THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO...
Exhibit
4.19
THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
WARRANT
TO
PURCHASE
SERIES
A PREFERRED STOCK
No. WSA-[__] |
June ___,
2009
|
Void
After June ___,
2014
This
certifies that, for value received, [_________], whose address is at
[________________________], or its assigns (the “Holder” or
“Purchaser”),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from AeroGrow International, Inc., a Nevada corporation, with its office at 0000
Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (the “Corporation”),
shares of the Corporation’s Series A Preferred Stock (the “Series A
Preferred Stock”) upon the terms and subject to the adjustments as
provided herein.
This
Warrant is being issued pursuant to the terms of the Series A Stock and Warrant
Purchase Agreement, dated June ___, 2009 (the “Purchase
Agreement”), by and among the Corporation and the parties set forth on
Exhibit A
thereto. Capitalized terms used herein but not otherwise defined
shall have the meanings given to them in the Purchase Agreement.
1. Definitions. As
used herein, the following terms shall have the following respective
meanings:
(a) “Exercise
Period” shall mean the time period commencing with the date of this
Warrant and ending five (5) years from date of this Warrant, unless sooner
terminated as provided below.
(b) “Exercise
Price” shall mean $1,250.00 per share subject to adjustment pursuant to
the terms herein, including Section 5 below (including adjustments for stock
splits, stock dividends, reclassifications, recapitalizations, combinations or
exchanges of shares, separations, reorganizations, liquidations or the
like).
(c) “Exercise
Shares” shall mean [____] shares of Series A Preferred Stock, subject to
adjustment pursuant to the terms herein, including Section 5 below.
(d) “Conversion
Shares” shall mean any shares of the Corporation’s common stock which may
be issued upon the conversion of shares of Series A Preferred
Stock.
2. Exercise of
Warrant. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Corporation at its address set forth above (or
at such other address as it may designate by notice in writing to the
Holder):
(a) an
executed Notice of Exercise in the form attached hereto;
(b) payment
of the Exercise Price in cash or by check; and
(c) this
Warrant.
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Upon the
exercise of the rights represented by this Warrant, a certificate or
certificates for the Exercise Shares so purchased, registered in the name of the
Holder or persons affiliated with the Holder, if the Holder so designates, shall
be issued and delivered to the Holder as soon as practicable after the rights
represented by this Warrant shall have been so exercised.
The
person in whose name any certificate or certificates for Exercise Shares are to
be issued upon exercise of this Warrant shall be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
3. Covenants
of the Corporation.
3.1 Covenants as to Exercise
Shares. The Corporation covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issuance thereof. The Corporation further covenants and agrees that
the Corporation shall at all times during the Exercise Period, (i) have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of any applicable class and series of its Common Stock and/or Series A
Preferred Stock to provide for the exercise of the rights represented by this
Warrant and (ii) if applicable, have authorized and reserved, free from
preemptive rights, a sufficient number of shares of its Common Stock to provide
for the conversion of the shares of Series A Preferred Stock issuable upon the
exercise of the rights represented by this Warrant. If at any time
during the Exercise Period the number of authorized but unissued shares of
Common Stock and/or Series A Preferred Stock, as applicable, shall not be
sufficient to permit exercise of this Warrant and, if applicable, the conversion
of the shares of Series A Preferred Stock issuable pursuant hereto, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock and/or Series A Preferred Stock, as applicable, to such number of shares
as shall be sufficient for such purposes.
3.2 No
Impairment. Except and to the extent as waived or consented to
by the Holder, the Corporation will not, by amendment of its Articles of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Holder against impairment.
3.3 Notices of Record
Date. In the event of any taking by the Corporation of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, the Corporation shall mail to the Holder, at least five (5)
business days prior to the date specified herein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend or
distribution.
3.4 Notice of
Expiration. If this Warrant has not been fully exercised
on or before the date thirty (30) days prior to the end of the Exercise Period,
the Corporation shall thereafter provide Holder with at least twenty (20) days
advance written notice of the date on which this Warrant is to
expire. If the Corporation fails to provide such notice, the Exercise
Period shall be extended until the date twenty (20) days after the date said
notice is provided to Holder. If this Warrant would terminate when it
could be net exercised pursuant to Section 2.1, it shall be deemed so exercised
immediately prior to such termination, unless Holder states explicitly to the
contrary in writing.
4. Representations
of Holder.
4.1 Acquisition of Warrant for Personal
Account. The Holder represents and warrants that it is
acquiring the Warrant solely for his, her or its account for investment and not
with a view to or for sale or distribution of said Warrant or any part thereof,
other than potential transfers between affiliates (including affiliate
funds). The Holder also represents that the entire legal and
beneficial interests of the Warrant and Exercise Shares the Holder is acquiring
is being acquired for, and will be held for, his, her or its account
only.
4.2 Securities Are Not
Registered.
(a) The
Holder understands that the Warrant, the Exercise Shares and the Conversion
Shares have not been registered under the Securities Act of 1933, as amended
(the “Act”) on
the basis that no distribution or public offering of the stock of the
Corporation is to be effected. The Holder realizes that the basis for
the exemption may not be present if, notwithstanding his, her or its
representations, the Holder has a present intention of acquiring the securities
for a fixed or determinable period in the future, selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the securities. The Holder has no such present
intention.
(b) The
Holder recognizes that the Warrant, the Exercise Shares and the Conversion
Shares must be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available.
(c) The
Holder is aware that none of the Warrant, the Exercise Shares or the Conversion
Shares may be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met, including, among other things, the existence of a public
market for the shares, the availability of certain current public information
about the Corporation, the resale following the required holding period under
Rule 144 and the number of shares being sold during any three month period not
exceeding specified limitations. Holder is aware that the conditions
for resale set forth in Rule 144 have not been satisfied and that the
Corporation presently has no plans to satisfy these conditions in the
foreseeable future.
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4.3 Disposition
of Warrant and Exercise Shares and Conversion Shares.
(a) The
Holder further agrees not to make any disposition of all or any part of the
Warrant or Exercise Shares or Conversion Shares in any event unless and
until:
(i) The
Corporation shall have received a letter secured by the Holder from the
Securities and Exchange Commission stating that no action will be recommended to
the Commission with respect to the proposed disposition; or
(ii) There
is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement; or
(iii) The
Holder shall have notified the Corporation of the proposed disposition and shall
have furnished the Corporation with a statement of the circumstances surrounding
the proposed disposition, and if reasonably requested by the Company, the Holder
shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, for the Holder to the effect that such disposition
will not require registration of such Warrant or Exercise Shares or Conversion
Shares under the Act or any applicable state securities laws; provided, however,
that such statement will not be required if the disposition is permitted under
Rule 144 of the Act, except in unusual circumstances.
(b) The
Holder agrees not to sell this Warrant or the Exercise Shares or the Conversion
Shares during a period specified by the representative of the underwriters of
the Corporation’s Common Stock (not to exceed one hundred eighty (180) days)
following the effective date of the initial registration statement of the
Corporation filed under the Act, so long as all officers, directors, and one
percent (1%) stockholders have executed similar agreements and are similarly
restricted from selling the Corporation’s stock, or pursuant to other
contractual obligations between the Holder and the Corporation.
(c) Notwithstanding
the provisions of paragraphs (a) and (b) above, the Holder may assign this
Warrant, the Exercise Shares or the Conversion Shares to (i) any partner or
retired partner of the Holder if Holder is a partnership, (ii) any member or
former member of the Holder if Holder is a limited liability company, (iii) any
affiliate, including affiliated funds or (iv) any family member or trust for the
benefit of the Holder if the Holder is an individual; provided that the
Corporation is given written notice thereof.
(d) The
Holder understands and agrees that all certificates evidencing the shares to be
issued to the Holder may bear the following legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
5. Adjustment
of Exercise Price and Exercise Shares; Effect of Organic Changes.
5.1 Adjustment of Exercise
Price. In the event of changes in the outstanding Series A
Preferred Stock by reason of stock dividends, splits, recapitalizations,
reclassifications, combinations or exchanges of shares, separations,
reorganizations, liquidations, or the like, the number and class of shares
available under the Warrant in the aggregate and the Exercise Price shall be
correspondingly adjusted to give the Holder of the Warrant, on exercise for the
same aggregate Exercise Price, the total number, class, and kind of shares as
the Holder would have owned had the Warrant been exercised prior to the event
and had the Holder continued to hold such shares until after the event requiring
adjustment. The form of this Warrant need not be changed because of
any adjustment in the number of Exercise Shares subject to this
Warrant.
5.2 Automatic Conversion. Upon the
automatic conversion of all outstanding shares of the series of equity
securities comprising the Exercise Shares, this Warrant shall become exercisable
for that number of shares of Common Stock of the Corporation into which the
Exercise Shares would then be convertible, so long as such shares, if this
Warrant had been exercised prior to such offering, would have been converted
into shares of the Corporation’s Common Stock pursuant to the Corporation’s
Articles of Incorporation. In such case, all references to “Exercise
Shares” shall mean shares of the Corporation’s Common Stock issuable upon
exercise of this Warrant, as appropriate.
