Exhibit (4)(f)
THIRD AMENDMENT TO CREDIT AGREEMENT
Dated as of June 12, 1997
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Trans-Tech, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX
Re: Third Amendment to the Credit Agreement dated as of September 29, 1995
by and among Alpha Industries, Inc. ("Alpha"), Trans-Tech, Inc.
("Trans-Tech"), Silicon Valley Bank ("SVB"), Fleet Bank of
Massachusetts, N.A., predecessor to Fleet National Bank ("Fleet"), and
Silicon Valley Bank as collateral agent for SVB and Fleet (the
"Collateral Agent"), as previously amended by the First Amendment to
Credit Agreement dated as of July 31, 1996 and the Second Amendment to
Credit Agreement dated as of September 30, 1996.
----------------------------------------------------------------------
Ladies and Gentlemen:
The purpose of this letter is to evidence the agreement between Alpha and
Trans-Tech (each a "Borrower" and, together, the "Borrowers" or "you"), SVB and
Fleet (each a "Bank" and, together, the "Banks") and the Collateral Agent that,
effective on the Effective Date (as defined below), the above-referenced Credit
Agreement (together with the schedules thereto, the "Credit Agreement") is
amended, and certain existing defaults thereunder are waived, all as set forth
on Annex I hereto (which is incorporated in this letter amendment by reference).
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Credit Agreement.
This letter amendment (the "Amendment") shall become effective as of June
12, 1997 (the "Effective Date"), provided that SVB, on behalf of the Banks,
shall have received the following on or before June 30, 1997 and provided
further, however, in no event shall this Amendment become effective until signed
by an officer of SVB in California:
(i) three copies of this letter, duly executed by each of you, with
the attached consent of Alpha Securities Corp. (the "Guarantor"), duly
executed thereby; and
(ii) two amended and restated promissory notes in the forms enclosed
herewith (the "Amended and Restated Notes"), duly executed by each of you.
By your signatures below, you are hereby representing that your
representations set forth in the Loan Documents (including those contained in
the Credit Agreement, as amended hereby) are true and correct as of the date
hereof as if made on and as of the date hereof. In addition, Alpha confirms its
grant of authorization, in connection with this transaction, (A) to SVB to debit
Alpha's account with SVB by $3,500 in payment of SVB's extension fee and by
$3,000 in payment of SVB's waiver and amendment fee and (B) to Fleet to debit
Alpha's account with Fleet by $2,333 in payment of Fleet's extension fee
relating to the Working Capital Line of Credit, by $2,000 in
-2-
payment of Fleet's waiver and amendment fee relating to the Working Capital Line
of Credit and by $3,000 in payment of Fleet's amendment fee relating to the
Equipment Line of Credit. Finally, each of you and the Guarantor agrees that, as
of this date, it has no defenses against its obligations to pay any amounts due
under the Credit Agreement and the other Loan Documents.
Upon the effectiveness hereof, each reference in each Security Instrument
or other Loan Document to "the Credit Agreement", "thereunder", "thereof",
"therein", or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended hereby. Except as
specifically set forth above, the Credit Agreement shall remain in full force
and effect and is hereby ratified and confirmed. Each of the other Loan
Documents is in full force and effect and is hereby ratified and confirmed. The
amendments and waivers set forth above (a) do not constitute a waiver or
modification of any term, condition or covenant of the Credit Agreement or any
other Loan Document, other than as expressly set forth herein, and (b) shall not
prejudice any rights which the Banks may now or hereafter have under or in
connection with the Credit Agreement, as modified hereby, or the other Loan
Documents.
You agree to pay on demand all costs and expenses of the Banks in
connection with the preparation, reproduction, execution and delivery of this
letter amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of Xxxxxxxx & Worcester LLP, special counsel for the Banks with respect
thereto.
This letter amendment may be signed in one or more counterparts each of
which taken together shall constitute one and the same instrument.
THIS LETTER AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
[remainder of page blank]
-3-
If you are in agreement with the foregoing, please sign and return the
enclosed copy of this letter amendment no later than June 30, 1997.
