UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event
reported): September
25,
2008
(Exact
Name of Registrant as specified in its Charter)
Delaware
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1-11056
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33-0325836
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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2925
Boardwalk, Ann Arbor, Michigan
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48104
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(Address
of Principal Executive Offices)
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(ZIP
Code)
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Registrant's
telephone number, including area code: (734)
864-5647
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
1.01 - Entry Into a Material Definitive Agreement.
On
September 25, 2008, Advanced Photonix, Inc. (the “Company”) and The PrivateBank
and Trust Company (the “Bank”) entered into a Loan Agreement (the “Loan
Agreement”) providing for (i) a line of credit (“Line of Credit”) permitting
borrowings by the Company of up to a maximum of $3,000,000 and (ii) a term
loan
(the “Term Loan”) to the Company of $1,735,716.61. The availability of
borrowings under the Line of Credit will be determined by the calculation of
a
borrowing base that includes a percentage of eligible accounts receivable and
inventory.
The
Loan
Agreement contains customary financial covenants, including a requirement that
the minimum debt service coverage ratio of the Company (as defined in the Loan
Agreement) be not less than 1.25:1.00 on a rolling four-quarter basis and that
the Company maintain certain levels of Adjusted EBITDA (as defined in the Loan
Agreement). The interest rate is variable and is adjusted on the effective
date
of any adjustment of the prime rate announced by the Bank. The principal loan
amount, with respect to the Line of Credit, is due on September 25, 2011, and,
with respect to the Term Loan, is due on September 25, 2012, provided that
if
existing loans to the Company by the Michigan Economic Development Corporation
have not converted to equity on or before August 31, 2011, the Line of Credit
and the Term Loan shall each be due on August 31, 2011.
The
Loan
Agreement contains customary representations, warranties and covenants. The
Loan
Agreement is guaranteed by each of Company’s wholly-owned subsidiaries,
Picometrix, LLC (“Picometrix”) and Silicon Sensors, Inc. (collectively, the
“Subsidiaries”), and the loan is secured by separate security agreements (each,
in the form attached hereto as Exhibit 10.4), each dated September 25, 2008,
between the Bank and the Company and each of the Subsidiaries, pursuant to
which, in each case, the Company and the Subsidiaries granted to the Bank a
first-priority security interest in their respective assets (excluding certain
intellectual property which secures debt owing to two of the company’s executive
officers incurred in connection with the Company’s prior acquisition of
Picometrix) (the “Picometrix Debt”). Pursuant to the Loan Agreement, upon full
repayment of the Picometrix Debt,
the
Company agreed to grant a security interest in such intellectual property to
the
Bank.
On
September 25, 2008, the Company drew down $1,735,716.61 under the Term Loan
and
$1,349,229.84 under the Line of Credit to pay in full its existing indebtedness
to Fifth Third Bank.
The
descriptions of the above documents are qualified in their entirety by reference
to the copies of the documents filed herewith as Exhibits 10.1, 10.2, 10.3,
10.4, 10.5 and 10.6, which are each incorporated herein by
reference.
As
described under Item 1.01 above, on September 25, 2008, the Company entered
into the Loan Agreement providing for a Line of Credit, permitting
borrowings by the Company of up to $3,000,000, and a Term Loan to the Company
of
$1,735,716.61. Upon the occurrence of certain events, including, but not limited
to, the Company’s failure to make required payments under the Loan
Agreement or the Company’s default in its other obligations under the Loan
Agreement, the Bank may take certain remedial actions, including, but not
limited to, declaring all unpaid principal, unpaid interest and all
other amounts payable by the Company immediately due.
This
description of the Loan Agreement is qualified in its entirety by reference
to the copy of the document filed herewith as Exhibit 10.1, which is
incorporated herein by reference.
Item
9.01 - Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
Number
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Exhibit
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10.1
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Loan
Agreement dated September 25, 2008 between Advanced Photonix, Inc.
and The
PrivateBank and Trust Company.
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10.2
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Promissory
Note (Term Loan – Prime) dated September 25, 2008 by Advanced Photonix,
Inc. in favor of The PrivateBank and Trust Company.
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10.3
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Promissory
Note (Line of Credit – Prime) dated September 25, 2008 by Advanced
Photonix, Inc. in favor of The PrivateBank and Trust Company.
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10.4
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Continuing
Security Agreement dated September 25, 2008 between Advanced Photonix,
Inc. and The PrivateBank and Trust Company.
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10.5
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Continuing
Guaranty dated September 25, 2008 by Picometrix, LLC and Silicon
Sensors,
Inc. for the benefit of The PrivateBank and Trust
Company.
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10.6
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Form
of Patent, Trademark and Security Agreement between Advanced Photonix,
Inc. and The PrivateBank and Trust Company.
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99.1
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Press
Release of Advanced Photonix, Inc. dated September 29,
2008.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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ADVANCED
PHOTONIX, INC.
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By:
/s/Richard D. Kurtz
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Richard
D. Kurtz, Chief Executive Officer
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Dated:
September 25, 2008
EXHIBIT
INDEX
Exhibit
Number
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Exhibit
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10.1
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Loan
Agreement dated September 25, 2008 between Advanced Photonix, Inc.
and The
PrivateBank and Trust Company.
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10.2
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Promissory
Note (Term Loan – Prime) dated September 25, 2008 by Advanced Photonix,
Inc. in favor of The PrivateBank and Trust Company.
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10.3
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Promissory
Note (Line of Credit – Prime) dated September 25, 2008 by Advanced
Photonix, Inc. in favor of The PrivateBank and Trust Company.
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10.4
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Continuing
Security Agreement dated September 25, 2008 between Advanced Photonix,
Inc. and The PrivateBank and Trust Company.
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10.5
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Continuing
Guaranty dated September 25, 2008 by Picometrix, LLC and Silicon
Sensors,
Inc. for the benefit of The PrivateBank and Trust
Company.
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10.6
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Form
of Patent, Trademark and Security Agreement between Advanced Photonix,
Inc. and The PrivateBank and Trust Company.
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99.1
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Press
Release of Advanced Photonix, Inc. dated September 25,
2008.
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