Document:

exhibit10-1.htm

    THIRD
AMENDMENT TO LOAN AGREEMENT

     

        This Third Amendment dated as of August
27, 2010, 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 two 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.
Section 6.28 of the Account is amended to read as follows:

     

        
“6.28 Picometrix
Debt. Borrower shall not and shall cause its Subsidiaries not to make any
payment with respect to the existing indebtedness owed to the former
shareholders of Picometrix (“Picometrix Debt”) unless (a) Borrower is in pro
forma compliance with all financial covenants under this Agreement both before
and after giving effect to such payment (b) no Event of Default (or event which
with the giving of notice or the passage of time or both would constitute an
Event of Default) has occurred and is continuing and (c) Borrower shall have
provided to the Lender at least thirty (30) days prior written notice that the
payment is to be made with respect to the Picometrix Debt. At least ten (10)
days prior to making any such payment, Borrower shall provide to Lender a
covenant compliance certificate giving pro forma effect to such payment.
Borrower shall not use more than seventy five percent (75%) of the proceeds of
the issuance of any equity interests to make payments with respect to the
Picometrix Debt.”

     

         2.
Paragraph 11 of the Second Amendment to Loan Agreement dated June 25, 2010
between Borrower and Bank (“Second Amendment”) is amended to read as
follows:

     

         “11.
Borrower agrees to provide to Lender on or before December 1, 2010 evidence
satisfactory to Lender that the documents related to the Picometrix Debt have
been amended to provide that the required December 1, 2010 principal payment and
maturity date of the Picometrix Debt have been deferred until at least April 1,
2011. Failure to comply with the provisions of this paragraph shall be an Event
of Default under the Agreement.”

     

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         3. Borrower violated the provisions of
paragraph 11 of the Second Amendment between Borrower and Bank (the “Undertaking
Violation”). The Lender hereby waives any event of default under the Agreement
resulting from the Undertaking Violation. This waiver shall not be deemed to amend or alter in
any respect the terms and conditions of the Agreement or any of the other loan
documents, or to constitute a waiver or release by the Lender of any right,
remedy or event of default under the Agreement or any of the other loan
documents, except to the extent expressly set forth above. Furthermore, this
waiver shall not affect in any manner whatsoever any rights or remedies of the
Lender with respect to any other non-compliance by the Borrower with the
Agreement or the other loan documents whether in the nature of an event of
default or otherwise, and whether now in existence or subsequently
arising.

     

         4. 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.

     

         5. Borrower hereby represents and
warrants that, after giving effect to the amendment and waiver 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.

     

         6. 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.

     

         7. This Amendment shall be
effective upon (a) the execution by Borrower and Lender of this Amendment and
(b) execution by the Guarantors of the attached Affirmation of
Guaranty.

     

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          8. Except as modified hereby, all
of the terms and conditions of the Agreement shall remain in full force and
effect.

     

          9. 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:  	  	      	By:  	 

	 	     	Eric Haege	
            	 	      	Richard Kurtz
	Its:	      	Associate Managing Director	 	Its:	 	President

    

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    AFFIRMATION OF GUARANTY

     

         The undersigned acknowledge the foregoing
Third 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.

     

    
      	August 27, 2010	SILICON SENSORS,
      INC.
	     
	  
	 	By: 	   
	 	 	     	Richard Kurtz 
	 	Its: 	 	President 
	   
	   
	 	PICOMETRIX
  LLC
	   
	   
	 	By: 	       
      
	 	 	 	Richard Kurtz 
	 	Its: 	 	Presidentf8k082310ex10i_aivtech.htm

Exhibit 10.1

 

DIRECTOR AGREEMENT

This DIRECTOR AGREEMENT is made as of this 23rd day of August, 2010 (the “Agreement”), by and between AIVtech International Group Co., a Nevada corporation (the “Company”) and James Hansel (the “Director”).

