WARRANT AGREEMENT
EXHIBIT
1.3
Agreement
made as of _________________, 2006, between AeroGrow International, Inc., a
Nevada corporation with offices at 000 00xx
Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 (“Company”), and Corporate Stock Transfer
Company, a Colorado corporation with offices at 0000 Xxxxxx Xxxxx Xxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000, (herein called “Warrant Agent”).
WHEREAS,
the Company is engaged in a public offering of Common Stock and Warrants
(“Public Offering”) and in connection therewith, has determined to issue and
deliver up to (i) _____
(including up to _____ that may be issued pursuant to the underwriter’s
over-allotment option) Class A Redeemable Common Stock Purchase Warrants
(“Public Warrants”) to the public investors and (ii) an
aggregate of _____ Warrants to the underwriters (“Underwriters”) or their
designees (“Underwriters’ Warrants” and together with the Public Warrants, the
“Warrant(s)”), each of such Warrants evidencing the right of the holder thereof
to purchase one share of the Company’s common stock, $.001 par value per share
(“Common Stock”), for an initial exercise price of $________; and
WHEREAS,
the Company has filed with the Securities and Exchange Commission a Registration
Statement (No. 333-____) on Form SB-2 (“Registration Statement”), for the
registration under the Securities Act of 1933, as amended, of, among others,
the
Warrants and the Common Stock issuable upon exercise of the Warrants;
and
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and
the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the Warrants;
and
WHEREAS,
the Company desires to provide for the form and provisions of the Warrants,
the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and
the
holders of the Warrants; and
WHEREAS,
all acts and things have been done and performed which are necessary to make
the
Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of
this
Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
1. Appointment
of Warrant Agent.
The
Company hereby appoints the Warrant Agent to act as agent for the Company for
the Warrants, and the Warrant Agent hereby accepts such appointment and agrees
to perform the same in accordance with the terms and conditions set forth in
this Agreement.
2. Warrants.
2.1 Form
of Warrant.
Each
Warrant certificate shall be issued in registered form only, shall be in
substantially the form of Exhibit
A
hereto,
the provisions of which are incorporated herein and shall be signed by, or
bear
the facsimile signature of, the Chairman of the Board or President and Secretary
or Assistant Secretary of the Company and shall bear a facsimile of the
Company’s seal. In the event the person whose facsimile signature has been
placed upon any Warrant certificate shall have ceased to be Chairman of the
Board or President and Secretary or Assistant Secretary of the Company before
such Warrant certificate is issued, it may be issued with the same effect as
if
he or she had not ceased to be such at the date of issuance. The Warrants
represented by a Warrant certificate may not be exercised until such certificate
has been countersigned by the Warrant Agent as provided in Section 2.3
hereof.
2.2 Effect
of Countersignature.
Unless
and until countersigned by the Warrant Agent pursuant to this Agreement, a
Warrant certificate shall be invalid and of no effect.
2.3 Events
for Countersignature.
The
Warrant Agent shall countersign a Warrant certificate only upon the occurrence
of either of the following events:
(a) if
the
Warrant certificate is to be issued in exchange or substitution for one or
more
previously countersigned Warrant certificates, as hereinafter provided,
or
(b) if
the
Company instructs the Warrant Agent to do so.
2.4 Registration.
2.4.1 Warrant
Register.
The
Warrant Agent shall maintain books (“Warrant Register”) for the registration of
original issuance and the registration of transfer of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register
the
Warrants in the names of the respective holders thereof in such denominations
and otherwise in accordance with instructions delivered to the Warrant Agent
by
the Company.
2.4.2 Registered
Holder.
Prior
to due presentment for registration of transfer of any Warrant certificate,
the
Company and the Warrant Agent may deem and treat the person in whose name such
Warrant certificate shall be registered upon the Warrant Register (“registered
holder”), as the absolute owner of such Warrant and of each Warrant represented
thereby (notwithstanding any notation of ownership or other writing on the
Warrant certificate made by anyone other than the Company or the Warrant Agent),
for the purpose of any exercise thereof, and for all other purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice to the
contrary.
3. Terms
and Exercise of Warrants.
3.1 Warrant
Price.
Each
Warrant certificate shall, when countersigned by the Warrant Agent, entitle
the
registered holder thereof, subject to the provisions of such Warrant certificate
and of this Warrant Agreement, to purchase from the Company the number of shares
of Common Stock stated therein, at the initial price of $_____ per whole share,
subject to the adjustments provided in Section 4 hereof. The term “Warrant
Price” as used in this Warrant Agreement refers to the price per share at which
Common Stock may be purchased at the time a Warrant is exercised and is subject
to adjustment as provided herein.
3.2 Duration
of Warrants.
A
Warrant may be exercised only during the period (“Exercise Period”) commencing
on __________, 2007, one year after issuance (“Commencement Date”), and
terminating on the earlier of ___________, 2011 or the date fixed for redemption
of the Warrant as provided in Section 6 of this Agreement (“Expiration Date”).
Each Warrant not exercised on or before its Expiration Date shall become void,
and all rights thereunder and all rights in respect thereof under this Agreement
shall cease at the close of business on its Expiration Date. The Company in
its
sole discretion may extend the duration of the Warrants by delaying the
Expiration Date.
3.3 Exercise
of Warrants.
3.3.1 Payment.
A
Warrant, when countersigned by the Warrant Agent, may be exercised by the
registered holder thereof by surrendering the certificate representing such
Warrant, at the office of the Warrant Agent, or at the office of its successor
as Warrant Agent, in the State of Colorado, with the purchase form, as set
forth
on the Warrant certificate and in substantially the form of Exhibit
A
hereto,
duly executed, and by paying in full, in lawful money of the United States,
in
cash, good certified check or bank draft payable to the order of the Company,
the Warrant Price for each full share of Common Stock as to which the Warrant
is
exercised and any and all applicable taxes due in connection with the exercise
of the Warrant, the exchange of the Warrant for the Common Stock, and the
issuance of the Common Stock.
3.3.2 Issuance
of Certificates.
As soon
as practicable after the exercise of any Warrant and the clearance of the funds
in payment of the Warrant Price, the Company shall issue to the registered
holder of such Warrant a certificate or certificates for the number of full
shares of Common Stock to which he is entitled, registered in such name or
names
as may be directed by him, and if such Warrant shall not have been exercised
in
full, a new countersigned Warrant certificate for the number of shares as to
which such Warrant shall not have been exercised. Notwithstanding the foregoing,
the Company shall not be obligated to deliver any securities pursuant to the
exercise of a Warrant unless a registration statement under the Securities
Act
of 1933 with respect to the securities is effective. Warrants may not be
exercised by, or securities issued to, any registered holder in any state in
which such exercise would be unlawful.
3.3.3 Valid
Issuance.
All
shares of Common Stock issued upon the proper exercise of a Warrant in
conformity with this Agreement shall be validly issued.
3.3.4 Date
of Issuance.
Each
person in whose name any such certificate for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which the Warrant certificate was surrendered and payment
of the Warrant Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company 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.
3.3.5 Warrant
Solicitation and Warrant Solicitation Fee.
(a) The
Company has engaged Xxxxxxx Securities LLC (“Xxxxxxx”), one of the Underwriters,
on a non-exclusive basis, as its agent for the solicitation of the exercise
of
the Warrants. The Company, at its cost, will (i) assist
Xxxxxxx with respect to such solicitation, if requested by Xxxxxxx, and
(ii) provide
to Xxxxxxx, and direct the Company’s transfer and warrant agent to deliver to
Xxxxxxx, lists of the record, and to the extent known, beneficial owners of
the
Company’s Warrants. Accordingly, the Company hereby instructs the Warrant Agent
to cooperate with Xxxxxxx in every respect in connection with Xxxxxxx’x
solicitation activities, including, but not limited to, providing to Xxxxxxx,
at
the Company’s cost, a list of record and beneficial holders of the Warrants and
circulating a prospectus or offering circular disclosing the compensation
arrangements referenced in Section 3.3.5(b) to holders of the Warrants at the
time of exercise of the Warrants. In addition to the conditions set forth in
Section 3.3.5(b), Xxxxxxx shall accept payment of the warrant solicitation
fee
provided in Section 3.3.5(b) only if it has provided bona fide services in
connection with the exercise of the Warrants. In addition to soliciting, either
orally or in writing, the exercise of Warrants by a Warrant holder, such
services also may include disseminating information, either orally or in
writing, to Warrant holders about the Company or the market for the Company’s
securities, or assisting in the processing of the exercise of
Warrants.
(b) In
each
instance in which a Warrant is exercised, the Warrant Agent shall promptly
give
written notice of such exercise to the Company and Xxxxxxx (“Warrant Agent’s
Exercise Notice”). If, upon the exercise of any Warrant after the first
anniversary of the effective date of the Registration Statement, (i) the
market price of the Company’s Common Stock is greater than the Warrant Price,
(ii) disclosure
of compensation arrangements was made both at the time of the original offering
and at the time of exercise (by delivery of the Prospectus or as otherwise
required by applicable law, rule or regulation), (iii) the
exercise of the Warrant was solicited by Xxxxxxx, (iv) the
Warrant was not held in a discretionary account, and (v) the
solicitation of the exercise of the Warrant was not in violation of Regulation
M
(as such rule or any successor rule may be in effect as of such time of
exercise) promulgated under the Securities Exchange Act of 1934, then the
Warrant Agent, simultaneously with the issuance of the common stock underlying
the Warrant(s), shall, on behalf of the Company, pay from the proceeds received
upon exercise of the Warrant(s), a fee of 5% of the Warrant Price to Xxxxxxx
in
accordance with its actual solicitation of a Warrant holder, provided that
Xxxxxxx delivers to the Warrant Agent within three (3) business days from the
date on which Xxxxxxx received the Warrant Agent’s Exercise Notice, a
certificate that the conditions set forth in the preceding clauses (iii), (iv)
and (v) have been satisfied. Xxxxxxx and the Company may, at any time during
business hours, examine the records of the Warrant Agent, including its ledger
of original Warrant certificates returned to the Warrant Agent upon exercise
of
Warrants.
(c) The
provisions of this Section 3.3.5 may not be modified, amended or deleted
without the prior written consent of Xxxxxxx.
4. Adjustments.
4.1 Stock
Dividends - Split-Ups.
If
after the date hereof, and subject to the provisions of Section 4.6, the number
of outstanding shares of Common Stock is increased by a stock dividend payable
in shares of Common Stock or by a split-up of shares of Common Stock or other
similar event, then, on the effective date thereof, the number of shares
issuable on exercise of each Warrant shall be increased in proportion to such
increase in outstanding shares and the then applicable Warrant Price shall
be
correspondingly decreased.
4.2 Aggregation
of Shares.
If
after the date hereof, and subject to the provisions of Section 4.6, the number
of outstanding shares of Common Stock is decreased by a consolidation,
combination or reclassification of shares of Common Stock or other similar
event, then, upon the effective date of such consolidation, combination or
reclassification, the number of shares issuable on exercise of each Warrant
shall be decreased in proportion to such decrease in outstanding shares and
the
then applicable Warrant Price shall be correspondingly increased.
4.3 Replacement
of Securities Upon Reorganization, etc.
