ex10-1.htm


    Exhibit
10.1

     

    CHANGE
IN TERMS AGREEMENT

     

    
      	
              Principal

              $1,000,000.00

            	
              Loan
      Date

              07-19-2009

            	
              Maturity

              11-30-2009

            	
              Loan
      No.

              42431

            	
              Call
      / Call

              4A1
      / BA

            	
              Account

            	
              Officer

              10033

            	
              Initials

            
	
              References
      in the boxes above are for Lender's use only and do not limit the
      applicability of this document to any particular loan or
item.

              Any
      item above containing ***** has been omitted due to text length
      limitations.

            
	
              Borrower:           
      AEROGROW INTERNATIONAL, INC.

                
      JACK J WALKER

                
      6075 LONGBOW DRIVE SUITE 20

                
      BOULDER,
      CO 80301

            	                 
       Lender:    	
              First
      National Bank

              Canyon
      Branch

              1155
      Canyon Blvd.

              Boulder,
      CO 80302-5121

            


    

     

    Principal
Amount:
$1,000,000.00                                                                                                           Date
of Agreement: August 28, 2009

     

    DESCRIPTION
OF EXISTING INDEBTEDNESS. A Promissory Note dated May 19, 2008 in the original
amount of $1,000,000.00 as modified from time to time by certain Change in Terms
Agreements, if applicable.

     

    DESCRIPTION
OF COLLATERAL. The collateral as described in any security instrument or other
related documents in which a security interest is given to the lender to secure
this indebtedness and any other indebtedness described therein.

     

    DESCRIPTION
OF CHANGE IN TERMS. Extend maturity date from July 19, 2009 to November 30,
2009.

     

    Remove
revolving line of credit feature and modify repayment schedule as detailed in
Payment paragraph below.

     

    Change
interest rate from Wall Street Journal Prime Rate plus 2.0% floating to a fixed
interest rate of 7.0%.

     

    Additional
collateral will be pledged to the note in the form of two AeroGrow
International, Inc. Series A Preferred Stock Certificates (currently totaling
200 shares) in the name of Jack J. Walker and a pledge on the First National
Bank Investment, Management & Trust account in the name of Jack
Walker.

     

    PAYMENT.
Borrower will pay this loan in accordance with the following payment schedule,
which calculates interest on the unpaid principal balances as described in the
“INTEREST CALCULATION METHOD” paragraph using the interest rates described in
this paragraph: one principal payment of $100,000.00 on August 28, 2009, during
which interest continues to accrue on the unpaid principal balances using an
interest rate of 7.000% per annum based on a year of 360 days; 3 monthly
consecutive interest payments, beginning August 30, 2009, with interest
calculated on the unpaid principal balances using an interest rate of 7.000% per
annum based on a year of 360 days; 2 monthly consecutive principal payments of
$50,000.00 each, beginning August 30, 2009, during which interest continues to
accrue on the unpaid principal balances using an interest rate of 7.000% per
annum based on a year of 360 days; one principal payment of $100,000.00 on
October 30, 2009, during which interest continues to accrue on the unpaid
principal balances using an interest rate of 7.000% per annum based on a year of
360 days; and one principal and interest payment of $704,219.44 on November 30,
2009, with interest calculated on the unpaid principal balances using an
interest rate of 7.000% per annum based on a year of 360 days.  This
estimated final payment is based on the assumption that all payments will be
made exactly as scheduled; the actual final payment will be for all principal
and accrued interest not yet paid, together with any other unpaid amounts on
this loan.  Notwithstanding the foregoing, the rate of interest
accrual described for any principal only payment stream applies only to the
extent that no other interest rate for any other payment stream
applies.

     

    INTEREST
CALCULATION METHOD. Interest on this loan is computed on a 365/360 basis: that
is, by applying the ratio of the interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. All interest payable under this
loan is computed using this method.

     

    CONTINUING
VALIDITY. Except as expressly changed by this Agreement, the terms of the
original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.

     

    PRIOR TO
SIGNING THIS AGREEMENT, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE AGREEMENT.

     

    BORROWER:

     

    AEROGROW
INTERNATIONAL, INC

     

    By:/s/ H. MacGregor
Clarke

    H.
MacGregor Clarke, Chief Financial Officer of

    AEROGROW
INTERNATIONAL, INC

     

    /s/ Jack J.
Walker

    JACK J.
WALKER, Individually