ex10-2.htm


    Exhibit
10.2

    
 

    


    EMPLOYMENT
AGREEMENT

     

     

    This
Employment Agreement (the “Agreement”), dated as of May 23, 2008, (the
“Effective Date”) is by and between AeroGrow International, Inc., a Nevada
corporation (the “Company”), and H.  MacGregor Clarke (the
“Executive”).

     

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

     

    Section 1.  Employment.  The
Company hereby agrees to employ Executive, and Executive hereby accepts
employment by the Company upon the terms and subject to the conditions
hereinafter set forth in this Agreement.  Executive’s employment with
Company pursuant to the terms of this Agreement commenced on May 23,
2008.

     

    Section 2.  Duties During Contract
Term.  Executive shall serve as the Chief Financial Officer
(“CFO”) of the Company.  Executive’s employment with the Company shall
be at the pleasure of the Chief Executive Officer and the Board of Directors of
the Company.  Executive hereby agrees to perform such responsibilities
and duties, and undertake such authorities, as are customarily performed and
undertaken by executives holding positions similar to that assigned to Executive
in similar businesses, as well as any other reasonable responsibilities, duties
and authorities commensurate with the CFO position.  Executive will
perform his duties under this paragraph faithfully and to the reasonable best of
his ability, will devote substantially all his working time and efforts to the
business of the Company, and shall comply with all reasonable and lawful
existing and future formal policies applicable to senior management level
employees of the Company and to the Company's business.

     

     Section 3.  Term.  Unless
Executive's employment hereunder is terminated earlier pursuant to Section 6 of
this Agreement, the term of this Agreement began on May 23, 2008 and shall
expire on May 23, 2009 (the “Initial Contract Term”), provided that upon the
expiration of the Initial Contract Term, the Executive'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 current term.  The Initial Contract Term and
any extension thereof are referred to as the Contract Term.

     

    Section 4.  Compensation and
Benefits.  In consideration for the services of the Executive
hereunder, the Company will compensate Executive as follows:

     

    (a) Base
Salary.  Beginning on the Effective Date, Executive shall be
entitled to receive a base salary of $200,000 per annum, payable in accordance
with the Company’s normal payroll procedures and subject to applicable tax
withholding.   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, but in no
event less frequently than once each month.   Executive’s base salary
may be increased from time to time in the discretion of the Board of Directors
and its Compensation Committee, but in no event will Executive’s base salary in
effect from time to time be reduced.

     

    (b) Bonus.  Executive shall
receive an annual cash bonus in an amount not less than 1.5% of the EBITDA of
the Company as determined by the Company’s annual financial
statements.  Such bonus shall be payable in a single lump sum payment
not later than one hundred and twenty (120) days after the end of the Company’s
fiscal year.  In order to be eligible for receipt of this bonus,
Executive must be employed by Company on the last day of the fiscal year for
which the bonus is payable, subject to the payment provisions provided for in
Section 6 hereof.

     

    (c) Benefits.  Executive shall
be entitled to participate in and receive benefits at active executive levels
and costs under any and all employee benefit plans and programs which are from
time to time generally made available to the 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.  Per the standard executive package, Executive will be granted
four (4) weeks paid time off for each year of the Contract Term.

     

    (d) Equity
Compensation.  Executive shall be eligible to participate in
the 2005 Equity Compensation Plan, and any successor plan providing for
compensation in the form of restricted or unrestricted stock, stock options and
other equity-related compensation provided by the Company to its
employees.  A grant of 150,000 stock options to be granted pursuant to
the Company’s 2005 Equity Compensation Plan shall be granted, with 30,000
granted on June 1, 2008, 60,000 on July 1, 2008, and 60,000 on October 1,
2008.  The exercise price of such options shall be the price of the
Company’s stock at market close on the date of each grant.  These
options shall: (i) vest according to the schedule set forth below; (ii) shall
not expire in less than five (5) years from the date of each grant, unless
Executive ceases to be employed by Company, in which case such options will
expire one (1) year following Executive’s date of separation of employment,
except that upon Executive’s retirement, disability or death (as those terms are
defined in the Stock Option Agreement relating to such share), such

