PLACEMENT AGREEMENT

February 6, 2006

Keating Securities, LLC
5251 DTC Parkway, Suite 1090
Greenwood Village, CO 80111

Re:
Private placement offering of up to 2,400,000 units (“Units”), with each Unit
consisting  of one share of common stock, $0.001 par value (“Common Stock”) and
one common  stock purchase warrant (“Warrant”).

Dear Sirs:

Aero Grow International, Inc. (“Company”) proposes to offer, offer for sale and
sell up to 2,400,000 Units at an offering price of $5.00 per Unit, to accredited
investors. The offering of the Units (“Offering”) is being made on a best
efforts, $5,000,000 minimum (“Minimum Amount”) $12,000,000 maximum (“Maximum
Amount”) basis. Each Unit shall consist of one share of Common Stock and one
Warrant. Each Warrant is exercisable for one share of Common Stock at an
exercise price of $6.25 per share. Each Warrant will be non-redeemable and will
be exercisable for five years from the closing of this Offering. There will be
only one closing of this Offering.

The Company agrees to file, on one occasion, a registration statement under the
Securities Act of 1933, as amended (“Securities Act”) to register the shares of
Common Stock included in each Unit and the shares of Common underlying the
Warrants included in each Unit.

The Company, the Units, the Common Stock, the Warrants and the registration
rights are more fully described in a private placement memorandum dated February
6, 2006 and any supplements or amendments thereto (the "Memorandum"). The
Company desires to employ Keating Securities, LLC (the "Placement Agent") as its
exclusive placement agent to offer, offer for sale and sell the Units subject to
all of the terms and conditions of this Agreement and subject to the terms and
conditions contained in the Memorandum.
 

1.  
Description of Offering and Appointment of Agent.

(a) Appointment. On the basis of the representations, warranties and covenants
herein contained, but subject to the terms and conditions herein set forth, the
Placement Agent is hereby appointed the exclusive agent of the Company during
the Offering Period (as defined herein) for the purpose of finding subscribers
for sale of up to $12,000,000 of Units on a “best efforts” basis. The Placement
Agent may, in its sole discretion, appoint participating agents (including
foreign banks, dealers and institutions) to offer and sell the Units as
sub-agents of the Placement Agent (the "Participating Agents") pursuant a
certain dealer agreement between the Placement Agent and each Participating
Agent (“Dealer Agreement”). A minimum purchase of 5,000 Units per investor is
required. No fractional Units will be sold in the Offering . The Placement Agent
acknowledges that the Company may limit its acceptance of subscriptions in any
manner it deems prudent in order to provide for the timely use of subscriber
funds and may reject any subscription for any reason, and the Placement Agent
agrees that any such rejection of a subscription obtained by the Placement Agent
or by the Participating Agents shall be deemed not to be a sale made by the
Placement Agent or by the Participating Agents. The Placement Agent further
acknowledges that (i) all wire transfers of subscription funds will be sent to
an escrow account (“Escrow Account”) maintained by Steele Street State Bank,
Denver, Colorado (“Escrow Agent”) under the name “Keating - AeroGrow Escrow
Account,” (ii) all subscribers' checks shall be made payable to and deposited
into the Escrow Account, (iii) all subscribers' check will be transmitted
directly to the Escrow Agent by noon of the next business day after receipt by
the Placement Agent or the Participating Agents, (iv) all executed subscription
documents shall be promptly sent to the Placement Agent, (v) no funds shall be
disbursed from the Escrow Account until such time as subscriptions in the
Minimum Amount have been accepted by the Company and approved by the Placement
Agent, and (vi) the Escrow Agent shall disburse funds from the Escrow Account
only upon the written direction signed by the Company and the Placement Agent.

 
 

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(b) Offering Period. The "Offering Period" shall mean that period during which
the Units are offered for sale, commencing on the date of the Memorandum and
continuing until March 1, 2006, or such later date mutually agreed to by the
Company and Placement Agent but not later than March 31, 2006 (the "Termination
Date"); provided, however, that the Offering Period shall in all events
terminate upon the sale of all of the Units.

(c) Acceptance. The Placement Agent hereby accepts such agency and agrees on the
terms an conditions herein set forth to use the Placement Agent's best efforts
during the Offering Period to find subscribers for the Units.

(d) Private Placement Offering. The Offering will not be registered under
federal securities laws or the securities laws of any state. The Offering will
be through a private offering to "accredited investors" (as such term is defined
in Rule 501 of Regulation D) ("Accredited Investors") pursuant to and in
accordance with exemptions from registration under federal securities laws and
state securities acts (the "State Acts"). With respect to federal securities
laws, the Company will rely on one or more exemptions from registration for
sales to Accredited Investors, including, without limitation, exemptions from
registration provided by Sections 3(b), 4(2) and/or 4(6) of the Securities Act,
Regulation S, and Rule 506 of Regulation D, promulgated as part of the rules and
regulations under the Securities Act (the "Rules and Regulations"). With respect
to the State Acts, the Company will not be subject to them pursuant to
preemption based on Section 18 of the Securities Act or will rely upon limited
offering exemptions of certain states approved by the Company. The Company shall
use its best efforts to qualify or register the Units for sale, or exempt the
Units from qualification or registration, under the State Acts as requested by
the Placement Agent, and the Company shall continue such qualifications in
effect for so long as may be necessary to complete the Offering. The Company or
its counsel shall provide Placement Agent with all applications, forms and
documents filed in each jurisdiction where the Units are to be qualified or
registered or qualified or offered in an exempt transaction under the State
Acts. The Offering of the Units shall be at the offering price and upon the
terms and conditions set forth in the Memorandum and the subscription agreement
which is included in the subscription documents to be delivered with the
Memorandum, and on the basis of the representations and warranties therein
contained, and subject to the terms and conditions herein set forth.

(e) Closing. All cash proceeds from the subscriptions (the "Funds") will be
deposited into the Escrow Account maintained by the Escrow Agent. After the
Company's acceptance of subscriptions in such amount as mutually determined by
the Company and the Placement Agent, but not less than the Minimum Amount, and
subject to the Placement Agent’s approval of such subscriptions, on a date to be
determined by the Company and Placement Agent, a closing will take place at the
offices of the Company's legal counsel or another location as determined by the
Company, and the shares of Common Stock and Warrants included in the Units
evidencing the subscriptions in the forms shown in the Memorandum will be duly
executed and issued by the Company in accordance with the terms of the
Memorandum and promptly delivered to the investors (the "Closing"), and the
shares of Common Stock when issued shall be fully paid and non-assessable.

 
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(f) Other Covenants. In connection with the Offering, the Company and Placement
Agent each agree as follows: (i) the Units will be offered and sold only to
Accredited Investors pursuant to the registration exemption provided by Sections
3(b), 4(2) and/or 4(6) of the Securities Act, Regulation S and Rule 506 of
Regulation D, as and to the extent applicable to the Offering, and will
otherwise comply with the applicable laws and regulations of any jurisdictions
in which the Units are offered or sold, (ii) neither the offer, sale nor
delivery of the Units in conformity with the terms hereof will violate Section 5
of the Securities Act, as currently in effect, and (iii) neither the Company nor
Placement Agent has taken, nor will either party take any action which conflicts
with the conditions and requirements of, or which would make unavailable with
respect to the sale of the Units, the exemptions from registration available
pursuant to Regulation S, Rule 506 of Regulation D or Sections 3(b), 4(2) and/or
4(6) of the Securities Act and neither the Company nor Placement Agent knows of
any reason why any such exemption would be otherwise unavailable to it.

(g) Information to be Supplied. The Company will furnish or cause to be
furnished to Placement Agent such information as Placement Agent reasonably
believes appropriate to its assignment or necessary in connection with its
assistance in the preparation of, review of, or inclusion in, the Memorandum. It
is also understood that the Company may make available to Placement Agent and
the offerees of the Units additional material, data or other information
relating to the Company to the extent such information can be obtained without
unreasonable effort or expense and is not otherwise confidential or a trade
secret of the Company (collectively, as limited the “Company Data”). The Company
recognizes and confirms that (a) in performing the services contemplated by this
Agreement, Placement Agent will use and rely primarily on the Memorandum and
Company Data made available to Placement Agent and on other information
available from generally recognized public sources without having independently
verified the same; (b) the contents of the Memorandum and the Company Data are
the sole responsibility of the Company, and Placement Agent does not assume any
responsibility for the accuracy or completeness of the Memorandum or the Company
Data, and will not undertake to verify independently any of their accuracy or
completeness; and (c) Placement Agent will furnish a copy of the Memorandum, and
each supplement or amendment thereto, to each purchaser of Units, and Placement
Agent will not employ any written material other than the Memorandum, each
supplement and amendment thereto and the Company Data.

2. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Placement Agent and the Participating Agents
(if any) as follows:

(a) The Company has been duly incorporated, and validly exists as a corporation
in good standing under the laws of the state of Nevada. The Company has the
requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being or currently planned
by the Company to be conducted. The Company is in possession of all franchises,
grants, authorizations, licenses, permits, easements, consents, certificates,
approvals and orders ("Approvals") necessary to own, lease and operate the
properties it purports to own, operate or lease and to carry on its business as
it is now being conducted, except where the failure to have such Approvals could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (as hereinafter defined) on the Company. The Company is not in
violation of any of the provisions of its Articles of Incorporation or its
bylaws, as currently in effect (“Charter Documents"). The Company is duly
qualified or licensed to do business as a foreign company and is in good
standing in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. The minute books or the equivalent of the Company to the extent of
their existence contain true and accurate records of meetings and true, complete
and accurate records of consents in lieu of meetings of its directors (and any
committees thereof), similar governing bodies, and stockholders ("Corporate
Records"), since the time of the Company's organization. The Company has no
subsidiaries. For purposes of this Agreement, the term "Material Adverse Effect"
when used in connection with an entity means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
changes, events, violations, inaccuracies, circumstances or effects, that is
materially adverse to the business, assets (including intangible assets),
revenues, financial condition or results of operations of such entity or its
subsidiaries, if any, taken as a whole (it being understood that neither of the
following alone or in combination shall be deemed, in and of itself, to
constitute a Material Adverse Effect: (a) changes attributable to the public
announcement or pendency of the Merger (as defined herein), the Offering or any
related transactions (collectively, the “Transactions”), (b) changes in general
national or regional economic conditions, or (c) changes affecting the industry
generally in which the Company operates.

 
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(b) The Company has complied and will comply with Sections 3(b), 4(2) and/or
4(6) of the Securities Act, with all of the provisions of the Rules and
Regulations promulgated under the Securities Act, specifically including the
provisions of Regulation S, Regulation D and Rule 506 thereunder, applicable to
them in connection with the offering and sale of the Units, and with all States
Acts and regulations applicable to them in connection with the offering and the
sale of the Units.

(c) The Memorandum, and any amendments or supplements thereto, as of the date
hereof, and at all subsequent times through the Closing, shall in all material
respects conform to all applicable provisions of the Securities Act, the Rules
and Regulations and the State Acts, and shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; provided
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Placement Agent and any
Participating Agents for use with reference to the Placement Agent and any
Participating Agents in connection with preparation of the Memorandum.

(d) The execution on performance of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by the Company and,
at the time of its execution and performance, shall not constitute or result in
any breach or violation (other than any breach or violation which shall have
been waived or consented to in writing) of any of the terms, provisions or
conditions of, or constitute a default under, any indenture, mortgage, deed of
trust, note, contract, commitment, instrument or document to which it or any of
its properties is subject, the Charter Documents or corresponding documents of
the Company, or any order, arbitration award , or judgment, of any court of
governmental agency or body having jurisdiction over the Company or any of its
activities or properties; and no consent, approval, authorization or order of
any court or governmental agency or body is required for the consummation of the
transactions contemplated hereby.

(e) The Units, the shares of Common Stock, the Warrants and the Agent Warrants
shall be duly authorized and shall be validly issued and binding obligations of
the Company, and shall conform to the description thereof contained in the
Memorandum. The shares of Common Stock included in the Units, and the shares of
Common Stock underlying the Warrants and the Agent Warrants, when issued, shall
be fully paid and non-assessable.

 
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(f) Neither the Company nor, to the Company’s knowledge, any of the Company’s
affiliates have been subject to any order, judgment or decree of any court of
competent jurisdiction temporarily, preliminary or permanently enjoining such
person for failing to comply with Rule 503 under Regulation D. During the past
five year period, to the Company’s knowledge, no current or former director,
executive officer or 10% or more stockholder of the Company has been the subject
of: (a) a petition under the Federal bankruptcy laws or any other insolvency or
moratorium law or has a receiver, fiscal agent or similar officer been appointed
by a court for such person, or any partnership in which such person was a
general partner at or within two years before the time of such filing, or any
corporation or business association of which such person was an executive
officer at or within two years before the time of such filing; (b) a conviction
in a criminal proceeding or a named subject of a pending criminal proceeding
(excluding traffic violations that do not relate to driving while intoxicated or
driving under the influence); (c) any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining any such person from, or
otherwise limiting, the following activities: (1) Acting as a futures commission
merchant, introducing broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant, any other person
regulated by the United States Commodity Futures Trading Commission or an
associated person of any of the foregoing, or as an investment adviser,
underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any conduct or
practice in connection with such activity; (2) Engaging in any type of business
practice; or (3) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
Federal, state or other securities laws or commodities laws; (d) any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
Federal, state or local authority barring, suspending or otherwise limiting for
more than 60 days the right of any such person to engage in any activity
described in the preceding sub-paragraph, or to be associated with persons
engaged in any such activity; (e) a finding by a court of competent jurisdiction
in a civil action or by the U.S. Securities and Exchange Commission (the
"Commission") to have violated any securities law, regulation or decree and the
judgment in such civil action or finding by the Commission has not been
subsequently reversed, suspended or vacated; or (f) a finding by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading
Commission to have violated any federal commodities law, and the judgment in
such civil action or finding has not been subsequently reversed, suspended or
vacated.

