LOAN MODIFICATION AGREEMENT
(MODIFICATION OF BORROWING BASE DEFINITION)
THIS AGREEMENT is made and entered into this ____ day of ____, 1996, by and
between SOFTNET SYSTEMS, INC., a New York Corporation ("SoftNet"), COMMUNICATE
DIRECT, INC., an Illinois Corporation ("CDI"), MICROGRAPHIC TECHNOLOGY
CORPORATION, a Delaware Corporation ("MTC"), KANSAS COMMUNICATIONS, INC., a
Kansas Corporation ("KCI") (SoftNet, CDI, MTC, and KCI collectively referred to
as "Borrowed;") and WEST SUBURBAN BANK ("Bank").
WHEREAS, Borrowers have executed and delivered to Bank a Revolving Credit Note
dated September 15, 1995 (the "Note") in the original principal amount of
$6,500,000.00 in which each of the Borrowers promises to pay to the order of
Bank the principal amount and interest thereon as more specifically provided in
the Note; and
WHEREAS, to secure the repayment of the Borrowers' obligations under He Note,
each of the Borrowers has executed and delivered to Bank a Loan and Security
Agreement dated September 15, 1995 and various other instruments and documents
executed in connection therewith (collectively the "Loan Agreements"); and
WHEREAS, Borrowers and Bank executed a Loan Modification Agreement dated March
15, 1996 wherein the maximum amount of credit under the Note and the Loan
Agreements was increased to $9,500,000.00 and the Borrowing Base limitations
were modified in accordance with the terms thereof; and
WHEREAS, Borrowers and Bank executed a Loan Modification Agreement dated
November ___, 1996 wherein the amount of credit availability under the Note and
the Loan Agreements was temporarily increased to an amount equivalent to
S1,000,000.00 in excess of the Borrowing Base limitations otherwise in effect,
subject to terms and limitations thereof; and
WHEREAS, Borrower has requested that the Borrowing Base limitations and
definitions set forth in the Loan Agreements be further modified in accordance
with the terms hereof; and
WHEREAS, Bank has agreed to such modifications, subject to the terms and
provisions hereof
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars in hand paid and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The foregoing recitals are incorporated herein by reference as though fully
set forth. Borrowers represent and warrant that the foregoing recite's are true
and correct.
2. The term "Borrowing Base" as defined in Section 2(c) of the Loan Agreements
is amended to include fifty (50%) percent of the Adjusted Value of Borrower's
Inventory/Rental Equipment (as hereinafter defined).
3. The term "Eligible Inventory" as defined in Section 2(c) of the Loan
Agreements is amended to exclude Borrower's Inventory/Rental Equipment (as
hereinafter defined).
4. The term "Inventory/Rental Equipment" shall mean MTC's equipment described on
Exhibit A. attached hereto.
5. The "Adjusted Value" of Borrower's Inventory/Rental Equipment shall initially
be the sum of S298,771.21 and shall decrease by the sum of $8,299.20 on December
1, 1996 and on the first day of each month thereafter (constituting the
depreciation of Borrower's Inventory/Rental Equipment over a Month period on the
basis of the straight-line method of depreciation).
6. The terms of the Loan Documents (as such term is defined in the Loan
Agreements) are hereby amended and modified to comport with the terms of this
instrument to the extent the terms of any of the Loan Documents may be otherwise
inconsistent with the terms hereof. In all other respects, the terms and
provisions of the Loan Documents shall remain in full force and effect.
7. Borrowers hereby reaffirm all of the terms, provisions, warranties, and
representations set forth in each of the Loan Agreements and the other Loan
Documents as modified hereby. Without limiting the generality of the foregoing,
each of the Borrowers warrants and represents that no event of default exists
under any of the Loan Agreements or any of the other Loan Documents and no event
has occurred or condition exists which with the passage of time or the giving of
notice would or could constitute an event of default.
8. Borrowers agree to promptly reimburse Bank for all attorney's fees and costs
incurred by Bank in connection with the negotiation, preparation, and execution
of this instrument.
IN WITNESS WHEREOF, the parties have entered into this Loan Modification
Agreement on the date first above written.
SOFTNET SYSTEMS, INC.
By: _________________________________
Its: ________________________________
Attest: _____________________________
Its: ________________________________
COMMUNICATE DIRECT, INC.
By: _________________________________
Its: ________________________________
Attest: _____________________________
Its: ________________________________
MICROGRAPHIC TECHNOLOGY CORPORATION
By: _________________________________
Its: ________________________________
Attest: _____________________________
Its: ________________________________
KANSAS COMMUNICATIONS, INC.
By: _________________________________
Its: ________________________________
Attest: _____________________________
Its: ________________________________
WEST SUBURBAN BANK
By: _________________________________
Its: ________________________________
Attest: _____________________________
Its: ________________________________
