EXHIBIT 10.1
 
LEASE AMENDMENT OF APRIL 1, 2005
 

PROPERTY NAME:
The Lotus Building
EFFECTIVE
October 1, 2004

 
UNITED PROFESSIONAL MANAGEMENT, INC. as agent for the owner, called Landlord
under that certain LEASE AGREEMENT (the "Lease") EFFECTIVE October 1, 2003,
between parties hereto and AEROGROW INTERNATIONAL INC., hereinafter called
Tenant under the Lease do hereby agree as follows:
 

 
1.
The Lease shall continue until April 30, 2006

     

 
2.
The monthly rent, payable in advance, for the term shall be:

     

a.
$2,534 in cash.

 
b.
6336 shares of stock and issued in advance at the beginning of each three months
beginning October 1, 2004.

c.
A to-be-determined sur-charge for the excess utility usage

 

 
3.
Tenant shall have the right to terminate this lease by giving a minimum of
ninety days written notice and in no event before the last day of the month. At
the same time of submitting the written notice to terminate, Tenant will pay all
the shares of stock rent due up to the termination date and will pay the cash
rent on a monthly basis.

 

 
4.
All other terms and conditions of the Lease shall remain the same except that
there shall be no further options to renew.

 
TENANT
 
LANDLORD
     
AeroGrow International, Inc.
 
United Professional Management, Inc.
     
/s/ Frederic Wiedemann, VP
 
/s/

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LEASE AMENDMENT
 

PROPERTY NAME:
The Lotus Building
EFFECTIVE:
October 7, 2003
   

UNITED PROFESSIONAL MANAGEMENT, INC. as agent for the owner, called Landlord
under that certain LEASE AGREEMENT (the "Lease") EFFECTIVE October 1, 2003,
between parties hereto and AEROGROW INTERNATIONAL INC.; hereinafter called
Tenant under the Lease do hereby agree as follows:
 

 
1.
ADDITION OF SUITE 203 AND SUITE 204: Effective March 1, 2004, Tenant shall
include Suite 203 and Suite 204 to the remaining term of the above described
Lease. Tenant may add portions or all of the Suites prior to March 1, 2003 and
will pay a prorated rent beginning on the date the additional area is added.

 

 
2.
RENT: The monthly rent for such period of extension from March 1, 2004 to and
thru midnight September 30, 2004, shall be $2,556 cash and 2,625 shares of
stock. Rent from October 1, 2003 until March 1, 2004 will be on prorated basis
for both the cash and stock amount computed upon the amount of space used each
month.

 

 
3.
The Premises as outlined to Section I. Premises shall be amended to read Suites
201, 203 and 204, which are delineated on Exhibit B attached hereto and
incorporated by this reference.

 

 
4.
SECURITY DEPOSIT: The security deposit shall be increased by $1,400 to a total
of $3,400.00

 

 
5.
All other terms and conditions of the Lease shall remain the same.

 
TENANT
 
LANDLORD
     
AeroGrow International, Inc.
 
United Professional Management, Inc.
     
/s/ Frederic Wiedemann, VP
 
/s/

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LEASE AGREEMENT
 
THIS LEASE, effective on October 1, 2003, is entered into by and between United
Professional Management, Inc., authorized agent for the owner, hereinafter
called Landlord, and AeroGrow International Inc., a Nevada corporation,
hereinafter called Tenant.
 
1.    Premises.
 
Landlord hereby leases to Tenant that portion of The Lotus Building commonly
known as Suites 201 (referred to herein as the Premises), the location and
approximate dimensions of which are delineated on EXHIBIT A attached hereto and
incorporated by this reference. Such building and improvements are situated upon
real property, which is legally described as follows:
 
The South 1/2 of the South 1/2 of the Northeast 1/4 of Section 32, Township 1
North, Range 70 West of the Sixth P.M., except the East 347 feet thereof and
except also portions excepted in a conveyance of said real estate by CONSUMERS
NATIONAL LIFE INSURANCE COMPANY; County of Boulder, State of Colorado;
 
also known as 900 28th Street, Boulder, Colorado 80303. The Premises are leased
together with the nonexclusive use of six (6) unassigned parking spaces in the
parking lot, which use shall be in common with other tenants of the building.
 
2.    Term.
 
2.1    Term. The term of this lease shall be one (1) year, beginning on October
1, 2003 and ending on September 30, 2004, both dates inclusive, unless sooner
terminated as herein provided.
 
2.2    Occupancy. Taking possession of the Premises or any part thereof by
Tenant shall be conclusive evidence that Tenant accepts the Premises in its
present condition. Tenant may have use of the Premises prior to October 1, 2003
for the purpose of doing authorized Tenant improvements. If Tenant operates its
business in the Premises prior to October 1, 2003, Tenant will pay a daily
prorated rent to Landlord.
 
2.3    Right of Extension. Tenant is granted the right to extend the basic term
for one (1) consecutive period of THREE (3) years, all upon the same agreements
and conditions, except rent, which shall be at the basic rate as determined by
the provisions outlined in Exhibit C provided that (1) Tenant is not in material
default at the commencement of the extended term, (2) Tenant gives written
notice to Landlord of its intention to extend the Lease at least ninety (90)
days prior to the expiration of the Lease Term, (3) In no event shall the Base
Rent for any Renewal Period be less than the Base Rent for the immediate prior
year.
 
