EXHIBIT 10.19 (g)
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of December 11, 1996, by
and between Fafco, Inc. ("Borrower') whose address is 0000 Xxxxxxxxxxx Xxxx,
Xxxxxxx Xxxx, XX 00000, and Silicon Valley Bank ("Bank") whose address is
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, an Amended and Restated Loan and Security Agreement, dated
June 5, 1996, as may be amended from time to time, (the "Loan Agreement'). The
Loan Agreement provided for, among other things, a Committed Line in the
original principal amount of One Million and 00/100 Dollars ($1,000,000.00)
(the "Revolving Facility"). Defined terms used but not otherwise defined
herein shall have the same meanings as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness
is secured by the Collateral as described in the Loan Agreement.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security
Documents, together with all other documents evidencing or securing the
Indebtedness shall be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. Notwithstanding anything to the contrary contained in the paragraphs
entitled "Eligible Accounts", accounts from Kailay International or Fafco Asia
Pacific Corporation (FAPCO) shall be considered eligible to a maximum aggregate
total accounts receivable of $410,000.00, subject to all other standard
eligibility requirements as defined in the paragraph entitled "Eligible
Accounts", for the ninety (90) day period beginning as of November 26, 1995
through February 25, 1997.
2. The term "Borrowing Base", as defined in Section 2.1 entitled "Advances"
shall mean an amount equal to (i) eighty percent (80%) of Eligible Accounts
beginning as of November 25, 1997, and (ii) seventy five percent (75%) of
Eligible Accounts thereafter.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that it has no defenses against the obligations to pay any amounts
under the Indebtedness.
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrowers representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant
to this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Bank to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the
intention of Bank and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released
by Bank in writing. No maker, endorser, or guarantor will be released by
virtue of this Loan Modification Agreement. The terms of this paragraph apply
not only to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
FAFCO, INC. SILICON VALLEY BANK
By:/s/Xxxx X. Xxxx By: /s/Xxxxx Xxxxxxxxx
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Title: V.P. Finance & Administration Title: Assistant Vice President