WHEREAS, the Company appointed the Director as a member of the Board of Directors of the Company on August 23, 2010 and desires to enter into an agreement with the Director with respect to such appointment; and

WHEREAS, the Director wishes to accept such appointment and to serve the Company on the terms set forth herein, and in accordance with, the provisions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1.           Position.  Subject to the terms and provisions of this Agreement, the Company shall cause the Director to be appointed as non-executive member of the Board of Directors (the “Board”) to fill an existing but now vacant directorship and the Director hereby agrees to serve the Company in that position upon the terms and conditions hereinafter set forth, provided, however, that the Directors continued service on the Board after the initial term on the Board shall be subject to any necessary approval by the Company’s stockholders.

2.           Duties.  During the Directorship Term (as defined in Section 5 hereof), the Director shall serve as a member of the Board, and the Director shall make reasonable business efforts to attend all Board meetings, serve on appropriate subcommittees as reasonably requested by the Board, make himself available to the Company at mutually convenient times and places, attend external meetings and presentations, as appropriate and convenient, and perform such duties, services and responsibilities and have the authority commensurate to such position.

The Director will use his best efforts to promote the interests of the Company. The Company recognizes that the Director (i) is or may become a full-time executive employee of another entity and that his responsibilities to such entity must have priority and (ii) sits on the Board of Directors of other entities.  Notwithstanding same, the Director will use reasonable business efforts to coordinate his respective commitments so as to fulfill his obligations to the Company and, in any event, will fulfill his legal obligations as a director. Other than as set forth above, the Director will not, without the prior notification to the Board, engage in any other business activity which could materially interfere with the performance of his duties, services and responsibilities hereunder or which is in violation of the reasonable policies established from time to time by the Company, provided that the foregoing shall in no way limit his activities on behalf of (i) his current employer and its affiliates or (ii) the Board of Directors of those entities on which he sits.  At such time as the Board receives such notification, the Board may require the resignation of the Director if it determines that such business activity does in fact materially interfere with the performance of the Director’s duties, services and responsibilities hereunder.

3.            Board Committees.  The Director hereby agrees to serve on or head a to-be-determined Committee of the Board at the Company’s discretion and to perform all of the duties, services and responsibilities necessary thereunder.

 

  

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4.           Monetary Remuneration.

(a)  Fees and Compensation.  During the Directorship Term the Director shall receive the following compensation and benefits:

(i)   A cash payment of $25,000 USD per year payable on a quarterly basis, such as September 1, December 1, March 1 and June 1;

(ii)  2,000 shares of the Company’s common stock to the Director within ten (10) business days of the date herein. The initial grant of stock will be vested upon completion of six months of service as a director, but will be subject to forfeit if the term of service does not equal or exceed the vesting period. Additionally, the Director shall receive warrants to purchase 20,000 shares of the Company’s common stock annually with an exercise period of five years and a strike price of 150% of the offering price in the proposed private placement with Maxim Group LLC or the average closing price over a ten (10) trading days period prior to the grant if the private placement has not completed when exercise. The warrants will be vested upon completion of twelve months of service as a director, but will be subject to forfeit if the term of service does not equal or exceed the vesting period; and

(ii)  The Director’s status during the Directorship Term shall be that of an independent contractor and not, for any purpose, that of an employee or agent with authority to bind the Company in any respect. All payments and other consideration made or provided to the Director under Section 4 shall be made or provided without withholding or deduction of any kind, and the Director shall assume sole responsibility for discharging, all tax or other obligations associated therewith.

(b) Expense Reimbursements.  During the Directorship Term, the Company shall reimburse the Director for all reasonable out-of-pocket expenses incurred by the Director in attending any in-person meetings, provided that the Director complies with the generally applicable policies, practices and procedures of the Company for submission of expense reports, receipts or similar documentation of such expenses. Any reimbursements for allocated expenses (as compared to out-of-pocket expenses of the Director) must be approved in advance by the Company.