3.    Security Deposit.
 
3.1    Payment of Deposit. Upon execution of this Lease, Tenant shall pay to
Landlord the sum of Two Thousand Dollars ($2,000.00) as security for Tenant's
full and faithful performance of all covenants and conditions of this Lease to
be kept and performed by Tenant. Said sum shall be returned to Tenant after the
expiration of the term of this Lease provided Tenant has fully and faithfully
performed all such covenants and conditions. Prior to the time when Tenant shall
be entitled to the return of the security deposit, Landlord shall be entitled to
intermingle such deposit with its own funds and to use such sum for such
purposes as Landlord may determine. Tenant shall not be entitled to any interest
on the security deposit.
 

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3.2    Default, by Tenant. In the event of default by Tenant in with respect to
any provision of this Lease, including, but not limited to, the payment of rent
and additional rent, Landlord may use, apply or retain all or any part of such
security deposit for the payment of any unpaid rent and additional rent, or for
any other amount which Landlord may be required to spend by reason of the
default of Tenant, including any damages or deficiency in re-leasing of the
Premises, regardless of whether the accrual of such damages or deficiency occurs
before or after an eviction or a summary re-entry or other re-entry by Landlord.
If any portion of the security deposit is so used or applied, Tenant shall,
within five (5) days after notice from Landlord, deposit cash with Landlord in
an amount sufficient to restore the security deposit to its original amount, and
failure to do so shall constitute a default under this Lease.
 
4.    Base Rent. The amount of annual Base Rent due from Tenant during the term
of this Lease shall be $18,000.00. Tenant shall pay Landlord the Base Rent in
twelve equal monthly installments of $1,500.00 without notice or demand and
without any deduction or set-off, at 4990 Osage Dr., #C-100, Boulder, Colorado
80306-7004, or at such other place as Landlord may direct in writing. Each
monthly rent installment shall be due and payable, in advance, on or before the
first day of each month during the term of this Lease.
 
5.    Additional Rent. Tenant agrees to pay as Additional Rent an amount equal
to Tenant's Proportionate Share of any "Operating Expenses" and "Real Estate
Taxes" as said terms are hereinafter defined. During the first year of this
lease, the Additional Rent shall be a fixed amount and payable quarterly in
advance, by the issuance of stock issued by AreoGrow International, Inc. (See
Exhibit B)
 
5.1    Operating Expenses. "Operating Expenses" for the purposes of this
paragraph 5, shall mean all reasonable and necessary costs and expenses of every
kind and nature, other than those expressly excluded below, paid or incurred by
Landlord in operating, managing, repairing, maintaining and administering the
Building including, without limitation or duplication:
 
(a)    The costs of general repairs, maintenance and replacements, excluding
capital expenditures, made from time to time by Landlord to the Building,
including costs under mechanical or other maintenance contracts and repairs and
replacements of equipment used in connection with such maintenance and repair
work.
 
(b)    The cost of pest control, security, cleaning and snow and ice removal
services.
 
(c)    The cost of maintaining, repairing, redecorating, renovating, replacement
of floor coverings, and landscaping the common facilities used by the public and
other tenants, such as elevator, hallways, stairways, etc. not for the exclusive
use of a single tenant, hereafter referred to as "Common Facilities," and of
maintaining and operating any fire detection, fire prevention, lighting and
communications systems.
 
(d)    The cost of all utilities (including, without limitation, water, sewer,
gas and electricity) used or consumed.
 
(e)    The cost of providing heating, ventilating and cooling to the interior
portions of the Building, if any.
 
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(f)    Remuneration and fees of persons and companies to the extent engaged in
repairing, maintaining, or administering the Building.
 
(g)    The cost of professional property management fees.
 
(h)    Costs incurred by Landlord or its agents in engaging accountants or other
consultants to assist in making the computations required hereunder.
 
(i)    The cost of capital improvements and structural repairs and replacements
made in, on, or to the Building that are (i) made in order to conform to changes
subsequent to the Commencement Date in any applicable laws, ordinances, rules,
regulations or orders of any governmental or quasi-governmental authority having
jurisdiction over the Building, or (ii) designed primarily to reduce Operating
Expenses or the rate of increase in Operating Expenses, or (iii) the replacement
of the roof, heating, ventilating and air conditioning equipment; such costs
shall be charged by Landlord to Operating Expense in equal annual installments
over the useful life of such capital improvement or structural repair or
replacement (as reasonably determined by Landlord) together with interest on the
balance of the un-reimbursed costs at two percent (2%) above the average Prime
Rate charged by three major banks in Boulder on the date the cost was incurred
by Landlord.
 
(j)    Other costs and expenses, including supplies, not otherwise expressly
excluded hereunder attributable to the operation, management, repair,
maintenance and administration of the Building.
 
5.2    Excluded Expenses. Operating Expenses shall not, however, include the
following:
 
(a)    Any charge for depreciation of the Building or equipment and any
principal, interest or other finance charge.
 
(b)    The cost of any work, including painting, decorating and work in the
nature of tenant finish, which Landlord performs in any rentable premises other
than work of a kind and scope which Landlord would be obligated to perform in
the demised premises.
 
(c)    The cost of repairs, replacements or other work occasioned by insured
casualty or defects in construction or equipment to the extent such cost is
reimbursed to Landlord (or not charged to Landlord) by reason of collected
insurance proceeds (using Landlord's good faith efforts to collect such
proceeds) or any contractors', manufacturers', or suppliers' warranties.
 
(d)    Expenditures required to be capitalized for federal income tax purposes
(except as provided in Section 5.1(i)).
 
(e)    Leasing commissions, advertising expenses and other costs incurred in
leasing space in the Building except as otherwise expressly provided in this
Lease.
 
