REVOLVING CREDIT AGREEMENT
BY AND AMONG
SANDSPORT DATA SERVICES, INC.,
SANDATA, INC.,
SANDATA HOME HEALTH SYSTEMS, INC.,
SANTRAX PRODUCTIVITY, INC.,
SANDATA SPECTRUM, INC.,
SANDATA INTECK, INC.,
SANTRAX SYSTEMS, INC.
AND
MARINE MIDLAND BANK
DATED AS OF APRIL 18, 1997
G:\DATA\LEGAL\MMBAGR.DOC
TABLE OF CONTENTS
SECTION 1: DEFINITIONS.....................................................(v)
1.1 Defined Terms......................................................(v)
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1.2 Accounting Terms....................................................4
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SECTION 2: AMOUNT AND TERMS OF ADVANCES.....................................4
2.1 Commitment..........................................................4
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2.2 Revolving Credit Note...............................................5
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2.3 Notice of Advances..................................................5
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2.4 Cancellation and Reduction of Commitment............................5
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2.5 Commitment Fee......................................................5
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2.6 Increase in Costs or Reduced Return Resulting from Capital
Adequacy Requirements...............................................6
2.7 Interest on the Revolving Credit Note...............................6
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2.8 Optional Prepayments................................................7
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2.9 Alternate Rate of Interest..........................................8
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2.10 Increased Costs.....................................................8
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2.11 Indemnity...........................................................9
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2.12 Continuation and Conversion of Advances............................10
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2.13 Balance Shortfall Fee..............................................10
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2.14 Payments...........................................................10
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2.16 Computations.......................................................11
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SECTION 3: REPRESENTATIONS ...............................................11
3.1 Subsidiaries; Existence............................................11
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3.2 Company and Guarantors; Existence..................................11
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3.3 Corporate Authority................................................12
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3.4 Binding Agreements.................................................12
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3.5 Litigation.........................................................12
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3.6 No Conflicting Law or Agreements...................................12
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3.7 Contingent Liabilities.............................................13
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3.8 Financial Condition................................................13
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3.9 Title to Properties................................................13
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3.10 Taxes..............................................................13
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3.11 Default............................................................14
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3.12 No Burdensome Agreements...........................................14
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3.13 ERISA..............................................................14
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3.14 Operation of Business..............................................14
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SECTION 4: CONDITIONS TO ADVANCES..........................................15
4.1 Conditions to the Initial Advance..................................15
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4.2 Conditions to each Advance.........................................17
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4.3 Approval of Bank's Counsel.........................................17
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SECTION 5: AFFIRMATIVE COVENANTS...........................................17
5.1 Information........................................................17
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5.2 Existence..........................................................20
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5.3 Payment of Obligations.............................................20
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5.4 Insurance..........................................................20
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5.5 Payment of Indebtedness and Performance of Obligations.............20
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5.6 Condition of Property..............................................20
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5.7 Observance of Legal Requirements...................................20
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5.8 Books and Records..................................................21
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5.9 Inspection.........................................................21
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5.10 Financial Requirements............................................21
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5.11 New Subsidiaries..................................................22
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SECTION 6: NEGATIVE COVENANTS.............................................22
6.1 Indebtedness for Borrowed Money...................................22
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6.2 Limitation on Liens...............................................23
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6.3 Merger, Consolidation and Acquisition.............................23
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6.4 Sale of Assets....................................................23
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6.5 Contingent Liabilities............................................24
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6.6 Investments; Loans................................................24
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6.7 Capital Expenditures..............................................24
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6.8 Nature of Business................................................25
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6.9 Transactions with Affiliates......................................25
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6.10 No Lien Senior to or Equal to Loan Documents......................25
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6.11 Change of Management..............................................25
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6.12 Dividends and Purchase of Stock...................................25
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SECTION 7: EVENTS OF DEFAULT..............................................26
SECTION 8: MISCELLANEOUS...................................................28
8.1 Consents to Amendments.............................................28
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8.2 Survival of Representations........................................28
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8.3 Successors and Assigns.............................................28
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8.4 Liability in Acting................................................28
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8.5 The Bank's Rights Not Waived; Cumulative Rights....................29
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8.6 Expenses...........................................................29
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8.7 Other Agreements...................................................29
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8.8 Repayment..........................................................30
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8.9 Applicable Law and Jurisdiction....................................30
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8.10 Counterclaim; Trial by Jury........................................30
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8.11 Entire Agreement...................................................30
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8.12 Headings...........................................................31
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8.13 Notices............................................................31
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8.14 Indemnification....................................................31
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8.15 Authority to Disclose..............................................32
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8.16 Severability.......................................................32
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8.17 Counterparts.......................................................33
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Exhibit A - Revolving Credit Note
REVOLVING CREDIT AGREEMENT
THIS AGREEMENT made as of the 18th day of April, 1997 by and among
SANDSPORT DATA SERVICES, INC., a New York corporation having its principal place
of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Company"), SANDATA, INC., SANDATA HOME HEALTH SYSTEMS, INC., SANDATA
PRODUCTIVITY, INC., SANDATA SPECTRUM, INC. and SANDATA INTECK, INC., each a
Delaware corporation having its principal place of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and SANTRAX SYSTEMS, INC., a New York
corporation having its principal place of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (individually, a "Guarantor" and, collectively, the
"Guarantors") and MARINE MIDLAND BANK, a New York State bank with an office at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bank").
W I T N E S S E T H :
SECTION 1: DEFINITIONS
1.1 Defined Terms: As used in this Agreement the following terms have the
following meanings, unless the context otherwise requires:
Adjusted LIBOR Rate: shall mean the LIBOR Rate plus two (2%) percent.
Advance or Advances: shall mean, collectively, all advances made pursuant
to Section 2.2 hereof whether Prime Rate Advances or LIBOR Rate Advances.
Assignment of Life Insurance: shall have the meaning assigned in Section
4.1(i) hereof.
Business Day: shall mean any day other than a Saturday, Sunday or other day
on which commercial banks in London and/or New York, New York are authorized or
required by law to close.
Commitment: shall have the meaning assigned in Section 2.1 hereof.
Commitment Period: shall mean the period from and including the date hereof
to, but not including, the Termination Date or such earlier date as the
Commitment shall terminate as provided herein.
Consolidated Group: shall mean the Company, the Guarantors and their
respective Subsidiaries.
Default: shall mean any of the events specified in Section 7 hereof,
whether or not any requirement for notice or lapse of time or any other
condition has been satisfied.
Default Rate: shall mean a rate per annum equal to the Prime Rate from time
to time in effect plus three (3%) percent.
ERISA: shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate: shall mean any trade or business (whether or not
incorporated) which together with the Company, a Guarantor or a Subsidiary would
be treated as a single employer under Section 4001 of ERISA.
Event of Default: shall mean any of the events specified in Section 7
hereof, provided that any requirement for notice or lapse of time or any other
condition has been satisfied.
Guarantor or Guarantors: shall mean Sandata, Inc., Sandata Home Health
Systems, Inc., Sandata Productivity, Inc., Sandata Spectrum, Inc., Sandata
Inteck, Inc., Santrax Systems, Inc. and each Person required to guaranty
pursuant to Section 5.11 hereof.
Guaranty or Guaranties: shall have the meaning assigned in Section 4.1(b)
hereof and include the guaranties of each Person required to guaranty pursuant
to Section 5.11 hereof.
Lien: shall mean any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing), any conditional sale or other title retention or trust
agreement, any lease in the nature thereof, and the filing or recording of or
agreement to give any financing statement or other document to be filed or
recorded under the Uniform Commercial Code of any jurisdiction.
LIBOR Borrowing Request: shall mean the written request by the Company to
the Bank for a LIBOR Rate Advance including the date of the LIBOR Rate Advance
and the amount.
LIBOR Period: shall mean a period, if available to the Bank, of ninety
(90)days.
LIBOR Rate: shall mean the per annum interest rate equal to the London
Interbank Offered Rate as shown on the Dow ▇▇▇▇▇ & Company's Telerate Screen, at
approximately 11:00 a.m. (London time) two Business Days prior to the proposed
borrowing date for deposits of United States dollars in an amount comparable to
the principal amount of the proposed LIBOR Rate Advance for the LIBOR Period.
LIBOR Rate Advance: shall mean any Advance bearing interest at the Adjusted
LIBOR Rate.
Loan Documents: shall mean this Agreement, the Note, the Security
Agreements, the Guaranties, the Assignment of Life Insurance and any other
documents executed by the Company or a Guarantor in connection herewith.
Multiemployer Plan: shall mean a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Company, a Subsidiary or any ERISA
Affiliate.
Officers' Certificate: shall mean a certificate signed in the name of the
Company or a Guarantor, by its President, or one of its Vice Presidents, and by
its Treasurer or Secretary.
PBGC: shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
Person: shall mean and include an individual, a partnership, a firm, a
corporation, a trust, a joint venture, an unincorporated organization and a
government or any department or agency thereof.
Plan: shall mean any plan referred to in Section 4021(a) of ERISA in
respect of which the Company, a Subsidiary or an ERISA Affiliate is an
"employer" or a "substantial employer" as said terms are defined in Sections
3(5) and 4001(a)(2) of ERISA, respectively.
Prime Borrowing Request: shall mean the written request by the Company for
a Prime Rate Advance including the date of the Prime Rate Advance and amount.
Prime Rate: shall mean the rate of interest publicly announced by the Bank
from time to time as its prime rate and is a base rate for calculating interest
on certain loans.
Prime Rate Advance: shall mean any Advance bearing interest at the Prime
Rate.
Prohibited Transaction: means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.
Regulatory Changes: shall mean, after the date hereof, the introduction of
any new, or any change in existing, applicable laws, rules or regulations or in
the interpretation or administration thereof by any court or governmental
authority charged with the interpretation or administration thereof, or
compliance by the Bank with any new request or directive by any such court or
authority (whether or not having the force of law).
Reportable Event: shall mean any of the events set forth in Section 4043(b)
of ERISA.
Revolving Credit Note: shall have the meaning assigned in Section 2.2
hereof.
Security Agreements: shall have the meaning assigned in Section 4.1(c)
hereof including any reaffirmations thereof.
Subsidiary: shall mean any corporation of which more than fifty percent
(50%) of the outstanding shares of stock of each class having ordinary voting
power (other than stock having such power only by reason of the happening of a
contingency) is at the time owned or controlled, directly or indirectly, by the
Company or a Guarantor or by one or more Subsidiaries or by the Company or a
Guarantor and one or more Subsidiaries.
Termination Date: shall mean April 18, 2000.
1.2 Accounting Terms: Each accounting term not defined in this Agreement,
and each accounting term partly defined in this Agreement, to the extent not
defined, shall have the meaning given to it under generally accepted accounting
principles consistent with those utilized in preparing the financial statements
referred to in Section 3.8 hereof.
SECTION 2: AMOUNT AND TERMS OF ADVANCES
2.1 Commitment: Subject to the terms and conditions hereof, the Bank agrees
to extend credit to the Company by making loans (each such loan being
hereinafter called an "Advance" and, collectively, "Advances") to the Company
from time to time during the Commitment Period up to an aggregate principal
amount outstanding at any one time of Three Million and 00/100 ($3,000,000.00)
Dollars (the "Commitment"). During the Commitment Period, the Company may use
the Commitment by borrowing, paying and prepaying in whole or in part and
reborrowing, all in accordance with the terms and conditions hereof. Each
Advance shall be in the principal amount of One Hundred Thousand and 00/100
($100,000.00) Dollars or an integral multiple thereof.
2.2 Revolving Credit Note: The Advances made by the Bank pursuant to
Section 2.1 hereof shall be evidenced by a promissory note of the Company,
payable to the order of the Bank, substantially in the form of Exhibit A hereto
(the "Revolving Credit Note"), representing the obligation of the Company to pay
the amount of the Commitment or, if less, the aggregate unpaid amount of all
Advances plus interest thereon as provided in Section 2.7 hereof. The Revolving
Credit Note shall be dated the date hereof and shall be payable to the order of
the Bank on the Termination Date. The date and amount of each Advance, and the
date and amount of each payment of principal on account thereof, shall be
recorded by the Bank at the time of such Advance or payment on the schedule
annexed to and constituting a part of the Note. The aggregate unpaid amount of
Advances set forth in such schedule shall be presumed to be the principal amount
owing and unpaid thereon; provided, however, that the failure of the Bank to
record such information on such schedule shall not in any way affect the
obligation of the Company to pay any amount due under the Revolving Credit Note.
2.3 Notice of Advances: Each request for an Advance whether a LIBOR
Borrowing Request or a Prime Borrowing Request shall be made on a Business Day
no later than 1:00 p.m. (New York time) in writing (including by facsimile
transmission) or orally by telephone directed to the office of the Bank located
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Each such oral request shall
be confirmed not later than one (1) Business Day thereafter in writing
(including by facsimile transmission). The Company may not make a LIBOR
Borrowing Request if the requested LIBOR Rate Advance would have an expiration
date later than the Termination Date. The Bank shall make the funds for each
Advance so requested available at such office in immediately available funds by
the close of business on the Business Day of such request.
2.4 Cancellation and Reduction of Commitment: The Commitment may be
canceled or reduced by the Company at any time and from time to time prior to
the Termination Date in whole or in part, in amounts of One Hundred Thousand and
00/100 ($100,000.00) Dollars or multiples thereof on one (1) Business Day prior
written notice thereof to the Bank; provided, however, that no such cancellation
or reduction shall be effective to the extent that it would reduce the
Commitment to an amount less than the aggregate unpaid amount of the Advances as
of the date of reduction unless such excess unpaid amount is simultaneously
prepaid. The Commitment, or part thereof, so reduced or canceled shall not be
reinstated.
2.5 Commitment Fee: The Company agrees to pay to the Bank a commitment fee
on the average daily unused portion of the Commitment from the date hereof until
the Termination Date, as such Commitment may have been reduced pursuant to
Section 2.4 hereof, at the rate of one quarter of one (1/4%) percent per annum,
payable quarterly in arrears on the first day of each March, June, September and
December commencing June 1, 1997 to and including the Termination Date.
2.6 Increase in Costs or Reduced Return Resulting from Capital Adequacy
Requirements: If any law, regulation or guideline or any change therein or
interpretation or application thereof by any regulatory body, court,
administrative or governmental authority charged with the interpretation or
administration thereof, or compliance with any request, directive, ruling,
decree, judgment or recommendation of any regulatory body, court, administrative
or governmental authority now existing or hereafter adopted (whether or not
having the force of law) imposes, modifies or deems applicable any capital
adequacy, increased capital adequacy or similar requirement and the result is to
increase the cost of, or reduce the rate of return on, the Bank's (or the Bank
affiliate's or participant's) capital as a consequence of its obligations
hereunder, the Bank shall notify the Company of such fact. The Company and the
Bank shall thereafter in good faith negotiate an adjustment to the fees payable
hereunder which, in the reasonable judgment of the Company and the Bank, will
adequately compensate the Bank (or the Bank affiliate or participant) in light
of these circumstances. In the event that the Company and the Bank are unable to
agree on such adjustment within thirty (30) days after the date on which the
Bank sends such notice to the Company, the Company shall on the later of such
30th day after notice or the date such increased cost or reduced return takes
effect, unless otherwise agreed to by the Bank (or the Bank affiliate or
participant), prepay all Advances and terminate the Commitment on the 30th day.
2.7 Interest on the Revolving Credit Note: a) The Revolving Credit Note
shall bear interest on the unpaid principal balance thereof at a rate per annum
equal to (i) with respect to Prime Rate Advances, the Prime Rate and (ii) with
respect to LIBOR Rate Advances, the Adjusted LIBOR Rate. For Prime Rate Advances
the interest rate shall change when and as the Prime Rate is changed, and any
such change in such Prime Rate shall become effective on the day on which such
change is adopted.
b) Interest accrued on each Advance shall be payable, without duplication,
on:
(i) with respect to any portion of any Advance repaid or prepaid
pursuant to this Agreement, the date of such repayment or prepayment, as
the case may be;
(ii) with respect to that portion of the outstanding principal amount
of all Advances maintained as Prime Rate Advances, the first day of each
month, commencing with the first such date following the date of the making
of such Advances;
(iii) with respect to that portion of the outstanding principal amount
of all Advances maintained as LIBOR Rate Advances, the last day of each
applicable LIBOR Period;
(iv) with respect to that portion of the outstanding principal amount
of all Advances converted into Prime Rate Advances on a day when interest
would not otherwise have been payable pursuant to Sections 2.7(b)(ii) or
(iii), the date of such conversion; and
(v) on the Termination Date.
c) If all or a portion of the principal or interest of any Advance shall
not be paid when due (whether at the stated or any accelerated maturity of such
Advance) or if any fee or other amount due hereunder shall not be paid when due,
all Advances, and such interest, fee or amount due hereunder, to the extent
permitted by applicable law, shall bear interest (payable on demand, and in any
event on the last day of each month, and computed daily on the basis of a
360-day year for actual days elapsed) (i) with respect to Prime Rate Advances,
at the Default Rate until paid and (ii) in the case of LIBOR Rate Advances at a
rate which shall be the greater of the Default Rate or two percent (2%) per
annum in excess of the rate applicable to such LIBOR Rate Advance until the
expiration of the LIBOR Period applicable to such LIBOR Rate Advance, at which
time the LIBOR Rate Advance will automatically be converted into a Prime Rate
Advance and until paid shall bear interest at the Default Rate.
d) Ntwithstanding anything to the contrary contained in this Agreement, the
rate of interest payable on the Revolving Credit Note shall never exceed the
maximum rate of interest permitted under applicable law. If at any time the rate
of interest otherwise prescribed herein shall exceed such maximum rate, then,
ipso facto, the obligation of the Company to pay interest or perform such act or
requirement shall be reduced to the limit authorized under such law, so that in
no event shall the Company be obligated to pay any interest, perform any act or
be bound by any requirement which would result in payment of interest in excess
of an amount which is lawfully collectible. All sums in excess of those lawfully
collectible as interest shall, without further agreement or notice between or by
any party hereto, be deemed applied to principal immediately upon receipt of
such monies by the Bank, with the same force and effect as though the Bank had
specifically designated such amount to be so applied to principal.
2.8 Optional Prepayments: The Company may at its option at any time or from
time to time prepay an Advance in whole or in part, without premium or penalty
but subject to the indemnity provisions of Section 2.11 hereof with respect to
LIBOR Rate Advances, upon at least three (3) Business Days prior written notice
to the Bank specifying the date and the amount of prepayment. Notwithstanding
the foregoing, the Company may not prepay a LIBOR Rate Advance prior to the last
day of the LIBOR Period. Partial prepayments shall be in the amount of One
Hundred Thousand and 00/100 ($100,000.00) Dollars or an integral multiple
thereof and each prepayment shall be made together with interest accrued thereon
to and including the date of prepayment.
2.9 Alternate Rate of Interest: If (i) by reason of any Regulatory Change,
the Bank determines that, by reason of circumstances affecting the London
interbank market generally, adequate and fair means do not or will not exist for
determining the LIBOR Rate, (ii) by reason of any Regulatory Change, the Bank
becomes restricted in the amount which it may hold of a category of liabilities
which includes deposits by reference to the LIBOR Rate or a category of assets
which includes loans which bear interest at a rate determined in part by
reference to the LIBOR Rate, (iii) by reason of any Regulatory Change, it shall
be unlawful for the Bank to maintain a LIBOR Rate Advance, or any portion
thereof, bearing interest at the Adjusted LIBOR Rate, (iv) in the exclusive
judgment of the Bank, deposits are not available to the Bank in the
international interbank market in the requisite amounts and for the requisite
durations, (v) in the exclusive judgment of the Bank, the Adjusted LIBOR Rate
does not adequately reflect the cost to the Bank of making or maintaining a
LIBOR Rate Advance then, in any such case, any LIBOR Rate Advance shall bear
interest at the Prime Rate. If the Bank determines that because of a change in
circumstances the Adjusted LIBOR Rate is again available to the Company
hereunder, the Bank will also advise the Company, and the Company may convert
the rate of interest payable hereunder to the Adjusted LIBOR Rate at any time
(provided the Adjusted LIBOR Rate is otherwise available hereunder) by making
such election in accordance with, and subject to the conditions of, this
Agreement.
2.10 Increased Costs: If, at any time, any Regulatory Change: (i) shall
subject the Bank to any tax, duty or other charge with respect to this
Agreement, except an income tax, based upon the charging and collecting of
interest hereunder at the Adjusted LIBOR Rate or shall change the basis of
taxation or payments to the Bank of the principal of or interest on the LIBOR
Rate Advances, (ii) shall result in the imposition, modification or deemed
applicability of any reserve, special deposit or similar requirements against
assets of, deposits with or for the account of, or credit extended by, the Bank;
(iii) shall, because of the existence of this Agreement, affect the amount of
capital required or expected to be maintained by the Bank, or any corporation
controlling the Bank; or (iv) shall impose on the Bank or the London interbank
market any other condition affecting this Agreement or the charging and
collecting of interest hereunder at the Adjusted LIBOR Rate and the result of
any of the foregoing is, in the Bank's reasonable judgment, (a) to increase the
cost to the Bank of charging and collecting interest hereunder at the Adjusted
LIBOR Rate, or (b) to reduce the return on the Bank's capital or the amount of
any sum received or receivable by the Bank under this Agreement by an amount
deemed by the Bank to be material, upon demand then, by the Bank, the Company
agrees to pay to the Bank such additional amount or amounts as will compensate
the Bank for such increased cost or reduction or, upon receipt of such demand,
request in writing that such Advance be converted to a Prime Rate Advance. Such
payments shall be made on the first date for payment of interest hereunder
following the date of the demand by the Bank and on each such payment date
thereafter or shall be paid promptly on demand if the Borrower is not advised of
the amount of such payment prior to any such payment date. Determinations by the
Bank for purposes of this paragraph of the effect of any Regulatory Change on
its costs of making or maintaining LIBOR Rate Advances and of the additional
amounts required to compensate the Bank in respect thereof, shall be conclusive
absent manifest error in calculation, provided that such determinations are made
in good faith.
2.11 Indemnity: If there is a prepayment of any LIBOR Rate Advance on a
date other than the expiration of the LIBOR Period for any reason whatsoever
including, but not limited to:
a) the occurrence of any Event of Default under this Agreement;
b) the failure of the Borrower to borrow a LIBOR Rate Advance after
sending notice of the amount with respect to the making of any such
Advance;
c) the receipt or recovery by the Bank of all or any part of a LIBOR
Rate Advance prior to the maturity or the last day of the LIBOR Period
thereof (whether by prepayment, acceleration or otherwise) unless due
solely to the conversion of a LIBOR Rate Advance into a Prime Rate Advance
pursuant to Section 2.9 or 2.10 hereof; or
d) the conversion at the Company's request, prior to the last day of
an applicable LIBOR Period, of a LIBOR Rate Advance into a Prime Rate
Advance;
than the Company shall pay to the Bank, as liquidated damages and not as a
penalty, a fee (the "Liquidation Fee") equal to the losses (including but not
limited to, lost profits of the Bank), costs and expenses of the Bank in
connection with such prepayment as determined by the Bank, which payment shall
be made by the Company to the Bank on the date on which such prepayment is made.
The calculations made by the Bank to ascertain such Liquidation Fee shall be
conclusive absent manifest error in calculation by the Bank, provided that such
calculations are made in good faith. The Bank, upon the written request of the
Company, shall advise the Company in writing of the amount of the Liquidation
Fee applicable to any such prepayment including an explanation of how the
Liquidation Fee was calculated.
2.12 Continuation and Conversion of Advances. The Company shall have the
right at any time on prior irrevocable written notice to the Bank as specified
in Section 2.3 to continue any LIBOR Rate Advance into a subsequent LIBOR
Period, (ii) to convert any LIBOR Rate Advance into a Prime Rate Advance, and
(iii) to convert any Prime Rate Advance into a LIBOR Rate Advance, subject to
the following:
(a) in the case of a conversion of less than all of the outstanding
Advances, the aggregate principal amount of Advances converted shall not be
less than $100,000 and shall be an integral multiple thereof; and
(b) no LIBOR Rate Advance shall be converted at any time other than at
the end of a LIBOR Period applicable thereto.
The Company directs the Bank to continue a LIBOR Rate Advance into a subsequent
LIBOR Period, on the last day of the LIBOR Period thereof without any further
notice from the Company unless the Company specifies in writing in accordance
with Section 2.3 that such Advance shall be converted into a Prime Rate Advance.
Notwithstanding anything to the contrary contained above, if a Default or an
Event of Default shall have occurred and is continuing, no LIBOR Rate may be
continued into a subsequent LIBOR Period and no Prime Rate Advance may be
converted into a LIBOR Rate Advance.
2.13 Balance Shortfall Fee: The Company shall pay a balance shortfall fee
for the preceding calendar quarter commencing June 1, 1997 at a rate per annum
equal to the monthly average 91 day treasury ▇▇▇▇ rate in effect for the quarter
multiplied by the average daily difference between $50,000 and the amount of
aggregate free balances maintained by the Consolidated Group at the Bank for the
quarter. Free balances shall mean balances in non-interest bearing accounts
maintained by the Company or a Guarantor in excess of the amounts required to
compensate the Bank for services rendered, determined in accordance with the
Bank's standard system of analysis for similar accounts. Nothing contained
herein shall require the Consolidated Group to maintain balances.
2.14 Payments: The Company authorizes the Bank to charge its account
maintained at the Bank for each payment of principal or interest due under the
Revolving Credit Note or otherwise under this Agreement on the due date thereof.
If any payment of the Revolving Credit Note or otherwise under this Agreement
becomes due and payable on a Saturday, Sunday or legal holiday under the laws of
the State of New York, the maturity thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable during such
extension.
2.15 Use of Proceeds: The Company hereby covenants and agrees that the
proceeds of (y) the initial Advance will be used to repay indebtedness to the
Bank under the existing revolving credit facility with the Bank dated as of
April 20, 1995 and (z) subsequent Advances will be used to carry projected
increases in accounts receivable due to growth and to support computer hardware
purchases and software development costs. No part of the proceeds of the
Advances will be used directly or indirectly to finance the acquisition of new
companies, including without limitation, Permitted Acquisitions, as defined in
Section 6.2 hereof, or new products or for any purpose that directly or
indirectly violates, or is inconsistent with, the provisions of Regulation U or
X of the Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect.
2.16 Computations: Interest on the Advances and any other amounts payable
hereunder shall be computed on the basis of a year of three hundred sixty (360)
days for actual days elapsed (including the first day but excluding the last)
occurring in the period for which payable.
SECTION 3: REPRESENTATIONS
In order to induce the Bank to enter into this Agreement and to make the
Advances herein provided for the Company and the Guarantors, jointly and
severally, represent and warrant to the Bank that:
3.1 Subsidiaries; Existence: Set forth on Schedule I annexed hereto is a
list setting forth the name, state of incorporation and percentage ownership of
each Subsidiary on the date hereof. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, and has the corporate power to own its assets and to transact
the business in which it is presently engaged and as proposed to be conducted
and is duly qualified as a foreign corporation to do business and is in good
standing in each jurisdiction where the failure to so qualify would have a
material adverse effect on the business, financial condition or operations of
the Company or such Subsidiary.
3.2 Company and Guarantors; Existence: The Company and each of the
Guarantors is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, and has the corporate
power to own its assets and to transact the business in which it is presently
engaged and as proposed to be conducted and is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the failure to so qualify would have a material adverse effect on the business,
financial condition or operation of the Company or any Guarantor.
