Document:

ex10-1.htm

    EXHIBIT
      10.1

     

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (the “Agreement”), dated as of November 12, 2007, (the
“Effective Date”) is by and between AeroGrow International, Inc., a Nevada
      corporation (the “Company”), and Jervis
      B. Perkins (“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 upon the terms and subject to the conditions hereinafter set
      forth in this Agreement.  Employee’s employment with Company will commence
      on November 12, 2007.

     

    Section 2.  Duties
      During Contract Term.  Employee shall serve as the President
      and Chief Operating Officer of the Company.  Employee will report to
      the Chief Executive Officer of the Company.  Employee 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 Employee in similar businesses, as well as any other reasonable
      responsibilities, duties and authorities commensurate with Employee’s position
      assigned by the Company’s Board of Directors or by the Chief Executive Officer
      of the Company.  Chief Executive Officer Michael Bissonnette and
      Employee will confer within thirty (30) days following the Effective Date to
      determine performance expectations of Employee. Employee 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
      Employee's employment hereunder is terminated earlier pursuant to Section 8
      of
      this Agreement, and unless this Agreement is amended or superseded by a new
      Agreement between the parties, the term of this Agreement shall begin on
      November 12, 2007 and shall expire on May 12, 2008 (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 current
      term.  The initial Contract Term and any extension thereof are
      referred to as the Contract Term.  Should this Agreement be renewed
      for a subsequent term, Employee will be provided with relocation assistance
      and
      an auto allowance, the terms of which will be agreed to by the parties in a
      separate written agreement.

     

    Section
      4.  Place
      of Employment and Transition Period.  During the initial
      Contract Term of this Agreement, Employee will commute to Company’s facilities
      in Boulder, Colorado.  During the initial Contract Term, Employee will
      meet with Company-appointed transition team bi-weekly (in person and/or by
      conference call), or more frequently as may be requested by Employee or Company,
      to ensure a successful transition.  During the initial Contract Term,
      senior advisors Ed Krakauer, Jack Walker, and such others as may be appointed
      by
      the Company, will make themselves reasonably available to consult with Employee
      for ongoing support, consultation, advice, and strategy.

     

    During
      the initial Contract Term,
      Employee will be physically present at Company’s facilities in Boulder, Colorado
      five days per week, subject to the following exceptions: 1) Employee may perform
      work away from the Boulder facilities as requested by the Company or as
      reasonably necessitated by Company business needs, 2) Employee may be absent
      from the Boulder facilities due to illness or injury and on days he takes paid
      vacation (in accordance with the paid time off policies of the Company), and
      3)
      Employee may be absent from the Boulder facilities for all holidays on which
      the
      facility is closed.  During the initial Contract Term, the Company
      shall pay Employee’s reasonably incurred commuting expenses, including airline
      travel between Employee’s home and Colorado (via coach class airline ticket),
      rental housing or hotel charges, and rental cars or car
      service.  Additionally, during the initial Contract Term, Company
      shall pay the cost of flying Employee to his home (via coach class airline
      ticket) weekly.  At the request of Employee, Company shall pay the
      cost of flying Employee’s spouse to Colorado (via coach class airline ticket)
      and rental car or car service for any week, but not more frequently than once
      every two week period unless agreed to by the Company.

     

    In
      lieu of renting automobiles for
      the dates during which he is in Colorado, Employee may obtain an automobile
      by
      lease or purchase.  In the event employee elects to lease or purchase
      an automobile during the Contract Term, Employee shall not be entitled to
      further rental car reimbursements but shall be entitled to an automobile
      allowance in the amount of one thousand dollars ($1,000.00) 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.  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 Effective Date, Employee shall
      be entitled to receive a base salary of $250,000 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.  Employee’s base salary
      may be increased from time to time in the discretion of the Chief Executive
      Officer and/or Board of Directors, but in no event will Employee’s base salary
      in effect from time to time be reduced.