(f)    The cost of repairing or rebuilding necessitated by condemnation.
 
(g)    The cost of any damage to the Building or any settlement, payment or
judgment incurred by Landlord, resulting from Landlord's tortious act, neglect
or breach of this Lease that is not covered by insurance proceeds.
 
5.3    Real Estate Taxes. "Real Estate Taxes" shall mean all real estate taxes,
assessments, and other governmental impositions and charges of every kind and
nature whatsoever, extraordinary as well as ordinary, foreseen and unforeseen,
and each and every installment thereof, which shall or may during the Lease term
be levied, assessed, imposed, become due and payable or liens upon, or which
arise in connection with the use, occupancy or possession of, or become due and
payable out of, or for the Building or any part thereof. If at any time during
the term of this Lease the method of taxation of real estate prevailing at the
time of execution hereof shall be or has been altered so as to cause the whole
or any part of the taxes now or hereafter levied, assessed or imposed on real
estate to be levied, assessed or imposed upon Landlord wholly or partially as a
capital levy or measured by the rents received therefrom then such new or
altered taxes attributable to the Premises shall be deemed to be included within
the term "Real Estate Taxes" for the purposes of this subparagraph, except that
such shall not be deemed to include any enhancement of said tax attributable to
another income or other ownerships of Landlord. Tenant shall in no event be
responsible for, or reimburse Landlord for any general income tax liabilities
incurred by Landlord.
 
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5.4    Payment of Additional Rent.
 
(a)    It is hereby agreed that Tenant shall pay to Landlord as Additional Rent
during each calendar year during the term hereof an estimate of "Tenant's
Proportionate Share of Operating Expenses and Real Estate Taxes" for the
calendar year as reasonably estimated by Landlord, payable monthly, at the rate
of one-twelfth (1/12) thereof, on the same date and at the same place that base
rent as described in Section 1 is or would otherwise be payable, with an
adjustment to be made between the parties at a later date as hereinafter
provided. Tenant shall deliver to Tenant, as soon as practicable following the
end of any calendar year, but in no event later than June 30th, an estimate of
the Operating Expenses and Real Estate Taxes for the new calendar year (the
"Budget Sheet"). Until receipt of the Budget Sheet, Tenant shall continue to pay
its monthly Tenant's Proportionate Share of Operating Expenses and Real Estate
Taxes based upon the estimate for the preceding calendar year. To the extent
that the Budget Sheet reflects an estimate of Tenant's Proportionate Share of
Operating Expenses and Real Estate Taxes for the new calendar year greater than
the amount actually paid to the date of receipt of the Budget Sheet for the new
calendar year, Tenant shall pay such amount to Landlord within thirty (30) days
of receipt of the Budget Sheet. Upon receipt of the Budget Sheet, Tenant shall
thereafter pay the amount of its monthly Tenant's Proportionate Share of
Operating Expenses and Real Estate Taxes. Notwithstanding the foregoing,
Landlord's failure to deliver the Budget Sheet to Tenant on or before June 30th,
shall in no way serve as a waiver of Landlord's right under this Section. As
soon as practicable following the end of any calendar year, but not later than
June 30th, Landlord shall submit to Tenant a statement in reasonable detail
describing the computations of the Operating Expenses and Real Estate Taxes,
setting forth the exact amount of Tenant's Proportionate Share of Operating
Expenses and Real Estate Taxes for the calendar year just completed (the
"Statement"), and the difference, if any, between the actual Tenant's
Proportionate Share of Operating Expenses and Real Estate Taxes for the calendar
year just completed and the estimated amount of Tenant's Proportionate Share of
Operating Expenses and Real Estate Taxes paid by Tenant to Landlord.
Notwithstanding the foregoing, Landlord's failure to deliver the Statement to
Tenant on or before June 30th, shall in no way serve as a waiver of Landlord's
right under this Section. To the extent that the actual Tenant's Proportionate
Share of Operating Expenses and Real Estate Taxes for the period covered by the
Statement is higher than the estimated Tenant's Proportionate Share of Operating
Expenses and Real Estate Taxes which Tenant previously paid during the calendar
year just completed, Tenant shall also pay to Landlord such balance within
thirty (30) days following receipt of the Statement from Landlord. To the extent
that the actual Tenant's Proportionate Share of Operating Expenses and Real
Estate Taxes for the period covered by the Statement is less than the estimated
Tenant's Proportionate Share of Operating Expenses and Real Estate Taxes which
Tenant previously paid during the calendar year just completed, Landlord shall
credit the excess against any sums then owing or next becoming due from Tenant
to Landlord under the Lease.
 
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(b)    If the Lease term hereunder covers a period of less than a full calendar
year during the first or last calendar years of the term hereof, Tenant's
Proportionate Share of Operating Expenses and Real Estate Taxes for such partial
year shall be calculated proportionately to reflect the number of months in such
year during which Tenant leased the Premises.
 
(c)    Even though the term has expired, when the final determination is made of
Tenant's share of Operating Expenses for the year in which this Lease
terminates, Tenant shall immediately pay any increase due over the estimated
expenses paid and, conversely, any overpayment made in the even said expenses
decreased shall be immediately rebated by Landlord to Tenant.
 
6.    Late Charge. If Landlord does not receive any monthly rent installment
within five (5) days after the day upon which the installment is due, Tenant
agrees to pay a late charge of one percent (1%) of the monthly rent installment
per day, commencing with the due date, not to exceed ten percent (10%) of the
monthly rental installment; provided; however, that if the fifth day of the
month falls on a Saturday, Sunday or legal holiday, the late charge shall not be
due if the rent is received by Landlord on the next business day following the
fifth day of the month.
 
