Document:

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                                                                     EXHIBIT 4.1

                 SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment"),
dated as of March 4, 2002, 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 ("First Amendment") dated as of
January 28, 2002 (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 First Quarter End 2002. The Borrower has requested that
the Lenders waive the Events of Default caused by such noncompliance.

     C. As of the date hereof, prior to the effectiveness of this Amendment, the
aggregate principal amount of Revolving Loans outstanding under the Credit
Agreement is $3,700,000. There are no Letters of Credit outstanding.

     D. As of the date hereof, prior to the effectiveness of this Amendment, the
aggregate principal amount of Term Loans outstanding under the Credit Agreement
is $28,900,000.

     E. The Lenders have agreed to waive the foregoing Events of Default,
subject to the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:

     SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended 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 "EBITDA" in Section 1.1 of the Credit Agreement is
restated in its entirety 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 and (iii) Interest Expense."

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     (b) The definition of "Fixed Charge Coverage Ratio" in Section 1.1 of the
Credit Agreement is restated in its entirety to read as follows:

          "`FIXED CHARGE COVERAGE RATIO': for the Borrower and its Subsidiaries
     on a consolidated basis for the fiscal quarter most recently ended and the
     immediately preceding three fiscal quarters, the ratio of (a) EBITDA minus
     Capital Expenditures to (b) Fixed Charges for such period.

     (c) The definition of "Fixed Charges" in Section 1.1 of the Credit
Agreement is restated in its entirety to read as follows:

          "`FIXED CHARGES': with respect to any period, for the Borrower and its
     Subsidiaries on a consolidated basis, the sum of (i) Interest Expense for
     such period, (ii) regularly scheduled principal payments due on
     Indebtedness for the succeeding four fiscal quarter period (excluding
     optional and mandatory prepayments due under Sections 2.4 and 2.5),
     including the principal component of Capitalized Lease Obligations;
     PROVIDED that the principal payment on the Term Loan payable on June 28,
     2002 shall not be included in the calculation of `Fixed Charges,' (iii)
     Restricted Payments made during such period and (iv) cash taxes paid or due
     and payable for such period."

     (d) The definition of "Interest Payment Date" in Section 1.1 of the Credit
Agreement is restated in its entirety to read as follows:

          "`INTEREST PAYMENT DATE': (a) as to any Base Rate Loan, the last day
     of each calendar month to occur while any such Loan is outstanding, (b) as
     to any LIBOR Loan, at one month intervals after the first day of such
     Interest Period and (c) for each of (a) and (b) above, the day on which any
     such Loan becomes due and payable in full or is paid or prepaid in full."

     (e) The definition of "Net Proceeds" in Section 1.1 of the Credit Agreement
is hereby amended as follows: (i) delete the word "and" immediately preceding
clause (B) and (ii) immediately preceding the final period in such definition,
insert the following:

          "; and (C) with respect to any refinancing of the property secured by
     the Mortgage, as contemplated in Section 6.2(h), the net amount equal to
     the aggregate amount received in cash in connection with such refinancing
     MINUS the sum of (a) the reasonable fees, commissions and other
     out-of-pocket expenses incurred by Wakefield in connection with such
     refinancing (other than amounts payable to Affiliates of the Borrower) and
     (b) federal, state and local taxes incurred in connection with such
     refinancing."

     (f) Section 1.1 of the Credit Agreement is amended to add the following
definition in appropriate alphabetical order:

          "`RESTRUCTURING CHARGES': non-recurring charges for headcount
     reductions and severance, inventory adjustments, the relocation of
     manufacturing equipment and consolidation of administrative facilities and
     associated lease expenses."

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     (g) Section 1.1 of the Credit Agreement is amended to add the following
definition in appropriate alphabetical order:

          "`SECOND AMENDMENT': that certain Second Amendment to Credit Agreement
     and Waiver dated as of March 4, 2002 entered into among the Borrower, the
     Lenders and the Agent amending this Agreement."

     (h) The definition of "Term Loan Maturity Date" is restated in its entirety
to read as follows:

          "`TERM LOAN MATURITY DATE": First Quarter End 2006.

