL THE EXPIRATION OF
THE TERM, WHICHEVER PERIOD IS SHORTER.
MISCELLANEOUS PROVISIONS.
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Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Waiver. Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is entitled to the
benefits thereof.
Headings. The headings contained in this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally, sent by nationally recognized overnight courier or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Company: CYL Development Holdings, L.L.C.
c/o Van Beuren Management, Inc.
000 Xxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
If to the Holder: Xxxxxxx X. Xxxxxxx, Xx.
000 Xxxx 00xx Xxxxxx
XX, XX 00000
Governing Law; Jurisdiction. This Agreement shall be construed,
and the rights and obligations of the parties hereunder determined, in
accordance with the substantive laws of the State of New Jersey, without
regard to conflict of law principles. For purposes of any suit, action, or
proceeding involving this Agreement, the parties hereby expressly submit to
the jurisdiction of all federal and state courts sitting in the State of
New Jersey. The parties hereto each hereby irrevocably waive any objection
that each may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out or relating to this Agreement brought in
any federal or state court sitting in the State of New Jersey and hereby
irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient form.
WAIVER OF JURY TRIAL. THE PARTIES HERETO EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EACH MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES
THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Entire Agreement. This Agreement contains the entire, final and
complete understanding of the parties hereto with respect to the
transactions contemplated herein and supersedes any and all prior
discussions, understandings, agreements or undertakings of the parties
(whether written or verbal) with respect to the matters contained herein,
and may be amended only by a written instrument executed by all of the
parties hereto.
Partial Invalidity. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or declared invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition and shall not affect
the validity of the remaining provisions of this Agreement.
Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective
successors, assigns, heirs, executors and personal representatives.
Further Assurances. The parties hereto shall duly execute and
deliver such further documents, certificates, instruments or agreements and
make such further assurances for and take such further actions reasonably
requested by the other party to this Agreement, all as may be reasonably
necessary to carry out the intent and purpose of this Agreement and
consummate the exercise of the Option.
Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
shall constitute together but one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an officer hereunto duly authorized, and the Holder has
hereunto set his or her hand, all as of the day and year first above
written.
CYL DEVELOPMENT HOLDINGS, L.L.C.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Manager
/s/ Xxxxxxx X. Xxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxx, Xx.
Exhibit A
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NOTICE OF EXERCISE OF OPTION
To: CYL DEVELOPMENT HOLDINGS, L.L.C. (the "Company")
000 Xxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
1. The undersigned hereby elects to purchase ____________ shares
of common stock of dreamlife, inc. (the "dreamlife Stock") pursuant to the
terms of the attached Option Agreement, and hereby tenders herewith full
payment of the exercise price of such shares to the Company in cash or
other immediately available funds.
2. Please instruct the transfer agent of the dreamlife Stock to
issue a certificate or certificates representing said shares in the name of
the undersigned or in such other name or names as are specified below, and
to deliver to us current certificates in the Company's name, with stock
powers endorsed in blank:
----------------------------------------- (Name)
----------------------------------------- (Address)
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3. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment purposes and not
with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or
reselling such shares.
Signature:
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Name:
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Address:
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