EXHIBIT 10.13
AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 2 to Loan and Security Agreement is entered into as of
the 26th day of April, 1996, by and between Silicon Valley Bank ("Bank") and
Fourth Shift Corporation ("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security Agreement
dated as of October 23, 1995, as amended (the "Agreement"). The parties desire
to amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The term "Maturity Date" in Section 1.1 shall be amended to read
"April 25, 2000," provided that the Revolving Facility shall terminate, and all
Advances outstanding thereunder shall be due and payable, on November 6, 1996.
2. New Section 2.1.3 shall be added to the Agreement, as follows:
2.1.3 EQUIPMENT ADVANCES.
(a) At any time from the date hereof through April 25,
1997 (the "Equipment Availability Date"), Borrower may from time to time
request advances (each an "Equipment Advance" and, collectively, the
"Equipment Advances") from Bank in an aggregate principal amount of
up to One Million Five Hundred Thousand Dollars ($1,500,00). The
Equipment Advances shall be used to purchase Equipment approved from time
to time by Bank, which Equipment (i) shall in any case have been purchased
by Borrower not earlier than ninety (90) days before the date of the
requested Equipment Advance and (ii) shall not be placed at any location
outside of the United States and shall not exceed one hundred percent
(100%) of the invoiced cost of such Equipment, excluding installation
expense, freight discounts, warranty charges and taxes.
(b) Interest shall accrue from the date of each Equipment
Advance at a fixed rate of Nine and One Quarter Percent (9.25%) per annum,
and shall be payable monthly for each month through the month in which the
Equipment Availability Date falls. The Equipment Advance or Equipment
Advances that are outstanding on the Equipment Availability Date will be
payable in thirty-six (36) equal monthly installments of principal, plus
accrued interest, beginning on the twenty-fifth day of the month following
the Equipment Availability Date. The entire principal balance and all
accrued but unpaid interest shall be due and payable on April 25, 2000.
(c) When Borrower desires to obtain an Equipment Advance,
Borrower shall notify Bank (which notice shall be irrevocable) by facsimile
transmission received no later than 3:00 p.m. California time one (1)
Business Day before the day on which the Equipment Advance is to be made.
Such notice shall be in substantially the form of EXHIBIT B. The notice
shall be signed by a Responsible Officer and include a copy of the invoice
for the Equipment to
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be financed.
3. Section 6.9 is amended to read as follows:
6.9 TANGIBLE NET WORTH. Borrower shall maintain as of the last
day of each fiscal quarter a Tangible Net Worth of not less than Four
Million Dollars ($4,000,000).
4. Section 6.10 is amended to read as follows:
6.10 PROFITABILITY. Borrower shall have a minimum profit of One
Dollar ($1.00) for each fiscal quarter.
5. New Section 6.13 is added to the Agreement, as follows:
6.13 DEBT SERVICE RATIO. Borrower shall maintain a Debt Service
Ratio of not less than 2.0 to 1.0. "Debt Service Ratio" shall mean, as
reflected in Borrower's quarterly financial statements delivered pursuant to
Section 6.3, the sum of Borrower's net income and depreciation and amortization
annualized for the preceding three month period, divided by the interest and
principal payments due on Borrower's current portion of long-term debt for such
three month period.
6. Section 8.2 of the Agreement is amended to include Section 6.13 in the
first clause, to read, "If Borrower fails to perform any obligations under
Sections 6.7, 6.8, 6.9, 6.10, 6.11 or 6.13 . . ."
7. Unless otherwise defined, all capitalized terms in this Amendment
shall be as defined in the Agreement. Except as amended, the Agreement remains
in full force and effect.
8. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
9 This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
10. As a condition to the effectiveness of this Amendment, Borrower shall
pay a Facility Fee shall be an amount equal to Four Thousand Dollars ($4,000),
payable upon the date hereof, plus all Bank Expenses incurred in connection with
the preparation of this Amendment.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
first date above written.
FOURTH SHIFT CORPORATION
By: /s/ X.X. Xxxxxx
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Title: V.P. and CFO
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SILICON VALLEY BANK
By: /s/ Xxxx Xxxxxxxxx
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Title: Vice President
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