UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 21, 2010
AEROGROW INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 001-33531 | 46-0510685 | |||
| (State or Other Jurisdiction of | (Commission File Number) | (I.R.S. Employer | |||
| Incorporation) | Identification No.) | ||||
| 6075 Longbow Dr. Suite 200, Boulder, Colorado | 80301 | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
Registrant's Telephone Number, Including Area Code: (303) 444-7755
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On May 21, 2010, AeroGrow International, Inc. (the “Company”) and First Western Trust Bank (“FWTB”) executed a business loan agreement and related promissory note (the “FWTB Line of Credit”). The FWTB Line of Credit provides for loans by FWTB to the Company of up to a maximum of $2 million at any given time, subject to the Company maintaining an equivalent amount of cash on deposit in a restricted account at FWTB. Loans under the FWTB Line of Credit bear interest at a fixed rate of 2.0% per annum. In addition, the Company paid FWTB an origination fee of $2,500. The terms and conditions of the FWTB Line of Credit include limitations on the Company incurring additional debt and paying dividends on the Company’s stock without the consent of FWTB.&# 160; In the event of a default under the FWTB Line of Credit, FWTB has the option to declare any loans outstanding immediately due and payable. The FWTB Line of Credit has a maturity date of May 20, 2011.
On May 21, 2010, the Company, FWTB and Jack J. Walker, the Company’s Chairman and CEO, as guarantor, executed a business loan agreement and related promissory note (the “FWTB Term Loan”) for a four-year loan in an initial principal amount of $1 million. The FWTB Term Loan is secured by a lien on the Company’s assets. In addition, Mr. Walker provided a guaranty of all Company obligations relating to the FWTB Term Loan. The FWTB Term Loan bears interest at a fixed rate of 7.25% per annum and the Company paid a $12,500 origination fee to FWTB. The Company will make equal monthly payments of principal/interest over the four-year term of the FWTB Term Loan, which has a final maturity date of May 21, 2014. The terms and conditions of the FWTB Term Loan inclu de limitations on the Company incurring additional debt and paying dividends on the Company’s stock without the consent of FWTB. In the event of a default under the FWTB Term Loan, FWTB has the option to declare the loan immediately due and payable.
Proceeds from the FWTB Term Loan were used to repay, in full, the Company’s $673,600 obligation to FCC, LLC d/b/a First Capital (“FCC”), and the revolving credit facility previously extended by FCC to the Company was terminated on May 24, 2010. Proceeds from the FWTB Term Loan were also used, along with other funds of the Company, to repay, in full, the Company’s $511,647 obligation to First National Bank of Colorado on May 24, 2010.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AeroGrow International, Inc. | ||
By: /s/ H. MacGregor Clarke | ||
| H. MacGregor Clarke | ||
| Chief Financial Officer and Treasurer |
DATED: May 26, 2010