EXHIBIT
        10.26

       

    

    EMPLOYMENT
      AGREEMENT

     

    Employment
      Agreement (the “Agreement”), dated as of July 24, 2006, by and between AeroGrow
      International, Inc., a Nevada corporation (the “Company”), and Randal Lee
      Seffren (“Employee”).

     

    In
      consideration of the promises and conditions contained herein, the parties
      hereto agree as follows:

     

    Section
      1. Employment.
      The
      Company hereby agrees to employ Employee, and Employee hereby accepts employment
      by the Company effective as of the date of this Agreement (the “Commencement
      Date”), upon the terms and subject to the conditions hereinafter set
      forth.

     

    Section
      2. Duties.
      Employee
      shall serve as the Chief Marketing Officer of the Company. Employee will perform
      the duties attendant to his executive position with the Company under the
      direction of the Chief Executive Officer and the Board of Directors of the
      Company.

     

    Section
      3. Term.
      Unless
      Employee's employment hereunder is terminated earlier pursuant
      to Section 7 of this Agreement, Employee's employment hereunder shall begin
      on
      July
      1, 2006,
      and shall expire on the last day of the twenty fourth (24th)
      month
      (calculated from the first day of the month following execution of this
      agreement) (the initial “Contract Term”), provided that upon the expiration of
      the initial Contract Term, the Employee's employment hereunder shall continue
      for additional consecutive extension terms of one (1) year each until either
      party gives notice of termination to the other at least thirty (30) days prior
      to end of the Contract
      Term. The initial Contract Term and any extension is referred to as the Contract
      Term.

     

    Section
      4. Place
      of Employment. Employee
      will live in and maintain an office in the greater Chicagoland area, or location
      of his choosing. Employee will commit approximately 50% of his working time
      to
      the Chicago office and will commit approximately 50% of his working time
      traveling on behalf of the Company to either his office at Company headquarters
      or to other locations as mutually agreed to. Employee when working outside
      of
      the Company headquarters will make his best efforts to be accessible and
      available to the Company Executive team as needed during normal business hours.
      Employee agrees to use all technological devices available to help ensure proper
      communication including webcams and cell phones as needed.

     

    Section
      5. Compensation
      and Benefits. In
      consideration for the services of the Employee hereunder, the Company will
      compensate Employee as follows:

     

    (a)    
       Base
      Salary. Beginning
      on the Commencement Date, Employee shall be entitled to receive a base salary
      of
      $200,000 per annum with an annual review. Such Base Salary shall be payable
      in
      periodic installments in accordance with the terms of the Company's regular
      payroll practices in effect from the time during the term of this Agreement
      and
      subject to applicable tax withholding, but in no event less frequently than
      once
      each month. Base salary is to be reviewed annually prior to the anniversary
      date
      and will be adjusted upwards as a performance based increase provided at the
      discretion of the CEO and/or Governance Committee of the AeroGrow Board of
      Directors.

     

    
      
        
        

      

      
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    (b
      )     Bonus.
      Employee
      shall receive an annual cash bonus in an amount representing 1.5% of the EBITDA
      of the Company as determined by the Company’s annual financial statements and
will
      be
      pro rated for any portion of such annual period covered under this Agreement.
      Such bonus
      shall be
      payable not later than one hundred and twenty (120) days after the end of each
      of the Company’s
      fiscal years covered under this agreement. Employee acknowledges the foregoing
      may be modified by the Board of Directors subsequent to the initial Contract
      Term, however, in such event; the Bonus herein shall in no event be less
      favorable than that granted to the Company’s senior executives. In the event the
      Employee is terminated or the contract period has expired and has not been
      renewed, Employee will receive the pro rata bonus he has earned during the
      employment period, and the bonus will be payable not later than one hundred
      and
      twenty (120) days after the end of the Company’s fiscal year.

