Document:

EXHIBIT
        4.13

      No.
        _______

      

      $1.25
        WARRANT

      To
        Purchase Common Stock

      of

      AeroGrow
        International, Inc.

       

      (as
        adjusted for a one for five split of shares of common stock

      for
        shareholders of record on May 31, 2005)

      

      THIS
        CERTIFIES THAT, upon surrender of this $1.25 Warrant at the office of AeroGrow
        International, Inc., a Nevada corporation (“Company”), in the City of Boulder,
        County of Boulder, State of Colorado, accompanied by payment as hereinafter
        provided, _____________________________________ or assigns (“Holder”) is
        entitled to purchase at any time prior to the expiration of the $1.25 Warrant
        Exercise Period (as hereinafter defined), but not thereafter, _________________
        shares of common stock (“Common Stock”), of AeroGrow International, Inc. as such
        Common Stock shall be constituted at the time of purchase, which shares have
        been duly authorized and set aside for issuance and will, upon such issuance,
        be
        fully paid and nonassessable, at the price of One Dollar and Twenty-five
        cents
        ($1.25) per share, and not otherwise.

      

      This
        $1.25 Warrant shall be exercisable in whole at any time or in part from time
        to
        time (provided that not less than One Thousand (1,000) shares of Common Stock,
        or any integral multiple of such amount, shall be purchased upon any such
        partial exercise hereof), for the period from issuance through December 31,
        2005, provided that the Common Stock issuable upon the exercise of this $1.25
        Warrant is, at the time of exercise, registered or otherwise qualified for
        sale
        under the Securities Act of 1933, as amended, and the securities or “blue sky”
        laws of the jurisdiction in which the exercise of this $1.25 Warrant is proposed
        to be effected (“$1.25 Warrant Exercise Period”). Upon the expiration of the
        $1.25 Warrant Exercise Period, this $1.25 Warrant will expire and become
        void
        and of no value. No fractional shares will be issued upon the exercise
        hereof.

      

      This
        $1.25 Warrant shall be registered at the office of the Company and is
        transferable only at said office by the registered Holder hereof or his duly
        authorized attorney upon surrender of this certificate, properly
        endorsed.

       

      Upon
        any
        adjustment of the number of shares of Common Stock that may be purchased
        upon
        the exercise of this $1.25 Warrant and/or the purchase price per share, then
        in
        each such case the Company shall give written notice thereof, as herein below
        provided, which notice shall state the purchase price per share resulting
        from
        such adjustment and the increase or decrease, if any, in the number of shares
        of
        Common Stock purchasable at such price upon the exercise of this $1.25 Warrant,
        setting forth in reasonable detail the method of calculation and the facts
        upon
        which such calculation is based.

       

       

      NEITHER
        THIS $1.25 WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
        HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (“ACT”) OR
        APPLICABLE STATE SECURITIES LAWS, AND SUCH SECURITIES ARE BEING SOLD IN RELIANCE
        UPON THE EXEMPTION FROM REGISTRATION PROVIDED IN SECTION 4(2) OF THE ACT
        AND
        REGULATIONS PROMULGATED THEREUNDER AND COMPARABLE PROVISIONS OF APPLICABLE
        STATE
        SECURITIES LAWS AND REGULATIONS. THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE SOLD, TRANSFERRED OR
        OTHERWISE DISPOSED OF, BY THE HOLDER HEREOF TO ANY OTHER PERSON OR ENTITY
        UNLESS
        SUCH TRANSACTION IS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
        AND
        UNDER THE APPLICABLE LAWS OF THE STATE OR JURISDICTION WHERE SUCH TRANSACTION
        OCCURS, OR UNLESS SUCH TRANSACTION SHALL QUALIFY UNDER AN ALLOWED EXEMPTION
        TO
        SUCH REGISTRATION. AS A CONDITION TO TRANSFERRING SAID SHARES ON THE BOOKS
        OF
        THE CORPORATION, THE HOLDER HEREOF MAY BE REQUIRED TO FURNISH THE CORPORATION
        WITH AN OPINION OF LEGAL COUNSEL SATISFACTORY TO THE CORPORATION TO THE EFFECT
        THAT THE SAID TRANSACTION SO COMPLIES WITH APPLICABLE SECURITIES
        LAWS.

       

       

      
        
          
          

        

        
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      The
        Holder of this $1.25 Warrant shall not by virtue thereof have any rights
        of a
        shareholder of the Company or to notice of meetings of shareholders or of
        any
        other proceedings of the Company.

       

      This
        $1.25 Warrant is divisible on surrender, in which case a new $1.25 Warrant
        or
        Warrants will be issued.

       

      If
        prior
        to the expiration of this $1.25 Warrant, by exercise hereof or by its
        terms:

      

      
        	 	
                (a)

              	
                The
                  Company shall be recapitalized through the subdivision of its outstanding
                  shares of Common Stock into a greater number of shares, or shall
                  by
                  exchange or substitution of or for its outstanding Common Stock
                  or
                  otherwise, reduce the number of such shares, then in each such
                  case the
                  number of shares deliverable upon the exercise of this $1.25 Warrant
                  shall
                  be changed in proportion to such increase or decrease of the outstanding
                  shares of such Common Stock of the Company, without any change
                  in the
                  aggregate payment by the $1.25 Warrant Holder from the aggregate
                  payment
                  specified on the face of this $1.25
                  Warrant.

              

      

      

      
        	 	
                (b)

              	
                A
                  dividend shall be declared or paid at any time on the Common Stock
                  of the
                  Company in its Common Stock or in securities convertible into Common
                  Stock
                  of the Company, then in each such case the number of shares deliverable
                  upon the exercise thereafter of this $1.25 Warrant shall, without
                  requiring any payment by the $1.25 Warrant Holder in addition to
                  the
                  payment specified on the face hereof, be increased in proportion
                  to the
                  increase, through such dividend, in the number of outstanding shares
                  of
                  Common Stock of the Company. In the computation of the increased
                  number of
                  shares deliverable upon the exercise of this $1.25 Warrant, any
                  dividend
                  paid or distributed upon the Common Stock in securities convertible
                  into
                  Common Stock shall be treated as a dividend paid in Common Stock
                  to the
                  extent that shares of Common Stock are issuable upon the conversion
                  thereof. The obligations of the Company and the rights of the Holder
                  hereof shall not be affected by the exercise of any conversion
                  privileges
                  heretofore granted to the holders of any of the stock or securities
                  of the
                  Company or of any other
                  corporation.

              

      

      

      
        	 	
                (c)

              	
                The
                  Company shall, at any time while any of the $1.25 Warrants are
                  outstanding, declare a dividend on its Common Stock, other than
                  as
                  provided in the preceding paragraph (b), then in each such case
                  the
                  Company shall give notice in writing to the registered Holder of
                  this
                  $1.25 Warrant, and such dividends so declared shall be made payable
                  only
                  to the shareholders of record on a date at least ten (10) days
                  subsequent
                  to the date of such notice, including stock issued pursuant to
                  the
                  exercise of such $1.25 Warrants prior to such record
                  date.

              

      

      

      
        	 	
                (d)

              	
                The
                  Company shall be recapitalized by reclassifying its outstanding
                  Common
                  Stock into stock without par value, or the Company or a successor
                  corporation shall consolidate or merge with, or convey all, or
                  substantially all, of its or any successor corporation's property
                  or
                  assets to, any other corporation or corporations (any such corporation
                  being included within the meaning of "successor corporation" as
                  hereinbefore used in the event of any consolidation or merger of
                  such
                  corporation with, or the sale of all, or substantially all, of
                  the
                  property or assets of such corporation to another corporation or
                  corporations) then in each such case, as a condition of such
                  recapitalization, consolidation, merger or conveyance, lawful and
                  adequate
                  provision shall be made whereby the Holder of each $1.25 Warrant
                  shall
                  thereafter have the right to purchase, upon the basis and upon
                  the terms
                  and conditions specified in this $1.25 Warrant, in lieu of the
                  shares of
                  Common Stock of the Company theretofore purchasable upon the exercise
                  of
                  this $1.25 Warrant, such shares of stock, securities or other assets
                  as
                  may be issued or payable with respect to, or in exchange for, the
                  number
                  of shares of Common Stock of the Company theretofore purchasable
                  upon the
                  exercise of this $1.25 Warrant had such recapitalization, consolidation,
                  merger or conveyance not taken place; and in any such event the
                  rights of
                  the $1.25 Warrant Holder to an adjustment of the number of shares
                  of
                  Common Stock purchasable upon the exercise of this $1.25 Warrant
                  as
                  hereinbefore provided shall continue and be preserved in respect
                  of any
                  stock that the $1.25 Warrant Holder becomes entitled to purchase.
                  It shall
                  be a condition of such consolidation, merger or conveyance that
                  each
                  successor corporation shall assume, in manner and form satisfactory
                  to the
                  Company, the obligation to deliver to the $1.25 Warrant Holder,
                  upon the
                  exercise of this $1.25 Warrant, such shares of stock, securities
                  or assets
                  as, in accordance with the provisions of this $1.25 Warrant, shall
                  have
                  been provided for such purpose. The Company shall assume no liability
                  for
                  its exercise of discretion hereunder, other than for willful
                  wrongdoing.

              

      

       

      
        
          
          

        

        
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      This
        $1.25 Warrant shall be deemed to have been exercised, and the Holder exercising
        the same to have become a shareholder of record of the Company, for the purpose
        of receiving dividends and for all other purposes whatsoever as of the date
        the
        Holder surrendered this $1.25 Warrant accompanied by payment in cash, as
        herein
        provided. The Company agrees that, while this $1.25 Warrant shall remain
        valid
        and outstanding, its stock transfer books shall not be closed for any purpose
        whatsoever, except under arrangements that shall insure to Holders exercising
        $1.25 Warrants or applying for transfer of stock within five (5) days after
        the
        books shall have been reopened all rights and privileges that they might
        have
        had or received if the transfer books had not been closed and they had exercised
        their $1.25 Warrants at any time during which such transfer books shall have
        been closed.

      

      Upon
        each
        increase or decrease in the number of shares of Common Stock of the Company
        deliverable upon the exercise of this $1.25 Warrant, or in the event of changes
        in the rights of the $1.25 Warrant Holders by reason of other events
        hereinbefore set forth, then in each such case the Company shall forthwith
        file
        with the Company a certificate executed by its President or one of its Vice
        Presidents, and attested by its Secretary or one of its Assistant Secretaries,
        stating the increased or decreased number of shares so deliverable and setting
        forth in reasonable detail the method of calculation and the facts upon which
        such calculation is based.

      

      The
        Company covenants, at all times when $1.25 Warrants are outstanding and in
        effect, to reserve, unissued, such number of shares of Common Stock as it
        may be
        required to deliver pursuant to the exercise of this $1.25 Warrant, subject
        to
        consolidation, merger or sale, as hereinabove set forth.

      

      As
        used
        herein, the terms "Holder" "$1.25 Warrant Holder" and "Holder of this $1.25
        Warrant" shall be construed to mean the registered holder hereof, and, in
        the
        case of any notice required by this $1.25 Warrant to be given to the $1.25
        Warrant Holder, it shall be sufficient if mailed to the last known address
        of
        such Holder as the same appears on the books of the Company.

      

      IN
        WITNESS WHEREOF, AEROGROW INTERNATIONAL, INC. has caused this $1.25 Warrant
        to
        be signed in its corporate name by its President or a Vice President, manually
        or in facsimile, and its corporate seal or a facsimile to be imprinted hereon
        and attested by the manual or facsimile signature of its Secretary or an
        Assistant Secretary, as of the day and year first above written.

       

      
        
          
            	
                  	 	 	
                    AEROGROW
                      INTERNATIONAL, INC.

                  
	
                    Attest:

                  	 	 	 
	 	 	 	 
	 	 	
                    By:

                  	 
	
                    

                  	 	 	
                    

                  
	Secretary	 	 	President

          

      

      [CORPORATE
        SEAL]

      

      
        
          
          

        

        
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      SUBSCRIPTION
        FORM

      (To
        be
        Executed Upon Exercise of $1.25 Warrant)

      

      The
        undersigned, the Holder(s) or assignee(s) of such Holder(s) of the within
        $1.25
        Warrant, hereby (i) subscribes for shares of Common Stock that the undersigned
        is entitled to purchase under the terms of the within $1.25 Warrant and (ii)
        tenders herewith the full exercise price of all shares subscribed
        for.

      

      Dated:
        _________________________

      

      Number
        of
        Shares Subscribed For:

       

      
         

        
          
            
              
                
                  	
                          ______________

                        	 	
                          
                            
 (Signature)

                        
	 	 	 
	 	 	
                          
                            
 (Signature)

                        

                

                
ASSIGNMENT

              

            

          

        

      

      

      (To
        Be
        Executed By the Registered Holder to Effect

      a
        Transfer of the Within $1.25 Warrant)

      

      FOR
        VALUE
        RECEIVED, the undersigned $1.25 Warrant Holder(s) do(es) hereby sell, assign
        and
        transfer unto ________________________________________ the right to purchase
        common stock evidenced by this $1.25 Warrant, and does hereby irrevocably
        constitute and appoint __________________________________________to transfer
        the
        said right on the books of the Company, with full power of
        substitution.

      

      Dated:
        _________________________

       

      
        
           

          
            
              
                
                  	
                           

                        	 	
                          
                            
 (Signature)

                        
	 	 	 
	 	 	
                          
                            
 (Signature)

                        

                

                 

              

            

          

        

         

      

      NEITHER
        THIS $1.25 WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
        HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (“ACT”), AND SUCH
        SECURITIES ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION
        PROVIDED IN SECTION 4(2) OF THE ACT. THIS $1.25 WARRANT AND ANY SHARES OF
        COMMON
        STOCK ISSUABLE UPON EXERCISE HEREOF CANNOT
        BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF, BY THE HOLDER HEREOF TO ANY
        OTHER
        PERSON OR ENTITY UNLESS SUCH TRANSACTION IS REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED, AND UNDER THE APPLICABLE LAWS OF THE STATE OR JURISDICTION
        WHERE SUCH TRANSACTION OCCURS, OR UNLESS SUCH TRANSACTION SHALL QUALIFY UNDER
        AN
        ALLOWED EXEMPTION TO SUCH REGISTRATION. AS A CONDITION TO TRANSFERRING SAID
        SHARES ON THE BOOKS OF THE CORPORATION, THE HOLDER HEREOF MAY BE REQUIRED
        TO
        FURNISH THE CORPORATION WITH AN OPINION OF LEGAL COUNSEL SATISFACTORY TO
        THE
        CORPORATION TO THE EFFECT THAT THE SAID TRANSACTION SO COMPLIES WITH APPLICABLE
        SECURITIES LAWS.

      
 

      
        
          
          

        

        A
          -
          4EXHIBIT
        10.1

       

      LEASE
        AMENDMENT OF APRIL 1, 2005

       

      

        
          	
                  PROPERTY
                    NAME:

                	
                  The
                    Lotus Building

                
	
                  EFFECTIVE

                	
                  October
                    1, 2004

                

        

      

      
      

       

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

       

      
        	 	
                1.

              	
                The
                  Lease shall continue until April 30,
                  2006

              

      

      
        
          	 	 	 

          	 	
                  2.

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

                

        

        
          	 	 	 

        

      

      
        	
              	a.	
                $2,534
                  in cash.

              

      

      
        	 	
                b.

