LOAN MODIFICATION AGREEMENT
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 "Borrowers") 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 the Note,
each of the Borrowers has executed and delivered to Bank a Loan and Security
Agreement dated September 15, 1995 (collectively the "Loan Agreements"); and
WHEREAS, to further secure the repayment of the Borrowers' obligations under the
Note, SoftNet has executed and delivered to Bank a Stock Pledge Agreement dated
September 15, 1995 (the "Pledge Agreement") whereby SoftNet has pledged 377,770
shares of common stock of IMNET Systems, Inc. in favor of Bank; and
WHEREAS, Borrowers have requested that the maximum amount of credit available
under the Note and the Loan Agreements be increased to $9,500,000.00 and that
the Borrowing Base limitations set forth in the Loan Agreements be modified in
accordance with the terms hereof; and
WHEREAS, Bank has agreed to increase the amount of credit available under the
Note and the Loan Agreements to $9,500,000.00 and the modification of the
Borrowing Base limitations, subject to the terms and conditions 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 recitals are true
and correct.
2. The terms of the Note are hereby amended to provide that the aggregate
maximum amount of credit available under the Note (the "Principal Sum") is NINE
MILLION FIVE HUNDRED THOUSAND AND NO/100 ($9,500,000.00) DOLLARS.
3. Each of the Loan Agreements is hereby amended to provide that the maximum
aggregate principal balance of the Loan shall not at any time exceed NINE
MILLION FIVE HUNDRED THOUSAND AND NO/100 ($9,500,000.00) DOLLARS (the "Credit
Limit").
4. Section 2(c) of each of the Loan Agreements is hereby modified by deleting
the following sentence therefrom:
"Notwithstanding the amount of Eligible Inventory, the amount of principal
advanced with respect to the Eligible Inventory portion of the Borrowing Base
shall not exceed the sum of Two Million and No/100 ($2,000,000.00) Dollars.
5. Section 2(c) of each of the Loan Agreements is further modified by adding the
following sentence:
"Notwithstanding the fair market value of the shares of stock of IMNET Systems,
Inc. owned by SoftNet as determined from time to time by Bank based upon
published price quotations, the amount of principal advanced with respect to the
portion of the Borrowing Base attributable to the shares of stock of IMNET
Systems, Inc. shall not exceed the sum of One Million Five Hundred Thousand and
No/100 ($1,500,000.00) Dollars.
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.
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: ________________________________
