Exhibit

10.19




 




AMENDMENT TO LOAN AGREEMENT AND NOTE




 




This amendment (the “Amendment”), dated as of

the date specified below, is by and between the borrower (the “Borrower”) and

the bank (the “Bank”) identified below.




 




RECITALS




 




A. The Borrower and the Bank have executed a

Loan Agreement (the “Agreement”) dated MARCH 15, 2002 and the Borrower has

executed a Note (the “Note”), dated MARCH 15, 2002, either or both which may

have been amended and replaced from time to time, and the Borrower (and if

applicable, certain third parties) have executed the collateral documents which

may or may not be identified in the Agreement and certain other related

documents (collectively the “Loan Documents”), setting forth the terms and

conditions upon which the Borrower may obtain loans from the Bank from time to

time in the original amount of $ 3,500,000.00, as may be amended from time to

time.




 




B. The Borrower has requested that the Bank

permit certain modifications to the Agreement and Note as described below.




 




C. The Bank has agreed to such modifications,

but only upon the terms and conditions outlined in this Amendment.




 




TERMS OF AGREEMENT




 




In

consideration of the mutual covenants contained herein, and for other good and

valuable consideration, the Borrower and the Bank agree as follows:




 




ý  Extension of Maturity Date.  If checked here, any references in the

Agreement or Note to the maturity date or date of final payment are hereby

deleted and replaced with “ JANUARY 31, 2004.”




 




o  Change in Maximum Loan Amount.  If checked here, all references in the

Agreement and in the Note (whether or not numerically) to the maximum loan

amount are hereby deleted and replaced with

“$                          “,

which evidences an additional

$                          available

to be advanced subject to the terms and conditions of the Agreement and Note.




 




o  Change in Multiple Advance Termination Date.   If checked here, all references in the

Agreement and in the Note to the termination date for multiple advances are

hereby deleted and replaced with

“                          ”.




 




Change in Financial Covenant(s).




 




(i)  o  If

checked here, all references to “$      ”in the

Agreement as the minimum Net Working Capital amount are hereby deleted and

replaced with “$            ”for

the period beginning     and thereafter.




 




(ii)  ý  If

checked here, all references to “$ 9,500,000” in the Agreement as the minimum

Tangible Net Worth amount are hereby deleted and replaced with “$ 10,000,000”

for the period beginning 02/01/03 and thereafter.




 




(iii) 

o  If checked

here, all references to

“                          ”

in the Agreement as the maximum Debt to Worth Ratio are hereby deleted and

replaced with

“                          ”

for the period beginning                 

and thereafter.




 




(iv)  o  If

checked here, all references to “  ” in the Agreement as the minimum

Current Ratio are hereby deleted and replaced with “  ” for the

period beginning     and thereafter.




 




(v)  o  If

checked here, all references to

“$                          ”

in the Agreement as the maximum Capital Expenditures amount are  hereby deleted and replaced with

“$                          ”

for the period beginning

                

and thereafter.




 




(vi)  o  If

checked here, all references to

“                          ”

in the agreement as the minimum Cash Flow Coverage Ratio are hereby deleted and

replaced with

“                          ”

for the period beginning

             and

thereafter.




 




(vii) 

o  If

checked here, all references to

“$                          ”  in the Agreement as the maximum Officers,

Directors, Partners, and Management Salaries and Other Compensation amount are

hereby deleted and replaced with

“$                          ”

for the period beginning

                    

and thereafter.




 




o  Change in

Payment Schedule.  If checked

here, effective upon the date of this Amendment, any payment terms are amended

as follows:




 





























 




ý  Change in Interest Rate.  If

checked here, effective upon the date of this Amendment, interest payable under

the Note is amended as follows:




 




The unpaid principal balance

will bear interest at an annual rate equal to 1.000% plus the prime rate

announced by the Bank.  The Interest

rate hereunder will be adjusted each time that the prime rate changes.




 




o  Change in

Late Payment Fee.  If checked

here, subject to applicable law, if any payment is not made on or before its

due date, the Bank may collect a delinquency charge of

        % of the unpaid amount.

Collection of the late payment fee shall not be deemed to be a waiver of the

Bank’s right to declare a default hereunder.




 




o  Change in

Closing Fee. If checked here and subject to applicable law, the

Borrower will pay the Bank a closing fee of

$                    

(apart form any prior closing fee) contemporaneously with the execution of this

Amendment.  This fee is in addition to

all other fees, expenses and other amounts due hereunder.




 




Default Interest Rate. Notwithstanding any provision of this Note to

the contrary, upon any default or at any time during the continuation thereof

(including failure to pay upon maturity), the Bank may, at its option and

subject to applicable law, increase the interest rate on this Note to a rate of

5% per annum plus the interest rate otherwise payable hereunder.  Notwithstanding the foregoing and subject to

applicable law, upon the occurrence of a default by the Borrower or any

guarantor involving bankruptcy, insolvency, receivership proceedings or an

assignment for the benefit of creditors, the interest rate on this Note shall

automatically increase to a rate of 5% per annum plus the rate otherwise

payable hereunder.




 




Effectiveness

of Prior Documents. Except as specifically amended

hereby, the Agreement, the Note and the other Loan Documents shall remain in

full force and effect in accordance with their respective terms. All warranties

and representations contained in the Agreement and the other Loan Documents are

hereby reconfirmed as of the date hereof. All collateral previously provided to

secure the Agreement and/or Note continues as security, and all guaranties

guaranteeing obligations under the Loan Documents remain in full force and

effect. This is an amendment, not a novation.




 




Preconditions to Effectiveness. This Amendment shall only become effective upon

execution by the Borrower and the Bank, and approval by any other third party

required by the Bank.




 




No Waiver of Defaults; Warranties. This Amendment shall not be construed as or be

deemed to be a waiver by the Bank of existing defaults by the Borrower, whether

known or undiscovered. All agreements, representations and warranties made

herein shall survive the execution of this Amendment.




 




Counterparts. This Amendment may be signed in any number of

counterparts, each of which shall be considered an original, but when taken

together shall constitute one document.




 




Authorization. The Borrower represents and warrants that the

execution, delivery and performance of this Amendment and the documents

referenced herein are within the authority of the Borrower and have been duly

authorized by all necessary action.




 




Attachments. All documents attached hereto,

including any appendices, schedules, riders, and exhibits to this Amendment,

are hereby expressly incorporated herein by reference.




 




	

  Dated as of: JANUARY 30, 2003


  	

   


  
	

  (Individual

  Borrower)


  	

  PHOENIX GOLD INTERNATIONAL, INC.


  
	

   


  	

  Borrower Name (Organization)


  
	

   


  	

   


  
	

   


  	

  a Oregon Corporation


  
	

   


  	

   


  
	

  Borrower Name


  	

  N/A


  	

  By:


  	

  /s/ Joseph K. O’Brien


  	

   


  
	

   


  	

   


  	

  Name and Title: Joseph K. O’Brien, VP, CFO

  & Secretary


  
	

   


  	

   


  	

   


  	

   


  
	

  Borrower Name


  	

  N/A


  	

  By:


  	

   


  	

   


  
	

   


  	

  Name and Title:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Agreed to:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  U.S. BANK N.A


  	

   


  	

   


  
	

  (Bank)


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/ Kris Miller


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Kris Miller


  	

   


  	

   


  
	

  Name and Title: Asst. Vice President


  	

   


  	

   


  
											





 




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