REVOLVING CREDIT AGREEMENT

                                  BY AND AMONG

                         SANDSPORT DATA SERVICES, INC.,
                                 SANDATA, INC.,
                       SANDATA HOME HEALTH SYSTEMS, INC.,
                           SANTRAX PRODUCTIVITY, INC.,
                             SANDATA SPECTRUM, INC.,
                              SANDATA INTECK, INC.,
                              SANTRAX SYSTEMS, INC.

                                       AND

                               MARINE MIDLAND BANK


                           DATED AS OF APRIL 18, 1997












G:\DATA\LEGAL\MMBAGR.DOC


<PAGE>



                                TABLE OF CONTENTS

SECTION 1:  DEFINITIONS.....................................................(v)

1.1      Defined Terms......................................................(v)
         -------------

1.2      Accounting Terms....................................................4
         ----------------

SECTION 2:  AMOUNT AND TERMS OF ADVANCES.....................................4

2.1      Commitment..........................................................4
         ----------

2.2      Revolving Credit Note...............................................5
         ---------------------

2.3      Notice of Advances..................................................5
         ------------------

2.4      Cancellation and Reduction of Commitment............................5
         ----------------------------------------

2.5      Commitment Fee......................................................5
         --------------

2.6      Increase in Costs or Reduced Return Resulting from Capital 
         Adequacy Requirements...............................................6

2.7      Interest on the Revolving Credit Note...............................6
         -------------------------------------

2.8      Optional Prepayments................................................7
         --------------------

2.9      Alternate Rate of Interest..........................................8
         --------------------------

2.10     Increased Costs.....................................................8
         ---------------

2.11     Indemnity...........................................................9
         ---------

2.12     Continuation and Conversion of Advances............................10
         ---------------------------------------

2.13     Balance Shortfall Fee..............................................10
         ---------------------

2.14     Payments...........................................................10
         --------

2.16     Computations.......................................................11
         ------------

SECTION 3:  REPRESENTATIONS  ...............................................11

3.1      Subsidiaries; Existence............................................11
         -----------------------

3.2      Company and Guarantors; Existence..................................11
         ---------------------------------

3.3      Corporate Authority................................................12
         -------------------

3.4      Binding Agreements.................................................12
         ------------------

3.5      Litigation.........................................................12
         ----------

3.6      No Conflicting Law or Agreements...................................12
         --------------------------------

3.7      Contingent Liabilities.............................................13
         ----------------------

3.8      Financial Condition................................................13
         -------------------

3.9      Title to Properties................................................13
         -------------------

3.10     Taxes..............................................................13
         -----

3.11     Default............................................................14
         -------

3.12     No Burdensome Agreements...........................................14
         ------------------------

3.13     ERISA..............................................................14
         -----

3.14     Operation of Business..............................................14
         ---------------------

SECTION 4:  CONDITIONS TO ADVANCES..........................................15

4.1      Conditions to the Initial Advance..................................15
         ---------------------------------

4.2      Conditions to each Advance.........................................17
         --------------------------

4.3      Approval of Bank's Counsel.........................................17
         --------------------------

SECTION 5:  AFFIRMATIVE COVENANTS...........................................17

5.1      Information........................................................17
         -----------

5.2      Existence..........................................................20
         ---------

5.3      Payment of Obligations.............................................20
         ----------------------

5.4      Insurance..........................................................20
         ---------

5.5      Payment of Indebtedness and Performance of Obligations.............20
         ------------------------------------------------------

5.6      Condition of Property..............................................20
         ---------------------

5.7      Observance of Legal Requirements...................................20
         --------------------------------

5.8      Books and Records..................................................21
         -----------------

5.9      Inspection.........................................................21
         ----------

5.10     Financial Requirements............................................21
         ----------------------

5.11     New Subsidiaries..................................................22
         ----------------

SECTION 6:  NEGATIVE COVENANTS.............................................22

6.1      Indebtedness for Borrowed Money...................................22
         -------------------------------

6.2      Limitation on Liens...............................................23
         -------------------

6.3      Merger, Consolidation and Acquisition.............................23
         -------------------------------------

6.4      Sale of Assets....................................................23
         --------------

6.5      Contingent Liabilities............................................24
         ----------------------

6.6      Investments; Loans................................................24
         ------------------

6.7      Capital Expenditures..............................................24
         --------------------

6.8      Nature of Business................................................25
         ------------------

6.9      Transactions with Affiliates......................................25
         ----------------------------

6.10     No Lien Senior to or Equal to Loan Documents......................25
         --------------------------------------------

6.11     Change of Management..............................................25
         --------------------

6.12     Dividends and Purchase of Stock...................................25
         -------------------------------

SECTION 7:  EVENTS OF DEFAULT..............................................26





<PAGE>




SECTION 8:  MISCELLANEOUS...................................................28

8.1      Consents to Amendments.............................................28
         ----------------------

8.2      Survival of Representations........................................28
         ---------------------------

8.3      Successors and Assigns.............................................28
         ----------------------

8.4      Liability in Acting................................................28
         -------------------

8.5      The Bank's Rights Not Waived; Cumulative Rights....................29
         -----------------------------------------------

8.6      Expenses...........................................................29
         --------

8.7      Other Agreements...................................................29
         ----------------

8.8      Repayment..........................................................30
         ---------

8.9      Applicable Law and Jurisdiction....................................30
         -------------------------------

8.10     Counterclaim; Trial by Jury........................................30
         ---------------------------

8.11     Entire Agreement...................................................30
         ----------------

8.12     Headings...........................................................31
         --------

8.13     Notices............................................................31
         -------

8.14     Indemnification....................................................31
         ---------------

8.15     Authority to Disclose..............................................32
         ---------------------

8.16     Severability.......................................................32
         ------------

8.17     Counterparts.......................................................33
         ------------

Exhibit A - Revolving Credit Note






<PAGE>


                           REVOLVING CREDIT AGREEMENT

     THIS  AGREEMENT  made  as of the  18th  day of  April,  1997  by and  among
SANDSPORT DATA SERVICES, INC., a New York corporation having its principal place
of  business  at 26 Harbor  Park  Drive,  Port  Washington,  New York 11050 (the
"Company"),   SANDATA,   INC.,  SANDATA  HOME  HEALTH  SYSTEMS,   INC.,  SANDATA
PRODUCTIVITY,  INC.,  SANDATA  SPECTRUM,  INC. and SANDATA INTECK,  INC., each a
Delaware  corporation  having its principal  place of business at 26 Harbor Park
Drive,  Port Washington,  New York 11050 and SANTRAX  SYSTEMS,  INC., a New York
corporation having its principal place of business at 26 Harbor Park Drive, Port
Washington, New York 11050 (individually,  a "Guarantor" and, collectively,  the
"Guarantors")  and MARINE  MIDLAND BANK, a New York State bank with an office at
534 Broad Hollow Road, Melville, New York 11747 (the "Bank").

                              W I T N E S S E T H :

                             SECTION 1: DEFINITIONS

  1.1 Defined Terms:  As used in this Agreement the following  terms have the
following meanings, unless the context otherwise requires:

     Adjusted LIBOR Rate: shall mean the LIBOR Rate plus two (2%) percent.

     Advance or Advances: shall mean,  collectively,  all advances made pursuant
to  Section  2.2 hereof  whether  Prime Rate  Advances  or LIBOR Rate  Advances.


     Assignment of Life  Insurance:  shall have the meaning  assigned in Section
4.1(i) hereof.

     Business Day: shall mean any day other than a Saturday, Sunday or other day
on which  commercial banks in London and/or New York, New York are authorized or
required by law to close. 

     Commitment: shall have the meaning assigned in Section 2.1 hereof.

     Commitment Period: shall mean the period from and including the date hereof
to,  but  not  including,  the  Termination  Date or  such  earlier  date as the
Commitment shall terminate as provided herein. 