(g) The Company represents and warrants that at all times from the respective
dates that the Memorandum (including, without limitation, any supplement or
amendment thereto) and the Company Data, if any, are furnished or made available
by the Company to Placement Agent or, either directly or through Placement
Agent, to offerees or any of their representatives, such Memorandum (including,
without limitation, any supplement or amendment thereto) and Company Data will
not, taken separately or in any combination as provided to Placement Agent or
any offeree or its representatives, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(h)  The Company will furnish Placement Agent from time to time, such number of
copies of the Memorandum and Company Data, any exhibits thereto and agreements
and documents referred to therein, as Placement Agent may reasonably request.

(i)  If any event shall occur or condition exist as a result of which it is
necessary or advisable, in the opinion of the Company or Placement Agent, to
amend or supplement the Memorandum in order that the Memorandum will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in light of the
circumstances existing at the time it is delivered to prospective purchasers,
the Company will forthwith prepare and furnish to Placement Agent such number of
copies as Placement Agent may reasonably request of an amendment or supplement
to the Memorandum (in form and substance satisfactory to Placement Agent and its
counsel) that will ensure that the Memorandum does not contain any misstatements
or omissions and is not in any respect misleading and provide the same to
offerees.

 
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(j) The Company will advise Placement Agent promptly of (A) the occurrence of
any event or the existence of any condition known to the Company referred to in
Section 2(i) hereof; (B) the receipt by the Company of any communication, stop
order or any order from the SEC, any state securities commissioner or any other
domestic or foreign securities or financial regulatory authority or
self-regulatory organization concerning the offering of the Units; and (C) the
commencement of any lawsuit or proceeding to which the Company is a party
relating to the Units or the Offering. The Company shall make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof as promptly as possible.

(k) The Company will (A) make available to each offeree of the Units the
Memorandum; and (B) provide each offeree the opportunity to ask questions of,
and receive answers from, the officers and employees of the Company concerning
the terms and conditions of the Offering and to obtain any other additional
information about the Company and the Units to the extent the officers and
employees of the Company possess the same or can acquire it without unreasonable
effort or expense and it is not otherwise confidential or trade secret
information. The Company may require appropriate confidentiality and
non-disclosure agreements as it is advised by counsel prior to the disclosure of
any information not otherwise contained in the Memorandum.

(l) The Company is not in default in the performance or observance of any
material obligation (A) under its Charter Documents, or any indenture, mortgage,
contract, purchase order or other agreement or instrument to which the Company
is a party or by which it or any of its property is bound or affected; or
(B) with respect to any order, writ injunction or decree of any court of any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, and there exists no
condition, event or act which constitutes, nor which after notice, the lapse of
time or both, could constitute a default under any of the foregoing, which in
either case would have a material adverse effect on the current business of the
Company.

(m) The Company has full right, power and authority to execute and deliver this
Agreement, and any document, certificate or instrument required hereunder or to
be executed or delivered at any Closing in connection with the Offering
(collectively, the “Documents”), and to perform all of its obligations hereunder
and thereunder or contemplated hereby or thereby. The Documents have been, or
will be, duly executed and delivered by the Company and the execution and
delivery by the Company of the Documents and the performance of all of its
obligations have been duly authorized by all requisite corporate action by the
Company, and each Document (assuming the due authorization and execution of the
other parties thereto) executed and delivered and obligation performed
constitutes, or will constitute, the legal, valid and binding obligation of the
Company enforceable in accordance with its respective terms, subject to
applicable bankruptcy, insolvency and other laws affecting the enforceability of
creditors' rights generally.

(n) The (A) authorization, execution, delivery and performance of the Documents;
and (B) authorization, issuance, sale and delivery of the Units, the shares of
Common Stock, the Warrants and the Agent Warrants will not (1) violate any
provision of law or statute or any order of any court or other governmental
agency applicable to the Company; or (2) conflict with or result in any breach
of any of the terms, conditions or provisions of, or constitute (with due notice
or lapse of time or both) a default under, or result in the creation of any
material lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company under its charter or by-laws, or any
indenture, mortgage, lease agreement or other material agreement or instrument
to which the Company is a party or by which it or any of its property is bound
or affected except for violations, conflicts breaches and defaults that would
not, individually or in the aggregate materially and adversely affect the
Company, Placement Agent or any investor in this Offering.

 
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(o) The Company has all requisite corporate power and authority to issue, sell
and deliver the Units, the shares of Common Stock, the Warrants and the Agent
Warrants and such issuances, sales and deliveries have been duly authorized by
all requisite corporate action of the Company and when so issued, sold and
delivered  the Units, the shares of Common Stock, the Warrants and the Agent
Warrants will be duly and validly issued and outstanding, valid and binding
obligations of the Company, and the shares of Common Stock included in the Units
and the shares of Common Stock underlying the Warrants and the Agent Warrants,
when issued, shall be fully paid and non-assessable, with no personal liability
attaching to the ownership thereof and will be free and clear of all liens,
charges, claims, encumbrances, restrictions or preemptive or any other similar
rights imposed by or through the Company, except as waived prior to the Closing
or as disclosed herein and as shall be disclosed in the Memorandum, and the
Company shall have paid all taxes, if any, in respect of the issuance thereof.
Assuming that the investors met such suitability standards as are specified by
the Company and the representations and warranties of Placement Agent are
accurate as to the method of offering, the offer and sale of the Units, the
shares of Common Stock, the Warrants and the Agent Warrants (collectively, the
“Securities”)are exempt from the registration requirements of the Securities Act
and the Rules and Regulations and the State Acts and the Securities will be
issued in compliance with all applicable Federal and state securities laws.

(p) No permit, consent, approval, authorization, order of, or filing with, any
court or governmental authority is required in connection with the execution and
delivery by the Company of this Agreement or to consummate the Offering, except
that the offer and sale of the Units in certain jurisdictions may be subject to
the provisions of the securities or “blue sky” laws of such jurisdictions and
the federal securities laws.

(q) There is no action suit proceeding before or by any United States court or
governmental agency or body, now pending or threatened, against or affecting the
Company, or any of its properties, which would reasonably be anticipated to
result in any Material Adverse Effect.

(r) The Company has (A) duly and timely filed all tax returns required to be
filed by the Company under applicable law that include or relate to the Company,
its income, assets, payroll, operations or business, which tax returns are true,
correct and complete in all material respects; (B) duly and timely paid, in
full, all taxes which are currently due and payable and for which the Company is
liable; or (C) adequately reserved for taxes that have not been paid or are in
dispute.

(s) The Company is not in default under any agreement, lease, license contract
or commitment, whether oral or written including, without limitation, agreements
with employees and consultants (“Company Agreements”) to which the Company is a
party or by which any of its assets are bound, and there is no event known to
the Company that, with notice, or lapse of time, or both, would constitute a
default by any party to any Company Agreement or give any party the right to
terminate or modify any of the same and the Company has not received notice that
any party to any Company Agreement intends to cancel or terminate any Company
Agreement or to exercise or not to exercise any renewal or extension options
under any Company Agreement, except as to any events described in this
subparagraph that would not have a Material Adverse Effect.

(t) The Company holds, and is in compliance with, all permits, licenses,
registrations and authorizations required by it in connection with the conduct
of the business of the Company as currently conducted under all Federal, state
and local laws, rules and regulations (the “Permits”), except where the failure
to be in compliance has not had, and is not reasonably expected to have, a
Material Adverse Effect.

 
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(u) The Company’s financial statements, which may be unaudited, that are
included in the Memorandum, are true and correct and fairly present, in
accordance with U.S. generally accepted accounting principles (“U.S. GAAP”),
consistently applied, the financial condition of the Company as of the dates
specified (“Financial Statements”). The audited Financial Statements of the
Company included in the Memorandum have been audited in accordance with the
standards of the U.S. Public Company Accounting Oversight Board (“PCAOB”) by an
independent certifying accountant duly registered with the PCAOB. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as set forth in Schedule 2(u)
hereto, the Company has no liabilities individually in excess of $25,000 and in
the aggregate in excess of $50,000 (absolute, accrued, contingent or otherwise)
of a nature required to be disclosed on a balance sheet or in the related notes
to the financial statements prepared in accordance with U.S. GAAP which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of the Company, except: (i) liabilities
provided for in or otherwise disclosed in the balance sheets of the Company as
of September 30, 2005 prepared in accordance with U.S. GAAP, (ii) such
liabilities arising in the ordinary course of the Company’s business since
September 30, 2005 and (iii) liabilities disclosed in the Memorandum, none of
which would have a Material Adverse Effect on the Company.

(v) Since September 30, 2005, the Company has conducted its business in the
ordinary course and has not suffered any Material Adverse Effect. The Company
has in place insurance policies covering the assets, business, products,
equipment, properties, operations, employees, officers, directors, managers and
managing members (collectively, the "Insurance Policies") of the Company
adequate for the Company’s business as presently conducted.

(w) The capitalization of the Company has been correctly and completely
described in the Memorandum and, except as shall be disclosed therein, no person
has any right of first refusal, pre-emptive right, right of participation, or
any similar right to participate in the transactions contemplated by the
Documents. There are no outstanding options, warrants, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any person
any right to subscribe for or acquire, any shares of capital stock of the
Company, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue shares of capital stock, except as shall
be reflected in the Memorandum. All of the outstanding shares of capital stock
of the Company are validly issued, fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares of capital stock was issued in violation of any
pre-emptive rights or similar rights to subscribe for or purchase securities.

(x) The Company has rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
other similar rights that are necessary or material for use in connection with
its business (collectively, the “Intellectual Property Rights”), except to the
extent that the failure to have such Intellectual Property Rights, individually
or in the aggregate, would not have or reasonably be expected to result in a
Material Adverse Effect. No claims have been made or threatened by any third
party to the effect that Intellectual Property Rights used by the Company
violate or infringe upon the rights of such claimant. To the actual knowledge of
the Company, all of the Intellectual Property Rights are enforceable and there
is no existing infringement by another person of any of the Intellectual
Property Rights.

 
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(y) At the Closing, the Company will deliver, or cause to be delivered, to
Placement Agent, in each case in form and substance satisfactory to Placement
Agent and its counsel: (A) a certificate of the Company signed by the Chief
Executive Officer and the Chief Financial Officer thereof certifying (1) that
the representations and warranties of the Company contained in this Agreement
are true and accurate in all material respects as of the Closing; and, (2)  that
the representations and warranties of the Company contained in each subscription
agreement entered into with a prospective purchaser of the Units are true and
correct in all material respects as of the date of such certificate, except to
the extent any such representation or warranty was expressly made as of any
other date, in which case such representation and warranty was true and correct
in all material respects as of such other date; and at the Closing, and (B) an
opinion of the Company’s counsel, as to matters reasonably requested by the
Placement Agent. In rendering the opinions required herein, counsel and special
securities counsel to the Company may, as to factual matters, rely upon
certificates, statements, letters, representations and affidavits of officers of
the Company, its officers, any other records of the Company, certificates of
public officials, and letters of independent certified public accountants. With
respect to the opinions required herein, “known to such counsel”, “to the best
knowledge of such counsel” or any like phrase or reference shall mean to the
best of knowledge of such counsel after due inquiry and investigation; “due
inquiry and investigation” shall include only (i) discussions, inquiries and
conferences with officials and agents of the Company occurring in connection
with such counsel's representation of the Company, (ii) review of certain
corporate records documents and proceedings of the Company as provided to such
counsel by the Company and (iii) review of files maintained by such counsel
relating to the Company; “due inquiry and investigation” shall not mean or imply
any independent verification of any factual matter of which such counsel becomes
aware as a result of the foregoing discussions, inquiries and reviews.

(z) The Company further agrees that it will not consummate the Offering unless
it delivers or causes to be delivered the items described in Section 2(m) to
Placement Agent at the Closing. The consummation of the Offering and the release
of the investor funds from the Escrow Account shall be further subject to any
other conditions set forth in the Memorandum or the subscription agreement
entered into by each purchaser of Units.

(aa)  The Company will be responsible for and comply with all applicable
notification and fee requirements to qualify the offering and sale under the
state securities or “blue sky” laws of such jurisdiction in which any sales
pursuant to the offering may be transacted and as may otherwise be required or
as requested by Placement Agent provided that, in connection therewith, the
Company shall not be required to qualify as a foreign corporation.

(bb) Except as set forth in this Agreement or as disclosed on Schedule 2(bb),
neither the Company nor, to the Company’s knowledge, any of its officers,
directors or stockholders has incurred, nor will they incur, directly or
indirectly, any liability for brokerage, finders' fees, agent’s commissions or
any similar charges in connection with this Agreement or the Transactions.
Except as set forth in this Agreement or the Transactions, no membership
interests, ownership interests, equity securities, convertible securities,
warrants, options, or other derivative securities of the Company will be payable
to any third party by the Company or any of its officers, directors or
stockholders as a result of the Transactions.

