Exhibit 10.1
 
FIFTH AMENDMENT TO LOAN AGREEMENT
 
This Fifth Amendment dated as of September 23, 2011, by and between The
PrivateBank and Trust Company (“Lender”) and Advanced Photonix, Inc.
(“Borrower”).
 
 
RECITALS
 
A.           The Lender and Borrower entered into that certain Loan Agreement
dated September 25, 2008, as amended by four amendments (the “Agreement”).
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Agreement.
 
B.           Lender and Borrower desire to amend the Agreement as set forth
below.
 
NOW, THEREFORE, Lender and Borrower agree as follows:
 
1.           The following definitions in Section 1 of the Agreement are amended
to read as follows:
 
 “‘Base Net Worth’ shall initially be Sixteen Million Two Hundred Thousand
Dollars ($16,200,000). On the last day of each fiscal year of Borrower, Base Net
Worth shall increase by ten percent (10%) of Net Income for the fiscal year then
ended. If Net Income for any fiscal year is less than $0, it shall be deemed to
be $0 for purposes of this calculation.”
 
“‘Borrowing Base Amount’ shall mean an amount equal to the sum of the following:
 
(a)           eighty percent (80%) of the then net book value (after deducting
any discount or incentive for early payment or any issued or unissued credit
memos but without deducting any bad debt reserve) of all Eligible Accounts; plus
 
(b)           the lesser of: (i) fifty percent (50%) of the lower of cost or
market value (after deduction of such reserves and allowances as the Lender
deems proper and necessary) of Eligible Inventory; and (ii) $750,000.”
 
“’Net Worth’ shall mean, as of any date of determination, the excess of (i) the
net book value of the assets of Borrower and its consolidated Subsidiaries as of
such date, after all appropriate deductions in accordance with GAAP (including,
without limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization) over (ii) Debt of Borrower and its consolidated
Subsidiaries as of such date, all as determined in accordance with GAAP;
provided, however, in calculating Net Worth as of any date of determination,
there shall be added to the net book value of Borrower’s assets an amount equal
to the amount of non-cash goodwill or intangible asset impairment charges taken
by Borrower after September 17, 2011 and during the period of March 31, 2009 to
December 31, 2009.”
 
 
 

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“‘Term Loan Amount’ shall mean $1,000,000.”
 
2.           Section 2.A of the Agreement is amended to read as follows:
 
“2.A.1           Term Loan.   Lender agrees to loan to Borrower and Borrower
agrees to borrow, on September 23, 2011, a sum equal to the Term Loan
Amount.  At the time of borrowing, Borrower agrees to execute the Term
Note.  The loan under this Article 2.A shall be subject to the terms and
conditions of this Agreement and the Term Note.
 
2.A.2           Interest.  The outstanding principal balance of the Term Loan
shall bear interest as set forth in the Term Note and interest shall be
computed, assessed and payable as set forth in the Term Note.
 
2.A.3           Repayment; Prepayment.  The indebtedness represented by the Term
Note shall be repaid as set forth in the Term Note, and may be prepaid as set
forth in the Term Note.  Borrower may prepay the Term Note only as set forth in
the Term Note.
 
2.A.4           Use of Proceeds:  The proceeds of the Term Loan will be used to
refinance existing term debt of Borrower to Lender and to finance capital
expenditures.”
 
3.           Section 2.B.1 of the Agreement is amended to read as follows:
 
“[Reserved].”
 
4.           Section 6.5 of the Agreement is amended to read as follows:
 
“6.5           Financial Covenants.
 
(a)           Borrower shall maintain at all times a Debt Service Coverage Ratio
of not less than the following amounts for the periods specified below:
 
September 30, 2011 through September 30,
2013                                                           1.10 to 1.0
December 31, 2013 and
thereafter                                                                                     1.20
to 1.0

(b)           Borrower shall maintain at all times Adjusted EBITDA of not less
than $1,500,000.
 
Adjusted EBITDA shall be determined on a trailing twelve month basis.
 
 
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(c)           Borrower shall maintain at all times Net Worth of not less than
the Base Net Worth.”
 
5.           Section 6.24 of the Agreement is amended to read as follows:
 
“6.24           Bank Accounts.  Borrower shall and shall cause each of its
Subsidiaries to maintain all primary deposit accounts at Lender.”
 