7.    Use of Premises.
 
7.1    Permitted Use. Tenant shall use and occupy the Premises solely as office
space and related uses and for no other purpose whatsoever without Landlord's
prior written consent.
 
7.2    Prohibited Use. Tenant shall not use or permit the use of the Premises in
a manner (nor do or permit to be done in the Premises anything) which will in
any way increase the existing premium for, or otherwise affect any insurance
upon the Premises; or which will cause or be likely to cause structural damage
to any part of the building; or which will constitute a public or private
nuisance; or which violates any laws or regulations of any governmental
authority. Tenant shall not commit or allow to be committed any waste in or upon
the Premises.
 
8.    Signs. Landlord shall provide, at Landlord's expense, a building
directory, which shall include a listing of the business name and suite number
of each tenant within the building, including Tenant. The design and location of
such directory shall be determined in Landlord's sole discretion. Tenant, at
Tenant's expense, may affix and maintain upon or within twelve (12) inches of
the door to the Premises such sign, name or insignia as have obtained written
approval of Landlord as to location, type, size, color and display qualities.
Landlord may require that all signs affixed or maintained by Tenant conform to
standard sign criteria.
 
9.    General Covenants of Tenant.
 
9.1    Compliance with Regulations. Tenant shall promptly comply with all laws,
orders, and regulations of federal, state, county and municipal authorities, and
with any direction of any public officer, pursuant to law, which shall impose
any duty upon Landlord or Tenant with respect to the leased premises including
fire and safety regulations; provided, however, that Tenant shall not be
required to expend more than $2,500.00 during the term of this Lease in
complying with the requirements of this subparagraph. In the event that such
public authority requires repair or improvement to the building which requires
expenditure of more than $50,000.00, Landlord shall have the option, in lieu of
making the repairs or improvements, to terminate this Lease by giving Tenant
notice of such intention. Following such notice, the Lease shall terminate upon
the last day occupancy is permitted by the public authority issuing the order
requiring the repairs or improvements.
 
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9.2    Licenses and Permits. After commencement of this lease, Tenant, at its
sole expense, shall obtain all licenses or permits which may be required for the
conduct of its business with the terms of this Lease, or for the making of
repairs, alterations, improvements or additions, and Landlord, where necessary
will cooperate with Tenant in applying for all such permits or licenses, but
Landlord shall incur no costs or expenses therefore.
 
9.3    Environmental Regulations. Tenant will not cause, or permit to be caused,
any act or practice, by negligence, omission or otherwise, that would adversely
affect the environment or do anything or permit anything to be done that would
violate any federal, state or local laws, regulations or guidelines concerning
the impact on the environment of the conduct of Tenant's business. Any violation
of this covenant shall constitute a default under this Lease.
 
(a)    If Tenant shall become aware of or receive notice or other communication
concerning any actual, alleged, suspected or threatened violation of any
environmental law, regulation, or ordinance, or liability of Tenant for
environmental damages in connection with the Premises or past or present
activities of any person thereon, including but not limited to notice or other
communication concerning any actual or threatened investigation, inquiry,
lawsuit, claim, citation, directive, summons, proceeding, complaint, notice,
order, writ, or injunction relating to same, then Tenant shall deliver to
Landlord, within ten (10) days of the receipt of such notice or communication,
by Tenant, a written description of said violation, liability, or actual or
threatened event or condition, together with copies of any documents evidencing
same. Receipt of such notice shall not be deemed to create any obligation on the
part of Landlord to defend or otherwise respond to any such notification.
 
(b)    Notwithstanding the obligation of Tenant to indemnify Landlord pursuant
to this Lease Agreement, Tenant shall, upon demand of Landlord, and at its sole
cost and expense, promptly take all actions to remediate any environmental
damages caused by Tenant. Tenant shall proceed continuously and diligently with
such remediation, provided that in all cases such actions shall be in accordance
with all applicable requirements of governmental entities. Any such actions
shall be performed in a good, safe and workmanlike manner and shall minimize any
impact on the businesses conducted at the property of which the Premises are a
part. Should Tenant fail to perform or observe any of its obligations or
agreements pertaining to remediation of environmental damage, then Landlord
shall have the right, but not the duty, without limitation upon any of the
rights of Landlord pursuant to this Lease Agreement, to perform the same, either
personally or through its agents, consultants or contractors.
 
(c)    Tenant shall indemnify and hold Landlord its principals, agents or
employees harmless from any and all claims, including all costs, expenses and
attorney's fees, by or on behalf of any person, entity or governmental agency
arising from any breach or default on the part of Tenant in the performance of
the covenant contained in this paragraph 3. In case any action or proceeding is
brought against Landlord its principals, agents or employees by reason of any
such claim, Tenant, upon written notice from Landlord, covenants to resist or
defend, at Tenant's expense, such action or proceeding by counsel reasonably
satisfactory to Landlord.
 
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(d)    If Landlord pays any amount for remediation of substances introduced onto
the Premises the building of which the Premises are a part, or their surrounding
environs by Tenant in violation of the covenant contained in this section,
including detection, removal or confinement of such substances, then the sum so
paid, together with all costs and attorney's fees, shall be paid by Tenant to
Landlord as additional rent within thirty (30) days of written notice to Tenant
of such expenditures.
 