Sincerely,
SILICON VALLEY EAST, a Division of Silicon
Valley Bank, as a Bank hereunder and as
Collateral Agent
By:_____________________________
Name:
Title:
SILICON VALLEY BANK, as a Bank hereunder and as
Collateral Agent
By:______________________________
Name:
Title:
(signed in Santa Clara, California)
FLEET NATIONAL BANK, successor to Fleet Bank of
Massachusetts, N.A., as a Bank hereunder
By:______________________________
Name:
Title:
The undersigned have reviewed and
accept and agree to the terms
of the foregoing (including the
attached Annex I):
ALPHA INDUSTRIES, INC.
By:__________________________
Name:_______________________
Title:________________________
Date:________________________
-4-
TRANS-TECH, INC.
By:__________________________
Name:_______________________
Title:________________________
Date:________________________
ANNEX I TO LETTER AMENDMENT
Effective as of the Effective Date and subject to the conditions set forth
in the foregoing letter amendment, the Credit Agreement is hereby amended, and
the Banks hereby waive certain existing defaults thereunder, as follows:
A. Amendments to Credit Agreement.
------------------------------
1. The date "August 1, 1997" appearing in Section 1.1 is deleted and the
date "October 1, 1997" is substituted in lieu thereof.
2. The phrase "80% of all Eligible Domestic Accounts Receivable"
appearing in clause (ii) of Section 1.5 is deleted and there is substituted in
lieu thereof the phrase "75% of all Eligible Domestic Accounts Receivable".
3. The date "August 1, 1997" appearing in Section 1.6 is deleted and the
date "October 1, 1997" is substituted in lieu thereof.
4. Section 3.1(a)(i) is amended and restated in its entirety as follows:
"(i) for Prime Rate Loans, at the Prime Rate per annum, plus 1.0% per
----
annum."
5. The first sentence of Section 7.9 ("Use of Proceeds") is amended and
---------------
restated in its entirety as follows:
"The Borrowers shall use the proceeds of the borrowings under the Working
Capital Notes for the working capital purposes of the Borrowers, including
the purchase of equipment."
6. Section 8.11 is amended and restated in its entirety as follows:
"8.11 Quick Ratio. The Borrowers will not permit the Quick Ratio to be
-----------
less than (a) 1.00 to 1 at the end of the fiscal quarters ending June 30,
1997 or September 30, 1997 or (b) 1.20 to 1 at the end of the fiscal
quarter ending December 31, 1997 or thereafter."
7. Section 8.14 is amended and restated in its entirety as follows:
"8.14 Tangible Net Worth. The Borrowers will not permit Tangible Net
------------------
Worth at the end of any fiscal quarter ending June 30, 1997 or thereafter
to be less than 42,500,000."
B. Waiver of Certain Existing Defaults.
-----------------------------------
The Banks and the Borrowers acknowledge and agree that certain Events of
Default (the "Existing Defaults") have occurred and currently exist with respect
-----------------
to the financial covenants set forth in Section 8.14 of the Credit Agreement as
in effect prior to the effectiveness of this Amendment with respect to the
fiscal quarter ended March 30, 1997. The Banks hereby waive, effective upon the
Effective Date, the Existing Defaults, provided that this waiver shall in no
--------
event be deemed to constitute a waiver with respect to any fiscal period other
than the fiscal period ended March 30, 1997 or with respect to any covenants
other than the financial covenants expressly identified in the first sentence of
this paragraph.
CONSENT
The undersigned, as Guarantor under the Subsidiary Guaranty dated as of
September 29, 1995 (the "Guaranty") in favor of Silicon Valley Bank and Fleet
National Bank (successor to Fleet Bank of Massachusetts, N.A.), hereby consents
to the foregoing letter amendment and to the amendment and restatement of the
two Working Capital Notes dated as of September 29, 1995 effected in connection
therewith and hereby confirms and agrees that the Guaranty is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, except that, upon the effectiveness of, and on and after the date
of, said letter amendment, each reference in the Guaranty and in each other Loan
Document (as defined in the Credit Agreement) to which the undersigned is a
party, including, without limitation, the Security Agreement dated as of
September 29, 1995 to which the Guarantor is a party, to "the Credit Agreement",
"thereunder", "thereof", "therein", or words of like import referring to the
Credit Agreement shall mean and be a reference to the Credit Agreement, as
amended thereby, and that each reference, by whatever terms, in the aforesaid
Loan Documents to the Working Capital Notes shall mean and be a reference to the
Working Capital Notes as amended and restated in connection therewith.
ALPHA SECURITIES CORP.
By:___________________________
Name:
Title:
AMENDED AND RESTATED PROMISSORY NOTE
(Working Capital Line of Credit Loans)
$4,500,000 Woburn, Massachusetts
June 12, 1997
(Originally dated as
of September 29, 1995)
For value received, the undersigned, ALPHA INDUSTRIES, INC., a
Delaware corporation, and TRANS-TECH, INC., a Maryland corporation (each a
"Borrower" and collectively the "Borrowers"), jointly and severally promise to
--------- ---------
pay to SILICON VALLEY BANK (the "Bank") at the office of the Bank located at
----
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000, or to its order, the lesser of
FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS ($4,500,000) or the outstanding
principal amount hereunder, on October 1, 1997 (the "Maturity Date"), together
-------------
with interest on the principal amount hereof from time to time outstanding at a
fluctuating rate per annum equal to the Prime Rate (as defined below) plus one
percent (1%) until the Maturity Date, payable monthly in arrears on the first
day of each calendar month occurring after the date hereof and on the Maturity
Date. The Bank's "Prime Rate" is the per annum rate of interest from time to
time announced and made effective by the Bank as its Prime Rate (which rate may
or may not be the lowest rate available from the Bank at any given time).
Computations of interest shall be made by the Bank on the basis of a
year of 360 days for the actual number of days occurring in the period for which
such interest is payable.
This promissory note amends and restates the terms and conditions of
the obligations of the Borrowers under the promissory note dated September 29,
1995 (the "Original Note") by the Borrowers to the Bank. Nothing contained in
-------------
this promissory note shall be deemed to create or represent the issuance of new
indebtedness or the exchange by the Borrowers of the Original Note for a new
promissory note. This promissory note is referred to in the credit agreement
dated September 29, 1995, as amended by amendments dated as of July 31, 1996,
September 30, 1996 and June 12, 1997, by the Bank and accepted by the Borrowers
together with all related schedules, as the same may be amended, modified or
supplemented from time to time (the "Credit Agreement"), and is subject to
----------------
optional and mandatory prepayment as provided therein, and is entitled to the
benefits thereof and of the other Loan Documents referred to therein. This note
is secured by a Security Agreement and a Pledge Agreement, both dated as of
September 29, 1995, by Alpha Industries, Inc., and a Guarantee dated as of
September 29, 1995 of Alpha Securities Corp., a Massachusetts corporation, as
the same may be amended, modified or supplemented from time to time.
Each reference in each Loan Document (as defined in the Credit
Agreement) to "the Note", "thereof", "therein", "thereunder", or words of like
import referring to the Original Note, shall mean and be a reference to the
Original Note, as amended and restated hereby.
Upon the occurrence of any Event of Default under, and as defined in,
the Credit Agreement, at the option of the Bank, the principal amount then
outstanding of and the accrued interest on the advances under this note and all
other amounts payable under this note shall become immediately due and payable,
without notice (including, without limitation, notice of intent
-2-
to accelerate), presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrowers.
The Bank shall keep a record of the amount and the date of the making
of each advance pursuant to the Credit Agreement and each payment of principal
with respect thereto by maintaining a computerized record of such information
and printouts of such computerized record, which computerized record, and the
printouts thereof, shall constitute prima facie evidence of the accuracy of the
----- -----
information so endorsed.
Each of the undersigned agrees to pay all reasonable costs and
expenses of the Bank (including, without limitation, the reasonable fees and
expenses of attorneys) in connection with the enforcement of this note and the
other Loan Documents and the preservation of its rights hereunder and
thereunder.