     

    (b)
      Bonus.  Employee shall receive an
      annual cash bonus in an amount not less than 2.0% of the EBITDA of the Company
      as determined by the Company’s annual financial statements.  For the
      fiscal year 2007, this bonus shall be pro-rated for the portion of such annual
      period covered under this Agreement.  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 each of the Company’s fiscal year.  In order to be
      eligible for receipt of this bonus, Employee must be employed by Company on
      the
      last day of the fiscal year for which the bonus is payable.

     

    (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 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.

     

    (d)
      Equity Compensation.  Employee 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.

     

    (i)
      The initial grant of the Stock
      Options to be granted pursuant to the Company’s 2005 Equity Compensation Plan
      shall be granted on February 1, 2008 (regardless of whether Employee is employed
      by Company on that date) and shall not be less than 33,334 options to purchase
      the common stock of the Company.  The exercise price of such options
      shall be the price of the Company’s stock at market close on the date of the
      grant.  These options shall: (i) fully vest on the date granted; (ii)
      shall not expire in less than five (5) years from the date of grant, unless
      Employee ceases to be employed by Company, in which case such options will
      expire pursuant to the terms of the Company’s 2005 Equity Compensation Plan and
      the Stock Option Agreement relating to such shares; and (iii) shall be subject
      to other standard terms and conditions under the 2005 Equity Compensation
      Plan.  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 Employee’s employment terminates before the
      anticipated date that these options are to grant and vest, such options will
      be
      granted and immediately vest as of the date of employment
      separation.

     

    (ii)
      Unless Employee is terminated by
      the Company for Cause on or before August 1, 2008, a second grant of Stock
      Options shall be granted pursuant to the Company’s 2005 Equity Compensation Plan
      on August 1, 2008 and shall not be less than 33,334 options to purchase the
      common stock of the Company.  The exercise price of such options shall
      be the price of the Company’s stock at market close on the date of the
      grant.  These options shall: (i) fully vest on the date granted; (ii)
      shall not expire in less than five (5) years from the date of grant, unless
      Employee ceases to be employed by Company, in which case such options will
      expire pursuant to the terms of the Company’s 2005 Equity Compensation Plan and
      the Stock Option Agreement relating to such shares; and (iii) shall be subject
      to other standard terms and conditions under the 2005 Equity Compensation
      Plan.  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 Employee’s employment terminates before the anticipated date that
      these options are to grant and vest, such options will be granted and
      immediately vest as of the date of employment separation.

     

     
(iii)
      Should this Agreement be
      renewed for a subsequent Contract Term, a subsequent grant of stock options
      to
      be granted pursuant to the Company’s 2005 Equity Compensation Plan shall be
      granted on August 1, 2008 and shall not be less than 133,336 options to purchase
      the common stock of the Company.  The exercise price of such options
      shall be the price of the Company’s stock at market close on the date of the
      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
      grant, unless Employee ceases to be employed by Company, in which case such
      options will expire pursuant to the terms of the Company’s 2005 Equity
      Compensation Plan and the Stock Option Agreement relating to such shares; and
      (iii) shall be subject to other standard terms and conditions under the 2005
      Equity Compensation Plan.  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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Vesting
      Schedule:

     

    
      	
              ·  

            	
              33,334
                stock options on February 1, 2009

            

    

     

    
      	
              ·  

            	
              33,334
                stock options on August 1, 2009

            

    

     

    
      	
              ·  

            	
              33,334
                stock options on February 1, 2010

            

    

     

    
      	
              ·  

            	
              33,334
                stock options on August 1, 2010

            

    

     

    In
      the
      event of a Change in Control, as that term is defined in the 2005 Equity
      Compensation Plan, or if Employee’s employment is terminated by the Company
      without Cause after May 12, 2008 but before the anticipated date that these
      options set forth in Section 5(d)(iii) are to vest, all unvested options that
      are scheduled to vest within one year after Employee’s separation of employment
      will immediately vest as of the date of employment separation.  In the
      event Employee’s employment is terminated in any manner other than by the
      Company without Cause after May 12, 2008, but before the anticipated date that
      these options set forth in Section 5(d)(iii) are to vest, no unvested options
      will vest.  In the event Employee is offered and accepts the position
      of Chief Executive Officer, all options set forth in this Agreement that have
      not yet vested will become null and void, and Employee’s right to further
      options will be defined in a separate Agreement.