3. Representations and Warranties of the Placement Agent. The Placement Agent
represents and warrants to, and agrees with, the Company as follows:

(a) The Placement Agent is a limited liability duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it was formed,
with all requisite power and authority to enter into this Agreement and to carry
out your obligations hereunder. This Agreement (i) has been duly authorized,
executed and delivered by the Placement Agent, (ii) constitutes legal, valid and
binding obligation of the Placement Agent, and (iii) subject to applicable
bankruptcy, insolvency and other laws affecting the enforceability of creditors'
rights generally, is enforceable as to the Placement Agent in accordance with
its terms.

 
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(b) The execution, delivery and performance of this Agreement by the Placement
Agent and the consummation by the Placement Agent of the transactions
contemplated hereby and by the Memorandum will not conflict with or result in
the Placement Agent’s breach or violation of any of the terms or provisions of,
or constitute a default in any material respect under, (i) any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Placement Agent is a party or to which the Placement Agent or its
property is subject, (ii) the Placement Agent’s charter or its operating
agreement or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Placement Agent of any court or governmental agency or body
having jurisdiction over the Placement Agent.

(c) The Placement Agent is, and at all times through the date of the final sale
of a Unit shall remain, duly registered pursuant to the provisions of the
Securities Exchange Act of 1934, as amended (“Exchange Act”) as a broker-dealer
and duly registered as a broker-dealer in those states in which the Placement
Agent is required to be so registered in order to carry out the Offering as
contemplated by the Memorandum; the Placement Agent is, and at all times through
the date of the final sale of a Unit shall remain, a member in good standing of
the National Association of Securities Dealers, Inc. (“NASD”); the Placement
Agent will not reallow discounts or pay commissions or other compensation for
participation in the distribution of the Offering in the United States to any
broker-dealer or person which is not a member of the NASD; the Placement Agent
shall act as an independent contractor, and nothing herein shall constitute the
Placement Agent an employee of the Company; the Placement Agent shall not make
sales of Units to discretionary accounts. The Placement Agent may reallow
discounts or pay commissions or other compensation to any foreign bank, person,
dealer or institution for participation in the distribution of the Offering
outside the United States to non-U.S. persons (notwithstanding that such foreign
bank, person, dealer or institution may not be a member of the NASD.

(d) In connection with the offer, offer for sale and sale of the Units, the
Placement Agent (and its representatives and agents) shall conform to and comply
with (i) the provisions of the Rules of Fair Practice of the NASD, (ii)
applicable provisions of federal law, including without limitation the
Securities Act, the Exchange Act and the Rules and Regulations, and (iii) the
State Acts and the rules and regulations thereunder, including without
limitation those referred to in such letters regarding state securities and
“blue sky” matters (“Blue Sky Letters”) as are prepared by counsel for the
Company and sent to the Placement Agent from time to time, with regard to, among
other things, the period during which and conditions under which the Units may
be offered, offered for sale and sold in various states; the Placement Agent
shall not distribute the Memorandum or otherwise commence the Offering in any
jurisdiction without prior confirmation from the Company or its counsel that the
Offering may be commenced under applicable securities laws, rules and
regulations.

(e) The Placement Agent will use its best efforts to procure subscribers for the
Units and will conduct the Offering in compliance with the suitability standards
set forth in the Memorandum and with the requirements of Sections 3(b), 4(2)
and/or 4(6) of the Securities Act, Regulation S and Rule 506 of Regulation D, as
and to the extent applicable to the Offering; accordingly, at all times through
the date of the final sale of a Unit, the Placement Agent will have:

(i) not made any untrue statement of a material fact and not omitted to state a
material fact required to be stated or necessary to make any statement made not
misleading, to the extent any representations are made by the Placement Agent
concerning the Offering or matters set forth in the Memorandum and Company Data
other than those set forth in the Memorandum and Company Data;

 
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(ii) not offered, offered for sale, or sold the Units by means of: (A) any
advertisement, article, notice, or other communication mentioning the Units
published in any newspaper, magazine or similar medium or broadcast over
television or radio; (B) any seminar or meeting, the attendees of which have
been invited by any general solicitation or general advertising; or (C) any
letter, circular, notice, or other written communication, unless the
communication is accompanied or preceded by the Memorandum, except to the extent
that any of the foregoing are permitted under or in connection with offers or
sales to non-U.S. persons under Regulation S;

(iii) prior to the sale of any of the Units, reasonably believed that each
subscriber and his or her purchaser representative, if any, met the suitability
and other investor standards set forth in the Memorandum and the Blue Sky
Letters, and the Placement Agent will have prepared and maintained, for your
benefit and the benefit of the Company, file memoranda and other appropriate
records substantiating the foregoing;

(iv) only used sales materials other than the Memorandum and Company Data which
have been approved for use in the Offering by the Company, and refrained from
providing any such materials to any offeree unless such materials were
accompanied or preceded by the Memorandum;

(v) provided each offeree with a copy of the Memorandum;

(vi) promptly distributed any amendment or supplement to the Memorandum provided
to the Placement Agent by the Company under this Agreement to persons who had
previously received a copy of the Memorandum from the Placement Agent and who
the Placement Agent believed continued to be interested in the Units and have
included such amendment or supplement in all deliveries of the Memorandum made
after receipt of any such amendment or supplement; and

(vii) not made any representations on behalf of the Company other than those
 contained in the Memorandum and the Company Data, nor shall the Placement Agent
have acted as  an agent of the Company or for the Company in any other capacity,
except as expressly set forth  herein.

4. Compensation and Expenses.
 
(a) The Company agrees to pay to the Placement Agent a placement fee of ten
percent (10%) of the aggregate gross offering proceeds of all of the Units sold.
The Placement Agent may instruct the Company to pay a portion of any placement
fee due directly to Participating Agents. Such placement fee shall be due and
payable at the Closing. The Company also agrees to pay to the Placement Agent,
as warrant placement agent for transactions involving the exercise of any
Warrants, which exercise is solicited by the Placement Agent, a warrant
solicitation fee of five percent (5%) of the aggregate exercise price received.
 
(b) In addition, the Company shall issue and sell, at the Closing, to the
Placement Agent or its designees 1 warrant (covering one share of Common Stock)
for every 10 Units sold in the Offering at a price of $0.0001 per warrant
(“Agent Warrants”). Each Agent Warrant shall entitle the holder thereof to
purchase one share of Common Stock. The Agent Warrants shall be non-redeemable
and shall be exercisable at any time after the Closing at a price equal $6.25
per share, on a net-issuance or cashless basis. The Company hereby grants the
same registration rights to the Placement Agent with respect to the shares of
common stock underlying the Agent Warrants as are granted to investors with
respect to the shares of Common Stock and the Warrants as set forth in this
Agreement and the Memorandum. The Agent Warrants will expire five (5) years from
the date of issuance.
 