     

    options
will expire three (3) years following such event; and (iii) shall be subject to
other standard terms and conditions under the 2005 Equity Compensation
Plan.  Under no circumstances may Executive exercise the options
described in this Agreement more than five (5) years after the date they are
granted.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Vesting Schedule:

     

    
      	
              ·  

            	
              30,000
      stock options on June 1, 2008

            


    

     

    
      	
              ·  

            	
              30,000
      stock options on December 1, 2008

            


    

     

    
      	
              ·  

            	
              30,000
      stock options on June 1, 2009

            


    

     

    
      	
              ·  

            	
              30,000
      stock options on December 1, 2009

            


    

     

    
      	
              ·  

            	
              30,000
      stock options on June 1, 2010

            


    

     

    In the
event of a Change in Control, as that term is defined in the 2005 Equity
Compensation Plan, all unvested options will immediately vest in accordance with
the Stock Option Agreement relating to such options.  If Executive’s
employment is terminated by the Company without Cause before the anticipated
date that these options are to vest, all unvested options that are scheduled to
vest within one year after Executive’s separation of employment will immediately
vest as of the date of employment separation.  In the event
Executive’s employment is terminated in any manner other than by the Company
without Cause before the anticipated date that these options are to vest, no
unvested options will vest.

     

    The
options granted to Executive pursuant to this Section 4(d) are granted subject
to approval by the Company’s shareholders at the Company’s next annual
meeting.  Failure by the Company to obtain such shareholder approval
on or before the earlier of March 31, 2009 or the date of the Company’s next
annual meeting will represent a material breach of the Company’s obligations
under this Agreement.

     

    (e) Automobile
Allowance.  Executive shall
be entitled to an automobile allowance in the amount of seven hundred fifty
dollars ($750.00) per month.  Executive shall be solely responsible
for the procurement of such vehicle and for payment of all expenses regarding
the operation, insurance and maintenance of the said vehicle.

     

    Section 5.  Expenses.  It is
acknowledged that Executive, 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 pay or reimburse Executive for all
reasonable expenses incurred by Executive in the performance of his duties
hereunder within fifteen days from date Executive or his representative submits
a request for such reimbursement.  Executive will comply with such
budget limitations and approval and reporting requirements with respect to
expenses as the Company may establish from time to time.

     

    Section 6.  Termination.

     

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

     

    (b) Without Cause by
Company.  The Company’s Board of Directors may terminate the
Executive'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
Executive, and if Executive 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 Executive's
employment hereunder without Cause.  If the Company terminates the
Executive’s employment in accordance with this paragraph, the Executive shall be
entitled to continuation in payment of his Base Salary for twelve months
following the date of termination; additionally, Executive will be entitled to a
pro-rated portion of the bonus described in paragraph 4(b) above and to
continued coverage under the health and welfare employee benefit plans and
programs described in paragraph 4(c) at active executive levels and costs for
twelve months following the date of termination.  Payment of all
salary continuation and pro-rated bonus payments described in this paragraph are
contingent on (i) Executive’s compliance with restrictive covenants provided in
Section 8 of this Agreement and (ii) Executive’s execution of a release of all
claims arising from his employment with the Company, in such reasonable form as
may then be used by the Company respecting termination of
employees.

     

    In the event the Company determines
that any severance or termination payments provided for in this Agreement or
otherwise payable to Executive constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”) and; (A) but for this paragraph, would be subject to the excise tax
imposed by Section 4999 of the Code (or any corresponding provisions of state
income tax law); and; (B) reduction of such payments to the amount necessary to
avoid the application of such excise tax would result in Executive retaining an
amount that is greater than the amount he would retain if such payments were
made without such reduction but after the application of such tax; then such
payments shall be delivered as to such lesser extent which would result in no
portion of such payments being subject to excise tax under Section 4999 of the
Code.  Any determination required under this paragraph shall be made
by the Company’s accountants, whose determination shall be conclusive and
binding upon the Executive and the Company for all purposes.  For
purposes of making the calculations required by this paragraph, the Company’s
accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code.  The
Company and Executive shall furnish to the accountants such information and
documents as the accountants may reasonably request in order to make a
determination under this paragraph.  The Company shall bear all costs
the accountants may reasonably incur in connection with any calculations
contemplated by this paragraph.  In the event this paragraph applies,
then unless otherwise agreed by the parties, lump sum payments shall be reduced
before periodic payments reduced to the extent necessary to avoid imposition of
such excise taxes.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
the foregoing, in the event that the timing of any of the payments or benefits
described in this Agreement would cause Executive to incur adverse tax
consequences due to application of Section 409A of the Code or the regulations
thereunder, the parties agree to negotiate in good faith the revision of the
timing of such payments and/or benefits to avoid such adverse tax consequences,
but in no event shall such payments and/or benefits be reduced.