3.3 Corporate Authority: The execution, delivery and performance of this
Agreement, the borrowings hereunder and the execution and delivery of the
Revolving Credit Note and all other Loan Documents executed in connection with
this Agreement by the Company and the Guarantors have been duly authorized by
all requisite corporate action. No consent or approval of stockholders or
consent, approval, license or authorization of, or registration or declaration
with, any governmental or administrative authority, instrumentality, bureau or
agency is required as a condition to the execution, delivery, validity or
enforceability of this Agreement or the Loan Documents executed in connection
herewith except those that have been obtained and delivered to the Bank.
3.4 Binding Agreements: This Agreement and the other Loan Documents when
issued and delivered pursuant hereto for value received, will constitute valid
and legally binding obligations of the Company and the Guarantors enforceable in
accordance with their respective terms except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally.
3.5 Litigation: Except as set forth on Schedule I annexed hereto, there are
no actions, suits, proceedings or investigations pending or threatened, to the
knowledge of the Company, a Subsidiary or any Guarantor, by or against the
Company, a Subsidiary or any Guarantor at law or in equity (whether or not
purportedly on behalf of the Company, a Subsidiary or a Guarantor) before or by
any Federal or state court, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, which in any case or in
the aggregate, if adversely determined, could reasonably be expected to have any
material adverse change in the business, operations, properties or assets, or in
the condition, financial or otherwise, of the Company, any Guarantor or a
Subsidiary or the ability of the Company or any Guarantor to perform their
respective obligations under this Agreement or the other Loan Documents. Neither
the Company nor any Guarantor is in default with respect to any order, decree or
judgment of any court, arbitrator or governmental authority, bureau or agency.
3.6 No Conflicting Law or Agreements: There is no charter, by-law or
preference stock provision of the Company or any Guarantor, and no provision of
any existing mortgage, indenture, contract, shareholder agreement, credit
agreement or other agreement binding on the Company or any Guarantor or
affecting their respective properties, which would conflict with, result in a
breach of or constitute a default thereunder or in any way prevent the
execution, delivery, or carrying out of the terms of this Agreement or the other
Loan Documents. Neither the Company nor a Guarantor is a party to any contract
or agreement or subject to any charge or other corporate restriction which
materially adversely affects its business, property, assets or financial
condition.
3.7 Contingent Liabilities: Except as set forth in the financial statements
delivered to the Bank pursuant to Section 3.8 hereof, neither the Company nor a
Guarantor is liable, directly or indirectly, in connection with the obligations,
stock or dividends of any other Person, whether by guarantee, endorsement,
agreement to supply or advance funds, agreement to maintain working capital or
net worth, agreement to purchase or repurchase goods or services whether or not
such goods or services are actually acquired, any other so-called "take-or-pay"
contract, or otherwise.
3.8 Financial Condition: The consolidated balance sheet of the Consolidated
Group as of May 31, 1996 together with the related consolidated statements of
income, retained earnings and cash flows for the fiscal year then ended audited
by ▇▇▇▇▇▇ & Kleigman, CPAs and the interim consolidated balance sheet of the
Consolidated Group as of November 30, 1996 together with the related
consolidated statements of income, retained earnings and cash flows for the
fiscal quarter then ended prepared by management to the Company and certified by
the chief financial officer of the Company and delivered to the Bank, are
complete and correct and fairly present the financial condition of the
Consolidated Group, and the results of the Consolidated Group's operations as of
the dates and for the periods referred to and have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved (subject to year-end adjustments in the case of the interim
statements). There has been no material adverse change in the material business,
properties, condition (financial or otherwise) or operations of the Company or
any Guarantor since the date of said financial statements.
3.9 Title to Properties: The Company, each of the Guarantors and their
Subsidiaries have valid leases of or good and marketable title to their
respective properties and assets, including the properties and assets reflected
in the balance sheets described in Section 3.8. Such properties and assets are
not subject to any Lien, except as reflected in such balance sheets.
3.10 Taxes: The Company, each of the Guarantors and their Subsidiaries have
filed or have obtained extensions for the filing of, all Federal tax returns
which are required to be filed and all state and other tax returns which the
Company and the Guarantors believe in good faith are required to be filed and
have paid all taxes shown as due. All the tax liabilities of the Company, each
of the Guarantors and their Subsidiaries are adequately provided for as of the
date hereof.
3.11 Default: No Default or Event of Default has occurred and is
continuing, or will occur as the result of the consummation of the transactions
contemplated hereby and neither the Company, any Guarantor nor any Subsidiary is
in default in any material respect in the observance or performance of any of
the covenants, terms or conditions of any agreement or instrument to which it is
a party.
3.12 No Burdensome Agreements: Neither the Company, any Guarantor nor any
Subsidiary is (a) subject to any restriction under its certificate of
incorporation or by-laws which materially adversely affects the business,
properties, assets, operations or financial condition of the Company, any
Guarantor or any Subsidiary or (b) a party to any agreement or instrument which
materially adversely affects the business, properties, assets, operations or
financial condition of the Company, any Guarantor or any Subsidiary.
3.13 ERISA: The Company, each Guarantor, each Subsidiary and each ERISA
Affiliate are in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan; no notice of intent to
terminate a Plan has been filed nor has any Plan been terminated; no
circumstances exist which constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer a Plan, nor has the PBGC instituted such proceedings; neither the
Company, a Guarantor, a Subsidiary nor an ERISA Affiliate has completely or
partially withdrawn under Sections 4201 or 4202 or ERISA from a Multiemployer
Plan; the Company, each Subsidiary, each Guarantor, and each ERISA Affiliate
have met their minimum funding requirements under ERISA with respect to all of
their Plans and the present fair market value of all Plan assets meets or
exceeds the present value of all vested benefits under each Plan, as determined
on the most recent valuation date of the Plan in accordance with the provisions
of ERISA and the regulations thereunder for calculating the potential liability
of the Company, each Subsidiary, each Guarantor or each ERISA Affiliate to the
PBGC or the Plan under Title IV of ERISA; and neither the Company, a Guarantor,
a Subsidiary nor an ERISA Affiliate has incurred any liability to the PBGC under
ERISA.
3.14 Operation of Business: The Company, the Guarantors and their
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, to conduct their respective
businesses substantially as now conducted and as presently proposed to be
conducted and the Company, the Guarantors and their Subsidiaries are not in
violation of any valid rights of others with respect to any of the foregoing.
SECTION 4: CONDITIONS TO ADVANCES
4.1 Conditions to the Initial Advance: The obligation of the Bank to make
the initial Advance hereunder is subject to compliance with the following
conditions precedent to the satisfaction of the Bank:
(a) Revolving Credit Note: There shall have been delivered to the Bank
the Revolving Credit Note duly executed by the Company and payable to the
order of the Bank in the form of Exhibit A.
(b) Guaranties: There shall have been delivered to the Bank unlimited
continuing guaranties of the Guarantors on the Bank's standard form
including corporate resolutions and, except with respect to Sandata, Inc.,
shareholder consents (collectively, the "Guaranties").
(c) Security Agreements: There shall have been delivered to the Bank
equipment security agreements of the Company and the Guarantors on the
Bank's standard form (collectively, the "Security Agreements") granting the
Bank a first priority security interest in the Company's
and each Guarantor's equipment together with
(degree) security agreement questionnaires
(degree) UCC-11 searches
(degree) UCC-3 financing statement amendments and/or
UCC-1 financing statements, as appropriate
(d) Amendment to IRB Guaranty: There shall have been delivered to the
Bank an amendment to the guaranty executed in connection with the 1994
Nassau County Individual Development Revenue Bonds (▇▇▇▇▇▇▇ Sibling Realty,
Inc. Project).
(e) Insurance Certificate: There shall have been delivered to the Bank
an insurance certificates naming the Bank as loss payee with respect to the
Company's and each Guarantor's equipment.
(f) Landlord Waiver: There shall have been delivered to the Bank
landlord waivers from the landlords of each site at which any equipment of
the Company or the Guarantors is located.
(g) Certified Copies and Other Documents: There shall have been
delivered to the Bank such certificates and other documents relating to the
Company and the Guarantors with respect to the matters herein contemplated
as the Bank may reasonably request, including but not
limited to:
(i) With respect to the Company and each Guarantor, its
certificate of incorporation certified by the Secretary of State of
the Company's and each Guarantor's state of incorporation;
(ii) With respect to the Company and each Guarantor, certificates
of good standing from the Secretary of State of the Company's and each
Guarantor's state of incorporation and, if not incorporated under the
laws of the State of New York, a certificate of authority to do
business in New York from the New York Secretary of State;
(iii) An Officers' Certificate of the Company dated the date of
this Agreement certifying, (w) true and correct copies of the by-laws
and any amendments thereto of the Company as in effect on the date of
adoption of the resolutions referred to in (x) of this subsection
(iii), (x) true and correct copies of resolutions adopted by the board
of directors of the Company (1) authorizing the Advances from the Bank
hereunder and the execution, delivery and performance by the Company
of this Agreement and any other Loan Document executed in connection
herewith and the granting of the security interest as contemplated by
the Company's Security Agreement, (2) approving forms in substantially
execution form of this Agreement and the other Loan Documents, and (3)
authorizing officers of the Company to execute and deliver this
Agreement and the other Loan Documents and any related documents, (y)
the incumbency and specimen signatures of the officers of the Company
executing any documents delivered to the Bank by the Company in
connection with the Advances, and (z) the truth of the representations
and warranties contained in Section 3 hereof;
(iv) An Officers' Certificate of each Guarantor dated the date of
this Agreement certifying (x) true and correct copies of the by-laws
and any amendments thereto of such Guarantor as in effect on the date
of adoption of the resolutions referred to in the Guaranties, (y) the
incumbency and specimen signatures of the officers of the Guarantor
executing its Guaranty and (z) the truth of the representations and
warranties contained in Section 3 hereof.
