Applied Optoelectronics, Inc. (NASDAQ:AAOI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On March 30, 2018, Applied Optoelectronics, Inc. (the “Company”) executed a First Amendment to Loan Agreement, a Note Modification Agreement and Addendum to Promissory Note for $60 million, a Promissory Note and Addendum to Promissory Note for $26 million, a Promissory Note and Addendum to Promissory Note for $21.5 million, a Texas Deed of Trust and Security Agreement, an Assignment of Lease and Rent, and an Environmental Certification and Indemnity Agreement, (collectively, the “Amended Credit Facility”), with Branch Banking and Trust Company (the “Lender”).
The Amended Credit Facility amends the Company’s three-year $50 million line of credit with the Lender, originally executed on September 28, 2017 (the “Existing Loan”). The Amended Credit Facility (1) increases the principal amount of the three-year line of credit from $50 million to $60 million (the “Line of Credit”);(2) allows the Company to borrow an additional $26 million from Lender in the form of a five-year capital expenditure loan (the “CapEx Loan”) and (3) allows the Company to borrow an additional $21.5 million in the form of a seventy-month real estate term loan (the “Term Loan”) to refinance the Company’s plant and facilities in Sugar Land, Texas.
Borrowings under the Line of Credit will bear interest at a rate equal to the one-month London Interbank Offered Rate (LIBOR) plus a Line of Credit margin ranging between 1.40% and 2.0%. Borrowings under the CapEx Loan will bear interest at a rate equal to the one-month LIBOR plus a CapEx Loan margin ranging between 1.30% and 2.0%. Borrowings under the Term Loan will bear interest at a rate equal to the one-month LIBOR plus a Term Loan margin ranging between 1.15% and 2.0%. The Company will make monthly payments of principal and accrued interest with the final monthly payments being for all principal and accrued interest not yet paid.
The Company’s obligations under the Amended Credit Facility will be secured by the Company’s accounts receivable, inventory, equipment, intellectual property, real property, and virtually all business assets.
The Amended Credit Facility requires the Company to maintain certain financial covenants and also contains representations and warranties and covenants applicable to the Company that are customary for agreements of this type.
The foregoing description of the Amended Credit Facility does not purport to be a complete statement of the parties’ rights and obligations under the Amended Credit Facility and is qualified in its entirety by reference to the full text of the First Amendment to Loan Agreement, the Note Modification Agreement, the Addendum to Promissory Note for $60 million, the Promissory Note and Addendum to Promissory Note for $26 million, the Promissory Note and Addendum to Promissory Note for $21.5 million, the Texas Deed of Trust and Security Agreement, the Assignment of Lease and Rent, and the Environmental Certification and Indemnity Agreement, all dated March 30, 2018, copies of which are attached as Exhibit 10.1 through 10.10 to this Current Report on Form 8-K and incorporated by reference herein.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 of this Current Report on Form 8-K with respect to the Credit Facility is incorporated by reference herein and made a part hereof.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
APPLIED OPTOELECTRONICS, INC. ExhibitEX-10.1 2 appliedopto_8k-ex1001.htm FIRST AMENDMENT TO LOAN AGREEMENT Exhibit 10.1 FIRST AMENDMENT TO LOAN AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT THIS FIRST AMENDMENT TO LOAN AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT (this “Amendment”) is made and entered into this 30th day of March,…To view the full exhibit click here
About Applied Optoelectronics, Inc. (NASDAQ:AAOI)
Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products. The Company offers its products for approximately three networking end markets, such as Internet data center; cable television (CATV), and fiber-to-the-home (FTTH). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. The Company’s customers in the Internet data center market include Internet-based (Web 2.0) data center operators, to whom it supplies optical transceivers that plug into switches and servers within the data center, and allow these network devices to send and receive data over fiber optic cables. To the CATV market, it supplies a range of products, including lasers, transmitters and turnkey equipment, as well as headend, node and distribution equipment. Its manufacturing sites are located at Sugar Land, Texas; Ningbo, China, and Taipei, Taiwan.