     

    (c) Without Cause by
Executive.  The Executive may terminate the Executive's
employment under this Agreement at any time upon giving at least thirty (30)
day’s advance written notice.  If the Executive terminates the
Executive’s employment in accordance with this paragraph, the Executive shall be
entitled to continuation in payment of his Base Salary and to continued coverage
under the Company’s employee benefit plans and programs described in Section
4(c) hereof until the end of the month following said notice. 


     

    (d) Non-Renewal
Deemed Termination.   The timely notice by the Company under
Section 3 of this Agreement not to extend the Contract Term for a subsequent one
year period shall be deemed a termination without Cause by the Company under
this Agreement.

     

    (e) Termination Upon
Death Or Disability.   This Employment Agreement shall
terminate immediately upon the death of Executive or, at the discretion of the
Board of Directors of the Company, upon Executive becoming disabled such that
Executive becomes qualified for Long-Term Disability Benefits.

     

    (f) Accrued
Compensation and Benefits.   In all cases of Executive’s
termination of employment, the Company shall, promptly following Executive’s
separation of employment, pay to Executive (or, in the case of Executive’s
death, his surviving spouse, if any, otherwise his estate) any earned but unpaid
salary, bonus, accrued vacation benefits, and other compensation together with
reimbursement for unpaid expenses approved by the Company.   In
addition, Executive shall be entitled to benefit continuation and conversion
rights as required by law or as permitted by the Company’s employee benefit
plans and programs described in paragraph 4(c).

     

    Section
7.  Restrictive
Covenants.

     

    (a) Confidential
Data.  The Executive 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, data, trade secrets, inventions, drawings, file data,
test data, documentation, diagrams, specifications, know how, processes,
formulas, models, flow charts, software in various stages of development, source
codes, object codes, research and development procedures, test results,
marketing techniques and materials, marketing and development plans, price
lists, pricing policies, business plans, information relating to customers
and/or suppliers’ identities, characteristics and agreements, financial
information and projection, employee files and all analyses, compilations,
studies, reports, records or other documents or materials which contain, or are
prepared on the basis of, any such non-public information of the Company, of any
firm owned by the Company, or any of its affiliates, which was learned through
or as a result of employment by the Company.

     

    (b) Covenant Not to
Compete.  In consideration
for the benefits provided in this Agreement and his employment with Company,
during the term of this agreement, and for twelve (12) months after the
termination of this Agreement, whichever is later, the Executive 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
hydroponics or aeroponics products or businesses, or which is otherwise engaged
in a business that is directly competitive with that conducted by the
Company.  Notwithstanding the foregoing, the Executive 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 (the
“Exchange Act”).

     

    (c) Ownership of
Inventions.  Every invention
and improvement conceived, invented or developed by the Executive during the
term of his employment hereunder relating to the Company’s business, including
but not limited 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, whether or not they are eligible for patent,
copyright, trademark, trade secret or other legal protection (“Intellectual
Property”) shall be considered “works made for hire” and are the exclusive
property of the Company, its successors and assigns whether or not fixed in a
tangible medium of expression.  Executive hereby assigns all Executive’s
rights, title, and interest, worldwide, in all Intellectual Property and in all
related patent applications, patents, copyrights and trademarks, trade secrets,
and other proprietary rights therein, to the Company.  Executive shall
assist and cooperate with the Company, both during and after the period of
Executive’s employment with the Company, at the Company's sole expense, to allow
the Company to obtain, maintain and enforce patent, copyright, trademark, trade
secret and other legal protection for the Intellectual Property.  Executive
shall sign such documents, and do such things as necessary, to obtain such
protection and to vest the Company with full and exclusive title in all
Intellectual Property against infringement by others.  Executive hereby
accepts and appoints an agent or attorney of Company’s choice as Executive's
representative to execute documents on Executive’s behalf, for this
purpose.  Executive shall not be entitled to any additional
compensation for any and all Intellectual Property made during the period of
Executive's employment with or consulting for the Company.

