Unassociated Document


     

     

    Interim
      Funding Schedule - No. 01

    Dated
      March
      6,
      2007

    


    To
      Master
      Equipment Lease Agreement

    Dated
      as
      of March
      6,
      2007

     

    
      	Lessor:	
              THE
                FIFTH THIRD LEASING COMPANY,

            


    

    an
      Ohio corporation

     

    
      	Lessee:	
              ADVANCED
                PHOTONIX, INC.

            


    

     

    All
      of
      the terms of the Master Equipment Lease Agreement dated as of March
      6,
      2007
      (as
      amended, supplemented or modified from time to time, the “Master Lease”) between
      Lessee and Lessor are incorporated by reference herein. Capitalized terms used,
      and not otherwise defined, herein shall have the meanings ascribed thereto
      in
      the Master Lease. This Interim Funding Schedule as it incorporates the terms
      of
      the Master Lease and each schedule, exhibit and rider attached hereto is
      referred to as this “Lease”. If any term of any schedule, exhibit or rider
      hereto conflicts with or is inconsistent with any term of this Interim Funding
      Schedule or the Master Lease, the terms of such schedule, exhibit or rider
      shall
      govern. This Interim Funding Schedule shall constitute an “Equipment Schedule”
for all purposes of the Master Lease.

     

    1. Equipment.

     

    This
      Interim Funding Schedule relates to equipment to be purchased by Lessor as
      described on Schedule 1 hereto (such equipment, to the extent a Final Equipment
      Schedule (as defined herein) has not been executed with respect thereto,
      collectively the “Equipment”).

     

    2. Lease
      of Equipment and Funding.

     

    (a) Subject
      to the terms and conditions set forth herein, on or before June
      30,
      2007
      (the
“Commitment Termination Date”), at the request of Lessee, Lessor shall fund the
      purchase of Equipment by making payments in respect of the purchase price of
      such Equipment as
      designated by Lessee on Schedule A attached hereto or one or more draw requests
      provided by Lessee to Lessor from time to time
      (the
“Progress Payments”). The aggregate amount of Progress Payments paid by Lessor
      hereunder shall not exceed a total of Two
      Million Three Hundred Thousand
      Dollars
      and zero Cents ($2,300,000.00)
      (the
“Commitment”).

     

    (b) Lessee
      shall request that Lessor make a Progress Payment by delivering a notice (a
      “Funding Request”) to Lessor which such notice shall (i) identify the
      amount of such Progress Payment, which, together with all other Progress
      Payments previously made by lessor shall not exceed the Commitment, (ii)
      identify the date on which such Progress Payment is to be made which date shall
      be a Business Day not earlier than three (3) Business Days after the date of
      such Funding Request and not later than the Commitment Termination Date and
      (iii) attach an invoice from the Supplier of the Equipment in an amount equal
      to
      the requested amount of the Progress Payment. Delivery of such Funding Request
      shall constitute an acknowledgement by Lessee that such invoice is approved
      and
      accepted by Lessee.

     

    (c) The
      obligation of Lessor to make Progress Payments shall be subject to satisfaction
      (or waiver by Lessor) of each of the following conditions, prior to the date
      on
      which such Progress Payment is to be made:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i) Lessor
      shall have received each of the following documents, in form and substance
      satisfactory to Lessor: (A) a Master Lease duly executed by Lessee; (B) a
      Funding Request; (C)
      each
      of
      the documents required by Section 7(a) of the Master Lease (other than the
      conditions referred to in Section 7(a)(ii) and (iv) with respect to any
      Equipment which will not be delivered to Lessee at the time such Progress
      Payment is made); and

     

    (ii) Each
      of
      the other conditions set forth in Section 7 of the Master Lease shall have
      been
      satisfied.

     

    3. Final
      Equipment Schedule; Termination.

     

    (a) Lessor
      and Lessee intend to execute an Equipment Schedule which expressly supercedes
      and replaces this Interim Funding Schedule (a “Final Equipment Schedule”). Such
      Final Equipment Schedule shall be effective on the date (the “Lease Closing
      Date”) on which each of the following conditions have been satisfied (or waived
      by Lessor):

     

    (i) Lessor
      shall have received each of the following documents, in form and substance
      satisfactory to Lessor: (A) a Final Equipment Schedule duly executed by Lessee;
      (B) an Acceptance Certificate for each “Item of Equipment” (as defined in such
      Final Equipment Schedule) (which shall include all Equipment for which Progress
      Payments have been made hereunder) duly executed by Lessee; (C) each of the
      other documents required by Section 7(a) of the Master Lease; 

     

    (ii) Not
      less
      than ten (10) days prior to the Lease Closing Date, Lessee shall have delivered
      a notice to Lessor requesting that a Final Equipment Schedule be executed and
      specifying a date intended to be the Lease Closing Date; 

     

    (iii) Each
      of
      the other conditions set forth in Section 7 of the Master Lease and each of
      the
      conditions (if any) set forth in the Final Equipment Schedule shall have been
      satisfied. 

     

    (b) The
      obligation of Lessor to make Progress Payments shall terminate on the earlier
      to
      occur of (A) the Lease Closing Date and (B) the Commitment Termination Date
      (such date, the “Termination Date”).

     

    4. Payments.

     

    (a) As
      used
      herein, “Interest Rate” shall mean the percentage per annum equal to the rate
      (adjusted for the current maximum reserve rate required to be maintained by
      Lender) reported in the Wall Street Journal (Eastern Edition) as Prime Rate
      plus
      1/8%. Interest shall be computed on the basis of a year of 360 days for the
      actual number of days elapsed and shall accrue on the outstanding principal
      amount hereunder from and including the date each Advance is made to but
      excluding the date the entire principal amount hereunder is paid in full. The
      Interest Rate applicable to each Advance shall initially be determined on the
      second to last calendar day of the month immediately preceding the date such
      Advance was made and the Interest Rate shall be adjusted automatically on the
      second to last calendar day of the month which is one
      month
      after
      the date such Interest Rate was last determined; provided
      that,
      in
      each such case, if such day is not a Business Day, such adjustment shall be
      made
      on the Business Day immediately preceding such day. 

     

    (b) On
      the
      Termination Date, Lessee shall pay to Lessor an amount equal to the aggregate
      amount of all Progress Payments made by Lessor hereunder together with all
      amounts due and payable pursuant to Section 4(a)
      hereof;
provided,
      however, that
      if
      the Lease Closing Date occurs, the amount which Lessee is obligated to pay
      pursuant to this Section 4(a)
      shall be
      reduced by an amount equal to the Lessor’s Capitalized Cost (as defined in such
      Final Equipment Schedule).

     

    
      
         

      

      
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    (c) If
      (i) an
      Event of Default has occurred and is continuing, or (ii) for any reason
      whatsoever Supplier fails to deliver to Lessee an item of Equipment described
      in
      the Supply Contract in accordance with the terms thereof, or (iii) Lessee fails
      to accept any Equipment, or (iv) Progress Payments shall exceed the maximum
      amount provided in Section 2(a),
      then,
      in any such event, Lessee shall immediately upon demand, pay Lessor an amount
      equal to the sum of (A) the total amount of all Progress Payments paid by Lessor
      for all Equipment, plus (B) any other amounts due under the Lease including
      any
      accrued but unpaid payments referred to in Section 4(a).
      Upon
      Lessor’s receipt of such aggregate payment, Lessor will transfer all its right,
      title and interest in and to the Equipment to Lessee on an “as-is, where-is”
basis without representation or warranty.

     

    5. Insurance.
      

     

    Lessee
      shall maintain the insurance required pursuant to Section 10 of the Master
      Lease. For purposes of this Interim Funding Schedule, the Stipulated Loss Value
      for the Equipment at any time shall be an amount equal to 103%
      of
      the
      amount of the Progress Payments made as of such time. The amount of public
      liability and property damage insurance required to be maintained by the Lessee
      pursuant to Section 10(a) of the Master Lease is $1,000,000.00.

     

    6. Additional
      Provisions.

     

    (a) The
      Equipment location shall be as specified on Schedule 1 hereto.

     

    (b) To
      the
      extent any Equipment is delivered to Lessee, Lessor shall be considered to
      be
      the owner of such Equipment and title to such Equipment shall vest in Lessor
      without further action by Lessor or Lessee.

     

    Except
      as
      expressly modified hereby, all terms and provisions of the Master Lease shall
      remain in full force and effect. This Interim Funding Schedule is not binding
      or
      effective with respect to the Master Lease or Equipment until executed on behalf
      of Lessor and Lessee by authorized representatives of Lessor and Lessee,
      respectively.

     

    Remainder
      of page intentionally left blank. Signature page follows.

    


    
      
         

      

      
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    IN
      WITNESS WHEREOF, Lessee and Lessor have caused this Interim Funding Schedule
      to
      be executed by their duly authorized representatives as of the date first above
      written.

     

     

    
      	LESSOR:  	 	LESSEE: 
	THE FIFTH THIRD LEASING
              COMPANY 	 	ADVANCED PHOTONIX,
              INC. 
	 	 	 
	 	 	
            
	By: /s/
              Derek Burke	 	By: /s/
              Robin F. Risser  
	Name: Derek
              Burke 	 	Name: Robin
              F. Risser  
	Title: Vice
              President	 	Title:  CFO  


    

    
THIS
      LEASE MAY BE EXECUTED IN SEVERAL COUNTERPARTS AND TO THE EXTENT, IF ANY, THAT
      THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
      COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
      INTEREST IN THIS LEASE MAY BE PERFECTED THROUGH THE TRANSFER OF POSSESSION
      OF
      ANY COUNTERPART OTHER THAT THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED
      AS THE CHATTEL PAPER ORIGINAL ON THE SIGNATURE PAGE THEREOF. THIS IS
      THE
      CHATTEL PAPER ORIGINAL.

     

    


     

    CHATTEL
      PAPER ORIGINAL

    
      
         

      

      
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    IN
      WITNESS WHEREOF, Lessee and Lessor have caused this Interim Funding Schedule
      to
      be executed by their duly authorized representatives as of the date first above
      written.

     

    
      	LESSOR:  	 	LESSEE: 
	THE FIFTH THIRD LEASING
              COMPANY 	 	ADVANCED PHOTONIX,
              INC. 
	 	 	 
	 	 	
            
	By: /s/
              Derek Burke	 	By: /s/
              Robin F. Risser  
	Name: Derek
              Burke 	 	Name: Robin
              F. Risser  
	Title: Vice
              President	 	Title:  CFO  


       

    

     

    THIS
      LEASE MAY BE EXECUTED IN SEVERAL COUNTERPARTS AND TO THE EXTENT, IF ANY, THAT
      THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
      COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
      INTEREST IN THIS LEASE MAY BE PERFECTED THROUGH THE TRANSFER OF POSSESSION
      OF
      ANY COUNTERPART OTHER THAT THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED
      AS THE CHATTEL PAPER ORIGINAL ON THE SIGNATURE PAGE THEREOF. THIS IS
      NOT
      THE
      CHATTEL PAPER ORIGINAL.

     

    
      
         

      

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