No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. The
Borrowers and every endorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral for this note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
THIS NOTE HAS BEEN DELIVERED TO THE BANK AND ACCEPTED BY THE BANK IN
THE STATE OF CALIFORNIA.
THE BORROWERS HEREBY EXPRESSLY WAIVE ANY RIGHT THEY MAY NOW OR
HEREAFTER HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES
OUT OF OR BY REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT
AGREEMENT), OR THE TRANSACTIONS CONTEMPLATED HEREBY.
BY ITS EXECUTION AND DELIVERY OF THIS NOTE, EACH BORROWER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS (OR IF FOR ANY REASON ACCESS
TO SUCH COURTS IS DENIED TO THE BANK, THEN, IN THE STATE OF CALIFORNIA) IN ANY
ACTION, SUIT OR PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY
REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT AGREEMENT), OR
THE TRANSACTIONS CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH
SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND
BY ANY FINAL JUDGMENT RENDERED BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR
PROCEEDING IN WHICH IT SHALL HAVE BEEN SERVED WITH PROCESS IN THE MANNER
HEREINAFTER PROVIDED, SUBJECT TO EXERCISE AND EXHAUSTION OF ALL RIGHTS OF APPEAL
AND TO THE EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING
ANY CLAIMS THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT,
THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE
ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE
THEREOF IS IMPROPER, AND AGREES THAT PROCESS MAY BE SERVED UPON IT IN ANY SUCH
ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL
LAWS OF MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR
RULE 4 OF THE FEDERAL RULES OF CIVIL PROCEDURE.
(remainder of page blank)
-3-
ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY THE LAW OF
THE COMMONWEALTH OF MASSACHUSETTS AND THIS NOTE SHALL BE DEEMED TO BE UNDER
SEAL.
Attest: ALPHA INDUSTRIES, INC.
By:
---------------------------- -------------------------
Name: Name:
Title: Title:
[Seal]
Attest: TRANS-TECH, INC.
By:
---------------------------- -------------------------
Name: Name:
Title: Title:
[Seal]
Accepted and Agreed
as of June 12, 1997:
SILICON VALLEY BANK
By:
-------------------------
Name:
Title:
AMENDED AND RESTATED PROMISSORY NOTE
(Working Capital Line of Credit Loans)
$3,000,000 Woburn, Massachusetts
June 12, 1997
(Originally dated as
of September 29, 1995)
For value received, the undersigned, ALPHA INDUSTRIES, INC., a
Delaware corporation, and TRANS-TECH, INC., a Maryland corporation (each a
"Borrower" and collectively the "Borrowers"), jointly and severally promise to
--------- ---------
pay to FLEET NATIONAL BANK, successor in interest to Fleet Bank of
Massachusetts, N.A. (the "Bank"), at the office of the Bank located at 00 Xxxxx
----
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to its order, the lesser of THREE
MILLION DOLLARS ($3,000,000) or the outstanding principal amount hereunder, on
October 1, 1997 (the "Maturity Date"), together with interest on the principal
-------------
amount hereof from time to time outstanding at a fluctuating rate per annum
equal to the Prime Rate (as defined below) plus one percent (1%) until the
Maturity Date, payable monthly in arrears on the first day of each calendar
month occurring after the date hereof and on the Maturity Date. The Bank's
"Prime Rate" is the per annum rate of interest from time to time announced and
made effective by the Bank as its Prime Rate (which rate may or may not be the
lowest rate available from the Bank at any given time).
Computations of interest shall be made by the Bank on the basis of a
year of 360 days for the actual number of days occurring in the period for which
such interest is payable.
This promissory note amends and restates the terms and conditions of
the obligations of the Borrowers under the promissory note dated September 29,
1995 (the "Original Note") by the Borrowers to the Bank. Nothing contained in
-------------
this promissory note shall be deemed to create or represent the issuance of new
indebtedness or the exchange by the Borrowers of the Original Note for a new
promissory note. This promissory note is referred to in the credit agreement
dated September 29, 1995, as amended by amendments dated as of July 31, 1996,
September 30, 1996 and June 12, 1997, by the Bank and accepted by the Borrowers
together with all related schedules, as the same may be amended, modified or
supplemented from time to time (the "Credit Agreement"), and is subject to
----------------
optional and mandatory prepayment as provided therein, and is entitled to the
benefits thereof and of the other Loan Documents referred to therein. This note
is secured by a Security Agreement and a Pledge Agreement, both dated as of
September 29, 1995, by Alpha Industries, Inc., and a Guarantee dated as of
September 29, 1995 of Alpha Securities Corp., a Massachusetts corporation, as
the same may be amended, modified or supplemented from time to time.