     

    (d) Solicitation of
Employees.  The Executive 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 period of
twenty-four (24) months after the termination of this Agreement, 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) 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.  The restrictions contained in this paragraph 7(d) shall not
apply if such solicitation or offer to hire results solely from the response of
the employee to: 1) a general advertisement for employment in a newspaper,
publication, website, or other public information source; 2) a job posting
identified by an independent employment agency or “headhunter”; or 3) any other
recruiting effort that is targeted to prospective employees generally.  The
restrictions contained in this paragraph 7(d) shall not apply to officers or
employees of the Company or its affiliates whose periods of employment did not
overlap with the periods of employment of Executive.

     

    (e) Return of
Property.   Upon termination of employment, and at the request
of the Company, the Executive 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
7(e).

     

    (f) Representations. 
 The Executive 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 Executive from complying with the provisions of
this Agreement and that 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.   Executive 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (g) Reformation. 
 If any court shall determine that the duration or scope of any
restriction contained in this Section 7 is unenforceable, it is the intention of
the parties that the provisions set forth herein shall not be terminated but
shall be deemed restricted, amended, and/or reformed to the extent necessary to
render it valid and enforceable.

     

    (h) Reasonable
Restrictions.   Executive acknowledges and agrees that the
provisions of this Section 7 are reasonable and necessary protections of the
immediate and substantial interests of the Company, that any violation of these
restrictions may cause substantial injury to the Company for which the Company
has no adequate legal remedy, and that the Company would not have entered into
this Employment Agreement with Executive without the additional consideration
offered by Executive in binding himself to the provisions of this Section
7.   In the event of a breach or threatened breach by Executive of any
provision of this Section 7, the Company shall be entitled to seek a temporary
restraining order and preliminary and/or permanent injunction restraining
Executive from such breach or threatened breach; provided, however, that nothing
herein contained shall be construed to preclude the Company from pursuing any
other available remedy for such breach or threatened breach in addition to, or
in lieu of, such injunctive relief.

     

    (i) Forum for
Injunctive Relief.   Notwithstanding any arbitration agreements
between Executive and Company, Executive and Company irrevocably consent to
personal jurisdiction in the state courts of Colorado, as well as the United
States District Court for the District of Colorado, for any matter arising out
of or associated with any of the provisions contained in this Section 7 of this
Agreement, including its subparts, including but not limited to any action
seeking to enforce any of the provisions contained in this Section 7 of this
Agreement.   Executive further agrees that venue for any action
arising out of or associated with any of the provisions contained in this
Section 7 of this Agreement, including its subparts (including but not limited
to common law claims or claims under the Uniform Trade Secrets Act or claims
under the Computer Fraud and Abuse Act, the Lanham Act, the Stored
Communications Act or any similar statutes) shall lie exclusively in the state
courts of Colorado covering Boulder County and in the United States District
Court for the District of Colorado, regardless of where Executive resides or
performs duties for Company.

     

    Section 8. 
 Arbitration.

     

