Document:

ex10_4.htm

Exhibit 10.4

 

 

REGISTRATION RIGHTS AGREEMENT

 

 

This Registration Rights Agreement (the “Agreement”) is made and entered into as of this 19th day of November 2013 by and among GrowLife, Inc., a Delaware corporation (the “Company”), and the CANX USA LLC, a Nevada limited liability company, its successors, designees and assigns (“CANX”).  Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

 

The parties hereby agree as follows:

1.           Certain Definitions.

 

As used in this Agreement, the following terms shall have the following meanings:

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Common Stock” means the Company’s common stock, par value $0.0001 per share,

 

“Prospectus”  means  (i)  the  prospectus  included  in  any  Registration  Statement,  as amended or  supplemented by  any prospectus supplement, with respect to  the terms of  the offering of any portion of the Registrable Securities covered by such Registration Statement and by   all   other  amendments  and   supplements  to   the   prospectus,  including  post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

 

“Holder” means CANX and any Affiliate or transferee of CANX who is a subsequent holder of any Registrable Securities.

“Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

 

“Registrable Securities” means the Warrants and the Warrant Shares and any other securities issued or issuable with respect to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise, provided, that the Holder has completed and delivered to the Company a Selling Stockholder Questionnaire; provided, further, that, a security shall cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale without restriction by the Holders pursuant to Rule 144.

 

“Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post- effective amendments, all exhibits and all material incorporated by reference in such Registration

Statement.

 

  

Exhibit C, Page 1

  

 

“Required Holders” means the Holders holding a majority of the Registrable Securities.

 

“Selling  Stockholder Questionnaire” means  a  questionnaire in  the  form  attached  as Exhibit B hereto, or such other form of questionnaire as may reasonably be adopted by the Company from time to time.

 

“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Warrants” means the warrants to  purchase shares of  Common Stock issued to  the

Holders pursuant to the JV Agreement.

 

“Warrant Shares” means the shares of Common Stock issuable upon the exercise of the Warrants.

 

2.           Registration.

 

(a)           Registration Statements.

 

(i)        Initial Registration Statement. At any time after the issuance of the Warrants pursuant to the JV Agreement, CANX shall have the right to demand that the Company prepare and file (the date of such demand, the “Filing Deadline”), and the Company agrees that promptly upon such demand, it shall prepare and file with the Commission a Registration Statement on Form S-1 (or, if Form S-1 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities), covering the resale of the Registrable Securities.  The out of pocket costs for the filing of the initial registration statement shall be borne by OGI, unless otherwise agreed.   Subject to any Commission comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that no Holder shall be named as an “underwriter” in the Registration Statement without the Holder’s prior written consent.  Such Registration Statement also  shall  cover  pursuant  to  Rule  416  such  indeterminate number  of  additional  shares  of Common Stock due to an increase in the number of Warrant Shares resulting from changes in the Conversion Price pursuant to the terms of the Exercise Price pursuant to the terms of the Warrants, as applicable (the “Additional Shares”).  Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Required Holders. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Holders and their counsel prior to its filing or other submission.  

  

Exhibit C, Page 2

  

 

(ii)       S-3 Qualification.  Promptly following the date (the “Qualification Date”) upon which the Company becomes eligible to use a registration statement on Form S-3 to register the Registrable Securities for resale, but in no event more than thirty (30) days after the Qualification Date (the “Qualification Deadline”), the Company shall file a registration statement on Form S-3 covering the Registrable Securities or Additional Shares, as applicable (or a post- effective amendment on Form S-3 to the registration statement on Form S-1) (a “Shelf Registration Statement”) and shall use its best efforts to cause such Shelf Registration Statement to be declared effective as promptly as practicable thereafter.  If a Shelf Registration Statement covering the Registrable Securities is not filed with the Commission on or prior to the Qualification Deadline, the Company will make pro rata payments to each Holder, as liquidated damages and not as a penalty, in an amount equal to 1.0% of the value of the Securities to be registered based on a price equal to the last closing bid price and last closing trade price of the Company’s Common Stock on the date of the Registration Demand attributable to those Registrable Securities that remain unsold at that time for each 30-day period or pro rata for any portion thereof following the date by which such Shelf Registration Statement should have been filed for which no such Shelf Registration Statement is filed with respect to the Registrable Securities or Additional Shares, as applicable.  Such payments shall constitute the Holders’ exclusive monetary remedy for such events, but shall not affect the right of the Holders to seek injunctive relief.  Such payments shall be made to each Holder in cash no later than three (3) Business Days after the end of each 30-day period.

 

(b)       Expenses.  Intentionally deleted.

 

(c)       Effectiveness.

 

(i)       The Company shall use its best efforts to have the Registration Statement declared effective as soon as practicable.  The Company shall notify the Holders by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Holders with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. 