6. Fractional
Shares. No fractional shares shall be issued upon the exercise
of this Warrant as a consequence of any adjustment pursuant
hereto. All Exercise Shares (including fractions) issuable upon
exercise of this Warrant may be aggregated for purposes of determining whether
the exercise would result in the issuance of any fractional
share. If, after aggregation, the exercise would result in the
issuance of a fractional share, the Corporation shall, in lieu of issuance of
any fractional share, pay the Holder otherwise entitled to such fraction a sum
in cash equal to the product resulting from multiplying the then current fair
market value of an Exercise Share by such fraction.
7. Acquisition
Or Asset Transfer. In the event of, at any time during the
Exercise Period, an Acquisition or an Asset Transfer (each as defined in the
Corporation’s Articles of Incorporation), the Corporation shall provide to the
Holder ten (10) days advance written notice of such Acquisition or Asset
Transfer, and this Warrant shall terminate unless exercised immediately prior to
the closing of such Acquisition or Asset Transfer.
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8. No
Stockholder Rights. This Warrant in and of itself shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Corporation.
9. Transfer Of
Warrant. Subject to applicable laws and any restrictions on
transfer set forth in this Warrant, this Warrant and all rights hereunder are
transferable, in whole but not in part, by the Holder in person or by duly
authorized attorney, upon delivery of this Warrant and the form of assignment
attached hereto to any transferee designated by Holder. The
transferee shall sign an investment letter in form and substance satisfactory to
the Corporation.
10. Lost,
Stolen, Mutilated Or Destroyed Warrant. The Corporation
covenants to the holder hereof that, upon receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, upon receipt of an indemnity reasonably satisfactory to the
Corporation, or in the case of any such mutilation, upon surrender and
cancellation of such Warrant or stock certificate, the Corporation will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
11. Notices,
Etc. Any notice required or permitted under this Warrant shall
be given in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (c) five (5) business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1)
business day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Corporation at
AeroGrow International, Inc., 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Attention: Chief Executive Officer; or to a Purchaser at the address set forth
on Exhibit
A to the Purchase Agreement, or at such other address as any such party
may designate by ten (10) days advance written notice to the other parties
hereto.
12. Acceptance. Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.
13. Governing
Law. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by the laws of the State of Colorado, without giving
effect to principles of conflicts of law.
14. Amendments
And Waivers. This Warrant may be amended in the same manner as
provided in the Purchase Agreement.
15. Severability. If
any provision of this Warrant is held to be unenforceable under applicable law,
such provision shall be excluded from this Warrant and the balance of the
Warrant shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
[Signature
Page Follows]
4
In Witness
Whereof, the Corporation has caused this Warrant to be executed by its
duly authorized officer as of the date first written above.
|
By:
|
||
Name:[ ] | |||
Title: [ ] | |||
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NOTICE
OF EXERCISE
(1) r The
undersigned hereby elects to purchase ________ shares of Series A Preferred
Stock of AeroGrow International, Inc. (the “Company”) pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
(2) Please
issue a certificate or certificates representing said shares of Series A
Preferred Stock in the name of the undersigned or in such other name as is
specified below:
___________________________________
(Name)
___________________________________
___________________________________
(Address)
(3) The
undersigned represents that (i) the aforesaid shares of Series A Preferred Stock
are being acquired for the account of the undersigned for investment 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; (ii) the undersigned is aware of the Company’s business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision regarding his, her or its
investment in the Company; (iii) the undersigned is experienced in making
investments of this type and has such knowledge and background in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned’s own interests; (iv)
the undersigned understands that the shares of Series A Preferred Stock issuable
upon exercise of this Warrant have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), by reason of a specific
exemption from the registration provisions of the Securities Act, which
exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; (v) the undersigned is aware that the aforesaid
shares of Stock may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has
held the shares for the period prescribed by Rule 144, that among the conditions
for use of the Rule is the availability of current information to the public
about the Company and the Company has not made such information available and
has no present plans to do so; (vi) the undersigned is an “accredited investor”
(as defined in Rule 501 promulgated pursuant to the Securities Act); and (vii)
the undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Series A Preferred Stock (or underlying shares of Common
Stock) unless and until there is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with said registration statement, or the undersigned has
provided the Company with an opinion of counsel satisfactory to the Company,
stating that such registration is not required.
(Date) | (Signature) |
(Print name) |
6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
For Value
Received, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to
Name: |
(Please
Print)
|
Address:
|
(Please
Print)
|
Dated:
_________________
|
Signature
of Holder’s Authorized Agent:
|
Title
of Authorized Agent:
|
Holder’s
Address:
|
NOTE: The signature
to this Assignment Form must correspond with the name as it appears on the face
of the Warrant, without alteration or enlargement or any change
whatsoever. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.
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