     

       
      (c)     Benefits.
      Employee
      shall be entitled to participate in and receive benefits under any and all
      employee benefit plans and programs which are from time to time generally made
      available to the executive employees of the Company, subject to approval and
      grant by the Governance Committee of the Board with respect to programs calling
      for such approvals or grants and consistent with plan terms. Additionally,
      Company will provide a $1,350 payment towards Employee’s current monthly health
      and dental insurance until such time as Company offers such coverage to Employee
      directly. Employee shall also be given the option to opt-out of healthcare
      and
      dental benefits provided by Company. In the event Employee exercises the opt-out
      option, Employee shall be entitled to receive a non-accountable/non-taxable
      expense allowance of $950 per month as reimbursement for Employee’s health and
      dental insurance premiums. Additionally, should Employee exercise the opt-out
      option, and later wishes to enroll in the Company’s health and dental insurance
      plan, Employee shall be given that right, subject to State and Federal
      regulations. Employee will accrue 1.67 days of vacation for each month of
      employment in addition to the holidays normally paid for in accordance with
      Company policy, and any other company-wide paid holiday days granted by Company.
      Vacation accrual will be post-dated to a January 1, 2006 start date. Vacation
      days earned, accrued and not used will roll over from year to year, not to
      exceed ten (10) days rollover per year. At Employee termination, end
      of
      contract period not renewed or Employee resignation any accrued vacation days
      earned but
      not used
      will be paid in a lump sum to Employee.

     

      
      (d)     Equity
      Compensation. Employee
      shall be entitled to participate in and receive benefits under the 2005 Equity
      Compensation Plan, and any successor plan providing for compensation in the
      form
      of stock, stock options and other equity-related compensation provided by the
      Company to its employees. The initial grant of the Stock Options granted to
      Employee pursuant to the Company’s 2005 Equity Compensation Plan shall not be
      less than 125,000 options to purchase the common stock of the Company at an
      exercise price of not greater than $5.00. The options shall; (i) vest pursuant
      to terms no less than a minimum of 50% of the amount of the grant per each
      twelve month period beginning January 1, 2006; (ii) shall not expire in less
      than five (5) years from the date of grant, (iii) shall be subject to other
      standard terms and conditions under the 2005 Equity Compensation Plan, and;
      (iv)
      shall have other terms and conditions no less favorable than that granted to
      other senior executives of the Company. Employee agrees that the foregoing
      options shall be subject to the lockup provisions as required by the Company’s
      investment bankers in conjunction with a private placement offering conducted
      during February 2006. In the event that the Employee is terminated or the
      Employee’s contract period has expired and not renewed, the total amount of
      options, not less than 125,000 will be immediately awarded to Employee and
      said
      options will be vested in full. Employee and Company hereby agree that the
      option grant of 125,000 options granted by the Company on March 28, 2006 was
      in
      full satisfaction of the foregoing.

     

    
      
        
        

      

      
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    (e )  
       Indemnification.
      Company
      will indemnify, and hold harmless Employee against all claims
      made against Employee and Company. Company will use commercially reasonable
      efforts
      to
      obtain and continue in force Directors & Officers liability
      insurance.

     

    Section
      6. Expenses.

     

    (a)    
       It is acknowledged that Employee, in connection with the services to be
      performed by
      him
      pursuant to the terms of this Agreement, will be required to make payments
      for
      travel, entertainment of business associates and similar expenses. The Company
      will reimburse Employee for all expenses authorized by the Company and incurred
      by Employee in the performance
      of his duties hereunder within fifteen days from date Employee submits a request
      for
      such
      reimbursement. Employee will comply with such budget limitations and approval
      and reporting
      requirements with respect to expenses as the Company may establish from time
      to
      time.
      Travel
      to Company headquarters, including but not limited to corporate housing, meals,
      airfare, rental car and miscellaneous expenses incurred while working at Company
      headquarters will be reimbursed to Employee as travel expense. While not a
      material requirement of this Agreement, Employee may exercise the option to
      relocate to Boulder, Colorado. Should relocation take place the Company’s
      obligation to Employee shall include tax-free reimbursement all of Employee’s
      expenses related to such relocation up to a maximum of $12,000 or a greater
      amount that is mutually agreeable to both parties at that time.