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

              

      

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

              

      

       

      
        	 	
                3.

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

              

      

       

      
        	 	
                4.

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

              

      

       

      
        
          	
                  TENANT

                	 	
                  LANDLORD

                
	 	 	 
	
                  AeroGrow
                    International, Inc.

                	 	
                  United
                    Professional Management, Inc.

                
	 	 	 
	
                  /s/
                    Frederic Wiedemann, VP

                	 	
                  /s/

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      LEASE
        AMENDMENT

       

      

        
          	
                  PROPERTY
                    NAME:

                	
                  The
                    Lotus Building

                
	
                  EFFECTIVE:

                	
                  October
                    7, 2003

                
	 	 

        

      

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

       

      
        	 	
                1.

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

              

      

       

      
        	 	
                2.

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

              

      

       

      
        	 	
                3.

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

              

      

       

      
        	 	
                4.

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

              

      

       

      
        	 	
                5.

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

              

      

       

      
        
          	
                  TENANT

                	 	
                  LANDLORD

                
	 	 	 
	
                  AeroGrow
                    International, Inc.

                	 	
                  United
                    Professional Management, Inc.

                
	 	 	 
	
                  /s/
                    Frederic Wiedemann, VP

                	 	
                  /s/

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      LEASE
        AGREEMENT

       

      THIS
        LEASE, effective on October 1, 2003, is entered into by and between United
        Professional Management, Inc., authorized agent for the owner, hereinafter
        called Landlord, and AeroGrow International Inc., a Nevada corporation,
        hereinafter called Tenant.

       

      1.    Premises.

       

      Landlord
        hereby leases to Tenant that portion of The Lotus Building commonly known
        as
        Suites 201 (referred to herein as the Premises), the location and approximate
        dimensions of which are delineated on EXHIBIT A attached hereto and incorporated
        by this reference. Such building and improvements are situated upon real
        property, which is legally described as follows:

       

      The
        South
        1/2 of the South 1/2 of the Northeast 1/4 of Section 32, Township 1 North,
        Range
        70 West of the Sixth P.M., except the East 347 feet thereof and except also
        portions excepted in a conveyance of said real estate by CONSUMERS NATIONAL
        LIFE
        INSURANCE COMPANY; County of Boulder, State of Colorado;

       

      also
        known as 900 28th Street, Boulder, Colorado 80303. The Premises are leased
        together with the nonexclusive use of six (6) unassigned parking spaces in
        the
        parking lot, which use shall be in common with other tenants of the
        building.

       

      2.    Term.

       

      2.1    Term.
        The
        term of this lease shall be one (1) year, beginning on October 1, 2003 and
        ending on September 30, 2004, both dates inclusive, unless sooner terminated
        as
        herein provided.

       

      2.2    Occupancy.
        Taking
        possession of the Premises or any part thereof by Tenant shall be conclusive
        evidence that Tenant accepts the Premises in its present condition. Tenant
        may
        have use of the Premises prior to October 1, 2003 for the purpose of doing
        authorized Tenant improvements. If Tenant operates its business in the Premises
        prior to October 1, 2003, Tenant will pay a daily prorated rent to
        Landlord.

       

      2.3    Right
        of Extension.
        Tenant
        is granted the right to extend the basic term for one (1) consecutive period
        of
        THREE (3) years, all upon the same agreements and conditions, except rent,
        which
        shall be at the basic rate as determined by the provisions outlined in Exhibit
        C
        provided that (1) Tenant is not in material default at the commencement of
        the
        extended term, (2) Tenant gives written notice to Landlord of its intention
        to
        extend the Lease at least ninety (90) days prior to the expiration of the
        Lease
        Term, (3) In no event shall the Base Rent for any Renewal Period be less
        than
        the Base Rent for the immediate prior year.

       

      3.    Security
        Deposit.

       

      3.1    Payment
        of Deposit.
        Upon
        execution of this Lease, Tenant shall pay to Landlord the sum of Two Thousand
        Dollars ($2,000.00) as security for Tenant's full and faithful performance
        of
        all covenants and conditions of this Lease to be kept and performed by Tenant.
        Said sum shall be returned to Tenant after the expiration of the term of
        this
        Lease provided Tenant has fully and faithfully performed all such covenants
        and
        conditions. Prior to the time when Tenant shall be entitled to the return
        of the
        security deposit, Landlord shall be entitled to intermingle such deposit
        with
        its own funds and to use such sum for such purposes as Landlord may determine.
        Tenant shall not be entitled to any interest on the security
        deposit.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.2    Default,
        by Tenant.
        In the
        event of default by Tenant in with respect to any provision of this Lease,
        including, but not limited to, the payment of rent and additional rent, Landlord
        may use, apply or retain all or any part of such security deposit for the
        payment of any unpaid rent and additional rent, or for any other amount which
        Landlord may be required to spend by reason of the default of Tenant, including
        any damages or deficiency in re-leasing of the Premises, regardless of whether
        the accrual of such damages or deficiency occurs before or after an eviction
        or
        a summary re-entry or other re-entry by Landlord. If any portion of the security
        deposit is so used or applied, Tenant shall, within five (5) days after notice
        from Landlord, deposit cash with Landlord in an amount sufficient to restore
        the
        security deposit to its original amount, and failure to do so shall constitute
        a
        default under this Lease.

       

      4.    Base
        Rent.
        The
        amount of annual Base Rent due from Tenant during the term of this Lease
        shall
        be $18,000.00. Tenant shall pay Landlord the Base Rent in twelve equal monthly
        installments of $1,500.00 without notice or demand and without any deduction
        or
        set-off, at 4990 Osage Dr., #C-100, Boulder, Colorado 80306-7004, or at such
        other place as Landlord may direct in writing. Each monthly rent installment
        shall be due and payable, in advance, on or before the first day of each
        month
        during the term of this Lease.

       

      5.    Additional
        Rent.
        Tenant
        agrees to pay as Additional Rent an amount equal to Tenant's Proportionate
        Share
        of any "Operating Expenses" and "Real Estate Taxes" as said terms are
        hereinafter defined. During the first year of this lease, the Additional
        Rent
        shall be a fixed amount and payable quarterly in advance, by the issuance
        of
        stock issued by AreoGrow International, Inc. (See Exhibit B)

       

      5.1    Operating
        Expenses.
        "Operating Expenses" for the purposes of this paragraph 5, shall mean all
        reasonable and necessary costs and expenses of every kind and nature, other
        than
        those expressly excluded below, paid or incurred by Landlord in operating,
        managing, repairing, maintaining and administering the Building including,
        without limitation or duplication:

       

      (a)    The
        costs
        of general repairs, maintenance and replacements, excluding capital
        expenditures, made from time to time by Landlord to the Building, including
        costs under mechanical or other maintenance contracts and repairs and
        replacements of equipment used in connection with such maintenance and repair
        work.

       

      (b)    The
        cost
        of pest control, security, cleaning and snow and ice removal
        services.

       

      (c)    The
        cost
        of maintaining, repairing, redecorating, renovating, replacement of floor
        coverings, and landscaping the common facilities used by the public and other
        tenants, such as elevator, hallways, stairways, etc. not for the exclusive
        use
        of a single tenant, hereafter referred to as "Common Facilities," and of
        maintaining and operating any fire detection, fire prevention, lighting and
        communications systems.

       

      (d)    The
        cost
        of all utilities (including, without limitation, water, sewer, gas and
        electricity) used or consumed.

       

      (e)    The
        cost
        of providing heating, ventilating and cooling to the interior portions of
        the
        Building, if any.

       

      
        
          
          

        

        
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      (f)    Remuneration
        and fees of persons and companies to the extent engaged in repairing,
        maintaining, or administering the Building.

       

      (g)    The
        cost
        of professional property management fees.

       

      (h)    Costs
        incurred by Landlord or its agents in engaging accountants or other consultants
        to assist in making the computations required hereunder.

       

      (i)    The
        cost
        of capital improvements and structural repairs and replacements made in,
        on, or
        to the Building that are (i) made in order to conform to changes subsequent
        to
        the Commencement Date in any applicable laws, ordinances, rules, regulations
        or
        orders of any governmental or quasi-governmental authority having jurisdiction
        over the Building, or (ii) designed primarily to reduce Operating Expenses
        or
        the rate of increase in Operating Expenses, or (iii) the replacement of the
        roof, heating, ventilating and air conditioning equipment; such costs shall
        be
        charged by Landlord to Operating Expense in equal annual installments over
        the
        useful life of such capital improvement or structural repair or replacement
        (as
        reasonably determined by Landlord) together with interest on the balance
        of the
        un-reimbursed costs at two percent (2%) above the average Prime Rate charged
        by
        three major banks in Boulder on the date the cost was incurred by
        Landlord.

       

      (j)    Other
        costs and expenses, including supplies, not otherwise expressly excluded
        hereunder attributable to the operation, management, repair, maintenance
        and
        administration of the Building.

       

      5.2    Excluded
        Expenses.
        Operating Expenses shall not, however, include the following:

       

      (a)    Any
        charge for depreciation of the Building or equipment and any principal, interest
        or other finance charge.

       

      (b)    The
        cost
        of any work, including painting, decorating and work in the nature of tenant
        finish, which Landlord performs in any rentable premises other than work
        of a
        kind and scope which Landlord would be obligated to perform in the demised
        premises.

       

      (c)    The
        cost
        of repairs, replacements or other work occasioned by insured casualty or
        defects
        in construction or equipment to the extent such cost is reimbursed to Landlord
        (or not charged to Landlord) by reason of collected insurance proceeds (using
        Landlord's good faith efforts to collect such proceeds) or any contractors',
        manufacturers', or suppliers' warranties.

       

      (d)    Expenditures
        required to be capitalized for federal income tax purposes (except as provided
        in Section 5.1(i)).

       

      (e)    Leasing
        commissions, advertising expenses and other costs incurred in leasing space
        in
        the Building except as otherwise expressly provided in this Lease.

       

      (f)    The
        cost
        of repairing or rebuilding necessitated by condemnation.

       

      (g)    The
        cost
        of any damage to the Building or any settlement, payment or judgment incurred
        by
        Landlord, resulting from Landlord's tortious act, neglect or breach of this
        Lease that is not covered by insurance proceeds.

       

      5.3    Real
        Estate Taxes.
        "Real
        Estate Taxes" shall mean all real estate taxes, assessments, and other
        governmental impositions and charges of every kind and nature whatsoever,
        extraordinary as well as ordinary, foreseen and unforeseen, and each and
        every
        installment thereof, which shall or may during the Lease term be levied,
        assessed, imposed, become due and payable or liens upon, or which arise in
        connection with the use, occupancy or possession of, or become due and payable
        out of, or for the Building or any part thereof. If at any time during the
        term
        of this Lease the method of taxation of real estate prevailing at the time
        of
        execution hereof shall be or has been altered so as to cause the whole or
        any
        part of the taxes now or hereafter levied, assessed or imposed on real estate
        to
        be levied, assessed or imposed upon Landlord wholly or partially as a capital
        levy or measured by the rents received therefrom then such new or altered
        taxes
        attributable to the Premises shall be deemed to be included within the term
        "Real Estate Taxes" for the purposes of this subparagraph, except that such
        shall not be deemed to include any enhancement of said tax attributable to
        another income or other ownerships of Landlord. Tenant shall in no event
        be
        responsible for, or reimburse Landlord for any general income tax liabilities
        incurred by Landlord.

       

      
        
          
          

        

        
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      5.4    Payment
        of Additional Rent.

       

      (a)    It
        is
        hereby agreed that Tenant shall pay to Landlord as Additional Rent during
        each
        calendar year during the term hereof an estimate of "Tenant's Proportionate
        Share of Operating Expenses and Real Estate Taxes" for the calendar year
        as
        reasonably estimated by Landlord, payable monthly, at the rate of one-twelfth
        (1/12) thereof, on the same date and at the same place that base rent as
        described in Section 1 is or would otherwise be payable, with an adjustment
        to
        be made between the parties at a later date as hereinafter provided. Tenant
        shall deliver to Tenant, as soon as practicable following the end of any
        calendar year, but in no event later than June 30th, an estimate of the
        Operating Expenses and Real Estate Taxes for the new calendar year (the "Budget
        Sheet"). Until receipt of the Budget Sheet, Tenant shall continue to pay
        its
        monthly Tenant's Proportionate Share of Operating Expenses and Real Estate
        Taxes
        based upon the estimate for the preceding calendar year. To the extent that
        the
        Budget Sheet reflects an estimate of Tenant's Proportionate Share of Operating
        Expenses and Real Estate Taxes for the new calendar year greater than the
        amount
        actually paid to the date of receipt of the Budget Sheet for the new calendar
        year, Tenant shall pay such amount to Landlord within thirty (30) days of
        receipt of the Budget Sheet. Upon receipt of the Budget Sheet, Tenant shall
        thereafter pay the amount of its monthly Tenant's Proportionate Share of
        Operating Expenses and Real Estate Taxes. Notwithstanding the foregoing,
        Landlord's failure to deliver the Budget Sheet to Tenant on or before June
        30th,
        shall in no way serve as a waiver of Landlord's right under this Section.
        As
        soon as practicable following the end of any calendar year, but not later
        than
        June 30th, Landlord shall submit to Tenant a statement in reasonable detail
        describing the computations of the Operating Expenses and Real Estate Taxes,
        setting forth the exact amount of Tenant's Proportionate Share of Operating
        Expenses and Real Estate Taxes for the calendar year just completed (the
        "Statement"), and the difference, if any, between the actual Tenant's
        Proportionate Share of Operating Expenses and Real Estate Taxes for the calendar
        year just completed and the estimated amount of Tenant's Proportionate Share
        of
        Operating Expenses and Real Estate Taxes paid by Tenant to Landlord.
        Notwithstanding the foregoing, Landlord's failure to deliver the Statement
        to
        Tenant on or before June 30th, shall in no way serve as a waiver of Landlord's
        right under this Section. To the extent that the actual Tenant's Proportionate
        Share of Operating Expenses and Real Estate Taxes for the period covered
        by the
        Statement is higher than the estimated Tenant's Proportionate Share of Operating
        Expenses and Real Estate Taxes which Tenant previously paid during the calendar
        year just completed, Tenant shall also pay to Landlord such balance within
        thirty (30) days following receipt of the Statement from Landlord. To the
        extent
        that the actual Tenant's Proportionate Share of Operating Expenses and Real
        Estate Taxes for the period covered by the Statement is less than the estimated
        Tenant's Proportionate Share of Operating Expenses and Real Estate Taxes
        which
        Tenant previously paid during the calendar year just completed, Landlord
        shall
        credit the excess against any sums then owing or next becoming due from Tenant
        to Landlord under the Lease.

       

      
        
          
          

        

        
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      (b)    If
        the
        Lease term hereunder covers a period of less than a full calendar year during
        the first or last calendar years of the term hereof, Tenant's Proportionate
        Share of Operating Expenses and Real Estate Taxes for such partial year shall
        be
        calculated proportionately to reflect the number of months in such year during
        which Tenant leased the Premises.

       

      (c)    Even
        though the term has expired, when the final determination is made of Tenant's
        share of Operating Expenses for the year in which this Lease terminates,
        Tenant
        shall immediately pay any increase due over the estimated expenses paid and,
        conversely, any overpayment made in the even said expenses decreased shall
        be
        immediately rebated by Landlord to Tenant.

