Back to top

CONVERTIBLE NOTE MODIFICATION AGREEMENT

Convertible Promissory Note

CONVERTIBLE NOTE MODIFICATION AGREEMENT | Document Parties: AEROGROW INTERNATIONAL, INC. You are currently viewing:
This Convertible Promissory Note involves

AEROGROW INTERNATIONAL, INC.

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: CONVERTIBLE NOTE MODIFICATION AGREEMENT
Date: 11/16/2006

CONVERTIBLE NOTE MODIFICATION AGREEMENT, Parties: aerogrow international  inc.
50 of the Top 250 law firms use our Products every day

CONVERTIBLE NOTE MODIFICATION AGREEMENT

 

 

THIS CONVERTIBLE NOTE MODIFICATION AGREEMENT (the “Modification Agreement”) is made as of this ___ day of January , 2006 by and among Aero Grow International, Inc., a Nevada corporation (the “Company”) and each of the investors identified on the signature page to this Agreement (the “Investors” and individually an “Investor”).

 

RECITALS

 

WHEREAS, the Company completed the sale of 300 units (“Units”) to the Investors during the period beginning July 12, 2005 and ending September 13, 2005 (“Closing Date”) in a private placement offering (“Offering”) in accordance with the terms set forth in the Confidential Private Placement Memorandum dated June 6, 2005, as amended and supplemented (“Memorandum”);

 

WHEREAS, each Unit consisted of a 10% unsecured convertible promissory note in the principal amount of $10,000 due June 30, 2006 (“Note”) and 2,000 five-year warrants, each warrant providing for the purchase of one share of the Company’s common stock (“Common Stock”) at the exercise price equal to the lesser of: (i) $5.01 per share, or (ii) if a registered public offering of securities by the Company is declared effective under the Securities Act of 1933, as amended (“Securities Act”) prior to the payment or conversion of the Note (“Registered Offering”), 100% of the per share offering price of the Company’s common stock in the Registered Offering (“Public Offering Price”) (“Warrants”);

 

WHEREAS, the principal amount of the Notes are convertible at any time, at the Investor’s election, into the shares of Common Stock at a conversion price (“Conversion Price”) equal to the lesser of: (i) $4.00 per share, or (ii) if a Registered Offering is declared effective under the Securities Act prior to the payment or conversion of the Notes, 80% of the Public Offering Price;

 

WHEREAS, upon conversion of the Notes, the Investor was entitled to receive additional five-year warrants to purchase 2,000 shares of Common Stock for each $10,000 of principal amount so converted (“Conversion Warrants”), with each Conversion Warrant being exercisable at any time at an exercise price equal to the lesser of: (i) $6.00 per share, or (ii) 120% of the Public Offering Price in the Registered Offering;

 

WHEREAS, during the 15 day period following the date upon which the Registered Offering was declared effective and the Company had received its funds from the Registered Offering, each Investor had the right, on one occasion only, to demand full and complete payment in cash of the outstanding principal amount of all Notes held by such Investor, together with all accrued interest thereon;

 

WHEREAS, the Company agreed to register: (i) the Common Stock into which the Notes may be converted (“Conversion Shares”), and (ii) the Common Stock underlying the Warrants and the Conversion Warrants (“Underlying Common Stock”), on the registration statement to be filed by the Company with respect to the securities being offered in the Registered Offering (“Registration Statement”);

 

WHEREAS, the Registration Statement was required to be filed within 60 days following the Closing Date and to be declared effective within 150 days from the Closing Date;

 

 

 


 

WHEREAS, the Company is required to pay Investors an amount equal to 1% of the purchase price of each Unit held by Investors for every 30 day period (or part) after the relevant date, in each case until the Registration Statement is filed or declared effective, as the case may be (“Registration Penalty”), if the Registration Statement is not filed or does not become effective on a timely basis, for any reason, other than adverse market conditions as determined by the Placement Agent in its sole discretion;

 

WHEREAS, each Investor is contractually prohibited from selling or transferring any Conversion Shares or Underlying Common Stock until the 180 th day following the closing of the Registered Offering;

 

WHEREAS, the Company filed the Registration Statement with the U.S. Securities and Exchange Commission (“SEC”) on November 4, 2005;

 

WHEREAS, the Company received a comment letter from the SEC on December 22, 2005 with respect to the Registration Statement filed on November 4, 2005;

 

WHEREAS, during December 2005, the Company had been notified by several of its warrant holders from prior offerings that they desired to exercise certain warrants held by them before such warrants expired on December 31, 2005 and, to comply with its contractual requirements under the said warrants, and to comply with the policies of federal securities laws, and in accordance with the advice of its attorneys, the Company’s board of directors approved the withdrawal of the Registration Statement and the abandonment of the Registered Offering on December 30, 2005;

 

WHEREAS, the Company filed the withdrawal of the Registration Statement with the SEC on January 4, 2006;

 

WHEREAS, the Company and Wentworth I, Inc. (“Wentworth”) entered into a certain Agreement and Plan of Merger (the “Merger Agreement”) on January 12, 2006 by which Wentworth will merge with and into the Company, with the Company being the surviving corporation (“Merger”);

 

WHEREAS, the Merger has been approved by the directors and stockholders of Wentworth, and Wentworth has filed a Schedule 14C information statement with the SEC on January 13, 2006, a copy of which has been made available to the Investor on the SEC website at www.sec.gov ;

 

WHEREAS, the consummation of the Merger is contingent on the closing of a “best efforts” $5,000,000 minimum, $12,000,000 maximum private placement offering for units (“Equity Units”) to investors (“Equity Investors”), at $5.00 per Equity Unit, consisting of one share of Common Stock (“New Common Stock”) and one warrant (“New Warrant”) exercisable for a period of five years after the closing, for one share of Common Stock, at $6.25 per share (“Equity Offering”);

 

WHEREAS, the Equity Offering will be commenced by the Company on or after February 6, 2006;

 

WHEREAS, the Company desires to complete the Merger and the Equity Offering on or about February 24, 2006;

 

WHEREAS, upon completion of the Merger, the Company will become a Section 12(g) reporting company under the Exchange Act with its shares of Common Stock becoming registered securities under Section 12(g) of the Exchange Act;

 

 

2


 

WHEREAS, depending on the number of Equity Units sold in the Equity Offering, the Company intends to use its commercially reasonable best efforts to have its shares of Common Stock commence quotation on either (i) Nasdaq Capital Markets (“Nasdaq”); or (ii) the Over-the-Counter Bulletin Board (“OTC BB”);

 

WHEREAS, there can be no assurance as to when and if the shares of Common Stock will become quoted on either Nasdaq or the OTC BB and, even if the shares of Common Stock are quoted on either venue, there can be no assurance that an active trading market will develop for such shares;

 

WHEREAS, as part of the Equity Offering, the Company has agreed to register for resale the shares of New Common Stock issued in the Equity Offering (together with the shares of Common Stock underlying the New Warrants) on a registration statement to be filed with the SEC;

 

WHEREAS, the Company and the Investor hereby desire to modify the terms and conditions of that certain subscription agreement executed by and between the Company and the Investor with respect to the Offering (“Subscription Agreement”) and the Note issued by the Company to the Investor in the Offering as set forth herein;

 

NOW, THEREFORE, for and in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.   Amendments to Note .

 

A. Exce


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more