 

(ii)    S-3 Qualification.  Promptly following the date (the “Qualification Date”) upon which the Company becomes eligible to use a registration statement on Form S-3 to register the Registrable Securities for resale, but in no event more than thirty (30) days after the Qualification Date (the “Qualification Deadline”), the Company shall file a registration statement on Form S-3 covering the Registrable Securities or Additional Shares, as applicable (or a post- effective amendment on Form S-3 to the registration statement on Form S-1) (a “Shelf Registration Statement”) and shall use its best efforts to cause such Shelf Registration Statement to be declared effective as promptly as practicable thereafter. If a Shelf Registration Statement covering the Registrable Securities is not filed with the Commission on or prior to the Qualification Deadline, the Company will make pro rata payments to each Holder, as liquidated damages and not as a penalty, in an amount equal to 1.0% of the value of the Securities to be registered based on a price equal to the last closing bid price and last closing trade price of the Company’s Common Stock on the date of the Registration Demand attributable to those Registrable Securities that remain unsold at that time for each 30-day period or pro rata for any portion thereof following the date by which such Shelf Registration Statement should have been filed for which no such Shelf Registration Statement is filed with respect to the Registrable Securities or Additional Shares, as applicable. Such payments shall constitute the Holders’ exclusive monetary remedy for such events, but shall not affect the right of the Holders to seek injunctive relief. Such payments shall be made to each Holder in cash no later than three (3) Business Days after the end of each 30-day period.

 

 

  

Exhibit C, Page 3

  

 

(d)    Rule 415; Cutback  If at any time the Commission takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires any Holder to be named as an “underwriter”, the Company shall use its best efforts to persuade the Commission that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Holders is an “underwriter,” including by using its best efforts to file amendments to the Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission. The Holders shall have the right to participate or have their counsel participate in any meetings or discussions with the Commission regarding the Commission’s position and to comment or have their counsel comment on any written submission made to the Commission with respect thereto. No such written submission shall be made to the Commission to which the Holders’ counsel reasonably objects. In the event that, despite the Company’s best efforts and compliance with the terms of this Section 2(d), the Commission refuses to alter its position, the Company shall first reduce or eliminate any securities to be included by any Person other than a Holder and, if any subsequent reduction is necessary, (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the Commission may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “Commission Restrictions”); provided, however, that the Company shall not agree to name any Holder as an “underwriter” in such Registration Statement without the prior written consent of such Holder. Any cut-back imposed on the Holders pursuant to this Section 2(d) shall be allocated among the Holders on a pro rata basis and shall be applied first to any Warrant Shares, unless the Commission Restrictions otherwise require or provide or the Holders otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any Commission Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the liquidated damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline and the Qualification Deadline for the Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the 90th day immediately after the Restriction Termination Date.

 

(e)           Right to Piggyback Registration.

 

(i)       If at any time following the date of this Agreement that any Registrable Securities remain outstanding (A) there is not one or more effective Registration Statements covering all of the Registrable Securities and (B) the Company proposes for any reason to register any shares of Common Stock under the 1933 Act (other than pursuant to a registration statement on Form S-4 or Form S-8 (or a similar or successor form)) with respect to an offering of Common Stock by the Company for its own account or for the account of any of its stockholders, it shall at each such time promptly give written notice to the holders of the Registrable Securities of its intention to do so (but in no event less than thirty (30) days before the anticipated filing date) and, to the extent permitted under the provisions of Rule 415 under the 1933 Act, include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after receipt of the Company’s notice (a “Piggyback Registration”). Such notice shall offer the holders of the Registrable Securities the opportunity to register such number of shares of Registrable Securities as each such holder may request and shall indicate the intended method of distribution of such Registrable Securities.

 

  

Exhibit C, Page 4

  

 

(ii)       Notwithstanding the foregoing, (A) if such registration involves an underwritten public offering, the Holders must sell their Registrable Securities to, if applicable, the underwriter(s) at the same price and subject to the same underwriting discounts and commissions that apply to the other securities sold in such offering (it being acknowledged that the Company shall be responsible for other expenses as set forth in Section 2(b)) and subject to the Holders entering into customary underwriting documentation for selling stockholders in an underwritten public offering, and (B) if, at any time after giving written notice of its intention to register any Registrable Securities pursuant to Section 2(e)(i) and prior to the effective date of the  registration  statement  filed  in  connection  with  such  registration,  the  Company  shall determine for any reason not to cause such registration statement to become effective under the 1933 Act, the Company shall deliver written notice to the Holders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration; provided, however, that nothing contained in this Section 2(e)(ii) shall limit the Company’s liabilities and/or obligations under this Agreement, including, without limitation, the obligation to pay liquidated damages under this Section 2.

3.         Company  Obligations.    The  Company  will  use  its  best  efforts  to  effect  the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

(a)       use  its  best  efforts  to  cause  such  Registration  Statement  to  become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by such Registration Statement may be sold without restriction pursuant to Rule 144 (the “Effectiveness Period”) and advise the Holders in writing when the Effectiveness Period has expired;

(b)       prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;

(c)       provide copies to and permit counsel designated by the Holders to review each Registration Statement and all amendments and supplements thereto no fewer than seven (7) days prior to their filing with the Commission and not file any document to which such counsel reasonably objects;

 

  

Exhibit C, Page 5

  

 

(d)       furnish to the Holders and their legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the Commission, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may  be)  one  (1)  copy  of  any  Registration  Statement  and  any  amendment  thereto,  each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the Commission or the staff of the Commission, and each item of correspondence from the Commission or the staff of the Commission, in each case  relating to  such  Registration Statement (other than  any  portion of  any  thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder that are covered by the related Registration Statement;

 

(e)       use its best efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

(f)        prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the Holders and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Holders and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;

(g)       use  its  best  efforts  to  cause  all  Registrable  Securities  covered  by  a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

 

  

Exhibit C, Page 6

  

 

(h)      immediately notify the Holders, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes 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 not misleading in light of the circumstances then existing, and promptly prepare, file with the Commission and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(i)       otherwise use its best efforts to comply with all applicable rules and regulations of the Commission under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the 1933 Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities  hereunder;  and  make  available  to  its  security  holders,  as  soon  as  reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter); and

(j)        With a view to making available to the Holders the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the Commission that may at any time permit the Holders to sell shares of Common Stock to the public without registration, the Company covenants and agrees to:   (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as  all  of  the  Registrable Securities may  be  sold  without restriction by  the  holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the Commission in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each Holder upon request, as long as such Holder owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Holder of any rule or regulation of the Commission that permits the selling of any such Registrable Securities without registration.

 

  

Exhibit C, Page 7

  

 

4.         Due Diligence Review; Information.  The Company shall make available, during normal business hours, for inspection and review by the Holders, advisors to and representatives of the Holders (who may or may not be affiliated with the Holders and who are reasonably acceptable to the Company), all financial and other records, all Commission Filings (as defined in the Purchase Agreement) and other filings with the Commission, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Holders or any such representative, advisor or underwriter in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Holders and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement.

The Company shall not disclose material nonpublic information to the Holders, or to advisors to or representatives of the Holders, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Holders, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Holder wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

5.           Obligations of the Holders.

 

(a)           Each  Holder  agrees  to  furnish  to  the  Company  a  completed  Selling Stockholder Questionnaire not more than five (5) Business Days following the date of this

 

Agreement. At least ten (10) Business Days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder other than the information contained in the Selling Stockholder Questionnaire, if any, which shall be completed and delivered to the Company promptly upon request and, in any event, within three (3) Business Days prior to the applicable anticipated filing date.  Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as described in the previous sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for further information, in either case, after its respective deadline, the Company shall use its best efforts to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this Section 5(a) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

 

  

Exhibit C, Page 8

  

 

(b)      Each Holder, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Holder has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

(c)       Each Holder agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Holder will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Holder is advised by the Company that such dispositions may again be made.

 

6.           Indemnification.

 

(a)       Indemnification by the Company.  The Company will indemnify and hold harmless each Holder and its officers, directors, members, employees and agents, successors and assigns, and each other person, if any, who controls such Holder within the meaning of the 1933

Act, against any losses, claims, damages or liabilities, joint or several, to which they may

 

become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading;  (iv)  any  violation  by  the  Company  or  its  agents  of  any  rule  or  regulation promulgated under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Holder’s behalf and will reimburse such Holder, and each such officer, director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Holder or any such controlling person in writing specifically for use in such Registration Statement or Prospectus.

(b)       Indemnification by the Holders.   Each Holder agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to  the extent, but only to  the extent that such untrue statement or omission is contained in any information furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto.  In no event shall the liability of an Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 6 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

 

  

Exhibit C, Page 9

  

 

(c)     Conduct of Indemnification Proceedings.    Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

(d)       Contribution.   If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations.  No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

 

  

Exhibit C, Page 10

  

 

7.           Miscellaneous.

 

(a)       Amendments and Waivers.  This Agreement may be amended only by a writing signed by the Company and the Required Holders.  The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of the Required Holders.

(b)       Notices.  All notices and other communications provided for or permitted hereunder shall be made as set forth in the JV Agreement.

(c)       Assignments and Transfers by Holders.  The provisions of this Agreement shall be binding upon and inure to the benefit of the Holders and their respective successors and assigns.  An Holder may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Holder to such person, provided that such Holder complies with all laws applicable thereto and provides  written  notice  of  assignment  to  the  Company  promptly  after  such  assignment  is effected.

 

(d)       Assignments and Transfers by the Company.  This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Required Holders, provided, however, that in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Holders in connection with such transaction unless such securities are otherwise freely tradable by the Holders after giving effect to such transaction.

(e)       Benefits of the Agreement.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

  

Exhibit C, Page 11

  

 

(f)        Counterparts; Faxes.   This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed via facsimile, which shall be deemed an original.

(g)       Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(h)      Severability.   Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.   To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

(i)        Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

(j)        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 in respect of the subject matter contained herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

  

Exhibit C, Page 12

  

 

(k)       Governing  Law;  Consent  to  Jurisdiction;  Waiver  of  Jury  Trial.    All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, stockholders, employees or agents) shall be commenced in the state and federal courts sitting in the County of Clark (the “Clark County Courts”).   Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Clark County Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Clark County Courts, or Clark County Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.   Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses reasonably incurred in the investigation, preparation and prosecution of such action or proceeding.

 

(l)       Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

(m)      No  Inconsistent  Agreements.  Neither  the  Company  nor  any  of  its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.  Neither the Company nor any of its subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

 

  

Exhibit C, Page 13

  

 

(n)       Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder.  It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.

 

  

Exhibit C, Page 14

  

 

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

 

 

	The Company:   	GROWLIFE, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Sterling Scott	 
	 	Name: Sterling Scott	 
	 	Title:   Chief Executive Officer	 
	 	 	 	 

 

 

 

[Company signature page to Registration Rights Agreement]

 

  

Exhibit C, Page 15

  

 

 

 

	Holder:  	CANX USA LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ 	 
	 	Name: 	 
	 	Title:   	 
	 	 	 	 

 

 

[Purchaser signature page to Registration Rights Agreement]

 

  

Exhibit C, Page 16

  

 

Exhibit A

Plan of Distribution

 

The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions.  These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

 

The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

 

	
  

	
−

	
ordinary brokerage transactions and transactions in which the broker-dealer solicits Holders;

 

	
  

	
−

	
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

 

	
  

	
−

	
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

	
  

	
−

	
an  exchange  distribution  in  accordance  with  the  rules  of  the  applicable exchange;

 

	
  

	
−

	 privately negotiated transactions;  

 

	
  

	
−

	short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the Commission;

 

	
  

	
−

	
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

	
  

	
−

	
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

 

	
  

	
−

	a combination of any such methods of sale; and

 

	
  

	
−

	any other method permitted by applicable law.

 

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common  stock,  from  time  to  time,  under  this  prospectus,  or  under  an  amendment to  this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.  The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

  

Exhibit C, Page 17

  

 

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities.  The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker- dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer  or  other  financial  institution  may  resell  pursuant  to  this  prospectus  (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any.   Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.   We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of the warrants.

The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.

The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be "underwriters" within the meaning of Section 2(11) of the Securities Act.  Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act.   Selling stockholders who are "underwriters" within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents,  dealer  or  underwriter,  any  applicable  commissions  or  discounts  with  respect  to  a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

 

  

Exhibit C, Page 18

  

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act.   The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 

We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.

 

We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.

 

 

 

 

 

 

 

  

Exhibit C, Page 19

  

 

Exhibit B

 

 

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

 

The  undersigned  holder  of  shares  of  the  common  stock,  par  value  $0.0001  per  share  of GrowLife, Inc. (the “Company”) issued pursuant to a certain Warrant issued pursuant to the Joint Venture  Agreement  by  and  among  the  Company  and  the  CANX  USA  LLC,  dated  as  of November 19, 2013, understands that the Company intends to file with the Securities and Exchange Commission a registration statement on Form S-1 (the “Resale Registration Statement”) for the registration and the resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities in accordance with the terms of a certain Registration Rights Agreement by and among the Company and the Holders named therein, dated as of November 19, 2013 (the “Agreement”). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.

 

In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable Securities generally will be required to be named as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to Holders of Registrable Securities (including pursuant to  Rule  172  under  the  Securities Act)  and  be  bound  by  the  provisions  of  the  Agreement (including certain indemnification provisions, as described below).  Holders must complete and deliver this Notice and Questionnaire in order to be named as selling stockholders in the Prospectus.   Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire within five (5) Trading Days following the date of the Agreement (1) will not be named as selling stockholders in the Resale Registration Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling stockholder in the Resale Registration Statement and the Prospectus.  Holders of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a selling stockholder in the Resale Registration Statement and the Prospectus.

 

NOTICE

 

The undersigned holder (the “Selling Stockholder”) of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in Item (3), pursuant to the Resale Registration Statement.    The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Agreement.

 

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

 

  

Exhibit C, Page 20

  

 

 

QUESTIONNAIRE

 

	a)         Name:	 	 
	 	 	 	 
	 	(1)  Full Legal Name of Selling Stockholder:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	(2)  Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	(3)  Full Legal Name of Natural Control Person (which means a natural person who directly or  indirectly alone  or  with  others  has  power  to  vote  or  dispose  of  the securities covered by the questionnaire):
	 	 	 	 
	 	 	 	 
	 

 

 

 

 

 

 

Exhibit C, Page 21ENR 10K 2013 Exhibit 10.65

       Exhibit 10.65

PERFORMANCE RESTRICTED STOCK EQUIVALENT AWARD AGREEMENT
In consideration of the mutual covenants contained herein, Energizer Holdings, Inc. (“Company”), and «Name» (“Recipient”) hereby agree as follows:
ARTICLE I
COMPANY COVENANTS
Company hereby covenants:
1.    Award.
The Company, pursuant to its Amended and Restated 2009 Incentive Stock Plan (the “Plan”), grants to Recipient a Restricted Stock Equivalent Award (“Performance Equivalents”) of «Shares» restricted common stock equivalents (“Target Performance Equivalents”). This Award Agreement is subject to the provisions of the Plan and to the following terms and conditions.
2.    Vesting; Payment.
Vesting of the Performance Equivalents is contingent upon achievement of performance targets for the period from October 1, 2013 through September 30, 2016 (the “Performance Period”).  Provided that such Performance Equivalents have not been forfeited pursuant to Section 5 below, a number of Performance Equivalents will vest on the date that the Company publicly releases earnings results for the third fiscal year of the Performance Period (the “Vesting/Payment Date”) equal to the following formula:
Base Metric Equivalents x Relative TSR Modifier
where Base Metric Equivalents is defined as:
(Target Performance Equivalents x ROIC Factor x 50%) + (Target Performance Equivalents x Cumulative EBITDA Factor x 50%)
provided that no award will be greater than 200% of the Target Performance Equivalents, or less than zero.
Relative TSR Modifier
The Relative TSR Modifier is calculated as follows.  The Relative TSR shall modify the number of awards granted as shown in the table below, with pro rata increases, at 1/10th of 1% increments, between each listed percentage.
***Table***
Relative TSR is defined as the TSR of the Company as compared to the TSR of the TSR Comparator Group.
TSR will be calculated based on the following formula:
(((Ending share price + total dividends) / beginning share price)^(1/# of years))-1
The result will be expressed as a percentage.  For this purpose, the beginning stock price will be the volume-weighted average closing stock price (VWAP) for the 20 trading days immediately preceding the performance period and the ending stock price will be the VWAP in the last 20 trading days of the performance period. Total dividends will be the aggregate amount of dividends per share of common stock, the record date of which occurred during the performance period.
The TSR Comparator Group for the Performance Period is Avon Products, Beiersdorf AG, Church & Dwight Inc., The Clorox Company, Colgate-Palmolive Co., Elizabeth Arden Inc., Hasbro Inc., Henkel AG & CO, Herbalife Ltd., Jarden Corp., 

Kimberly-Clark Corporation, Lauder (Estee) Companies, Inc., Loreal Co., Mattel Inc., Mead Johnson Nutrition Co., Newell Rubbermaid, Inc., Nu Skin Enterprises, Procter & Gamble Co., Reckitt Benckiser Group PLC and Spectrum Brands Holdings Inc.
A member shall be deleted from the TSR Comparator Group during the three-year performance period by the Committee due to a merger, liquidation or other corporate event which causes the Member to cease to exist as a publicly traded company, and such change will be made retroactively to the beginning of the Performance Period.
ROIC Factor
The ROIC Factor is calculated as follows.  Adjusted Return on Invested Capital is calculated by dividing Operating Profit After Taxes by the Company’s Invested Capital Base.
Operating Profit After Taxes means the average over the Performance Period of annual earnings before income taxes plus interest expense and other financing items, net of tax at effective rate of 31%, adjusted to exclude each of the following items, which shall be determined by applying U.S. generally accepted accounting principles:
		
	•
	unusual or non-recurring accounting impacts or changes in accounting standards or treatment;

		
	•
	non-cash costs associated with events such as plant closings, sales of facilities or operations, and business restructurings; or

		
	•
	unusual or extraordinary non-cash items.

Invested Capital Base means the average of an amount equal to total shareholders’ equity plus current maturities of long-term debt, notes payable and long-term debt, as of the end of the quarterly period immediately prior to the performance period and each quarterly period end during the performance period, adjusted to add back each of the following items, which shall be determined by applying U.S. generally accepted accounting principles:
		
	•
	unusual or non-recurring accounting impacts or changes in accounting standards or treatment;

		
	•
	non-cash costs associated with events such as plant closings, sales of facilities or operations, and business restructurings; or

		
	•
	unusual or extraordinary non-cash items.

The ROIC Factor will be a percentage based on Adjusted Return on Invested Capital at the end of the Performance Period equal to  40% at Threshold, 100% at Target and 200% at Stretch, as shown in the table below, with pro rata increases, at 1/10th of 1% increments, between each listed percentage.  
***Table***
Cumulative EBITDA Factor
The Cumulative EBITDA Factor is calculated as follows.  Adjusted Cumulative EBITDA means the sum of earnings before income taxes plus interest and other financing items, depreciation, amortization and miscellaneous expenses, for the Performance Period, adjusted to exclude each of the following items, which shall be determined by applying U.S. generally accepted accounting principles:
		
	•
	the effects of acquisitions; divestitures; or recapitalizations;

		
	•
	a corporate transaction, such as any merger of the Company with another corporation; any consolidation of the Company and another corporation into another corporation; any separation of the Company or its business units (including a spin-off or other distribution of stock or property by the Company);

		
	•
	any reorganization of the Company (whether or not such reorganization comes within the definition of such term in Code Section 368); or any partial or complete liquidation by the Company; or sale of all or substantially all of the assets of the Company;

		
	•
	unusual or non-recurring accounting impacts or changes in accounting standards or treatment;

		
	•
	non-cash costs associated with events such as plant closings, sales of facilities or operations; and business restructurings; or

		
	•
	unusual or extraordinary non-cash items.