     (i) Section 1.1 of the Credit Agreement is amended to add the following
definition in appropriate alphabetical order:

          "`WAKEFIELD': Wakefield Thermal Solutions, Inc. (formerly known as
     Wakefield Engineering, Inc. and successor by merger of National Northeast
     Corporation, a Delaware corporation), a Delaware corporation."

     (j) The definition of "Warrant Agreements" contained in Section 1.1 of the
Credit Agreement is restated in its entirety to read as follows:

          "`WARRANT AGREEMENTS': those certain warrants, (i) each entitled
     Warrant to Purchase Shares of Common Stock, dated as of January 28, 2002
     and (ii) each entitled Warrant to Purchase Shares of Common Stock, dated as
     of March 4, 2002, 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 and (ii) dated as of March 4, 2002 shall be $77,007.05,
     which assigned values shall be apportioned on a pro-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)."

     (k) Section 2.2(d) of the Credit Agreement is 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"):

             Second Quarter End 2002                       $750,000
             June 28, 2002                               $5,000,000
             Third Quarter End 2002                        $750,000

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             Fiscal Year End 2002                          $750,000

             First Quarter End 2003                      $1,200,000
             Second Quarter End 2003                     $1,200,000
             Third Quarter End 2003                      $1,200,000
             Fiscal Year End 2003                        $1,200,000

             First Quarter End 2004                      $1,500,000
             Second Quarter End 2004                     $1,500,000
             Third Quarter End 2004                      $1,500,000
             Fiscal Year End 2004                        $1,500,000

             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                      $3,650,000

     ; PROVIDED, that the final Reduction Installment paid shall be in an amount
equal to all amounts outstanding on the Term Notes; and PROVIDED FURTHER, that
notwithstanding the foregoing, the principal payment due and payable on June 28,
2002 shall be the greater of (i) $5,000,000 and (ii) the Net Proceeds of any
refinancing or sale of the property subject to the Mortgage. 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."

     (l) The second line of Section 2.5(c) of the Credit Agreement is hereby
amended by adding "(other than the Asset Disposition contemplated by the proviso
in Section 6.5)" following the words "Asset Disposition."

     (m) 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 year of the Borrower
     ending on and after Fiscal Year End 2001 there shall exist Excess Cash Flow
     with respect to such fiscal year, 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 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, 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 such percentage 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. On or prior to
     the date of any prepayment required by this Section 2.5(d), the Borrower
     agrees to provide the Agent with the calculations used by the Borrower in
     determining the amount of any such prepayment."

     (n) Section 6.1(a) of the Credit Agreement is restated in its entirety to
read as follows:

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     "(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
           ------                                                -----

           Second Quarter End 2002                              5.30:1

           Third Quarter End 2002                               3.90:1

           Fiscal Year End 2002                                 3.00:1

           First Quarter End 2003                               2.75:1

           Second Quarter End 2003                              2.50:1

           Third Quarter End 2003                               2.25:1

           Fiscal Year End 2003 through and including           2.00:1
           Third Quarter End 2004

           Fiscal Year 2004 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 the effect,
     if any, of execution of warrant agreements in connection with the Loan
     Documents), (v) $281,000 in Restructuring Charges for the fiscal quarter
     ended Second Quarter End 2001, (vi) $252,000 in Restructuring Charges for
     the fiscal quarter ended Third Quarter End 2001, (vii) $855,000 in
     Restructuring Charges for the fiscal quarter ended Fiscal Year End 2001,
     (viii) $250,000 in Restructuring Charges for Fiscal Year 2002 and (ix) the
     amount of any charge taken by the Borrower solely for the adoption of FASB
     Rule 142."