(h) Opinion of Counsel: There shall have been delivered to the Bank an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., counsel to the Company and the
Guarantors, dated the date of this Agreement in form and substance
satisfactory to the Bank and its counsel.
(i) Assignment of Life Insurance Policy: There shall have been
delivered to the Bank an Assignment of Life Insurance Policy as Collateral
("Assignment of Life Insurance") on the Bank's standard form on the life of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in the amount of $2,000,000.00 acknowledged by the home
office of the insurer together with a life insurance questionnaire on the
Bank's standard form and the original life insurance policy.
(j) Fees: There shall have been delivered to the Bank evidence of
payment of all fees associated with this Agreement including the Bank's
commitment fee and fees and disbursements of the Bank's counsel.
4.2 Conditions to each Advance: The obligation of the Bank to make each
Advance to be made by it hereunder shall also be subject to the following
conditions precedent: (i) the Company and the Guarantors shall have complied
with and shall be in compliance with all the terms, covenants and conditions of
this Agreement; (ii) there shall exist no Default or Event of Default; (iii) the
representations and warranties contained in Section 3 hereof shall be true and
correct; and (iv) there shall have been delivered to the Bank a certificate to
the foregoing effect executed by a duly authorized officer of the Company and
the Guarantors.
4.3 Approval of Bank's Counsel: All of the documentation specified in
Section 4.1 shall be in form and substance satisfactory to the Bank and its
counsel and all legal matters incident to the Advances hereunder shall be
satisfactory to counsel to the Bank.
SECTION 5: AFFIRMATIVE COVENANTS
The Company and the Guarantors, jointly and severally, covenant and agree
that, so long as the Commitment remains in effect or the Revolving Credit Note
remains outstanding and unpaid or any other amount is owing to the Bank
hereunder and until the fulfillment of all obligations hereunder to:
5.1 Information: Furnish to the Bank:
(1) As soon as possible, but not more than one hundred thirty (130)
days after the close of each fiscal year, the Consolidated Group's Form
10-K and the financial statements of the Consolidated Group including a
consolidated balance sheet with related consolidated statements of income,
retained earnings and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
prepared in accordance with generally accepted accounting principles
consistently applied and audited by ▇▇▇▇▇▇ & Kliegman, CPAs or another
accounting firm acceptable to the Bank. Such financial statements shall be
accompanied by a certificate of such accounting firm stating whether the
audit revealed any Default or Event of Default and, if so, stating the
facts with respect thereto and whether the same has been cured prior to the
date of such certificate, and, if not, what action is proposed to be taken
with respect thereto.
(2) As soon as possible, but not more than ninety (90) days after the
close of each of the first three fiscal quarters of each fiscal year, the
Consolidated Group's Form 10-Q and the financial statements of the
Consolidated Group including a consolidated balance sheet with related
consolidated statements of income, retained earnings and cash flows for the
immediately preceding fiscal quarter, setting forth in each case in
comparative form the figures for the comparable fiscal quarter of the
previous year, all prepared in accordance with generally accepted
accounting principles consistently applied (subject to year end
adjustments) prepared by management to the Company and certified by the
chief financial officer of the Company. Such financial statements shall be
accompanied by an Officers' Certificate stating whether a Default or Event
of Default has occurred and, if so, stating the facts with respect thereto
and whether the same has been cured prior to the date of such certificate,
and, if not, what action is proposed to be taken with respect thereto. Such
financial statements shall be accompanied by an Officers' Certificate
evidencing compliance with the financial covenants contained in Section
5.10 hereof, in form and detail acceptable to the Bank.
(3) Prompt written notice if: (i) any obligation (other than an
obligation under this Agreement) of the Company, a Guarantor or a
Subsidiary for borrowed money or for the deferred purchase price of any
property is declared or shall become due and payable prior to its stated
maturity, (ii) the holder of any note (other than the Revolving Credit
Note), or other evidence of indebtedness, certificate or security
evidencing any such obligation, has the right to declare such obligation
due and payable prior to its stated maturity, or (iii) to the knowledge of
any officer of the Company or any Guarantor there shall occur a Default or
an Event of Default hereunder.
(4) Prompt written notice of: (i) any citation, summons, subpoena,
order to show cause or other order naming the Company, a Guarantor or a
Subsidiary a party to any proceeding before any governmental body which if
adversely determined would have a material adverse effect on the business,
financial condition or operations of the Company, a Guarantor or a
Subsidiary, and include with such notice a copy of such citation, summons,
subpoena, order to show cause or other order, (ii) any lapse or other
termination of a license, permit or other authorization issued to the
Company, a Guarantor or a Subsidiary by any governmental body or Person,
which lapse or other termination would have a material adverse effect on
the property, business, profits or conditions (financial or otherwise) of
the Company, a Guarantor or a Subsidiary, (iii) any refusal by any
governmental body or Person to renew or extend such license, permit or
other authorization, and (iv) any suit between the Company, a Guarantor or
a Subsidiary and any governmental body or Person or formal demand made upon
the Company, a Guarantor or a Subsidiary by any governmental body or Person
which if adversely determined would have a material adverse effect on the
property, business, profits or conditions (financial or otherwise) of the
Company, a Guarantor or a Subsidiary.
(5) Prompt written notice in the event that: (i) the Company, a
Guarantor or a Subsidiary shall fail to make any payment when due and
payable under any Plan or (ii) the Company, a Guarantor or a Subsidiary
shall receive notice from the Internal Revenue Service or the Department of
Labor that it shall have failed to meet the minimum funding requirements of
any Plan, and include therewith a copy of such notice.
(6) Copies of any request for a waiver of the funding standards or any
extension of the amortization periods required by Sections 303 and 304 of
ERISA, or Section 402 of the Code, promptly after any such request is
submitted to the Department of Labor or the Internal Revenue Service, as
the case may be.
(7) Promptly after a Reportable Event occurs which may result in a
termination of a Plan, or the Company, a Guarantor or a Subsidiary receives
notice that the PBGC has instituted or intends to institute proceedings
under Section 4042 of ERISA to terminate a Plan, a copy of any notice of
such Reportable Event which is filed with the PBGC, or any notice delivered
by the PBGC evidencing its institution of such proceedings or its intent to
institute such proceedings, or any notice to the PBGC that a Plan is to be
terminated, as the case may be.
(8) Promptly upon becoming aware of the occurrence of any Prohibited
Transaction in connection with any Plan, a written notice specifying the
nature thereof, what action the Company, a Guarantor or a Subsidiary is
taking or proposes to take with respect thereto, and, when known, any
action taken by the Internal Revenue Service with respect thereto.
(9) Promptly after the filing thereof, copies of each annual report
required to be filed pursuant to Section 103 of ERISA and copies of any
other reports required to be filed with respect to any Plan.
(10) Promptly upon becoming available, copies of all regular, periodic
or special reports, schedules, and other material which the Company, a
Guarantor or a Subsidiary may now or hereafter be required to file with or
deliver to any securities exchange or to the Securities and Exchange
Commission, or any other governmental body succeeding to the functions
thereof.
(11) Prior to entering into a Permitted Acquisition, as defined in
Section 6.2 hereof, written notice to the Bank outlining the terms of such
acquisition in form and detail reasonably acceptable to the Bank.
(12) Promptly upon the occurrence of any change to Schedule I
delivered pursuant hereto, a revised Schedule I.
(13) Promptly upon request therefor, such other information and
reports relating to the financial condition and operations of the Company,
a Guarantor or a Subsidiary as the Bank at any time or from time to time
may reasonably request.
5.2 Existence: Preserve and maintain, and cause each Subsidiary to
preserve and maintain, its corporate existence and its rights, privileges
and franchises.
5.3 Payment of Obligations: Pay and discharge, and cause each
Subsidiary to pay and discharge, all taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits, or upon
any property belonging to it, prior to the date upon which penalties attach
thereto except where contested in good faith and by proper proceedings if
appropriate reserves are maintained with respect thereto.
5.4 Insurance: Maintain and cause each Subsidiary to maintain
insurance, at all times throughout the term of this Agreement, on its
property with responsible insurance carriers licensed to do business in the
State of New York, against such risks, loss, damage and liability
(including liability to third parties) and in such amounts as is
customarily maintained by similar businesses, including, without
limitation, public liability and workers' compensation insurance, and file
with the Bank within ten (10) days after request therefor a detailed list
of such insurance then in effect, stating the names of the carriers
thereof, the policy numbers, the insureds thereunder, the amounts of
insurance, dates of expiration thereof and the property and risks covered
thereby, together with a certificate of a duly authorized officer of the
Company or a Guarantor certifying that in the opinion of the management of
the Company or a Guarantor such insurance is adequate in nature and amount,
complies with the obligations of the Company or a Guarantor under this
paragraph, and is in full force and effect.
5.5 Payment of Indebtedness and Performance of Obligations: Pay and
discharge, and cause each Subsidiary to pay and discharge promptly all
lawful claims for labor, materials and supplies or otherwise which, if
unpaid, would have a material adverse effect on the property, business,
profits or conditions (financial or otherwise) of the Company, a Guarantor
or a Subsidiary.