 
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(c) The Company will pay all costs and expenses related to the Offering and/or
the performance of the Company's obligations under this Agreement, including
preparation of the Memorandum, preparation of related documentation, accounting
fees, legal fees, experts fees, consultants' fees, escrow fees, filing fees with
the SEC and applicable states, any costs and expenses to qualify the Units for
sale in any state, and any all costs and expenses for investor or road show
presentations. Notwithstanding the foregoing, the Company shall not be
responsible for any expenses of the Placement Agent or Participating Agents
incurred in connection with the Offering, including, but without limitation,
attorneys' fee, operating expenses, travel expenses and other incidental
expenses incurred by the Placement Agent or the Participating Agents; except
that the Company shall pay the Placement Agent a non-accountable expense
allowance equal to three percent (3%) of the aggregate gross offering proceeds
of all of the Units sold (“Allowance”).

5. Covenants of the Company. The Company covenants and agrees that it will:

(a) Comply with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, by the Rules and Regulations from time to time in force,
and by all State Acts, to permit the continuance of offers and sales of the
Units in accordance with the provisions of Sections 3(b), 4(2) and/or 4(6) of
the Securities Act, Regulation S and Rule 506 of Regulation D, as and to the
extent applicable to the Offering, and the Memorandum. During the Offering
Period, the Company will amend or supplement the Memorandum in order to make
such Memorandum comply with the requirements of the Securities Act, the Rules
and Regulations and the State Acts.

(b) Until the termination of the Offering Period, furnish to the Placement Agent
information necessary to keep the Memorandum fair, accurate and complete in all
material respects.

(c) If at any time any event occurs as a result of which the Memorandum would
include an untrue statement of a material fact or, in view of the circumstances
under which they were made, omit to state any material fact necessary to make
the statements therein not misleading, the Company will notify the Placement
Agent thereof (unless the information shall have been received from the
Placement Agent) and will effect the preparation of an amended or supplemental
Memorandum which will correct such statement or omission.

(d) Upon the Placement Agent's reasonable request, the Company will prepare an
amended or supplemental Memorandum and take any other action which may be
necessary of advisable in connection with the offer and sale of the Units.

(e) Not offer, offer to sell, offer for sale or sell any of the Units of the
Company or other securities, except and to the extent any such offer, offer to
sell, offer for sale or sale shall not render unavailable the exemptions from
registration and qualification requirements of the Securities Act and the State
Acts relied upon the respect to the offering and sale of the Units contemplated
by this Agreement.

(f) Provided their subscriptions are accepted by the Company and approved by the
Placement Agent, issue the shares of Common Stock and Warrants with respect to
the Units to the holders in accordance with the description of the procedures as
set forth in the Memorandum and the subscription documents to be delivered with
the Memorandum.

 
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(g) Prepare, execute and file a Form D (and any and all amendments or
supplements thereto) with the SEC in timely manner and deliver copies thereof to
the Placement Agent, together with copies of all forms (including without
limitation, Form Ds) and other documents and/or materials filed either before or
after the Closing, and comply with Regulation D and the State Acts and make any
fillings required by the SEC and state securities authorities in a timely
manner.

(h) The Company will make available for inspection by the Placement Agent or its
authorized representatives, at the Company’s principal office during normal
business hours, any information and documents relating to the business and
operations of the Company as the Placement Agent may reasonably request and as
are available to the Company or obtainable by it without unreasonable effort or
expense.

(i) The Company will apply the net proceeds from the sale of the Units as set
forth in the Memorandum.

(j) The Company shall at all times reserve and keep available such number of
authorized shares of its common stock as are sufficient to permit the exercise
of the Warrants and Agent Warrants; all shares of common stock issued upon the
exercise of Warrants and Agent Warrants, upon receipt of full payment therefore,
will be duly authorized, validly and legally issued, fully paid and
non-assessable, and such common stock will not have been issued in violation of
or subject to any preemptive rights provided for by law or by the Company's
Charter Documents or be subject to any lien, claim, encumbrance, security
interest, preemptive rights or any other claim of any third party.

(k) The Company shall file such registration statements and include such
securities of the Company in such registration statements filed under the
Securities Act as specifically provided in the Memorandum and the subscription
agreement entered into by the purchaser of the Units.  

6. Covenants of Placement Agent. The Placement Agent covenants and agrees that
it will:

(a) Comply with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, by the Rules and Regulations from time to time in force,
and by all State Acts, to permit the continuance of offers and sales of the
Units in accordance with Sections 3(b), 4(2) and/or 4(6) of the Securities Act,
Regulation S and Rule 506 of Regulation D, as and to the extent applicable to
the Offering, and the Memorandum.

(b) Comply with all applicable rules of the NASD and any other laws, rules and
regulations applicable to broker-dealers.

(c) Not offer, offer to sell, offer for sale or sell any of the Units of the
Company or other securities, except and to the extent any such offer, offer to
sell, offer for sale or sale shall nor render unavailable the exemptions from
registration and qualification requirements of the Securities Act and the State
Acts relied upon with respect to the offering and sale of the Units contemplated
by this Agreement.

7. Conditions of Closing. The purchase of, and payment for, the Units on the
Closing shall be subject to the continuing accuracy of the representations and
warranties of the Company and the Placement Agent as of the date hereof and as
of the Closing, to the performance by the Company and Placement Agent of their
respective obligations hereunder, and to the following conditions:

 
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(a) The Placement Agent's obligations as provided herein shall be subject to the
accuracy of the representations, warranties and covenants of the Company herein
contained as of the date hereof and as of the Closing, and to the performance by
the Company of its obligations hereunder to be performed.

(b) The Closing of the Offering shall be subject to the Company's acceptance of
subscriptions in such amount as mutually determined by the Company and the
Placement Agent, but not less than the Minimum Amount, and subject to the
Placement Agent’s approval of such subscriptions.

(c) The Closing of the Offering shall be subject to the closing of the merger
transaction (“Merger”) contemplated under that certain Agreement and Plan of
Merger by and between the Company and Wentworth I, Inc. (“Wentworth”) dated
January 12, 2006 (“Merger Agreement”).

(d) The Closing of the Offering shall be subject to the satisfaction of the
conditions set forth in the subscription agreement between the Company and each
purchaser of Units.

(e) At the Closing, the Company shall:
 
(1) Accept subscriptions of qualifying potential purchasers that the Company
reasonably believes to be accredited investors under Regulation D and the State
Acts, in accordance with the Memorandum.
 
(2) Issue and deliver the shares of Common Stock and the Warrants with respect
to the Units to subscribers as described in the Memorandum.

(3) Issue and deliver the Agent Warrants to the Placement Agent as provided
hereunder.
 
