EXHIBIT 4.1
SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment"),
dated as of September 5, 2003, is entered into among (1) ALPHA TECHNOLOGIES
GROUP, INC., a Delaware corporation (the "Borrower"), (2) the Lenders party to
the Credit Agreement referred to below and (3) UNION BANK OF CALIFORNIA, N.A.,
as administrative agent for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Borrower, the Lenders and the Agent previously entered into that
certain Credit Agreement dated as of December 26, 2000, as amended by that
certain Amendment to Credit Agreement and Waiver dated as of January 28, 2002,
that certain Second Amendment to Credit Agreement and Waiver dated as of March
4, 2002, that certain Third Amendment to Credit Agreement and Waiver dated as of
July 24, 2002, that certain Fourth Amendment to Credit Agreement dated as of
September 27, 2002, that certain Fifth Amendment to Credit Agreement and Waiver
dated as of February 6, 2003 and that certain Sixth Amendment to Credit
Agreement and Waiver dated as of May 27, 2003 (as amended, the "Credit
Agreement"). Capitalized terms used herein and not defined shall have the
meanings assigned to them in the Credit Agreement.
B. The Borrower has informed the Agent and the Lenders that it is in
default of the Maximum Leverage Ratio covenant contained in Section 6.1(a) and
the Fixed Charge Coverage Ratio covenant contained in Section 6.1(b) of the
Credit Agreement for its Third Quarter End 2003.
C. In connection therewith, the Borrower has requested that the Lenders
(i) waive such Events of Default and (ii) modify the Maximum Leverage Ratio and
Fixed Charge Coverage Ratio covenants, (iii) reduce the Reduction Installments
due Fiscal Year End 2003 and at the end of each fiscal quarter in Fiscal Year
2004 and (iv) extend the Revolving Loan Commitment Expiration Date, as more
fully set forth herein. The Lenders have agreed to grant such waiver and make
such changes, in each case subject to the terms and conditions set forth herein.
D. As of the date hereof, prior to the effectiveness of this Amendment,
(i) the aggregate principal amount of Revolving Loans outstanding under the
Credit Agreement is $3,200,000 and (ii) the aggregate principal amount of Term
Loans outstanding under the Credit Agreement is $19,400,000. The Aggregate
Revolving Loan Commitment is $5,000,000. There are no Letters of Credit
outstanding.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
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SECTION 1. Amendments to and Restatements of Credit Agreement. Various
provisions of the Credit Agreement are hereby amended or restated as follows
effective as of the date first set forth above, subject to satisfaction of the
conditions precedent set forth in Section 3 below:
(a) The definition of "Revolving Loan Commitment Expiration Date" in
Section 1.1 of the Credit Agreement is amended by replacing the date "June 30,
2004" with "January 31, 2005."
(b) The definitions of "Applicable Margin," "Excess Cash Flow" and
"Warrant Agreements" contained in Section 1.1 of the Credit Agreement are
restated in their entirety to read as follows:
"`Applicable Margin': for LIBOR Loans, Base Rate Loans and commitment
fees, as applicable, subject to Section 2.8(d), as set forth below:
Leverage Level LIBOR Margin Base Rate Margin Commitment Fee
-------------- --------------- ---------------- ----------------
1 (< or = 1.50) 2.00% per annum 0.25% per annum 0.250% per annum
2 (>1.50 < or = 2.00) 2.25% per annum 0.50% per annum 0.375% per annum
3 (>2.00 < or = 2.50) 3.00% per annum 1.25% per annum 0.500% per annum
4 (>2.50 < or = 3.00) 3.25% per annum 1.50% per annum 0.625% per annum
5 (>3.00) 3.50% per annum 1.75% per annum 0.750% per annum
; provided that, with respect to Leverage Xxxxx 0 for periods ending on and
after April 1, 2004, (i) the Applicable Margin for LIBOR Loans shall be 4.00%
per annum and (ii) the Applicable Margin for Base Rate Loans shall be 2.25% per
annum."