Each reference in each Loan Document (as defined in the Credit
Agreement) to "the Note", "thereof", "therein", "thereunder", or words of like
import referring to the Original Note, shall mean and be a reference to the
Original Note, as amended and restated hereby.
Upon the occurrence of any Event of Default under, and as defined in,
the Credit Agreement, at the option of the Bank, the principal amount then
outstanding of and the accrued interest on the advances under this note and all
other amounts payable under this note shall become immediately due and payable,
without notice (including, without limitation, notice of intent
-2-
to accelerate), presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrowers.
The Bank shall keep a record of the amount and the date of the making
of each advance pursuant to the Credit Agreement and each payment of principal
with respect thereto by maintaining a computerized record of such information
and printouts of such computerized record, which computerized record, and the
printouts thereof, shall constitute prima facie evidence of the accuracy of the
----- -----
information so endorsed.
Each of the undersigned agrees to pay all reasonable costs and
expenses of the Bank (including, without limitation, the reasonable fees and
expenses of attorneys) in connection with the enforcement of this note and the
other Loan Documents and the preservation of its rights hereunder and
thereunder.
No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. The
Borrowers and every endorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral for this note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
THIS NOTE HAS BEEN DELIVERED TO THE BANK AND ACCEPTED BY THE BANK IN
THE STATE OF CALIFORNIA.
THE BORROWERS HEREBY EXPRESSLY WAIVE ANY RIGHT THEY MAY NOW OR
HEREAFTER HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES
OUT OF OR BY REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT
AGREEMENT), OR THE TRANSACTIONS CONTEMPLATED HEREBY.
BY ITS EXECUTION AND DELIVERY OF THIS NOTE, EACH BORROWER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS (OR IF FOR ANY REASON ACCESS
TO SUCH COURTS IS DENIED TO THE BANK, THEN, IN THE STATE OF CALIFORNIA) IN ANY
ACTION, SUIT OR PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY
REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT AGREEMENT), OR
THE TRANSACTIONS CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH
SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND
BY ANY FINAL JUDGMENT RENDERED BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR
PROCEEDING IN WHICH IT SHALL HAVE BEEN SERVED WITH PROCESS IN THE MANNER
HEREINAFTER PROVIDED, SUBJECT TO EXERCISE AND EXHAUSTION OF ALL RIGHTS OF APPEAL
AND TO THE EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING
ANY CLAIMS THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT,
THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE
ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE
THEREOF IS IMPROPER, AND AGREES THAT PROCESS MAY BE SERVED UPON IT IN ANY SUCH
ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL
LAWS OF MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR
RULE 4 OF THE FEDERAL RULES OF CIVIL PROCEDURE.
(remainder of page blank)
-3-
ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY THE LAW OF
THE COMMONWEALTH OF MASSACHUSETTS AND THIS NOTE SHALL BE DEEMED TO BE UNDER
SEAL.
Attest: ALPHA INDUSTRIES, INC.
_______________________________ By:_________________________________
Name: Name:
Title: Title:
[Seal]
Attest: TRANS-TECH, INC.
_______________________________ By:_________________________________
Name: Name:
Title: Title:
[Seal]
Accepted and Agreed
as of June 12, 1997:
FLEET NATIONAL BANK, successor
to Fleet Bank of Massachusetts, N.A.
By:_____________________________________
Name:
Title:
SECOND AMENDMENT TO CREDIT AGREEMENT
Dated as of September 30, 1996
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Trans-Tech, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX
Re: Second Amendment to the Credit Agreement dated as of September 29,
1995 by and among Alpha Industries, Inc. ("Alpha"), Trans-Tech, Inc.
("Trans-Tech"), Silicon Valley Bank ("SVB"), Fleet Bank of
Massachusetts, N.A., predecessor to Fleet National Bank ("Fleet"), and
Silicon Valley Bank as collateral agent for SVB and Fleet (the
"Collateral Agent"), as previously amended by the First Amendment to
Credit Agreement dated as of July 31, 1996
Ladies and Gentlemen:
The purpose of this letter is to evidence the agreement between Alpha and
Trans-Tech (each a "Borrower" and, together, the "Borrowers" or "you"), SVB and
Fleet (each a "Bank" and, together, the "Banks") and the Collateral Agent that,
effective on the Effective Date (as defined below), the above-referenced Credit
Agreement (as previously amended and together with the schedules thereto, the
"Credit Agreement") is amended as set forth on Annex I hereto (which is
incorporated in this letter amendment by reference). Capitalized terms used but
not defined herein shall have the meanings assigned to them in the Credit
Agreement.
This letter amendment (the "Amendment") shall become effective as of
September 30, 1996 (the "Effective Date"), provided that SVB, on behalf of the
Banks, shall have received on or before December 23, 1996 three (3) copies of
this letter, duly executed by each of you, with the attached consent of Alpha
Securities Corp. (the "Guarantor"), duly executed thereby, and provided,
further, however, that in no event shall this Amendment become effective until
signed by an officer of SVB in California.
By your signatures below, you are hereby representing that your
representations set forth in the Loan Documents (including those contained in
the Credit Agreement, as amended hereby) are true and correct as of the date
hereof as if made on and as of the date hereof. In addition, each of you and
the Guarantor agrees that, as of this date, it has no defenses against its
obligations to pay any amounts due under the Credit Agreement and the other Loan
Documents.
Upon the effectiveness hereof, each reference in each Security Instrument
or other Loan Document to "the Credit Agreement", "thereunder", "thereof",
"therein", or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended hereby. Except as
specifically set forth above, the Credit Agreement shall remain in full force
and effect and is hereby ratified and confirmed. Each of the other Loan
Documents is in full force and effect and is hereby ratified and confirmed. The
amendments set forth herein (a) do not
constitute a waiver or modification of any term, condition or covenant of the
Credit Agreement or any other Loan Document, other than as expressly set forth
herein, and (b) shall not prejudice any rights which the Banks may now or
hereafter have under or in connection with the Credit Agreement, as modified
hereby, or the other Loan Documents.
You agree to pay on demand all costs and expenses of the Banks in
connection with the preparation, reproduction, execution and delivery of this
letter amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of Xxxxxxxx & Worcester LLP, special counsel for the Banks with respect
thereto.
This letter amendment may be signed in one or more counterparts each of
which taken together shall constitute one and the same instrument.
THIS LETTER AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
If you are in agreement with the foregoing, please sign and return the
enclosed copy of this letter amendment no later than December 23, 1996.
Sincerely,
SILICON VALLEY EAST, a Division of Silicon Valley Bank,
as a Bank hereunder and as Collateral Agent
By:_____________________________
Name:
Title:
SILICON VALLEY BANK, as a Bank hereunder and as
Collateral Agent
By:______________________________
Name:
Title:
(signed in Santa Clara, California)
FLEET NATIONAL BANK, successor to Fleet Bank of
Massachusetts, N.A., as a Bank hereunder
By:______________________________
Name:
Title:
The undersigned have reviewed and
accept and agree to the terms
of the foregoing (including the
attached Annex I):
ALPHA INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
TRANS-TECH, INC.
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
ANNEX I TO LETTER AMENDMENT
Effective as of the Effective Date and subject to the conditions set forth
in the foregoing letter amendment, the Credit Agreement is hereby amended as
follows:
1. Section 1.5 is amended by deleting clause (ii) thereof and
substituting in lieu thereof the following:
"(ii) 80% of all Eligible Domestic Accounts Receivable and 75% of all
Eligible International Accounts Receivable at such time,".
