Item 1.01. Entry into a Material Definitive Agreement.
Second Amendment to Loan Agreement with Michigan Strategic Fund
On November 6, 2013, Advanced Photonix, Inc. (the “Company”), its wholly-owned subsidiary Picometrix LLC (“Picometrix”, and together with the Company, the “Borrowers”) and the Michigan Strategic Fund (“MSF”), as successor in interest to the Michigan Economic Development Corporation (“MEDC”), executed a Second Amendment (the “MSF Amendment") to the Loan Agreement dated September 15, 2005 (as amended, the “MSF Loan Agreement”) by and among the Borrowers and MEDC. The MSF Amendment became effective November 6, 2013.
Among other things, the MSF Amendment (1) affirms the total outstanding principal of the original promissory note issued in connection with the MSF Loan Agreement to be $326,746 as of September 30, 2013, (2) changes the annual interest rate of the original promissory note to 5% per annum, an increase of 1% per annum effective September 1, 2013, (3) commences interest only payments starting on October 1, 2013 and continuing on the first business day of each of the following twelve (12) calendar months, (4) affirms the Borrowers’ obligation to make a final payment (“MSF Final Payment”) to MSF which shall reflect all remaining outstanding indebtedness under the MSF Loan Agreement on November 1, 2014, and (5) provides that if the Borrowers fail to make the MSF Final Payment on November 1, 2014, beginning November 2, 2014, the Borrowers will be obligated to pay a default rate of interest equal to fifteen percent (15%) per annum until the indebtedness is paid in full.
Fourth Amendment to Loan Agreement between Michigan Economic Development Corporation
On November 6, 2013, the Borrowers and the MEDC executed a Fourth Amendment (the “MEDC Amendment") to the Convertible Loan Agreement dated September 15, 2004 (as amended, the “MEDC Loan Agreement”) by and among the Borrowers and MEDC. The MEDC Amendment became effective November 6, 2013.
Among other things, the MEDC Amendment (1) affirms the total outstanding principal of the original promissory note issued in connection with the MEDC Loan Agreement to be to be $327,883 as of September 30, 2013, (2) changes the annual interest rate of the original promissory note to 5% per annum, an increase of 1% per annum effective September 1, 2013, (3) commences interest only payments starting on October 1, 2013 and continuing on the first business day of each of the following thirteen (13) calendar months, (4) affirms Borrowers’ obligation to make a final payment (“MEDC Final Payment”) to MEDC which shall reflect all remaining outstanding indebtedness under the MEDC Loan Agreement on December 1, 2014, and (5) provides that if the Borrowers fail to make the MEDC Final Payment on December 1, 2014, beginning December 2, 2014, the Borrowers will be obligated to pay a default rate of interest equal to fifteen percent (15%) per annum until the indebtedness is paid in full.
The preceding descriptions of the MSF Amendment and MEDC Amendment are qualified in their entirety by reference to the copies of the MSF Amendment and MEDC Amendment filed herewith as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit
Number
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Exhibit
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10.1
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Amendment Two to the Loan Agreement between Michigan Strategic Fund and Advanced Photonix, Inc., dated November 6, 2013.
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10.2
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Amendment Four to the Convertible Loan Agreement between Michigan Economic Development Corporation and Advanced Photonix, Inc., dated November 6, 2013.
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