     (o) Section 6.1(b) of the Credit Agreement is restated in its entirety to
read as follows:

     "(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:

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           PERIOD                                                RATIO
           ------                                                -----

           Second Quarter End 2002                              1.00:1

           Third Quarter End 2002                               1.20:1

           Fiscal Year End 2002 through and including           1.25:1
           Third Quarter End 2003

           Fiscal Year End 2003                                 1.20:1

           First Quarter End 2004 and thereafter                1.15:1

; PROVIDED, that for purposes of calculating the covenant in this Section 6.1(b)
only,

(i)   the Fixed Charge Coverage Ratio for (a) Second Quarter End 2002 shall be
based on the fiscal quarter most recently ended only, without reference to any
other fiscal quarter, (b) Third Quarter End 2002 shall be based on the fiscal
quarter most recently ended and the immediately preceding fiscal quarter only,
without reference to any other fiscal quarter and (c) 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; and

(ii)  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 the effect,
     if any, of execution of warrant agreements in connection with the Loan
     Documents), (v) $250,000 in Restructuring Charges for Fiscal Year 2002 and
     (vi) the amount of any charge taken by the Borrower solely for the adoption
     of FASB Rule 142.

     (p) Section 6.1(c) of the Credit Agreement is restated in its entirety to
read as follows:

          "`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, $700,000 and (iii) for each Fiscal Year
     thereafter, $1,000,000 per year."

     (q) Section 6.1(d) of the Credit Agreement is restated in its entirety to
read as follows:

          "`MINIMUM NET WORTH'. Permit Net Worth of the Borrower and its
     Subsidiaries on a consolidated basis, as of the end of any fiscal quarter
     of the Borrower, to be less than $33,050,000 PLUS (i) with respect to each
     fiscal quarter of the Borrower ending on or after First Quarter End 2001,
     75% of any Net Income as revealed by the Borrower's financial statements
     for such fiscal quarter, such increase to become effective upon receipt of
     such

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     financial statements, PLUS (ii) 100% of the Net Proceeds of each Equity
     Offering consummated after the date hereof, such increase to become
     effective immediately, LESS the amount of any Permitted Stock Repurchase,
     such decrease to become effective immediately, MINUS (iii) the amount of
     any charge to the Borrower as a result of issuance of warrant agreements in
     connection with the Loan Documents, MINUS (iv) the amount of any one-time
     charge not to exceed $20,000,000 taken in Fiscal Year 2002 solely for the
     adoption of FASB Rule 142 relating to goodwill amortization."

     (r) Section 6.1 of the Credit Agreement is hereby amended to add the
following Section 6.1(e) in appropriate section order:

          "(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
            ------                                               ------

            First Quarter End 2002                              $892,000

            Second Quarter End 2002                            $2,437,000

            Third Quarter End 2002                             $4,554,000

            Fiscal Year End 2002                               $7,032,000"

     (s) Section 6.2 of the Credit Agreement is hereby amended as follows: (i)
strike the word "and" at the end of paragraph (f), (ii) delete the period at the
end of paragraph (g) and replace it with "; and" and (iii) add a new paragraph
(h) in appropriate alphabetical order to read as follows:

          "(h) mortgage Indebtedness of Wakefield secured solely by Wakefield's
     manufacturing facility located in Pelham, New Hampshire, which Indebtedness
     may be guaranteed by the Borrower; PROVIDED THAT, (i) the Net Proceeds of
     such Indebtedness are applied to repay the Term Loans as contemplated by
     Section 2.2(d) on the earlier of receipt by the Borrower or Wakefield of
     such Net Proceeds and June 28, 2002 and (ii) final drafts of the
     documentation for such Indebtedness are delivered to the Agent at least 15
     Business Days prior to the execution thereof."

     (t) Section 6.3 of the Credit Agreement is hereby amended as follows: (i)
strike the word "and" at the end of paragraph (f), (ii) delete the period at the
end of paragraph (g) and replace it with "; and" and (iii) add a new paragraph
(h) in appropriate alphabetical order to read as follows:

          "(h) a Lien on Wakefield's manufacturing facility located in Pelham,
     New Hampshire securing Wakefield's Indebtedness permitted by Section
     6.2(h); PROVIDED THAT such Lien covers solely such real property and
     improvements located thereon."

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     (u) Section 6.5 of the Credit Agreement is hereby amended by adding the
following new sentence to the end thereof:

          "Notwithstanding the foregoing, Wakefield may sell the property
     subject to the Mortgage if (x) the Net Proceeds of such Asset Disposition
     are paid to the Agent on or before June 28, 2002 and (y) such sale complies
     with clauses (i), (ii) and (iii) of this Section 6.5, and such sale shall
     not constitute usage of the limit described in clause (iv)."

     (v) Section 7(k) of the Credit Agreement is restated in its entirety to
read as follows:

          "(k) Any material provision of any Loan Document, after delivery
     thereof pursuant to the provisions hereof, shall, for any reason other than
     pursuant to the terms thereof, cease to be valid or enforceable in
     accordance with its terms, or any Lien created under any Loan Document
     shall for any reason other than pursuant to the terms thereof, cease to be
     a valid and perfected first priority (except for as permitted by Section
     6.3) Lien in any material portion of the Collateral, the Guarantor
     Collateral or the property purported to be covered thereby (provided that
     nothing in this Section 7(k) shall be deemed to prohibit any sale or
     refinance of Wakefield's Pelham, New Hampshire property in accordance with
     Sections 6.2, 6.3 or 6.5, as applicable, and any reconveyance of the
     Mortgage in connection therewith); or."

     SECTION 2. WAIVERS AND AGREEMENTS.

     (a) Section 6.1(a) of the Credit Agreement requires that the Maximum
Leverage Ratio not exceed 2.25:1.00 for First Quarter End 2002. The Borrower has
informed the Agent and the Lenders that its Maximum Leverage Ratio for such
period will be 4.91:1.00. 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 1.20:1.00 for the First Quarter End 2002. The
Borrower has informed the Agent and the Lenders that its Fixed Charge Coverage
Ratio for such period was 0.63:1.00. 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) Section 5 of the First Amendment provides that the continuing
effectiveness of the First Amendment is subject to the condition subsequent
that, not later than 30 days after the execution, delivery and effectiveness of
the First Amendment, the Borrower shall deliver to the Agent control agreements
with respect to each of the deposit accounts subject to either the Security
Agreement or the Guarantor Security Agreement. The Borrower has requested that
(i) the Lenders only require such control agreements for (x) Account Number
2000003243998 held with First Union National Bank, (y) Account Number
2000003244007 held with First Union National Bank and (z) Account Number 2306552
held with State Street Bank and Trust on the condition that the Borrower agree
it shall maintain a balance no greater than $15,000 in each account not subject
to a control agreement, allowing a greater balance in each such account only as
necessary to fulfill present payroll obligations of the Borrower or any
Subsidiary and (ii) the

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Lenders extend the time period for obtaining such control agreements until 30
days after the execution, delivery and effectiveness of this Amendment. The
Lenders agree to the Borrower's request, subject to the terms and conditions set
forth herein. The Borrower hereby covenants that it shall maintain a balance no
greater than $15,000 in any deposit account not subject to a control agreement,
allowing a greater balance in each such account only as necessary to fulfill
present payroll obligations of the Borrower or any Subsidiary; failure of the
Borrower or any Subsidiary to observe this covenant shall be an Event of Default
under the Credit Agreement.

     (d) Section 7(A) of the Warrant Agreements dated as of January 28, 2002
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 as a shelf registration no later than 90 days after the
Issue Date (as defined therein). The Borrower has requested that the Lenders
provide an additional 30 days after each such compliance date. The Lenders agree
to the Borrower's request, subject to the terms and conditions set forth herein.

     (e) The Agent and the Lenders hereby agree that the Agent shall, upon
request of the Borrower and at its expense, reconvey the Mortgage in connection
with any sale or refinancing of the real property encumbered by the Mortgage,
PROVIDED THAT (i) the Agent has received, or has been assured to its
satisfaction that it will receive, concurrently with such sale or refinancing,
the Net Proceeds thereof, (ii) such sale or refinancing, as the case may be, is
in compliance with the terms of the Credit Agreement and (iii) no Default has
occurred and is continuing or would be caused thereby.

     (f) The foregoing waivers and agreements are given in this instance only.
The foregoing waivers and agreements 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 or
agreements be construed to evidence the willingness of the Agent or the Lenders
to give any other or additional waiver or agreement, 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) modification of the Mortgage, in form and substance to the Agent, and
such title endorsement(s) as the Agent shall reasonably request;

     (d) the warrant agreements dated as of March 4, 2002, substantially in the
form of Exhibit B hereto, duly executed by the Borrower and exercisable for an
aggregate amount of 66,667 common shares of the Borrower;

                                       9

<PAGE>

     (e) resolutions of the board of directors of the Borrower, authorizing this
Amendment and the warrant agreements referenced in Section 3(d) hereto,
certified by a Responsible Officer of the Borrower;

     (f) an opinion of counsel to the Borrower regarding this Amendment and the
warrant agreements referenced in Section 3(d) hereto, in form and substance
satisfactory to the Agent;

     (g) modification of the Security Agreement and each Guarantor Security
Agreement, in form and substance satisfactory to the Agent, containing changes
necessary to reflect the revised Article 9 to the Uniform Commercial Code;

     (h) an amendment and waiver fee of $183,342.50, in immediately available
funds, to be shared pro rata by each Lender, and all outstanding fees and
expenses of the Agent including legal fees incurred in connection with the
negotiation, drafting and execution of this Amendment; and

     (i) 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) 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 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

                                       10

<PAGE>

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; (vi) EXHIBIT 3 attached hereto sets
forth a true and complete list of all bank accounts of the Borrower and all
Subsidiaries, identifying whether such account shall be subject to a control
agreement or to the account balance limitation of Section 2(c) hereof and (vii)
except as referred to in Section 2 hereof, no Default has occurred and is
continuing.

     SECTION 6. 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 7. 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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<PAGE>

     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/ ROBERT C. STREITER
                                     -------------------------------------------
                                  Name:  Robert C. Streiter
                                       -----------------------------------------
                                  Title:  President
                                        ----------------------------------------

                                  UNION BANK OF CALIFORNIA, N.A., as Agent and
                                  as a Lender

                                  By: /s/ CECILIA M. VALENTE
                                     -------------------------------------------
                                  Name:  Cecilia M. Valente
                                       -----------------------------------------
                                  Title:  Senior Vice President
                                        ----------------------------------------

                                  CALIFORNIA BANK & TRUST, as a Lender

                                  By: /s/ ROBERT K. CHAULK
                                     -------------------------------------------
                                  Name:  Robert K. Chaulk
                                       -----------------------------------------
                                  Title:  Senior Vice President
                                        ----------------------------------------

                                  IBM CREDIT CORPORATION, as a Lender

                                  By: /s/ THOMAS S. CURCIO
                                     -------------------------------------------
                                  Name:  Thomas S. Curcio
                                       -----------------------------------------
                                  Title:  Manager, Credit
                                        ----------------------------------------

                                  MANUFACTURERS BANK
                                  A California Banking Corporation, as a Lender

                                  By: /s/ KAREN J. KEARNEY
                                     -------------------------------------------
                                  Name:  Karen J. Kearney
                                       -----------------------------------------
                                  Title:  Vice President
                                        ----------------------------------------

                                      S-1

<PAGE>

                                  U.S. BANK NATIONAL ASSOCIATION, as a Lender

                                  By: /s/ ELIZABETH C. HENGEVELD
                                     -------------------------------------------
                                  Name:  Elizabeth C. Hengeveld
                                       -----------------------------------------
                                  Title:  Vice President
                                        ----------------------------------------

                                      S-2<PAGE>

                                                                   Exhibit 10.16
                                February 21, 2001
Bruno Melzi
C/O Zimmer, Inc.
Italy

                            PERSONAL AND CONFIDENTIAL

Dear Bruno:

     Last year you and Bristol-Myers Squibb Company ("Bristol-Myers Squibb")
executed a letter agreement dated November 3, 2000 (the "2000 Agreement"), and a
letter amendment dated December 14, 2000 (the "2000 Amendment") that described
the bonus payments and other incentives that you would receive in the event that
Zimmer, Inc. ("Zimmer") was sold to a third-party entity on or before September
30, 2001. It now appears possible that Bristol-Myers Squibb may divest its
interest in Zimmer through a "spin-off" transaction involving the distribution
of Zimmer stock to Bristol-Myers Squibb shareholders (the "Spin-Off"). The
Spin-Off may be preceded by a public offering of Zimmer shares (the "IPO").
During the divestiture process, we believe that operating the Zimmer business as
usual is in the best interests of Bristol-Myers Squibb, Zimmer and its
employees. To provide assurance to you and to help ensure that the Zimmer
business is managed and operated efficiently and effectively both before and
after the divestiture, Bristol-Myers Squibb and Zimmer wish to offer you the
incentives described in this letter. If these incentives are satisfactory and
you wish to participate, please sign and return this letter in the manner
described on the last page of this letter.

     The terms and conditions of this letter agreement will apply in the event
of an IPO or Spin-Off of Zimmer that occurs on or before September 30, 2001 and,
with respect to payments and benefits contingent upon a Spin-Off, the
consummation of the Spin-Off on or before March 31, 2002. In the event of a
disposition of Zimmer which is not an IPO or Spin-Off occurring on or before
September 30, 2001 and, with respect to payments and benefits contingent upon a
Spin-Off, if the Spin-Off is not completed on or before March 31, 2002, the
terms and conditions of this letter agreement will terminate and will not apply.
Please note that if Zimmer is sold to a third party entity on or before
September 30, 2001, you will receive the bonus payments and other incentives
subject to the conditions described in the 2000 Agreement and the 2000
Amendment.

     As a member of the Zimmer management team, you are expected to carry out
the duties and responsibilities of your job during the coming months. In
addition, your assistance will be necessary to complete the divestiture process.
For your extra efforts and cooperation in helping Bristol-Myers Squibb and
Zimmer during this period, you will be provided with the following incentives,
subject to all of the terms and conditions of this letter agreement:

1. SPECIAL STOCK OPTION AWARD. Effective on the date of the Spin-Off or, if it
occurs first, the IPO (the "Effective Date"), you will receive an option to
purchase shares of Zimmer stock with an economic value at the time of grant of
$175,000 using a generally accepted valuation methodology. This option will be
issued under a new option and equity compensation plan (the "Zimmer Stock
Incentive Plan") that will be adopted by Zimmer's Board of Directors. Your
option will vest in equal installments over a period of four years provided that
you remain employed with Zimmer during that time, or as provided otherwise under
the Zimmer Stock Incentive Plan. The exercise price will equal the fair market
value of Zimmer stock at the time the option is granted.

2. SPECIAL RESTRICTED STOCK AWARD. As of the Effective Date, you will receive a
grant of Zimmer restricted stock with a value (determined as if no restrictions
applied) of $60,000. The restricted stock will vest in three equal installments
on the third, fourth and fifth anniversaries of the grant of the award provided
that you remain employed with Zimmer during that time. Any dividends that are
payable on Zimmer stock

<PAGE>
Bruno Melzi
February 21, 2001
Page 2

will be paid to you on this restricted stock on a current basis. This restricted
stock will also be issued under the Zimmer Stock Incentive Plan.

3. CONVERSION OF OUTSTANDING STOCK OPTIONS. Any Bristol-Myers Squibb stock
options granted to you prior to the Effective Date (including, but not limited
to, the options awarded to you on January 3, 2000 pursuant to a 50% reduction in
target cash bonus under the Bristol-Myers Squibb Company Performance Incentive
Plan ("PIP")) that are outstanding on the date of the Spin-Off, will be
converted into new Zimmer stock options. The number of shares and the exercise
price of your new Zimmer options will be determined by the Bristol-Myers Squibb
Board of Directors based upon a conversion ratio that will be used for all
Zimmer employees and that preserves any gains earned through the date of
conversion. Your new Zimmer options will be vested in the same proportion that
your Bristol-Myers Squibb options were vested and the nonvested portion of your
new Zimmer options will vest from the original grant date of your Bristol-Myers
Squibb options according to the vesting schedule in such Bristol-Myers Squibb
options. Certain of your Bristol-Myers Squibb options were subject to a price
appreciation threshold of 30% for a period of eight years following grant. Your
new Zimmer options will also be subject to a 30% price appreciation threshold
that will be based upon the adjusted exercise price of your Zimmer options and
future share price appreciation of Zimmer shares subject to the requirement that
the price appreciation threshold be met for 15 consecutive trading days. Any
Bristol-Myers Squibb stock options granted to you after the date of this letter
agreement that are converted into new Zimmer stock options will reflect any
applicable conditions to exercisability such as vesting requirements or price
appreciation thresholds.