2. Effective as of November 15, 1996, Sections 3.1(a)(i) and (ii) are
amended and restated in their entirety as follows:
"(i) for Prime Rate Loans, at the Prime Rate per annum, plus 0.50% per
----
annum.
"(ii) [Intentionally deleted]."
3. Effective as of November 15, 1996, Sections 3.1(b)(i) and (ii) are
amended and restated in their entirety as follows:
"(i) for Prime Rate Loans, at the Prime Rate per annum, plus 0.50% per
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annum; and
"(ii) for LIBOR Loans, at the LIBOR Rate, plus 300 basis points
----
per annum."
4. Section 3.1 is further amended by inserting the following subsection
(d):
"(d) Notwithstanding anything to the contrary in this Credit
Agreement or any other agreement or instrument to which either of the Banks
is a party, effective as of November 15, 1996 the Borrowers shall not
request, and shall have no right to receive, from the Banks any Working
Capital Line of Credit Loan that would constitute a LIBOR Loan."
5. The Section 8.11 is amended and restated in its entirety as follows:
"8.11 Quick Ratio. The Borrowers will not permit the Quick Ratio to
-----------
be less than (a) 1.10 to 1 at the end of the fiscal quarter ending December
31, 1996 or (b) 1.20 to 1 at the end of any fiscal quarter thereafter."
6. Section 8.12 is amended and restated in its entirety as follows:
"8.12 Minimum Profitability. The Borrowers will not (a) incur Net
---------------------
Losses in the fiscal quarter ending September 30, 1997 or thereafter, (b)
permit cumulative Net Income for the four consecutive fiscal quarters
ending on March 31, 1998 and June 30, 1998, respectively, to be less than
$1,000,000, or (c) permit cumulative Net Income for any four consecutive
fiscal quarters, beginning with the four consecutive fiscal quarters ending
on September 30, 1998, to be less than $2,000,000."
7. Section 8.13 is amended by deleting the ratio "1.25 to 1" appearing
therein and substituting in lieu thereof the ratio "0.75 to 1".
8. Section 8.14 is amended and restated in its entirety as follows:
"8.14 Tangible Net Worth. The Borrowers will not permit Tangible Net
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Worth at the end of any fiscal quarter to be less than $47,500,000 minus
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the cumulative amount, not to exceed $3,000,000 in the aggregate, of
extraordinary charges appropriately disclosed in the Borrowers' financial
statements beginning with the fiscal quarter ending December 31, 1996."
9. Section 8.15 is deleted and there is substituted in lieu thereof the
following:
"8.15 Cash Flow Coverage. [Intentionally deleted.]"
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10. The definition of "Quick Ratio" in Section 11.1 is amended and
restated in its entirety as follows:
"Quick Ratio" means, at any time, all cash and accounts receivable,
-----------
less reserves for doubtful accounts, less advance xxxxxxxx to customers, of
the Borrowers and their Subsidiaries at such time, on a consolidated basis,
determined in accordance with GAAP, divided by the sum (without
duplication) of (a) the aggregate of all Current Liabilities at such time,
(b) then outstanding Working Capital Extensions of Credit, (c) then
outstanding Equipment Line of Credit Loans, and (d) the then current
portion of long-term Indebtedness of the Borrowers and their Subsidiaries
as calculated in accordance with GAAP."
CONSENT
The undersigned, as Guarantor under the Subsidiary Guaranty dated as of
September 29, 1995 (the "Guaranty") in favor of Silicon Valley Bank and Fleet
National Bank (successor to Fleet Bank of Massachusetts, N.A.), hereby consents
to the foregoing letter amendment and hereby confirms and agrees that the
Guaranty is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects, except that, upon the effectiveness of,
and on and after the date of, said letter amendment, each reference in the
Guaranty and in each other Loan Document (as defined in the Credit Agreement
referred to in the foregoing letter amendment) to which the undersigned is a
party, including, without limitation, the Security Agreement dated as of
September 29, 1995 to which the Guarantor is a party, to "the Credit Agreement",
"thereunder", "thereof", "therein", or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended thereby.
ALPHA SECURITIES CORP.
By:___________________________
Name:
Title:
