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Exhibit 10(b)
LANVISION SYSTEMS, INC.
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT ("Amendment") is executed pursuant
to and made a part of the Loan and Security Agreement dated July 17, 1998, by
and between LANVISION SYSTEMS, INC., a Delaware Corporation ("Borrower"), and
THE HILLSTREET FUND, L.P., a Delaware limited partnership ("Lender"), as amended
by letter agreements dated March 18, 1999, April 12, 1999, September 14, 1999
and Amendment Number 1, dated November 25, 1998 and an Amendment dated February
11, 2000 ( as amended, the "Loan Agreement").
WHEREAS, Borrower and Lender wish to further amend the Loan Agreement in
accordance with the terms and provisions hereof.
NOW, THEREFORE, the parties agree as follows:
1. Waiver. Lender hereby agrees to waive Borrower's compliance with the
following covenants set forth in the Amendment dated February 11,
2000:
Section 6.4 (a) Minimum Revenues and Section 6.4 (b) Minimum EBIT for
the July 31, 2000 Computation Date.
2. Amendments to Loan Agreement. The following amendments shall be made
to the terms of the Loan Agreement:
(a) Minimum Revenues and EBIT. Section 6.4 of the Loan Agreement
shall be amended in its entirety to read as follows:
"Section 6.4 Minimum Revenues and EBIT.
(a) Minimum Revenues. On each of the Computation Dates set forth
below, the Borrower shall not permit the total cumulative
revenues (calculated for the period of time beginning on
February 1, 2000 through such Computation Date) to be less
than the minimum amount set forth bellow:
MINIMUM
COMPUTATION DATE CUMULATIVE REVENUES
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October 31, 2000 $5,500,000
January 31, 2001 $8,800,000
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(b) Minimum EBIT. On each Computation date set forth below, the
Borrower shall not permit the total Cumulative EBIT
(calculated for the period of time beginning on February 1,
2000 through such Computation Date) to be less than the
minimum amount set forth below:
MINIMUM
COMPUTATION DATE CUMULATIVE EBIT
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October 31, 2000 ($415,000)
January 31, 2001 $400,000
Borrower and Lender shall amend this Agreement on or before
February 28, 2001, to provide covenant compliance ( at
minimum levels acceptable to Lender ) under Section 6.4(a)
and 6.4 (b) above for April 30, 2001, and each Computation
date thereafter."
(c) Net Worth. Section 6.5 of the Loan Agreement shall be
amended in its entirety to read as follows:
"Section 6.5 Net Worth. At all times prior to January 31,
2001, Borrower shall maintain a minimum Net Worth of
Eight-Hundred Thousand Dollars ($800,000), and at all times
during the term of this Loan Agreement on or after January
31, 2001, Borrower shall maintain a minimum Net Worth of One
Million One Hundred Thousand Dollars ($1,100,000)."
(b) Section 2 of the Loan Agreement shall be amended to add the
following:
"Section 2.10 Special Payment. Borrower has accrued on its
balance sheet at August 31, 2000 the sum of One Million Nine
Hundred Forty-one Thousand Five Hundred Nineteen and 09/100
Dollars ($1,941,519.09) as a liability to Lender, representing
the amount of the additional fee accrued through August 31, 2000
to guarantee Lender a minimum compounded annual internal rate of
return of twenty-five percent (25%) at maturity on July 31, 2004
pursuant to Section 2.3(c) of the Loan Agreement (the "Yield
Guarantee at Maturity"). Borrower has agreed to pay to Lender the
sum of One Million Dollars ($1,000,000) of such accrued amount
contemporaneously with the execution of this Third Amendment,
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September 5, 2000 (the "Special Payment"). Accordingly, upon
payment in full of the Term Loan, Lender agrees to credit against
the amount of the Yield Guarantee at Maturity due Lender an
amount equal to the future value of One Million Dollars
($1,000,000), compounded at an assumed interest rate of six
percent (6%) per annum from the date hereof to the date of
payment of the Term Loan. The amount so computed is referred to
as the "Future Credit Amount." For example, if the Loan is paid
in full at maturity on July 31, 2004, the Future Credit Amount
shall be equal to One Million Two Hundred Fifty-five Thousand,
Four Hundred Forty-two and 63/100 Dollars ($1,255,442.63).
Notwithstanding this Special Payment of One Million Dollars
($1,000,000), Borrower shall be liable to Lender for the full
amount of the Yield Guarantee at Maturity as if this Special
Payment had not been made, and will continue to accrue an amount
to satisfy such Yield Guarantee at Maturity on a monthly basis as
if this Special Payment had not been made.
"Section 2.11 Special Prepayment Fee with New Option to Prepay.
Lender agrees that Borrower may prepay the Loan at any time upon
payment of a "Special Prepayment Fee" (in addition to payment in
full of the principal of the Term Loan and any accrued and unpaid
interest and any other fees and expenses or other obligations due
under the Loan Agreement) as follows. The Special Prepayment Fee
shall be equal to (i) the amount of the Yield Guarantee at
Maturity, but discounted to present value to the date of payment
in full of the Loan, using an assumed discount rate of six
percent (6%), minus (ii) the Future Credit Amount, computed in
the same manner as specified in Section 2.10."
3. Reaffirmation of Covenants, Representations and Warranties. Borrower
hereby agrees and covenants that all representations and warranties in
the Loan Agreement including, without limitation, all of those
representations and warranties set forth in Article 4, are true and
accurate as of the date hereof. Borrower further reaffirms all
covenants in the Loan Agreement and reaffirms each of the covenants
set forth in Articles 5 & 6 thereof, as if fully set forth herein,
except to the extent modified by this agreement.
Remainder of page intentionally left blank. Signature page follows.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Loan Agreement as of the 5th day of September, 2000.
LENDER: BORROWER:
THE HILLSTREET FUND, L.P. LANVISION SYSTEMS, INC.
By: HillStreet Capital, Inc. By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇
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Its: Investment Manager J. ▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Date: 9/5/00 Date: 9/5/00
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