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
Date of Report (Date of earliest event reported): January 6, 2009
Streamline Health Solutions, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-28132 | 31-1455414 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer 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 January 6, 2009, Streamline Health, Inc. (the “Borrower”), a wholly owned subsidiary of
Streamline Health Solutions, Inc. (the “Registrant”), entered into a revised revolving note with
Fifth Third Bank, Cincinnati, OH. The terms of the loan remain the same as set forth in the
revolving note entered into on July 31, 2008 except that the Borrowing Base limitation has been
modified and is now set at “the lesser of 80% of the net amount of Borrower’s Eligible Accounts
(less than 90 days) or 2 times trailing twelve month EBITDA of Streamline Health Solutions, Inc.”
compared to the previous limitation of “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.”
The loan continues to be guaranteed by the Registrant and is secured by a first lien on all of the
assets of the Registrant and its subsidiary. In connection with the entering into of the revised
revolving note, the Registrant also entered into a revised continuing guaranty agreement. The
terms of the continuing guarantee agreement remain the same as set forth in the guarantee agreement
entered into on July 31, 2008 except that the Registrant’s covenant to maintain a minimum Tangible
Net Worth of at least $1,000,000 at all times after October 31, 2008 has been modified to provide
that the Registrant must maintain a minimum Tangible Net Worth that increases on a periodic basis
as follows:
Period |
Min. Amount | |||
10/31/08 through 01/30/09 |
$ | 1,000,000.00 | ||
01/31/09 through 04/29/09 |
$ | 1,500,000.00 | ||
04/30/09 through 07/30/09 |
$ | 1,750,000.00 | ||
07/31/09 through 10/30/09 |
$ | 2,000,000.00 | ||
10/31/09 through 01/30/10 |
$ | 2,250,000.00 | ||
01/31/09 and thereafter |
$ | 2,500,000.00 | ||
Prior to entering into the revised continuing guarantee agreement, the Registrant and the Borrower
had received a waiver from Fifth Third Bank as to the Registrant’s non-compliance with the minimum
Tangible Net Worth requirement as of October 31, 2008.
The maximum principal amount under the terms of the revolving note is $2,000,000. The interest
rate on amounts borrowed 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 EBITDA. The
continuing guarantee agreement contains other covenants including a minimum Fixed Charge Coverage
Ratio and maximum ratio of Funded Indebtedness to EBITDA. This loan facility expires on August 1,
2010.
The complete terms of the revised loan are set forth in the Revolving Note and Continuing Guarantee
Agreement attached as Exhibits 10.1 and 10.2, respectively, which replace the previous Revolving
Note and Continuing Guarantee Agreement entered into on July 31, 2008 with Fifth Third Bank. All
defined terms used in this Form 8-K and not defined herein, have the meanings set forth in the
Revolving Note and Continuing Guarantee Agreement, as applicable.
2
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
| EXHIBIT | ||
| NUMBER | DESCRIPTION |
|
10.1
|
Revolving Note, effective as of January 6, 2009 | |
10.2
|
Continuing Guarantee Agreement, effective as of January 6, 2009 |
3
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: January 9, 2009 | By: | /s/ Donald E. Vick, Jr. | ||
| Donald e. Vick, Jr. | ||||
| Interim Chief Financial Officer | ||||
4
INDEX TO EXHIBITS
| Exhibit No. | Description of Exhibit |
|
Exhibit 10.1
|
Revolving Note, effective as of January 6, 2009 | |
Exhibit 10.2
|
Continuing Guarantee Agreement, effective as of January 6, 2009 |
5
Exhibit 10.1
| 001 - FTCI | Fifth Third Bank | |||
Revolving Note
| OFFICER No. 04009 | NOTE No. 0902074749-00026 | |
| $2,000,000.00 | January 6, 2009 | |
| (Effective Date) |
1. PROMISE TO PAY. On or before August 1, 2010 (the “Maturity Date”), the
undersigned, Streamline
Health, 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 xxxxx. 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 may be applied in
the following order accrued interest, principal, fees, charges and advanced costs.
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):
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) |
| 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 July 30, 2008, in the principal amount
of $2,000,000.00 (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. REPRESENTATIONS AND WARRANTIES. Borrower hereby warrants and represents to Lender
the following:
(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.
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 2 - |
(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.
6. 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
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.
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 3 - |
(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.
(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.
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 4 - |
(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 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.
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 5 - |
(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.
7. 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.
8. 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 2 times trailing twelve
month EBITDA 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
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
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 6 - |
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 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,
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 7 - |
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.
9. 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.
(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.
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 8 - |
(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.
10. 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.
11. 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.
12. ENTIRE AGREEMENT. Borrower agrees that there are no conditions or understandings
which are not
expressed in this Note and the documents referred to herein.
13. SEVERABILITY. The declaration of invalidity of any provision of this Note shall
not affect any part of the
remainder of the provisions.
14. 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.
15. 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.
16. 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.
17.
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.
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 9 - |
18.
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.
19. 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., an Ohio corporation | ||||||
| By: | /s/ Donald E. Vick, Jr.
|
|||||
| (Authorized Signer) | ||||||
| Donald E. Vick Jr., CFO | ||||||
| (Print Name and Title) | ||||||
| PROMISSORY-NOTE © Fifth Third Bancorp 2001M (12/08) | - 10 - |
Exhibit 10.2
| 001 - FTCI | Fifth Third Bank | |||
Continuing Guaranty Agreement
THIS
CONTINUING GUARANTY AGREEMENT (the “Guaranty”) made as of January 6, 2009 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., 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
December 26, 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
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) |
the
Obligations is subject to any right on the part or 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.
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 2 - |
(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.
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 3 - |
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 through 01/30/2009 |
$1,000,000.00 | |
01/31/2009 through 04/29/2009 |
$1,500,000.00 | |
04/30/2009 through 07/30/2009 |
$1,750,000.00 | |
07/31/2009 through 10/30/2009 |
$2,000,000.00 | |
10/31/2009
through 01/30/2010 |
$2,250,000.00 | |
01/31/2010 and thereafter |
$2,500,000.00 |
(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 trailing 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)
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 4 - |
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.
(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.
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 5 - |
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.
(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 therefore, shall reimburse the reasonable fees of such
attomeys 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
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 6 - |
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.
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.
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 7 - |
(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.
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/ Donald E. Vick, Jr.
|
||||||||||
| (Signature) | (Authorized Signer) | ||||||||||||
| Daniel G. Feldmann, AVP | Donald E.Vick Jr., CFO | ||||||||||||
(Print Name and Title)
|
(Print Name and Title) | ||||||||||||
| CONT-GUAR © Fifth Third Bancorp 2001M (7/08) | - 8 - |