SANDSPORT DATA SERVICES, INC.,
SANDATA, INC.,
SANDATA HOME HEALTH SYSTEMS, INC.,
SANTRAX PRODUCTIVITY, INC.,
SANDATA SPECTRUM, INC.,
PRO-HEALTH SYSTEMS, INC.,
formerly known as Sandata Inteck, Inc.,
SANTRAX SYSTEMS, INC.
AND
HSBC BANK USA
formerly known as
MARINE MIDLAND BANK
SECOND AMENDMENT DATED AS OF
FEBRUARY 14, 2000 TO LOAN AGREEMENT
DATED AS OF APRIL 18, 1997
THIS SECOND AMENDMENT made as of the 14th day of February, 2000 among
SANDSPORT DATA SERVICES, INC., a New York corporation having its principal place
of business at 00 Xxxxxx Xxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000 (the
"Company"), SANDATA, INC., SANDATA HOME HEALTH SYSTEMS, INC., SANTRAX
PRODUCTIVITY, INC., SANDATA SPECTRUM, INC. and PRO-HEALTH SYSTEMS, INC.,
formerly known as Sandata Inteck, Inc., each a Delaware corporation having its
principal place of business at 00 Xxxxxx Xxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx
00000 and SANTRAX SYSTEMS, INC., a New York corporation having its principal
place of business at 00 Xxxxxx Xxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
(individually, a "Guarantor" and, collectively, the "Guarantors")
and
HSBC BANK USA, formerly known as Marine Midland Bank, a New York bank,
having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the
"Bank").
WITNESSETH:
WHEREAS, the Company, the Guarantors and the Bank entered into a
certain revolving credit agreement dated as of April 18, 1997, as amended by a
First Amendment dated as of August 3, 1999 (collectively, the "Agreement")
providing for certain financial accommodations to the Company and which
Agreement is now in full force and effect; and
WHEREAS, the Company has requested that the Bank amend, and the Bank
has agreed to amend, certain terms and provisions of the Agreement;
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter set forth and for other good and various consideration, the parties
hereto agree as follows:
1. As used in this Second Amendment capitalized unless otherwise defined,
shall have the meaning ascribed thereto in the Agreement.
2. The Bank and the Company agree that as of February 2000 the outstanding
principal balance of the Revolving Credit was $2,700,000.00 and all interest due
on the Revolving Credit has been paid through January 31, 2000.
3. The Agreement is hereby amended as follows:
(a) The definition of "Business Day" is hereby deleted and the
following is added to substitute for same: "Business Day": shall
mean any day other than a Saturday, Sunday or other day on which
commercial banks in London with respect to (LIBOR Rate Advances)
and/or New York, New York (with respect to Prime Rate Advances)
are authorized or required by law to close.
(b) The definition of "Guarantors" is hereby deleted and the
following is added to substitute for same:
"Guarantor or Guarantors": shall mean Sandata, Inc., Sandata Home
Health Systems, Inc., Sandata Productivity, Inc., Sandata
Spectrum, Inc., Pro-Health Systems, Inc. (formerly known as
Sandata Inteck, Inc.), Santrax Systems, Inc. and each Person
required to guaranty pursuant to Section 5.11 hereof. (c)
(c) The definition of "LIBOR Borrowing Request" is hereby deleted and
the following is added to substitute for same:
"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, the LIBOR Period and the
amount.
(d) The definition of "LIBOR Period" is hereby deleted and the
following is added to substitute for same:
"LIBOR Period": shall mean a period, if available to the Bank, of
30, 60, 90, 120, 180 or 360 days, such period not to extend
beyond the Termination Date.
(e) The definition of "Termination Date" is hereby deleted and the
following is added to substitute for same:
"Termination Date": shall mean February 14, 2003.
(f) Section 2.1 is hereby deleted and the following is added to
substitute for same:
2.1 COMMITMENT: Subject to the terms and conditions hereof, the
Bank agrees to extend credit to the Company by making such
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 Four Million
Five Hundred Thousand and 00/100 ($4,500,000.00) 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.
(g) Section 2.7(a) is hereby deleted and the following is added to
substitute for same:
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,
each such Advance as elected by the Company in accordance
with Section 2.3 hereof.
(h) Section 2.11 is hereby deleted and the following is added to
substitute for same:
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;
then the Company shall pay to the Bank, as liquidated
damages and not as a penalty, a fee (the "Liquidation Fee") equal
to the losses (excluding lost profits its 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.
(i) Section 2.13 is hereby deleted and the following is added to
substitute for same:
"[RESERVED]."
(j) Section 2.15 is hereby deleted and the following is added to
substitute for same:
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 for working capital
purposes 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.
(k) Section 5.1(2) is hereby deleted and the following is added to
substitute for same:
(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 Sandata, Inc. and certified by the
chief financial officer of Sandata, Inc. 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.
(1) Section 5.1 is hereby amended by adding the following new
paragraph as subsection (2(a)) immediately after subsection
(2) and prior to subsection (3):
(2(a)) As soon as possible, but not more than one hundred thirty
(130) days after the close of each fiscal year, the
consolidating financial statements reflecting each of the
corporations comprising the Consolidated Group including for
each of such corporations a balance sheet with related
statements of income, retained earnings and cash flows for
such fiscal year or immediately preceding fiscal quarter, as
applicable, setting forth in each case figures for the
previous year or comparable fiscal quarter of the previous
year, as applicable, all prepared in accordance with
generally accepted accounting principles consistently
applied prepared by management to such corporations and
certified by the chief financial officers of such
corporations.
(m) Section 5.10 is hereby deleted and the following is added to
substitute for same:
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 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 $7,491,000 from May 31, 1999
to and including May 30, 2000, to be increased by $75,000 in
each fiscal year thereafter.
(iii)A total liabilities to Net Worth ratio of not more
than 1.2 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, all as determined
in accordance with generally accepted accounting principles
consistently applied.
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.
(n) Section 8.13 (b) is hereby deleted and the following is added to
substitute for same:
HSBC Bank USA
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxx
Vice President
4. The Borrower and each Guarantor hereby represents and warrants to the
Bank that:
(a) Each and every of the representations and warranties set forth in
the Agreement is true as of the date hereof and with the same
effect as though made on the date hereof, and is hereby
incorporated herein in full by reference as if fully restated
herein in its entirety.
(b) No Default or Event of Default and no event or condition which,
with the giving of notice or lapse of time or both, would
constitute such a Default or Event of Default, now exists or
would exist after giving effect hereto.
5. It is expressly understood and agreed that all collateral security for
the Advances and other extensions of credit set forth in the Agreement prior to
the amendment provided for herein is and shall continue to be collateral
security for the Advances and other extensions of credit provided in the
Agreement as herein amended. Without limiting the generality of the foregoing,
the Company hereby absolutely and unconditionally confirms that each document
and instrument executed by the Company pursuant to the Agreement continues in
full force and effect, is ratified and confirmed and is and shall continue to be
applicable to the Agreement (as herein amended).
6. By their execution of this Amendment in the space provided below, each
of the Guarantors indicated below hereby consent to this Amendment and reaffirm
their continuing liability under their respective guarantees, in respect of the
Agreement as amended hereby and all security agreements, documents, instruments
and agreements executed pursuant thereto or in connection therewith, without
offset, defense or counterclaim (any such offset, defense or counterclaim as may
exist being hereby irrevocably waived by such guarantors).
7. The amendments set forth herein are limited precisely as written and
shall not be deemed to (a) be a consent to or a waiver of any other term or
condition of the Agreement or any of the documents referred to therein or (b)
prejudice any right or rights which the Bank may now have or may have in the
future under or in connection with the Agreement or any documents referred to
therein. Whenever the Agreement is referred to in the Agreement or any of the
instruments, agreements or other documents or papers executed and delivered in
connection therewith, it shall be deemed to me an the Agreement as modified by
this Second Amendment.
8. The Company agrees to pay on demand, and the Bank may charge any deposit
or loan accounts(s) of the Company, all reasonable expenses incurred by the Bank
in connection with the negotiation, preparation and administration (including
any future waiver or modification and legal counsel as to the rights and duties
of the Bank) under the Agreement.
9. This Amendment shall become effective on such date as all of the
following conditions shall be satisfied:
(a) Revolving Credit Note. The Bank shall have received a duly
executed Revolving Credit Note.
(b) Reaffirmation. The Bank shall have received a duly executed
collective amendment and reaffirmation of equipment security
agreements.
(c) Good Standing Certificates. The Bank shall have received good
standing certificates from the applicable state of incorporation
of the Company and each of the Guarantors and, if not
incorporated in the State of New York, a certificate of authority
to do business from the New York Secretary of State.
(d) Officers' Certificate. The Bank shall have received officers'
certificates of the Company and the Corporate Guarantors.
(e) Opinion of Counsel. The Bank shall have received an opinion of
counsel to the Company and the Guarantors.
(f) Fees. All fees of the Bank and fees and disbursements of the
Bank's counsel shall have been paid in full.
(g) Legal Matters. All legal matters and the form and substance of
all documents required hereunder shall be satisfactory to the
Bank's counsel.
10. This Amendment is dated as of February 14, 2000 and shall be effective
on the date of execution by the Bank retroactive to such date.
11. This Amendment may be executed in counterparts, each of which shall
constitute an original, and each of which taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed and delivered by their respective duly authorized
officers as of the date first above written.
SANDSPORT DATA SERVICES, INC.
By:/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Chairman
HSBC BANK USA
By:/s/ Xxxx Xxxxx
Xxxx Xxxxx
Vice President
Each of the guarantors indicated below hereby consent to this Amendment
and reaffirm their continuing liability under their respective guarantees in
respect of the Agreement as amended hereby and all the security agreements,
documents, instruments and agreements executed pursuant thereto or in connection
therewith, without offset, defense or counterclaim (any such offset, defense or
counterclaim as may exist being hereby irrevocably waived by such guarantors).
SANDATA, INC.
By:/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
President
SANDATA HOME HEALTH SYSTEMS, INC.
By:/s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
President
SANTRAX PRODUCTIVITY, INC.
By:/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
President
SANDATA SPECTRUM, INC.
By:/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
President
PRO-HEALTH SYSTEMS, INC.
Formerly known as Sandata Inteck, Inc.
By:/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
President
SANTRAX SYSTEMS, INC.
By:/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
President
State of New York, County of Nassau, ss:
On the 15th day of February, in the year 2000, before me the
undersigned, personally appeared XXXX X. XXXXXXX, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual or the person upon behalf of which the individual acted, executed
the instrument.
--------------------------------
Notary Public
State of New York, County of Suffolk, ss:
On the 25th day of February, in the year 2000, before me the
undersigned, personally appeared XXXX XXXXX, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual or the person upon behalf of which the individual acted, executed the
instrument.
---------------------------------
Notary Public
STATE OF NEW YORK)
) ss.:
COUNTY OF NASSAU)
On the 15th day of February in the year 2000 before me, the
undersigned, a Notary Public in and for said State, personally Appeared Xxxx
Xxxxxx, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
---------------------------------
Notary Public