 

 

5.           Directorship Term.  The term of the Director under this Agreement shall mean the period commencing on the date hereof and terminating on the 22nd day of August, 2011 (the “Initial Employment Term”). Subject to Section 5 herein, at the end of the Initial Employment Term this Agreement shall be automatically extended for an additional one-year period (the “Additional Term”) unless either party to this Agreement elects not to extend this Agreement with a written notice at least 30 days prior to the expiration of the Additional Term. The Initial Term and any Additional Term shall be referred to herein as the “Directorship Term.” Compensation for services provided after the first year will be determined by mutual agreement of the parties. The Directorship Term shall terminate on the first of the following to occur:

(a)  the death of the Director (“Death”);

(b)  the termination of the Director from the position of member of the Board by the mutual agreement of the Company and the Director;

(c)  the removal of the Director from the Board by the shareholders of the Company;

 

  

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(d)  the resignation by the Director from the Board if after the date hereof, the Chief Executive Officer of his current employer determines that the Director’s continued service on the Board conflicts with his fiduciary obligations to his current employer (a “Fiduciary Resignation”); and

(e)  the resignation by the Director from the Board under other circumstances if such resignation is not a Fiduciary Resignation by giving a thirty (30) days written notice.

6.           Director’s Representation and Acknowledgment.  The Director represents to the Company that his execution and performance of this Agreement shall not be in violation of any agreement or obligation (whether or not written) that he may have with or to any person or entity, including without limitation, any prior employer. The Director hereby acknowledges and agrees that this Agreement (and any other agreement or obligation referred to herein) shall be an obligation solely of the Company, and the Director shall have no recourse whatsoever against any stockholder of the Company or any of their respective affiliates with regard to this Agreement.

7.           Director Covenants.

(a)  Unauthorized Disclosure.  The Director agrees and understands that in the Director's position with the Company, the Director has been and will be exposed to and receive information relating to the confidential affairs of the Company, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Director agrees that during the Directorship Term and thereafter, the Director will keep such information confidential and will not disclose such information, either directly or indirectly, to any third person or entity without the prior written consent of the Company; provided, however, that (i) the Director shall have no such obligation to the extent such information is or becomes publicly known or generally known in the Company's industry other than as a result of the Director's breach of his obligations hereunder and (ii) the Director may, after giving prior notice to the Company to the extent practicable under the circumstances, disclose such information to the extent required by applicable laws or governmental regulations or judicial or regulatory process. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of the Directorship Term, the Director will promptly return to the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data or any other tangible product or document which has been produced by, received by or otherwise submitted to the Director in the course or otherwise as a result of the Director's position with the Company during or prior to the Directorship Term, provided that, the Company shall retain such materials and make them available to the Director if requested by his in connection with any litigation against the Director under circumstances in which (i) the Director demonstrates to the reasonable satisfaction of the Company that the materials are necessary to his defense in the litigation, and (ii) the confidentiality of the materials is preserved to the reasonable satisfaction of the Company.

(b)  Non-Solicitation.  During the Directorship Term and for a period of three (3) years thereafter, the Director shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who, on the date of the termination of the Directorship Term, was an employee or customer of the Company or otherwise had a material business relationship with the Company.

 

  

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(c)  Remedies.  The Director agrees that any breach of the terms of this Section 7 would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law; the Director therefore also agrees that in the event of said breach or any threat of breach, the Company shall be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Director and/or any and all entities acting for and/or with the Director, without having to prove damages, in addition to any other remedies to which the Company may be entitled at law or in equity. The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the Director. The Director acknowledges that the Company would not have entered into this Agreement had the Director not agreed to the provisions of this Section 7.

(i)  The provisions of this Section 7 shall survive any termination of the Directorship Term, and the existence of any claim or cause of action by the Director against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements of this Section 7.

8.           Indemnification.  The Company agrees to indemnify the Director for his activities as a director of the Company to the fullest extent permitted by law, and to cover the Director under any directors and officers liability insurance obtained by the Company.  The Company agrees to maintain a directors and officers liability insurance policy with a minimum coverage of $3 million after the Company uplisting to a senior exchange, including Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global Select or any successor market thereto or NYSE Amex or any successor market thereto. The Company agrees to furnish each director with valid and current Certificate of Insurance listing the director as a “Named Insured” under the Company’s directors and officers liability insurance policy for all periods of the director’s service on the board.

9.           Non-Waiver of Rights.  The failure to enforce at any time the provisions of this Agreement or to require at any time performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part hereof, or the right of either party to enforce each and every provision in accordance with its terms. No waiver by either party hereto of any breach by the other party hereto of any provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions at that time or at any prior or subsequent time.

10.           Notices.  Every notice relating to this Agreement shall be in writing and shall be given by personal delivery or by registered or certified mail, postage prepaid, return receipt requested; to:

If to the Company:

AIVtech International Group Co.

1305 East Hightech Plaza, Phase 2, Tian’An Cyber Park

Futian District, Shenzhen City, Guangdong Province

People’s Republic of China

Attention: Jinlin Guo, President and Chief Executive Officer

Telephone: 86 (139) 2349-3889

 

  

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With a copy to:

 

 

Anslow & Jaclin, LLP

195 Route 9 South, Suite 204

Manalapan, NJ 07726

Attention: Yarona Y. Liang

Telephone: (732) 409-1212

If to the Director:

James Hansel

336 Sound Beach Avenue

Old Greenwich, CT 06870-1931

USA

Email: jamies.hansel@eightwindscapital.com

Telephone: +1 203 409 3938

Either of the parties hereto may change their address for purposes of notice hereunder by giving notice in writing to such other party pursuant to this Section 10.

11.           Binding Effect/Assignment.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, personal representatives, estates, successors (including, without limitation, by way of merger) and assigns. Notwithstanding the provisions of the immediately preceding sentence, neither the Director nor the Company shall assign all or any portion of this Agreement without the prior written consent of the other party.

12.           Entire Agreement.  This Agreement (together with the other agreements referred to herein) sets forth the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, written or oral, between them as to such subject matter.

13.           Severability.  If any provision of this Agreement, or any application thereof to any circumstances, is invalid, in whole or in part, such provision or application shall to that extent be severable and shall not affect other provisions or applications of this Agreement.

14.           Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without reference to the principles of conflict of laws. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any New York state or federal court and the parties hereto hereby consent to the jurisdiction of such courts in any such action or proceeding; provided, however, that neither party shall commence any such action or proceeding unless prior thereto the parties have in good faith attempted to resolve the claim, dispute or cause of action which is the subject of such action or proceeding through mediation by an independent third party.

15.           Legal Fees.  The parties hereto agree that the non-prevailing party in any dispute, claim, action or proceeding between the parties hereto arising out of or relating to the terms and conditions of this Agreement or any provision thereof (a “Dispute”), shall reimburse the prevailing party for reasonable attorney’s fees and expenses incurred by the prevailing party in connection with such Dispute; provided, however, that the Director shall only be required to reimburse the Company for its fees and expenses incurred in connection with a Dispute, if the Director's position in such Dispute was found by the court, arbitrator or other person or entity presiding over such Dispute to be frivolous or advanced not in good faith.

 

  

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16.           Modifications.  Neither this Agreement nor any provision hereof may be modified, altered, amended or waived except by an instrument in writing duly signed by the party to be charged.

17.           Tense and Headings.  Whenever any words used herein are in the singular form, they shall be construed as though they were also used in the plural form in all cases where they would so apply. The headings contained herein are solely for the purposes of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement.

18.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company has caused this Director Agreement to be executed by authority of its Board of Directors, and the Director has hereunto set his hand, on the day and year first above written.

 

	AIVtech International Group Co.	 
	 	 	 
	
By: 

	/s/ Jinlin Guo	 
	Name:  	Jinlin Guo	 
	Title:	President and Chief Executive Officer	 
	 	 	 

 

	Independent Director:	 
	 	 	 
	
By: 

	/s/ James Hansel	 
	Name:  	James Hansel	 
	 	 	 

     

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