If after
the date hereof any capital reorganization or reclassification of the Common
Stock of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation or other similar event shall be effected, then, as a condition
of
such reorganization, reclassification, consolidation, merger, or sale, lawful
and fair provision shall be made whereby the Warrant holders shall thereafter
have the right to purchase and receive, upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, such shares of stock, securities,
or
assets as may be issued or payable with respect to or in exchange for the number
of outstanding shares of such Common Stock equal to the number of shares of
such
stock immediately theretofore purchasable and receivable upon the exercise
of
the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares purchas-able upon the exercise of the Warrants)
shall thereafter be applicable, as nearly as may be in relation to any share
of
stock, securities, or assets thereafter deliver-able upon the exercise hereof.
The Company shall not effect any such consolidation, merger, or sale unless
prior to the consummation thereof the successor corporation (if other than
the
Company) resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume by written instrument executed and
delivered to the Warrant Agent the obligation to deliver to the Warrant holders
such shares of stock, securities, or assets as, in accordance with the foregoing
provisions, such holders may be entitled to purchase.
4.4 Notices
of Changes in Warrant.
Upon
every adjustment of the Warrant Price or the number of shares issuable on
exercise of a Warrant, the Company shall give written notice thereof to the
Warrant Agent, which notice shall state the Warrant Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of a Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the occurrence of any event specified in Sections
4.1, 4.2, or 4.3, the Company shall give written notice in the manner set forth
above of the record date for such dividend, distribution, or subscription
rights, or the effective date of such reorganization, reclassification,
con-solidation, merger, sale, dissolution, liquidation, winding up or issuance
or the adjustment date of the increase in the exercise price. Such notice shall
also specify the date as of which the holders of Common Stock of record shall
participate in such dividend, distribution, or subscription rights, or shall
be
entitled to exchange their Common Stock for stock, securities, or other assets
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, winding up or issuance. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of
such
event.
4.5 No
Fractional Shares.
Notwithstanding any provision contained in this Warrant Agreement to the
contrary, the Company shall not issue fractional shares upon exercise of
Warrants. If, by reason of any adjustment made pursuant to this Section 4,
the holder of any Warrant would be entitled, upon the exercise of such Warrant,
to receive a fractional interest in a share, the number of shares of Common
Stock to be received shall be rounded up to the nearest whole
number.
4.6 Form
of Warrant.
The
form of Warrant need not be changed because of any adjustment pursuant to this
Section 4, and Warrants issued after such adjustment may state the same Warrant
Price and the same number of shares as is stated in the Warrants initially
issued pursuant to this Agreement. However, the Company may at any time in
its
sole discretion make any change in the form of Warrant that the Company may
deem
appropriate and that does not affect the substance thereof, and any Warrant
thereafter issued or countersigned, whether in exchange or substitution for
an
outstanding Warrant or otherwise, may be in the form as so changed.
5. Transfer
and Exchange of Warrants.
5.1 Registration
of Transfer.
The
Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of a Warrant certificate
for
transfer, properly endorsed with signatures properly guaranteed and accompanied
by appropriate instructions for transfer. Upon any such transfer, a new Warrant
certificate representing an equal aggregate number of Warrants shall be issued
and the old Warrant certificate shall be canceled by the Warrant Agent. The
Warrant certificate so canceled shall be delivered by the Warrant Agent to
the
Company from time to time upon request.
5.2 Procedure
for Surrender of Warrants.
Warrant
certificates may be surrendered to the Warrant Agent, together with a written
request for exchange, and thereupon the Warrant Agent shall issue in exchange
therefor one or more new Warrant certificates as requested by the registered
holder of the Warrant certificates so surrendered, representing an equal
aggregate number of Warrants; provided, however, that in the event that a
Warrant certificate surrendered for transfer bears a restrictive legend, the
Warrant Agent shall not cancel such Warrant certificate and issue new Warrant
certificates in exchange therefor until the Warrant Agent has received an
opinion of counsel for the Company stating that such transfer may be made and
indicating whether the new Warrant certificates also must bear a restrictive
legend.
5.3 Fractional
Warrants.