       

      6.    Late
        Charge.
        If
        Landlord does not receive any monthly rent installment within five (5) days
        after the day upon which the installment is due, Tenant agrees to pay a late
        charge of one percent (1%) of the monthly rent installment per day, commencing
        with the due date, not to exceed ten percent (10%) of the monthly rental
        installment; provided; however, that if the fifth day of the month falls
        on a
        Saturday, Sunday or legal holiday, the late charge shall not be due if the
        rent
        is received by Landlord on the next business day following the fifth day
        of the
        month.

       

      7.    Use
        of Premises.

       

      7.1    Permitted
        Use.
        Tenant
        shall use and occupy the Premises solely as office space and related uses
        and
        for no other purpose whatsoever without Landlord's prior written
        consent.

       

      7.2    Prohibited
        Use.
        Tenant
        shall not use or permit the use of the Premises in a manner (nor do or permit
        to
        be done in the Premises anything) which will in any way increase the existing
        premium for, or otherwise affect any insurance upon the Premises; or which
        will
        cause or be likely to cause structural damage to any part of the building;
        or
        which will constitute a public or private nuisance; or which violates any
        laws
        or regulations of any governmental authority. Tenant shall not commit or
        allow
        to be committed any waste in or upon the Premises.

       

      8.    Signs.
        Landlord
        shall provide, at Landlord's expense, a building directory, which shall include
        a listing of the business name and suite number of each tenant within the
        building, including Tenant. The design and location of such directory shall
        be
        determined in Landlord's sole discretion. Tenant, at Tenant's expense, may
        affix
        and maintain upon or within twelve (12) inches of the door to the Premises
        such
        sign, name or insignia as have obtained written approval of Landlord as to
        location, type, size, color and display qualities. Landlord may require that
        all
        signs affixed or maintained by Tenant conform to standard sign
        criteria.

       

      9.    General
        Covenants of Tenant.

       

      9.1    Compliance
        with Regulations.
        Tenant
        shall promptly comply with all laws, orders, and regulations of federal,
        state,
        county and municipal authorities, and with any direction of any public officer,
        pursuant to law, which shall impose any duty upon Landlord or Tenant with
        respect to the leased premises including fire and safety regulations; provided,
        however, that Tenant shall not be required to expend more than $2,500.00
        during
        the term of this Lease in complying with the requirements of this subparagraph.
        In the event that such public authority requires repair or improvement to
        the
        building which requires expenditure of more than $50,000.00, Landlord shall
        have
        the option, in lieu of making the repairs or improvements, to terminate this
        Lease by giving Tenant notice of such intention. Following such notice, the
        Lease shall terminate upon the last day occupancy is permitted by the public
        authority issuing the order requiring the repairs or improvements.

       

      
        
          
          

        

        
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      9.2    Licenses
        and Permits.
        After
        commencement of this lease, Tenant, at its sole expense, shall obtain all
        licenses or permits which may be required for the conduct of its business
        with
        the terms of this Lease, or for the making of repairs, alterations, improvements
        or additions, and Landlord, where necessary will cooperate with Tenant in
        applying for all such permits or licenses, but Landlord shall incur no costs
        or
        expenses therefore.

       

      9.3    Environmental
        Regulations.
        Tenant
        will not cause, or permit to be caused, any act or practice, by negligence,
        omission or otherwise, that would adversely affect the environment or do
        anything or permit anything to be done that would violate any federal, state
        or
        local laws, regulations or guidelines concerning the impact on the environment
        of the conduct of Tenant's business. Any violation of this covenant shall
        constitute a default under this Lease.

       

      (a)    If
        Tenant
        shall become aware of or receive notice or other communication concerning
        any
        actual, alleged, suspected or threatened violation of any environmental law,
        regulation, or ordinance, or liability of Tenant for environmental damages
        in
        connection with the Premises or past or present activities of any person
        thereon, including but not limited to notice or other communication concerning
        any actual or threatened investigation, inquiry, lawsuit, claim, citation,
        directive, summons, proceeding, complaint, notice, order, writ, or injunction
        relating to same, then Tenant shall deliver to Landlord, within ten (10)
        days of
        the receipt of such notice or communication, by Tenant, a written description
        of
        said violation, liability, or actual or threatened event or condition, together
        with copies of any documents evidencing same. Receipt of such notice shall
        not
        be deemed to create any obligation on the part of Landlord to defend or
        otherwise respond to any such notification.

       

      (b)    Notwithstanding
        the obligation of Tenant to indemnify Landlord pursuant to this Lease Agreement,
        Tenant shall, upon demand of Landlord, and at its sole cost and expense,
        promptly take all actions to remediate any environmental damages caused by
        Tenant. Tenant shall proceed continuously and diligently with such remediation,
        provided that in all cases such actions shall be in accordance with all
        applicable requirements of governmental entities. Any such actions shall
        be
        performed in a good, safe and workmanlike manner and shall minimize any impact
        on the businesses conducted at the property of which the Premises are a part.
        Should Tenant fail to perform or observe any of its obligations or agreements
        pertaining to remediation of environmental damage, then Landlord shall have
        the
        right, but not the duty, without limitation upon any of the rights of Landlord
        pursuant to this Lease Agreement, to perform the same, either personally
        or
        through its agents, consultants or contractors.

       

      (c)    Tenant
        shall indemnify and hold Landlord its principals, agents or employees harmless
        from any and all claims, including all costs, expenses and attorney's fees,
        by
        or on behalf of any person, entity or governmental agency arising from any
        breach or default on the part of Tenant in the performance of the covenant
        contained in this paragraph 3. In case any action or proceeding is brought
        against Landlord its principals, agents or employees by reason of any such
        claim, Tenant, upon written notice from Landlord, covenants to resist or
        defend,
        at Tenant's expense, such action or proceeding by counsel reasonably
        satisfactory to Landlord.

       

      
        
          
          

        

        
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      (d)    If
        Landlord pays any amount for remediation of substances introduced onto the
        Premises the building of which the Premises are a part, or their surrounding
        environs by Tenant in violation of the covenant contained in this section,
        including detection, removal or confinement of such substances, then the
        sum so
        paid, together with all costs and attorney's fees, shall be paid by Tenant
        to
        Landlord as additional rent within thirty (30) days of written notice to
        Tenant
        of such expenditures.

       

      9.4    Indemnity.

       

      (a)    Tenant
        shall indemnify and hold Landlord harmless against and from any and all claims
        arising from Tenant's use of the Premises or from the conduct of its business
        or
        from any activity, work or other things done, permitted or suffered by Tenant
        in
        or about the Premises, and shall further indemnify and hold Landlord harmless
        against and from any and all claims arising from any breach or default in
        the
        performance of any obligation on Tenant's part to be performed under the
        terms
        of this Lease, or arising from any act or negligence of Tenant, or any officer,
        agent, employee, guest or invitee of Tenant, and from all costs, attorneys'
        fees, and liabilities incurred in or about the defense of any such claim
        or any
        action or proceeding brought thereon, and in case any action or proceeding
        be
        brought against Landlord by reason of such claim, Tenant upon notice from
        Landlord shall defend the same at Tenant's expense by counsel reasonably
        satisfactory to Landlord. Tenant, as a material part of the consideration
        to
        Landlord, hereby assumes all risk of damage to property or injury to persons
        upon the Premises, from any cause other than the negligence of Landlord,
        its
        agents, servants or employees, and Tenant hereby waives all claims in respect
        thereof against Landlord. Tenant shall give prompt notice to Landlord in
        case of
        casualty or accidents in the Premises.

       

      (b)    Landlord
        or its agents shall not be liable for any loss or damage to persons or property
        resulting from fire, explosion, steam, gas, electricity, water or rain which
        may
        leak from any part of the building or from the pipes, appliances or plumbing
        therein or from the roof, street or subsurface or from any other place resulting
        from dampness or any other cause whatsoever, unless caused by or due to the
        negligence of Landlord, its agents, servants or employees.