6.           Borrower will reimburse the Lender for all costs and expenses,
including reasonable attorneys’ fees, incurred by the Lender in connection with
the preparation of this Amendment and the documents, instruments and agreements
executed in connection herewith.
 
7.           Borrower hereby represents and warrants that, after giving effect
to the amendments contained herein, (a) execution, delivery and performance of
this Amendment and any other documents and instruments required under this
Amendment or the Agreement are within Borrower’s powers, have been duly
authorized, are not in contravention of law or the terms of Borrower’s Articles
of Incorporation or Bylaws, and do not require the consent or approval of any
governmental body, agency, or authority; and this Amendment and any other
documents and instruments required under this Amendment or the Agreement, will
be valid and binding in accordance with their terms; (b) the continuing
representations, warranties and covenants of Borrower set forth in Section 5 of
the Agreement and any other documents, instruments or agreements executed in
connection therewith, are true and correct on and as of the date hereof with the
same force and effect as if made on and as of the date hereof; and (c)  no event
of default, or condition or event which, with the giving of notice or the
running of time, or both, would constitute an event of default under the
Agreement, has occurred and is continuing as of the date hereof.
 
8.           BORROWER WAIVES, DISCHARGES, AND FOREVER RELEASES LENDER, LENDER’S
EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS, STOCKHOLDERS, AND THEIR SUCCESSORS
AND ASSIGNS, FROM AND OF ANY AND ALL CLAIMS, CAUSES OF ACTION, ALLEGATIONS OR
ASSERTIONS THAT BORROWER HAS OR MAY HAVE HAD AT ANY TIME UP THROUGH AND
INCLUDING THE DATE OF THIS AMENDMENT, AGAINST ANY OR ALL OF THE FOREGOING,
REGARDLESS OF WHETHER ANY SUCH CLAIMS, CAUSES OF ACTION, ALLEGATIONS OR
ASSERTIONS ARE KNOWN TO COMPANIES OR WHETHER ANY SUCH CLAIMS, CAUSES OF ACTION,
ALLEGATIONS OR ASSERTIONS AROSE AS RESULT OF LENDER’S ACTIONS OR OMISSIONS IN
CONNECTION WITH THE AGREEMENT OR ANY OTHER DOCUMENTS, INSTRUMENTS OR AGREEMENTS
IN CONNECTION THEREWITH, OR ANY AMENDMENTS, EXTENSIONS OR MODIFICATIONS THERETO,
OR BANK’S ADMINISTRATION OF THE DEBT UNDER THE AGREEMENT OR OTHERWISE.
 
9.           This Amendment shall be effective upon (a) the execution by
Borrower and Lender of this Amendment, (b) execution by the Guarantors of the
attached Affirmation of Guaranty, (c) execution by Borrower of a replacement
Term Note and Amendment to Note in form acceptable to Lender, and (d) payment by
Borrower to Lender of a non-refundable commitment fee in the amount of $10,000.
 
 
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10.           Except as modified hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect.
 
11.           This Amendment may be executed and acknowledged in counterparts,
each of which shall constitute an original and all of which shall together
constitute one and the same Amendment.
 
 
THE PRIVATEBANK AND TRUST
   
ADVANCED PHOTONIX, INC.
 
COMPANY
                           
By: /s/ Eric Haege
   
By:  /s/ Richard D. Kurtz
           
Its:  Associate Managing Director
   
Its:  Chief Executive Officer
 
 
   
 
                 
By:  /s/ Jeff Anderson
                 
Its:  Chief Financial Officer
 

 
 
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AFFIRMATION OF GUARANTY
 
The undersigned acknowledge the foregoing Fifth Amendment to Loan Agreement, and
ratify and confirm their obligations under their Guaranty of Borrower’s
obligations to the Lender and acknowledge that the Guaranty remains in full
force and effect in accordance with its terms subject to no setoff, defense or
counterclaim.
 
 

September 23, 2011 
SILICON SENSORS, INC.
                     
 
By:
/s/ Richard D. Kurtz             Its:  President             By:               
Its:     

 
 
 

 
PICOMETRIX LLC
                     
 
By:
/s/ Richard D. Kurtz            
Its:
President
            By:               Its: