Exhibit 10.3


 





FOURTH
AMENDMENT TO


LOAN
AND SECURITY AGREEMENT


 


This
Fourth Amendment to Loan and Security Agreement (this "Amendment") is entered into as of May 11,
2015, by and among MODERN SYSTEMS CORPORATION, a Delaware corporation, formerly known as BluePhoenix Solutions USA, Inc.,
a Delaware corporation ("Modern") and MS MODERNIZATION SERVICES, INC., a Texas corporation, formerly known as
Sophisticated Business Systems, Inc., successor by merger to BP-AT Acquisition LLC, a Delaware limited liability company
f/k/a BP-AT Acquisition Corporation, a Delaware corporation ("MS", and collectively with Modern,
"Borrowers", and each individually, a "Borrower"), and COMERICA BANK
("Bank").


 


RECITALS


 


Borrowers
and Bank are parties to that Loan and Security Agreement dated March 24, 2014, as it may be amended from time to time, including
without limitation by that certain First Amendment to Loan and Security Agreement, Joinder, and Modification to Loan Documents
dated September 25, 2014, that certain Omnibus Modification to Loan Documents and Consent dated January 8, 2015, and that certain
Third Amendment to Loan and Security Agreement, Modification to Loan Documents and Consent dated May 1, 2015 (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.           Exhibit A of
the Agreement is amended by amending and restating the following defined terms to read in their entireties as follows:


 


"'Non-Formula
Revolving Line Maturity Date' means June 30, 2016."


 


"'Revolving Line Maturity Date' means June 30, 2016."


 


2.           Subparagraph
(d) of the definition of "Eligible Accounts" in Exhibit A of the Agreement is amended and restated to read in its entirety
as follows:


 


"(d)Accounts with respect to an
account debtor, including Subsidiaries and Affiliates, whose total obligations to Borrower exceed twenty-five percent (25%)
of all Accounts ("Concentration Limit"), to the extent such obligations exceed the aforementioned percentage,
except as approved in writing by Bank; provided, however, the Concentration Limit for (i) IBM Corporation, (ii) Jetro, (iii)
Xerox, (iv) New York Times, (v) King Country, (vi) Dell, (vii) Fujitsu, and (viii) Idaho State Controller's Office shall be
one hundred percent (100%);"


 


3.           New Section 6.7(b) is added to the Agreement to read in its entirety as follows:


 


"(b)New Equity Event. On
or before December 31, 2015, Borrower shall provide, or cause to be provided, to Bank evidence that Borrower received cash
proceeds from the issuance of new equity, on terms and from investors satisfactory to Bank, of not less than Two Million Five
Hundred Thousand Dollars ($2,500,000)."


 


4.           Exhibit E of the Agreement is replaced
with Exhibit E attached to this Amendment.


 


5.           Unless
otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remains in full force and effect in accordance with its terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as
a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.









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6.           Borrowers waive, discharge, and
forever release Bank, Bank's employees, officers, directors, attorneys, stockholders, and their successors and assigns, from
and of any and all claims, causes of action, allegations or assertions that Borrowers have or may have had at any time up
through and including the date of this Amendment, against any or all of the foregoing, regardless of whether any such claims,
causes of action, allegations or assertions are known to Borrowers or whether any such claims, causes of action, allegations
or assertions arose as result of Bank's actions or omissions in connection with the Loan Documents, or any amendments,
extensions or modifications thereto, or Bank's administration of the Obligations or otherwise.


 


7.           Borrowers
represent and warrant that the representations and warranties contained in the Agreement are true and correct in all material
respects as of the date of this Amendment, and that no Event of Default has occurred and is continuing.


 


8.           As a condition to the effectiveness of this
Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:


 


(a)         this
Amendment, executed by Borrowers;


 


(b)         an
Affirmation of Guaranties, executed by Columbia Pacific Opportunity Fund, L.P. and Prescott Group Aggressive Small Cap Master
Fund;


 


(c)         Corporation
Resolutions and Incumbency Certifications: Authority to Procure Loans, executed by Borrowers; and


 


(d)         all
reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrowers' accounts.


 


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.


 


[Remainder of Page Intentionally Left Blank]






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IN
WITNESS WHEREOF, Borrowers and Bank have executed and delivered this Fourth Amendment to Loan and Security Agreement as of the
date first set forth above. 


 


	 	MODERN
    SYSTEMS CORPORATION, a 

Delaware corporation, formerly known as 

BluePhoenix Solutions USA, Inc.
	 	 	 
	 	By:	/s/
    Rick Rinaldo
	 	Printed Name:  	Rick
    Rinaldo
	 	Title:	CFO
	 	 	 
	 	MS
    MODERNIZATION SERVICES, INC., a

 Texas corporation, formerly known as Sophisticated

 Business Systems, Inc., successor by
    merger to BP-

AT Acquisition LLC, formerly known as BP-AT

 Acquisition Corporation
	 	 	 
	 	By:	/s/
    Rick Rinaldo
	 	Printed Name:  	Rick
    Rinaldo
	 	Title:	CFO
	 	 	 
	 	COMERICA
    BANK
	 	 	 
	 	By:	
	 	Printed Name:  	
	 	Title:	






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IN WITNESS WHEREOF,
Borrowers and Bank have executed and delivered this Fourth Amendment to Loan and Security Agreement as of the date first set forth
above. 





	 	MODERN
    SYSTEMS CORPORATION, a 

Delaware corporation, formerly known as

 BluePhoenix Solutions USA, Inc.
	 	 	 
	 	By:	
	 	Printed Name:  	
	 	Title:	
	 	 	 
	 	MS
    MODERNIZATION SERVICES, INC., a

 Texas corporation, formerly known as Sophisticated

 Business Systems, Inc., successor by
    merger to BP-

AT Acquisition LLC, formerly known as BP-AT

 Acquisition Corporation
	 	 	 
	 	By:	
	 	Printed Name:  	
	 	Title:	
	 	 	 
	 	COMERICA
    BANK
	 	 	 
	 	By:	/s/
    Michael Fishback
	 	Printed Name:  	Michael Fishback
	 	Title:	Vice
    President


 



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EXHIBIT
E


 


COMPLIANCE
CERTIFICATE


 


	Please
    send all Required Reporting to:	Comerica
        Bank

        Technology
        & Life Sciences Division

        Loan
        Analysis Department

        250
        Lytton Avenue

        3rd.
        Floor, MC 4240

        Palo
        Alto CA 94301

        Phone:
        (650) 462-6060

        Fax:
        (650) 462-6061



 


FROM:
Modern Systems Corporation and MS Modernization Services, Inc.


 


The
undersigned authorized Officer of Modern Systems Corporation and MS Modernization Services, Inc. (individually and collectively,
"Borrower"), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the "Agreement"), (i) Borrower is in complete compliance for the period ending                            ,
201     with all required covenants, including without limitation the ongoing registration of
intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties
of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof; provided, however, that
those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects
as of such date. Attached herewith are the required documents supporting the above certification ("Supporting Documents").
The Officer further certifies the Supporting Documents are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and are consistently applied form one period to the next except as explained in an accompanying letter or footnotes.


 


Please indicate
compliance status by circling Yes/No under "Complies" or "Applicable" column,


 


	REPORTING
    COVENANTS	 	REQUIRED	 	COMPLIES
	 	 	 	 	 	 
	Company
    Prepared Monthly F/S	 	Monthly,
    within 30 days	 	YES	NO
	Compliance
    Certificate	 	Monthly,
    within 30 days	 	YES	NO
	CPA
    Audited, Unqualified F/S for Parent	 	Annually,
    within 150 days of FYE	 	YES	NO
	Company
    Prepare Annual Consolidating F/S for Parent	 	Annually,
    within 150 days of FYE (commencing 2014 FY)	 	YES	NO
	Company
    Prepared Annual F/S	 	Annually,
    within 150 days of EYE	 	YES	NO
	Borrowing
    Base Cert, A/R & A/P Agings	 	Monthly,
    within 30 days	 	YES	NO
	Annual
    Business Plan	 	Annually,
    on or before 1/31	 	YES	NO
	Intellectual
    Property Report	 	Quarterly
    within 30 days	 	YES	NO
	Audit	 	Semi-annual	 	YES	NO
	 	 	 	 	 	 
	If
    Public:	 	 	 	 	 
	10-Q	 	Quarterly,
    within 5 days of SEC filing (50 days)	 	YES	NO
	10-K	 	Annually,
    within 5 days of SEC filing (95 days)	 	YES	NO
	 	 	 	 	 	 
	Total
    amount of Borrower's cash and investments	 	Amount:
    $                              	 	YES	NO
	Total
    amount of Borrower's cash and investments maintained with Bank	 	Amount:
    $                              	 	YES	NO
	 	 	 	 	 	 
	 	 	DESCRIPTION	 	APPLICABLE
	 	 	 	 	 	 
	Legal
    Action > $250,000 (Sect. 6.2(iv))	 	Notify
    promptly upon notice                      	 	YES	NO
	Inventory
    Disputes> $250,000 (Sect. 6.3)	 	Notify
    promptly upon notice                      	 	YES	NO
	Mergers
    & Acquisitions> $250,000 (Sect. 7.3)	 	Notify
    promptly upon notice                      	 	YES	NO
	Cross
    default with other agreements >$250,000 (Sect. 8.6)	 	Notify
    promptly upon notice                      	 	YES	NO
	Judgments/Settlements
    > $250,000 (Sect. 8.8)	 	Notify
    promptly upon notice                      	 	YES	NO


  


	FINANCIAL
    COVENANTS 	 	REQUIRED	 	ACTUAL	 	COMPLIES
	 	 	 	 	 	 	 	 
	Bank
    Debt Liquidity Ratio (tested monthly commencing on the Revolving Line Increase Effective Date)	 	1.10:1.00	 	              :1.00	 	YES	NO
	New
    Equity	 	See
    Sec. 6.7(b)	 	$                              	 	YES	NO


 


 


	FINANCIAL
    COVENANTS 	 	REQUIRED	 	ACTUAL	 	COMPLIES
	 	 	 	 	 	 	 	 
	Permitted
    Indebtedness for equipment leases	 	<$250,000	 	$                              	 	YES	NO
	Permitted
    Investments for stock repurchase	 	<$250,000	 	$                              	 	YES	NO
	Permitted
    Investments for subsidiaries	 	<$250,000	 	$                              	 	YES	NO
	Permitted
    Investments for employee loans	 	<$250,000	 	$                              	 	YES	NO
	Permitted
    Investments for joint ventures	 	<$250,000	 	$                              	 	YES	NO
	Permitted
    Liens for equipment leases	 	<$250,000	 	$                              	 	YES	NO
	Permitted
    Transfers	 	<$250,000	 	$                              	 	YES	NO


 






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Please Enter
Below Comments Regarding Violations:


 


The undersigned further acknowledges that at any time Borrower
is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no
Credit Extensions will be made.


 


Very truly
yours,


 


MODERN
SYSTEMS CORPORATION, for itself and on behalf of MS Modernization Services, Inc.


 


	 	 
	Authorized Signer	 
	 	 
	 	 
	Name	 
	 	 
	 	 
	Title	 



 


 


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