     Consolidated  Group:  shall  mean the  Company,  the  Guarantors  and their
respective  Subsidiaries.  

     Default:  shall  mean any of the  events  specified  in  Section  7 hereof,
whether  or not any  requirement  for  notice  or  lapse  of  time or any  other
condition has been satisfied.

     Default Rate: shall mean a rate per annum equal to the Prime Rate from time
to time in effect plus three (3%) percent. 

     ERISA:  shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time.

     ERISA  Affiliate:  shall  mean  any  trade  or  business  (whether  or  not
incorporated) which together with the Company, a Guarantor or a Subsidiary would
be treated as a single employer under Section 4001 of ERISA. 

     Event of  Default:  shall  mean any of the  events  specified  in Section 7
hereof,  provided that any  requirement for notice or lapse of time or any other
condition has been satisfied. 

     Guarantor or  Guarantors:  shall mean  Sandata,  Inc.,  Sandata Home Health
Systems,  Inc.,  Sandata  Productivity,  Inc.,  Sandata Spectrum,  Inc., Sandata
Inteck,  Inc.,  Santrax  Systems,  Inc.  and each  Person  required  to guaranty
pursuant to Section 5.11 hereof.

     Guaranty or Guaranties:  shall have the meaning  assigned in Section 4.1(b)
hereof and include the guaranties of each Person  required to guaranty  pursuant
to Section 5.11 hereof.

     Lien: shall mean any mortgage,  deed of trust,  pledge,  security interest,
encumbrance,  lien or charge of any kind (including any agreement to give any of
the  foregoing),  any  conditional  sale  or  other  title  retention  or  trust
agreement,  any lease in the nature  thereof,  and the filing or recording of or
agreement  to give any  financing  statement  or other  document  to be filed or
recorded under the Uniform Commercial Code of any jurisdiction.

     LIBOR Borrowing  Request:  shall mean the written request by the Company to
the Bank for a LIBOR Rate Advance  including  the date of the LIBOR Rate Advance
and the amount. 

     LIBOR  Period:  shall mean a period,  if available  to the Bank,  of ninety
(90)days.

     LIBOR  Rate:  shall  mean the per annum  interest  rate equal to the London
Interbank Offered Rate as shown on the Dow Jones & Company's Telerate Screen, at
approximately  11:00 a.m.  (London time) two Business Days prior to the proposed
borrowing date for deposits of United States dollars in an amount  comparable to
the principal amount of the proposed LIBOR Rate Advance for the LIBOR Period.

     LIBOR Rate Advance: shall mean any Advance bearing interest at the Adjusted
LIBOR Rate.

     Loan  Documents:   shall  mean  this  Agreement,  the  Note,  the  Security
Agreements,  the  Guaranties,  the  Assignment  of Life  Insurance and any other
documents  executed  by the  Company  or a  Guarantor  in  connection  herewith.


     Multiemployer  Plan:  shall mean a Plan described in Section  4001(a)(3) of
ERISA  which  covers  employees  of the  Company,  a  Subsidiary  or  any  ERISA
Affiliate. 

     Officers'  Certificate:  shall mean a certificate signed in the name of the
Company or a Guarantor, by its President, or one of its Vice Presidents,  and by
its Treasurer or Secretary. 

     PBGC:  shall mean the  Pension  Benefit  Guaranty  Corporation  established
pursuant to Subtitle A of Title IV of ERISA.

     Person:  shall mean and include an  individual,  a  partnership,  a firm, a
corporation,  a trust, a joint venture,  an  unincorporated  organization  and a
government or any department or agency thereof. 

     Plan:  shall  mean any plan  referred  to in  Section  4021(a)  of ERISA in
respect  of  which  the  Company,  a  Subsidiary  or an  ERISA  Affiliate  is an
"employer"  or a  "substantial  employer"  as said terms are defined in Sections
3(5) and 4001(a)(2) of ERISA, respectively. 

     Prime Borrowing Request:  shall mean the written request by the Company for
a Prime Rate  Advance  including  the date of the Prime Rate Advance and amount.


     Prime Rate: shall mean the rate of interest publicly  announced by the Bank
from time to time as its prime rate and is a base rate for calculating  interest
on certain loans. 

     Prime Rate Advance:  shall mean any Advance  bearing  interest at the Prime
Rate.

     Prohibited  Transaction:  means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.

     Regulatory Changes:  shall mean, after the date hereof, the introduction of
any new, or any change in existing,  applicable laws, rules or regulations or in
the  interpretation  or  administration  thereof  by any  court or  governmental
authority  charged  with  the  interpretation  or  administration   thereof,  or
compliance  by the Bank with any new request or  directive  by any such court or
authority (whether or not having the force of law).

     Reportable Event: shall mean any of the events set forth in Section 4043(b)
of ERISA.

     Revolving  Credit  Note:  shall have the  meaning  assigned  in Section 2.2
hereof.

     Security  Agreements:  shall have the meaning  assigned  in Section  4.1(c)
hereof including any reaffirmations thereof.

     Subsidiary:  shall mean any  corporation  of which more than fifty  percent
(50%) of the  outstanding  shares of stock of each class having  ordinary voting
power (other than stock  having such power only by reason of the  happening of a
contingency) is at the time owned or controlled,  directly or indirectly, by the
Company or a  Guarantor  or by one or more  Subsidiaries  or by the Company or a
Guarantor and one or more Subsidiaries.

     Termination Date: shall mean April 18, 2000.

     1.2 Accounting  Terms:  Each accounting term not defined in this Agreement,
and each  accounting  term partly defined in this  Agreement,  to the extent not
defined,  shall have the meaning given to it under generally accepted accounting
principles  consistent with those utilized in preparing the financial statements
referred to in Section 3.8 hereof.


                     SECTION 2: AMOUNT AND TERMS OF ADVANCES

     2.1 Commitment: Subject to the terms and conditions hereof, the Bank agrees
to  extend  credit  to the  Company  by  making  loans  (each  such  loan  being
hereinafter  called an "Advance" and,  collectively,  "Advances") to the Company
from time to time  during the  Commitment  Period up to an  aggregate  principal
amount  outstanding at any one time of Three Million and 00/100  ($3,000,000.00)
Dollars (the  "Commitment").  During the Commitment  Period, the Company may use
the  Commitment  by  borrowing,  paying  and  prepaying  in whole or in part and
reborrowing,  all in  accordance  with the terms  and  conditions  hereof.  Each
Advance  shall be in the  principal  amount of One Hundred  Thousand  and 00/100
($100,000.00) Dollars or an integral multiple thereof.

     2.2  Revolving  Credit  Note:  The  Advances  made by the Bank  pursuant to
Section 2.1 hereof  shall be  evidenced  by a  promissory  note of the  Company,
payable to the order of the Bank,  substantially in the form of Exhibit A hereto
(the "Revolving Credit Note"), representing the obligation of the Company to pay
the amount of the  Commitment  or, if less,  the aggregate  unpaid amount of all
Advances plus interest thereon as provided in Section 2.7 hereof.  The Revolving
Credit  Note shall be dated the date hereof and shall be payable to the order of
the Bank on the Termination  Date. The date and amount of each Advance,  and the
date and  amount of each  payment of  principal  on  account  thereof,  shall be
recorded  by the Bank at the time of such  Advance or  payment  on the  schedule
annexed to and  constituting a part of the Note. The aggregate  unpaid amount of
Advances set forth in such schedule shall be presumed to be the principal amount
owing and unpaid  thereon;  provided,  however,  that the failure of the Bank to
record  such  information  on such  schedule  shall  not in any way  affect  the
obligation of the Company to pay any amount due under the Revolving Credit Note.

     2.3  Notice  of  Advances:  Each  request  for an  Advance  whether a LIBOR
Borrowing  Request or a Prime Borrowing  Request shall be made on a Business Day
no later  than 1:00 p.m.  (New York  time) in writing  (including  by  facsimile
transmission) or orally by telephone  directed to the office of the Bank located
at 534 Broad Hollow Road, Melville, New York 11747. Each such oral request shall
be  confirmed  not  later  than  one (1)  Business  Day  thereafter  in  writing
(including  by  facsimile  transmission).  The  Company  may  not  make a  LIBOR
Borrowing  Request if the requested  LIBOR Rate Advance would have an expiration
date later  than the  Termination  Date.  The Bank shall make the funds for each
Advance so requested available at such office in immediately  available funds by
the close of business on the Business Day of such request.

     2.4  Cancellation  and  Reduction  of  Commitment:  The  Commitment  may be
canceled  or reduced  by the  Company at any time and from time to time prior to
the Termination Date in whole or in part, in amounts of One Hundred Thousand and
00/100 ($100,000.00)  Dollars or multiples thereof on one (1) Business Day prior
written notice thereof to the Bank; provided, however, that no such cancellation
or  reduction  shall  be  effective  to the  extent  that it  would  reduce  the
Commitment to an amount less than the aggregate unpaid amount of the Advances as
of the date of  reduction  unless such excess  unpaid  amount is  simultaneously
prepaid.  The Commitment,  or part thereof,  so reduced or canceled shall not be
reinstated.

     2.5 Commitment  Fee: The Company agrees to pay to the Bank a commitment fee
on the average daily unused portion of the Commitment from the date hereof until
the  Termination  Date,  as such  Commitment  may have been reduced  pursuant to
Section 2.4 hereof,  at the rate of one quarter of one (1/4%) percent per annum,
payable quarterly in arrears on the first day of each March, June, September and
December commencing June 1, 1997 to and including the Termination Date.

     2.6 Increase in Costs or Reduced  Return  Resulting  from Capital  Adequacy
Requirements:  If any law,  regulation  or  guideline  or any change  therein or
interpretation   or  application   thereof  by  any  regulatory   body,   court,
administrative  or governmental  authority  charged with the  interpretation  or
administration  thereof,  or  compliance  with any request,  directive,  ruling,
decree, judgment or recommendation of any regulatory body, court, administrative
or  governmental  authority  now existing or hereafter  adopted  (whether or not
having the force of law)  imposes,  modifies  or deems  applicable  any  capital
adequacy, increased capital adequacy or similar requirement and the result is to
increase  the cost of, or reduce  the rate of return on, the Bank's (or the Bank
affiliate's  or  participant's)  capital  as a  consequence  of its  obligations
hereunder,  the Bank shall notify the Company of such fact.  The Company and the
Bank shall  thereafter in good faith negotiate an adjustment to the fees payable
hereunder  which,  in the reasonable  judgment of the Company and the Bank, will
adequately  compensate the Bank (or the Bank affiliate or  participant) in light
of these circumstances. In the event that the Company and the Bank are unable to
agree on such  adjustment  within  thirty  (30) days after the date on which the
Bank sends such notice to the  Company,  the Company  shall on the later of such
30th day after notice or the date such  increased  cost or reduced  return takes
effect,  unless  otherwise  agreed  to by the  Bank (or the  Bank  affiliate  or
participant), prepay all Advances and terminate the Commitment on the 30th day.

     2.7 Interest on the Revolving  Credit Note:  a) The  Revolving  Credit Note
shall bear interest on the unpaid principal  balance thereof at a rate per annum
equal to (i) with respect to Prime Rate  Advances,  the Prime Rate and (ii) with
respect to LIBOR Rate Advances, the Adjusted LIBOR Rate. For Prime Rate Advances
the interest  rate shall  change when and as the Prime Rate is changed,  and any
such change in such Prime Rate shall  become  effective on the day on which such
change is adopted.

     b) Interest accrued on each Advance shall be payable,  without duplication,
on:

          (i) with  respect  to any  portion  of any  Advance  repaid or prepaid
     pursuant to this  Agreement,  the date of such repayment or prepayment,  as
     the case may be;

          (ii) with respect to that portion of the outstanding  principal amount
     of all Advances  maintained as Prime Rate  Advances,  the first day of each
     month, commencing with the first such date following the date of the making
     of such Advances;

          (iii) with respect to that portion of the outstanding principal amount
     of all Advances  maintained  as LIBOR Rate  Advances,  the last day of each
     applicable LIBOR Period;

          (iv) with respect to that portion of the outstanding  principal amount
     of all Advances  converted  into Prime Rate Advances on a day when interest
     would not otherwise  have been payable  pursuant to Sections  2.7(b)(ii) or
     (iii), the date of such conversion; and

          (v) on the Termination Date.

     c) If all or a portion of the  principal  or interest of any Advance  shall
not be paid when due (whether at the stated or any accelerated  maturity of such
Advance) or if any fee or other amount due hereunder shall not be paid when due,
all Advances,  and such  interest,  fee or amount due  hereunder,  to the extent
permitted by applicable law, shall bear interest (payable on demand,  and in any
event  on the last  day of each  month,  and  computed  daily on the  basis of a
360-day year for actual days  elapsed) (i) with respect to Prime Rate  Advances,
at the Default Rate until paid and (ii) in the case of LIBOR Rate  Advances at a
rate which  shall be the greater of the  Default  Rate or two  percent  (2%) per
annum in excess of the rate  applicable  to such  LIBOR Rate  Advance  until the
expiration of the LIBOR Period  applicable to such LIBOR Rate Advance,  at which
time the LIBOR Rate Advance will  automatically  be converted  into a Prime Rate
Advance  and  until  paid  shall  bear   interest  at  the  Default   Rate.   

     d) Ntwithstanding anything to the contrary contained in this Agreement, the
rate of interest  payable on the  Revolving  Credit Note shall never  exceed the
maximum rate of interest permitted under applicable law. If at any time the rate
of interest  otherwise  prescribed  herein shall exceed such maximum rate, then,
ipso facto, the obligation of the Company to pay interest or perform such act or
requirement  shall be reduced to the limit authorized under such law, so that in
no event shall the Company be obligated to pay any interest,  perform any act or
be bound by any requirement  which would result in payment of interest in excess
of an amount which is lawfully collectible. All sums in excess of those lawfully
collectible as interest shall, without further agreement or notice between or by
any party hereto,  be deemed  applied to principal  immediately  upon receipt of
such  monies by the Bank,  with the same force and effect as though the Bank had
specifically designated such amount to be so applied to principal.

     2.8 Optional Prepayments: The Company may at its option at any time or from
time to time prepay an Advance in whole or in part,  without  premium or penalty
but subject to the  indemnity  provisions of Section 2.11 hereof with respect to
LIBOR Rate Advances,  upon at least three (3) Business Days prior written notice
to the Bank  specifying the date and the amount of  prepayment.  Notwithstanding
the foregoing, the Company may not prepay a LIBOR Rate Advance prior to the last
day of the  LIBOR  Period.  Partial  prepayments  shall be in the  amount of One
Hundred  Thousand  and  00/100  ($100,000.00)  Dollars or an  integral  multiple
thereof and each prepayment shall be made together with interest accrued thereon
to and including the date of prepayment.

