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EXHIBIT 10.70
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
Borrower: Alpha Microsystems
Address: 2722 South Fairview Street
Santa Ana, California 92704
Date: February 7, 1996
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend the Loan and Security Agreement between them
(the "Loan Agreement") dated July 28, 1995, as amended, effective as of the date
hereof. (Capitalized terms used but not defined in this Amendment, shall have
the meanings set forth in the Loan Agreement.)
1. Modification to Advance Percentage. The section of the
Schedule to the Loan Agreement entitled "Credit Limit (Section 1.1)" is hereby
amended by replacing the percentage figure of "70%" in clause (ii) of the first
paragraph of such section with the percentage figure of "50%".
2. Modification to Interest Rate. The section of Schedule to
the Loan Agreement entitled "Interest Rate (Section 1.2)" is hereby deleted in
its entirety and replace with the following:
"Interest Rate (Section 1.2): A rate equal to the "Prime Rate"
in effect from time to time,
plus 2.50% per annum. Interest
shall be calculated on the basis
of a 360-day year for the actual
number of days elapsed. "Prime
Rate" means the rate announced
from time to time by Silicon as
its "prime rate;" it is a base
rate upon which other rates
charged by Silicon are based,
and it is not necessarily the
best rate available at Silicon.
The interest rate applicable to
the Obligations shall change on
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each date there is a change in
the Prime Rate."
3. Modification to Financial Covenants. The section of the
Schedule to the Loan Agreement entitled "Financial Covenants (Section 4.1)" is
hereby deleted in its entirety and replaced with the following:
"Financial Covenants
(Section 4.1): Borrower shall comply with all of the
following covenants. Compliance shall be
determined as of the end of each month,
except as otherwise specifically provided
below:
Quick Asset Ratio: Borrower shall maintain a ratio of
"Quick Assets" to current liabilities
of not less than 1.00 to 1.
Tangible Net Worth: Borrower shall maintain a tangible net
worth of not less than $4,700,000.
Debt to Tangible Net
Worth Ratio: Borrower shall maintain a ratio of total
liabilities to tangible net worth of
not more than 1.25 to 1.
Profitability: Borrower shall not incur a loss (after
taxes) for the fiscal year ending
February 29, 1996 in excess of
$1,600,000. Thereafter, Borrower
shall not incur any losses (after
taxes) in any fiscal quarter, other
than for losses (after taxes) in two
fiscal quarters during any fiscal year
if the aggregate amount of such losses
for such two fiscal quarters does not
exceed $250,000.
Definitions: "Current assets," and "current
liabilities" shall have the meanings
ascribed to them in accordance with
generally accepted accounting
principles.
"Tangible net worth" means the
excess of total assets over total
liabilities, determined in
accordance with generally accepted
accounting
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principles, excluding
however all assets which would be
classified as intangible assets
under generally accepted accounting
principles, including without
limitation goodwill, licenses,
patents, trademarks, trade names,
copyrights, capitalized software and
organizational costs, licences and
franchises.
"Quick Assets" means cash on hand or
on deposit in banks, readily
marketable securities issued by the
United States, readily marketable
commercial paper rated "A-1" by
Standard & Poor's Corporation (or a
similar rating by a similar rating
organization), certificates of
deposit and baker's acceptances, and
accounts receivable (net of
allowance for doubtful accounts).
Deferred Revenues: For purposes of the above quick asset
ratio, deferred revenues shall not be
counted as current liabilities. For
purposes of the above debt to tangible
net worth ratio, deferred revenues
shall not be counted in determining
total liabilities but shall be counted
in determining tangible net worth for
purposes of such ratio. For all other
purposes deferred revenues shall be
counted as liabilities in accordance
with generally accepted accounting
principles.
Subordinated Debt: "Liabilities" for purposes of
foregoing covenants do not include
indebtedness which is subordinated to
the indebtedness to Silicon under a
subordination agreement in form
specified by Silicon or by language in
the instrument evidencing the
indebtedness which is acceptable to
Silicon."
4. Limited Waiver of Certain Financial Covenants. Silicon and Borrower
agree that the Borrower's compliance with the Quick Ratio and Tangible Net Worth
financial covenants set
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forth in Section 4.1 of the Schedule to Loan Agreement for the months ending
December 31, 1995 and January 31, 1996 is hereby waived. It is understood by the
parties hereto, however, that such waiver does not constitute a waiver of any
other provision or term of the Loan Agreement or any related document, nor an
agreement to waive in the future these covenants or any other provision or term
of the Loan Agreement or any related document.
5. Fee. Borrower shall pay to Silicon a fee in the amount of
$5,000, which shall be in addition to interest and all other amounts due
Silicon and shall not be refundable.
6. Representations True. Borrower represents and warrants to
Silicon that all representations and warranties set forth in the Loan
Agreement, as amended hereby, are true and correct.
7. General Provisions. This Amendment, the Loan Agreement any
prior written amendments to the Loan Agreement signed by Silicon and the
Borrower, and the other written documents and agreements between Silicon and the
Borrower set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Silicon and the Borrower shall continue in full force and
effect and the same are hereby ratified and confirmed.
Borrower: Silicon:
ALPHA MICROSYSTEMS SILICON VALLEY BANK
By /s/ MICHAEL J. LOWELL By /s/ TERRY BESS
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President or Vice President Assistant Vice President
By /s/ JOHN GLADE
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Secretary or Ass't Secretary
Guarantor's Consent
The undersigned guarantor acknowledges that its consent to the
foregoing Amendment is not required, but the undersigned nevertheless does
hereby consent to the foregoing Amendment and to the documents and agreements
referred to therein and to all future modifications and amendments thereto, and
to any and all
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other present and future documents and agreements between or among the foregoing
parties. Nothing herein shall in any way limit any of the terms or provisions of
the Continuing Guaranty executed by the undersigned in favor of Silicon, which
is hereby ratified and affirmed and shall continue to full force and effect.
ALPHAHEATHCARE, INC.
By: /s/ MICHAEL J. LOWELL
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Chief Financial Officer and Vice President
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