"`Excess Cash Flow': for any period, for the Borrower and its Subsidiaries
on a consolidated basis, an amount equal to EBITDA for such period, less, during
such period (in each case, without duplication), (i) Interest Expense for such
period, (ii) regularly scheduled principal payments due on Indebtedness during
such period (excluding optional and mandatory prepayments due under Sections 2.4
and 2.5), including payments due with respect to the principal component of
Capitalized Lease Obligations, (iii) cash taxes paid or due and payable for such
period, (iv) cash Capital Expenditures made during such period and (v) increases
(or plus decreases) in Net Working Investment."
"`Warrant Agreements': those certain warrants, (i) each entitled Warrant
to Purchase Shares of Common Stock, dated as of January 28, 2002, (ii) each
entitled Warrant to Purchase Shares of Common Stock, dated as of March 4, 2002
and (iii) each entitled Warrant to Purchase Shares of Common Stock, dated as of
September 5, 2003, each executed by the Borrower in favor of each Lender
existing on such respective dates, or such Lender's affiliate as determined by
such Lender, in form and substance satisfactory to the Lenders, as such warrants
may be amended, modified or restated from time to time in accordance with the
terms hereof. The aggregate fair market value and aggregate purchase price of
such warrants (i) dated as of January 28, 2002 shall be $57,359.43, (ii) dated
as of March 4, 2002 shall be $77,007.05 and (iii) dated as of September 5, 2003
shall be $122,000, which assigned values shall be apportioned on a pro-
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rata basis in accordance with the number of shares issuable upon exercise of
each warrant. The Borrower and the initial holders of such warrants agree to use
the foregoing fair market values and purchase prices for United States federal
income tax purposes with respect to all transactions involving such warrants
(unless otherwise required by a final determination by the United States
Internal Revenue Service or a court of competent jurisdiction)."
(c) Section 1.1 of the Credit Agreement is amended to add the following
definitions in appropriate alphabetical order:
(i) "`Fifth Amendment': that certain Fifth Amendment to Credit
Agreement and Waiver dated as of February 6, 2003 entered into among the
Borrower, the Lenders and the Agent amending this Agreement."
(ii) "`Sixth Amendment': that certain Sixth Amendment to Credit
Agreement and Waiver dated as of May 27, 2003 entered into among the
Borrower, the Lenders and the Agent amending this Agreement."
(iii) "`Seventh Amendment': that certain Seventh Amendment to Credit
Agreement and Waiver dated as of September 5, 2003 entered into among the
Borrower, the Lenders and the Agent amending this Agreement."
(d) Section 2.2(d) of the Credit Agreement is hereby restated in its
entirety to read as follows:
"(d) On each date set forth below, the Borrower shall repay the principal
of the Term Notes in an aggregate amount equal to the corresponding amount set
forth below (each such amount a "Reduction Installment"):
Third Quarter End 2002 $750,000
October 1, 2002 $5,000,000
Fiscal Year End 2002 $750,000
First Quarter End 2003 $750,000
Second Quarter End 2003 $750,000
Third Quarter End 2003 $750,000
Fiscal Year End 2003 $250,000
First Quarter End 2004 $250,000
Second Quarter End 2004 $250,000
Third Quarter End 2004 $250,000
Fiscal Year End 2004 $250,000
First Quarter End 2005 $1,800,000
Second Quarter End 2005 $1,800,000
Third Quarter End 2005 $1,800,000
Fiscal Year End 2005 $1,800,000
First Quarter End 2006 $10,950,000
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; provided, that the final Reduction Installment paid shall be in an amount
equal to all amounts outstanding on the Term Notes. The aggregate amount payable
to any Term Loan Lender on any Term Loan reduction date set forth in this
Section 2.2(d) shall be determined in accordance with the provisions of Section
2.11."
(e) Section 2.5(d) of the Credit Agreement is restated in its entirety to
read as follows:
"(d) In the event that at the end of any fiscal quarter of the Borrower
ending on and after Fiscal Year End 2002 there shall exist Excess Cash Flow with
respect to such fiscal quarter, then on the date which is ten Business Days
(such date, the "Payment Date") after the earlier to occur of (i) the date upon
which unaudited financial statements of the Borrower with respect to such fiscal
quarter become available and (ii) the 45th day after the end of such fiscal
quarter, the Borrower shall prepay the Loans (and such prepayment shall be
applied as set forth in Section 2.5(f)) and, after all Loans have been prepaid,
make a Cash Collateral Deposit, in an amount equal to 90% of such Excess Cash
Flow; provided that if such fiscal quarter end is also a Fiscal Year End, (A)
"Payment Date" shall mean the date which is ten Business Days after the earlier
to occur of (i) the date upon which the audited financial statements of the
Borrower with respect to such fiscal year become available and (ii) the 90th day
after the end of such fiscal year and (B) in the event that such audited
financial statements reveal additional Excess Cash Flow with respect to any
prior quarter in such fiscal year which should have been applied as a prepayment
hereunder (such amount, an "Additional Prepayment Amount"), then the payment due
on such Payment Date shall be increased by an amount equal to such Additional
Prepayment Amount; provided, further that the foregoing reference to 90% shall
be 50% if the Maximum Leverage Ratio for the two fiscal quarters of the Borrower
immediately preceding the Payment Date was less than 1.50:1. The Borrower agrees
to provide to the Agent, concurrently with delivery of each Covenant Compliance
Certificate pursuant to Section 5.2(a), a certificate of the Borrower setting
forth its calculation of Excess Cash Flow for the applicable period (it being
understood that such certificate shall be provided regardless of whether such
calculation results in a positive or negative number)."
(f) Sections 2.8 and 2.9 of the Credit Agreement are hereby restated in
their entirety to read as follows:
"2.8 Interest Rates and Payment Dates. (a)Each LIBOR Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the LIBOR Adjusted Rate plus the Applicable Margin. Each Base
Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus
the Applicable Margin.
(b) If any Event of Default shall have occurred and be continuing, all
amounts outstanding hereunder shall bear interest at a rate per annum equal to
the Base Rate plus 2% per annum, from the date of the occurrence of such Event
of Default until such Event of Default is no longer continuing (after as well as
before judgment).
(c) Interest shall be payable in arrears on each Interest Payment Date;
provided, however, that interest accruing pursuant to paragraph (b) of this
Section shall be payable on demand.
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(d) For purposes of determining the Applicable Margin for Loans,
commitment fees and standby letter of credit fees hereunder, interest rates on
the Loans and such fees shall be calculated on the basis of the Maximum Leverage
Ratio set forth in the most recent Covenant Compliance Certificate received by
the Agent in accordance with Section 5.2(a). For accrued and unpaid interest and
fees only (no changes being made for interest or fee payments previously made),
changes in interest rates on the Loans or the rate of such fees attributable to
changes in the Applicable Margin caused by changes in the Maximum Leverage Ratio
shall be calculated upon the delivery of a Covenant Compliance Certificate, and
such change shall be effective with respect to Base Rate Loans, LIBOR Loans and
such fees from the day which is five days after receipt by the Agent of such
Covenant Compliance Certificate. If, for any reason, the Borrower shall fail to
deliver a Covenant Compliance Certificate when due in accordance with Section
5.2(a), and such failure shall continue for a period of ten days, the Leverage
Level shall be deemed to be Leverage Xxxxx 0 for such purposes, retroactive to
the date on which the Borrower should have delivered such Covenant Compliance
Certificate, and shall continue until a Covenant Compliance Certificate
indicating a different Leverage Level is delivered to the Agent.
2.9 Computation of Interest and Fees. Interest on the Loans and all other
Obligations shall be calculated on the basis of a 360-day year for the actual
days elapsed. Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error."
(g) Sections 2.17 and 2.18 of the Credit Agreement are hereby restated in
their entirety to read as follows:
"2.17 Unused Commitment Fee. (a) The Borrower agrees to pay to the Agent,
for the account of the Revolving Loan Lenders, an unused commitment fee to be
shared pro rata among the Revolving Loan Lenders for the period from and
including the date hereof to but excluding the Revolving Loan Commitment
Expiration Date, based on the average aggregate amount, for each day during such
period, of the Available Revolving Loan Commitment, and computed at a rate equal
to the Applicable Margin for commitment fees. Such unused commitment fees shall
be payable in installments quarterly in arrears on the last day of each March,
June, September and December and on the Revolving Loan Commitment Expiration
Date, commencing on the first such date to occur after the date hereof.
(b) The Borrower agrees to pay to the Agent, for the account of the Term
Loan Lenders, an unused commitment fee to be shared pro rata among the Term Loan
Lenders for the period from and including the date hereof to but excluding the
date the Term Loans are funded in accordance with Section 2.2, based on the
Aggregate Term Loan Commitment, and computed at a rate equal to 0.25% per annum.
Such unused commitment fee shall be payable on the Closing Date.
2.18 Deferred Restructuring Fee. The Borrower agrees to pay to the Agent,
for the account of those Lenders party to the Credit Agreement on the effective
date of the Fourth Amendment, a deferred restructuring fee to be shared pro rata
among such Lenders, equal to 1% of the sum of (a) the Aggregate Revolving Loan
Commitment and (ii) the outstanding principal amount of the Term Loans, in each
case as in existence as of Fiscal Year End 2004. Such fee
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shall be deemed earned in full by such Lenders as of the effectiveness of the
Fourth Amendment, but shall not be due until Fiscal Year End 2004."
(h) Section 6.1 of the Credit Agreement is restated in its entirety to
read as follows:
"6.1 Financial Condition Covenants. The Borrower shall not:
(a) Maximum Leverage Ratio. Permit the Maximum Leverage Ratio, as of the
end of any fiscal quarter of the Borrower, to exceed the following levels for
the periods indicated:
Period Ratio
------ -----
Third Quarter End 2002 5.00:1
Fiscal Year End 2002 4.45:1
First Quarter End 2003 Waived in Fifth Amendment
Second Quarter End 2003 Waived in Sixth Amendment
Third Quarter End 2003 8.50:1
Fiscal Year End 2003 11.00:1
First Quarter End 2004 11.00:1
Second Quarter End 2004 11.00:1
Third Quarter End 2004 10.30:1
Fiscal Year End 2004 8.1:1
First Quarter End 2005 and thereafter 1.75:1
; provided, that for purposes of calculating the covenant in this Section 6.1(a)
only, the definition of `EBITDA' shall be deemed to read as follows:
`EBITDA': for the Borrower and its Subsidiaries on a consolidated basis, for the
fiscal quarter most recently ended and the immediately preceding three fiscal
quarters, Net Income after eliminating extraordinary gains and losses, plus,
without duplication, (i) provisions for income taxes, (ii) depreciation and
amortization, (iii) Interest Expense, (iv) loan fees paid in connection with the
Loan Documents (including (x) the effect, if any, of execution of warrant
agreements in connection with the Loan Documents and (y) the amendment and
waiver fee paid pursuant to the Third Amendment, the amendment fee paid pursuant
to Section 3 of the Fourth Amendment, the amendment and waiver fee paid pursuant
to Section 3 of the Fifth Amendment, the amendment fee paid pursuant to Section
3 of the Sixth Amendment and the amendment fee paid pursuant to Section 3 of the
Seventh Amendment), (v) $250,000 in Restructuring Charges for Fiscal Year 2002,
(vi) the amount of any annual impairment charges taken by the Borrower in
connection
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with FAS Rule 142 and (vii) consultant fees paid in connection with Tactical
Solutions, LLC's review of the Borrower.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio,
as of the end of any fiscal quarter of the Borrower, to be less than the
following levels for the periods indicated:
Period Ratio
------ -----
Third Quarter End 2002 1.15:1
Fiscal Year End 2002 1.00:1
First Quarter End 2003 Waived in Fifth Amendment
Second Quarter End 2003 Waived in Sixth Amendment
Third Quarter End 2003 N/A
Fiscal Year End 2003 N/A
First Quarter End 2004 0.60:1
Second Quarter End 2004 0.70:1
Third Quarter End 2004 0.70:1
Fiscal Year End 2004 0.85:1
First Quarter End 2005 and thereafter 0.85:1
; provided, that for purposes of calculating the covenant in this Section 6.1(b)
only,
(i) (A) the Fixed Charge Coverage Ratio for Fiscal Year End 2002 shall be based
on the fiscal quarter most recently ended and the immediately preceding two
fiscal quarters only, without reference to any other fiscal quarter; (B) the
Fixed Charge Coverage Ratio for Second Quarter End 2003 shall be based on such
respective fiscal quarter only, without reference to any other fiscal quarter;
(C) the Fixed Charge Coverage Ratio for First Quarter End 2004 shall be based on
such fiscal quarter only, without reference to any other fiscal quarter; (D) the
Fixed Charge Coverage Ratio for Second Quarter End 2004 shall be based on the
fiscal quarter most recently ended and the immediately preceding fiscal quarter
only; and (E) the Fixed Charge Coverage Ratio for Third Quarter End 2004 shall
be based on the fiscal quarter most recently ended and the immediately preceding
two fiscal quarters only; and
(ii) the definition of "EBITDA" shall be deemed to read as follows:
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"EBITDA": for the Borrower and its Subsidiaries on a consolidated basis,
for the fiscal quarter most recently ended and the immediately preceding
three fiscal quarters, Net Income after eliminating extraordinary gains
and losses, plus, without duplication, (i) provisions for income taxes,
(ii) depreciation and amortization, (iii) Interest Expense, (iv) loan fees
paid in connection with the Loan Documents (including (x) the effect, if
any, of execution of warrant agreements in connection with the Loan
Documents and (y) the amendment and waiver fee paid pursuant to the Third
Amendment, the amendment fee paid pursuant to Section 3 of the Fourth
Amendment, the amendment and waiver fee paid pursuant to Section 3 of the
Fifth Amendment, the amendment fee paid pursuant to Section 3 of the Sixth
Amendment and the amendment fee paid pursuant to Section 3 of the Seventh
Amendment), (v) $250,000 in Restructuring Charges for Fiscal Year 2002,
(vi) the amount of any annual impairment charges taken by the Borrower in
connection with FAS Rule 142 and (vii) consultant fees paid in connection
with Tactical Solutions, LLC's review of the Borrower.
(c) Capital Expenditures. Permit Capital Expenditures of the Borrower and
its Subsidiaries on a consolidated basis for any fiscal year to be more than (i)
for the Borrower's Fiscal Year 2002, $500,000, (ii) for the Borrower's Fiscal
Year 2003, $450,000, (iii) for the Borrower's Fiscal Year 2004, $300,000 and
(iv) for each Fiscal Year thereafter, $1,000,000 per year.
(d) Interest Coverage. Permit the ratio of (a) EBITDA for any fiscal
quarter less actual Capital Expenditures for such fiscal quarter to (b) Interest
Expense for such fiscal quarter to be less than the following levels for the
periods indicated:
Period Ratio
------ -----
Fiscal Year End 2003 0.70:1
First Quarter End 2004 1.00:1
Second Quarter End 2004 1.20:1
Third Quarter End 2004 1.20:1
Fiscal Year End 2004 1.50:1
(e) Minimum EBITDA. Permit EBITDA, as of the end of each fiscal quarter,
on a year to date basis, of the Borrower indicated below, to be less than the
following amount for the periods indicated:
Period Amount
------ ------
Third Quarter End 2003 $400,000
Fiscal Year End 2003 $350,000
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First Quarter End 2004 $520,000
Second Quarter End 2004 $1,220,000
Third Quarter End 2004 $1,730,000
Fiscal Year End 2004 $2,620,000
; provided, that for purposes of calculating the covenant in this Section 6.1(e)
only, Minimum EBITDA as of the end of each of Third Quarter End 2003 and Fiscal
Year End 2003 shall be based on the fiscal quarter most recently ended, without
reference to any other fiscal quarter."
SECTION 2. Waivers.
(a) Section 6.1(a) of the Credit Agreement requires that the Maximum
Leverage Ratio not exceed 4.90:1.00 for Third Quarter End 2003. The Borrower has
informed the Agent and the Lenders that its Maximum Leverage Ratio for such
period was 8.06:1.00. As a result of such noncompliance, an Event of Default has
occurred and is continuing under the Credit Agreement. At the Borrower's
request, the Lenders agree to waive such Event of Default, subject to the terms
and conditions set forth herein.
(b) Section 6.1(b) of the Credit Agreement requires that the Fixed Charge
Coverage Ratio not be less than 1.10:1.00 for Xxxxx Xxxxxxx Xxx 0000. The
Borrower has informed the Agent and the Lenders that its Fixed Charge Coverage
Ratio for such period was 0.25:1.00. As a result of such noncompliance, an Event
of Default has occurred and is continuing under the Credit Agreement. At the
Borrower's request, the Lenders agree to waive such Event of Default, subject to
the terms and conditions set forth herein.
(c) The foregoing waivers are given in this instance only. The foregoing
waivers shall not be construed as a waiver of or consent to any violation of, or
deviation from, any other term or condition of the Credit Agreement or any other
Loan Document, nor shall such waivers be construed to evidence the willingness
of the Agent or the Lenders to give any other or additional waiver, whether in
similar or different circumstances.
SECTION 3. Conditions Precedent. This Amendment shall become effective as
of the date first set forth above upon receipt by the Agent of the following:
(a) this Amendment, duly executed by the Borrower and the Lenders;
(b) evidence of the Guarantors' consent to this Amendment, substantially
in the form of Exhibit A hereto;
(c) the warrant agreements dated as of September 5, 2003, substantially in
the form of Exhibit B hereto, duly executed by the Borrower and exercisable for
an aggregate amount of 114,020 common shares of the Borrower;
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(d) resolutions of the board of directors of the Borrower, authorizing
this Amendment and the warrant agreements referenced in Section 3(c) hereto,
certified by a Responsible Officer of the Borrower;
(e) an opinion of counsel to the Borrower regarding this Amendment and the
warrant agreements referenced in Section 3(c) hereto, in form and substance
satisfactory to the Agent;
(f) an amendment fee equal to twenty-five basis points on the sum of the
outstanding Term Loans and the Aggregate Revolving Commitment, which is $61,000,
in immediately available funds, to be shared pro rata by the Lenders executing
this Amendment on or before September 5, 2003, and all outstanding fees and
expenses of the Agent including a non-cash fee for its services in connection
herewith and legal fees incurred in connection with the negotiation, drafting
and execution of this Amendment to the extent requested by the Agent to be paid
in connection herewith; and
(g) such other documents, agreements and opinions as the Agent or any
Lender may request.
SECTION 4. Reference to and Effect on the Credit Agreement and the Other
Loan Documents.(a) (a) Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement," "hereunder," "hereof" or words of
like import referring to the Credit Agreement, and each reference in the other
Loan Documents to "the Credit Agreement," "thereunder," "thereof" or words of
like import referring to the Credit Agreement, shall mean and be a reference to
the Credit Agreement, as amended and/or restated hereby.
(b) Except as specifically amended herein, the Credit Agreement and all
other Loan Documents are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Agent or the Lenders
under the Credit Agreement or any other Loan Documents, nor constitute a waiver
of any provision of the Credit Agreement or any other Loan Documents, except as
specifically set forth herein.
