Document:

Exhibit 10.10.10

 

TENTH AMENDMENT
 TO
  AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This Tenth Amendment to Amended and Restated Loan and Security Agreement is entered into as of September 10, 2013 (the “Amendment”), by and between APPLIED OPTOELECTRONICS, INC. (“Borrower”) and EAST WEST BANK (“Bank”).

 

RECITALS

 

Borrower and Bank are parties to that certain Amended and Restated Loan and Security Agreement dated as of May 20, 2009 and as amended from time to time including that certain First Amendment to Amended and Restated Loan and Security Agreement dated as of May 3, 2010, that certain Second Amendment to Amended and Restated Loan and Security Agreement dated as of October 28, 2010, that certain Third Amendment to Amended and Restated Loan and Security Agreement dated as of December 6, 2010, that certain Fourth Amendment to Amended and Restated Loan and Security Agreement dated as of May 5, 2011, that certain letter dated September 30, 2011, that certain Fifth Amendment to Amended and Restated Loan and Security Agreement dated as of November 30, 2011, that certain Sixth Amendment to Amended and Restated Loan and Security Agreement dated as of March 29, 2012, that certain Seventh Amendment to Amended and Restated Loan and Security Agreement dated as of June 29, 2012, that certain Eighth Amendment to Amended and Restated Loan and Security Agreement dated as of November 2, 2012, that certain Assignment, Assumption and Amendment Agreement dated as of March 25, 2013, and that certain Ninth Amendment to Amended and Restated Loan and Security Agreement dated as of April 11, 2013 (collectively, the “Agreement”).  The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

AGREEMENT

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      The following defined terms set forth in Section 1.1 of the Agreement are amended and restated in their entirety to read as follows:

 

“Domestic Borrowing Base” means an amount equal to (i) 80% of Eligible Accounts, plus (ii) the lesser of 30% of Eligible Inventory or $1,000,000, plus (iii) Excess Cash; as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrower.  Notwithstanding the foregoing, Eligible Inventory shall not exceed 50% of the total Domestic Borrowing Base; and the Excess Cash component of the Domestic Borrowing Base shall not exceed $2,000,000.

 

“Shares” means the capital stock of all of Borrower’s direct and indirect Subsidiaries, including without limitation, Prime World International Holdings, Ltd., and Global Technology, Inc.; provided however that the Shares shall not include more than 65% of the outstanding capital stock of Global Technology, Inc.

 

2.                                      The following defined terms are added to Section 1.1 of the Agreement as follows:

 

“Equipment II Advance” means a cash advance or cash advances made under Section 2.1(h).

 

“Equipment II Maturity Date” means September 10, 2017.

 

“Excess Cash” means the amount of Borrower’s unrestricted cash maintained at Bank in excess of Four Million Dollars ($4,000,000).

 

3.                                      Section 2.1(g) is amended in its entirety to read as follows:

 

 

(g)                                  Priority.  Notwithstanding the foregoing provisions, any payments by Borrower to Bank following an Event of Default shall not be applied to any Line II Advance or Equipment II Advance or any interest accrued thereon until all other Credit Extensions are fully repaid.

 

4.                                      The following is added as a new subsection (h) following the end of Section 2.1(g):

 

(h)                                 Equipment II Advances.

 

(i)                                     Subject to and upon the terms and conditions of this Agreement, on or before March 10, 2014 (the “Amortization Date”), Bank agrees to make one or more Equipment II Advances to Borrower in an aggregate amount not to exceed Five Million Dollars ($5,000,000). On or before the initial Equipment II Advance made to Borrower, Borrower shall execute and deliver to Bank a promissory note for the Equipment II Advances in substantially the form attached hereto as Exhibit B-6.  Bank may enforce its rights in respect of the Equipment II Advance under this Agreement without such note. Equipment II Advances may only be used to finance Equipment purchased by Borrower no earlier than March 31, 2013, which was new when purchased by Borrower.  No Equipment II Advance may exceed ninety percent (90%) of the total invoice for such Equipment (excluding taxes, shipping, warranty charges, freight discounts and installation expenses relating to such Equipment).

 

(ii)                                  Borrower shall pay interest on the aggregate outstanding principal amount of the Equipment II Advances on the fifth day of each month for so long as any Equipment II Advances are outstanding.  On the fifth day of each month following the Amortization Date and until the Equipment II Advance Maturity Date, Borrower shall repay the outstanding Equipment II Advances in forty two (42) equal monthly installments of principal, plus accrued interest.  The entire principal balance and all accrued but unpaid interest on the Equipment II Advances shall be due and payable on the Equipment II Advance Maturity Date.  Equipment II Advances, once repaid, may not be reborrowed.  Borrower may prepay any Equipment II Advances without penalty or premium.

