Exhibit 10.13

LOAN MODIFICATION AGREEMENT
 

  March 30, 2006

 
THIS AGREEMENT is by and among Wainwright Bank & Trust Company, having an office
at 63 Franklin Street, Boston, Massachusetts 02110 (the “Bank”), and Zoom
Telephonics, Inc., a Delaware corporation, having a principal place of business
and chief executive office at 207 South Street, Boston, Massachusetts 02111 (the
“Borrower”).

Recitals

A.   The Bank is the holder of a Commercial Real Estate Promissory Note from the
Borrower dated January 10, 2001, in the original principal amount of
$6,500,000.00, as amended by First Amendment to Commercial Real Estate
Promissory Note dated March 28, 2005 (the “Note”). The Note is secured, in part,
by that certain Mortgage, Security Agreement and Assignment from the Borrower to
the Bank dated January 10, 2001, and recorded with the Suffolk County Registry
of Deeds in Book 25763, Page 284, and filed with the Suffolk County Registry
District of the Land Court (the “Registry District”) as Document No. 609541 (the
“Mortgage”), which Mortgage covers the land and premises known as and located at
195-201 South Street, 50 Utica Street, 207-209 South Street, and 162-168
Kneeland Street, Boston, Massachusetts (the “Mortgaged Property”). The Note, the
Mortgage, and all other instruments, including but not limited to, an Assignment
of Leases and Rents from the Borrower to the Bank dated January 10, 2001, and
recorded with the Suffolk County Registry of Deeds in Book 25763, Page 315, and
filed with the Registry District as Document No. 609542, given to the Bank
heretofore or hereafter as security for the Note or in connection with the
indebtedness evidenced thereby are herein referred to collectively as the “Loan
Documents”. All capitalized terms used herein without definition that are
defined in the Note or in the Mortgage shall have the same meaning herein as in
the Note or in the Mortgage, as the case may be, as herein modified.

B.   The Note matured on January 10, 2006, but has not been paid in full. The
Borrower has continued to make, and the Bank has continued to receive, payments
on a monthly basis as if the Note had not matured, without the Bank waiving or
modifying said maturity. The Borrower has requested certain modifications to the
Note, including an extension of said Maturity Date of January 10, 2006. The Bank
is willing to agree to such modifications, subject to the terms and conditions
of this Agreement.

IN CONSIDERATION OF the foregoing and the sum of Ten Dollars ($10.00), and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as follows:

1.    Effective as of the date hereof, the Note is hereby amended as follows:

(a)          The Maturity Date is hereby extended and changed to April 10, 2007.
The Borrower may elect further to extend the Maturity Date to April 10, 2008, by
notifying the Bank of such election and paying the Bank an extension fee of
$36,750.00 on or before March 10, 2007, provided that (i) prior to the time of
such election, the Bank has not exercised its right to accelerate the maturity
of the Note following any default, and (ii) at the time of such election, no
Event of Default then exists and no other event, set of facts or circumstances
has then occurred and is then continuing which, with the giving of notice or the
passage of time, or both, would constitute such an Event of Default.

(b)         Commencing on the date hereof, the Interest Rate on the Note shall
be changed to a fluctuating rate of interest equal to the from time to time
prime rate published in The Wall Street Journal (the “Prime Rate”), it being
understood that if more than one such rate is published, the highest of such
rates will be used. Currently, the Prime Rate is 7.75% per annum. The effective
rate of interest on the Note shall change on each day that the Prime Rate
changes.

(c)          Payments of principal and interest shall continue to be due monthly
in arrears on the tenth (10th) day of each calendar month (with the next such
payment due on April 10, 2006) until the Maturity Date (as herein provided) in
an amount from time to time as determined by the Bank, in its sole discretion
(absent manifest error), equal to the monthly payment required as of each such
payment day to amortize the then current outstanding principal balance of the
Note at the then applicable Interest Rate over the then remaining portion of the
original twenty-year amortization period.
 
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(d)         Each of the following additional events shall constitute an Event of
Default under the Note:

(o)         If the amount of the outstanding principal balance of the Note plus
all interest, fees, and charges due thereunder or in connection therewith shall
at any time exceed fifty percent (50%) of the value of the Mortgaged Property,
as determined by the Bank in its sole discretion (and such event shall
constitute an Event of Default notwithstanding the terms of Section 4-27 (a) of
the Mortgage).

(p)         The failure of the Borrower to maintain and hold at all times, in
its name, cash and cash equivalents, free from any and all encumbrances, in an
amount not less than $1,000,000.00 (and such event shall constitute an Event of
Default notwithstanding the terms of Section 4-27 (c) of the Mortgage).

(q)         The failure of the Borrower to maintain at all times a Tangible Net
Worth of not less than $7,000,000.00. “Tangible Net Worth” means the amount
equal to the Borrower’s stockholders’ equity, minus the sum of its intangible
assets (patents, goodwill, etc.) and amounts due Borrower from any employee or
parent, subsidiary or other affiliate of Borrower, all determined in accordance
with generally accepted accounting principles consistently applied (“GAAP”).

2.           The Borrower shall establish on the date hereof, fund and maintain
with the Bank, an account (the “Debt Service Reserve Account”) in an amount
satisfactory to the Bank and equal to at least six (6) times the monthly payment
due on the Note from time to time. Initially, the sum of $211,000.00 shall be
maintained in the Debt Service Reserve Account. If from time to time the Bank
determines that the amount then in the Debt Service Reserve Account is less than
six (6) times the then monthly payment due on the Note, upon notice to the
Borrower, the Borrower shall be required to deposit into the Debt Service
Reserve Account the amount of such deficiency. The Debt Service Reserve Account
shall not constitute a trust fund and may be commingled with other monies held
by the Bank. The Borrower hereby pledges to the Bank and grants to the Bank a
security interest in any and all monies now or hereafter deposited in the Debt
Service Reserve Account as additional security for the payment of the Note. Upon
the occurrence of an Event of Default, the Bank may apply any sums then present
in the Debt Service Reserve Account to the payment of the Note in any order in
its sole discretion.

3.           All obligations and representations of the Borrower under this
Agreement shall be secured by the Mortgage and the Loan Documents and a default
with respect to such obligations or representations shall be a default under the
Mortgage and the Loan Documents.

4.           The Borrower hereby warrants that all of the representations and
warranties contained in the Loan Documents are true and correct as of the date
hereof (except for Borrower's representation with respect to its financial
condition, which is accurately reflected on Borrower's most recent financial
statements provided to the Bank) and that no Event of Default has occurred and
is continuing under the Note or the other Loan Documents or would constitute
such an Event of Default but for the requirement that notice be given or time
elapse or both.

5.           The Borrower hereby agrees to pay all reasonable fees and expenses
incurred by the Bank in connection with the transaction contemplated by this
Agreement, including reasonable attorneys' fees.

6.           The Borrower acknowledges and agrees that as of the date of this
Agreement, the Borrower is indebted to the Bank under the Note, without
limitation, for the unpaid principal balance of $3,675,000.00, plus accrued
interest on the principal balance, and, if any, other charges, fees and expenses
as provided in the Note and the other Loan Documents. It is understood and
agreed that such principal balance reflects a substantial principal paydown made
by the Borrower recently as a condition of the Bank entering into this
Agreement. The Borrower expressly acknowledges that the Note, as herein
modified, provides for a balloon payment upon maturity of sums equal to the
unpaid principal and interest due under the Note, as modified by this Agreement,
and all other costs, expenses and charges due thereon, and the Bank has no
obligation to the Borrower to extend or renew the Note beyond the Maturity Date
herein provided.

7.           The Borrower acknowledges that the Bank and its representatives,
including but not limited to its officers, employees and any independent
contractors, has fulfilled all of its obligations to it under the Loan Documents
and that the amount of principal recited herein together with accrued interest
is due and owing as of the date of this Agreement. The Borrower represents and
warrants that it has no defenses, set-offs or counterclaims to the payment of
its liabilities and obligations to the Bank as set forth in the Loan Documents,
as modified by this Agreement, with respect to any actions, inactions or
statements of fact arising or existing prior and up to the date of this
Agreement, and to the extent that the Borrower has any defense, set-off or
counterclaim, the Borrower hereby affirmatively WAIVES any such claim. The
Borrower hereby releases and forever discharges the Bank and its representatives
from any and all claims, defenses, actions, causes of action, suits,
controversies, agreements, provisions and demands in law or in equity which the
Borrower ever had, now has or now may have against the Bank or its
representatives, including, but not limited to, claims relating to and arising
out of the Loan Documents or the administration of the Note to date.

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8.           The Bank does not hereby waive any defaults now existing or
hereinafter arising under the Loan Documents or any of its rights and remedies
upon the occurrence of any Event of Default under the Loan Documents.

9.           This Agreement and all other documents, instruments, and agreements
executed in connection herewith represent the entire agreement of the parties
hereto and incorporate the final results of all discussions and negotiations
between the undersigned and the Bank, either express or implied, concerning the
matters included herein and in such other documents, instruments and agreements,
any custom, usage, or course of dealings to the contrary notwithstanding. No
such discussions, negotiations, custom, usage, or course of dealings shall
limit, modify, or otherwise affect the provisions hereof. Any modification,
amendment, or waiver of any provision of this Agreement or of any provision of
any other agreement between the undersigned and the Bank must be executed in
writing by the Bank and the party against which/whom enforcement is sought.

10.         Each of the Note and the other Loan Documents are hereby amended to
be consistent with the terms and provisions of this Agreement. All references in
the Note and the other Loan Documents to each of the others shall be deemed to
refer to such document(s) as amended by this Agreement

11.         Except as modified and amended by this Agreement, the Note shall
remain in full force and effect as originally written and the same, as so
modified, is hereby ratified and confirmed.
 
12.         All the other Loan Documents are hereby ratified and confirmed as if
said instruments were executed this day in connection with the Note as modified
by this Agreement.

[here ends this page; the next page is the signature page]
 
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EXECUTED as a sealed instrument as of the date first above written.
 

        WAINWRIGHT BANK & TRUST COMPANY  
   
   
   /s/ C. Norris By:   /s/ Darryl J. Fess  

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Witness 
C. Norris      
Name:  Darryl J. Fess
     Title: Senior Vice-President

 

        ZOOM TELEPHONICS, INC.  
   
   
  /s/ John Feeney By:   /s/ Frank B. Manning  

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Witness 
John Feeney      
Frank B. Manning, President   
     duly authorized

       
   
   
  /s/ John Feeney By:   /s/ Robert Crist  

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Witness 
John Feeney
Robert A. Crist, Treasurer 
 duly authorized

 
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