Exhibit 10.1

 

Execution Copy

 

CASE - 119912

 

Amendment Three

to the

Loan Agreement

between

Michigan Strategic Fund

and

Advanced Photonix, Inc.

 

This Amendment Three (the “Amendment”), dated December 9, 2014, is to the Loan
Agreement between the Michigan Strategic Fund (the “MSF”) and Advanced Photonix,
Inc. (the “Company”), dated September 15, 2005, as amended (the “Agreement”).

 

Pursuant to Section 9.11 of the Agreement, the Parties agree to amend the
Agreement as follows:

 

 

1.

Second Revised Exhibit D is deleted in its entirety and replaced with the
attached Third Revised Exhibit D.

          The following document is incorporated by reference as binding
obligations, terms and conditions of the Agreement:

 

Third Revised Exhibit D: Fourth Amended and Restated Promissory Note

 

Except as specifically provided above, the Parties agree that all terms and
conditions of the Agreement shall remain unchanged and in effect.

 

The signatories below warrant that they are empowered to enter into this
Amendment.

 

 COMPANY ACCEPTANCE: 

Advanced Photonix, Inc.

 

 

   

Dated:                                                  

                                                                                                          

 

Jeff Anderson

 

Chief Financial Officer

 

 

 

 

MSF ACCEPTANCE:

Michigan Strategic Fund

 

 

 

 

Dated:                                   

                                                                                                            

 

Mark Morante

 

Fund Manager

 

 

 

 

    

 
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Execution Copy

 

THIRD REVISED EXHIBIT D

 

FORM OF NOTE

 

FOURTH AMENDED AND RESTATED PROMISSORY NOTE

(Line of Credit)

 

Up to $1,200,000  

 Dated: December 9, 2014

   

THIS FOURTH AMENDED AND RESTATED PROMISSORY NOTE REPLACES AND AMENDS AND
RESTATES IN ITS ENTIRETY THAT CERTAIN PROMISSORY NOTE (LINE OF CREDIT) EXECUTED
BY BORROWER AND DELIVERED TO LENDER IN THE ORIGINAL PRINCIPAL AMOUNT OF UP TO
ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000) DATED SEPTEMBER 15, 2005,
AS AMENDED AND RESTATED ON JANUARY 26, 2009, JUNE 16, 2010 AND NOVEMBER 6, 2013
(THE “PRIOR NOTES”). BY ACCEPTANCE OF THIS FOURTH AMENDED AND RESTATED
PROMISSORY NOTE, LENDER ACKNOWLEDGES AND AGREES THAT THE PRIOR NOTES SHALL CEASE
TO EVIDENCE ANY OBLIGATIONS OF BORROWER TO LENDER.

 

FOR VALUE RECEIVED, Advanced Photonix, Inc. (the “Borrower”), promises to pay to
the order of the Michigan Strategic Fund, a public body corporate and politic
within the Department of Treasury of the State of Michigan (the “Lender” or
“MSF”), at 300 North Washington Square, Lansing, Michigan or at such other place
as Lender may designate in writing, the principal sum of One Million Two Hundred
Thousand Dollars ($1,200,000) or such lesser sum as shall have been advanced by
Lender to Borrower under this Note and as contemplated by that certain Loan
Agreement between Borrower and Lender, dated September 15, 2005, as amended (the
“Loan Agreement”), plus interest as hereinafter provided, all in lawful money of
the United States of America, in accordance with the terms hereof. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Loan Agreement.

 

All disbursements made under this Fourth Amended and Restated Promissory Note
(the “Note”) shall be charged to a loan account in Borrower’s name on Lender’s
books, and Lender shall debit to such account the amount of each advance made
to, and credit to such account the amount of each repayment made by Borrower.
From time to time and upon Borrower's request, Lender shall furnish Borrower a
statement of Borrower’s loan account, which statement shall be deemed to be
correct, accepted by, and binding upon Borrower, unless Lender receives a
written statement of exceptions from Borrower within ten (10) calendar days
after such statement has been furnished.