The Cumulative EBITDA Factor will be a percentage based on Adjusted Cumulative EBITDA at the end of the Performance Period equal to 40% at Threshold, 100% at Target and 200% at Stretch, as shown in the table below, with pro rata increases, at 1/10th of 1% increments, between each listed percentage.  
***Table***

Upon vesting, as described above, the Company shall transfer to the Recipient or his or her beneficiary one share of the Company’s $0.01 par value Common Stock (“Common Stock”) for each Performance Equivalent that so vests.  Such shares of Common Stock shall be issued to the Recipient or his or her beneficiary on, or as soon as practicable after, the Vesting/Payment Date, but in no event later than the last day of the calendar year in which the Performance Period ends.  Any Performance Equivalents that are scheduled to vest on such Vesting/Payment Date that do not so vest because the threshold performance criteria related to such Performance Equivalents was not achieved shall be forfeited and the Recipient and his or her beneficiaries will have no further rights with respect thereto.
3.    Additional Cash Payment.
On the Vesting/Payment Date on which Performance Equivalents vest, the Company shall pay the Recipient or his or her beneficiary an amount equal to the amount of cash dividends, if any, that would have been paid to the Recipient between the Effective Date and such Vesting/Payment Date had vested shares of Common Stock been issued to the Recipient in lieu of the Performance Equivalents that so vested as well as any cash dividend for which the record date has passed but the payment date has not yet occurred.  Such amounts shall be paid in a single lump-sum as soon as practicable following such Vesting/Payment Date or accelerated vesting date described in paragraph 4 or 5, but in no event later than the last day of the calendar year in which the Vesting/Payment Date or accelerated vesting date occurs, or, if later than the last day of the calendar year, the 15th day of the third month following the end of the month in which such Vesting/Payment Date or accelerated payment date occurs.  No interest shall be included in the calculation of such additional cash payment.  
4.    Acceleration.
Notwithstanding the provisions of paragraph 2 above, vesting of Performance Equivalents shall be accelerated upon death, Disability, or a Change of Control in accordance with the provisions of this Section 4.
Death.  The Target Performance Equivalents then outstanding will immediately vest in the event of the Recipient’s death and shall be released as soon as administratively feasible.  
Disability.  A pro-rata portion of the Target Performance Equivalents then outstanding will immediately vest in the event of a Recipient’s Termination of Employment due to Disability.  Such pro-rata portion shall be equal to the Target Performance Equivalents multiplied by a fraction, the numerator of which is the number of full months beginning on the first day of the month in which the Effective Date occurs and ends on the first day of the month following the Recipient’s Termination of Employment, and the denominator of which is the number of full months in the Performance Period.
Change of Control.  Upon a Change of Control, the Performance Equivalents that will immediately vest upon such Change of Control will be the greater of:
(a)    Target Performance Equivalents granted, or
		
	(b)
	the amount of Target Performance Equivalents which would have vested had the Performance Period ended on the date the Change of Control occurs based on the Committee’s determination of the extent to which performance goals with respect to that Performance Period have been met based on such audited or unaudited financial information or other information then available that the Committee deems relevant.

Upon vesting, as described in this Section 4, the Company shall transfer to the Recipient or his or her beneficiary one share of the Company’s Common Stock for each Performance Equivalent that so vests.  If vesting is accelerated due to death or a Change of Control, such shares of Common Stock shall be issued to the Recipient or his or her beneficiary on, or as soon as practicable after, the date of the Recipient’s death or the date of the Change of Control, but in no event later than the last day of the calendar year in which such event occurs or, if later, the 15th day of the third calendar month following the month in which the Recipient’s death or the Change of Control occurs.  If vesting is accelerated due to the Recipient’s Termination of Employment due to Disability, such shares of Common Stock shall be issued to the Recipient on the date which is six (6) months after the date of such Termination of Employment.
5.    Forfeiture.
All rights in and to any and all Performance Equivalents granted pursuant to this Award Agreement, and to any shares of Common Stock that would be issued to the Recipient in connection with the vesting of such Performance Equivalent, which have not vested by the Vesting/Payment Date, as described in paragraph 2 above, or as described in paragraph 4 above, shall be 

forfeited.  In addition, except as provided below in this paragraph 5, all rights in and to any and all Performance Equivalents granted pursuant to this Award Agreement which have not vested in accordance with the terms hereof, and to any shares of Common Stock that would be issued to the Recipient in connection with the vesting of such Performance Equivalent, shall be forfeited upon:
		
	(a)
	the Recipient’s voluntary or involuntary Termination of Employment; or

		
	(b)
	a determination by the Committee that the Recipient engaged in Competition (as defined in the Plan) with the Company or other conduct contrary to the best interests of the Company in violation of Article II of this Agreement.

If the Recipient incurs a voluntary Termination of Employment (i) more than twelve (12) months after the Effective Date of this Agreement and (ii) the Recipient is (a) at least age 55  years of age and (b) has ten (10) or more Years of Service as of such date, the Recipient shall not forfeit a portion of the Performance Equivalents equal to the number of Performance Equivalents vested in accordance with paragraph 2 after the end of the Performance Period (as determined after the end of the Performance Period) multiplied by a fraction, the numerator of which is the number of full months in the period which begins on the first day of the month in which the Effective Date occurs and ends on the first day of the month following the Recipient’s Termination of Employment, and the denominator of which is the number of full months in the Performance Period.  The Company shall transfer to such Recipient one share of the Company’s Common Stock for each Performance Equivalent that so vests at the same time that he or she would have received such transfer if his or her employment had not terminated, in accordance with the payment terms in paragraph 4.
6.    Shareholder Rights; Adjustment of Equivalents.
Recipient shall not be entitled, prior to the issuance of shares of Common Stock in connection with the vesting of a Performance Equivalent, to any rights as a shareholder with respect to such shares of Common Stock, including the right to vote, sell, pledge, transfer or otherwise dispose of the shares.  Recipient shall, however, have the right to designate a beneficiary to receive such shares of Common Stock under this Award Agreement, subject to the provisions of Section V of the Plan.  The number of Performance Equivalents credited to Recipient shall be adjusted in accordance with the provisions of Section VI(F) of the Plan.
7.    Other.
The Company reserves the right, as determined by the Nominating and Executive Compensation Committee of the Board of Directors of the Company (the “Committee”), to convert the Performance Equivalents granted pursuant to this Award Agreement to a substantially equivalent award and to make any other modification it may consider necessary or advisable to comply with any applicable law or governmental regulation, or to preserve the tax deductibility of any payments hereunder.  Notwithstanding the foregoing, the Company shall not so convert such Performance Equivalents to the extent such conversion could result in the imposition of negative tax consequences for the Recipient under Code Section 409A. Shares of Common Stock shall be withheld in satisfaction of federal, state, and local or other international withholding tax obligations arising upon the vesting of Equivalents.  Shares of Common Stock tendered as payment of required withholding shall be valued at the Fair Market Value of the Company’s Common Stock on the date such withholding obligation arises.
8.    Code Section 409A.
It is intended that this Award Agreement either be exempt from or comply with the requirements of Code Section 409A. The Plan will be administered and interpreted in a manner consistent with this intent, and any provision that would cause the Agreement to fail to satisfy Code Section 409A will have no force and effect until amended to comply therewith (which amendment may be retroactive to the extent permitted by Code Section 409A).  Notwithstanding any other provision of this Award Agreement or the Plan to the contrary, if a Recipient is considered a “specified employee” for purposes of Code Section 409A, any payment that constitutes “deferred compensation” within the meaning of Code Section 409A that is otherwise due to the Recipient as a result of such Recipient’s “separation from service” under this Award Agreement or the Plan during the six-month period immediately following Recipient’s “separation from service” shall be accumulated and paid to the Recipient on the date that is as soon as administratively feasible after six months following such “separation from service”.

9.    Definitions.
Affiliates shall mean all entities within the controlled group that includes the Company, as defined in Code Sections 414(b) and 414(c) and the regulations thereunder, provided that the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in such definition.
Change of Control shall mean the either of the following, provided that the following constitutes a “change in the ownership” of the Company or “change in the ownership of a substantial portion of the Company’s assets” within the meaning of Code Section 409A:
		
	(i)
	The acquisition by one person, or more than one person acting as a group, of ownership of stock (including Common Stock) of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. Notwithstanding the above, if any person or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons will not constitute a Change of Control; or

		
	(ii)
	A majority of the members of the Company’s Board of Directors is replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the date of the appointment or election.

Persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Disability shall mean the Recipient is unable to perform the required duties in relation to their current occupation by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
Termination of Employment shall mean a “separation from service” with the Company and its Affiliates, within the meaning of Code Section 409A.
Years of Service shall mean the number of years of service the Recipient is credited with for vesting purposes under any U.S. qualified plan maintained by the Company, regardless of whether the Recipient is a participant in such plan.
ARTICLE II
RECIPIENT COVENANTS
Recipient hereby covenants:
1.    Confidential Information.
By executing this Award Agreement, I agree that I shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of my assigned duties and for the benefit of the Company, either during the period of my employment or at any time thereafter, any nonpublic, proprietary or confidential information, knowledge or data relating to the Company, any of its affiliates, or their businesses, which I shall have obtained during my employment by the Company or an affiliate. The foregoing shall not apply to information that (a) was known to the public prior to its disclosure to me; (b) becomes known to the public subsequent to disclosure to me through no wrongful act of mine or any of my representatives; or (c) I am required to disclose by applicable law, regulation or legal process (provided that I provide the Company with prior notice of the contemplated disclosure and reasonably cooperate with the Company at its expense in seeking a protective order or other appropriate protection of such information). Notwithstanding clauses (a) or (b) of the preceding sentence, my obligation to maintain such disclosed information in confidence shall not terminate if only portions of the information are in the public domain.