     2.9 Alternate Rate of Interest:  If (i) by reason of any Regulatory Change,
the Bank  determines  that,  by reason of  circumstances  affecting  the  London
interbank market generally, adequate and fair means do not or will not exist for
determining  the LIBOR Rate, (ii) by reason of any Regulatory  Change,  the Bank
becomes  restricted in the amount which it may hold of a category of liabilities
which  includes  deposits by reference to the LIBOR Rate or a category of assets
which  includes  loans  which  bear  interest  at a rate  determined  in part by
reference to the LIBOR Rate, (iii) by reason of any Regulatory  Change, it shall
be  unlawful  for the Bank to  maintain a LIBOR  Rate  Advance,  or any  portion
thereof,  bearing  interest at the Adjusted  LIBOR Rate,  (iv) in the  exclusive
judgment  of  the  Bank,   deposits  are  not  available  to  the  Bank  in  the
international  interbank  market in the requisite  amounts and for the requisite
durations,  (v) in the exclusive  judgment of the Bank,  the Adjusted LIBOR Rate
does not  adequately  reflect  the cost to the Bank of making or  maintaining  a
LIBOR Rate Advance  then,  in any such case,  any LIBOR Rate Advance  shall bear
interest at the Prime Rate. If the Bank  determines  that because of a change in
circumstances  the  Adjusted  LIBOR  Rate  is  again  available  to the  Company
hereunder,  the Bank will also advise the  Company,  and the Company may convert
the rate of interest  payable  hereunder to the Adjusted  LIBOR Rate at any time
(provided the Adjusted  LIBOR Rate is otherwise  available  hereunder) by making
such  election  in  accordance  with,  and  subject to the  conditions  of, this
Agreement.

     2.10 Increased  Costs:  If, at any time, any Regulatory  Change:  (i) shall
subject  the  Bank to any  tax,  duty  or  other  charge  with  respect  to this
Agreement,  except an income tax,  based upon the  charging  and  collecting  of
interest  hereunder  at the  Adjusted  LIBOR  Rate or shall  change the basis of
taxation or payments  to the Bank of the  principal  of or interest on the LIBOR
Rate  Advances,  (ii) shall  result in the  imposition,  modification  or deemed
applicability of any reserve,  special deposit or similar  requirements  against
assets of, deposits with or for the account of, or credit extended by, the Bank;
(iii) shall,  because of the existence of this  Agreement,  affect the amount of
capital  required or expected to be maintained  by the Bank, or any  corporation
controlling  the Bank; or (iv) shall impose on the Bank or the London  interbank
market  any  other  condition  affecting  this  Agreement  or the  charging  and
collecting  of interest  hereunder at the Adjusted  LIBOR Rate and the result of
any of the foregoing is, in the Bank's reasonable judgment,  (a) to increase the
cost to the Bank of charging and collecting  interest  hereunder at the Adjusted
LIBOR Rate,  or (b) to reduce the return on the Bank's  capital or the amount of
any sum  received or  receivable  by the Bank under this  Agreement by an amount
deemed by the Bank to be material,  upon demand then,  by the Bank,  the Company
agrees to pay to the Bank such  additional  amount or amounts as will compensate
the Bank for such  increased  cost or reduction or, upon receipt of such demand,
request in writing that such Advance be converted to a Prime Rate Advance.  Such
payments  shall be made on the first  date for  payment  of  interest  hereunder
following  the date of the  demand  by the Bank and on each  such  payment  date
thereafter or shall be paid promptly on demand if the Borrower is not advised of
the amount of such payment prior to any such payment date. Determinations by the
Bank for purposes of this  paragraph of the effect of any  Regulatory  Change on
its costs of making or  maintaining  LIBOR Rate  Advances and of the  additional
amounts required to compensate the Bank in respect thereof,  shall be conclusive
absent manifest error in calculation, provided that such determinations are made
in good faith.

     2.11  Indemnity:  If there is a  prepayment  of any LIBOR Rate Advance on a
date other than the  expiration  of the LIBOR  Period for any reason  whatsoever
including, but not limited to: 

          a) the occurrence of any Event of Default under this Agreement;

          b) the failure of the  Borrower to borrow a LIBOR Rate  Advance  after
     sending  notice  of the  amount  with  respect  to the  making  of any such
     Advance;

          c) the  receipt or  recovery by the Bank of all or any part of a LIBOR
     Rate  Advance  prior to the  maturity  or the last day of the LIBOR  Period
     thereof  (whether by  prepayment,  acceleration  or  otherwise)  unless due
     solely to the  conversion of a LIBOR Rate Advance into a Prime Rate Advance
     pursuant to Section 2.9 or 2.10 hereof; or

          d) the conversion at the Company's  request,  prior to the last day of
     an  applicable  LIBOR  Period,  of a LIBOR Rate  Advance  into a Prime Rate
     Advance;

than the  Company  shall pay to the Bank,  as  liquidated  damages  and not as a
penalty,  a fee (the  "Liquidation  Fee") equal to the losses (including but not
limited  to,  lost  profits  of the  Bank),  costs and  expenses  of the Bank in
connection with such  prepayment as determined by the Bank,  which payment shall
be made by the Company to the Bank on the date on which such prepayment is made.
The  calculations  made by the Bank to ascertain such  Liquidation  Fee shall be
conclusive absent manifest error in calculation by the Bank,  provided that such
calculations  are made in good faith.  The Bank, upon the written request of the
Company,  shall  advise the Company in writing of the amount of the  Liquidation
Fee  applicable  to any such  prepayment  including  an  explanation  of how the
Liquidation Fee was calculated.

     2.12  Continuation  and Conversion of Advances.  The Company shall have the
right at any time on prior  irrevocable  written notice to the Bank as specified
in Section  2.3 to  continue  any LIBOR Rate  Advance  into a  subsequent  LIBOR
Period,  (ii) to convert any LIBOR Rate Advance into a Prime Rate  Advance,  and
(iii) to convert any Prime Rate  Advance into a LIBOR Rate  Advance,  subject to
the following:

          (a) in the case of a  conversion  of less than all of the  outstanding
     Advances, the aggregate principal amount of Advances converted shall not be
     less than $100,000 and shall be an integral multiple thereof; and

          (b) no LIBOR Rate Advance shall be converted at any time other than at
     the end of a LIBOR Period applicable thereto.

The Company  directs the Bank to continue a LIBOR Rate Advance into a subsequent
LIBOR Period,  on the last day of the LIBOR Period  thereof  without any further
notice from the Company  unless the Company  specifies in writing in  accordance
with Section 2.3 that such Advance shall be converted into a Prime Rate Advance.
Notwithstanding  anything to the contrary  contained  above,  if a Default or an
Event of Default  shall have  occurred and is  continuing,  no LIBOR Rate may be
continued  into a  subsequent  LIBOR  Period  and no Prime Rate  Advance  may be
converted into a LIBOR Rate Advance.

     2.13 Balance  Shortfall Fee: The Company shall pay a balance  shortfall fee
for the preceding  calendar quarter  commencing June 1, 1997 at a rate per annum
equal to the monthly average 91 day treasury bill rate in effect for the quarter
multiplied by the average  daily  difference  between  $50,000 and the amount of
aggregate free balances maintained by the Consolidated Group at the Bank for the
quarter.  Free balances  shall mean balances in  non-interest  bearing  accounts
maintained  by the Company or a Guarantor  in excess of the amounts  required to
compensate  the Bank for services  rendered,  determined in accordance  with the
Bank's  standard  system of analysis  for similar  accounts.  Nothing  contained
herein shall require the Consolidated Group to maintain balances.

     2.14  Payments:  The  Company  authorizes  the Bank to charge  its  account
maintained  at the Bank for each  payment of principal or interest due under the
Revolving Credit Note or otherwise under this Agreement on the due date thereof.
If any payment of the Revolving  Credit Note or otherwise  under this  Agreement
becomes due and payable on a Saturday, Sunday or legal holiday under the laws of
the  State of New York,  the  maturity  thereof  shall be  extended  to the next
succeeding  Business  Day and  interest  thereon  shall be payable  during  such
extension.

     2.15 Use of  Proceeds:  The Company  hereby  covenants  and agrees that the
proceeds of (y) the initial  Advance will be used to repay  indebtedness  to the
Bank under the  existing  revolving  credit  facility  with the Bank dated as of
April  20,  1995 and (z)  subsequent  Advances  will be used to carry  projected
increases in accounts  receivable due to growth and to support computer hardware
purchases  and  software  development  costs.  No  part of the  proceeds  of the
Advances will be used directly or indirectly to finance the  acquisition  of new
companies,  including without limitation,  Permitted Acquisitions, as defined in
Section  6.2  hereof,  or new  products  or for any  purpose  that  directly  or
indirectly violates,  or is inconsistent with, the provisions of Regulation U or
X of the Board of Governors of the Federal  Reserve  System as now and from time
to time hereafter in effect.