(c) At the Closing, if any, the Placement Agent shall:
 
(1) Deliver to the Company all subscription agreements that the Company agrees
are acceptable.

(2) Receive from the Company or give assignment instructions for all
compensation, including Agent Warrants, payable to the Placement Agent.

8. Indemnification.
 
(a) The Placement Agent and each of the Participating Agents, severally and not
jointly, agree to indemnify and hold the Company and the directors, officers,
employees, agents, attorneys, shareholders and control persons (as defined under
federal and state securities laws) of the Company, and the respective heirs,
personal representatives and assigns of each of the foregoing (collectively, the
"Company Indemnified Persons") harmless from and against any loss, liability,
claim, damage and expense (including, but not limited to, expenses reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever based upon) to which the
Company Indemnified Persons may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities, costs and
expenses (including reasonable attorneys' and experts' fees) arise solely out
of: (i) any breach of any representation, warranty, agreement or covenant under
this Agreement by Placement Agent or under the Dealer Agreement by Participating
Agents, (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Memorandum, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Memorandum or such supplement or such amendment
in reliance upon and in conformity with information furnished to the Company by
the Placement Agent, (iii) any statement made, either orally or in a writing
other than the Memorandum or the Company Data, by the Placement Agent or the
Participating Agents containing an untrue statement or alleged untrue statement
of any material fact or the omission or alleged omission to state a material
fact required to be stated or necessary to make the statements not misleading,
unless such statements or omissions are made in reliance upon or in conformity
with statements made or information provided by the Company and/or the actions
of the Company, and/or (iv) any amount paid in settlement of any litigation,
commenced or threatened, or of any claim based upon any of the matters under (i)
through (iii) (including, but not limited to, expenses reasonably incurred in
investigating, preparing or defending against any such litigation or claim) if
such settlement is affected with the written consent of the Placement Agent
and/or the effected Participating Agents.
 
 
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If for any reason, the foregoing indemnification is unavailable to any Company
Indemnified Persons, then the Placement Agent or Participating Agents shall
contribute to the amount paid or payable by any such Company Indemnified Person
as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the Placement Agent or
Participating Agents and any Company Indemnified Person.
 
Promptly after a Company Indemnified Person receives notice of the commencement
of any action, claim, proceeding or investigation (“Action”), such Company
Indemnified Person, if a claim in respect thereof is to be made against the
Placement Agent or Participating Agents under this Section 8(a), will notify the
Placement Agent or Participating Agents of the commencement thereof. The
omission to so notify the Placement Agent or Participating Agents will relieve
the Placement Agent and Participating Agents from any liability which they may
have to any Company Indemnified Person under this Section 8(a) if the Placement
Agent or Participating Agents have been prejudiced in asserting, or shall have
lost the right to assert, a legal defense by reason of such omission. The
Placement Agent or Participating Agents will be entitled to participate in, and,
to the extent that they may wish, to assume the defense thereof subject to the
provisions herein stated, with counsel reasonably satisfactory to such Company
Indemnified Person. The Company Indemnified Person will have the right to employ
separate counsel in any such Action and to participate in the defense thereof
but the fees and expenses of such counsel will be at the expense of the Company
Indemnified Person if the Placement Agent or Participating Agents have assumed
the defense of the Action with counsel reasonably satisfactory to the Company
Indemnified Person. No settlement of any Action against a Company Indemnified
Person for which indemnification from the Placement Agent or Participating
Agents is sought will be made without the consent of the Placement Agent or
Participating Agents.

(b) The Company agrees to indemnify and hold the Placement Agent and
Participating Agents, and the directors, officers, employees, agents, attorneys,
shareholders and control persons (as defined under federal and state securities
laws) of the Placement Agent and Participating Agents, and the respective heirs,
personal representatives and assigns of each of the foregoing (collectively, the
"Agent Indemnified Persons") harmless from and against any loss, liability,
claim, damage and expense (including, but not limited to, expenses reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever based upon) to which the Agent
Indemnified Persons may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities, costs and expenses
(including reasonable attorneys' and experts' fees) arise out of or relate to:
(i) any breach of any representation, warranty, agreement or covenant under this
Agreement by the Company, (ii) any untrue statement or alleged untrue statement
of any material fact contained in the Memorandum, or any amendment or supplement
thereto, or the Company Data, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, (iii) any statement
made, either orally or in a writing other than the Memorandum or the Company
Data, by the Company containing an untrue statement or alleged untrue statement
of any material fact or the omission or alleged omission to state a material
fact required to be stated or necessary to make the statements not misleading,
and/or (iv) any amount paid in settlement of any litigation, commenced or
threatened, or of any claim based upon any of the matters under (i) through
(iii) (including, but not limited to, expenses reasonably incurred in
investigating, preparing or defending against any such litigation or claim) if
such settlement is affected with the written consent of the Company;
provided, however, that the Company shall not be liable to any Agent Indemnified
Persons to the extent that any such losses, claims, damages, liabilities, costs
or expenses, or any actions in respect thereof, arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in the Memorandum or such amendment or such supplement in reliance upon and
in conformity with information furnished to the Company by or on behalf of the
Placement Agent
 
 
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If for any reason, the foregoing indemnification is unavailable to any Agent
Indemnified Persons, then the Company shall contribute to the amount paid or
payable by any such Agent Indemnified Persons as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative
fault of the Company and any Agent Indemnified Person.

Promptly after an Agent Indemnified Person receives notice of the commencement
of any action, claim, proceeding or investigation (“Action”), such Agent
Indemnified Person, if a claim in respect thereof is to be made against the
Company under this Section 8(b), will notify the Company of the commencement
thereof. The omission to so notify the Company will relieve the Company from any
liability which it may have to any Agent Indemnified Person under this Section
8(b) if the Company has been prejudiced in asserting, or shall have lost the
right to assert, a legal defense by reason of such omission. The Company will be
entitled to participate in, and, to the extent that they may wish, to assume the
defense thereof subject to the provisions herein stated, with counsel reasonably
satisfactory to such Agent Indemnified Person. The Agent Indemnified Person will
have the right to employ separate counsel in any such Action and to participate
in the defense thereof but the fees and expenses of such counsel will be at the
expense of the Agent Indemnified Person if the Company has assumed the defense
of the Action with counsel reasonably satisfactory to the Agent Indemnified
Person. No settlement of any Action against an Agent Indemnified Person for
which indemnification from the Company is sought will be made without the
consent of the Company.

9. Representations, Indemnities and Agreements to Survive Sale and Payment. The
respective representations, indemnities, warranties, covenants and other
agreements of the Company and the Placement Agent set forth in or made pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent, the Company, or any
Agent Indemnified Person or Company Indemnified Person, and shall survive
closing, delivery of, and payment for the Units.