5.6 Condition of Property: Maintain, protect and keep in good repair,
working order and condition, all property of the Company and the Guarantors
used or required in connection with the proper conduct of the Company's or
Guarantor's business, ordinary wear and tear excepted and
cause each Subsidiary to do the same.
5.7 Observance of Legal Requirements: Observe and comply and cause
each Subsidiary to observe and comply in all respects with all laws
(including but not limited to ERISA), ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all governmental bodies which now or at any time thereafter
may be applicable to the Company, a Guarantor or a Subsidiary, a violation
of which would have a material adverse effect on the property, business,
profits or conditions (financial or otherwise) of the Company, a Guarantor
or a Subsidiary except where contested in good faith and by proper
proceedings if appropriate reserves, in the Bank's reasonable judgment, are
maintained with respect thereto.
5.8 Books and Records: Keep, and cause each Subsidiary to keep, proper
books of record and account.
5.9 Inspection: At any reasonable time and from time to time, upon
reasonable notice and during normal business hours, permit the Bank,
through officers or employees or authorized representatives to visit and
inspect any of the properties of the Company or a Guarantor and its
Subsidiaries and to examine the minute books, books of account, reports and
other records of the Company and its Subsidiaries and make copies thereof
or extracts therefrom, and to discuss the affairs, finances and accounts of
the Company and its Subsidiaries with their respective principal officers
or with the Company's or a Guarantor's independent accountants.
5.10 Financial Requirements: (a) Maintain on the date of this
Agreement and at all times thereafter, or for the periods indicated below,
the following financial requirements on a consolidated basis with respect
to the Consolidated Group:
(i) Working capital of at least $1,000,000.00. Solely for
purposes of calculating compliance with the covenant contained in this
Section 5.10(a)(i), the Advances and notes due Affiliates which are
evidenced by long term promissory notes shall not be considered
Current Liabilities. Current Liabilities shall mean all indebtedness
for borrowed money payable within one year.
(ii) Net Worth of at least:
$4,200,000 from the date hereof to and including May 30, 1997;
$5,500,000 from May 31, 1997 to and including May 30, 1998, to be
increased by $250,000 in each fiscal year thereafter.
(iii) A total liabilities to Net Worth ratio of not more than 1.0
to 1.0.
(iv) A Debt Service Coverage Ratio of at least 1.2 to 1.0 at each
fiscal year end.
(v) An Interest Coverage Ratio of at least 4.0 to 1.0 at each
fiscal year end.
As used in this Section:
Net Worth shall mean the sum of retained earnings, additional paid in
capital plus common stock less net intangible assets and loans and advances to
officers and Affiliates of Sandata, Inc. and its Subsidiaries all as determined
in accordance with generally accepted accounting principles consistently
applied. Solely for purposes of calculating compliance with the covenants
contained in Section 5.10(a)(ii) and (iii), leasehold improvements and
unamortized software costs shall not be considered intangible assets.
Debt Service Coverage Ratio shall mean a ratio of earnings before interest,
taxes, depreciation and amortization to total debt service.
Interest Coverage Ratio shall mean a ratio of earnings before interest,
taxes, depreciation and amortization to total interest expense.
(b) Realize on a consolidated basis with respect to the Consolidated Group
for each fiscal year, a net profit after taxes determined in accordance with
generally accepted accounting principles consistently applied of at least $1.00.
5.11 New Subsidiaries: Cause any wholly owned Subsidiary formed after the
date of this Agreement to execute and deliver to the Bank an unlimited
continuing Guaranty on the Bank's standard form and obtain or cause to be
obtained resolutions authorizing same and shareholder consents thereto.
SECTION 6: NEGATIVE COVENANTS
The Company and the Guarantors, jointly and severally, agree that, so long
as the Commitment remains in effect or the Revolving Credit Note remains
outstanding and unpaid or any other amount is owing to the Bank hereunder,
neither the Company nor any Guarantor shall directly or indirectly, without the
written consent or waiver of the Bank:
6.1 Indebtedness for Borrowed Money. Create, incur, assume or suffer to
exist any indebtedness for borrowed money except for (i) indebtedness for
borrowed money to the Bank, (ii) indebtedness for borrowed money reflected in
the financial statements referred to in Section 3.8 hereof including any
extensions, renewals or replacements of any such indebtedness, (iii)
indebtedness for borrowed money subordinated on terms reasonably satisfactory to
the Bank to the Company's or Guarantor's, as the case may be, obligations to the
Bank under this Agreement, the Revolving Credit Note or otherwise, and (iv)
indebtedness for borrowed money not exceeding $500,000 in the aggregate.
6.2 Limitation on Liens: Create, incur, assume or suffer to exist any Lien
upon, or any security interest in, any of its property or assets, whether now
owned or hereafter acquired, or permit any Subsidiary to do so except for (i)
Liens granted to the Bank, (ii) Liens on accounts receivable securing
indebtedness permitted by Section 6.1 (iii) hereof and (iii) except purchase -
money liens or security interests on any property hereafter acquired or the
assumption of any lien or security interest on property existing at the time of
such acquisition or a lien or security interest incurred in connection with any
conditional sale or other title retention agreement or a finance lease provided
that any property subject to any of the foregoing is acquired by the Company or
any Guarantor in the ordinary course of their respective businesses and the lien
or security interest on any such property is created contemporaneously with such
acquisition and each such lien or security interest shall attach only to the
property so acquired and the obligation secured by such lien is permitted under
Section 6.1 hereof and the related expenditure is permitted under Section 6.7
hereof.
6.3 Merger, Consolidation and Acquisition: Merge into or consolidate with
any other Person or permit any other Person to merge into it or acquire all or
substantially all the properties or assets or stock of any other Person or
become a partner of or venturer with any other Person or permit any Subsidiary
to do so except that (a) any Subsidiary may merge into or transfer assets to the
Company, (b) any Subsidiary may merge into or consolidate with or transfer
assets to another Subsidiary, (c) provided the Bank has been given notice
pursuant to Section 5.1(11), the Company may merge into any other Person
provided the Company is the surviving corporation or acquire all or
substantially all of the properties or assets of any other Person in any
transaction which, after giving effect to such merger or acquisition, would not
otherwise violate any of the provisions of this Agreement including but not
limited to Sections 5.10, 6.7 and 6.9 (such merger or acquisition hereinafter a
"Permitted Acquisition"); provided, however, if the Person to be acquired
conducts business outside of the Company's Line of Business, such acquisition
shall not be considered a Permitted Acquisition and will not be permitted
without the Bank's prior written consent which consent will not be unreasonably
withheld or delayed. The Company's Line of Business shall mean the business of
providing computerized data processing services to the health care industry and
the general commercial market.
6.4 Sale of Assets: Sell, assign, transfer, lease or otherwise dispose of
all or any part of its assets or property or permit any Subsidiary to do so
(which consent will not be unreasonably withheld or delayed) except (a) for the
sale or other disposition of assets no longer used or useful in the conduct of
its business, (b) for the sale of inventory disposed of in the ordinary course
of business, (c) subject to the proviso below, any Subsidiary may sell, assign,
lease or otherwise transfer its assets to the Company and (d) subject to the
proviso below, any Subsidiary may sell, assign, lease or otherwise transfer its
assets, provided in each instance referred to in (c) or (d) hereof, the proceeds
of the sale are used to repay Advances.
6.5 Contingent Liabilities: Assume, guarantee, endorse, sell with recourse,
contingently agree to purchase, discount, or otherwise become or remain liable
with respect to any indebtedness, obligation or other liability of any Person,
or enter into any agreement for the purchase or other acquisition of any
products, materials or supplies, or for transportation or for the payment for
services, if in any such case payment therefor is to be made regardless of the
non-delivery of the products, materials or supplies or the non-furnishing of the
transportation or service except for (a) the endorsement of negotiable
instruments in the ordinary course of business, (b) guaranties in favor of the
Bank, (c) provided no Default or Event of Default has occurred or would occur as
a result of entering into or performing the following guaranties, guaranties of
auto leases which leases do not in the aggregate require the Company and the
Guarantors to make payments (including taxes, insurance and similar expenses
which the Company or any Guarantor is required to pay under the terms of any
lease) during any calendar year in excess of $100,000.00 and (d) a guaranty by
the Company and the Guarantors of the obligations of BFS Realty LLC to the U.S.
Small Business Administration in a principal amount not exceeding $750,000.00.
6.6 Investments; Loans: Purchase, acquire, exercise an option to purchase
or acquire, or own the assets, obligations, stock or any other interest of or
in, or make loans or advances to, or investments in, any Person, whatsoever
except for (i) investments in certificates of deposit issued by or time deposits
with banks with capital in excess of One Hundred Million and 00/100
($100,000,000.00) Dollars; (ii) direct obligations of the United States
Government; (iii) loans reflected in the financial statements referred to in
Section 3.8 hereof, but not any extensions, renewals or replacements of any such
loans; (iv) acquisitions permitted by Section 6.3 hereof and (v) commercial
paper of a domestic issuer rated at least "A-1" by Standard & Poor's Corporation
or "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc.
6.7 Capital Expenditures: Make any net expenditures, or permit any
Subsidiary to do so, on a consolidated basis for fixed or capital assets
including software development costs exceeding, on a cumulative basis in the
aggregate, $2,500,000.00 for any fiscal year net of sale/leaseback
proceeds.
6.8 Nature of Business: Change the general nature of its business or the
general manner of conducting its business or permit any Subsidiary to do so.
6.9 Transactions with Affiliates: Except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or a Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would obtain in a comparable arms' length transaction with
a Person not an Affiliate, enter into any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate, or permit any Subsidiary to enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate. "Affiliate" shall
mean a person (1) which directly or indirectly controls, or is controlled by, or
is under common control with the Company or a Subsidiary, (2) which directly or
indirectly beneficially owns or holds five (5%) percent or more of any class of
voting stock of the Company or any Subsidiary, or (3) five (5%) percent or more
of the voting stock of which is directly or indirectly beneficially owned or
held by the Company or a Subsidiary. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
6.10 No Lien Senior to or Equal to Loan Documents: Create or cause to be
created any lien or charge on any property subject to the security interests of
the Loan Documents which is superior or equal to the liens or security interests
of the Loan Documents.
6.11 Change of Management: Permit ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at any time to not be
active on a substantially full time basis in the affairs of the Company by
maintaining the position of President or its equivalent.
6.12 Dividends and Purchase of Stock: Declare any dividends or make any
distributions either in cash or property on any shares of any class of its
capital stock or apply any of its property or assets to the purchase, redemption
or other retirement of, or set apart any sum for the payment of any dividends
on, or the purchase, redemption or other retirement of, or make any other
distribution by reduction of capital or otherwise in respect of, any shares of
any class of capital stock of the Company or any Guarantor; provided, however,
Sandata, Inc. may redeem stock in an aggregate amount not to exceed
$3,000,000.00 provided that Sandata, Inc. simultaneously raises capital in the
amount of the redeemed stock and provided further that no Default or Event of
Default has occurred or will occur as a result of such redemption.
SECTION 7: EVENTS OF DEFAULT
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
agreement, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) Default in the payment of the principal of or interest on the
Revolving Credit Note or any amount payable pursuant to Section 2.5 or 2.6;
or
(b) Any representation or warranty made by the Company or a Guarantor
herein or any statement or representation made in any certificate, report
or opinion delivered pursuant hereto shall prove to have been incorrect in
any material respect when made; or
(c) Default in the due observance or performance of any covenant,
condition or agreement on the part of the Company, a Guarantor or a
Subsidiary to be observed or performed pursuant to Section 5.10 or 5.11 or
Section 6 hereof; or
(d) Default in the due observance or performance of any other
covenant, condition or agreement on the part of the Company, a Guarantor or
a Subsidiary to be observed or performed pursuant hereto (other than a
covenant, condition or agreement a default in the performance of which or a
breach of which is elsewhere in this Section specifically dealt with) and
such default shall remain unremedied for thirty (30) consecutive calendar
days after written notice shall have been given by the Bank; or
(e) Entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company, a Subsidiary or a Guarantor a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company, a Subsidiary or a Guarantor under the Federal Bankruptcy Code
or any other applicable Federal or state law, or appointing a receiver,
liquidator, assignee, trustee, (or other similar official) of the Company,
a Subsidiary or a Guarantor or of any substantial part of their respective
properties, or ordering the winding up or liquidation of their respective
affairs, and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days; or
(f) The Company, a Subsidiary or a Guarantor shall: (i) apply for or
consent to the appointment of a receiver, trustee or liquidator of the
Company, such Subsidiary or such Guarantor or any of their respective
properties or assets; (ii) admit in writing its inability to pay its debts
as they mature; (iii) make a general assignment for the benefit of
creditors; (iv) be adjudicated a bankrupt or insolvent; or (v) file a
voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such
law or if corporate action shall be taken by the Company, any such
Subsidiary or any such Guarantor, for the purpose of effecting any of the
foregoing; or
(g) Rendering against the Company, a Subsidiary or a Guarantor of one
or more judgments, decrees or orders for the payment of money in excess of
Two Hundred Fifty Thousand and 00/100 ($250,000.00) Dollars in the
aggregate other than a judgment for which the Company, Subsidiary or
Guarantor is fully insured and the continuance of such judgments, decrees
or orders unsatisfied and in effect for a period of thirty (30) consecutive
days without a stay of execution; or
(h) The Company, a Subsidiary or a Guarantor defaults in any payment
of principal of or interest on any indebtedness or obligation for borrowed
money (other than the Revolving Credit Note) or for the deferred purchase
price of property (which indebtedness, obligation, or deferred purchase
price exceeds One Hundred Thousand and 00/100 ($100,000.00) Dollars in the
aggregate) or defaults in the performance of any other agreement, term or
condition contained in any such obligation or in any agreement relating
thereto, if the effect of such default is to cause, or to permit the holder
or holders of such obligation (or a trustee on behalf of such holder or
holders) to cause, such obligation to become due prior to its stated
maturity; or
(i) Any of the following events occur or exist with respect to the
Company, a Guarantor, a Subsidiary or an ERISA Affiliate: (1) any
Prohibited Transaction involving any Plan, (2) any Reportable Event shall
occur with respect to any Plan, (3) the filing under Section 4041 of ERISA
of a notice of intent to terminate any Plan or the termination of any Plan,
(4) any event or circumstance exists which might constitute grounds
entitling the PBGC to institute proceedings under Section 4042 of ERISA for
the termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings, or (5)
complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency or termination of any
Multiemployer Plan, and in each case above, such event or condition,
together with all other events or conditions, if any, could in the opinion
of the Bank subject the Company to any tax, penalty, or other liability to
a Plan, a Multiemployer Plan, the PBGC or otherwise (or a combination
thereof) which in the aggregate exceed or may exceed Two Hundred Fifty
Thousand and 00/100 ($250,000.00) Dollars; or
(j) Any Loan Document shall cease to be in full force and effect or
the party obligated thereunder shall assert that it has no further
obligation to the Bank thereunder.
Then, upon the happening of any of the foregoing Events of Default, the
Commitment of the Bank to make any further Advance shall terminate, the
principal of and accrued interest on the Revolving Credit Note shall become and
be immediately due and payable upon declaration to that effect delivered by the
Bank to the Company; provided, that, upon the happening of any event specified
in subsections (e) or (f) of this Section 7, the obligation of the Bank to make
the Commitment of the Bank to any further Advances shall terminate and the
Revolving Credit Note shall be immediately due and payable without declaration
or other notice to the Company and the Company expressly waives any presentment,
demand, protest or other notice of any kind.
If one or more Events of Default shall occur, the Bank shall have the
right, in addition to all other rights and remedies available to it, to set off
against the unpaid balance of the Revolving Credit Note any debt owing to the
Company by the Bank, including without limitation, any funds in any deposit
account maintained by the Company with the Bank, and nothing in this Agreement
shall be deemed any waiver or prohibition of the Bank's right of banker's lien
or set-off.
SECTION 8: MISCELLANEOUS
8.1 Consents to Amendments: This Agreement may be amended and the Company
may take any action prohibited, or omit to perform any act required to be
performed by it, if the Company shall first obtain the Bank's written consent to
such amendment, action or omission to act.
8.2 Survival of Representations: All representations, warranties, covenants
and agreements made by the Company and the Guarantors in connection herewith
shall survive the execution and delivery of this Agreement and the Revolving
Credit Note.
8.3 Successors and Assigns: All covenants and agreements herein shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto, provided the Company may not transfer or assign any of its rights or
interests hereunder without the specific written consent of the Bank.
8.4 Liability in Acting: In connection with this Agreement and the
Commitment, each party hereto will be protected in acting upon any notice,
request, consent, certificate, agreement, writing, signature, resolution,
application or other paper or document believed by it to be genuine and to have
been signed, executed, passed, presented or delivered by the proper party or
parties.
8.5 The Bank's Rights Not Waived; Cumulative Rights: Wherever in this
Agreement or in any other manner an option, power or right is granted the Bank,
it may be exercised without notice to the Company, except as in this Agreement
specifically provided. Each and every right granted to the Bank hereunder or
under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No delay, omission or failure to act on the part of the Bank in
exercising any option, power or right, shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude the other, later or
further exercise thereof or the exercise of any other power or right.
8.6 Expenses: The Company agrees (a) to pay or reimburse the Bank for its
origination fee and the fees and disbursements of counsel to the Bank in
connection with the development, preparation and execution of this Agreement and
any other Loan Document prepared in connection herewith, and the consummation of
the transactions contemplated hereby and thereby and all of its out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of any amendment, supplement or modification to this Agreement and any
other Loan Document prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
fees and disbursements of counsel to the Bank; and (b) to pay or reimburse the
Bank for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement and any such other Loan
Document, including, without limitation, fees and disbursements of counsel to
the Bank. The agreements in this subsection shall survive repayment of the Notes
and all other amounts payable hereunder.
8.7 Other Agreements: The rights granted to the Bank by the Company
hereunder are cumulative and in addition to the rights granted by every other
agreement which the Company at any time executes and delivers to the Bank, and
no such agreement shall be read or construed to limit, restrict or otherwise
modify in any way the rights given hereby, except as the intent to limit is
expressly set forth in such agreement and likewise no provision of this
Agreement shall be deemed to limit, restrict or otherwise modify in any way any
rights granted to the Bank by other agreements by the Company. All agreements
herein contained and contained in any such other written agreement, whether
typed or otherwise, shall be fully effective and fully enforceable in favor of
the Bank and against the Company, except that if there by a conflict in the
provisions of such agreements with this Agreement, the provisions of this
Agreement shall prevail, and if there are similar but not identical provisions,
the provisions of this Agreement shall prevail.
8.8 Repayment: Subject to the terms and conditions of this Agreement, the
Company hereby covenants and agrees to repay to the Bank its obligations
hereunder, both principal and interest, as and when the same shall become due
and payable, and faithfully to perform every term, condition and covenant of
this Agreement and of any instrument evidencing such obligation, and every other
agreement securing or relating to the same.
8.9 Applicable Law and Jurisdiction: This Agreement and the rights and
obligations of the parties hereunder shall be construed and interpreted in
accordance with the law of the State of New York. The Company hereby submits to
the jurisdiction of the Supreme Court of the State of New York and agrees with
the Bank that personal jurisdiction over the Company shall rest with said Court
for purposes of any action on or related to this Agreement or the Note
contemplated hereby.
8.10 Counterclaim; Trial by Jury: The Company and the Guarantors hereby
expressly waive any and every right to interpose a counterclaim (except
mandatory counterclaims) and to a trial by jury in any action on or related to
this Agreement or any Loan Document or the enforcement of
either or all of the same.
8.11 Entire Agreement: The Company, the Guarantors and the Bank agree that
this Agreement and the other Loan Documents executed and delivered in connection
herewith including the Notes represent the entire understanding of the parties.
No modification, amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Company, a Guarantor
or a Subsidiary shall in any event be effective unless the same shall be in
writing and signed by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
statements, agreements or representations, oral or written, which may have been
made either by the Bank or by any employee, agent or broker with respect to this
Agreement or the Advances shall be of any force or effect, except to the extent
stated in this Agreement, and all prior agreements and representations in
respect of this Agreement and the Advances are merged herein so that this
Agreement shall contain the entire agreement with respect to the provisions of
the Advances referred to herein. The Company and the Guarantors hereby expressly
acknowledge and agree that (i) no oral commitments have been made by the Bank to
extend or continue any credit to the Company or any other party, (ii) the Bank
has made no representation or agreement that it will forebear or refrain in any
way from exercising any right or remedy in its favor hereunder or otherwise
against the Company, and (iii) they will not rely on any commitment (regardless
of when made) to extend or continue any credit, or on any such agreement
(regardless of when made) to forebear or refrain from exercising rights or
remedies unless such commitment or agreement shall be in writing and not signed
by an officer of the Bank.
8.12 Headings: The headings herein are for convenience only and shall not
limit or affect the meaning or construction of the provisions herein.
8.13 Notices: Notices and consents provided herein shall be in writing and
shall be given to the other party by personal delivery or certified mail, return
receipt requested, in a pre-paid wrapper directed to the other party at its
address stated below or such other address as from time to time designated in
writing by one party to the other:
(a) if to the Company or a Guarantor:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(b) if to the Bank:
Marine Midland Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Vice President
Notice by mail shall be effective when received but if not sooner received shall
be deemed effective at 2:45 p.m. on the second Business Day after mailing. This
provision shall not prevent any party from using hand delivery or delivery by
facsimile as a method of giving notice which, if hand delivered, shall be
effective on the day on which delivered to such party at its address specified
above and, if sent by facsimile, shall be effective when sent to a facsimile
number provided by a party hereto.
8.14 Indemnification: (a) The Company and each of the Guarantors shall
indemnify, pay and hold the Bank and any holder of the Revolving Credit Note
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgment, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Bank or any holder of the Revolving Credit Note in any way relating
to or arising out of the Company's, any Guarantor's or any Subsidiary's act or
omission to act in violation of this Agreement.
(b) In the event that any claim or demand for which the Company and/or
each Guarantor would be liable to the Bank pursuant to Section 8.14(a)
above is asserted against or sought to be collected from the Bank by a
third party, the Bank shall notify the Company and the appropriate
Guarantor of such claim or demand, specifying the nature of such claim or
demand and the amount or the estimated amount thereof to the extent then
feasible. The Company and/or the appropriate Guarantor may, at its option,
with the consent of the Bank in its sole discretion defend the Bank against
such claim or demand with counsel satisfactory to the Bank.
8.15 Authority to Disclose: All Federal, state, municipal and other
authorities (including the United States Treasury Department and the Internal
Revenue Service) and all banks, trust companies and other banking or financial
corporations, and organizations and all accountants, auditors, appraisers and
examiners with which or whom the Company or any Guarantor has heretofore, now
has or hereafter may have banking or professional relations, are hereby
irrevocably authorized and directed to permit representatives of the Bank to
have full access during regular business hours and from time to time upon
reasonable request to make copies of and extracts from all reports,
examinations, audits, appraisals, and returns by or with respect to the Company
or any Guarantor and all information concerning the Company or any Guarantor
from time to time contained in their files and records subject to reasonable
restrictions as requested by the Company provided such restrictions do not
conflict with applicable law. The Bank shall hold information so obtained in
confidence except that it may disclose such information as it may be required by
law to disclose. The Company or any Guarantor may disclose the existence of this
Agreement in connection with its filings with the Securities and Exchange
Commission and this Agreement may be filed and made available as a public record
in connection with such filings.
8.16 Severability: In the event that any one or more of the provisions of
this Agreement or the Revolving Credit Note shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.
8.17 Counterparts: This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the year and date first above written.
BORROWER:
SANDSPORT DATA SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
GUARANTORS:
SANDATA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
SANDATA HOME HEALTH
SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
SANDATA PRODUCTIVITY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
SANDATA SPECTRUM, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
SANDATA INTECK, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
SANTRAX SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
BANK:
MARINE MIDLAND BANK
By:/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Vice President
SCHEDULE I
Subsidiaries of Sandata, Inc.
State of Percentage
Name Incorporation Ownership
The Company New York 100%
Sandata Home Health Delaware 100%
Systems, Inc.
Sandata Productivity, Inc. Delaware 100%
Sandata Spectrum, Inc. Delaware 100%
Sandata Inteck, Inc. Delaware 100%
Santrax Systems, Inc. New York 100%
Neither the Company nor any of the other Guarantors has any Subsidiaries.
Section 3.5 Litigation
None.
EXHIBIT A
REVOLVING CREDIT NOTE
$3,000,000.00 Melville, New York
April 18, 1997
FOR VALUE RECEIVED, SANDSPORT DATA SERVICES, INC., a New York corporation
("Company") promises to pay to the order of MARINE MIDLAND BANK ("Bank") at its
office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ the principal sum of
the lesser of: (a) Three Million and 00/100 ($3,000,000.00) Dollars; or (b) the
aggregate unpaid principal amount of all Advances made by Bank to Company
pursuant to the Agreement hereinafter referred to, on March 1, 2000.
Company shall also pay interest on the unpaid balance from time to time
outstanding, at said office at the rate and times and in accordance with the
provisions of Section 2.7 of the Revolving Credit Agreement among the Company,
certain affiliated corporations and the Bank dated as of April 18, 1997.
Interest on payments which are past due whether at the stated maturity or by
acceleration or otherwise shall accrue at the otherwise applicable rate per
annum plus three (3%) percent. All computations of interest hereunder shall be
made on the basis of a 360 day year for the actual number of days elapsed.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. If a
payment becomes due and payable on a Saturday, Sunday, or public or other
banking holiday under the laws of the State of New York, the maturity thereof
shall be extended to the next succeeding business day, and interest shall be
payable thereon at the rate herein specified during such extension.
Company hereby authorizes Bank to enter from time to time the amount of
each Advance to Company on the schedule annexed hereto and made a part hereof.
Failure of Bank to record such information on such schedule shall not in any way
affect the obligation of Company to pay any amount due under this Note.
This Note is the Revolving Credit Note referred to the Agreement as such
Agreement may be further amended from time to time, and is subject to prepayment
and its maturity is subject to acceleration upon the terms contained in said
Agreement.
If any action or proceeding be commenced to collect this Note or enforce
any of its provisions, Company further agrees to pay all costs and expenses of
such action or proceeding and reasonable attorneys' fees and further expressly
waives any and every right to interpose any counterclaim in any such action or
proceeding. Company hereby submits to the jurisdiction of the Supreme Court of
the State of New York and agrees with Bank that personal jurisdiction over
Company shall rest with the Supreme Court of the State of New York for purposes
of any action on or related to this Note or the enforcement of same. Company
hereby expressly waives any and every right to a trial by jury in any action on
or related to this Note or the enforcement of the same.
Bank may transfer this Note and may deliver the security or any part
thereof to any transferee or transferees, who shall thereupon become vested with
all the powers and rights above given to Bank in respect thereto, and Bank shall
thereafter be forever relieved and fully discharged from any liability or
responsibility in the matter. The failure of any holder of this Note to insist
upon strict performance of each and/or all of the terms and conditions hereof
shall not be construed or deemed to be a waiver of any such term or condition.
Company and all endorsers and guarantors hereof waive presentment and
demand for payment, notice of non-payment, protest, and notice of protest.
This Note and its provisions shall be construed in accordance with the laws
of the State of New York.
SANDSPORT DATA SERVICES, INC.
By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
Address:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Schedule of Advances and Payments of Principal
Amount of Principal Paid or Prepaid Name of Person Making Notation
Amount of Advance Unpaid Principal Balance