SECTION 5. Representations and Warranties. The Borrower hereby represents
and warrants, for the benefit of the Lenders and the Agent, as follows: (i) the
Borrower has all requisite power and authority under applicable law and under
its charter documents to execute, deliver and perform this Amendment, and to
perform the Credit Agreement as amended hereby; (ii) all actions, waivers and
consents (corporate, regulatory and otherwise) necessary or appropriate for the
Borrower to execute, deliver and perform this Amendment, and to perform the
Credit Agreement as amended hereby, have been taken and/or received; (iii) this
Amendment, and the Credit Agreement, as amended by this Amendment, constitute
the legal, valid and binding obligation of the Borrower enforceable against it
in accordance with the terms hereof; (iv) the execution, delivery and
performance of this Amendment, and the performance of the Credit Agreement, as
amended hereby, will not (a) violate or contravene any material Requirement of
Law, (b) result in any material breach or violation of, or constitute a material
default under, any agreement or instrument by which the Borrower or any of its
property may be
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bound, or (c) result in or require the creation of any Lien upon or with respect
to any properties of the Borrower, whether such properties are now owned or
hereafter acquired; (v) the representations and warranties contained in the
Credit Agreement and the other Loan Documents are correct in all material
respects on and as of the date of this Amendment, after giving effect to the
same, as though made on and as of such date; and (vi) except as discussed in
Section 2 of this Amendment, no Default has occurred and is continuing.
SECTION 6. Additional Covenant of the Borrower. In addition to the
covenants set forth in the Credit Agreement, the other Loan Documents and this
Amendment, the Borrower hereby agrees as follows: Section 7(A) of each Warrant
Agreement provides that no later than 45 days following the Issue Date (as
defined therein), the Borrower will file a registration statement with the
Securities and Exchange Commission to effect the registration under the
Securities Act of 1933, as amended, of the shares of common stock issued or
issuable upon the exercise of such Warrant Agreements and will cause such
registration statement to become effective (the "Registration Effective Date")
as a shelf registration no later than 90 days after the Issue Date (as defined
therein). As part of the Second Amendment and with respect to the Warrant
Agreements dated as of January 28, 2002, the Lenders agreed to provide an
additional 30 days after each such compliance date, subject to the terms and
conditions set forth in the Second Amendment. Pursuant to a letter agreement
dated April 22, 2002, the Registration Effective Date was again extended to June
10, 2002. The Borrower failed to cause its registration statement to become
effective by June 10, 2002, resulting in an Event of Default under the Credit
Agreement. As part of the Third Amendment, the Lenders agreed to waive such
Event of Default, subject to the terms and conditions set forth therein and
provided that that the Borrower (i) filed its amended registration statement for
the Warrant Agreements on a date not later than February 4, 2003 and (ii) caused
such registration statement to become effective as a shelf registration on a
date not later than March 31, 2003. The Borrower failed to cause its
registration statement to become effective by March 31, 2003, resulting in an
Event of Default under the Credit Agreement. As part of the Fourth Amendment,
the Lenders agreed to waive such Event of Default, subject to the terms and
conditions set forth therein and provided that the Borrower filed its amended
registration statement for the Warrant Agreements on a date not later than March
31, 2004. The Borrower hereby agrees that it shall file its registration
statement for the Warrant Agreements issued in connection with this Amendment
and cause such registration statement to become effective as a shelf
registration on a date not later than March 31, 2004, as more fully set forth in
the Warrant Agreements delivered in connection with this Amendment.
SECTION 7. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 8. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA (WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES).
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ALPHA TECHNOLOGIES GROUP, INC.
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Chairman and Chief Executive Officer
UNION BANK OF CALIFORNIA, N.A., as Agent
and as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
CALIFORNIA BANK & TRUST, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
IBM CREDIT LLC, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Manager, Global Special Handling
MANUFACTURERS BANK
A California Banking Corporation, as a Lender
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Vice President
