EXHIBIT 10.12
AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 1 to Loan and Security Agreement is entered into as of
the 29th day of March, 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 (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. New Sections 2.1.1 and 2.1.2 shall be added to the Amendment, as
follows:
2.1.1 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, Bank
agrees to issue or cause to be issued letters of credit for the account of
Borrower in an aggregate face amount not to exceed (i) the lesser of the
Committed Line or the Borrowing Base minus (ii) the then outstanding principal
balance of the Advances provided that the face amount of outstanding letters of
credit (including drawn but unreimbursed letters of credit) shall not in any
case exceed One Million Five Hundred Thousand Dollars ($1,500,000). Each such
letter of credit shall have an expiry date no later than ninety (90) days after
the Maturity Date, provided that Borrower's letter of credit reimbursement
obligation shall be secured by cash on terms acceptable to Bank at any time
after the Maturity Date if the term of this Agreement is not extended by Bank.
All such letters of credit shall be, in form and substance, acceptable to Bank
in its sole discretion and shall be subject to the terms and conditions of
Bank's form of application and letter of credit agreement. Each request for a
letter of credit shall be deemed a request for an Advance under the Agreement.
Each letter of credit shall be deemed an "Advance" for the purpose of
calculating availability under the Committed Line.
(b) Borrower shall indemnify, defend and hold Bank harmless from
any loss, cost, expense or liability, including, without limitation, reasonable
attorneys' fees, arising out of or in connection with any letters of credit.
2.1.2 LETTER OF CREDIT REIMBURSEMENT RESERVE.
(a) Borrower may request that Bank issue a letter of credit
payable in a currency other than United States Dollars. If a demand for payment
is made under any such letter of credit, Bank shall treat such demand as an
advance to Borrower of the equivalent of the amount thereof (plus cable charges)
in United States currency at the then prevailing rate of exchange in San
Francisco, California, for sales of that other currency for cable transfer to
the country of which it is the currency.
(b) Upon the issuance of any letter of credit payable in a
currency other than United States Dollars, Bank shall create a reserve under the
Committed Line for letters of credit against fluctuations in currency exchange
rates in an amount equal to twenty percent (20%) of the face amount of
-38-
such letter of credit. The amount of such reserve may be amended by Bank
from time to time to account for fluctuations in the exchange rate. The
availability of funds under the Committed Line shall be reduced by the amount
of such reserve for so long as such letter of credit remains outstanding.
2. 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.
3. 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.
4. 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.
FOURTH SHIFT CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------
Title: V.P. and CFO
------------------
SILICON VALLEY BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
Title: Vice President
------------------
-39-