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LOAN MODIFICATION AGREEMENT

Addendum or Modifications

LOAN MODIFICATION AGREEMENT | Document Parties: BRANCH BANKING AND TRUST COMPANY | LMIC MANUFACTURING, INC | My Commission You are currently viewing:
This Addendum or Modifications involves

BRANCH BANKING AND TRUST COMPANY | LMIC MANUFACTURING, INC | My Commission

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Title: LOAN MODIFICATION AGREEMENT
Governing Law: Maryland     Date: 1/5/2005
Industry: Electronic Instr. and Controls     Sector: Technology

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Exhibit 99.1

LOAN MODIFICATION AGREEMENT

---------------------------

THIS LOAN MODIFICATION AGREEMENT ("AGREEMENT") is made to be effective as

of the 29th day of December 2004, by and between BRANCH BANKING AND TRUST

COMPANY ("LENDER"), LMIC MANUFACTURING, INC, formerly Linsang Manufacturing,

Inc., a Delaware corporation (the "BORROWER") and KWOK-LEUNG LI (collectively,

the "OBLIGORS").

RECITALS

--------

R.1. The LENDER has extended a term loan ("LOAN") to the BORROWER

evidenced by a Promissory Note dated May 31, 2001 in the original stated

principal amount of $5,000,000.00 ("NOTE").

R.2. The terms of the LOAN are governed by a Loan Agreement dated May 31,

2001, which was amended by an Amendment to Loan Agreement dated April 3, 2002

(collectively the "LOAN AGREEMENT").

R.3. The BORROWER'S repayment obligations under the NOTE are secured by

its equipment, accounts, inventory, documents, general intangibles and

instruments pursuant to the terms of a Security Agreement dated May 31, 2001

("SECURITY AGREEMENT").

R.4. A proper financing statement under the name Linsang Manufacturing,

Inc. was filed by the LENDER with the Delaware Secretary of State on March 12,

2001. Subsequent to a merger wherein Linsang Manufacturing, Inc. was the

surviving corporate entity, Linsang Manufacturing, Inc. changed its name to LMIC

Manufacturing, Inc., effective October 15, 2003. A proper amendment to financing

statement, noting a name change to LMIC Manufacturing, Inc., was filed by the

LENDER in the records of the Delaware Secretary of State on November 3, 2003,

which operated to continue the LENDER'S perfected security interests.

R.5. Several Note Modification Agreements were executed by the BORROWER

and the LENDER deferring principal payments due in November and December 2002,

April through December 2003 and June through August 2004 (the "NOTE

MODIFICATIONS").

R.6. The BORROWER'S repayment obligations under the NOTES are guaranteed

by Kwok-Leung Li pursuant to the terms of a Guaranty Agreement dated May 31,

2001, as amended by an Amendment to Guaranty Agreement dated April 3, 2002,

pursuant to which Kwok Li agreed to pledge personal collateral owned by him and

his wife to secure his guaranty (collectively, the "GUARANTY").

<PAGE>

R.7. Kwok-Leung Li and Felice Li executed a Security Agreement dated April

3, 2002 ("PERSONAL PLEDGE AGREEMENT") pledging certain personally owned assets

to secure the obligations of Kwok-Leung Li under the GUARANTY.

R.8. The BORROWER is in default under the terms of the NOTE in that it has

failed to make the required principal payments due thereunder for September

through December 2004 (the "EXISTING DEFAULT").

R.9. The BORROWER has requested that the LENDER agree to permit the

deferral of principal payments from September 2004 through January 2005 in order

to improve the cash flow of the BORROWER and to better enable the BORROWER to

acquire a firm commitment from another lender or other financial institution to

refinance the indebtedness of the BORROWER to the LENDER on or before March 30,

2005.

R.10. The LENDER is willing to consent to the request if the OBLIGORS

agree to the acceleration of the maturity of the LOAN to March 31, 2005 from

June 1, 2005, execute and deliver this AGREEMENT and comply with the terms and

conditions set forth herein.

R.11. All of the documents relating to the NOTE, the NOTE MODIFICATIONS,

the LOAN AGREEMENT, the GUARANTY, the SECURITY AGREEMENT, the PERSONAL PLEDGE

AGREEMENT and all documentation relating thereto are hereinafter referred to as

the "LOAN DOCUMENTS."

NOW, THEREFORE, in consideration of the premises, and other good and

valuable consideration, the receipt and adequacy of which are hereby

acknowledged, the LENDER and the OBLIGORS hereby agree as follows:

Section 1. Recitals. The LENDER and the OBLIGORS acknowledge that the

Recitals set forth above are true and accurate. Each of the Recitals is

incorporated into this AGREEMENT by reference and made a part hereof.

