EXHIBIT 10.1
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
This Amendment No. 5 to Loan and Security Agreement (this "Amendment") is
made as of March 31, 1997, by and between FOURTH SHIFT Corporation.
("Borrower") and Silicon Valley Bank ("Bank").
RECITALS
Borrower and Bank are parties to, among other documents, 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, Borrower and Bank agree as follows:
1. Bank hereby waives Borrower's existing default under the Loan
Agreement by virtue of Borrower's failure to comply with the Profitability,
the Debt Service Ratio and the Debt Service Ratio-Second Term Loan covenants
as of quarter ended December 31, 1996. Bank's waiver of Borrower's
compliance of these covenants shall apply only to the foregoing period.
Accordingly, for the quarter ending March 31, 1997, Borrower shall be in
compliance with these covenants, as amended herein.
Bank's agreement to waive the above-described default (1) in no way
shall be deemed an agreement by the Bank to waive Borrower's compliance with
the above-described covenants as of all other dates and (2) shall not limit
or impair the Bank's right to demand strict performance of these covenants as
of all other dates and (3) shall not limit or impair the Bank's right to
demand strict performance of all other covenants as of any date.
2. Section 6.10 entitled "Profitability" is hereby amended to provide
that Borrower shall not suffer a loss in excess of $2,800,000.00 in the
fiscal quarter ending March 31, 1997 and a loss in excess of $1,000,000.00 in
each of the fiscal quarters ending June 30, 1997 and September 30, 1997.
Borrower shall achieve profitability for each fiscal quarter thereafter.
3. Section 6.13 entitled "Debt Service Ratio" and Section 6.14
entitled "Debt Service Ratio-Second Term Loan" shall hereby be replaced with
the following Liquidity Ratio:
6.13 Liquidity. Borrower shall maintain, as of the last day of
each quarter, a minimum Liquidity Ratio of 1.40 to 1.00, beginning with
fiscal quarter ending March 31, 1997. Liquidity Ratio is defined as
unrestricted cash and equivalents plus the net available under Borrower's
Revolving Facility divided by total outstandings under bank debt plus total
outstandings under capital leases.
4. Section 6.8 entitled "Quick Ratio" is hereby amended in its entirety
to read as follows:
Borrower shall maintain, as of the last day of each calendar month,
beginning with the month ending March 31, 1997, a ratio of Quick Assets to
Current Liabilities (excluding deferred revenue) of at least 1.30 to 1.00.
5. 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.
6. 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.
7. 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.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
BORROWER: BANK:
FOURTH SHIFT CORPORATION SILICON VALLEY BANK
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxx Xxxxxx
----------------------------------------- -----------------------
Name: Xxxxx X. Xxxxxx Name: Xxx Xxxxxx
----------------------------------------- -----------------------
Title: Vice President & Chief Financial Officer Title: Vice President
----------------------------------------- -----------------------