     

    (b)   
       In addition to the foregoing, Employee shall be entitled to receive a
      non-accountable/non-taxable expense allowance of $1,200 per month as
      reimbursement for Employee’s
      auto, home office and other expenditures in addition to those included in
      Section 6(a)
      that are
      commensurate with Employee’s position.

     

    Section
      7. Termination.

     

    (a)  For
      Cause by Company. The
      Company may terminate the Employee's employment under
      this Agreement at any time for Cause. “Cause” is defined as (i) a material act
      of dishonesty
      by
      Employee in connection with his responsibilities as an Employee, (ii) conviction
      of, or plea of nolo contendere to, a felony, (iii) gross misconduct, or (iv)
      continued substantial violation of his employment duties after Employee has
      received a written demand for performance from the Company which specifically
      sets forth the factual basis for the Company’s belief that Employee has not
      substantially performed his duties.

     

    (b)  Without
      Cause by Company. The
      Company may terminate the Employee's employment under this Agreement at any
      time
      without Cause. If the Company breaches any term of this Agreement and fails
      to
      cure such breach within thirty (30) days of notice of such breach from the
      Employee, and if Employee terminates his employment with the Company within
      thirty (30) days after the period for the cure of the breach by the Company
      expires, the Company shall be deemed to have terminated the Employee's
      employment hereunder without Cause. Material breach, as defined herein shall
      include, without limitation, (a) any failure by the Company to comply with
      Section 4, 5 or 6 hereof in any material way; or (b) any misrepresentation
      by
      Company to any government or other violation of law.

     

    
      
        
        

      

      
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    (c)  Entitlements.
      If
      the
      Employee’s employment is terminated pursuant to Section 7, the Employee shall be
      entitled to; (i) a lump sum payment totaling six (6) months of his Base Salary,
      at the rate in effect immediately before the termination; (ii) the payment
      by
      the Company of medical benefits payable to employee until the end of the twelfth
      (12th
      ) month
      following termination, and; (iii) the pro rata portion of bonus payable pursuant
      to Section 5(b) as determined by the EBITDA as of the nearest quarter end
      financial statements of the Company. The foregoing is provided that the Employee
      honors the restrictive covenants provided in this Agreement and executes a
      release of all claims arising from his employment by the Company, in such form
      as may then be used by the Company respecting termination of
      employees.

     

    (d)  Without
      Cause by Employee. The
      Employee may terminate the Employee's employment under this Agreement at any
      time without Cause upon giving at least thirty (30) day’s advance written
      notice.

     

    (e)  Change
      of Control. Upon
      termination by the Company without cause after the occurrence of a Change of
      Control, Employee shall be entitled to; (i) a lump sum payment in an amount
      equal to 12 months of his Base Salary, at the rate in effect immediately before
      the termination; (ii) the payment by the Company of medical benefits payable
      to
      employee until the end of the twelfth (12th
      ) month
      following termination, and; (iii) the pro rata portion of bonus payable pursuant
      to Section 5(b) as determined by the EBITDA as of the nearest quarter end
      financial statements of the Company. Upon the occurrence of a Change of Control,
      Employee may, at Employee’s option, terminate Employee's employment under this
      Agreement after (90) ninety days of the occurrence of such Change of Control
      upon giving at least one hundred and eighty days (180) day’s advance written
      notice. For purposes of this Agreement, a "change of control" shall mean the
      appointment by the Board of Directors of a new Chief Executive Officer, a change
      in Employee’s reporting structure, or a material change in job responsibilities
      not mutually agreed to between Employee and Company.

     

    (f)  Disability.
      If
      Employee becomes permanently and totally disabled, this Agreement shall be
      terminated. Employee shall be deemed permanently and totally disabled if he
      is
      unable to engage in the activities required by this Agreement by reason of
      any
      medically determinable physical or mental impairment, as confirmed by three
      independent physicians, which can be expected to result in death or which has
      lasted or can be expected to last for a continuous period of not less than
      twelve (12) months. Upon termination due to disability, any portion of any
      of
      the Options granted to the Employee that is not then vested shall vest and
      all
      Options shall be exercisable by Employee until ninety (90) days after the
      termination. Nothing herein shall limit the entitlement of the Employee to
      any
      other rights or benefits then available to the Employee under any plan or
      program of the Company or under applicable law.

     

    (g)  Death.
      If
      Employee dies during the Employment Term, the Employment shall be terminated
      on
      the last day of the calendar month of his death and any portion of any of the
      Options granted to the Employee that is not then vested shall become vested
      and
      all Options shall be exercisable by the designated beneficiary, the estate
      or
      personal representative of Employee ninety (90) days after death. This Section
      will not limit the entitlement of the Employee's estate, personal representative
      or beneficiaries to any death or other benefits then available to the
Employee
      under any life insurance, stock ownership, stock options, or other benefit
      plan
      or policy
      that is
      maintained by the Company for the Employee's benefit.

     

    (h)  Non-Renewal
      Is Termination. The
      notice by the Company not to renew the Contract Term for another year shall
      be
      deemed a termination without cause by the Company under this
      Agreement.

     

    
      
        
        

      

      
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    Section
      8. Restrictive
      Covenants and Representations.

     

    (a)  Confidential
      Data. The
      Employee will hold in a fiduciary capacity and will not reveal, communicate
      or
      divulge during the period of his employment by the Company or thereafter, any
      information, knowledge or data to any person, firm or corporation other than
      the
      Company or persons, firms or corporations designated by the Company, which
      relates to the names of the customers, finances, technical data concerning
      products or services, or any other secret or confidential information, knowledge
      or data of the Company or of any firm owned by the Company, which was learned
      through or as a result of employment by the Company.

     

    (b)  Covenant
      Not to Compete. In
      consideration for his employment hereunder, during the term of this agreement,
      and for twenty-four (24) months after the termination of this agreement,
      whichever is later, the Employee shall not, within the United States, either
      directly or indirectly, own, have a proprietary interest of any kind in, be
      employed by, or serve as a consultant to or in any
      other
      capacity for any firm which is in the primary business of providing aeroponics
      products or
      businesses, or which is otherwise engaged in a business that is competitive
      with
      that conducted
      by the
      Company. Notwithstanding the foregoing, the Employee may invest in the
      securities of any corporation whose shares are listed on a national securities
      exchange or registered under the Securities Exchange Act of 1934.

     

    (c)  Ownership
      of Inventions. There
      shall become the exclusive property of the Company, its
      successors and assigns, every invention and improvement conceived, invented
      or
      developed by
      the
      Employee during the term of his employment hereunder relating to products or
      services to be manufactured, sold, used or in the process of development by
      the
      Company or by any parent or affiliate of the Company during such period of
      employment, or which may be sold or used in competition
      with any such product. Employee agrees to execute such assignments, instruments
      or
      other
      documents as the Company or its counsel may request to implement this
      paragraph.

     

    (d)  Non-Solicitation
      of Employees. The
      Employee and any entity controlled by him or with which he is associated (as
      the
      terms "control" and "associate" are defined in the Exchange Act) shall not,
      during the Contract Term and for a term of eighteen (18) months thereafter,
      directly or indirectly solicit, interfere with, offer to hire or induce any
      person who is or was an officer or employee of the Company or any affiliate
      (as
      the term "affiliate" is defined in the Exchange Act) (other than secretarial
      personnel) to discontinue his or her relationship with the Company or an
      affiliate of the Company, in order to accept employment by, or enter into a
      business relationship with, any other entity or person. (These acts are
      hereinafter referred to as the "prohibited acts of solicitation.")

     

    (e)  Return
      of Property. Upon
      termination of employment, and at the request of the Company, the Employee
      agrees to promptly deliver to the Company all Company or affiliate memoranda,
      notes, records, reports, manuals, drawings, designs, computer files in any
      media, and
      any
      other documents (including extracts and copies thereof) relating to the Company
      or its affiliates, and all other property of the Company. Upon termination,
      the
      Executive shall cease to use all such materials and information set forth under
      this Section 8(a).

     

    
      
        
        

      

      
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    (f)
      Representations.
      The
      Employee represents and warrants to the Company that he has full power and
      authority to enter into this Agreement and perform his duties hereunder, and
      that he has no outstanding agreement, whether oral or written or any obligation
      that is or may be in conflict with any of the provisions of this Agreement
      or
      that would preclude Employee from complying with the provisions of this
      Agreement and the performance of his duties shall not result in a breach of,
      or
      constitute a default under, any agreement , whether oral or written,
including,
      without limitation, any restrictive covenant or confidentiality agreement,
      to
      which he is
      a party
      or by which he may be bound. Employee further represents and warrants that
      he
      has not misappropriated any confidential information and/or trade secrets of
      any
      third party that he intends
      to use in the performance of his duties under this Agreement. Company and the
      individual
      signing
      this Agreement on behalf of Company each represent and warrant that they each
      have full power and authority to enter into this Agreement, that there are
      no
      agreements whether oral or written, or legal requirements, that conflict with
      any provisions of this Agreement, and that the performance of this Agreement
      shall not result in a breach of, or constitute a material default, under, any
      such agreement or legal requirement.

     

    Section
      9. Indemnities

     

    (a)  Employee.
      Employee
      shall indemnify and hold harmless the Company from and against any losses,
      claims, damages or liabilities which arise out of any breach of Employee's
      representations and warranties set forth in Section 8 (f) of this Agreement
      as
      determined in a court of law and made part of a final judgment after exhaustion
      of, or the time has lapsed for, any appeal thereof.

     

    (b)  Company.
      Company
      shall defend, indemnify and hold Employee harmless from and against any losses,
      claims, damages or liabilities which arise out of any: (a) action or inaction
      taken or not taken by him in the ordinary course of Company's business or as
      directed by the Chairman, CEO or the Board unless a court of law determines
      that
      Employee has breached the Employee's representations and warranties set forth
      in
      Section 8 (f) of this Agreement as part of a final judgment after exhaustion
      of,
      or the time has lapsed for, any appeal thereof. The Company agrees to obtain
      and
      maintain Directors and Officers Liability Insurance which will specifically
      cover Employee during the Contract Term with coverage of not less than $1.5
      million.

     

    Section
      10. General.

     

    (a)
      Notices.
      All
      notices and other communications hereunder will be in writing or by written
      telecommunication, and will be deemed to have been duly given if delivered
      personally or
      if
      mailed by certified mail, return receipt requested, or by written
      telecommunication, to the relevant address set forth below, or to such other
      address as the recipient of such notice or communication will have specified
      to
      the other party hereto in accordance with this Section ll(a):

     

    If
      to
      Employer, to:

     

    AeroGrow
      International, Inc. 
900 28th Street, Suite 201 
Boulder, Co
      80303

     

    If
      to
      Employee, to:

     

    Randal
      Lee Seffren
1545 Hackberry Road
Deerfield, IL 60015

     

    
      
        
        

      

      
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    (b)  Withholding;
      No Offset. All
      payments required to be made by Employer under this Agreement to Employee will
      be subject to the withholding of such amounts, if any, relating to federal,
      state and local taxes as may be required by law. No payment under this Agreement
      will be subject to offset or reduction attributable to any amount Employee
      may
      owe to the Company or any other person.