     

    Section 6.  Potential
      Succession To Chief Executive Officer Position.  On or before
      the expiration of the initial Contract Term, Company will notify Employee of
      whether the Agreement and Employee’s employment will be renewed for a subsequent
      Contract Term.  If Employee is offered a subsequent Contract Term, he
      may be offered employment in his current position of President and Chief
      Operating Officer under the terms and conditions set forth in this Agreement
      or
      as Chief Executive Officer of Company.  The decision of whether to
      renew Employee’s Agreement for a subsequent Contract Term, and whether Employee
      should be retained in current position or offered the Chief Executive Officer
      position, is committed to the sole and absolute discretion of the Board of
      Directors of the Company.  Should Employee be offered the Chief
      Executive Officer position, the terms and conditions of his employment in that
      position will be set forth in a separate Agreement with will supersede this
      Agreement.  Such terms and conditions shall be in all respects at
      least as favorable as the terms and conditions set forth in this
      Agreement.

     

    Section 7.  Expenses.  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 pay or reimburse Employee for all
      reasonable expenses incurred by Employee in the performance of his duties
      hereunder within fifteen days from date Employee or his representative 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.

     

    Section 8.  Termination.

     

    (a)
For
      Cause.  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.  If the Company terminates the Employee’s employment in
      accordance with this paragraph, and Employee has been employed by Company for
      less than six months, the Employee shall be entitled to continuation in payment
      of his Base Salary for six months following the date of termination;
      additionally, Employee will be entitled to a pro-rated portion of the bonus
      described in paragraph 5(b) above and to continued coverage under the health
      and
      welfare employee benefit plans and programs described in paragraph 5(c) at
      active executive levels and costs for six months following the date of
      termination.  If the Company terminates the Employee’s employment in
      accordance with this paragraph, and Employee has been employed by Company for
      six months or longer, the Employee shall be entitled to continuation in payment
      of his Base Salary for twelve months following the date of termination;
      additionally, Employee will be entitled to a pro-rated portion of the bonus
      described in paragraph 5(b) above and to continued coverage under the health
      and
      welfare employee benefit plans and programs described in paragraph 5(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) Employee’s compliance
      with restrictive covenants provided in Section 9 of this Agreement and (ii)
      Employee’s execution of a release of all claims arising from his employment with
      the Company, in such 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 Employee 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
      Employee 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 Employee 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 Employee 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 Employee 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
      Employee.  The Employee may terminate the Employee's
      employment under this Agreement at any time after the initial Contract Term
      without Cause upon giving at least thirty (30) day’s advance written
      notice.  If the Employee terminates the Employee’s employment in
      accordance with this paragraph, the Employee shall be entitled to continuation
      in payment of his Base Salary until the end of the month following said notice.
      Notwithstanding any other provision of this Agreement, in the event
      Employee is offered a subsequent Contract Term following the initial Contract
      Term set forth in Section 3 above and declines such offer, Employee will not
      be
      entitled to any benefits after his separation of employment (including
      additional stock options, bonuses, and salary continuation) other than those
      set
      forth in (i) this Paragraph 8(c).

     

    (d)
Non-Renewal
      Deemed
      Termination.  The timely notice by the Company under
      Section 3 of this Agreement not to renew the Contract Term for a subsequent
      term
      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 Employee or, at the discretion of the
      Board of Directors of the Company, upon Employee becoming disabled such that
      Employee becomes qualified for Long Term Disability Benefits.

     

    (f)
Accrued
      Compensation
      and Benefits.  In all cases of Employee’s termination of
      employment, the Company shall, within 90 days following Employee’s separation of
      employment, pay to Employee (or, in the case of Employee’s death, his surviving
      spouse, if any, otherwise his estate) any earned but unpaid salary, bonus and
      other compensation together with reimbursement for unpaid expenses approved
      by
      the Company.   In addition, Employee 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
      5(c).