       

      9.5    Damage
        to Premises.
        Tenant
        shall not damage nor permit any damage to any portion of the Premises, and
        at
        the termination of this Lease, Tenant shall deliver the Premises to Landlord
        in
        as good condition as existed at the commencement date of this Lease, ordinary
        wear and tear and damage by casualty that is covered by Landlord's insurance
        excepted. The cost and expense of any repairs necessary to restore the condition
        of the Premises shall be borne by Tenant, and if Landlord undertakes to restore
        the Premises it shall have a right of reimbursement against Tenant.

       

      9.6    Liens
        and Encumbrances.
        Tenant
        shall pay before delinquency all costs for work done or caused to be done
        by
        Tenant in the Premises which could result in any lien or encumbrance on
        Landlord's interest in the Premises or any part thereof. If any such lien
        or
        encumbrance is filed against the Premises or the Property and Tenant shall
        fail
        to cause such lien to be discharged of record within thirty (30) days after
        Tenant receives written notice of its filing, whether by payment or posting
        of a
        statutory surety bond with the appropriate court, Landlord may, at its option,
        pay such charge and related costs and interest, and the amount paid, together
        with reasonable attorney's fees incurred by Landlord, shall be immediately
        due
        from Tenant to Landlord.

       

      
        
          
          

        

        
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      9.7    Alterations
        and Improvements.
        Tenant
        shall not make any alterations or improvements to the Premises without
        Landlord's prior written approval which approval shall not be unreasonably
        withheld. Any alterations or improvements to the Premises made by Tenant
        shall
        be at Tenant's expense and, with the exception of trade fixtures installed
        by
        Tenant, shall become the property of Landlord and shall be surrendered to
        Landlord upon termination of this Lease. Landlord, at its option, may require
        Tenant to remove any physical additions and repair any alterations to which
        Landlord has not previously consented in accordance with this subparagraph,
        in
        order to restore the Premises to the condition existing at the time Tenant
        took
        possession thereof. All costs of such removal and repair shall be borne by
        Tenant.

       

      9.8    Janitorial
        Service.
        Tenant
        shall provide, at Tenant's sole expense, janitorial or cleaning service for
        the
        Premise which shall clean the Premises in a manner satisfactory to
        Landlord.

       

      9.9    Non-Smoking
        Environment.
        Tenant
        shall maintain a smoke free environment within the Premises and all common
        areas
        of the building and shall not smoke or permit smoking of cigarettes, pipes,
        cigars or other tobacco products within the Premises or the common areas
        of the
        building.

       

      10.    Landlord's
        Covenants.

       

      10.1    Services
        Provided.
        So long
        as Tenant is not in default under any of the covenants of this Lease to be
        performed by Tenant, Landlord shall provide the following services:

       

      (a)    Heat
        for
        the Premises when and as reasonably required for comfortable occupancy of
        the
        Premises, and air conditioning for the Premises when and as reasonably required
        for comfortable occupancy of the Premises, on business days from 8:00 a.m.
        to
        6:00 p.m. (if Tenant requires air conditioning for more extended hours or
        on
        Saturdays, Sundays or on holidays, Landlord will furnish the same at Tenant's
        expense);

       

      (c)    Water
        and
        sewer service for ordinary lavatory and toilet purposes;

       

      (d)    Janitorial
        service and maintenance of the common areas, parking areas and landscaping,
        which shall include window cleaning, inside and outside, twice in each lease
        year,

       

      (e)    Electricity
        sufficient for Tenant's permitted uses of the Premises;

       

      10.2    Service
        Interruption.
        Landlord shall not be liable for the interruption of heating, plumbing, air
        conditioning, electrical systems, or cleaning or other services, if any,
        by
        causes beyond Landlord's control or when necessary by reason of accident
        or for
        repairs, alterations, replacements, or improvements necessary or desirable
        in
        the judgment of Landlord for as long as maybe reasonably required by reason
        thereof. No such interruption of service shall be deemed a default by Landlord
        nor shall it be deemed an eviction or disturbance of Tenant's use or quiet
        enjoyment of the Premises.

       

      
        
          
          

        

        
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      10.3    Repairs.
        Landlord shall repair and maintain the structural portions of the building
        in
        which the Premises are located, including exterior walls and roof. Landlord
        shall not be liable for failure to make such repairs or to perform any
        maintenance unless such failure shall persist for an unreasonable time after
        written notice of the need for such repairs or maintenance is given to Landlord
        by Tenant.

       

      10.4    Non-Smoking
        Environment.
        Landlord shall include subparagraph 9.9 in all leases for the Lotus Building,
        and shall make every reasonable effort to enforce such provision as to all
        tenants.

       

      11.    Personal
        Property.

       

      11.1    Abandonment
        by Tenant.
        Any
        property of Tenant remaining in the Premises at any time when Landlord recovers
        possession of the Premises shall be deemed abandoned, and Landlord shall
        have no
        responsibility or liability whatsoever for any of said personal property.
        Without modifying the foregoing, Landlord may store any of such property
        in any
        public or private warehouse, and Tenant shall pay to Landlord promptly upon
        demand all costs incurred in connection with such property, including the
        costs
        of moving and storage, court costs, and attorneys' fees. Landlord may, at
        its
        option, without notice, sell any such personal property at any public or
        private
        sale for such prices as Landlord may obtain, and Landlord shall apply the
        proceeds of such sale first to the costs incurred in the connection with
        such
        property, and then to any amounts due under this Lease from Tenant to Landlord,
        and the surplus, if any, to Tenant.

       

      11.2    Landlord's
        Lien.
        Tenant
        hereby grants to Landlord a lien upon and a security interest in all property
        now owned or hereafter acquired by Tenant which shall come in or be placed
        upon
        the Premises, to secure the payment of rent and the performance of each and
        every other obligation hereunder to be performed by Tenant. Following any
        event
        of default, Landlord, without notice or demand, may take possession of and
        sell
        such property at public and private sale upon giving Tenant ten (10) days'
        notice. The proceeds of any such sale shall be applied first to the payment
        of
        expenses thereof, second to the discharge of the unpaid rent or other liability
        hereunder, and the balance, if any, shall be paid to Tenant. Tenant agrees
        to
        execute and record any financing statements and other documents necessary
        to
        perfect or record the lien herein granted. Failure to obtain execution or
        to
        record financing statements by the Landlord shall have no effect upon the
        granted herein.

       

      11.3    Personal
        Property Tax.
        Tenant
        shall pay, or cause to be paid, before delinquency any and all taxes levied
        or
        assessed and which become payable during the term hereof upon all Tenant's
        leasehold improvements, equipment, furniture, fixtures, and any other property
        located in the Premises. In the event any or all of Tenant's leasehold
        improvements, equipment, fixtures, furniture and other personal property
        shall
        be assessed and taxed with the real property, Tenant shall pay to Landlord
        its
        share of such taxes within ten (10) days after delivery to Tenant by Landlord
        of
        a statement in writing setting forth the amount of such taxes applicable
        to
        Tenant's property.

       

      12.    Entry
        Upon Premises By Landlord.
        After
        giving reasonable notice to Tenant, which need not be in writing, Landlord
        and
        its representatives may enter the Premises at any reasonable time, for the
        purpose of inspecting the Premises, performing any work which Landlord may
        reasonably elect to undertake or which is made necessary by reason of Tenant's
        default under the terms of this Lease, or exhibiting the Premises for sale,
        lease or mortgage financing, or any other reasonable purpose. Tenant hereby
        waives any claim for damages or for any injury or inconvenience to or
        interference with Tenant's business, loss of occupancy or quiet enjoyment
        of the
        Premises, or any other loss occasioned thereby. For each of the aforesaid
        purposes, Landlord shall at all times have and retain a key with which to
        unlock
        all of the doors in, upon and about the Premises.