4. 2001 PERFORMANCE INCENTIVE PLAN and PIP DEFERRAL PROGRAM. Your 2001 payment
under the PIP will be calculated in accordance with the following terms and
conditions: (i) your full target bonus will be in effect in 2001; (ii) your
payment will be based upon actual results versus targeted performance criteria
through the Effective Date, subject to the established PIP payout schedule;
(iii) if the Effective Date is on or before June 30, 2001, a six-month bonus
payment will be made; (iv) if the Effective Date occurs after June 30, 2001, you
will accrue additional months of bonus credit beyond six months subject to any
applicable conditions of the PIP; and (v) your 2001 PIP payment will be made on
December 15, 2001 and February 15, 2002 consistent with the current plan
provisions, provided that you remain employed with Zimmer through the
aforementioned payment dates. Regarding your participation in the PIP Referral
Program, you will receive distributions from your PIP deferral account
consistent with the terms of your distribution election as soon as practicable
after the Effective Date.

5. SPECIAL SEVERANCE UPON TERMINATION OF EMPLOYMENT. In the event that you are
terminated without cause on the Effective Date or within twelve months following
the consummation of the Spin-Off, you will be eligible to receive termination
payments. Based on our common understanding of the current regulations of the
Italian dirigenti of trade companies (CCNL dirigenti commercio), in no case will
any termination payment be less than 12 months of base salary. (This 12 months
of base salary is inclusive of any notice periods/payments that may apply.
Twelve months base salary means your monthly base salary, not including the
value of benefits, car, or any other allowances, multiplied by twelve). Should
the current regulation, applicable to dirigenti of trade companies, be modified,
as to reduce your termination payment, we will ensure that in no case will the
payment be less than 12 months salary, inclusive of notice/payments which may
apply.

6. CONDITIONS OF THIS LETTER AGREEMENT. The incentive payments and benefits
described in this letter agreement are contingent upon: (a) the Effective Date
occurring on or before September 30, 2001 and, with respect to payments and
benefits contingent upon a Spin-Off, the consummation of the Spin-Off on or
before March 31, 2002; (b) your continuous employment with Zimmer through and
including the date of the relevant award, and your cessation of employment
within the Bristol-Myers Squibb controlled group (as defined under section
1563(a) of the Internal Revenue Code) as a result of

<PAGE>
Bruno Melzi
February 21, 2001
Page 3

the Spin-Off; (c) your execution on the date of the consummation of the
Spin-Off, and the effectiveness, of a general release in favor of Bristol-Myers
Squibb, its affiliates, and others related to such entities (including but not
limited to their directors, officers, employees) and a limited release of
Zimmer, its affiliates, and others related to such entities (including but not
limited to their directors, officers, employees) with respect to Zimmer's
obligations in connection with the Spin-Off, in form and substance satisfactory
to Bristol-Myers Squibb and Zimmer, (d) your honoring the need for strict
confidentiality regarding the IPO and the Spin-Off and the terms of this letter
agreement, neither of which should be discussed with anyone (other than your
personal financial or legal advisors) without the express and specific
permission of George P. Kooluris, Senior Vice President, Corporate Development,
it being acknowledged that matters relating to the IPO and the Spin-Off (except
the terms of this letter agreement) may be discussed only with employees of
Bristol-Myers Squibb and its affiliates and their legal and financial advisors
who are participating in the IPO and the Spin-Off process and no others (and
then only with those individuals on a "need to know" basis); (e) your providing
full support and cooperation in the best interests of Bristol-Myers Squibb and
Zimmer up to and including the date of the Spin-Off; and (f) following the
Spin-Off, your taking no action, excluding normal competitive activity not
contrary to law and not inconsistent with your other contractual obligations to
Bristol-Myers Squibb, Zimmer or their affiliates, but including any actions
prohibited by this letter agreement, which would be considered contrary to the
best interests of Bristol-Myers Squibb, Zimmer or their affiliates.

7. NON-COMPETE AND NON-SOLICITATION. As a condition to your receipt of any
payments or benefits under this letter agreement, you agree that, for a period
commencing on the date of your execution of this letter agreement and ending on
the date which is one year after the consummation of the Spin-Off you will not,
directly or indirectly, (i) own, manage, control or participate in the
ownership, management or control of, be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or otherwise
with, any other corporation, partnership, proprietorship, firm, association, or
other business entity, or otherwise engage in any business, which is engaged in
any manner in, or otherwise competes with, the business of Zimmer or any of its
affiliates in the United States of America or any of the countries in which
Zimmer or any of its affiliates is doing business, (ii) solicit on behalf of any
other corporation, partnership, proprietorship, firm, association, or other
business entity, any person or business that is a customer or supplier of Zimmer
or any of its affiliates, or (iii) solicit for employment, hire, employ, or
retain in any capacity (including but not limited to as an employee, director,
independent contractor, consultant or otherwise), other than for employment
within Zimmer or its affiliates in conjunction with the IPO and Spin-Off or
within Bristol-Myers Squibb or its affiliates, any person who is employed or
otherwise engaged on a full or part-time basis by Bristol-Myers Squibb or its
affiliates (including but not limited to Zimmer). You understand and agree that
a breach by you of this paragraph would be a material breach of your obligations
under this letter agreement, and that, if any amounts have been provided to you
under the terms of this letter agreement prior to any such breach, in addition
to any other remedy that may be available to Bristol-Myers Squibb in law or at
equity, upon demand, you will promptly return all such amounts to Bristol-Myers
Squibb or Zimmer as appropriate.

8. NOT AN EMPLOYMENT AGREEMENT. The terms of this letter agreement neither bind
you to continued employment with Bristol-Myers Squibb, Zimmer, their affiliates
or any successor thereto, nor confer any rights upon you with respect to the
continuation of employment by Bristol-Myers Squibb, Zimmer, their affiliates or
any successor thereto.

9. WITHHOLDING. With the exception of your PIP payments, which will be paid to
you through normal payroll processing for PIP, with appropriate withholding of
relevant taxes, if applicable, the tax liabilities that may arise from other
payments will be your sole responsibility.

<PAGE>
Bruno Melzi
February 21, 2001
Page 4

10. EXCLUSIVE RETENTION AND SEVERANCE BENEFIT. In the event that any or all
other employees of Zimmer receive or are offered either a retention or similar
bonus payable upon or in connection with the IPO or the Spin-Off (a "Retention
Bonus"), or an enhanced severance benefit payable upon or in connection with the
IPO or the Spin-Off, you understand and agree that you will not be eligible to
receive such Retention Bonus or enhanced severance benefit, except as explicitly
set forth in this letter agreement.

11. RETURN OF COMPANY PROPERTY AND USE OF COMPANY PERQUISITES. In the event of
your separation from Bristol-Myers Squibb, Zimmer or their affiliates (whether
prior to or in connection with the IPO or Spin-Off), you agree to return all
property belonging to Bristol-Myers Squibb, Zimmer or their affiliates
(including but not limited to any company laptop or computers, and other
equipment, documents and property belonging to Bristol-Myers Squibb, Zimmer or
their affiliates) upon such separation (in accordance with the normal practice
relating thereto); provided, however, at Zimmer's discretion, you may continue
to retain use of your employer-provided automobile.

12. GOVERNING LAW; JURISDICTION. This letter agreement will be governed by and
construed under the laws of the State of New York, without regard to its
principles of conflict of laws. You and Bristol-Myers Squibb agree to submit to
the jurisdiction of the courts of the state of New York in the event of any
dispute regarding this letter agreement.

Please acknowledge your understanding of and agreement to the provisions of this
letter agreement by signing and returning a copy of this letter to me by March
9, 2001.

Very truly yours,
  /s/ George P. Kooluris
George P. Kooluris
Senior Vice President
Corporate Development
Bristol-Myers Squibb Company

Bruno Melzi
Zimmer, Inc.

AGREED TO AND ACCEPTED:

----------------------------

DATE:
     -----------------------

For specific acceptance of Paragraph #7 (Non-Compete and Non-Solicitation)

AGREED TO AND ACCEPTED:

----------------------------

DATE:
     -----------------------

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