     

    Section
      9.  Restrictive Covenants.

     

    (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 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 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 (the “Exchange Act”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)
Ownership
      of
      Inventions.  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 shall be considered work for hire
      and become the exclusive property of the Company, its successors and assigns.
      Employee agrees to execute such assignments, instruments or other documents
      as
      the Company or its counsel may request to implement this paragraph.

     

    (d)
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
      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) (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.  The
      restrictions contained in this paragraph 9(d) shall not apply to officers or
      employees of the Company or its affiliates who periods of employment did not
      overlap with the periods of employment of Employee.

     

    (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 Employee shall
      cease to use all such materials and information set forth under this Section
      9(e).

     

    (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 that  the performance of his denies 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.

     

    (g)
      Reformation.  If any court shall determine
      that the duration or scope of any restriction contained in this Section 9 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.  Employee acknowledges and agrees that the
      provisions of this Section 9 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 Employee without the additional consideration
      offered by Employee in binding himself to the provisions of this Section
      9.  In the event of a breach or threatened breach by Employee of any
      provision of this Section 9, the Company shall be entitled to seek a temporary
      restraining order and preliminary and/or permanent injunction restraining
      Employee 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 Employee and Company, Employee 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 9 of
      this
      Agreement, including its subparts, including but not limited to any action
      seeking to enforce any of the provisions contained in this Section 9 of this
      Agreement.  Employee further agrees that venue for any action arising
      out of or associated with any of the provisions contained in this Section 9
      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 Employee resides or performs duties for
      Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section 10.  Arbitration.

     

    The
      parties agree that any claim,
      controversy or dispute that may arise directly or indirectly in connection
      with
      Employee’s employment or the termination of Employee’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 Employee 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 Employee and
      Company, including but not limited to those claims referenced in Section 9
      above.  By signing this Agreement, Employee voluntarily, knowingly and
      intelligently waives any right Employee 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 Employee 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) to the extent such fees and costs are
      otherwise provided for by the statute or common law that forms the basis for
      the
      claims being arbitrated.  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 10 of this Agreement shall take place within 50 miles of
      Boulder, Colorado.

     

    Section 11.  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.

    900
      28th Street, Suite
      201

    Boulder,
      Co 80303

    Fax:  303-444-0406

     

           
          If to Employee, to:

     

    Jervis
      B. Perkins

    1750
      Parliament Court

    Lake
      Forest, IL 60045

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)
      Withholding.  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.

     

            
        (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 Employee and the
      successors of the Company.  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.

     

               
      (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.

     

               
      (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/
                Michael Bissonnette

            
	
              Its:

            	
               

            	
              Chief
                Executive Officer

            
	
               

              EMPLOYEE:

            
	
               

              By:

            	 	
              /s/
                Jervis B. Perkins

            
	
               

            	 	
              Jervis
                B. Perkinsex10-1.htm

    EXHIBIT 10.1

     

    Landbank
      Group, Inc.

    

    CONSULTING,
      CONFIDENTIALITY AND PROPRIETARY RIGHTS AGREEMENT

    

    This
      Consulting, Confidentiality and Proprietary Rights Agreement ("Agreement")
      is
      entered into as of the 27th day of September, 2007 (the “Effective Date”) by and
      between Landbank Group, Inc., a Delaware corporation (the “Company”), and Venor,
      Inc. (“Consultant”).

    

    WHEREAS,
      the Company desires to engage Consultant to provide certain services as set
      forth on Schedule attached hereto and as specified from time to time by the
      Company.

    

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants and
      conditions contained herein, the parties hereto agree as follows:

    

    1.  Engagement.  The
      Company hereby engages Consultant, using Eric Stoppenhagen (the “Principal”) to
      perform those duties set forth in the Schedule attached hereto and such other
      duties as may be requested from time to time by the Chairman or Board of
      Directors of the Company. Consultant hereby accepts such engagement upon the
      terms and subject to conditions set forth in this Agreement.