Section 2. Acknowledgment Of Obligations. The OBLIGORS acknowledge that:

(a) the LOAN DOCUMENTS are the valid and binding obligations of the OBLIGORS,

and are fully enforceable in accordance with their stated terms; (b) the LENDER

but for this AGREEMENT would have the right to exercise its default rights and

remedies; and (c) the duties of the OBLIGORS to pay and perform its obligations

to the LENDER in accordance with the LOAN DOCUMENTS are not subject to any

set-offs, defenses or counterclaims.

Section 3. Acknowledgment of Amounts Due Under LOAN DOCUMENTS. The

OBLIGORS acknowledge and agree that the principal amount which is outstanding

under the NOTE as of December 28, 2004 is $2,365,734.47.

In addition, there is also due and owing from the BORROWER to the LENDER,

under the LOAN DOCUMENTS, all actual costs, expenses, fees, including, but not

limited to, attorneys' fees which the LENDER has incurred and may incur in the

future in connection with the LOAN DOCUMENTS, including, but not limited to, all

costs, expenses and attorneys' fees which the LENDER has incurred and may incur

in the future in preparing, negotiating and consummating this AGREEMENT and in

preparing, negotiating, consummating and/or recording any and all other

documents provided for in and/or contemplated by this AGREEMENT.

<PAGE>

Section 4. Representations. To induce the LENDER to enter into this

AGREEMENT and to provide the OBLIGORS with the accommodations described herein,

the OBLIGORS make the representations and warranties set forth below and

acknowledge the LENDER'S justifiable right to rely upon these representations

and warranties.

a. No Litigation. There is no material action, suit, investigation,

or proceeding pending or, in the knowledge of the OBLIGORS, threatened against

either of the OBLIGORS, nor is there any action, suit, investigation, or

proceeding pending which may affect the ability of the OBLIGORS to provide any

of the security acquired by the LENDER. In the event that, subsequent to the

execution and delivery of this AGREEMENT, either of the OBLIGORS receives notice

of, or otherwise acquires knowledge of, any such suit, investigation, or

proceeding, it shall immediately disclose the same to the LENDER in writing.

b. Organization; Good Standing; Authorization. The BORROWER: (i) has

the power to enter into this AGREEMENT and all other LOAN DOCUMENTS required to

be executed and has the power to perform all of its obligations hereunder and

thereunder; (ii) has duly authorized the entry into and performance of this

AGREEMENT and all other LOAN DOCUMENTS required to be executed by it; and (iii)

is in good standing in the state of its organization, and is in good standing

and qualified in all other states in which such qualification is required or is

in the process of obtaining such required qualification. Luis Negrete, president

of the BORROWER, is authorized to execute this AGREEMENT on behalf of the

BORROWER based on the Certificate of Corporate Resolutions and Authorization to

Borrow, dated April 26, 2001, previously delivered to the LENDER.

c. Valid, Binding and Enforceable. Each of the LOAN DOCUMENTS to

which each of the OBLIGORS is a party is the valid and binding obligation of

each OBLIGOR which is a party thereto, and is fully enforceable in accordance

with all stated terms.

d. No Violation. The OBLIGORS' entry into this AGREEMENT will not

violate any agreements to which they are a party or by which any of their

property is bound.

e. No Other Defaults. The OBLIGORS represent that there are no

defaults under the LOAN DOCUMENTS other than the EXISTING DEFAULT.

f. Corporate Documents. The OBLIGORS confirm that there have been no

changes or amendments to the BORROWER'S organizational documents last delivered

to the LENDER.

<PAGE>

g. Lease. There are currently no defaults under the lease with

Ammendale Commerce Center Limited Partnership

Section 5. Payments. The BORROWER shall make principal payments in the

amount of $122,368.53 on February 1, 2005 and March 1, 2005, and then make a

final payment of all indebtedness owed under the NOTE on or before March 31,

2005.

Section 6. New Maturity. All amounts due under the NOTE and the LOAN

DOCUMENTS shall be fully due and payable on or before March 31, 2005.

Section 7. Deferral Fee. The BORROWER shall pay to the LENDER a $15,000.00

deferral fee, which shall immediately be deemed to have been fully earned upon

execution of this AGREEMENT, and shall be paid by the BORROWER on or before

January 17, 2005.

Section 8. Waiver of Existing Default. The LENDER waives the EXISTING

DEFAULT and the requirement for principal payments from September 1, 2004

through January 1, 2005.

Section 9. Events of Default. The following shall constitute events of

default ("EVENTS OF DEFAULT") under this AGREEMENT: (a) any breach by either of

the OBLIGORS of their respective duties and obligations set forth in this

AGREEMENT; (b) if any misrepresentation has been made herein; or (c) the

occurrence of an event of default under any of the LOAN DOCUMENTS.

Section 10. Remedies. If there is an EVENT OF DEFAULT under this

AGREEMENT, the LENDER shall be entitled to exercise all of its rights and

remedies under the LOAN DOCUMENTS and applicable law, including, but not limited

to, accelerating the indebtedness owed under each of the NOTES an


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