Applied Optoelectronics, Inc. (NASDAQ:AAOI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On November 29, 2018, Prime World International Holdings, Ltd. (“Prime World”), a wholly owned subsidiary of Applied Optoelectronics, Inc. entered into a Purchase and Sale Contract (the “Sale Contract”) and a Finance Lease Agreement (the “Finance Lease Agreement,” together with the Sale Contract, the “Financing Agreements”) with Chailease Finance Co., Ltd. (“Chailease”) in connection with certain equipment, structured as a sale lease-back transaction. to the Sale Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,340,468. Simultaneously, Prime World leased the equipment back from Chailease for a term of three-years, to the Finance Lease Agreement.
Prime World is obligated to pay an initial payment of NT$67,340,468, thereafter the monthly lease payments range from NT$5,571,229 to NT$6,139,188. Based on the lease payments made under the Finance Lease Agreement, the annual interest rate is calculated to be 3.5%. Upon an event of default under the Finance Lease Agreement, Prime World’s payment obligation will be secured by a promissory note to Chailease in the amount of NT$210,601,605 (the “Promissory Note”) subject to certain terms and conditions. The title of the equipment will be transferred to the Prime World upon expiration of the Finance Lease Agreement.
The foregoing description of the Financing Agreements and Promissory Note does not purport to be a complete statement of the parties’ rights and obligations under the Financing Agreements and Promissory Note and is qualified in its entirety by reference to the translation of the full text of the Sale Contract and Finance Lease Agreement and Promissory Note which are attached as Exhibits 10.1 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 Financing Agreements 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 applied_8k-ex1001.htm PURCHASE AND SALE AGREEMENT Exhibit 10.1 Purchase and Sale Contract Chailease Finance Co.,…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.