    

    2.  Compensation.  For
      the services rendered by Consultant under this Agreement, the Company shall
      pay
      to Consultant the compensation specified in the Schedule, subject to the terms
      and conditions set forth in this Agreement.

    

    3.  Term
      and Survivability.  The term of this Agreement shall be for a
      period of six months from the Effective Date.  Notwithstanding the
      foregoing, Company may terminate this Agreement on or after thirty days (30)
      of
      providing written notice to Consultant and Consultant may terminate this
      Agreement on or after thirty days (30) of providing written notice to
      Company.  In addition, this Agreement may be terminated if either
      party materially fails to perform or comply with this Agreement or any material
      provision hereof. Termination shall be effective five (5) days after notice
      of
      such material failure to perform or comply with this Agreement or any material
      provision hereof to the defaulting party if the defaults have not been cured
      within such five (5) day period.  In the event that the Consultant is
      required to provide any services whatsoever after the term of this Agreement,
      the Consultant shall be prepaid $200 per hour for any time
      spent.  Upon termination of this Agreement the following sections of
      this Agreement shall survive such termination:  Sections 3, 5, 6, 7,
      8, 10, 12 and 13.

    

    4.  Costs
      and Expenses of Consultant’s Performance.  Except as set forth on
      the Schedule, all costs and expenses of Consultant’s performance hereunder shall
      be borne by the Consultant.

    

    5.  Taxes.  As
      an independent contractor, Consultant acknowledges and agrees that it is solely
      responsible for the payment of any taxes and/or assessments imposed on account
      of the payment of compensation to, or the performance of services by Consultant
      pursuant this Agreement, including, without limitation, any unemployment
      insurance tax, federal and state income taxes, federal Social Security (FICA)
      payments, and state disability insurance taxes. The Company shall not make
      any
      withholdings or payments of said taxes or assessments with respect to amounts
      paid to Consultant hereunder; provided, however, that if required by law or
      any
      governmental agency, the Company shall withhold such taxes or assessments from
      amounts due Consultant, and any such withholding shall be for Consultant's
      account and shall not be reimbursed by the Company to Consultant. Consultant
      expressly agrees to make all payments of such taxes, as and when the same may
      become due and payable with respect to the compensation earned under this
      Agreement.

    

    6.  Confidentiality.  Consultant
      agrees that Consultant will not, except when required by applicable law or
      order
      of a court, during the term of this Agreement or thereafter, disclose directly
      or indirectly to any person or entity, or copy, reproduce or use, any Trade
      Secrets (as defined below) or Confidential Information (as defined below) or
      other information treated as confidential by the Company known, learned or
      acquired by the Consultant during the period of the Consultant's engagement
      by
      the Company.  For purposes of this Agreement, "Confidential
      Information" shall mean any and all Trade Secrets, knowledge, data or know-how
      of the Company, any of its affiliates or of third parties in the possession
      of
      the Company or any of its affiliates, and any nonpublic technical, training,
      financial and/or business information treated as confidential by the Company
      or
      any of its affiliates, whether or not such information, knowledge, Trade Secret
      or data was conceived, originated, discovered or developed by Consultant
      hereunder.  For purposes of this Agreement, "Trade Secrets" shall
      include, without limitation, any formula, concept, pattern, processes, designs,
      device, software, systems, list of customers, training manuals, marketing or
      sales or service plans, business plans, marketing plans, financial information,
      or compilation of information which is used in the Company's business or in
      the
      business of any of its affiliates.  Any information of the Company or
      any of its affiliates which is not readily available to the public shall be
      considered to be a Trade Secret unless the Company advises Consultant in writing
      otherwise. Consultant acknowledges that all of the Confidential
      Information is proprietary to the Company and is a special, valuable and unique
      asset of the business of the Company, and that Consultant's past, present and
      future engagement by the Company has created, creates and will continue to
      create a relationship of confidence and trust between the Consultant and the
      Company with respect to the Confidential Information.  Furthermore,
      Consultant shall immediately notify the Company of any information which comes
      to its attention which might indicate that there has been a loss of
      confidentiality with respect to the Confidential Information. In such event,
      Consultant shall take all reasonable steps within its power to limit the scope
      of such loss.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.    Return
      of the Company’s Proprietary Materials.  Consultant agrees to
      deliver promptly to the Company on termination of this Agreement for whatever
      reason, or at any time the Company  may so request, all documents,
      records, artwork, designs, data, drawings, flowcharts, listings, models,
      sketches, apparatus, notebooks, disks, notes, copies and similar repositories
      of
      Confidential Information and any other documents of a confidential nature
      belonging to the Company, including all copies, summaries, records,
      descriptions, modifications, drawings or adaptations of such materials which
      Consultant may then possess or have under its control.  Concurrently
      with the return of such proprietary materials to the Company, Consultant agrees
      to deliver to the Company such further agreements and assurances to ensure
      the
      confidentiality of proprietary materials.  Consultant further agrees
      that upon termination of this Agreement, Consultant's, employees, consultants,
      agents or independent contractors shall not retain any document, data or other
      material of any description containing any Confidential Information or
      proprietary materials of the Company.

    

    8.   Assignment
      of Proprietary Rights.  Other than the Proprietary Rights listed
      on the Schedule attached hereto, if any, Consultant hereby assigns and transfers
      to the Company all right, title and interest that Consultant may have, if any,
      in and to all Proprietary Rights (whether or not patentable or copyrightable)
      made, conceived, developed, written or first reduced to practice by Consultant,
      whether solely or jointly with others, during the period of Consultant's
      engagement by the Company which relate in any manner to the actual or
      anticipated business or research and development of the Company, or result
      from
      or are suggested by any task assigned to Consultant or by any of the work
      Consultant has performed or may perform for the Company.

    

    Consultant
      acknowledges and agrees that the Company shall have all right, title and
      interest in, among other items, all research information and all documentation
      or manuals related thereto that Consultant develops or prepares for the Company
      during the period of Consultant's engagement by the Company and that such work
      by Consultant shall be work made for hire and that the Company shall be the
      sole
      author thereof for all purposes under applicable copyright and other
      intellectual property laws. Other than the Proprietary Rights listed on the
      Schedule attached hereto, Consultant represents and covenants to the Company
      that there are no Proprietary Rights relating to the Company's business which
      were made by Consultant prior to Consultant's engagement by the Company.
      Consultant agrees promptly to disclose in writing to the Company all Proprietary
      Rights in order to permit the Company to claim rights to which it may be
      entitled under this Agreement.  With respect to all Proprietary Rights
      which are assigned to the Company pursuant to this Section 8, Consultant will
      assist the Company in any reasonable manner to obtain for the Company's benefit
      patents and copyrights thereon in any and all jurisdictions as may be designated
      by the Company, and Consultant will execute, when requested, patent and
      copyright applications and assignments thereof to the Company, or other persons
      designated by the Company, and any other lawful documents deemed necessary
      by
      the Company to carry out the purposes of this Agreement. Consultant will further
      assist the Company in every way to enforce any patents, copyrights and other
      Proprietary Rights of the Company.

    

    9.  Trade
      Secrets of Others.  Consultant represents to the Company that its
      performance of all the terms of this Agreement does not and will not breach
      any
      agreement to keep in confidence proprietary information or trade secrets
      acquired by Consultant in confidence or in trust prior to its engagement by
      the
      Company, and Consultant will not disclose to the Company, or induce the Company
      to use, any confidential or proprietary information or material belonging to
      others. Consultant agrees not to enter into any agreement, either written or
      oral, in conflict with this Agreement.

    

    10.  Other
      Obligations.  Consultant acknowledges that the Company, from time
      to time, may have agreements with other persons which impose obligations or
      restrictions on the Company regarding proprietary rights made or developed
      during the course of work hereunder or regarding the confidential nature of
      such
      work. Consultant agrees to be bound by all such obligations and restrictions
      and
      to take all action necessary to discharge the obligations of the Company
      hereunder.