     2.16  Computations:  Interest on the Advances and any other amounts payable
hereunder  shall be computed on the basis of a year of three hundred sixty (360)
days for actual days elapsed  (including  the first day but  excluding the last)
occurring in the period for which payable.

                           SECTION 3: REPRESENTATIONS

     In order to induce  the Bank to enter into this  Agreement  and to make the
Advances  herein  provided  for the  Company  and the  Guarantors,  jointly  and
severally, represent and warrant to the Bank that:

     3.1  Subsidiaries;  Existence:  Set forth on Schedule I annexed hereto is a
list setting forth the name, state of incorporation and percentage  ownership of
each  Subsidiary  on the date hereof.  Each  Subsidiary  is a  corporation  duly
organized,  validly existing and in good standing under the laws of the state of
its incorporation, and has the corporate power to own its assets and to transact
the  business in which it is  presently  engaged and as proposed to be conducted
and is duly  qualified  as a foreign  corporation  to do business and is in good
standing  in each  jurisdiction  where the  failure to so  qualify  would have a
material  adverse effect on the business,  financial  condition or operations of
the Company or such Subsidiary.

     3.2  Company  and  Guarantors;  Existence:  The  Company  and  each  of the
Guarantors  is a  corporation  duly  organized,  validly  existing  and in  good
standing under the laws of the state of its incorporation, and has the corporate
power to own its assets and to transact  the  business in which it is  presently
engaged and as  proposed  to be  conducted  and is duly  qualified  as a foreign
corporation  to do business and is in good standing in each  jurisdiction  where
the failure to so qualify would have a material  adverse effect on the business,
financial condition or operation of the Company or any Guarantor.

     3.3 Corporate  Authority:  The execution,  delivery and performance of this
Agreement,  the  borrowings  hereunder  and the  execution  and  delivery of the
Revolving  Credit Note and all other Loan Documents  executed in connection with
this  Agreement by the Company and the Guarantors  have been duly  authorized by
all  requisite  corporate  action.  No consent or  approval of  stockholders  or
consent,  approval,  license or authorization of, or registration or declaration
with, any governmental or administrative authority,  instrumentality,  bureau or
agency is  required  as a  condition  to the  execution,  delivery,  validity or
enforceability  of this Agreement or the Loan  Documents  executed in connection
herewith except those that have been obtained and delivered to the Bank.

     3.4 Binding  Agreements:  This  Agreement and the other Loan Documents when
issued and delivered  pursuant hereto for value received,  will constitute valid
and legally binding obligations of the Company and the Guarantors enforceable in
accordance  with their  respective  terms except as  enforcement  thereof may be
limited by bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws affecting the enforcement of creditors' rights generally.

     3.5 Litigation: Except as set forth on Schedule I annexed hereto, there are
no actions, suits,  proceedings or investigations pending or threatened,  to the
knowledge  of the  Company,  a Subsidiary  or any  Guarantor,  by or against the
Company,  a  Subsidiary  or any  Guarantor  at law or in equity  (whether or not
purportedly on behalf of the Company,  a Subsidiary or a Guarantor) before or by
any  Federal  or  state  court,  municipal  or  other  governmental  department,
commission,  board, bureau,  agency or instrumentality,  which in any case or in
the aggregate, if adversely determined, could reasonably be expected to have any
material adverse change in the business, operations, properties or assets, or in
the  condition,  financial  or  otherwise,  of the Company,  any  Guarantor or a
Subsidiary  or the  ability of the  Company or any  Guarantor  to perform  their
respective obligations under this Agreement or the other Loan Documents. Neither
the Company nor any Guarantor is in default with respect to any order, decree or
judgment of any court, arbitrator or governmental authority, bureau or agency.

     3.6 No  Conflicting  Law or  Agreements:  There is no  charter,  by-law  or
preference stock provision of the Company or any Guarantor,  and no provision of
any  existing  mortgage,  indenture,  contract,  shareholder  agreement,  credit
agreement  or  other  agreement  binding  on the  Company  or any  Guarantor  or
affecting their respective  properties,  which would conflict with,  result in a
breach  of or  constitute  a  default  thereunder  or in  any  way  prevent  the
execution, delivery, or carrying out of the terms of this Agreement or the other
Loan  Documents.  Neither the Company nor a Guarantor is a party to any contract
or  agreement  or  subject to any charge or other  corporate  restriction  which
materially  adversely  affects  its  business,  property,  assets  or  financial
condition.

     3.7 Contingent Liabilities: Except as set forth in the financial statements
delivered to the Bank pursuant to Section 3.8 hereof,  neither the Company nor a
Guarantor is liable, directly or indirectly, in connection with the obligations,
stock or  dividends  of any other  Person,  whether by  guarantee,  endorsement,
agreement to supply or advance funds,  agreement to maintain  working capital or
net worth,  agreement to purchase or repurchase goods or services whether or not
such goods or services are actually acquired, any other so-called  "take-or-pay"
contract, or otherwise.

     3.8 Financial Condition: The consolidated balance sheet of the Consolidated
Group as of May 31, 1996  together with the related  consolidated  statements of
income,  retained earnings and cash flows for the fiscal year then ended audited
by Marcum & Kleigman,  CPAs and the interim  consolidated  balance  sheet of the
Consolidated   Group  as  of  November  30,  1996   together  with  the  related
consolidated  statements  of income,  retained  earnings  and cash flows for the
fiscal quarter then ended prepared by management to the Company and certified by
the chief  financial  officer of the  Company  and  delivered  to the Bank,  are
complete  and  correct  and  fairly  present  the  financial  condition  of  the
Consolidated Group, and the results of the Consolidated Group's operations as of
the dates and for the periods  referred to and have been  prepared in accordance
with generally accepted accounting  principles  consistently  applied throughout
the periods involved (subject to year-end adjustments in the case of the interim
statements). There has been no material adverse change in the material business,
properties,  condition  (financial or otherwise) or operations of the Company or
any Guarantor since the date of said financial statements.

     3.9 Title to  Properties:  The Company,  each of the  Guarantors  and their
Subsidiaries  have  valid  leases  of or good  and  marketable  title  to  their
respective properties and assets,  including the properties and assets reflected
in the balance sheets  described in Section 3.8. Such  properties and assets are
not subject to any Lien, except as reflected in such balance sheets.

     3.10 Taxes: The Company, each of the Guarantors and their Subsidiaries have
filed or have  obtained  extensions  for the filing of, all  Federal tax returns
which are  required  to be filed and all state and other tax  returns  which the
Company and the  Guarantors  believe in good faith are  required to be filed and
have paid all taxes shown as due. All the tax  liabilities of the Company,  each
of the Guarantors and their  Subsidiaries are adequately  provided for as of the
date hereof.  

     3.11  Default:  No  Default  or  Event  of  Default  has  occurred  and  is
continuing,  or will occur as the result of the consummation of the transactions
contemplated hereby and neither the Company, any Guarantor nor any Subsidiary is
in default in any material  respect in the  observance or  performance of any of
the covenants, terms or conditions of any agreement or instrument to which it is
a party.

     3.12 No Burdensome  Agreements:  Neither the Company, any Guarantor nor any
Subsidiary  is  (a)  subject  to  any  restriction   under  its  certificate  of
incorporation  or by-laws  which  materially  adversely  affects  the  business,
properties,  assets,  operations  or financial  condition  of the  Company,  any
Guarantor or any Subsidiary or (b) a party to any agreement or instrument  which
materially  adversely affects the business,  properties,  assets,  operations or
financial condition of the Company, any Guarantor or any Subsidiary.

     3.13 ERISA:  The Company,  each  Guarantor,  each Subsidiary and each ERISA
Affiliate  are in  compliance  in all  material  respects  with  all  applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred  and is  continuing  with  respect to any Plan;  no notice of intent to
terminate  a  Plan  has  been  filed  nor  has  any  Plan  been  terminated;  no
circumstances  exist  which  constitute  grounds  under  Section  4042 of  ERISA
entitling the PBGC to institute  proceedings to terminate,  or appoint a trustee
to administer a Plan, nor has the PBGC instituted such proceedings;  neither the
Company,  a Guarantor,  a Subsidiary  nor an ERISA  Affiliate has  completely or
partially  withdrawn  under Sections 4201 or 4202 or ERISA from a  Multiemployer
Plan; the Company,  each  Subsidiary,  each Guarantor,  and each ERISA Affiliate
have met their minimum funding  requirements  under ERISA with respect to all of
their  Plans and the  present  fair  market  value of all Plan  assets  meets or
exceeds the present value of all vested  benefits under each Plan, as determined
on the most recent  valuation date of the Plan in accordance with the provisions
of ERISA and the regulations  thereunder for calculating the potential liability
of the Company,  each Subsidiary,  each Guarantor or each ERISA Affiliate to the
PBGC or the Plan under Title IV of ERISA; and neither the Company,  a Guarantor,
a Subsidiary nor an ERISA Affiliate has incurred any liability to the PBGC under
ERISA.

     3.14  Operation  of  Business:   The  Company,  the  Guarantors  and  their
Subsidiaries possess all licenses,  permits,  franchises,  patents,  copyrights,
trademarks  and trade names,  or rights  thereto,  to conduct  their  respective
businesses  substantially  as now  conducted  and as  presently  proposed  to be
conducted and the Company,  the  Guarantors  and their  Subsidiaries  are not in
violation of any valid rights of others with respect to any of the foregoing.






<PAGE>


                        SECTION 4: CONDITIONS TO ADVANCES

     4.1 Conditions to the Initial  Advance:  The obligation of the Bank to make
the  initial  Advance  hereunder  is subject to  compliance  with the  following
conditions     precedent     to    the     satisfaction     of     the     Bank:


          (a) Revolving Credit Note: There shall have been delivered to the Bank
     the  Revolving  Credit Note duly executed by the Company and payable to the
     order of the Bank in the form of Exhibit A. 

          (b) Guaranties:  There shall have been delivered to the Bank unlimited
     continuing  guaranties  of the  Guarantors  on  the  Bank's  standard  form
     including corporate resolutions and, except with respect to Sandata,  Inc.,
     shareholder consents (collectively, the "Guaranties"). 

          (c) Security  Agreements:  There shall have been delivered to the Bank
     equipment  security  agreements  of the Company and the  Guarantors  on the
     Bank's standard form (collectively, the "Security Agreements") granting the
     Bank   a   first    priority    security    interest   in   the   Company's
     and each Guarantor's equipment together with

                  (degree)        security agreement questionnaires
                  (degree)        UCC-11 searches
                  (degree)        UCC-3 financing statement amendments and/or 
                                  UCC-1 financing statements, as appropriate

          (d) Amendment to IRB Guaranty:  There shall have been delivered to the
     Bank an  amendment  to the guaranty  executed in  connection  with the 1994
     Nassau County Individual Development Revenue Bonds (Brodsky Sibling Realty,
     Inc. Project). 

          (e) Insurance Certificate: There shall have been delivered to the Bank
     an insurance certificates naming the Bank as loss payee with respect to the
     Company's and each Guarantor's equipment.

          (f)  Landlord  Waiver:  There  shall have been  delivered  to the Bank
     landlord  waivers from the landlords of each site at which any equipment of
     the Company or the Guarantors is located. 

          (g)  Certified  Copies  and Other  Documents:  There  shall  have been
     delivered to the Bank such certificates and other documents relating to the
     Company and the Guarantors with respect to the matters herein  contemplated
     as   the    Bank    may    reasonably    request,    including    but   not
     limited to:

               (i)  With  respect  to  the  Company  and  each  Guarantor,   its
          certificate  of  incorporation  certified by the Secretary of State of
          the Company's and each Guarantor's state of incorporation;

               (ii) With respect to the Company and each Guarantor, certificates
          of good standing from the Secretary of State of the Company's and each
          Guarantor's state of incorporation  and, if not incorporated under the
          laws of the  State of New  York,  a  certificate  of  authority  to do
          business in New York from the New York Secretary of State;

               (iii) An Officers'  Certificate  of the Company dated the date of
          this Agreement certifying,  (w) true and correct copies of the by-laws
          and any amendments  thereto of the Company as in effect on the date of
          adoption  of the  resolutions  referred  to in (x) of this  subsection
          (iii), (x) true and correct copies of resolutions adopted by the board
          of directors of the Company (1) authorizing the Advances from the Bank
          hereunder and the execution,  delivery and  performance by the Company
          of this  Agreement and any other Loan Document  executed in connection
          herewith and the granting of the security  interest as contemplated by
          the Company's Security Agreement, (2) approving forms in substantially
          execution form of this Agreement and the other Loan Documents, and (3)
          authorizing  officers  of the  Company to  execute  and  deliver  this
          Agreement and the other Loan Documents and any related documents,  (y)
          the incumbency and specimen  signatures of the officers of the Company
          executing  any  documents  delivered  to the  Bank by the  Company  in
          connection with the Advances, and (z) the truth of the representations
          and warranties contained in Section 3 hereof;

               (iv) An Officers' Certificate of each Guarantor dated the date of
          this  Agreement  certifying (x) true and correct copies of the by-laws
          and any amendments  thereto of such Guarantor as in effect on the date
          of adoption of the resolutions referred to in the Guaranties,  (y) the
          incumbency  and specimen  signatures  of the officers of the Guarantor
          executing  its Guaranty and (z) the truth of the  representations  and
          warranties contained in Section 3 hereof.

          (h) Opinion of Counsel: There shall have been delivered to the Bank an
     opinion  of  Stuart  Angowitz,   Esq.,  counsel  to  the  Company  and  the
     Guarantors,  dated  the  date  of this  Agreement  in  form  and  substance
     satisfactory to the Bank and its counsel. 

          (i)  Assignment  of Life  Insurance  Policy:  There  shall  have  been
     delivered to the Bank an Assignment of Life Insurance  Policy as Collateral
     ("Assignment of Life Insurance") on the Bank's standard form on the life of
     Bert E.  Brodsky in the amount of  $2,000,000.00  acknowledged  by the home
     office of the insurer  together with a life insurance  questionnaire on the
     Bank's standard form and the original life insurance policy.

          (j) Fees:  There  shall have been  delivered  to the Bank  evidence of
     payment of all fees  associated  with this  Agreement  including the Bank's
     commitment fee and fees and disbursements of the Bank's counsel. 

     4.2  Conditions  to each Advance:  The  obligation of the Bank to make each
Advance  to be made by it  hereunder  shall  also be  subject  to the  following
conditions  precedent:  (i) the Company and the  Guarantors  shall have complied
with and shall be in compliance with all the terms,  covenants and conditions of
this Agreement; (ii) there shall exist no Default or Event of Default; (iii) the
representations  and warranties  contained in Section 3 hereof shall be true and
correct;  and (iv) there shall have been  delivered to the Bank a certificate to
the foregoing  effect executed by a duly  authorized  officer of the Company and
the Guarantors.

     4.3  Approval of Bank's  Counsel:  All of the  documentation  specified  in
Section  4.1  shall be in form and  substance  satisfactory  to the Bank and its
counsel  and all legal  matters  incident  to the  Advances  hereunder  shall be
satisfactory to counsel to the Bank. 

                        SECTION 5: AFFIRMATIVE COVENANTS

     The Company and the Guarantors,  jointly and severally,  covenant and agree
that, so long as the Commitment  remains in effect or the Revolving  Credit Note
remains  outstanding  and  unpaid  or any  other  amount  is  owing  to the Bank
hereunder and until the fulfillment of all obligations hereunder to:

     5.1 Information: Furnish to the Bank:

          (1) As soon as  possible,  but not more than one hundred  thirty (130)
     days after the close of each fiscal  year,  the  Consolidated  Group's Form
     10-K and the financial  statements of the  Consolidated  Group  including a
     consolidated balance sheet with related consolidated  statements of income,
     retained  earnings  and cash flows for such fiscal year,  setting  forth in
     each case in comparative form the figures for the previous fiscal year, all
     prepared  in  accordance  with  generally  accepted  accounting  principles
     consistently  applied  and  audited by Marcum &  Kliegman,  CPAs or another
     accounting firm acceptable to the Bank. Such financial  statements shall be
     accompanied by a certificate of such  accounting  firm stating  whether the
     audit  revealed  any Default or Event of Default  and,  if so,  stating the
     facts with respect thereto and whether the same has been cured prior to the
     date of such certificate,  and, if not, what action is proposed to be taken
     with respect thereto.

          (2) As soon as possible,  but not more than ninety (90) days after the
     close of each of the first three fiscal  quarters of each fiscal year,  the
     Consolidated  Group's  Form  10-Q  and  the  financial  statements  of  the
     Consolidated  Group  including a  consolidated  balance  sheet with related
     consolidated statements of income, retained earnings and cash flows for the
     immediately  preceding  fiscal  quarter,  setting  forth  in  each  case in
     comparative  form the  figures  for the  comparable  fiscal  quarter of the
     previous  year,  all  prepared  in  accordance   with  generally   accepted
     accounting   principles   consistently   applied   (subject   to  year  end
     adjustments)  prepared by  management  to the Company and  certified by the
     chief financial officer of the Company.  Such financial statements shall be
     accompanied by an Officers'  Certificate stating whether a Default or Event
     of Default has occurred and, if so, stating the facts with respect  thereto
     and whether the same has been cured prior to the date of such  certificate,
     and, if not, what action is proposed to be taken with respect thereto. Such
     financial  statements  shall be  accompanied  by an  Officers'  Certificate
     evidencing  compliance  with the financial  covenants  contained in Section
     5.10 hereof, in form and detail acceptable to the Bank.

          (3)  Prompt  written  notice  if: (i) any  obligation  (other  than an
     obligation  under  this  Agreement)  of  the  Company,  a  Guarantor  or  a
     Subsidiary  for borrowed  money or for the deferred  purchase  price of any
     property is declared  or shall  become due and payable  prior to its stated
     maturity,  (ii) the holder of any note  (other  than the  Revolving  Credit
     Note),  or  other  evidence  of   indebtedness,   certificate  or  security
     evidencing any such  obligation,  has the right to declare such  obligation
     due and payable prior to its stated maturity,  or (iii) to the knowledge of
     any officer of the Company or any Guarantor  there shall occur a Default or
     an Event of Default hereunder.

          (4) Prompt  written  notice of: (i) any citation,  summons,  subpoena,
     order to show cause or other order  naming the  Company,  a Guarantor  or a
     Subsidiary a party to any proceeding  before any governmental body which if
     adversely  determined would have a material adverse effect on the business,
     financial  condition  or  operations  of  the  Company,  a  Guarantor  or a
     Subsidiary, and include with such notice a copy of such citation,  summons,
     subpoena,  order  to show  cause or other  order,  (ii) any  lapse or other
     termination  of a  license,  permit  or other  authorization  issued to the
     Company,  a Guarantor or a Subsidiary by any  governmental  body or Person,
     which lapse or other  termination  would have a material  adverse effect on
     the property,  business,  profits or conditions (financial or otherwise) of
     the  Company,  a  Guarantor  or a  Subsidiary,  (iii)  any  refusal  by any
     governmental  body or  Person to renew or extend  such  license,  permit or
     other authorization,  and (iv) any suit between the Company, a Guarantor or
     a Subsidiary and any governmental body or Person or formal demand made upon
     the Company, a Guarantor or a Subsidiary by any governmental body or Person
     which if adversely  determined  would have a material adverse effect on the
     property,  business,  profits or conditions (financial or otherwise) of the
     Company, a Guarantor or a Subsidiary.

          (5)  Prompt  written  notice in the event  that:  (i) the  Company,  a
     Guarantor  or a  Subsidiary  shall  fail to make any  payment  when due and
     payable  under any Plan or (ii) the  Company,  a Guarantor  or a Subsidiary
     shall receive notice from the Internal Revenue Service or the Department of
     Labor that it shall have failed to meet the minimum funding requirements of
     any Plan, and include therewith a copy of such notice.

          (6) Copies of any request for a waiver of the funding standards or any
     extension of the  amortization  periods required by Sections 303 and 304 of
     ERISA,  or  Section  402 of the Code,  promptly  after any such  request is
     submitted to the Department of Labor or the Internal  Revenue  Service,  as
     the case may be.

          (7)  Promptly  after a  Reportable  Event occurs which may result in a
     termination of a Plan, or the Company, a Guarantor or a Subsidiary receives
     notice that the PBGC has  instituted  or intends to  institute  proceedings
     under  Section  4042 of ERISA to  terminate a Plan, a copy of any notice of
     such Reportable Event which is filed with the PBGC, or any notice delivered
     by the PBGC evidencing its institution of such proceedings or its intent to
     institute such proceedings,  or any notice to the PBGC that a Plan is to be
     terminated, as the case may be.

          (8) Promptly upon becoming  aware of the  occurrence of any Prohibited
     Transaction in connection  with any Plan, a written  notice  specifying the
     nature  thereof,  what action the Company,  a Guarantor or a Subsidiary  is
     taking or proposes  to take with  respect  thereto,  and,  when known,  any
     action taken by the Internal Revenue Service with respect thereto.

          (9) Promptly  after the filing  thereof,  copies of each annual report
     required  to be filed  pursuant  to Section  103 of ERISA and copies of any
     other reports required to be filed with respect to any Plan.

          (10) Promptly upon becoming available, copies of all regular, periodic
     or special  reports,  schedules,  and other material  which the Company,  a
     Guarantor or a Subsidiary  may now or hereafter be required to file with or
     deliver  to any  securities  exchange  or to the  Securities  and  Exchange
     Commission,  or any other  governmental  body  succeeding  to the functions
     thereof.

          (11) Prior to  entering  into a Permitted  Acquisition,  as defined in
     Section 6.2 hereof,  written notice to the Bank outlining the terms of such
     acquisition in form and detail reasonably acceptable to the Bank.

          (12)  Promptly  upon  the  occurrence  of any  change  to  Schedule  I
     delivered pursuant hereto, a revised Schedule I.

          (13)  Promptly  upon  request  therefor,  such other  information  and
     reports relating to the financial  condition and operations of the Company,
     a Guarantor  or a  Subsidiary  as the Bank at any time or from time to time
     may reasonably request.

          5.2  Existence:  Preserve and maintain,  and cause each  Subsidiary to
     preserve and maintain,  its corporate existence and its rights,  privileges
     and franchises. 

          5.3  Payment  of  Obligations:  Pay  and  discharge,  and  cause  each
     Subsidiary to pay and discharge,  all taxes,  assessments and  governmental
     charges or levies  imposed upon it or upon its income and profits,  or upon
     any property belonging to it, prior to the date upon which penalties attach
     thereto except where  contested in good faith and by proper  proceedings if
     appropriate reserves are maintained with respect thereto.

