EXHIBIT 10.14
AMENDMENT NO. 3
TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 3 to Loan and Security Agreement is entered into as of
the 24th day of September, 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
"September 23, 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 2.1.4 shall be added to the Agreement, as follows:
2.1.4 EQUIPMENT ADVANCES.
(a) At any time from the date hereof through September 23, 1997,
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 Six Hundred Thousand Dollars
($600,000). 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 exceed one
hundred percent (100%) of the invoiced cost of such Equipment, including
installation expense, freight discounts, warranty charges and taxes.
Notwithstanding any other provisions of the Agreement, if the forced
liquidation value of Borrower's fixed assets, less any Equipment Advances
outstanding under Section 2.1.3, is less than the aggregate outstanding
Equipment Advances under Sections 2.1.3 and 2.1.4, Borrower may not request
further Equipment Advances under this Section 2.1.4.
(b) Interest shall accrue from the date of each Equipment
Advance made under this Section 2.1.4 at a fixed rate of Nine and One Half
Percent (9.50%) per annum, and shall be payable monthly on the 23rd day of
each month through September 23, 1997. The Equipment Advance or Equipment
Advances that are outstanding under this Section 2.1.4 on September 23,
1997 will be payable in thirty-six (36) equal monthly installments of
principal, plus accrued interest, beginning on October 23, 1997. The
entire principal balance and all accrued but unpaid interest shall be due
and payable on September 23, 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
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shall be signed by a Responsible Officer and include a copy of the invoice
for the Equipment to be financed.
3. New Section 6.14 is added to the Agreement, as follows:
6.14 DEBT SERVICE RATIO-SECOND TERM LOAN. Borrower shall maintain a
Debt Service Ratio-Second Term Loan of not less than 1.75 to 1.0. "Debt Service
Ratio-Second Term Loan" shall mean, as reflected in Borrower's quarterly
financial statements delivered pursuant to Section 6.3, the sum of Borrower's
U.S. cash flow on a six-month rolling basis, divided by the interest and
principal payments due on Borrower's current portion of long-term debt for such
period.
4. Section 8.2 of the Agreement is amended to include Section 6.14 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, 6.13 or 6.14 . . ."
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.
8. As a condition to the effectiveness of this Amendment, Borrower shall
pay a Facility Fee shall be an amount equal to Three Thousand Dollars ($3,000),
payable upon the date hereof, plus all Bank Expenses incurred in connection with
the preparation of this Amendment.
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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