 

As of October 31, 2014, the Parties agree that the total outstanding balance due
under this Note is Three Hundred Twenty Six Thousand Seven Hundred Forty Six and
05/100 Dollars ($326,746.05) (the “Outstanding Balance”) and accrued interest of
One Thousand Three Hundred Eighty Seven and 55/100 Dollars ($1,387.55) which was
paid to the Lender in November 2014. Beginning November 1, 2014 the Outstanding
Balance of this Note shall bear interest at a per annum rate of six percent
(6%). Interest shall be computed on the basis of the actual number of days
elapsed.

 

 
D-1

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Execution Copy

 

 

Borrower shall have no obligation to make any payment of principal or accrued
interest on this Note until November 1, 2015. As of October 31, 2015, all
accrued but unpaid interest on this Note shall be added to the then outstanding
balance, with such sum referred to herein as the “Restated Principal”.
Commencing on November 1, 2015, and continuing on the first business day of each
of the following eleven (11) calendar months, Borrower shall pay the Lender the
Restated Principal and accrued interest on any unpaid portion thereof in equal
installments until paid in full. If Borrower fails to make a monthly payment,
the then outstanding principal balance of this Note shall bear interest, as of
the date of default, at a default per annum rate of fifteen percent (15%) until
any default is cured to the satisfaction of the Lender.

 

In the event that any payment under this Note is not received by Lender within
ten days of the date when due, a late charge of five (5%) percent of the amount
of such shall be due and payable. Borrower agrees that the late charge is a
reasonable estimate of the administrative costs which Lender will incur in
processing the delinquency. Lender’s acceptance of a late payment and/or of the
late payment charge will not waive any default under this Note.

 

The Borrower shall have the right to prepay accrued interest and principal in
whole or in part at any time without payment of any prepayment fee or penalty.
Prepayments are to be applied first to accrued interest and then to principal.

 

Upon the occurrence of a Trigger Event (as defined in the Debt Conversion
Agreement) or an Event of Default (as defined in the Loan Agreement), the entire
Indebtedness, shall become immediately due and payable at the election of Lender
without notice, demand or presentment. All costs and expenses of collection,
including, without limitation, reasonable attorney’s fees and expenses, shall be
added to and become part of the total Indebtedness evidenced by this Note.

 

Upon the occurrence of a Trigger Event (as defined in the Debt Conversion
Agreement dated May 12, 2010), Lender may at its sole option and discretion
declare the entire indebtedness, plus a premium equal to seven percent (7%) of
the then-outstanding principal balance of this Note, immediately due and
payable. Lender shall give Borrower written notice of this declaration of
acceleration by sending a statement to Borrower stating the declaration and
setting out the amount owed as of the date of the notice. Interest shall
continue to accrue at the rate set out herein until Borrower pays the
indebtedness and such premium, in full.

 

Acceptance by Lender of any payment in an amount less than the amount then due
shall be deemed an acceptance on account only, and Borrower’s failure to pay the
entire amount then due shall be and continue to be a default. Upon the
occurrence of any Event of Default under the Loan Agreement, neither the failure
of Lender promptly to exercise its right to declare the outstanding principal
and accrued unpaid interest and any applicable premium hereunder to be
immediately due and payable, nor the failure of Lender to demand strict
performance of any other obligation of Borrower, shall constitute a waiver of
any such rights, nor a waiver of such rights in connection with any future
default on the part of Borrower or any other person who may be liable hereunder.

 

 
D-2

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Execution Copy

 

 

Notwithstanding anything herein to the contrary, in no event shall Borrower be
required to pay a rate of interest in excess of the Maximum Rate. The term
“Maximum Rate” shall mean the maximum non-usurious rate of interest that Lender
is allowed to contract for, charge, take, reserve or receive under the
applicable laws of any applicable state or of the United States of America
(whichever from time to time permits the highest rate for the use, forbearance
or detention of money) after taking into account, to the extent required by
applicable law, any and all relevant payments or charges hereunder, or under any
other document or instrument executed and delivered in connection therewith and
the Indebtedness.

 

In the event Lender ever receives, as interest, any amount in excess of the
Maximum Rate, such amount as would be excessive interest shall be deemed a
partial prepayment of principal, and, if the principal hereof is paid in full,
any remaining excess shall be returned to Borrower. In determining whether or
not the interest paid or payable, under any specified contingency, exceeds the
Maximum Rate, Borrower and Lender shall, to the maximum extent permitted by law,
(a) characterize any non-principal payment as an expense, fee, or premium rather
than as interest; (b) exclude voluntary prepayments and the effects thereof; and
(c) amortize, prorate, allocate and spread the total amount of interest through
the entire contemplated term of such indebtedness until payment is made in full
of the principal (including the period of any extension or renewal thereof) so
that the interest on account of such indebtedness shall not exceed the Maximum
Rate.

 

This Note shall be binding upon Borrower and its permitted successors and
assigns, and the benefits hereof shall inure to Lender and its successors and
assigns. This Note has been executed in the State of Michigan, and all rights
and obligations hereunder shall be governed by the laws of the State of
Michigan.

 

 

BORROWER:

ADVANCED PHOTONIX, INC.

 

 

 

___________________________

Jeff Anderson

Chief Financial Officer

 

 
D-3

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Execution Copy

 

 

FOURTH AMENDED AND RESTATED PROMISSORY NOTE

(Line of Credit)

 

Up to $1,200,000 

 Dated: December 9, 2014

    

THIS FOURTH AMENDED AND RESTATED PROMISSORY NOTE REPLACES AND AMENDS AND
RESTATES IN ITS ENTIRETY THAT CERTAIN PROMISSORY NOTE (LINE OF CREDIT) EXECUTED
BY BORROWER AND DELIVERED TO LENDER IN THE ORIGINAL PRINCIPAL AMOUNT OF UP TO
ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000) DATED SEPTEMBER 15, 2005,
AS AMENDED AND RESTATED ON JANUARY 26, 2009, JUNE 16, 2010 AND NOVEMBER 6, 2013
(THE “PRIOR NOTES”). BY ACCEPTANCE OF THIS FOURTH AMENDED AND RESTATED
PROMISSORY NOTE, LENDER ACKNOWLEDGES AND AGREES THAT THE PRIOR NOTES SHALL CEASE
TO EVIDENCE ANY OBLIGATIONS OF BORROWER TO LENDER.

 

FOR VALUE RECEIVED, Advanced Photonix, Inc. (the “Borrower”), promises to pay to
the order of the Michigan Strategic Fund, a public body corporate and politic
within the Department of Treasury of the State of Michigan (the “Lender” or
“MSF”), at 300 North Washington Square, Lansing, Michigan or at such other place
as Lender may designate in writing, the principal sum of One Million Two Hundred
Thousand Dollars ($1,200,000) or such lesser sum as shall have been advanced by
Lender to Borrower under this Note and as contemplated by that certain Loan
Agreement between Borrower and Lender, dated September 15, 2005, as amended (the
“Loan Agreement”), plus interest as hereinafter provided, all in lawful money of
the United States of America, in accordance with the terms hereof. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Loan Agreement.

 

All disbursements made under this Fourth Amended and Restated Promissory Note
(the “Note”) shall be charged to a loan account in Borrower’s name on Lender’s
books, and Lender shall debit to such account the amount of each advance made
to, and credit to such account the amount of each repayment made by Borrower.
From time to time and upon Borrower's request, Lender shall furnish Borrower a
statement of Borrower’s loan account, which statement shall be deemed to be
correct, accepted by, and binding upon Borrower, unless Lender receives a
written statement of exceptions from Borrower within ten (10) calendar days
after such statement has been furnished.

 

As of October 31, 2014, the Parties agree that the total outstanding balance due
under this Note is Three Hundred Twenty Six Thousand Seven Hundred Forty Six and
05/100 Dollars ($326,746.05) (the “Outstanding Balance”) and accrued interest of
One Thousand Three Hundred Eighty Seven and 55/100 Dollars ($1,387.55) which was
paid to the Lender in November 2014. Beginning November 1, 2014 the Outstanding
Balance of this Note shall bear interest at a per annum rate of six percent
(6%). Interest shall be computed on the basis of the actual number of days
elapsed.

 

 
D-4

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Execution Copy

 

 

Borrower shall have no obligation to make any payment of principal or accrued
interest on this Note until November 1, 2015. As of October 31, 2015, all
accrued but unpaid interest on this Note shall be added to the then outstanding
balance, with such sum referred to herein as the “Restated Principal”.
Commencing on November 1, 2015, and continuing on the first business day of each
of the following eleven (11) calendar months, Borrower shall pay the Lender the
Restated Principal and accrued interest on any unpaid portion thereof in equal
installments until paid in full. If Borrower fails to make a monthly payment,
the then outstanding principal balance of this Note shall bear interest, as of
the date of default, at a default per annum rate of fifteen percent (15%) until
any default is cured to the satisfaction of the Lender.

 

In the event that any payment under this Note is not received by Lender within
ten days of the date when due, a late charge of five (5%) percent of the amount
of such shall be due and payable. Borrower agrees that the late charge is a
reasonable estimate of the administrative costs which Lender will incur in
processing the delinquency. Lender’s acceptance of a late payment and/or of the
late payment charge will not waive any default under this Note.

 

The Borrower shall have the right to prepay accrued interest and principal in
whole or in part at any time without payment of any prepayment fee or penalty.
Prepayments are to be applied first to accrued interest and then to principal.

 

Upon the occurrence of a Trigger Event (as defined in the Debt Conversion
Agreement) or an Event of Default (as defined in the Loan Agreement), the entire
Indebtedness, shall become immediately due and payable at the election of Lender
without notice, demand or presentment. All costs and expenses of collection,
including, without limitation, reasonable attorney’s fees and expenses, shall be
added to and become part of the total Indebtedness evidenced by this Note.

 

Upon the occurrence of a Trigger Event (as defined in the Debt Conversion
Agreement dated May 12, 2010), Lender may at its sole option and discretion
declare the entire indebtedness, plus a premium equal to seven percent (7%) of
the then-outstanding principal balance of this Note, immediately due and
payable. Lender shall give Borrower written notice of this declaration of
acceleration by sending a statement to Borrower stating the declaration and
setting out the amount owed as of the date of the notice. Interest shall
continue to accrue at the rate set out herein until Borrower pays the
indebtedness and such premium, in full.

 

Acceptance by Lender of any payment in an amount less than the amount then due
shall be deemed an acceptance on account only, and Borrower’s failure to pay the
entire amount then due shall be and continue to be a default. Upon the
occurrence of any Event of Default under the Loan Agreement, neither the failure
of Lender promptly to exercise its right to declare the outstanding principal
and accrued unpaid interest and any applicable premium hereunder to be
immediately due and payable, nor the failure of Lender to demand strict
performance of any other obligation of Borrower, shall constitute a waiver of
any such rights, nor a waiver of such rights in connection with any future
default on the part of Borrower or any other person who may be liable hereunder.

 

 
D-5

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Execution Copy

 

 

Notwithstanding anything herein to the contrary, in no event shall Borrower be
required to pay a rate of interest in excess of the Maximum Rate. The term
“Maximum Rate” shall mean the maximum non-usurious rate of interest that Lender
is allowed to contract for, charge, take, reserve or receive under the
applicable laws of any applicable state or of the United States of America
(whichever from time to time permits the highest rate for the use, forbearance
or detention of money) after taking into account, to the extent required by
applicable law, any and all relevant payments or charges hereunder, or under any
other document or instrument executed and delivered in connection therewith and
the Indebtedness.

 

In the event Lender ever receives, as interest, any amount in excess of the
Maximum Rate, such amount as would be excessive interest shall be deemed a
partial prepayment of principal, and, if the principal hereof is paid in full,
any remaining excess shall be returned to Borrower. In determining whether or
not the interest paid or payable, under any specified contingency, exceeds the
Maximum Rate, Borrower and Lender shall, to the maximum extent permitted by law,
(a) characterize any non-principal payment as an expense, fee, or premium rather
than as interest; (b) exclude voluntary prepayments and the effects thereof; and
(c) amortize, prorate, allocate and spread the total amount of interest through
the entire contemplated term of such indebtedness until payment is made in full
of the principal (including the period of any extension or renewal thereof) so
that the interest on account of such indebtedness shall not exceed the Maximum
Rate.

 

This Note shall be binding upon Borrower and its permitted successors and
assigns, and the benefits hereof shall inure to Lender and its successors and
assigns. This Note has been executed in the State of Michigan, and all rights
and obligations hereunder shall be governed by the laws of the State of
Michigan.

 

 

BORROWER:

ADVANCED PHOTONIX, INC.

 

 

 

___________________________

Jeff Anderson

Chief Financial Officer

 

 D-6