 

(iii)                               When Borrower desires to obtain an Equipment II Advance, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three (3) Business Days before the day on which the Equipment II Advance is to be made.  Such notice shall be substantially in the form of Exhibit C.  The notice shall be signed by a Responsible Officer or its designee and include a copy of the invoice or other documentation with respect to the purchase and payment terms of the Equipment being acquired by Borrower that is to be financed by Bank, with such details as may be requested by Bank.

 

5.                                      The following is added as a new subsection (v) to the end of Section 2.3(a) as follows:

 

(v)                                 Except as set forth in Section 2.3(b), the outstanding principal balance of each Equipment II Advance shall bear interest at a variable rate per annum equal to the Prime Rate plus 1.25%.

 

6.                                      The following is added to the end of Section 6.2(a) of the Agreement:

 

Notwithstanding the foregoing, following Borrower’s initial public offering and for so long as Borrower is required to file its Form 10Q with the Securities Exchange Commission), in lieu of delivering monthly financial statements, Borrower shall deliver quarterly consolidated and consolidating financial statements (balance sheet, income

 

 

statement and cash flow statement) to Bank on or before the date Borrower’s report on Form 10-Q is required to be filed with the Securities Exchange Commission.

 

7.                                      Section 6.6 of the Agreement is amended in its entirety to read as follows:

 

6.6                               [Intentionally Omitted].

 

8.                                      Section 6.15 of the Agreement is amended in its entirety to read as follows:

 

6.15                        Minimum Debt Service Coverage.  Borrower shall maintain a minimum ratio of EBITDASO on a consolidated basis for the trailing four quarter period to the sum of (x) all accrued interest payable in the same four quarter period plus (y) all principal payable in the same four quarter period on any Indebtedness (not including principal outstanding on any revolving lines of credit) owing by Borrower and its Subsidiaries to Bank or other financial institutions, of at least 1.25 to 1.00 (the “DSC Ratio”), measured on a quarterly basis. Notwithstanding the foregoing, Borrower’s failure to maintain the DSC Ratio shall not constitute an Event of Default if, within 60 days after the reporting period of such failure, Borrower receives cash proceeds from the sale and issuance of its equity and/or Subordinated Debt securities in an amount no less than the shortfall amount that caused Borrower’s failure to maintain the DSC Ratio.

 

9.                                      Section 7.2 of the Agreement is amended in its entirety to read as follows:

 

7.2 Change in Name or Executive Management; Change in Business; Change in Fiscal Year; Change in Control.  (i) Change its name without 30 days prior written notification to Bank; or (ii) terminate or replace its chief executive officer or chief financial officer or other executive level officer without prior written approval of Bank (provided however Borrower need not comply with this clause (ii) following Borrower’s initial public offering and for so long as Borrower’s capital stock is publicly traded on a nationally recognized exchange market); or (iii) engage in any business, or permit any of its Subsidiaries to engage in any business, other than or reasonably related or incidental to the businesses currently engaged in by Borrower; or (iv) change its fiscal year end; or (v) have a Change in Control.

 

10.                               Exhibit B-6 attached hereto is incorporated in its entirety as Exhibit B-6 to the Agreement.

 

11.                               Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remains in full force and effect in accordance with its terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all instruments, documents and agreements entered into in connection with the Agreement.

 

12.                               Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

 

13.                               This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

 

14.                               As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

 

(a)                                 this Amendment, duly executed by Borrower;

 

 

(b)                                 Corporate Resolutions and Incumbency Certification;

 

(c)                                  payment of an amendment fee of $12,500, plus all Bank Expenses incurred through the date of this Amendment; and

 

(d)                                 such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

	
 
    	
APPLIED   OPTOELECTRONICS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Chih-Hsiang (Thompson) Lin
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CEO
    
	
 
    	
 
    	
 
    
	
 
    	
EAST   WEST BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lisa Chang
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Vice   PresidentAmerican Petro-Hunter Inc. - Exhibit 10.4 - Filed by newsfilecorp.com

STRICTLY PRIVATE AND CONFIDENTIAL

TERM SHEET
Summary of Terms and
Conditions

July 26, 2013

The primary purpose of this Term Sheet (“Term Sheet”) is
to set forth the principal terms and conditions of the purchase as described
herein.

	
      Seller: 
	
      Warpaint Kansas, LP (“Seller”). 

		 
	
      Buyer: 
	
      American Petro-Hunter, Inc. or its assignees or
      affiliates thereof (“Buyer”). 

		 
	
      Properties: 
	
      The following described assets, properties, rights,
      titles and interests of Seller, located and owned by the Seller in Rice
      and Reno Counties, Kansas, (herein collectively called the
      “Properties”) include: All producing and non-producing oil,
      condensate, natural gas, natural gas liquids, and hydrocarbons and other
      minerals; all oil, gas and mineral leases, and the leasehold estates
      created thereby, working interests, net profits interests, reversionary
      interests, and other leasehold and fee interests (all depths); areas of
      mutual interest, property and rights, including all rights in any pooled,
      communitized or unitized acreage; all well locations, surface equipment,
      downhole equipment, vehicles, and any other equipment and real property;
      permits, licenses, contracts, commodity and any other hedges; and any
      other asset, however, excluding cash, accounts receivable, prepaid
      expenses, and other similar assets. 

		 
	
      Mineral Acres: 
	
      The Properties shall include the leasehold of an
      undivided eighty (80%) interest in approximately 15,000 net mineral acres
      located in Rice and Reno Counties, Kansas owned by the Seller
      (“Purchased Acres”). 

		 
	
      Purchase Price: 
	
      At Closing, Buyer will pay Seller, via wire transfer, the
      purchase price in an amount equal to the product of $450 per acre and the
      Purchased Acres less the Down Payment. Based on 12,000 net mineral acres
      (80% of 15,000 mineral acres), the total purchase price is expected to be
      $5.4 million. 

		 
	
      Down Payment: 
	
      Upon execution of the Definitive Agreements, Buyer will
      pay Seller, via wire transfer, a five hundred forty thousand dollars
      ($540,000) down payment in exchange for the Exclusivity Period. Buyer
      shall forfeit Down Payment if Closing does not occur through no fault of
      Seller. 

		 
	
      Net Revenue Interest: 
	
      Seller shall deliver to Buyer a 81.25% (8/8th
      ’s basis) net revenue interest on the Properties.

Page 1

STRICTLY PRIVATE AND CONFIDENTIAL

	
      Additional Acreage: 
	
      Buyer shall provide Seller the option to acquire a
      proportionally reduced twenty percent (20%) interest in any and all
      leasehold mineral acres acquired by Buyer subsequent to the Closing. At
      the same time, Seller shall provide Buyer the option to acquire a
      proportionally reduced eighty (80%) percent interest in any and all
      leasehold mineral acres acquired by Seller subsequent to the Closing.
    

	
       
	
       

	
      Area of Mutual Interest: 
	
      The Definitive Agreements will include an area of mutual
      interest located in Rice and Reno County, Kansas. 

	
       
	
       

	
      Operator: 
	
      Buyer shall form a wholly-owned subsidiary, which shall
      act as operator of record for the Properties (“Newco”). 

	
       
	
       

	
      Participation Rights: 
	
      Seller will have the right to participate as a twenty
      percent (20%) non-operating working interest partner (8/8ths basis) in all
      wells located on the Properties on a “heads up” basis with Buyer
      (“Participation Rights”). The Participation Rights shall also
      include any other wells drilled by Buyer in Rice and Reno Counties, Kansas
      in which Seller owns an undivided interest as described herein. 

	
       
	
       

	
      JOA: 
	
      All operations upon the Properties shall be governed by a
      joint operating agreement (each, a “JOA”), agreeable to the Buyer
      and Seller and executed with the Definitive Agreements. The Definitive
      Agreements will also provide for pooling and well proposals. 

	
       
	
       

	
      Closing Date: 
	
      The transaction outlined in this Term Sheet shall close
      no later than forty-five (45) Business Days nor less than fifteen (15)
      Business Days immediately following the formal execution of this Term
      Sheet (the “Closing”). A “Business Day” shall be defined as a day
      other than a Saturday, a Sunday or a day on which banks located in New
      York, New York are required or permitted by law to remain closed.
  

	
       
	
       

	
      Effective Date: 
	
      The effective date shall be the same date and time as
      Closing. 

	
       
	
       

	
      Exclusivity: 
	
      The Seller agrees to work in good faith expeditiously
      towards completing the transactions contemplated herein. Subject to the
      Deadline for Definitive Agreements, the Seller further agrees that it will
      not, for a period of sixty ( 60) Business Days from the date of this Term
      Sheet is accepted by Seller (“Exclusivity Period”), take any action
      to solicit, initiate, encourage or assist the submission of any proposal,
      negotiation or offer from any person or entity other than Buyer relating
      to any transaction involving the Properties and shall notify Buyer
      promptly of any inquiries by any third parties in regards to the foregoing. This Term Sheet,
however, may be terminated by mutual written agreement of the Buyer and Seller
or by either Buyer or Seller upon expiration of the Exclusivity Period.

Page 2

STRICTLY PRIVATE AND CONFIDENTIAL

	Documentation: 	The transaction shall be in
      accordance with appropriate documents necessary to effect the transactions
      contemplated herein, including, but not limited to, the a Purchase and
      Sale Agreement, JOA, and Assignments (collectively, the “Definitive
      Agreements”), all acceptable in form and substance to the parties and
      their respective counsel. The Definitive Agreements shall contain
      representations, warranties, and indemnification provisions that are usual
      and customary for transactions of this type. Buyer’s counsel will prepare
      the initial draft of the Purchase and Sale Agreement. Seller’s counsel
      will prepare the initial draft of the JOA and Assignments. 
	  	  
	Deadline for Definitive Agreements: 	NOTWITHSTANDING ANYTHING
      CONTAINED HEREIN TO THE CONTRARY, THE DEFINITIVE AGREEMENTS
      WILL BE EXECUTED AND THE DOWN PAYMENT WILL BE MADE NO LATER
      WEDNESDAY, AUGUST 14, 2013 AT 2:00 PM CST
      (“DEADLINE FOR DEFINITIVE AGREEMENTS”). IF
      EITHER THE DEFINITIVE AGREEMENTS ARE NOT EXECUTED, OR THE DOWN
      PAYMENT IS NOT MADE, BY WEDNESDAY, AUGUST 14, 2013 AT 2:00
      PM CST, THE SELLER CAN UNILATERALLY TERMINATE THE TERM
      SHEET, INCLUDING THE EXCLUSIVITY PERIOD, WITHOUT PENALTY OR
      LIABILITY. 
	  	  
	Due Diligence: 	Execution and delivery of the
      Definitive Agreements, will be subject to appropriate due diligence by
      Buyer that shall include, but not be limited to, title, environmental,
      operational, engineering, regulatory, taxes and legal reviews with respect
      to the Properties (“Due Diligence”). Seller will provide Buyer
      access to all technical, financial and any other information relating to
      Properties at Buyer’s request. Additionally, Seller shall provide Buyer
      all information discovered by Seller regarding the Properties during Due
      Diligence. Buyer agrees that all information provided by Seller shall be
      held in confidence, and shall not be disclosed by Buyer other than to
      those of its employees and agents retained to conduct due diligence, shall
      not be used by Buyer or its employees or agents for any other purpose, and
      shall be returned to Seller, without retention of copies by Buyer,
      immediately upon termination of this Term Sheet or the Definitive
      Agreements. 

Page 3

STRICTLY PRIVATE AND CONFIDENTIAL

	Marketable Title: 	Seller will provide title to the
      leasehold estate of the Properties which is (i) free of any significant
      title defects, demands, lawsuits, claims, mortgages, liens or
      encumbrances, created by through or under the Seller, and (ii) grants to
      the oil and gas lessee all of the rights considered usual and necessary to
      explore for and produce oil and gas. 
	  	  
	Closing Conditions: 	Unless waived by Buyer, closing
      and funding of this Agreement and performance of any obligations set forth
      hereunder, will be subject and conditioned upon the following: (i)
      Seller’s providing Marketable Title to the Properties; (ii) receipt by the
      Buyer of full and complete releases from Seller’s creditors, if any; (iii)
      the Properties have a minimum 81.25% net revenue interest (8/8th
      ’s); and (iv) Buyer’s receipt of financing to effect the
      transactions contemplated herein. 
	  	  
	Confidentiality: 	This Term Sheet is being made
      available to the Seller and Newco on a confidential basis. Neither this
      Term Sheet nor its contents are to be divulged to other parties other than
      as required by law without the express written consent of Seller. 
	  	  
	Law Governance: 	This Term Sheet and the
      Definitive Agreements shall be governed by the laws of the State of
      Kansas, without regard to conflicts of laws principles. 
	  	  
	Jurisdiction: 	State of Kansas 
	  	  
	Notices: 	All notices hereunder shall be
      deemed to be delivered, if in writing, upon the earlier of actual receipt
      by the party to be notified or three (3) days after deposit in the U.S.
      mail, postage prepaid, return receipt requested, certified or overnight
      courier addressed as follows: 

	 	If to Buyer: 	ASYM Energy Partners LLC 
	 	  	1055 Washington Blvd, Suite 410 
	 	  	Stamford, CT 06901 
	 	  	  
	 	If to Seller: 	Warpaint Resources LLC 
	 	  	1925 Cedar Springs Road, Suite 103 
	 	  	Dallas, Texas 75201-1783 

[SIGNATURE PAGE FOLLOWS]

Page 4

STRICTLY PRIVATE AND CONFIDENTIAL

     IN WITNESS WHEREOF, the
undersigned have caused this Term Sheet to be executed by their duly authorized
representatives as of the date first above written.

WARPAINT KANSAS, LP

By: Oklaunion Management, LP,
its General Partner
By: Warpaint Resources, LLC, its General
Partner

By: /s/ Robert O. Dow
Title: Vice
President
Name: Robert O. Dow

AMERICAN PETRO-HUNTER, INC.

By: /s/ Robert B.
McIntosh
Title: President and C.E.O
Name: Robert B.
McIntosh

Page 5

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