The
Warrant Agent shall not be required to effect any registration of transfer
or
exchange which will result in the issuance of a warrant certificate for a
fraction of a warrant. The number of Warrants to be delivered shall be rounded
up to the nearest whole number.
5.4 Service
Charges.
No
service charge shall be made for any exchange or registration of transfer of
Warrants.
5.5 Warrant
Execution and Countersignature.
The
Warrant Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Agreement, the Warrants required to be issued pursuant
to
the provisions hereof, and the Company, whenever required by the Warrant Agent,
will supply the Warrant Agent with Warrant certificates duly executed on behalf
of the Company for such purpose.
6. Redemption.
6.1 Redemption.
Not
less than all of the outstanding Warrants may be redeemed, at the option of
the
Company, after they become exercisable and prior to the Expiration Date, at
the
office of the Warrant Agent, upon the notice referred to in Section 6.2,
at
the price of $.01 per Warrant (“Redemption Price”). The Warrants may be
redeemed, if and only if (i) the
last
sale price of the Common Stock has been at least 150% of the then Warrant Price
on each of the twenty (20) consecutive trading days ending on the third business
day prior to the date on which notice of redemption is given, and (ii) the
trading volume on the primary exchange or trading medium where the Common Stock
trades equals at least 50,000 shares for each of the twenty (20) consecutive
trading days ending on the third business day prior to the date on which notice
of redemption is given. The satisfaction of these two conditions shall be
certified by the Company to the Warrant Agent and to Xxxxxxx. The provisions
of
this Section 6.1 may not be modified, amended or deleted without the prior
written consent of Xxxxxxx.
6.2 Date
Fixed for, and Notice of, Redemption.
In the
event the Company shall elect to redeem all or any part of the outstanding
Warrants, the Company shall fix a date for the redemption. Notice of redemption
shall be mailed by first class mail, postage prepaid, by the Company or the
Company’s agent at its direction not less than 30 days from the date fixed for
redemption to the registered holders of the outstanding Warrants to be redeemed
at their last address as they shall appear on the registration books and to
Xxxxxxx. Any notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the registered holder received
such notice. The failure to give notice to Xxxxxxx will be a material breach
of
this agreement and is deemed to be a material condition to the redemption such
that if notice is not given to Xxxxxxx, the right of redemption will be denied
to the Company.
6.3 Exercise
After Notice of Redemption.
The
outstanding Warrants may be exercised in accordance with Section 3 of
this
Agreement at any time after notice of redemption shall have been given by the
Company pursuant to Section 6.2 hereof and prior to the date fixed for
redemption. On and after the redemption date, the record holder of the
outstanding Warrants shall have no further rights except to receive, upon
surrender of the outstanding Warrants, the Redemption Price.
6.4 Outstanding
Warrants Only.
The
Company understands that the redemption rights provided for by this Section
6
apply only to outstanding Warrants. To the extent a person holds rights to
purchase Warrants, such purchase rights shall not be extinguished by redemption.
However, once such purchase rights are exercised, the Company may redeem the
Warrants issued upon such exercise provided that the criteria for redemption
is
met. The provisions of this Section 6.4 may not be modified, amended or deleted
without the prior written consent of Xxxxxxx.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1 No
Rights as Stockholder.
A
Warrant does not entitle the registered holder thereof to any of the rights
of a
stockholder of the Company, including, without limitation, the right to receive
dividends, or other distributions, exercise any preemptive rights to vote or
to
consent or to receive notice as stockholders in respect of the meetings of
stockholders or the election of directors of the Company or any other
matter.
7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants.
If any
Warrant certificate is lost, stolen, mutilated, or destroyed, the Company and
the Warrant Agent may, on such terms as to indemnity or otherwise as they may
in
their discretion impose (which shall, in the case of a mutilated Warrant
certificate, include the surrender thereof), issue a new Warrant certificate
of
like denomination, tenor, and date as the Warrant certificate so lost, stolen,
mutilated, or destroyed. Any such new Warrant certificate shall constitute
a
substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant certificate shall be at any time
enforceable by anyone.
7.3 Reservation
of Common Stock.
The
Company shall at all times reserve and keep available a number of its authorized
but unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants issued pursuant to this
Agreement.
7.4 Registration
of Common Stock.
The
Company agrees that prior to the date that the Warrants become exercisable,
it
shall file with the Securities and Exchange Commission a post-effective
amendment to the Registration Statement, if possible, or a new registration
statement, to register, under the Securities Act of 1933, and it shall take
such
action as is necessary to qualify for sale, in those states in which the
Warrants were initially offered by the Company, the Common Stock issuable upon
exercise of the Warrants. In either case, the Company shall cause the same
to
become effective at or prior to the date the Warrants become exercisable, and
maintain the effectiveness of such registration statement and keep current
a
prospectus thereunder and maintain such qualification until the expiration
of
the Public Warrants and the Underwriters’ Warrants in accordance with the
provisions of this Agreement. The provisions of this Section 7.4 may not be
modified, amended or deleted without the prior written consent of the
Xxxxxxx.
8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes.
The
Company will from time to time promptly pay all taxes and charges that may
be
imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of Warrants, but the
Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent.
The
Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities (other than those
incurred prior to such resignation or discharge) hereunder after giving sixty
(60) days’ notice in writing to the Company. If the office of the Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a successor Warrant Agent in place of the Warrant
Agent. If the Company shall fail to make such appointment within a period of
30
days after it has been notified in writing of such resignation or incapacity
by
the Warrant Agent or by a holder of Warrants (who shall, with such notice,
submit his Warrant for inspection by the Company), then the holder of any
Warrant may apply to the appropriate court of the State of Colorado for the
appointment of a successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized,
existing and in good standing and authorized under the laws of the state in
which it was incorporated to exercise corporate trust powers for the transfer
of
the Warrants, and subject to supervision or examination by federal or state
authority and shall be authorized to serve as Warrant Agent for the Warrants
under the Securities Exchange Act of 1934, as amended. After appointment, any
successor Warrant Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Warrant Agent with like
effect as if originally named as Warrant Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or appropriate, the
predecessor Warrant Agent shall execute and deliver, at the expense of the
Company, an instrument transferring to such successor Warrant Agent all the
authority, powers, and rights of such predecessor Warrant Agent hereunder;
and
upon request of any successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more fully
and
effectually vesting in and confirming to such successor Warrant Agent all such
authority, powers, rights, immunities, duties, and obligations.
8.2.2 Notice
of Successor Warrant Agent.
In the
event a successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the transfer agent for
the
Common Stock not later than the effective date of any such
appointment.
8.2.3 Merger
or Consolidation of Warrant Agent.
Any
corporation into which the Warrant Agent may be merged or with which it may
be
consolidated or any corporation resulting from any merger or consolidation
to
which the Warrant Agent shall be a party, if it shall be eligible to serve
as
Warrant Agent under Section 8.2.1, shall be the successor Warrant Agent under
this Agreement without any further act.
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The
Company agrees to pay the Warrant Agent reasonable remuneration for its services
as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand
for all expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder.
8.3.2 Further
Assurances.
The
Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reason-ably be required by the Warrant
Agent for the carrying out or performing of the provisions of this
Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement.
Whenever in the performance of its duties under this Warrant Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter
be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the President of the Company and delivered
to the Warrant Agent. The Warrant Agent may rely upon such statement for any
action taken or suffered in good faith by it pursuant to the provisions of
this
Agreement.
8.4.2 Indemnity.
The
Warrant Agent shall be liable hereunder only for its own negligence or willful
misconduct. The Company agrees to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent
in
the execution of this Agreement except as a result of the Warrant Agent’s
negligence, willful misconduct, or bad faith.
8.4.3 Exclusions.
The
Warrant Agent shall have no responsibility with respect to the validity of
this
Agreement or with respect to the validity or execution of any Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by
the
Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under
the
provisions of Section 4 hereof or responsible for the manner, method, or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to
make
any representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Warrant
or
as to whether any shares of Common Stock will when issued be valid and fully
paid and nonassessable.
8.5 Acceptance
of Agency.
The
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys
received by the Warrant Agent for the purchase of shares of the Company’s Common
Stock through the exercise of Warrants.
9. Miscellaneous
Provisions.
9.1 Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.
9.2 Notices.
Any
notice, statement or demand authorized by this Warrant Agreement to be given
or
made by the Warrant Agent or by the holder of any Warrant to or by the Company
shall be sufficiently given or made if sent by certified mail, or private
courier service, postage prepaid, addressed (until another address is filed
in
writing by the Company with the Warrant Agent), as follows:
000
00xx
Xxxxxx,
Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
Attn: W.
Xxxxxxx Xxxxxxxxxxx
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with
a
copy to:
Rothgerber
Xxxxxxx & Xxxxx LLP
0000
00xx
Xxxxxx,
Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxx X. Xxxx, Esq.
TEL:
000-000-0000
Fax:
3030623-9222
Any
notice, statement or demand authorized by this Agreement to be given or made
by
the holder of any Warrant or by the Company to or on the Warrant Agent shall
be
sufficiently given or made if sent by certified mail or private courier service,
postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company), as follows:
Corporate
Stock Transfer Company
0000
Xxxxxx Xxxxx Xxxxx Xxxxx
Xxxxxx,
Xxxxxxxx 00000
9.3 Applicable
law; Jurisdiction.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the law of the State of Colorado, without
giving effect to principles of conflicts of law. The Company hereby agrees
that
any action, proceeding or claim against it arising out of or relating in any
way
to this Agreement shall be brought and enforced in the courts of the State
of
Colorado or the United States District Court for the district in which Denver,
Colorado is located, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to
such
exclusive jurisdiction and that such courts represent an inconvenience forum.
Any such process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
9.2 hereof. Such mailing shall be deemed personal service and shall be legal
and
binding upon the Company in any action, proceeding or claim.
9.4 Persons
Having Rights Under This Agreement.
Nothing
in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the parties hereto and the registered
holders of the Warrants and, for the purposes of Sections 3.3.5, 4.4, 6.1
through 6.4 and 7.4 hereof, Xxxxxxx, any right, remedy, or claim under or by
reason of this Warrant Agreement or of any covenant, condition, stipulation,
promise, or agreement hereof. Xxxxxxx shall be deemed to be a third-party
beneficiary of this Agreement with respect to such Sections. All covenants,
conditions, stipulations, promises, and agreements contained in this Warrant
Agreement shall be for the sole and exclusive benefit of the parties hereto
(and
Xxxxxxx to the extent set forth above) and their successors and assigns and
of
the registered holders of the Warrants.
9.5 Examination
of the Warrant Agreement.
A copy
of this Agreement shall be available at all reasonable times at the office
of
the Warrant Agent in Denver, Colorado (or in the city in which any successor
Warrant Agent has its principal offices) for inspection by the registered holder
of any Warrant. The Warrant Agent may require any such holder to submit his
or
her Warrant for inspection by it.
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9.6 Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
9.7 Effect
of Headings.
The
Section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the interpretation thereof.
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IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
under their respective corporate seals as of the day and year first above
written.
| Attest: | AEROGROW INTERNATIONAL, INC. | ||
| By: | |||
|
Name:
|
Name: W. Xxxxxxx Xxxxxxxxxxx |
||
|
Title:
|
Title: President |
| Attest: |
CORPORATE
STOCK TRANSFER COMPANY
|
||
| By: | |||
|
Name:
|
Name: |
||
|
Title:
|
Title: |
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