    The
parties agree that any claim, controversy or dispute that may arise directly or
indirectly in connection with Executive’s employment or the termination of
Executive’s employment, and involving the Company, and/or any employee(s),
Director(s), officer(s), or agent(s) of it, whether arising in contract,
statute, tort, fraud, misrepresentation, discrimination, common law or any other
legal theory, including, but not limited to disputes relating to the making,
performance or interpretation of this Employment Agreement; and claims or other
disputes arising under any federal or state employment statutes including,
without limitation, Title VII of the Civil Rights Act of 1964, as amended; the
Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967; as
amended; 42 U.S.C.  § 1981, § 1981a, § 1983, § 1985, or § 1988; the Family
and Medical Act of 1993; the Americans with Disabilities Act of 1990, as
amended; the Rehabilitation Act of 1973, as amended; the Fair Labor Standards
Act of 1938, as amended; the Worker Adjustment and Retraining Notification Act;
the Executive Retirement Income Security Act of 1974, as amended (“ERISA”); the
Colorado Anti-Discrimination Act; or any other similar federal, state or local
law or regulation, whenever brought, shall be resolved by
arbitration.  If, however, any party would otherwise be legally
required to exhaust administrative remedies to obtain legal relief, that party
can and must exhaust such administrative remedies prior to pursuing
arbitration.  The only claims between the parties that are not subject
to arbitration are claims for workers’ compensation or unemployment compensation
benefits, claims for injunctive relief, or other claims specifically exempted
from arbitration by this or any subsequent agreement between Executive and
Company, including but not limited to those claims referenced in Section 7
above.  By signing this Agreement, Executive voluntarily, knowingly
and intelligently waives any right Executive may otherwise have to seek remedies
with a court or other forums, including the right to a jury
trial.  Company also hereby voluntarily, knowingly, and intelligently
waives any right it might otherwise have to seek remedies against Executive in
court or other forums.  The Federal Arbitration Act, 9 U.S.C.  §§
1-16 (“FAA”) shall govern the arbitrability of all claims, provided that they
are arbitrable under the FAA, as it may be amended from time to
time.  In the event the FAA does not apply, the Colorado Uniform
Arbitration Act shall apply.

     

    A single
arbitrator engaged in the practice of law shall conduct the arbitration under
the National Rules For The Resolution Of Employment Disputes of the American
Arbitration Association (“AAA”) in effect at the time of the arbitration, unless
otherwise agreed to by the parties.  Other than as set forth in this
Employment Agreement, the arbitrator shall have no authority to add to, detract
from, change, amend, or modify existing law.  All arbitration
proceedings will be confidential.  The prevailing party in any
arbitration shall be entitled to receive reasonable attorney fees and costs (to
include the fees of the arbitrator).  The arbitrator’s decision and
award shall be final and binding as to all claims that were or could have been
raised in the arbitration, and judgment upon the award rendered by the
arbitrator may be entered by any court of competent jurisdiction.  If
any party to this Employment Agreement files a judicial or administrative action
asserting claims subject to this arbitration provision, and another party
successfully stays such action and/or compels arbitration of such claims, the
party filing the initial court action shall pay the other party’s costs and
expenses incurred in seeking the stay and/or compelling arbitration, including
reasonable attorney fees not to exceed Twenty-Five Thousand Dollars
($25,000.00).  Any arbitration under this Section 7 of this Agreement
shall take place within 50 miles of Boulder, Colorado.

     

    Section 9.  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
facsimile, 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 Agreement:

     

    If to Employer, to:

     

    AeroGrow International,
Inc.

    6075 Longbow Drive, Suite
200

    Boulder, CO 80301

    Fax:  303-444-0406

     

              If
to Executive, to:

     

    H.  MacGregor Clarke

    32710 El Diente Court

    Evergreen, CO 80439

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Withholding.   All payments
required to be made by Employer under this Agreement to Executive will be
subject to the withholding of such amounts, if any, relating to federal, state
and local taxes as may be required by law.

     

    (c) 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.

     

    (d) 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.

     

    (e) 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.

     

    (f) 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

     

    (g) 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.

     

    (h) 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 Executive and the
successors of the Company.  If Executive dies while any amounts would
still be payable to him hereunder, such amounts will be paid to Executive’s
estate.  This Agreement is not otherwise assignable by
Executive.

     

    (i) 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.  This Agreement specifically supersedes the May 21,
2008 Letter Agreement between Executive and the Company.

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    EXECUTED as of the date first above
written.

     

     

     

    
      	
              AEROGROW
      INTERNATIONAL, INC.

            
	 
      	 
      	 
      
	
              By:

            	 
      	
               /s/
      Jervis B. 
      Perkins                 
      

            
	
              Its:

            	 
      	
               President
      & CEO

            
	
               

              EXECUTIVE:

               

            
	
              By:

            	 
      	
              /s/
      H.  MacGregor
      Clarke            

            
	 
      	 
      	
              H. 
      MacGregor Clarke