    

    11.  Independent
      Contractor.  Consultant shall not be deemed to be an employee or
      agent of the Company for any purpose whatsoever. Consultant shall have the
      sole
      and exclusive control over its employees, consultants or independent contractors
      who provide services to the Company, and over the labor and employee relations
      policies and policies relating to wages, hours, working conditions or other
      conditions of its employees, consultants or independent
      contractors.

    

    12.
      Non-Solicit. Consultant will not, during the term this Agreement and for
      one year thereafter, directly or indirectly (whether as an owner, partner,
      shareholder, agent, officer, director, employee, independent contractor,
      consultant, or otherwise) with or through any individual or entity: (i) employ,
      engage or solicit for employment any individual who is, or was at any time
      after
      the Effective Date of this Agreement for any reason, an employee of the Company,
      or otherwise seek to adversely influence or alter such individual's relationship
      with the Company; or (ii) solicit or encourage any individual or entity that
      is,
      or was after the Effective Date and immediately prior to the termination of
      this
      Agreement for any reason, a customer or vendor of the Company to terminate
      or
      otherwise alter his, her or its relationship with the Company or any of its
      affiliates.

     

    13.
      Equitable Remedies.  In the event of a breach or threatened
      breach of the terms of this Agreement by Consultant, the parties hereto
      acknowledge and agree that it would be difficult to measure the damage to the
      Company from such breach, that injury to the Company from such breach would
      be
      impossible to calculate and that monetary damages would therefore be an
      inadequate remedy for any breach. Accordingly, the Company, in addition to
      any
      and all other rights which may be available, shall have the right of specific
      performance, injunctive relief and other appropriate equitable remedies to
      restrain any such breach or threatened breach without showing or proving any
      actual damage to the Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    14.
      Governing Law.  This Agreement shall be governed, construed and
      interpreted in accordance with the internal laws of the State of California.
      In
      the event a judicial proceeding is necessary, the sole forum for resolving
      disputes arising under or relating to this Agreement are the Municipal and
      Superior Courts for the County of Los Angeles, California or the Federal
      District Court for the Central District of California and all related appellate
      courts, and the parties hereby consent to the jurisdiction of such courts,
      and
      that venue shall be in Los Angeles County, California.

    

    15.  Entire
      Agreement: Modifications and Amendments.  The terms of this
      Agreement are intended by the parties as a final expression of their agreement
      with respect-to such terms as are included in this Agreement and may not be
      contradicted by evidence of any prior or contemporaneous agreement. The Schedule
      referred to in this Agreement is incorporated into this Agreement by this
      reference. This Agreement may not be modified, changed or supplemented, nor
      may
      any obligations hereunder be waived or extensions of time for performance
      granted, except by written instrument signed by the parties or by their agents
      duly authorized in writing or as otherwise expressly permitted
      herein.

    

    16.  Attorneys
      Fees.  Should any party institute any action or proceeding to
      enforce this Agreement or any provision hereof, or for damages by reason of
      any
      alleged breach of this Agreement or of any provision hereof, or for a
      declaration of rights hereunder, the prevailing party in any such action or
      proceeding shall be entitled to receive from the other party all costs and
      expenses, including reasonable attorneys' fees, incurred by the prevailing
      party
      in connection with such action or proceeding.

    

    17.
      Prohibition of Assignment.  This Agreement and the rights,
      duties and obligations hereunder may not be assigned or delegated by Consultant
      without the prior written consent of the Company. Any assignment of rights
      or
      delegation of duties or obligations hereunder made without such prior written
      consent shall be void and of no effect.

    

    18.  Binding
      Effect: Successors and Assignment.  This Agreement and the
      provisions hereof shall be binding upon each of the parties, their successors
      and permitted assigns.

    

    19.  Validity.  This
      Agreement is intended to be valid and enforceable in accordance with its terms
      to the fullest extent permitted by law. If any provision of this Agreement
      is
      found to be invalid or unenforceable by any court of competent Jurisdiction,
      the
      invalidity or unenforceability of such provision shall not affect the validity
      or enforceability of all the remaining provisions hereof.

    

    20.
      Notices.  All notices and other communications hereunder shall
      be in writing and, unless otherwise provided herein, shall be deemed duly given
      if delivered personally or by telecopy or mailed by registered or certified
      mail
      (return receipt requested) or by Federal Express or other similar courier
      service to the parties at the following addresses or (at such other address
      for
      the party as shall be specified by like notice)

    

    (i)  If
      to the Company:

    Landbank
      Group, Inc.

    7030
      Hayvenhurst Ave

    Van
      Nuys, California
      91406

    Attn:  Gary
      Freeman,

    

    (ii)
      If
      to the Consultant:

    Venor,
      Inc.

    1328
      West Balboa

    Newport
      Beach, CA 92661

    Attn:
      Eric Stoppenhagen

    Phone:
      (949) 903-0468

    

    Any
      such
      notice, demand or other communication shall be deemed to have been given on
      the
      date personally delivered or as of the date mailed, as the case may
      be.

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Consulting,
      Confidentiality, and Proprietary Rights Agreement as of the Effective Date
      written above.

    

      
      Venor, Inc.

     

     

    
      	 	 	By:
              /s/ Eric Stoppenhagen    

      	
               

            	 	
              Name:
                Eric Stoppenhagen

            

    

    
      	
               

            	
              Title:   Principal

            

    

    

    

      
      Landbank Group, Inc.

    

     

    
      	 	 	By:
              /s/ Gary Freeman        
              

      	
               

            	 	
              Name:
                

            

    

    
      	
               

            	
              Title:

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Schedule

    1.  DUTIES

     

    A.  Financial
      Duties required to maintain a public shell

    

    
      	
              §  

            	
              Maintain
                accurate books and records of the Company including
                accounting.

            

    

    
      	
              §  

            	
              Oversee
                reviews and audits.

            

    

    
      	
              §  

            	
              Timely
                make appropriate and necessary
                filings.

            

    

    
      	
              §  

            	
              Handle
                all AP and AR related matters.

            

    

    
      	
              §  

            	
              Shut
                down operating activities.

            

    

    
      	
              §  

            	
              Oversee
                tax matters.

            

    

    
      	
              §  

            	
              Oversee
                legal matters as related to the operation of the
                shell.

            

    

     

    C. 
Interim
      President and Secretary Duties

     

    
      	
              §  

            	
              Serve
                as interim President and Secretary.

            

    

    
      	
              §  

            	
              Perform
                the duties as set forth under the Company’s
                By-Laws.

            

    

    

    2.           SCHEDULE
      AND COMITTMENT OF TIME:

     

    If
      at any
      time during the performance of this contract any phases of the required tasks
      appear to be impossible of execution or if any phase cannot be completed on
      schedule, it is agreed that Consultant will notify Company within one (1) day
      of
      such determination.  At the time of such notification Consultant shall
      explain to Company why a particular task is impossible to complete and propose
      alternative procedures for achieving the desired result.

    

    3.           REPORTING
      SCHEDULE:

     

    Consultant
      shall report regularly, and not less frequent than once every month, to the
      Company his progress on the tasks enumerated above.

    

    4.           COMPENSATION
      AND PAYMENT TERMS:

    

    From
      the
      Effective Date until November 30, 2007 the Consultant shall be paid at a rate
      of
      $5,000 per month.  Thereafter, the Consultant shall be paid $4,000 per
      month payable on the first business day of the month.  In the event
      the Consultant is requested to perform services outside the Duties required
      to
      maintain a public shell, the Consultant shall be paid at a rate of $200 per
      hour
      (“Hourly Services”).  Hourly Services shall be pre-approved in
      advanced by email from any member of the Board of Directors.

    

    5           EXPENSES:

     

    Company
      agrees to reimburse Consultant for reasonably necessary travel, phone and office
      expenses other then rent. However, should such expenses exceed $500 in any
      given
      calendar month; such expenses shall be pre-approved in advance by Company in
      order to qualify to reimbursement. An email authorization by the Chairman of
      Company shall be deemed a valid approval.

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