       

      
        
          
          

        

        
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      13.    Damage
        to
        Premises.
        In the
        event that without negligence or willful misconduct of Tenant or its employees,
        agents, or licensees, the Premises are damaged by fire or other casualty
        to such
        extent that the Premises are rendered substantially inaccessible or unusable
        for
        office purposes then either Landlord or Tenant shall have the option to
        terminate this Lease, provided that the party wishing to terminate this Lease
        must give written notice of termination to the other party within thirty
        (30)
        days after the date upon which such damage occurs or the option to terminate
        shall be void. In the event that either party exercises the option to terminate,
        this Lease shall be deemed to terminate on the third day after the giving
        of
        said notice, and Tenant shall surrender possession within ten (10) days
        thereafter. In the event neither party exercises the aforesaid option to
        terminate this Lease, Landlord, at its expense, shall repair the damage with
        reasonable dispatch, restoring the Premises as nearly as possible to its
        condition prior to such damage and all Base Rent and Additional Rent payable
        hereunder shall abate from the date the damage occurred until such time as
        the
        Premises have been entirely repaired and restored. Any disbursement of insurance
        proceeds by a holder of a deed of trust shall be deemed to have been made
        by
        Landlord. In determining what constitutes reasonable dispatch, consideration
        shall be given to delays caused by strikes, adjustment of insurance, and
        other
        causes beyond Landlord's control. Notwithstanding the foregoing provision,
        in
        the event the Premises are damaged by fire or other insured casualty due
        to the
        negligence or willful misconduct of Tenant, or the employees, agents or
        licensees of Tenant then without prejudice to any other rights and remedies
        of
        Landlord or its insurer, the damage shall be repaired as provided above.
        Tenant,
        however, shall not be relieved of any liability for any damage to the Premises
        caused by any negligence or willful misconduct of Tenant or its employees,
        agents or licensees.

       

      14.    Liability
        Insurance.
        At all
        times Tenant shall, at Tenant's expense, keep in full force and effect a
        policy
        of comprehensive public liability insurance, with a company acceptable to
        Landlord, insuring Landlord and Tenant against any liability arising out
        of the
        ownership, use, occupancy or maintenance of the Premises and all areas
        appurtenant thereto. Such insurance shall be in an amount not less than
        $1,000,000.00 for injury or death of one person in any one accident or
        occurrence, and in an amount not less than $1,000,000.00 for injury or death
        of
        more than one person in any one accident or occurrence. Such insurance shall
        further insure Landlord and Tenant against liability for property damage
        in an
        amount not less than $500,000.00. The limit of any such insurance shall not,
        however, limit the liability of Tenant under this Lease. Tenant shall deliver
        to
        Landlord copies of the policies of insurance required herein or certificates
        evidencing the existence and amounts of such insurance with loss payable
        clauses
        satisfactory to Landlord.

       

      15.    Quiet
        Enjoyment.
        Tenant,
        upon payment of the required rents and performing the terms, conditions,
        covenants and agreements contained in this Lease, shall peaceably and quietly
        hold and enjoy the Premises during the full term of this Lease. Landlord
        shall
        reasonably endeavor to insure Tenant's quiet enjoyment, but Landlord shall
        not
        be responsible for the acts or omissions of any third party that may interfere
        with Tenant's use and enjoyment of the Premises, so long as such acts or
        omissions of such third party are beyond Landlord's control.

       

      
        
          
          

        

        
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      16.    Assignment
        and Subletting.

       

      16.4    Assignment
        by Landlord.
        Landlord and owner shall have the right to transfer and assign, in whole
        or in
        part., right, title and interest in the Premises and its rights and obligations
        in and under this Lease. Landlord and owner shall be released from all
        obligations from the date of transfer, except for obligations as related
        to the
        period of time from the commencement date to the date of transfer and provided
        that Landlord or owner shall transfer Tenant's security deposit to its
        transferee and that such transferee agrees in writing to assume Landlord's
        or
        owner's obligation to hold such security deposit consistent with the terms
        of
        this Lease.

       

      16.5    Assignment
        by Tenant.
        Tenant
        shall not assign this Lease or any interest therein, or sublet all or any
        part
        of the Premises without the prior written consent of Landlord, which consent
        shall not be unreasonably withheld; provided, however, that as a condition
        of
        giving such consent:

       

      (a)    Landlord
        shall have the right to make reasonable inquiry into the financial qualification
        of any proposed subtenant or assignee to operate a business enterprise upon
        the
        Premises, and to perform a lease agreement therefor, and Landlord's obligation
        to permit assignment of this Lease or a sublease is contingent upon Landlord's
        approval of the proposed subtenant's or assignee's financial qualification.
        "Reasonable inquiry" may include, without limitation, requiring any prospective
        subtenant or assignee to supply to Landlord current and complete financial
        statements and credit reports.

       

      (b)    Upon
        Tenant's application for Landlord's consent to assignment or sublease, Landlord
        shall have the option to charge Tenant an administrative charge, not to exceed
        $500.00, to reimburse Landlord for its costs in reviewing Tenant's application
        for such assignment or sublease and making any inquiry related thereto. In
        addition, and as a condition of Landlord's approval, Tenant shall reimburse
        Landlord for any attorney fees incurred by Landlord in review or negotiation
        of
        any assignment or sublease.

       

      (c)    If
        Tenant
        is a corporation or a partnership, an assignment, as that term is used herein,
        includes one or more sales or transfers by which an aggregate of more than
        50%
        of Tenant's shares or partnership interests shall be vested in a party or
        parties who are not shareholders or partners as of the date of this Lease.
        For
        purposes of this paragraph, share and partnership interest ownership shall
        be
        determined in accordance with the principles set forth in Section 544 of
        the
        Internal Revenue Code.

       

      (d)    Without
        modifying the foregoing provisions of subparagraph 16.2, Landlord will permit
        the assignment of this lease to an entity owned or controlled by the individuals
        identified as Tenant in the preamble of this Lease, provided that Tenant
        makes
        written application for consent to such assignment accompanied by documentation
        sufficient for Landlord to determine that such entity legally exists and
        is
        owned or controlled by said individuals.

       

      16.6    Continuing
        Liability.
        Notwithstanding any sublease or assignment of this Lease, Tenant shall remain
        liable under all of the provisions and conditions of this Lease for the
        remaining term of the Lease.

       

      17.    Default
        by Tenant.

       

      
        
          
          

        

        
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      17.7 Events
        of Default.
        The
        following shall be deemed to be events of default by Tenant under this
        Lease:

       

      (a)    Failure
        by Tenant to pay when due any installment of Base Rent, Additional Rent,
        or any
        other sum payable by Tenant under this Lease.

       

      (b)    Abandonment
        by Tenant of the Premises for a period of thirty (30) consecutive days except
        following damage to, or destruction of the Premises;

       

      (c)    Failure
        by Tenant to comply with any term, provision or covenant of this Lease, other
        than the payment of rent, and the failure is not cured within ten (10) days
        after written notice to Tenant; provided, however, that if such default shall
        be
        of such a nature that the same cannot be cured or remedied within such ten
        (10)
        day period, then Tenant shall not be deemed to be in default hereunder if
        within
        such ten (10) day period Tenant shall commence to cure such default and shall
        thereafter diligently and in good faith proceed to cure such
        default.

       

      17.8    Remedies
        for Tenant's Default.
        Upon
        the occurrence of any event of default, Landlord shall have the
        option:

       

      (a)    To
        terminate this Lease; or

       

      (b)    Terminate
        Tenant's right to possession of the Premises and re-enter or repossess the
        Premises, either by legal proceeding, surrender or otherwise, and dispossess
        and
        remove therefrom Tenant or other occupants thereof and their effects without
        being liable to any prosecution or civil damages. Landlord shall use its
        best
        efforts to rerent the Premises at such rental and upon such other terms and
        conditions as Landlord may deem advisable in its reasonable discretion. However,
        Tenant shall remain liable under the terms of this Lease, and Tenant's
        obligations including the obligation to pay rent shall continue for the full
        term of this Lease, provided, however, that Tenant shall receive appropriate
        credit for amounts received by Landlord as a result of any
        rerenting.