9.4    Indemnity.
 
(a)    Tenant shall indemnify and hold Landlord harmless against and from any
and all claims arising from Tenant's use of the Premises or from the conduct of
its business or from any activity, work or other things done, permitted or
suffered by Tenant in or about the Premises, and shall further indemnify and
hold Landlord harmless against and from any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act or negligence
of Tenant, or any officer, agent, employee, guest or invitee of Tenant, and from
all costs, attorneys' fees, and liabilities incurred in or about the defense of
any such claim or any action or proceeding brought thereon, and in case any
action or proceeding be brought against Landlord by reason of such claim, Tenant
upon notice from Landlord shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons upon the Premises, from any cause other than the negligence of
Landlord, its agents, servants or employees, and Tenant hereby waives all claims
in respect thereof against Landlord. Tenant shall give prompt notice to Landlord
in case of casualty or accidents in the Premises.
 
(b)    Landlord or its agents shall not be liable for any loss or damage to
persons or property resulting from fire, explosion, steam, gas, electricity,
water or rain which may leak from any part of the building or from the pipes,
appliances or plumbing therein or from the roof, street or subsurface or from
any other place resulting from dampness or any other cause whatsoever, unless
caused by or due to the negligence of Landlord, its agents, servants or
employees.
 
9.5    Damage to Premises. Tenant shall not damage nor permit any damage to any
portion of the Premises, and at the termination of this Lease, Tenant shall
deliver the Premises to Landlord in as good condition as existed at the
commencement date of this Lease, ordinary wear and tear and damage by casualty
that is covered by Landlord's insurance excepted. The cost and expense of any
repairs necessary to restore the condition of the Premises shall be borne by
Tenant, and if Landlord undertakes to restore the Premises it shall have a right
of reimbursement against Tenant.
 
9.6    Liens and Encumbrances. Tenant shall pay before delinquency all costs for
work done or caused to be done by Tenant in the Premises which could result in
any lien or encumbrance on Landlord's interest in the Premises or any part
thereof. If any such lien or encumbrance is filed against the Premises or the
Property and Tenant shall fail to cause such lien to be discharged of record
within thirty (30) days after Tenant receives written notice of its filing,
whether by payment or posting of a statutory surety bond with the appropriate
court, Landlord may, at its option, pay such charge and related costs and
interest, and the amount paid, together with reasonable attorney's fees incurred
by Landlord, shall be immediately due from Tenant to Landlord.
 
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9.7    Alterations and Improvements. Tenant shall not make any alterations or
improvements to the Premises without Landlord's prior written approval which
approval shall not be unreasonably withheld. Any alterations or improvements to
the Premises made by Tenant shall be at Tenant's expense and, with the exception
of trade fixtures installed by Tenant, shall become the property of Landlord and
shall be surrendered to Landlord upon termination of this Lease. Landlord, at
its option, may require Tenant to remove any physical additions and repair any
alterations to which Landlord has not previously consented in accordance with
this subparagraph, in order to restore the Premises to the condition existing at
the time Tenant took possession thereof. All costs of such removal and repair
shall be borne by Tenant.
 
9.8    Janitorial Service. Tenant shall provide, at Tenant's sole expense,
janitorial or cleaning service for the Premise which shall clean the Premises in
a manner satisfactory to Landlord.
 
9.9    Non-Smoking Environment. Tenant shall maintain a smoke free environment
within the Premises and all common areas of the building and shall not smoke or
permit smoking of cigarettes, pipes, cigars or other tobacco products within the
Premises or the common areas of the building.
 
10.    Landlord's Covenants.
 
10.1    Services Provided. So long as Tenant is not in default under any of the
covenants of this Lease to be performed by Tenant, Landlord shall provide the
following services:
 
(a)    Heat for the Premises when and as reasonably required for comfortable
occupancy of the Premises, and air conditioning for the Premises when and as
reasonably required for comfortable occupancy of the Premises, on business days
from 8:00 a.m. to 6:00 p.m. (if Tenant requires air conditioning for more
extended hours or on Saturdays, Sundays or on holidays, Landlord will furnish
the same at Tenant's expense);
 
(c)    Water and sewer service for ordinary lavatory and toilet purposes;
 
(d)    Janitorial service and maintenance of the common areas, parking areas and
landscaping, which shall include window cleaning, inside and outside, twice in
each lease year,
 
(e)    Electricity sufficient for Tenant's permitted uses of the Premises;
 
10.2    Service Interruption. Landlord shall not be liable for the interruption
of heating, plumbing, air conditioning, electrical systems, or cleaning or other
services, if any, by causes beyond Landlord's control or when necessary by
reason of accident or for repairs, alterations, replacements, or improvements
necessary or desirable in the judgment of Landlord for as long as maybe
reasonably required by reason thereof. No such interruption of service shall be
deemed a default by Landlord nor shall it be deemed an eviction or disturbance
of Tenant's use or quiet enjoyment of the Premises.
 
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10.3    Repairs. Landlord shall repair and maintain the structural portions of
the building in which the Premises are located, including exterior walls and
roof. Landlord shall not be liable for failure to make such repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need for such repairs or maintenance is given
to Landlord by Tenant.
 
10.4    Non-Smoking Environment. Landlord shall include subparagraph 9.9 in all
leases for the Lotus Building, and shall make every reasonable effort to enforce
such provision as to all tenants.
 
11.    Personal Property.
 
11.1    Abandonment by Tenant. Any property of Tenant remaining in the Premises
at any time when Landlord recovers possession of the Premises shall be deemed
abandoned, and Landlord shall have no responsibility or liability whatsoever for
any of said personal property. Without modifying the foregoing, Landlord may
store any of such property in any public or private warehouse, and Tenant shall
pay to Landlord promptly upon demand all costs incurred in connection with such
property, including the costs of moving and storage, court costs, and attorneys'
fees. Landlord may, at its option, without notice, sell any such personal
property at any public or private sale for such prices as Landlord may obtain,
and Landlord shall apply the proceeds of such sale first to the costs incurred
in the connection with such property, and then to any amounts due under this
Lease from Tenant to Landlord, and the surplus, if any, to Tenant.
 
11.2    Landlord's Lien. Tenant hereby grants to Landlord a lien upon and a
security interest in all property now owned or hereafter acquired by Tenant
which shall come in or be placed upon the Premises, to secure the payment of
rent and the performance of each and every other obligation hereunder to be
performed by Tenant. Following any event of default, Landlord, without notice or
demand, may take possession of and sell such property at public and private sale
upon giving Tenant ten (10) days' notice. The proceeds of any such sale shall be
applied first to the payment of expenses thereof, second to the discharge of the
unpaid rent or other liability hereunder, and the balance, if any, shall be paid
to Tenant. Tenant agrees to execute and record any financing statements and
other documents necessary to perfect or record the lien herein granted. Failure
to obtain execution or to record financing statements by the Landlord shall have
no effect upon the granted herein.
 
11.3    Personal Property Tax. Tenant shall pay, or cause to be paid, before
delinquency any and all taxes levied or assessed and which become payable during
the term hereof upon all Tenant's leasehold improvements, equipment, furniture,
fixtures, and any other property located in the Premises. In the event any or
all of Tenant's leasehold improvements, equipment, fixtures, furniture and other
personal property shall be assessed and taxed with the real property, Tenant
shall pay to Landlord its share of such taxes within ten (10) days after
delivery to Tenant by Landlord of a statement in writing setting forth the
amount of such taxes applicable to Tenant's property.
 
12.    Entry Upon Premises By Landlord. After giving reasonable notice to
Tenant, which need not be in writing, Landlord and its representatives may enter
the Premises at any reasonable time, for the purpose of inspecting the Premises,
performing any work which Landlord may reasonably elect to undertake or which is
made necessary by reason of Tenant's default under the terms of this Lease, or
exhibiting the Premises for sale, lease or mortgage financing, or any other
reasonable purpose. Tenant hereby waives any claim for damages or for any injury
or inconvenience to or interference with Tenant's business, loss of occupancy or
quiet enjoyment of the Premises, or any other loss occasioned thereby. For each
of the aforesaid purposes, Landlord shall at all times have and retain a key
with which to unlock all of the doors in, upon and about the Premises.
 
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13.    Damage to Premises. In the event that without negligence or willful
misconduct of Tenant or its employees, agents, or licensees, the Premises are
damaged by fire or other casualty to such extent that the Premises are rendered
substantially inaccessible or unusable for office purposes then either Landlord
or Tenant shall have the option to terminate this Lease, provided that the party
wishing to terminate this Lease must give written notice of termination to the
other party within thirty (30) days after the date upon which such damage occurs
or the option to terminate shall be void. In the event that either party
exercises the option to terminate, this Lease shall be deemed to terminate on
the third day after the giving of said notice, and Tenant shall surrender
possession within ten (10) days thereafter. In the event neither party exercises
the aforesaid option to terminate this Lease, Landlord, at its expense, shall
repair the damage with reasonable dispatch, restoring the Premises as nearly as
possible to its condition prior to such damage and all Base Rent and Additional
Rent payable hereunder shall abate from the date the damage occurred until such
time as the Premises have been entirely repaired and restored. Any disbursement
of insurance proceeds by a holder of a deed of trust shall be deemed to have
been made by Landlord. In determining what constitutes reasonable dispatch,
consideration shall be given to delays caused by strikes, adjustment of
insurance, and other causes beyond Landlord's control. Notwithstanding the
foregoing provision, in the event the Premises are damaged by fire or other
insured casualty due to the negligence or willful misconduct of Tenant, or the
employees, agents or licensees of Tenant then without prejudice to any other
rights and remedies of Landlord or its insurer, the damage shall be repaired as
provided above. Tenant, however, shall not be relieved of any liability for any
damage to the Premises caused by any negligence or willful misconduct of Tenant
or its employees, agents or licensees.
 
14.    Liability Insurance. At all times Tenant shall, at Tenant's expense, keep
in full force and effect a policy of comprehensive public liability insurance,
with a company acceptable to Landlord, insuring Landlord and Tenant against any
liability arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be in an amount
not less than $1,000,000.00 for injury or death of one person in any one
accident or occurrence, and in an amount not less than $1,000,000.00 for injury
or death of more than one person in any one accident or occurrence. Such
insurance shall further insure Landlord and Tenant against liability for
property damage in an amount not less than $500,000.00. The limit of any such
insurance shall not, however, limit the liability of Tenant under this Lease.
Tenant shall deliver to Landlord copies of the policies of insurance required
herein or certificates evidencing the existence and amounts of such insurance
with loss payable clauses satisfactory to Landlord.
 
15.    Quiet Enjoyment. Tenant, upon payment of the required rents and
performing the terms, conditions, covenants and agreements contained in this
Lease, shall peaceably and quietly hold and enjoy the Premises during the full
term of this Lease. Landlord shall reasonably endeavor to insure Tenant's quiet
enjoyment, but Landlord shall not be responsible for the acts or omissions of
any third party that may interfere with Tenant's use and enjoyment of the
Premises, so long as such acts or omissions of such third party are beyond
Landlord's control.
 