2.    Non-Competition.
By executing this Award Agreement, I acknowledge that my services are of a unique nature for the Company that are irreplaceable, and that my performance of such services for a competing business will result in irreparable harm to the Company and its affiliates. Accordingly, during my employment with the Company or any affiliate and for the one (1) year period thereafter, I agree that I will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in any business of the same type as any business in which the Company or any of its affiliates is engaged on the date of termination or in which they have proposed, on or prior to such date, to be engaged in on or after such date and in which I have been involved to any extent (on other than a de minimus basis) at any time during the one (1) year period ending with my date of termination, in any locale of any country in which the Company or any of its affiliates conducts business. This subsection shall not prevent me from owning not more than one percent of the total shares of all classes of stock outstanding of any publicly held entity engaged in such business.  I agree that the foregoing restrictions are reasonable, necessary, and enforceable for the protection of the goodwill and business of the Company.
3.    Non-Solicitation.
During my employment with the Company or an affiliate and for the two (2) year period thereafter, I agree that I will not, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, knowingly solicit, aid or induce (a) any employee of the Company or any affiliate to leave such employment in order to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or knowingly take any action to hire or to materially assist or aid any other person, firm, corporation or other entity in identifying or hiring any such employee, or (b) any customer of the Company or any affiliate to purchase goods or services then sold by the Company or any affiliate from another person, firm, corporation or other entity or assist or aid any other persons or entity in identifying or soliciting any such customer.  I agree that the foregoing restrictions are reasonable, necessary, and enforceable in order to protect the Company’s trade secrets, confidential and proprietary information, goodwill, and loyalty.
4.    Non-Disparagement.
I agree not to make any statements that disparage the Company or its affiliates or their respective employees, officers, directors, products or services, and the Company, by its execution of this Award Agreement agrees that it and its affiliates and their respective executive officers and directors shall not make any such statements regarding me. Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to this subsection.
5.    Reasonableness.
In the event any of the provisions of this Article II shall ever be deemed to exceed the time, scope or geographic limitations permitted by applicable laws, then such provisions shall be reformed to the maximum time, scope or geographic limitations, as the case may be, permitted by applicable laws.
6.    Equitable Relief.
		
	(a)
	I acknowledge that the restrictions contained in this Article II are reasonable and necessary to protect the legitimate interests of the Company and its affiliates, that the Company would not have granted me this Award Agreement in the absence of such restrictions, and that any violation of any provisions of this Article II will result in irreparable injury to the Company and its affiliates. By agreeing to accept this Award Agreement, I represent that my experience and capabilities are such that the restrictions contained herein will not prevent me from obtaining employment or otherwise earning a living at the same general level of economic benefit as is currently the case. I further represent and acknowledge that I have been advised by the Company to consult my own legal counsel in respect of this Award Agreement, and I have had full opportunity, prior to agreeing to accept this Award Agreement, to review thoroughly its terms and provisions with my counsel.

		
	(b)
	I agree that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Article II, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.

		
	(c)
	I irrevocably and unconditionally consent to the service of any process, pleadings notices or other papers in a manner permitted by law.

7.    Waiver; Survival of Provisions.
The failure by the Company to enforce at any time any of the provisions of this Article II or to require at any time performance by me of any provisions hereof, shall in no way be construed to be a release of me or waiver of such provisions or to affect the validity of this Award Agreement or any part hereof, or the right of the Company thereafter to enforce every such provision in accordance with the terms of this Award Agreement. The obligations contained in this Article II shall survive the termination of my employment with the Company or any affiliate and shall be fully enforceable thereafter.
ARTICLE III
OTHER AGREEMENTS
		
	1.
	Governing Law.

All questions pertaining to the validity, construction, execution, and performance of this Award Agreement shall be construed in accordance with, and be governed by, the laws of the State of Missouri, without giving effect to the choice of law principles thereof.
2.    Notices.
Any notices necessary or required to be given under this Award Agreement shall be sufficiently given if in writing, and personally delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to the last known addresses of the parties hereto, or to such other address or addresses as any of the parties shall have specified in writing to the other party hereto.
3.    Entire Agreement.
This Award Agreement constitutes the entire agreement of the parties hereto with respect to the matters contained herein, and no modification, amendment, or waiver of any of the provision of this Award Agreement shall be effective unless in writing and signed by all parties hereto; provided that, no consent by the Recipient is required to the extent the Company desires to accelerate payment under this Award Agreement in accordance with the provisions of Treasury Regulation Section 1.409A-3(j)(4).  This Award Agreement constitutes the only agreement between the parties hereto with respect to the matters herein contained.
4.    Waiver.
No change or modification of this Award Agreement shall be valid unless the same is in writing and signed by all the parties hereto.  No waiver of any provision of this Award Agreement shall be valid unless in writing and signed by the party against whom it is sought to be enforced.
5.    Counterparts; Effect of Recipient’s Signature.
This Award Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that both parties need not sign the same counterpart. The provisions of this Award Agreement shall not be valid and in effect until such execution by both parties. By the execution of this Award Agreement, Recipient signifies that Recipient has fully read, completely understands, and voluntarily agrees with this Award Agreement consisting of twelve (12) pages and knowingly and voluntarily accepts all of its terms and conditions.

6.    Effective Date.
This Award Agreement shall be deemed to be effective as of the date executed by the Company below.

IN WITNESS WHEREOF, the Company duly executed this Award Agreement as of November 6, 2013 and Recipient duly executed it as of ________________________, 2013.

ACKNOWLEDGED AND ACCEPTED:        ENERGIZER HOLDINGS, INC.

    	
					
	 
	 
	By:
	 
	 

	Recipient
	 
	Ward M. Klein
	 
	 

	 
	 
	Chief Executive Officer

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