10. Termination of Agreement. Notwithstanding any of the terms and provisions
thereof, this Agreement may be terminated by the Placement Agent based on a
material breach of this Agreement by the Company. The Placement Agent shall give
fifteen (15) days' prior written notice to the Company of such material breach,
and the Company shall have thirty (30) days to cure such material breach before
the Placement Agent may terminate the Agreement. In the event the Placement
Agent reasonably determines that the Units are not marketable, notwithstanding
its best efforts to sell the Units, the Placement Agent may terminate this
Agreement with thirty (30) days' prior written notice to the Company.

 
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In the event of any termination this Agreement or the expiration of the Offering
Period, the Placement Agent shall be entitled to; (i) any fees and compensation
to which it was entitled as of the date of termination or expiration, and (ii)
the fees and compensation as set forth in Section 4 for any securities sold by
Company during the one (1) year period following such expiration or termination
to any investor introduced by Placement Agent and/or any Participating Agent.

Additionally, Sections 4, 8, 9, 10, 11, 12 and 14 shall survive any termination
or survive closing, delivery of, and payment for the Units.

11. Notices. All notices, requests, demands or other communications with respect
to this Agreement shall be in writing and shall be personally delivered or
mailed, postage prepaid, certified mail, or delivered by facsimile or a
nationally recognized express courier service, charges prepaid, to the Company
or Placement Agent at the addresses set forth in this Agreement (or such other
addresses as the parties may specify from time to time in accordance with this
section). Any such notice shall, when sent in accordance with the preceding
sentence, be deemed to have been given and received, on the earliest of:(i) on
the day personally delivered including by facsimile, (ii) on the third day
following the date mailed, or (iii) twenty-four hours after shipment by such
courier service.

 
If to the Company:
Aero Grow International, Inc.
   
900 28th Street, Suite 201
   
Boulder, CO 80303
   
Attn: W. Michael Bissonnette, CEO
   
(303) 444-7755
   
(303) 444-0406 telecopy
             
If to the Placement Agent
Keating Securities, LLC
   
5251 DTC Parkway, Suite 1090
   
Greenwood Village, CO 80111
   
Attn: Timothy J. Keating, President
   
(720) 889 -0131
   
(720) 889-0139 telecopy

12. Successors. This Agreement shall be binding upon and inure solely to the
benefit of the Placement Agent and the Company and, to the extent provided in
Section 8, an Agent Indemnified Person or Company Indemnified Person, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Units shall be construed a successor,
representative or assignee by reason of such purchase.

13. Right of Exclusive Representation. During the one year period following the
Closing of the Offering, the Company grants Placement Agent the right to act as
the Company’s exclusive placement agent and/or managing underwriter for any
private placement or public offering of securities by the Company and as the
Company’s exclusive financial advisor for any merger or acquisition involving
the Company. This provision will not apply to any sale of securities to
employees.
 

14.  
Miscellaneous Provisions.

(a) Construction. This agreement shall be governed by, subject to an construed
in accordance with the laws of the state of Colorado without regard to such
state’s conflicts of law principles.

 
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(b) Severability. If any portion of this Agreement shall be held invalid or
inoperative, then, so far as is reasonable and possible (i) the remainder of
this Agreement shall be considered valid and operative, and (ii) effect shall be
given to the intent manifested by the portion held invalid or inoperative.

(c) Modification or Amendment. This Agreement may not be modified or amended
except by written agreement executed by the parties hereto.

(d) Number and Gender of Words. Whenever the contest so requires, the masculine
shall include the feminine and neuter, and the singular shall include the
plural, and conversely.

(e) Other Instruments; Counterparts. The parties hereto covenant and agree that
they will execute such other and further instruments and documents are or may
become necessary or convenient to effect and carry out the terms of this
Agreement. This Agreement may be executed by facsimile signatures and in
multiple counterparts, each of which shall be deemed an original. It shall not
be necessary that each party executes each counterpart, or that any one
counterpart be executed by more than one party so long as each party executes at
least one counterpart.

(f) No Partnership. The Placement Agent is not a principal of or a partner with,
or does not control in any way, the Company or its employees or agents.
 
(g) Announcements.. Before the Company releases any information referring to the
Placement Agent’s role under this Offering or uses Placement Agent’s name in a
manner which may result in public dissemination thereof, the Company shall
furnish drafts of all documents or prepared oral statements to Placement Agent
for comments, and shall not release any information relating thereto without the
prior written consent of the Placement Agent. Nothing herein shall prevent the
Company from releasing any information to the extent that such release is
required by law, rule or regulation. The Company agrees that, following the
completion of the Offering, the Placement Agent shall have the right to place
“tomb stone” advertisements in financial and other newspapers and journals, at
the Company’s cost, describing its services to the Company hereunder, provided
that Placement Agent will submit a copy of any such advertisements to the
Company for its prior approval, which approval shall not be unreasonably
withheld.
 
(h) Assignment. The Placement Agent may assign this Agreement to another company
or firm under its common control. Otherwise, this Agreement shall not be
assignable by any party to this Agreement without the express prior written
consent of the other party to the Agreement, and in the event of an attempted
assignment by one party to this Agreement without such consent, such attempted
assignment shall be void and without effect.

(i) Parties. This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and any permitted assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained, except that the Participating Dealers shall be a third party
beneficiary of the provisions of Section 8(b) hereof.

(j) Entire Agreement. This Agreement contains the entire understanding between
the parties and supersedes any prior understandings or written or oral
agreements between them respecting the subject matter hereof.

 
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(k)  Consent to Jurisdiction and Waiver of Trial by Jury. Each party hereto;
(i) consents to personal jurisdiction and service and venue in any court in
which a claim subject to this agreement is brought against the other party
hereto or any other Indemnified Party; and (ii) waives all right to trial by
jury in any action, proceeding or counterclaim (whether based upon contract,
tort or otherwise) related to or arising out of the engagement of Placement
Agent pursuant to, or the performance by Placement Agent of the services
contemplated by, this Agreement.

(l) Attorneys’ Fees. In the event any party hereto shall commence legal
proceedings against the other to enforce the terms hereof, or to declare rights
hereunder, as the result of a breach of any covenant or condition of this
Agreement, the prevailing party in any such proceeding shall be entitled to
recover from the losing party its costs of suit, including reasonable attorneys’
fees, as may be fixed by the court.

[Remainder of this page intentionally left blank.]

 
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If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this Agreement and the Placement
Agent's acceptance hereof shall constitute a binding agreement between you, as
the Placement Agent, and the Company.

Aero Grow International, Inc.
 

By: ___________________________________
       W. Michael Bissonnette, CEO
 

ACCEPTED AND AGREED TO:

Keating Securities, LLC

By: ___________________________________
       Timothy J. Keating, President      

Date: _________________________________
 
 
 
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