       

      17.9    Waiver
        of Default or Remedy.
        Failure
        of Landlord to declare an event of default immediately upon its occurrence,
        or
        delay in taking any action in connection with an event of default, shall
        not
        constitute a waiver of the default, but Landlord shall have the right to
        declare
        the default at any time and take such action as is lawful or authorized under
        this Lease. Failure by Landlord to enforce the remedy provided upon an event
        of
        default shall not be deemed or construed to constitute a waiver of the default
        or of any other violation or breach of any of the terms, provisions and
        covenants contained in this Lease.

       

      18.    Force
        Majeure.
        In the
        event Landlord or Tenant shall be delayed or hindered in or prevented from
        performing any of the agreements, provisions or covenants required hereunder
        by
        restrictive governmental laws or regulations, riots, insurrection, war or
        other
        reason of a like nature not the fault of Landlord or Tenant, in performing
        work
        or doing acts required under the terms of this Lease, then performance of
        such
        act shall be extended for a period equivalent to the period of such
        delay.

       

      19.    Holding
        Over.
        In the
        event of holding over by Tenant after the expiration or termination of this
        Lease, the holdover shall be as a month to month tenancy and all of the terms
        and provisions of this Lease shall be applicable during that period, except
        that
        Tenant shall pay Landlord as rental for the period of such hold over an amount
        equal to one hundred twenty percent (120%) of the rent and additional rent
        which
        would have been payable by Tenant had the holdover period been a part of
        the
        original term of this Lease, including any adjustments made during the lease
        term. Tenant agrees to vacate and deliver the Premises to Landlord upon Tenant's
        receipt of notice from Landlord to vacate. The rent payable during the holdover
        period shall be payable to Landlord on demand. No holding over by Tenant,
        whether with or without consent of Landlord, shall operate to extend this
        Lease
        except as otherwise expressly provided in this Lease. In the event Tenant
        fails
        to surrender the Premises upon termination or expiration of this Lease, then
        Tenant shall indemnify Landlord against loss or liability resulting from
        any
        delay by Tenant in surrendering the Premises, including, but not limited
        to, any
        amounts required to be paid to third parties which were to have occupied
        the
        Premises and any reasonable attorney's fees related thereto.

       

      
        
          
          

        

        
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      20.    Condemnation.

       

      20.10    Taking
        of Premises.
        If,
        during the term of this Lease, all or a substantial part of the Premises
        are
        condemned or taken for any public or quasi-public use by any public authority,
        under any law, ordinance or regulation, by right of eminent domain or purchase
        in lieu thereof, then this Lease shall terminate upon the date when possession
        is taken by such public authority.

       

      20.11    Partial
        Taking.
        In the
        event a portion of the Premises or the portion of the parking area currently
        paved, adjacent to the Building and located on the Property, shall be taken
        for
        any public or quasi-public use by any public authority, under any law, ordinance
        or regulation, or by right of eminent domain or by purchase in lieu thereof,
        this Lease shall be voidable in the discretion of either party provided that
        the
        party wishing to terminate the Lease must give written notice of termination
        within thirty (30) days after Tenant is given notice of Landlord's consent
        to
        the taking or the entry of an order for the taking by a court of competent
        jurisdiction. The Lease shall terminate upon the date when possession of
        the
        Premises is taken by the public authority.

       

      20.12    Condemnation
        Proceeds.
        All
        compensation awarded or paid upon such a total or partial taking of the Premises
        by condemnation shall belong to and be the property of Landlord; provided,
        however, that nothing contained herein shall be construed to preclude Tenant
        from prosecuting any claim directly against the condemning authority in such
        condemnation proceeding for loss of the leasehold, business, or depreciation
        to,
        damage to, or cost of removal of, or for the value of stock, trade fixtures,
        equipment, furniture, and other personal property belonging to Tenant. Landlord
        and Tenant hereby agree to cooperate in the joint prosecution of their claims
        against the condemning authority.

       

      21.    Miscellaneous
        Provisions.

       

      21.13    Applicable
        Law and Construction.
        This
        Lease and the rights, duties and obligations hereunder shall be controlled
        by
        the laws of the State of Colorado. The singular shall include the plural
        and the
        plural shall include the singular as appropriate. Any reference to gender
        shall
        include all genders as appropriate. The titles and headnotes of paragraphs
        and
        subparagraphs of this Lease are for reference only, are not intended as an
        interpretation, and shall not affect or change the context or meaning of
        this
        Lease.

       

      21.14    Parties
        Bound.
        All
        covenants and agreements contained in this Lease shall extend to, be binding
        upon and inure to the benefit of the parties to this Lease and their respective
        heirs, personal representatives, successors, legal representatives and
        assigns.

       

      21.15    Severability.
        The
        invalidity or unenforceability of any provision of this Lease shall not affect
        or impair the validity or enforceability of any other provision in this
        Lease.

       

      
        
          
          

        

        
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      21.16    Notices.
        Whenever any notice is required or permitted hereunder, such notice shall
        be in
        writing unless otherwise specifically provided. Except as required or permitted
        under applicable law, any notice or document required to be delivered hereunder
        shall be deemed to be given and delivered four (4) days after it is deposited
        in
        the United States Mail, certified mail, Return Receipt Requested, addressed
        to
        the Landlord at the address set forth at subparagraph 5.1(i) and to Tenant
        at
        the Premises, or at such other addresses as either party has specified by
        written notice delivered in accordance herewith.

       

      21.17    Attorney
        Fees.
        In the
        event either party initiates legal action due to the other party's breach
        of any
        covenant, condition or agreement contained in this Lease, the prevailing
        party
        in such legal action shall be entitled to recover from the losing party all
        of
        the prevailing party's reasonable costs, expenses and attorney fees incurred
        in
        relation to such legal action.

       

      21.18    Entire
        Agreement.
        This
        Lease contains the entire agreement of the parties, and there are no
        representations, warranties, agreements, promises or understandings, either
        oral
        or written, between them, except such as are expressly set forth in this
        Lease.
        Tenant represents and agrees that it has not relied upon any statements,
        representations, warranties, agreements or promises made by Landlord, or
        anyone
        acting or claiming to be acting on Landlord's behalf, with respect to this
        Lease
        or the Premises, including, without limitation, its size or physical
        condition.

       

      21.19    Modification.
        This
        Lease may not be altered, waived, amended or extended except by an instrument
        in
        writing signed by the party or parties to be bound thereby.

       

      21.8    Bathroom
        Access.
        Notwithstanding any other provision of this Lease to the contrary, Tenant
        agrees
        to permit use of the bathroom facility within the Premises on the date of
        this
        Lease which has been modified to provide access to persons with disabilities
        by
        all persons using the building on business days from 9:00 a.m. to 5:00 p.m.
        including other tenants and their employees, customers, clients and
        patrons.

       

      WHEREFORE,
        the parties execute this Lease effective on the date set forth in the preamble
        on page 1 of this Lease.

      

        
          	
                  Landlord:

                	 	
                  Tenant:

                
	 	 	 
	
                  United
                    Professional Management, Inc.

                	 	
                  AeroGrow
                    International Inc.

                
	 	 	 
	
                  /s/
                    Trent Cole

                	 	
                  /s/
                    Michael Bissonnette

                
	
                  By:
                    Trent Cole, President

                	 	
                  By:
                    Michael Bissonnette

                

        

      

    

     

     

    
      
        
        

      

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