SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (EX-IM LOAN FACILITY)

THIS SECOND AMENDMENT to Loan and Security Agreement (Ex-Im Loan Facility) (this “Amendment”) is entered into as of February __, 2013, by and among Silicon Valley Bank (“Bank”) and ADVANCED PHOTONIX, INC. and PICOMETRIX, LLC (individually, a “Borrower” and, collectively, the “Borrowers”).

 

 

A.           Bank, Advanced Photonix, Inc. and Picometrix, LLC are parties to that certain Loan and Security Agreement (Ex-Im Loan Facility) dated as of January 31, 2012, as amended by a First Amendment to Loan and Security Agreement dated as of October 25, 2012  (as the same may from time to time be further amended, modified, supplemented or restated, collectively, the “Loan Agreement”).

 

B.           Borrowers have requested that Bank amend the Loan Agreement.

 

C.           In reliance upon the representations and warranties set forth below, Bank has agreed to so amend certain provisions of the Loan Agreement in accordance with the terms and subject to the conditions set forth herein.

 

 

Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1.           Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 

 

              2.1            Section 13 (Definitions).  The following term in Section 13.1 is amended and restated to read as follows:

 

“Revolving Margin” is 0.5% when the Liquidity Ratio is greater than or equal to 3.0 and trailing 3 month EBITDA is greater than or equal to $1.00, 1.5% when the Liquidity Ratio is greater than or equal to 3.0 and trailing 3 month EBITDA is less than $1.00, but greater than or equal to negative $500,000, 3.0% when the Liquidity Ratio is greater than or equal to 3.0 and trailing 3 month EBITDA is less than negative $500,000 but greater than or equal to negative $750,000; 1.25% when the Liquidity Ratio is greater than or equal to 2.5 but less than 3.0 and trailing 3 month EBITDA is greater than or equal to $1.00, 2.25% when the Liquidity Ratio is greater than or equal to 2.5 but less than 3.0 and trailing 3 month EBITDA is less than $1.00 but greater than or equal to negative $500,000, 3.50% when the Liquidity Ratio is greater than or equal to 2.5 but less than 3.0 and trailing 3 month EBITDA is less than negative $500,000 but greater than or equal to negative $750,000; and 1.75% when the Liquidity Ratio is less than 2.5 and trailing 3 month EBITDA is greater than or equal to $1.00, 2.75% when the Liquidity Ratio is less than 2.5 and trailing 3 month EBITDA is less than $1.00 but greater than or equal to negative $500,000, 4.00% when the Liquidity Ratio is less than 2.5 and trailing 3 month EBITDA is less than negative $500,000 but greater than or equal to negative $750,000.

 

4.           Representations and Warranties.  To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

 

              4.1             Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

 

              4.2            Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

 

              4.3            Except with respect to Borrower’s By-Laws, which were amended on October 16, 2012, the organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

 

              4.4            The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

 

              4.5            The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

 

              4.6            The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

 

              4.7            This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

 

5.           Counterparts.  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

 

6.           Effectiveness.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) Borrower’s payment an amount equal to the Bank Expenses incurred in connection with this Amendment, and (c) and such other documents as Bank may reasonably request.

 

[Signature page follows.]

 

 

In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

BANK			BORROWER
SILICON VALLEY BANK			ADVANCED PHOTONIX, INC.
			By:
By:			Name:
Name:			Title:
Title:
			PICOMETRIX, LLC
			By:
			Name:
			Title: