UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2008
Streamline Health Solutions, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-28132 | 31-1455414 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 10200 Alliance Road, Suite 200, Cincinnati, OH | 45242-4716 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (513) 794-7100
(Former name, former address, and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION
On July 31, 2008, Streamline Health, Inc., a wholly owned subsidiary of Streamline Health
Solutions, Inc., entered into a new revolving loan agreement with the Fifth Third Bank, Cincinnati,
OH, in the principal amount of $2,000,000. The interest rate on amounts borrowed will accrue at a
variable rate from the Prime Rate less 1% to the Prime Rate plus 3%, based on the ratio of the
funded indebtedness to the trailing twelve months earnings before interest, taxes, depreciation and
amortization (EBITDA). The agreement contains other covenants including; Borrowing Base Limitation
(80% of Eligible Receivables, less than 90 days old) Minimum Tangible Net Worth, Fixed Charge
Coverage Ratio and Funded Indebtedness to EBITDA. The loan is guaranteed by the Registrant and is
secured by a first lien on all of the assets of the Registrant and its subsidiary. The complete
terms of this loan are set forth in the Revolving Note and Continuing Guarantee Agreement attached
as Exhibits 10.1 & 10.2.
This new facility expires on August 1, 2010, and replaces the previous Revolving Loan Facility
entered into on April 30, 2008 with the Fifth Third Bank.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
| EXHIBIT | ||
| NUMBER | DESCRIPTION | |
10.1
|
Revolving Note, effective as of July 30, 2008 | |
10.2
|
Continuing Guarantee Agreement, effective as of July 30, 2008 |
Signatures
Pursuant to the requirements of the Securities Act of 1934, registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
| Streamline Health Solutions, Inc. |
||||
| Date: August 1, 2008 | By: | /s/ Paul W. Bridge, Jr. | ||
| Paul W. Bridge, Jr. | ||||
| Chief Financial Officer | ||||
2
INDEX TO EXHIBITS
| Exhibit No. | Description of Exhibit | |
Exhibit 10.1
|
Revolving Note, effective as of July 30, 2008 | |
Exhibit 10.2
|
Continuing Guarantee Agreement, effective as of July 30, 2008 |
3
Exhibit 10.1
Fifth Third Bank
Revolving Note
| OFFICER No. 04009 $2,000,000.00 |
NOTE No. 0902074749-00026 July 30, 2008 (Effective Date) |
1. PROMISE TO PAY. On or before August 1, 2010 (the “Maturity Date”), the undersigned,
Streamline Health, Inc. fka LanVision, Inc., an Ohio corporation located at 10200 Alliance Road
Suite 200, Cincinnati, Hamilton County, Ohio 45242 (“Borrower”) for value received, hereby promises
to pay to the order of Fifth Third Bank, an Ohio banking corporation located at 38 Fountain Square
Plaza, Cincinnati, Hamilton County, Ohio 45263 for itself and as agent for any affiliate of Fifth
Third Bancorp (together with its successors and assigns, the “Lender”) the sum of Two Million and
00/100 Dollars ($2,000,000.00) (the “Borrowing”), plus interest as provided herein, less such
amounts as shall have been repaid in accordance with this Note. The outstanding balance of this
Note shall appear on a supplemental bank record and is not necessarily the face amount of this
Note, which record shall evidence the balance due pursuant to this Note at any time.
Principal and interest payments shall be initiated by Lender in accordance with the terms of this
Note from Borrower’s account through BillPayer 2000®. Borrower hereby authorizes Lender to initiate
such payments from Borrower’s account located at Fifth Third Bank, routing number 042000314 account
number . Borrower acknowledges and agrees that use of BillPayer 2000® shall be governed by
the BillPayer 2000® Terms and Conditions, a copy of which Borrower acknowledges receipt. Borrower
further acknowledges and agrees to maintain payments hereunder through BillPayer 2000® throughout
the term of this Note. Each payment hereunder shall be applied first to advanced costs, charges and
fees, then to accrued interest, and then to principal, which will be repaid in inverse
chronological order of maturity.
Subject to the terms and conditions hereof and in reliance upon the representations and warranties
of Borrower herein, Lender hereby extends to Borrower a line of credit facility pursuant to which
Lender, in its reasonable discretion, may make loans hereunder to Borrower, on a revolving basis
and upon Borrower’s request from time to time during the term of this Note (each, a “Revolving
Loan”), provided that: (a) the aggregate principal amount borrowed hereunder at any time shall not
exceed the lesser of (i) the Borrowing, or (ii) the Borrowing Base (as defined below) and (b) no
Event of Default shall exist or be caused thereby. Lender may create and maintain reserves from
time to time based on such credit and collateral considerations as Lender may deem appropriate.
Borrower may borrow, prepay, in whole or in part, and reborrow hereunder; provided that, in the
event that the principal amount of all Revolving Loans outstanding at any one time under this Note
shall exceed the foregoing limits, Borrower shall immediately repay the amount of such excess to
Lender in cash. In the event Borrower fails to pay such excess, Lender may, in its discretion,
setoff such amount against Borrower’s accounts at Lender.
Borrower may request a Revolving Loan by written notice to Lender, via facsimile transmission,
electronic mail or otherwise, no later than 10:00 a.m. local time on the date Borrower shall
request that such Revolving Loan be advanced, which written request shall include a Borrowing Base
Certificate certified by the Borrower or financial officer of Borrower that sets forth the
calculation of the Borrowing Base as of such date if requested or required by Lender. Lender shall
make each Revolving Loan by crediting the amount thereof to Borrower’s account at Lender.
The entire principal balance, together with all accrued and unpaid interest and any other charges,
advances and fees, if any, outstanding hereunder, shall be due and payable in full on the earlier
of the Maturity Date or upon acceleration of the Note.
The principal sum outstanding shall bear interest from the date of the first advance until paid at
a floating rate of interest equal to the percent per annum set forth below (the “Interest Rate”),
which rate of interest will fluctuate on a periodic basis as provided herein to the rate specified
by the following table based upon the ratio of Borrower’s Trailing Twelve Month EBITDA (TTM
EBITDA):
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| TTM EBITDA | Then Interest Rate Equals | |
Zero to $300,000.00
|
Prime Rate plus 3.00% | |
Greater than $300,000 but less than or equal to $700,000
|
Prime Rate plus 2.00% | |
Greater than $700,000 but less than or equal to $1,200,000
|
Prime Rate plus 1.00% | |
Greater than $1,200,000 but less than or equal to $1,500,000
|
Prime Rate | |
Greater than $1,500,000 but less than or equal to $2,500,000
|
Prime Rate minus 0.50% | |
Greater than $2,500,000
|
Prime Rate minus 1.00% |
Interest rate changes based upon changes in the foregoing chart will be made effective as of the
date of the first advance hereunder and on the first day of the calendar month following the review
by Lender of Borrower’s monthly financial statements detailing compliance with the above-mentioned
financial measurement. As used herein, Prime Rate shall mean the rate established from time to time
by Fifth Third Bank at its principal office as its “Prime Rate”, whether or not Fifth Third Bank
shall at times lend to borrowers at lower rates of interest, or if there is no such prime rate,
then such other rate as may be substituted by Fifth Third Bank for the prime rate. In addition to
changes occurring pursuant to fluctuations in the foregoing chart, the interest rate charged
hereunder shall change automatically upon each change in the Prime Rate. Interest shall be
calculated based on a 360-day year and charged for the actual number of days elapsed, and shall be
payable on the 1st day of each month beginning on September 1, 2008.
Notwithstanding any provision to the contrary in this Note, in no event shall the interest rate
charged on the Borrowing exceed the maximum rate of interest permitted under applicable state
and/or federal usury law. Any payment of interest that would be deemed unlawful under applicable
law for any reason shall be deemed received on account of, and will automatically be applied to
reduce, the principal sum outstanding and any other sums (other than interest) due and payable to
Lender under this Note, and the provisions hereof shall be deemed amended to provide for the
highest rate of interest permitted under applicable law.
2. USE OF PROCEEDS. Borrower certifies that the proceeds of this loan are to be used for
business purposes.
3. RENEWAL. This Note is issued, not as a payment toward, but as a continuation of, the
obligations of Borrower to Lender pursuant to that certain note dated April 30, 2008, in the
principal amount of $500,000.00 (together with all prior amendments thereto or restatements thereof
the “Prior Note”). Accordingly, this Note shall not be construed as a novation or extinguishment
of, the obligations arising under the Prior Note, and its issuance shall not affect the priority of
any security interest granted in connection with the Prior Note.
4. UNUSED
COMMITMENT FEE may charge, and Borrower agrees to pay the following fees at the
times stated below:
On the 30th day of each May, August, November, and February of each year that Obligations (defined
herein) remain outstanding, an unused commitment fee, to be determined as follows: the average
daily amount of the Borrowing unused by Borrower for the previous three-month period as measured on
each April 30, July 31, October 31, and January 31, multiplied by 0.0035 (35 basis points).
5. NOTE PROCESSING FEE. Lender may charge, and Borrower agrees to pay on the above Effective
Date, a note processing fee in the amount of $400.00.
6. REPRESENTATIONS AND WARRANTIES. Borrower hereby warrants and represents to Lender the
following:
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(a) Organization and Qualification. Borrower is duly organized, validly existing and
in good standing under the laws of the State of its incorporation, has the power and
authority to carry on its business and to enter into and perform all documents relating to
this loan transaction, and is qualified and licensed to do business in each jurisdiction in
which such qualification or licensing is required. All information provided to Lender with
respect to Borrower and its operations is true and correct.
(b) Due Authorization. The execution, delivery and performance by Borrower of the
Loan Documents have been duly authorized by all necessary corporate action, and shall not
contravene any law or any governmental rule or order binding on Borrower, or the articles
of incorporation and code of regulations or by-laws of Borrower, nor violate any agreement
or instrument by which Borrower is bound nor result in the creation of a Lien on any assets
of Borrower except the Lien granted to Lender herein. Borrower has duly executed and
delivered to Lender the Loan Documents and they are valid and binding obligations of
Borrower enforceable according to their respective terms, except as limited by equitable
principles and by bankruptcy, insolvency or similar laws affecting the rights of creditors
generally. No notice to, or consent by, any governmental body is needed in connection with
this transaction.
(c) Litigation. There are no suits or proceedings pending or threatened against or
affecting Borrower, and no proceedings before any governmental body are pending or
threatened against Borrower except as otherwise specifically disclosed to Lender on or
prior to the Effective Date or as set forth on any Litigation Exhibit which may be attached
hereto.
(d) Business. Borrower is not a party to or subject to any agreement or restriction
that may have a material adverse effect on Borrower’s business, properties or prospects.
Borrower has all franchises, authorizations, patents, trademarks, copyrights and other
rights necessary to advantageously conduct its business. They are all in full force and
effect and are not in known conflict with the rights of others.
(e) Licenses, etc. Borrower has obtained any and all licenses, permits, franchises,
governmental authorizations, patents, trademarks, copyrights or other rights necessary for
the ownership of its properties and the advantageous conduct of its business. Borrower
possesses adequate licenses, patents, patent applications, copyrights, trademarks,
trademark applications, and trade names to continue to conduct its business as heretofore
conducted by it, without any conflict with the rights of any other person or entity. All of
the foregoing are in full force and effect and none of the foregoing are in known conflict
with the rights of others.
(f) Laws. Borrower is in material compliance with all laws, regulations, rulings,
orders, injunctions, decrees, conditions or other requirements applicable to or imposed
upon Borrower by any law or by any governmental authority, court or agency.
(g) Title. Borrower has good and marketable title to the assets reflected on the most
recent balance sheet submitted to Lender, free and clear from all liens and encumbrances of
any kind, except for (collectively, the “Permitted Liens”) (a) current taxes and
assessments not yet due and payable, (b) liens and encumbrances, if any, reflected or noted
on such balance sheet or notes thereto, (c) assets disposed of in the ordinary course of
business, and (d) any security interests, pledges, assignments or mortgages granted to
Lender to secure the repayment or performance of the Obligations.
(h) Subsidiaries and Partnerships. Borrower has no subsidiaries and is not a party to
any partnership agreement or joint venture agreement.
7. AFFIRMATIVE COVENANTS. Borrower covenants with, and represents and warrants to, Lender
that, from and after the execution date of the Loan Documents until the Obligations are paid and
satisfied in full:
(a) Access to Business Information. Borrower shall maintain proper books of accounts
and records and enter therein complete and accurate entries and records of all of its
transactions in accordance with generally accepted accounting principles and give
representatives of Lender access thereto at all reasonable times, including permission to:
(a) examine, copy and make abstracts from any such books and records and such other
information which might be helpful to Lender in evaluating the status of the Obligations
as it may reasonably
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request from time to time, and (b) communicate directly with any of Borrower’s officers, employees,
agents, accountants or other financial advisors with respect to the business, financial conditions
and other affairs of the Borrower.
(b) Inspection of Collateral. Borrower shall give Lender reasonable access to the Collateral
and the other property securing the Obligations for the purpose of performing examinations thereof
and to verify its condition or existence.
(c) Financial Statements. Borrower shall maintain a standard and modern system for accounting
and shall furnish to Lender:
(i) Within 120 days after the end of each fiscal year, a copy of Borrower’s
internally prepared consolidated financial statements for that year in a form reasonably
acceptable to Lender, prepared and certified as complete and correct, subject to changes
resulting from year-end adjustments, by the principal financial officer of Borrower;
(ii) With the statements submitted above, a certificate signed by the Borrower, (i)
stating that no Event of Default specified herein, nor any event which upon notice or lapse
of time, or both would constitute such an Event of Default, has occurred, or if any such
condition or event existed or exists, specifying it and describing what action Borrower has
taken or proposes to take with respect thereto, and (ii) setting forth, in summary form,
figures showing the financial status of Borrower in respect of the financial restrictions
contained herein;
(iii) Immediately upon any officer of Borrower obtaining knowledge of any condition or
event which constitutes or, after notice or lapse of time or both, would constitute an
Event of Default, a certificate of such person specifying the nature and period of the
existence thereof, and what action Borrower has taken or is taking or proposes to take in
respect thereof;
(iv) Within 20 days after the end of each month, Borrower shall deliver to Lender an
accounts receivable aging report in form and substance reasonably acceptable to Lender;
All of the statements referred to in (i) and (iv) above shall be in conformance with generally
accepted accounting principles and give representatives of Lender access thereto at all reasonable
times, including permission to examine, copy and make abstracts from any such books and records and
such other information which might be helpful to Lender in evaluating the status of the loans as it
may reasonably request from time to time.
On the execution date hereof and within 20 days after the end of each calendar month, Borrower
shall deliver to Lender a Borrowing Base Certificate in the form regularly used by Lender’s
commercial loan customers.
With all financial statements delivered to Lender as provided in (i) and (iv) above, Borrower shall
deliver to Lender a Financial Statement Compliance Certificate in addition to the other information
set forth therein, which certifies the Borrower’s compliance with the financial covenants set forth
herein and that no Event of Default has occurred.
If at any time Borrower has any additional subsidiaries which have financial statements that could
be consolidated with those of Borrower under generally accepted accounting principles, the
financial statements required by subsections (i) and (iv) above shall be the financial statements
of Borrower and all such subsidiaries prepared on a consolidated and consolidating basis.
(d) Condition and Repair. Borrower shall maintain its equipment and all Collateral used in
the operation of its business in good repair and working order and shall make all appropriate
repairs, improvements and replacements thereof so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
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(e) Insurance. At its own cost, Borrower shall obtain and maintain insurance against (a)
loss, destruction or damage to its properties and business of the kinds and in the amounts
customarily insured against by corporations with established reputations engaged in the same or
similar business as Borrower and, in any event, sufficient to fully protect Lender’s interest in
the Collateral, and (b) insurance against public liability and third party property damage of the
kinds and in the amounts customarily insured against by corporations with established reputations
engaged in the same or similar business as Borrower. All such policies shall (i) be issued by
financially sound and reputable insurers, (ii) name Lender as an additional insured and, where
applicable, as loss payee under a Lender loss payable endorsement satisfactory to Lender, and (iii)
shall provide for thirty (30) days written notice to Lender before such policy is altered or
canceled. All of the insurance policies required hereby shall be evidenced by one or more
Certificates of Insurance delivered to Lender by Borrower on the Closing Date and at such other
times as Lender may request from time to time.
(f) Taxes. Borrower shall pay when due all taxes, assessments and other governmental charges
imposed upon it or its assets, franchises, business, income or profits before any penalty or
interest accrues thereon (provided, however, that extensions for filing and payment of such taxes
shall be permitted hereunder if disclosed to and consented to by Lender), and all claims
(including, without limitation, claims for labor, services, materials and supplies) for sums which
by law might be a lien or charge upon any of its assets, provided that (unless any material item or
property would be lost, forfeited or materially damaged as a result thereof) no such charge or
claim need be paid if it is being diligently contested in good faith, if Lender is notified in
advance of such contest and if Borrower establishes an adequate reserve or other appropriate
provision required by generally accepted accounting principles and deposits with Lender cash or
bond in an amount acceptable to Lender.
(g)
Existence; Business. Borrower shall (a) maintain its existence as a corporation, (b)
continue to engage primarily in business of the same general character as that now conducted, and
(c) refrain from entering into any lines of business substantially different from the business or
activities in which Borrower is presently engaged.
(h) Compliance with Laws. Borrower shall comply with all federal, state and local laws,
regulations and orders applicable to Borrower or its assets including but not limited to all
Environmental Laws, in all respects material to Borrower’s business, assets or prospects and shall
immediately notify Lender of any violation of any rule, regulation, statute, ordinance, order or
law relating to the public health or the environment and of any complaint or notifications received
by Borrower regarding to any environmental or safety and health rule, regulation, statute,
ordinance or law. Borrower shall obtain and maintain any and all licenses, permits, franchises,
governmental authorizations, patents, trademarks, copyrights or other rights necessary for the
ownership of its properties and the advantageous conduct of its business and as may be required
from time to time by applicable law.
(i) Notice of Default. Borrower shall, within ten (10) days of its knowledge thereof, give
written notice to Lender of: (a) the occurrence of any event or the existence of any condition
which would be, after notice or lapse of applicable grace periods, an Event of Default, and (b) the
occurrence of any event or the existence of any condition which would prohibit or limit the ability
of Borrower to reaffirm any of the representations or warranties, or to perform any of the
covenants, set forth herein.
(j) Costs. Borrower shall reimburse Lender for any and all fees, costs and expenses
including, without limitation, reasonable attorneys’ fees, other professionals’ fees, appraisal
fees, environmental assessment fees (including Phase I and Phase II assessments), field exam
audits, expert fees, court costs, litigation and other expenses (collectively, the “Costs”)
incurred or paid by Lender or any of its officers, employees or agents in connection with: (a) the
preparation, negotiation, procurement, review, administration or enforcement of the Loan Documents
or any instrument, agreement, document, policy, consent, waiver, subordination, release of lien,
termination statement, satisfaction of mortgage, financing statement or other lien search,
recording or filing related thereto (or any amendment, modification or extension to, or any
replacement or substitution for, any of the foregoing), whether or not any particular portion of
the transactions contemplated during such negotiations is ultimately consummated, and (b) the
defense, preservation and protection of Lender’s rights and remedies thereunder, including without
limitation, its security interest in the Collateral or any other property pledged to secure the
Loans, whether incurred in bankruptcy, insolvency, foreclosure or other litigation or proceedings
or
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otherwise. The Costs shall be due and payable upon demand by Lender. If Borrower fails to
pay the Costs when upon such demand, Lender is entitled to disburse such sums as
Obligations. Thereafter, the Costs shall bear interest from the date incurred or disbursed
at the highest rate set forth in the Note(s). This provision shall survive the termination
of this Agreement and/or the repayment of any amounts due or the performance of any
Obligation.
(k) Other Amounts Deemed Loans. If Borrower fails to pay any tax, assessment,
governmental charge or levy or to maintain insurance within the time permitted or required
by this Note, or to discharge any Lien prohibited hereby, or to comply with any other
Obligation, Lender may, but shall not be obligated to, pay, satisfy, discharge or bond the
same for the account of Borrower. To the extent permitted by law and at the option of
Lender, all monies so paid by Lender on behalf of Borrower shall be deemed Obligations and
Borrower’s payments under this Note may be increased to provide for payment of such
Obligations plus interest thereon.
(l) Further Assurances. Borrower shall execute, acknowledge and deliver, or cause to
be executed, acknowledged or delivered, any and all such further assurances and other
agreements or instruments, and take or cause to be taken all such other action, as shall be
reasonably necessary from time to time to give full effect to the Loan Documents and the
transactions contemplated thereby.
8. NEGATIVE COVENANTS. Borrower covenants with, and represents and warrants to, Lender that,
from and after the execution date hereof until the Obligations are paid and satisfied in full:
(a) Indebtedness. Borrower shall not incur, create, assume or permit to exist any
additional Indebtedness for borrowed money (other than the Obligations) or Indebtedness on
account of deposits, notes, bonds, debentures or similar obligations or other indebtedness
evidenced by notes, bonds, debentures, capitalized leases or similar obligations.
(b) Merger; Disposition of Assets. Borrower shall not (a) change its capital
structure, (b) merge or consolidate with any entity, (c) amend or change its articles of
incorporation and code of regulations or by-laws or (d) sell, lease, transfer or otherwise
dispose of, or grant any person an option to acquire, or sell and leaseback, all or any
substantial portion of its assets, whether now owned or hereafter acquired, except for bona
fide sales of Inventory in the ordinary course of business and dispositions of property
which is obsolete and not used or useful in its business.
9. DEFINITIONS. Certain capitalized terms have the meanings set forth on any exhibit hereto,
in the Security Agreement, if applicable, or any other Loan Document. All financial terms used
herein but not defined on the exhibits, in the Security Agreement, if applicable, or any other Loan
Document have the meanings given to them by generally accepted accounting principles. All other
undefined terms have the meanings given to them in the Uniform Commercial Code as adopted in the
state whose law governs this instrument. The following definitions are used herein:
(a) “Account Debtor” means Borrower’s customers and all other persons obligated to
Borrower on Accounts.
(b) “Borrowing Base” means, as of the relevant date of determination, borrowings will
be limited to the lesser of 80% of the net amount of Borrower’s Eligible Accounts (less
than 90 days) or the Tangible Net Worth of Streamline Health Solutions, Inc.
(c) “Eligible Accounts” means, as of the relevant date of determination, those trade
accounts arising in the ordinary course of business that: (i) shall be due and payable
within 90 days from the invoice date, (ii) have been validly assigned to Lender, (iii)
strictly comply with all of Borrower’s warranties and representations to Lender in the Loan
Documents, and, (iv) with regard to which Borrower strictly complies with its covenants
with Lender in the Loan Documents; provided that Eligible Accounts shall not include the
following: (a) Accounts with respect to which the Account Debtor is a shareholder, officer,
employee or agent of Borrower, or a corporation more than 5% of the stock of which is owned
by any of such persons; (b) Accounts with respect to which the Account Debtor is not a
resident of the United States or Canada; (c) Accounts with respect to which the Account
Debtor is the United States or any department, agency or instrumentality of the United
States unless Borrower has assigned its
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interests in such Accounts to Lender pursuant to Federal Assignment of Claims Act or Lender has
expressly waived that requirement with respect to specific receivables; (d) Accounts with respect
to which the Account Debtor is any State of the United States or any city, town municipality or
division thereof that requires Borrower to support its obligations to such Account Debtor with a
performance bond issued by a surety company; (e) Accounts with respect to which the Account Debtor
is a subsidiary of, related to, affiliated or has common officers or directors with Borrower; (f)
any Accounts of a particular Account Debtor if Borrower is or may become liable to that Account
Debtor for goods sold or services rendered by that Account Debtor to such Borrower; (g) any
Accounts owed by a particular Account Debtor, other than the U.S. Government, or a department or
agency thereof, which exceed 20% of all Eligible Accounts; (h) any and all Accounts owed by a
particular Account Debtor when 25% or more of the total Accounts of such Account Debtor are more
than 90 days old from the invoice date; (i) any Accounts owed by an Account Debtor who does not
meet Lender’s standards of creditworthiness, in Lender’s sole credit judgment exercised in good
faith; (j) any Accounts owed by any Account Debtor which has filed or has had filed against it a
petition for bankruptcy, insolvency, reorganization or any other type of relief under insolvency
laws; (k) any Accounts owed by an Account Debtor which has made an assignment for the benefit of
creditors; and (l) any Accounts deemed to be ineligible by Lender based upon credit and collateral
considerations as Lender may deem appropriate, in Lender’s sole judgment exercised in good faith.
(d) “Indebtedness” means (i) all items (except items of capital stock, of capital surplus, of
general contingency reserves or of retained earnings, deferred income taxes, and amount
attributable to minority interest if any) which in accordance with generally accepted accounting
principles would be included in determining total liabilities on a consolidated basis (if Borrower
should have a subsidiary) as shown on the liability side of a balance sheet as at the date as of
which Indebtedness is to be determined, (ii) all indebtedness secured by any mortgage, pledge, lien
or conditional sale or other title retention agreement to which any property or asset owned or held
is subject, whether or not the indebtedness secured thereby shall have been assumed (excluding
non-capitalized leases which may amount to title retention agreements but including capitalized
leases), and (iii) all indebtedness of others which Borrower or any subsidiary has directly or
indirectly guaranteed, endorse (otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire, or in respect of which Borrower or any subsidiary has agreed to
apply or advance funds (whether by way of loan, stock purchase, capital contribution or otherwise)
or otherwise to become directly or indirectly liable.
(e) “Lien” means any security interest, mortgage, pledge, assignment, lien or other
encumbrance of any kind, including interests of vendors or lessors under conditional sale contracts
or capital leases.
(f) “Loan Documents” means any and all Rate Management Agreements and each and every document
or agreement executed by any party evidencing, guarantying or securing any of the Obligations; and
“Loan Document” means any one of the Loan Documents.
(g) “TTM EBITDA” means on a consolidated basis, the amount of Borrower’s earnings before
interest, taxes, depreciation and amortization expense for the measurement period to be calculated
on a historical trailing twelve month basis.
(h) “Obligation(s)” means all loans, advances, indebtedness and each and every other
obligation or liability of Borrower owed to each of Lender and/or any affiliate of Fifth Third
Bancorp, however created, of every kind and description whether now existing or hereafter arising
and whether direct or indirect, primary or as guarantor or surety, absolute or contingent,
liquidated or unliquidated, matured or unmatured, participated in whole or in part, created by
trust agreement, lease overdraft, agreement or otherwise, whether or not secured by additional
collateral, whether originated with Lender or owed to others and acquired by Lender by purchase,
assignment or otherwise, and including, without limitation, all loans, advances, indebtedness and
each and every obligation or liability arising under the loan document, any and all Rate Management
Obligations (as defined in the Loan Documents), letters of credit now or hereafter issued by Lender
or any affiliate of Fifth Third Bancorp for the benefit of or at the request of Borrower, all
obligations to perform or forbear from performing acts, and agreements, instruments and documents
evidencing, guarantying, securing or otherwise executed in connection with any of the foregoing,
together with any amendments, modifications and restatements thereof, and all
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expenses and attorneys’ fees incurred by Lender hereunder or any other document, instrument
or agreement related to any of the foregoing.
(i) “Collateral” means all personal and/or real property provided by Borrower to
Lender as collateral security for the obligations.
(j) “Rate Management Agreement” means any agreement, device or arrangement providing
for payments which are related to fluctuations of interest rates, exchange rates, forward
rates, or equity prices, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants, and any agreement pertaining to equity derivative transactions
(e.g., equity or equity index swaps, options, caps, floors, collars and forwards),
including without limitation any ISDA Master Agreement between Borrower and Lender or any
affiliate of Fifth Third Bancorp, and any schedules, confirmations and documents and other
confirming evidence between the parties confirming transactions thereunder, all whether now
existing or hereafter arising, and in each case as amended, modified or supplemented from
time to time.
(k) “Rate Management Obligations” means any and all obligations of Borrower to Lender
or any affiliate of Fifth Third Bancorp, whether absolute, contingent or otherwise and
howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefore),
under or in connection with (i) any and all Rate Management Agreements, and (ii) any and
all cancellations, buy backs, reversals, terminations or assignments of any Rate Management
Agreement.
10. EVENTS OF DEFAULT. Upon the occurrence of any of the following events (each, an “Event of
Default”), Lender may, at its option, without any demand or notice whatsoever, cease making
advances and declare this Note and all Obligations to be fully due and payable in their aggregate
amount, together with accrued interest and all prepayment premiums, fees, and charges applicable
thereto:
(a) Any failure to make any payment when due of principal or accrued interest on this
Note or any other Obligation and such nonpayment remains uncured for 10 days after written
notice from Lender to Borrower of such default.
(b) Any representation or warranty of Borrower set forth in this Note or in any
agreement, instrument, document, certificate or financial statement evidencing,
guarantying, securing or otherwise related to, this Note or any other Obligation shall be
materially inaccurate or misleading.
(c) Borrower shall fail to observe or perform any other material term or condition of
this Note or any other term or condition set forth in any agreement, instrument, document,
certificate or financial statement evidencing, guarantying or otherwise related to this
Note or any other Obligation, or Borrower shall otherwise default in the observance or
performance of any covenant or agreement set forth in any of the foregoing for 30 days
after written notice from Lender to Borrower of such default.
(d) The dissolution of Borrower or of any endorser or guarantor of the Obligations, or
the merger or consolidation of any of the foregoing with a third party, or the lease, sale
or other conveyance of a material part of the assets or business of any of the foregoing to
a third party outside the ordinary course of its business, or the lease, purchase or other
acquisition of a material part of the assets or business of a third party by any of the
foregoing.
(e) The creation of any Lien (except a lien to Lender) on, the institution of any
garnishment proceedings by attachment, levy or otherwise against, the entry of a judgment
against, or the seizure of, any of the property of Borrower or any endorser or guarantor
hereof including, without limitation, any property deposited with Lender.
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(f) In the reasonable judgment of Lender in good faith, any material adverse change
occurs in the existing or prospective financial condition of Borrower that will affect the
ability of Borrower to repay the Obligations.
(g) A commencement by the Borrower of a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or the entry of a
decree or order for relief in respect of the Borrower in a case under any such law or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Borrower, or for any substantial part of the property of Borrower,
or ordering the wind-up or liquidation of the affairs of Borrower; or the filing and
pendency for 30 days without dismissal of a petition initiating an involuntary case under
any such bankruptcy, insolvency or similar law; or the making by Borrower of any general
assignment for the benefit of creditors; or the failure of the Borrower of the Obligations
generally to pay its debts as such debts become due; or the taking of action by the
Borrower in furtherance of any of the foregoing.
(h) Nonpayment by the Borrower of any Rate Management Obligation relating to this Note
when due or the breach by the Borrower of any term, provision or condition contained in any
Rate Management Agreement.
11. REMEDIES. After the occurrence of an Event of Default, in addition to any other remedy
permitted by law, Lender may at any time, without notice, apply the Collateral to this Note or such
other Obligations, whether due or not, and Lender may, at its option, proceed to enforce and
protect its rights by an action at law or in equity or by any other appropriate proceedings;
provided that this Note and the Obligations shall be accelerated automatically and immediately if
the Event of Default is a filing under the Bankruptcy Code.
Lender’s rights and remedies hereunder are cumulative, and may be exercised together, separately,
and in any order. No delay on the part of Lender in the exercise of any such right or remedy shall
operate as a waiver. No single or partial exercise by Lender of any right or remedy shall preclude
any other further exercise of it or the exercise of any other right or remedy. No waiver or
indulgence by Lender of any Event of Default shall be effective unless in writing and signed by
Lender, nor shall a waiver on one occasion be construed as a waiver of any other occurrence in the
future.
12. LATE PAYMENTS; DEFAULT RATE; FEES. If any payment is not paid when due (whether by
acceleration or otherwise) or within 10 days thereafter, undersigned agrees to pay to Lender a late
payment fee as provided for in any loan agreement or 5% of the payment amount, whichever is greater
with a minimum fee of $20.00. After an Event of Default, Borrower agrees to pay to Lender a fixed
charge of $25.00, or Borrower agrees that Lender may, without notice, increase the Interest Rate by
three percentage points (3%) (the “Default Rate”), whichever is greater. Lender may impose a
non-sufficient funds fee for any check that is presented for payment that is returned for any
reason. In addition, Lender may charge loan documentation fees as may be reasonably determined by
the Lender.
13. ENTIRE AGREEMENT. Borrower agrees that there are no conditions or understandings which are
not expressed in this Note and the documents referred to herein.
14. SEVERABILITY. The declaration of invalidity of any provision of this Note shall not affect
any part of the remainder of the provisions.
15. ASSIGNMENT. Borrower agrees not to assign any of Borrower’s rights, remedies or
obligations described in this Note without the prior written consent of Lender. Borrower agrees
that Lender may assign some or all of its rights and remedies described in this Note without notice
to, or prior consent from, the Borrower.
16. MODIFICATION; WAIVER OF LENDER. The modification or waiver of any of Borrower’s
obligations or Lender’s rights under this Note must be contained in a writing signed by Lender.
Lender may perform Borrower’s obligations, or delay or fail to exercise any of its rights or
remedies, without causing a waiver of those obligations or rights. A waiver on one occasion shall
not constitute a waiver on another occasion. Borrower’s obligations under this Note shall not be
affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases (i) any
of the obligations belonging to any co- borrower, endorser or guarantor or (ii) any of its rights
against any co- borrower, guarantor or endorser.
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17. WAIVER OF BORROWER. Demand, presentment, protest and notice of dishonor, notice of protest
and notice of default are hereby waived by Borrower, and any endorser or guarantor hereof. Each of
Borrower, including but not limited to all co-makers and accommodation makers of this Note, hereby
waives all suretyship defenses including but not limited to all defenses based upon impairment of
Collateral and all suretyship defenses described in Section 3-605 of the Uniform Commercial Code
(the “UCC”). Such waiver is entered to the full extent permitted by Section 3-605 (i) of the UCC.
18. GOVERNING LAW; CONSENT TO JURISDICTION. This Note is delivered in, is intended to be
performed in, will be governed, construed, and enforceable in accordance with and governed by the
internal laws of, the State of Ohio, without regard to principles of conflicts of law. Borrower
agrees that the state and federal courts in the County where the Lender is located shall have
exclusive jurisdiction over all matters arising out of this Note, and that service of process in
any such proceeding shall be effective if mailed to Borrower at the address set forth herein.
19. JURY WAIVER. BORROWER, AND ANY ENDORSER OR GUARANTOR HEREOF, WAIVE THE RIGHT TO A TRIAL BY
JURY OF ANY MATTERS ARISING OUT OF THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20. WARRANT OF ATTORNEY. Borrower authorizes any attorney of record to appear for it in any
court of record in the State of Ohio, after maturity of this Note, whether by its terms or upon
default, acceleration or otherwise, to waive the issuance and service of process, and release all
errors, and to confess judgment against it in favor of Lender for the principal sum due herein
together with interest, charges, court costs and attorneys’ fees. Stay of execution and all
exemptions are hereby waived. If this Note or any Obligation is referred to an attorney for
collection, and the payment is obtained without the entry of a judgment, the obligors shall pay to
the holder of such obligations its attorneys’ fees. EACH OF BORROWER AND ANY ENDORSER OR ANY
GUARANTOR AGREES THAT AN ATTORNEY WHO IS COUNSEL TO LENDER OR ANY OTHER HOLDER OF SUCH OBLIGATION
MAY ALSO ACT AS ATTORNEY OF RECORD FOR BORROWER WHEN TAKING THE ACTIONS DESCRIBED ABOVE IN THIS
PARAGRAPH. BORROWER AGREES THAT ANY ATTORNEY TAKING SUCH ACTIONS MAY BE PAID FOR THOSE SERVICES BY
LENDER OR HOLDER OF SUCH OBLIGATION. BORROWER WAIVES ANY CONFLICT OF INTEREST THAT MAY BE CREATED
BECAUSE THE ATTORNEY REPRESENTING THE BORROWER IS BEING PAID BY LENDER OR THE HOLDER OF SUCH
OBLIGATION.
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
| BORROWER: | ||||
| Streamline Health, Inc. fka LanVision, Inc., an Ohio corporation | ||||
| By: /s/ Paul W. Bridge Jr. | ||||
| Paul W. Bridge Jr., CFO | ||||
| (Print Name and Title) | ||||
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Exhibit 10.2
Fifth Third Bank
Continuing Guaranty Agreement
THIS CONTINUING GUARANTY AGREEMENT (the “Guaranty”) made as of July 30, 2008 by and between
Streamline Health Solutions, Inc., a Delaware corporation located at 10200 Alliance Road,
Cincinnati, Hamilton County, Ohio 45242 (the “Guarantor”) and Fifth Third Bank, an Ohio banking
corporation located at 38 Fountain Square Plaza, Cincinnati, Hamilton County, Ohio 45263 for itself
and as agent for any affiliate of Fifth Third Bancorp (“Beneficiary”).
W I T N
E S S E T H:
WHEREAS, Beneficiary has agreed to extend credit and financial accommodations to Streamline
Health, Inc. fka LanVision, Inc., an Ohio corporation (“Borrower”), pursuant to the Term Note,
dated July 30, 2004, executed by Borrower and made payable to the order of Beneficiary and the
Revolving Note, dated July 30, 2008, executed by Borrower and made payable to the order of
Beneficiary (collectively, the “Notes”), and all agreements, instruments and documents executed or
delivered in connection with any of the foregoing or otherwise related thereto (together with any
amendments, modifications, or restatements thereof, the “Loan Documents”); and
WHEREAS, Guarantor is affiliated with Borrower and, as such, shall be benefited directly by
the transaction contemplated by the Loan Documents, and shall execute this Guaranty in order to
induce Beneficiary to enter into such transaction.
NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, Guarantor hereby guarantees, promises and undertakes as follows:
1. GUARANTY.
(a) Guarantor hereby unconditionally, absolutely and irrevocably guarantees to
Beneficiary the full and prompt payment and performance when due (whether at maturity by
acceleration or otherwise) of any and all loans, advances, indebtedness and each and every
other obligation or liability of Borrower owed to Beneficiary and any affiliate of Fifth
Third Bancorp, however created, of every kind and description, whether now existing or
hereafter arising and whether direct or indirect, primary or as guarantor or surety,
absolute or contingent, due or to become due, liquidated or unliquidated, matured or
unmatured, participated in whole or in part, created by trust agreement, lease, overdraft,
agreement, or otherwise, whether or not secured by additional collateral, whether
originated with Beneficiary or owed to others and acquired by Beneficiary by purchase,
assignment or otherwise, and including, without limitation, all loans, advances,
indebtedness and each and every other obligation or liability arising under the Loan
Documents, letters of credit now or hereafter issued by Beneficiary or any affiliate of
Fifth Third Bancorp for the benefit of or at the request of Borrower, all obligations to
perform or forbear from performing acts, any and all Rate Management Obligations (as
defined in the Loan Documents), and all agreements, instruments and documents evidencing,
guarantying, securing or otherwise executed in connection with any of the foregoing,
together with any amendments, modifications, and restatements thereof, and all expenses and
attorneys’ fees incurred or other sums disbursed by Beneficiary or any affiliate of Fifth
Third Bancorp under this Guaranty or any other document, instrument or agreement related to
any of the foregoing (collectively, the “Obligations”).
(b) This Guaranty is a continuing guaranty of payment, and not merely of collection,
that shall remain in full force and effect until expressly terminated in writing by
Beneficiary, notwithstanding the fact that no Obligations may be outstanding from time to
time. Such termination by Beneficiary shall be applicable only to transactions having
their inception after the effective date thereof, and shall not affect the enforceability
of this Guaranty with regard to any Obligations arising out of transactions having their
inception prior to such effective date, even if such Obligations shall have been modified,
renewed, compromised, extended, otherwise amended or performed by Beneficiary subsequent to
such termination. In the absence of any termination of
this Guaranty as provided above, Guarantor agrees that Guarantor’s obligations
hereunder shall not be deemed discharged or satisfied until the Obligations are fully paid
and performed, and no such payments or performance with regard to
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the Obligations is subject to any right on the part of any person whomsoever, including but
not limited to any trustee in bankruptcy, to recover any of such payments. If any such
payments are so set aside or settled without litigation, all of which is within
Beneficiary’s discretion, Guarantor shall be liable for the full amount Beneficiary is
required to repay, plus costs, interest, reasonable attorneys’ fees and any and all
expenses that Beneficiary paid or incurred in connection therewith. A successor of
Borrower, including Borrower in its capacity as debtor in a bankruptcy reorganization case,
shall not be considered to be a different person than Borrower; and this Guaranty shall
apply to all Obligations incurred by such successor.
(c) Guarantor agrees that Guarantor is directly and primarily liable to Beneficiary
and that the Obligations hereunder are independent of the Obligations of Borrower, or of
any other guarantor. The liability of Guarantor hereunder shall survive discharge or
compromise of any Obligation of Borrower in bankruptcy or otherwise. Beneficiary shall not
be required to prosecute or seek to enforce any remedies against Borrower or any other
party liable to Beneficiary on account of the Obligations, or to seek to enforce or resort
to any remedies with respect to any collateral granted to Beneficiary by Borrower or any
other party on account of the Obligations, as a condition to payment or performance by
Guarantor under this Guaranty.
(d) Beneficiary may, without notice or demand and without affecting its rights
hereunder, from time to time: (i) renew, extend, accelerate or otherwise change the amount
of, the time for payment of, or other terms relating to, any or all of the Obligations, or
otherwise modify, amend or change the terms of the Loan Documents or any other document or
instrument evidencing, securing or otherwise relating to the Obligations, (ii) take and
hold collateral for the payment of the Obligations guaranteed hereby, and exchange,
enforce, waive, and release any such collateral, and apply such collateral and direct the
order or manner of sale thereof as Beneficiary in its discretion may determine.
Accordingly, Guarantor hereby waives notice of any and all of the foregoing.
(e) Guarantor hereby waives all defenses, counterclaims and off-sets of any kind or
nature, whether legal or equitable, that may arise: (i) directly or indirectly from the
present or future lack of validity, binding effect or enforceability of the Loan Documents
or any other document or instrument evidencing, securing or otherwise relating to the
Obligations, (ii) from Beneficiary’s impairment of any collateral, including the failure to
record or perfect the Beneficiary’s interest in the collateral, or (iii) by reason of any
claim or defense based upon an election of remedies by Beneficiary in the event such
election may, in any manner, impair, affect, reduce, release, destroy or extinguish any
right of contribution or reimbursement of Guarantor, or any other rights of the Guarantor
to proceed against any other guarantor, or against any other person or any collateral.
(f) Guarantor hereby waives all presentments, demands for performance or payment,
notices of nonperformance, protests, notices of protest, notices of dishonor, notices of
default or nonpayment, notice of acceptance of this Guaranty, and notices of the existence,
creation, or incurring of new or additional Obligations, and all other notices or
formalities to which Guarantor may be entitled, and Guarantor hereby waives all suretyship
defenses, including but not limited to all defenses set forth in the Uniform Commercial
Code, as revised from time to time (the “UCC”) to the full extent such a waiver is
permitted thereby.
(g) Guarantor hereby irrevocably waives all legal and equitable rights to recover from
Borrower any sums paid by the Guarantor under the terms of this Guaranty, including without
limitation all rights of subrogation and all other rights that would result in Guarantor
being deemed a creditor of Borrower under the federal Bankruptcy Code or any other law, and
Guarantor hereby waives any right to assert in any manner against Beneficiary any claim,
defense, counterclaim and offset of any kind or nature, whether legal or equitable, that
Guarantor may now or at any time hereafter have against Borrower or any other party liable
to Beneficiary.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Guarantor hereby represents, warrants and
covenants as follows:
(a) Guarantor is duly organized, validly existing and in good standing under the laws
of the state of its incorporation, has the power and authority to carry on its business and
to enter into and perform this Guaranty and is qualified and licensed to do business in
each jurisdiction in which such qualification or licensing is required.
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(b) The execution, delivery and performance by Guarantor of this Guaranty have been
duly authorized by all necessary corporate action, and shall not violate any provision of
law or regulation applicable to Guarantor, or the articles of incorporation, regulations or
bylaws of Guarantor, or any writ or decree of any court or governmental instrumentality, or
any instrument or agreement to which Guarantor is a party or by which Guarantor may be
bound; this Guaranty is a legal, valid and binding obligation of said Guarantor,
enforceable in accordance with its terms; and there is no action or proceeding before any
court or governmental body agency now pending that may materially adversely affect the
condition (financial or otherwise) of Guarantor.
3. AFFIRMATIVE COVENANTS. Guarantor covenants with, and represents and warrants to,
Beneficiary that, from and after the execution date of the Loan Documents until the Obligations are
paid and satisfied in full:
(a) Financial Statements. Guarantor shall maintain a standard and modern system for
accounting and shall furnish to Beneficiary:
(i) Within 30 days after the end of each month, a copy of Guarantor’s
internally prepared consolidated financial statements for that month and for the
year to date in a form reasonably acceptable to Beneficiary, prepared and certified
as complete and correct, subject to changes resulting from year-end adjustments, by
the principal financial officer of Guarantor;
(ii) Within 45 days after the end of each quarter, a copy of Guarantor’s
financial statements for that quarter and for the year to date and certified as
complete and correct, subject to changes resulting from year-end adjustments, by
the principal financial officer of Guarantor;
(iii) Within 120 days after the end of each fiscal year, a copy of Guarantor’s
financial statements audited by a firm of independent certified public accountants
acceptable to Beneficiary (which acceptance shall not be unreasonably withheld) and
accompanied by an audit opinion of such accountants without qualification;
(iv) With the statements submitted above, a certificate signed by the
Guarantor, (i) stating that no Event of Default specified herein, nor any event
which upon notice or lapse of time, or both would constitute such an Event of
Default, has occurred, or if any such condition or event existed or exists,
specifying it and describing what action Guarantor has taken or proposes to take
with respect thereto, and (ii) setting forth, in summary form, figures showing the
financial status of Guarantor in respect of the financial restrictions contained
herein;
(v) Immediately upon any officer of Guarantor obtaining knowledge of any
condition or event which constitutes or, after notice or lapse of time or both,
would constitute an Event of Default, a certificate of such person specifying the
nature and period of the existence thereof, and what action Guarantor has taken or
is taking or proposes to take in respect thereof;
All of the statements referred to in (i), (ii) and (iii) above shall be in conformance with
generally accepted accounting principles and give representatives of Beneficiary access
thereto at all reasonable times, including permission to examine, copy and make abstracts
from any such books and records and such other information which might be helpful to
Beneficiary in evaluating the status of the loans as it may reasonably request from time to
time.
With all financial statements delivered to Beneficiary as provided in (i), (ii) and (iii)
above, Guarantor shall deliver to Beneficiary a Financial Statement Compliance Certificate
in addition to the other information set forth therein, which certifies the Guarantor’s
compliance with the financial covenants set forth herein and that no Event of Default has
occurred.
If at any time Guarantor has any additional subsidiaries which have financial statements
that could be consolidated with those of Guarantor under generally accepted accounting
principles, the financial statements required by subsections (i), (ii) and (iii) above
shall be the financial statements of Guarantor and all such subsidiaries prepared on a
consolidated and consolidating basis.
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4. NEGATIVE COVENANTS. Guarantor covenants with, and represents and warrants to, Beneficiary
that, from and after the execution date hereof until the Obligations are paid and satisfied in
full:
(a) Capital Stock and Distribution. Guarantor shall not (a) declare or pay any
dividend or distributions (except stock dividends) on its capital stock, (b) make any
payments of any kind to its shareholders (including, without limitation, debt repayments,
payments for goods or services or otherwise, but excluding ordinary salary payments to
shareholders employed by Guarantor) or (c) redeem any shares of its capital stock in any
fiscal year. Notwithstanding the foregoing, if Guarantor elects to be taxed as an “S”
corporation for federal income tax purposes, distributions to Guarantor’s shareholders
shall be permitted in amounts necessary to cover federal and state income tax liabilities
payable solely as a result of income of Guarantor being included in such shareholders’ tax
returns which distributions shall be in amounts necessary to pay such shareholders’ tax
obligations based upon such income derived from Guarantor; such distributions may be made
only so long as no Event of Default has occurred prior to such distributions or shall occur
as a result of such distribution.
5. FINANCIAL COVENANTS. Guarantor and Beneficiary hereby agrees as follows:
(a) Minimum Tangible Net Worth. Guarantor shall not permit its Tangible Net Worth,
on a consolidated basis, to be less than the following at the end of any quarter during any
of the periods set forth below:
| Period | Min. Amount | |||
10/31/2008 and thereafter |
$ | 1,000,000.00 | ||
(b) Fixed Charge Coverage Ratio. Guarantor shall not permit its Fixed Charge Coverage Ratio,
on a consolidated basis, to be less than the following at the end of any quarter during any of the
following periods as measured on a rolling twelve month basis.
| Period | Min. Ratio | |||
10/31/2008 and thereafter |
1.10 to 1.0 | |||
(c) Funded Indebtedness to EBITDA. Guarantor shall not permit its Funded Indebtedness to
EBITDA, on a consolidated basis, to be greater than the following at the end of any quarter during
any of the following periods as measured on a rolling twelve month basis.
| Period | Max. Ratio | |||
10/31/2008 and thereafter |
2.0 to 1.0 | |||
6. DEFINITIONS. Certain capitalized terms have the meanings set forth on any exhibit hereto,
in the Security Agreement, if applicable, or any other Loan Document. All financial terms used
herein but not defined on the exhibits, in the Security Agreement, if applicable, or any other Loan
Document have the meanings given to them by generally accepted accounting principles. All other
undefined terms have the meanings given to them in the Uniform Commercial Code as adopted in the
state whose law governs this instrument. The following definitions are used herein:
(a) “EBITDA” means on a consolidated basis, the amount of Guarantor’s earnings before
interest, taxes, depreciation and amortization expense for the measurement period.
(b) “Fixed Charge Coverage Ratio” means the ratio of (a) Guarantor’s EBITDA plus rent
and operating lease payments, less distributions, dividends and capital expenditures (other
than capital expenditures financed with the proceeds of purchase money Indebtedness or
capital leases to the extent permitted hereunder) and other extraordinary items for the
twelve month period then ending to (b) the consolidated sum of (i) Guarantor’s interest
expense, and (ii) all principal payments with respect to Indebtedness that were paid or
were due and payable by all consolidated entities during the period plus rent and operating
lease expense incurred and all cash taxes paid in the same such period.
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(c) “Funded Indebtedness” means all Indebtedness (i) in respect of money borrowed or
(ii) evidenced by a note, debenture (senior or subordinated) or other like written
obligation to pay money, or (iii) in respect of rent or hire of property under leases or
lease arrangements which under generally accepted accounting principles are required to be
capitalized, or (iv) in respect of obligations under conditional sales or other title
retention agreements.
(d) “Indebtedness” means (i) all items (except items of capital stock, of capital
surplus, of general contingency reserves or of retained earnings, deferred income taxes,
and amount attributable to minority interest if any) which in accordance with generally
accepted accounting principles would be included in determining total liabilities on a
consolidated basis (if Guarantor should have a subsidiary) as shown on the liability side
of a balance sheet as at the date as of which Indebtedness is to be determined, (ii) all
indebtedness secured by any mortgage, pledge, lien or conditional sale or other title
retention agreement to which any property or asset owned or held is subject, whether or not
the indebtedness secured thereby shall have been assumed (excluding non-capitalized leases
which may amount to title retention agreements but including capitalized leases), and (iii)
all indebtedness of others which Guarantor or any subsidiary has directly or indirectly
guaranteed, endorse (otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or otherwise) to
purchase or repurchase or otherwise acquire, or in respect of which Guarantor or any
subsidiary has agreed to apply or advance funds (whether by way of loan, stock purchase,
capital contribution or otherwise) or otherwise to become directly or indirectly liable.
(e) “Loan Documents” means any and all Rate Management Agreements and each and every
document or agreement executed by any party evidencing, guarantying or securing any of the
Obligations; and “Loan Document” means any one of the Loan Documents.
(f) “Subsidiary” means any corporation of which Guarantor directly or indirectly owns
or controls at the time outstanding stock having ordinary circumstances (not depending on
the happening of a contingency) voting power to elect a majority of the board of directors
of said corporation.
(g) “Tangible Net Worth” shall mean the total of the capital stock (less treasury
stock), paid-in capital surplus, general contingency reserves and retained earnings
(deficit) of Guarantor and any Subsidiary as determined on a consolidated basis in
accordance with generally accepted accounting principles after eliminating all
inter-company items and all amounts properly attributable to minority interests, if any, in
the stock and surplus of any Subsidiary, minus the following items (without duplication of
deductions), if any, appearing on the consolidated balance sheet of Guarantor:
(i) all deferred charges (less amortization, unamortized debt discount and
expense and corporate organization expenses);
(ii) the book amount of all assets which would be treated as intangibles under
generally accepted accounting principles, including, without limitation, such items
as goodwill, trademark applications, trade names, service marks, brand names,
copyrights, patents, patent applications and licenses, and rights with respect to
the foregoing;
(iii) the amount by which aggregate inventories or aggregate securities
appearing on the asset side of such consolidated balance sheet exceed the lower of
cost or market value (at the date of such balance sheet) thereof; and
(iv) any write-up in the book amount of any asset resulting from a revaluation
thereof from the book amount entered upon acquisition of such asset.
7. EVENTS OF DEFAULT. Any of the following occurrences shall constitute an “Event of Default”
under this Guaranty:
(a) An Event of Default occurs under the terms of the Loan Documents or any other
document or instrument evidencing, securing or otherwise relating to the Obligations, as
“Event of Default” shall be defined therein.
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(b) Guarantor shall fail to observe or perform any covenant, condition, or agreement
under this Guaranty for a period of thirty (30) days from the date of such breach, or any
representation or warranty of Guarantor set forth in this Guaranty shall be materially
inaccurate or misleading when made or delivered.
(c) The dissolution of Guarantor, or of any endorser or other guarantor of the
Obligations, or the merger or consolidation of any of the foregoing with a third party, or
the lease, sale or other conveyance of a material part of the assets or business of any of
the foregoing to a third party outside the ordinary course of its business, or the lease,
purchase or other acquisition of a material part of the assets or business of a third party
by any of the foregoing.
(d) The default by Guarantor under the terms of any indebtedness of Guarantor now or
hereafter existing, which default has not been cured within any time period permitted
pursuant to the terms and conditions of such indebtedness or the occurrence of an event
which gives any creditor the right to accelerate the maturity of any such indebtedness.
(e) The commencement by Guarantor of a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect; or the entry of a decree or
order for relief in respect of Guarantor in a case under any such law or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Guarantor or for any substantial part of Guarantor’s property, or ordering the
wind-up or liquidation of Guarantor’s affairs; or the filing and pendency for 30 days
without dismissal of a petition initiating an involuntary case under any such bankruptcy,
insolvency or similar law; or the making by Guarantor of any general assignment for the
benefit of creditors; or the failure of Guarantor generally to pay Guarantor’s debts as
such debts become due; or the taking of action by Guarantor in furtherance of any of the
foregoing.
(f) The revocation or attempted revocation of this Guaranty by Guarantor before the
termination of this Guaranty in accordance with its terms, or the assignment or attempted
assignment of this Guaranty by Guarantor.
8. REMEDIES.
(a) Whenever any Event of Default as defined herein shall have happened, Beneficiary,
in its sole discretion, may take any remedial action permitted by law or in equity or by
the Loan Documents or any other document or instrument evidencing, securing or otherwise
relating to the Obligations, including demanding payment in full of all sums guaranteed
hereby, plus any accrued interest or other expenses.
(b) If Beneficiary should employ attorneys or incur other expenses for the enforcement
of this Guaranty, Guarantor, on demand therefor, shall reimburse the reasonable fees of
such attorneys and such other expenses to the extent permitted by law.
(c) No remedy set forth herein is exclusive of any other available remedy or remedies,
but each is cumulative and in addition to every other remedy given under this Guaranty or
now or hereafter existing at law or in equity or by statute. No delay or omission on the
part of Beneficiary to exercise any right or remedy shall be construed to be a waiver
thereof, but any such right or remedy may be exercised from time to time and as often as
may be deemed expedient thereby, and a waiver on any one occasion shall be limited to that
particular occasion.
9. FINANCIAL CONDITION OF BORROWER. Guarantor is presently informed of the financial condition
of Borrower and of all other circumstances that a diligent inquiry would reveal and which would
bear upon the risk of nonpayment of any of the Obligations. Guarantor hereby covenants that
Guarantor shall continue to keep informed of such matters, and hereby waives Guarantor’s right, if
any, to require Beneficiary to disclose any present or future information concerning such matters
including, but not limited to, the release of or revocation by any other guarantor.
10. SUBORDINATION. All indebtedness and liability now or hereafter owing by Borrower to
Guarantor is hereby postponed and subordinated to the Obligations owing to Beneficiary; and such
indebtedness and liability to Guarantor, if Beneficiary so requests, shall be collected, enforced
and received by Guarantor as trustee for Beneficiary and be paid over to Beneficiary on account of
the Obligations.
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11. NOTICES. Any notices under or pursuant to this Guaranty shall be deemed duly sent when
delivered in hand or when mailed by registered or certified mail, return receipt requested,
addressed as follows:
| To Guarantor: | Streamline Health Solutions, Inc. 10200 Alliance Road Cincinnati, Ohio 45242 Hamilton County, Ohio |
|||
| To Beneficiary: | Fifth Third Bank 38 Fountain Square Plaza Cincinnati, Ohio 45263 Hamilton County, Ohio |
Either party may change such address by sending notice of the change to the other party.
12. MISCELLANEOUS.
(a) This Guaranty may be executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(b) This Guaranty is the complete agreement of the parties hereto and supersedes all previous
understandings and agreements relating to the subject matter hereof. Neither this Guaranty nor any
of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only
by an instrument in writing signed by the party against whom enforcement of the termination,
amendment, supplement, waiver or modification is sought.
(c) As the context herein requires, the singular shall include the plural and one gender shall
include one or both other genders.
(d) This Guaranty shall inure to the benefit of Beneficiary’s successors and assigns and shall
be binding upon the heirs, executors, administrators and successors of Guarantor. This Guaranty is
not assignable by Guarantor.
(e) If any provision of this Guaranty or the application thereof to any person or circumstance
is held invalid, the remainder of this Guaranty and the application thereof to other persons or
circumstances shall not be affected thereby.
(f) If from any cause or circumstances whatsoever, fulfillment of any provisions of this
Guaranty at the time performance of such provision shall be due involves transcending the limit of
validity presently prescribed by any applicable usury statute or any other applicable law, with
regard to obligations of like character and amount, then ipso facto the obligation to be fulfilled
shall be reduced to the limit of such validity. The provisions of this paragraph shall control
every other provision of this Guaranty.
(g) This Guaranty is assignable by Beneficiary, and any assignment hereof or any transfer or
assignment of the Loan Documents or portions thereof by Beneficiary shall operate to vest in any
such assignee all rights and powers herein conferred upon and granted to Beneficiary.
(h) This Guaranty shall be governed by and construed in accordance with the law of the State
of Ohio. Guarantor agrees that the state and federal courts for the County in which the Beneficiary
is located or any other court in which Beneficiary initiates proceedings have exclusive
jurisdiction over all matters arising out of this Guaranty.
(i) GUARANTOR AND BENEFICIARY HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING
IN CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED THERETO.
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13. CONFESSION OF JUDGMENT. Guarantor authorizes any attorney of record to appear for it in
any court of record in the State of Ohio, after an Obligation becomes due and payable whether by
its terms or upon default, waive the issuance and service of process, and release all errors, and
confess a judgment against it in favor of the holder of such Obligation, for the principal amount
of such Obligation plus interest thereon, together with court costs and attorneys’ fees. Stay of
execution and all exemptions are hereby waived. If an Obligation is referred to an attorney for
collection, and the payment is obtained without the entry of a judgment, the obligors shall pay to
the holder of such obligation its attorneys’ fees. GUARANTOR AGREES THAT AN ATTORNEY WHO IS COUNSEL
TO BENEFICIARY OR ANY OTHER HOLDER OF SUCH OBLIGATION MAY ALSO ACT AS ATTORNEY OF RECORD FOR
GUARANTOR WHEN TAKING THE ACTIONS DESCRIBED ABOVE IN THIS PARAGRAPH. GUARANTOR AGREES THAT ANY
ATTORNEY TAKING SUCH ACTIONS MAY BE PAID FOR THOSE SERVICES BY BENEFICIARY OR THE HOLDER OF SUCH
OBLIGATION. GUARANTOR WAIVES ANY CONFLICT OF INTEREST THAT MAY BE CREATED BECAUSE THE ATTORNEY WHO
ACTS FOR GUARANTOR PURSUANT TO THIS PARAGRAPH IS ALSO REPRESENTING BENEFICIARY OR THE HOLDER OF
SUCH OBLIGATION, OR BECAUSE SUCH ATTORNEY IS BEING PAID BY BENEFICIARY OR THE HOLDER OF SUCH
OBLIGATION.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as of the date first
above written.
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
BENEFICIARY:
|
GUARANTOR: | |
Fifth Third Bank, an Ohio banking corporation
|
Streamline Health Solutions, Inc., a Delaware corporation | |
By:
/s/ Daniel G. Feldmann
|
By: /s/ Paul W. Bridge Jr. | |
(Signature)
|
(Authorized Signer) | |
Daniel
G. Feldmann, AVP
|
Paul W. Bridge Jr., CFO | |
(Print Name and Title)
|
(Print Name and Title) |
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