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16.    Assignment and Subletting.
 
16.4    Assignment by Landlord. Landlord and owner shall have the right to
transfer and assign, in whole or in part., right, title and interest in the
Premises and its rights and obligations in and under this Lease. Landlord and
owner shall be released from all obligations from the date of transfer, except
for obligations as related to the period of time from the commencement date to
the date of transfer and provided that Landlord or owner shall transfer Tenant's
security deposit to its transferee and that such transferee agrees in writing to
assume Landlord's or owner's obligation to hold such security deposit consistent
with the terms of this Lease.
 
16.5    Assignment by Tenant. Tenant shall not assign this Lease or any interest
therein, or sublet all or any part of the Premises without the prior written
consent of Landlord, which consent shall not be unreasonably withheld; provided,
however, that as a condition of giving such consent:
 
(a)    Landlord shall have the right to make reasonable inquiry into the
financial qualification of any proposed subtenant or assignee to operate a
business enterprise upon the Premises, and to perform a lease agreement
therefor, and Landlord's obligation to permit assignment of this Lease or a
sublease is contingent upon Landlord's approval of the proposed subtenant's or
assignee's financial qualification. "Reasonable inquiry" may include, without
limitation, requiring any prospective subtenant or assignee to supply to
Landlord current and complete financial statements and credit reports.
 
(b)    Upon Tenant's application for Landlord's consent to assignment or
sublease, Landlord shall have the option to charge Tenant an administrative
charge, not to exceed $500.00, to reimburse Landlord for its costs in reviewing
Tenant's application for such assignment or sublease and making any inquiry
related thereto. In addition, and as a condition of Landlord's approval, Tenant
shall reimburse Landlord for any attorney fees incurred by Landlord in review or
negotiation of any assignment or sublease.
 
(c)    If Tenant is a corporation or a partnership, an assignment, as that term
is used herein, includes one or more sales or transfers by which an aggregate of
more than 50% of Tenant's shares or partnership interests shall be vested in a
party or parties who are not shareholders or partners as of the date of this
Lease. For purposes of this paragraph, share and partnership interest ownership
shall be determined in accordance with the principles set forth in Section 544
of the Internal Revenue Code.
 
(d)    Without modifying the foregoing provisions of subparagraph 16.2, Landlord
will permit the assignment of this lease to an entity owned or controlled by the
individuals identified as Tenant in the preamble of this Lease, provided that
Tenant makes written application for consent to such assignment accompanied by
documentation sufficient for Landlord to determine that such entity legally
exists and is owned or controlled by said individuals.
 
16.6    Continuing Liability. Notwithstanding any sublease or assignment of this
Lease, Tenant shall remain liable under all of the provisions and conditions of
this Lease for the remaining term of the Lease.
 
17.    Default by Tenant.
 
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17.7 Events of Default. The following shall be deemed to be events of default by
Tenant under this Lease:
 
(a)    Failure by Tenant to pay when due any installment of Base Rent,
Additional Rent, or any other sum payable by Tenant under this Lease.
 
(b)    Abandonment by Tenant of the Premises for a period of thirty (30)
consecutive days except following damage to, or destruction of the Premises;
 
(c)    Failure by Tenant to comply with any term, provision or covenant of this
Lease, other than the payment of rent, and the failure is not cured within ten
(10) days after written notice to Tenant; provided, however, that if such
default shall be of such a nature that the same cannot be cured or remedied
within such ten (10) day period, then Tenant shall not be deemed to be in
default hereunder if within such ten (10) day period Tenant shall commence to
cure such default and shall thereafter diligently and in good faith proceed to
cure such default.
 
17.8    Remedies for Tenant's Default. Upon the occurrence of any event of
default, Landlord shall have the option:
 
(a)    To terminate this Lease; or
 
(b)    Terminate Tenant's right to possession of the Premises and re-enter or
repossess the Premises, either by legal proceeding, surrender or otherwise, and
dispossess and remove therefrom Tenant or other occupants thereof and their
effects without being liable to any prosecution or civil damages. Landlord shall
use its best efforts to rerent the Premises at such rental and upon such other
terms and conditions as Landlord may deem advisable in its reasonable
discretion. However, Tenant shall remain liable under the terms of this Lease,
and Tenant's obligations including the obligation to pay rent shall continue for
the full term of this Lease, provided, however, that Tenant shall receive
appropriate credit for amounts received by Landlord as a result of any
rerenting.
 
17.9    Waiver of Default or Remedy. Failure of Landlord to declare an event of
default immediately upon its occurrence, or delay in taking any action in
connection with an event of default, shall not constitute a waiver of the
default, but Landlord shall have the right to declare the default at any time
and take such action as is lawful or authorized under this Lease. Failure by
Landlord to enforce the remedy provided upon an event of default shall not be
deemed or construed to constitute a waiver of the default or of any other
violation or breach of any of the terms, provisions and covenants contained in
this Lease.
 
18.    Force Majeure. In the event Landlord or Tenant shall be delayed or
hindered in or prevented from performing any of the agreements, provisions or
covenants required hereunder by restrictive governmental laws or regulations,
riots, insurrection, war or other reason of a like nature not the fault of
Landlord or Tenant, in performing work or doing acts required under the terms of
this Lease, then performance of such act shall be extended for a period
equivalent to the period of such delay.
 