     

    (c)  Equitable
      Remedies. Each
      of
      the parties hereto acknowledges and agrees that upon any breach by Employee
      of
      his obligations under any of Section 7 hereof, the Company will have no adequate
      remedy at law, and accordingly will be entitled to specific performance and
      other appropriate injunctive and equitable relief.

     

    (d)  Severability.
      If
      any
      provision of this Agreement is held to be illegal, invalid or unenforceable,
      such provision will be fully severable and this Agreement will be construed
      and
      enforced as if such illegal, invalid or unenforceable provision never comprised
      a part hereof; and the
      remaining provisions hereof will remain in full force and effect and will not
      be
      affected by the
      illegal,
      invalid or unenforceable provision or by its severance herefrom. Furthermore,
      in
      lieu of such illegal, invalid or unenforceable provision, there will be added
      automatically as part of this Agreement
      a provision as similar in its terms to such illegal, invalid or unenforceable
      provision as
      may be
      possible and be legal, valid and enforceable.

     

    (e)  Waivers.
      No
      delay
      or omission by either party hereto in exercising any right, power or privilege
      hereunder will impair such right, power or privilege, nor will any single or
      partial exercise
      of any such right, power or privilege preclude any further exercise thereof
      or
      the exercise
      of any
      other right, power or privilege.

     

    (f)  Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which will be deemed
      an original, and all of which together will constitute one and the same
      instrument.

     

    (g)  Captions.
      The
      captions in this Agreement are for convenience of reference only and will not
      limit or otherwise affect any of the terms or provisions hereof

     

    (h)  Reference
      to Agreement. Use
      of
      the words “herein,” “hereof,” “hereto” and the like in this Agreement refer to
      this Agreement only as a whole and not to any particular subsection or provision
      of this Agreement, unless otherwise noted.

     

    (i)  Binding
      Agreement. This
      Agreement will be binding upon and inure to the benefit of the parties and
      will
      be enforceable by the personal representatives and heirs of Employee and the
      successors of Employer. If Employee dies while any amounts would still be
      payable to him hereunder, such amounts will be paid to Employee’s estate. This
      Agreement is not otherwise assignable by Employee.

     

    (j)  Designation
      of Beneficiary. If
      the
      Employee shall die before receipt of all payments and
      benefits to which he is entitled under this Agreement, payment of such amounts
      or benefits in
      the
      manner provided herein shall be made to such beneficiary as he shall have
      designated in writing filed with the Secretary of the Company or, in the absence
      of such designation, to his estate or personal representative.

     

    (k)  Attorneys
      Fees. In
      any
      proceeding brought to enforce any provision of this Agreement, or to seek
      damages for a breach of any provision hereof, or when any provision hereof
      is
      validly asserted as a defense, the prevailing party will be entitled to receive
      from the other party all reasonable attorney's fees and costs in connection
      therewith.

     

    
      
        
        

      

      
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    (l)  Entire
      Agreement. This
      Agreement contains the entire understanding of the parties, supersedes all
      prior
      agreements and understandings relating to the subject matter hereof and may
      not
      be amended except by a written instrument hereafter signed by each of the
      parties hereto.

     

    (m)  Governing
      Law. This
      Agreement and the performance hereof will be construed and governed in
      accordance with the laws of the State of Nevada, without regard to its choice
      of
      law principles.

     

    EXECUTED
      as of the date first above written.

    
      	
               

            	 	 
	 	AEROGROW
              INTERNATIONAL, INC.
	 
 	 
 	 
 
	 	By:  	/s/ W.
              Michael Bissonnette
	
               Its:
                 

            	
              
 W.
              Michael Bissonette, Chief Executive Officer
	 	 


    

    
      	 	 	 
	 	EMPLOYEE:
	 
 	 
 	 
 
	 	By:  	/s/ Randal
              Lee Seffren
	 	
              

              Randal
                Lee Seffren

            
	 	 


    

     

    
      
        
        

      

      
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