19.    Holding Over. In the event of holding over by Tenant after the expiration
or termination of this Lease, the holdover shall be as a month to month tenancy
and all of the terms and provisions of this Lease shall be applicable during
that period, except that Tenant shall pay Landlord as rental for the period of
such hold over an amount equal to one hundred twenty percent (120%) of the rent
and additional rent which would have been payable by Tenant had the holdover
period been a part of the original term of this Lease, including any adjustments
made during the lease term. Tenant agrees to vacate and deliver the Premises to
Landlord upon Tenant's receipt of notice from Landlord to vacate. The rent
payable during the holdover period shall be payable to Landlord on demand. No
holding over by Tenant, whether with or without consent of Landlord, shall
operate to extend this Lease except as otherwise expressly provided in this
Lease. In the event Tenant fails to surrender the Premises upon termination or
expiration of this Lease, then Tenant shall indemnify Landlord against loss or
liability resulting from any delay by Tenant in surrendering the Premises,
including, but not limited to, any amounts required to be paid to third parties
which were to have occupied the Premises and any reasonable attorney's fees
related thereto.
 
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20.    Condemnation.
 
20.10    Taking of Premises. If, during the term of this Lease, all or a
substantial part of the Premises are condemned or taken for any public or
quasi-public use by any public authority, under any law, ordinance or
regulation, by right of eminent domain or purchase in lieu thereof, then this
Lease shall terminate upon the date when possession is taken by such public
authority.
 
20.11    Partial Taking. In the event a portion of the Premises or the portion
of the parking area currently paved, adjacent to the Building and located on the
Property, shall be taken for any public or quasi-public use by any public
authority, under any law, ordinance or regulation, or by right of eminent domain
or by purchase in lieu thereof, this Lease shall be voidable in the discretion
of either party provided that the party wishing to terminate the Lease must give
written notice of termination within thirty (30) days after Tenant is given
notice of Landlord's consent to the taking or the entry of an order for the
taking by a court of competent jurisdiction. The Lease shall terminate upon the
date when possession of the Premises is taken by the public authority.
 
20.12    Condemnation Proceeds. All compensation awarded or paid upon such a
total or partial taking of the Premises by condemnation shall belong to and be
the property of Landlord; provided, however, that nothing contained herein shall
be construed to preclude Tenant from prosecuting any claim directly against the
condemning authority in such condemnation proceeding for loss of the leasehold,
business, or depreciation to, damage to, or cost of removal of, or for the value
of stock, trade fixtures, equipment, furniture, and other personal property
belonging to Tenant. Landlord and Tenant hereby agree to cooperate in the joint
prosecution of their claims against the condemning authority.
 
21.    Miscellaneous Provisions.
 
21.13    Applicable Law and Construction. This Lease and the rights, duties and
obligations hereunder shall be controlled by the laws of the State of Colorado.
The singular shall include the plural and the plural shall include the singular
as appropriate. Any reference to gender shall include all genders as
appropriate. The titles and headnotes of paragraphs and subparagraphs of this
Lease are for reference only, are not intended as an interpretation, and shall
not affect or change the context or meaning of this Lease.
 
21.14    Parties Bound. All covenants and agreements contained in this Lease
shall extend to, be binding upon and inure to the benefit of the parties to this
Lease and their respective heirs, personal representatives, successors, legal
representatives and assigns.
 
21.15    Severability. The invalidity or unenforceability of any provision of
this Lease shall not affect or impair the validity or enforceability of any
other provision in this Lease.
 
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21.16    Notices. Whenever any notice is required or permitted hereunder, such
notice shall be in writing unless otherwise specifically provided. Except as
required or permitted under applicable law, any notice or document required to
be delivered hereunder shall be deemed to be given and delivered four (4) days
after it is deposited in the United States Mail, certified mail, Return Receipt
Requested, addressed to the Landlord at the address set forth at subparagraph
5.1(i) and to Tenant at the Premises, or at such other addresses as either party
has specified by written notice delivered in accordance herewith.
 
21.17    Attorney Fees. In the event either party initiates legal action due to
the other party's breach of any covenant, condition or agreement contained in
this Lease, the prevailing party in such legal action shall be entitled to
recover from the losing party all of the prevailing party's reasonable costs,
expenses and attorney fees incurred in relation to such legal action.
 
21.18    Entire Agreement. This Lease contains the entire agreement of the
parties, and there are no representations, warranties, agreements, promises or
understandings, either oral or written, between them, except such as are
expressly set forth in this Lease. Tenant represents and agrees that it has not
relied upon any statements, representations, warranties, agreements or promises
made by Landlord, or anyone acting or claiming to be acting on Landlord's
behalf, with respect to this Lease or the Premises, including, without
limitation, its size or physical condition.
 
21.19    Modification. This Lease may not be altered, waived, amended or
extended except by an instrument in writing signed by the party or parties to be
bound thereby.
 
21.8    Bathroom Access. Notwithstanding any other provision of this Lease to
the contrary, Tenant agrees to permit use of the bathroom facility within the
Premises on the date of this Lease which has been modified to provide access to
persons with disabilities by all persons using the building on business days
from 9:00 a.m. to 5:00 p.m. including other tenants and their employees,
customers, clients and patrons.
 
WHEREFORE, the parties execute this Lease effective on the date set forth in the
preamble on page 1 of this Lease.

Landlord:
 
Tenant:
     
United Professional Management, Inc.
 
AeroGrow International Inc.
     
/s/ Trent Cole
 
/s/ Michael Bissonnette
By: Trent Cole, President
 
By: Michael Bissonnette

 
 
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