          5.4  Insurance:   Maintain  and  cause  each  Subsidiary  to  maintain
     insurance,  at all  times  throughout  the term of this  Agreement,  on its
     property with responsible insurance carriers licensed to do business in the
     State  of  New  York,  against  such  risks,  loss,  damage  and  liability
     (including   liability  to  third  parties)  and  in  such  amounts  as  is
     customarily   maintained   by  similar   businesses,   including,   without
     limitation,  public liability and workers' compensation insurance, and file
     with the Bank within ten (10) days after  request  therefor a detailed list
     of such  insurance  then in  effect,  stating  the  names  of the  carriers
     thereof,  the policy  numbers,  the  insureds  thereunder,  the  amounts of
     insurance,  dates of expiration  thereof and the property and risks covered
     thereby,  together with a certificate of a duly  authorized  officer of the
     Company or a Guarantor  certifying that in the opinion of the management of
     the Company or a Guarantor such insurance is adequate in nature and amount,
     complies  with the  obligations  of the Company or a  Guarantor  under this
     paragraph, and is in full force and effect.

          5.5 Payment of Indebtedness  and  Performance of Obligations:  Pay and
     discharge,  and cause each  Subsidiary  to pay and  discharge  promptly all
     lawful  claims for labor,  materials  and supplies or otherwise  which,  if
     unpaid,  would have a material  adverse  effect on the property,  business,
     profits or conditions  (financial or otherwise) of the Company, a Guarantor
     or a Subsidiary.

          5.6 Condition of Property:  Maintain, protect and keep in good repair,
     working order and condition, all property of the Company and the Guarantors
     used or required in connection  with the proper conduct of the Company's or
     Guarantor's    business,    ordinary    wear   and   tear    excepted   and
     cause each Subsidiary to do the same.

          5.7  Observance  of Legal  Requirements:  Observe and comply and cause
     each  Subsidiary  to  observe  and  comply  in all  respects  with all laws
     (including but not limited to ERISA), ordinances, orders, judgments, rules,
     regulations, certifications,  franchises, permits, licenses, directions and
     requirements of all governmental bodies which now or at any time thereafter
     may be applicable to the Company, a Guarantor or a Subsidiary,  a violation
     of which would have a material  adverse  effect on the property,  business,
     profits or conditions  (financial or otherwise) of the Company, a Guarantor
     or a  Subsidiary  except  where  contested  in  good  faith  and by  proper
     proceedings if appropriate reserves, in the Bank's reasonable judgment, are
     maintained with respect thereto.

          5.8 Books and Records: Keep, and cause each Subsidiary to keep, proper
     books of record and account. 

          5.9  Inspection:  At any reasonable  time and from time to time,  upon
     reasonable  notice  and  during  normal  business  hours,  permit the Bank,
     through  officers or employees or authorized  representatives  to visit and
     inspect  any of the  properties  of the  Company  or a  Guarantor  and  its
     Subsidiaries and to examine the minute books, books of account, reports and
     other records of the Company and its  Subsidiaries  and make copies thereof
     or extracts therefrom, and to discuss the affairs, finances and accounts of
     the Company and its Subsidiaries with their respective  principal  officers
     or with the Company's or a Guarantor's independent accountants.

          5.10  Financial  Requirements:  (a)  Maintain  on  the  date  of  this
     Agreement and at all times thereafter,  or for the periods indicated below,
     the following  financial  requirements on a consolidated basis with respect
     to the Consolidated Group: 

               (i)  Working  capital  of  at  least  $1,000,000.00.  Solely  for
          purposes of calculating compliance with the covenant contained in this
          Section  5.10(a)(i),  the Advances and notes due Affiliates  which are
          evidenced  by long  term  promissory  notes  shall  not be  considered
          Current  Liabilities.  Current Liabilities shall mean all indebtedness
          for borrowed money payable within one year.

               (ii) Net Worth of at least:

               $4,200,000 from the date hereof to and including May 30, 1997;

               $5,500,000 from May 31, 1997 to and including May 30, 1998, to be
          increased by $250,000 in each fiscal year thereafter.

               (iii) A total liabilities to Net Worth ratio of not more than 1.0
          to 1.0.

               (iv) A Debt Service Coverage Ratio of at least 1.2 to 1.0 at each
          fiscal year end. 

               (v) An  Interest  Coverage  Ratio of at least  4.0 to 1.0 at each
          fiscal year end.

     As used in this Section:

     Net Worth  shall  mean the sum of  retained  earnings,  additional  paid in
capital plus common stock less net  intangible  assets and loans and advances to
officers and Affiliates of Sandata,  Inc. and its Subsidiaries all as determined
in  accordance  with  generally  accepted  accounting  principles   consistently
applied.  Solely for  purposes  of  calculating  compliance  with the  covenants
contained  in  Section  5.10(a)(ii)  and  (iii),   leasehold   improvements  and
unamortized software costs shall not be considered intangible assets.

     Debt Service Coverage Ratio shall mean a ratio of earnings before interest,
taxes, depreciation and amortization to total debt service.

     Interest  Coverage  Ratio shall mean a ratio of earnings  before  interest,
taxes, depreciation and amortization to total interest expense.

     (b) Realize on a consolidated  basis with respect to the Consolidated Group
for each fiscal year, a net profit after taxes  determined  in  accordance  with
generally accepted accounting principles consistently applied of at least $1.00.

     5.11 New  Subsidiaries:  Cause any wholly owned Subsidiary formed after the
date  of this  Agreement  to  execute  and  deliver  to the  Bank  an  unlimited
continuing  Guaranty  on the  Bank's  standard  form and  obtain  or cause to be
obtained resolutions authorizing same and shareholder consents thereto.


                          SECTION 6: NEGATIVE COVENANTS

     The Company and the Guarantors,  jointly and severally, agree that, so long
as the  Commitment  remains  in  effect or the  Revolving  Credit  Note  remains
outstanding  and  unpaid  or any other  amount  is owing to the Bank  hereunder,
neither the Company nor any Guarantor shall directly or indirectly,  without the
written consent or waiver of the Bank:

     6.1 Indebtedness  for Borrowed Money.  Create,  incur,  assume or suffer to
exist any  indebtedness  for  borrowed  money  except for (i)  indebtedness  for
borrowed money to the Bank,  (ii)  indebtedness  for borrowed money reflected in
the  financial  statements  referred  to in  Section  3.8 hereof  including  any
extensions,   renewals  or   replacements  of  any  such   indebtedness,   (iii)
indebtedness for borrowed money subordinated on terms reasonably satisfactory to
the Bank to the Company's or Guarantor's, as the case may be, obligations to the
Bank under this  Agreement,  the Revolving  Credit Note or  otherwise,  and (iv)
indebtedness for borrowed money not exceeding $500,000 in the aggregate.

     6.2 Limitation on Liens: Create,  incur, assume or suffer to exist any Lien
upon,  or any security  interest in, any of its property or assets,  whether now
owned or hereafter  acquired,  or permit any  Subsidiary to do so except for (i)
Liens  granted  to  the  Bank,  (ii)  Liens  on  accounts   receivable  securing
indebtedness  permitted by Section 6.1 (iii) hereof and (iii) except  purchase -
money liens or security  interests  on any  property  hereafter  acquired or the
assumption of any lien or security  interest on property existing at the time of
such acquisition or a lien or security  interest incurred in connection with any
conditional sale or other title retention  agreement or a finance lease provided
that any property  subject to any of the foregoing is acquired by the Company or
any Guarantor in the ordinary course of their respective businesses and the lien
or security interest on any such property is created contemporaneously with such
acquisition  and each such lien or security  interest  shall  attach only to the
property so acquired and the obligation  secured by such lien is permitted under
Section 6.1 hereof and the related  expenditure  is permitted  under Section 6.7
hereof.

     6.3 Merger,  Consolidation and Acquisition:  Merge into or consolidate with
any other  Person or permit any other  Person to merge into it or acquire all or
substantially  all the  properties  or assets  or stock of any  other  Person or
become a partner of or venturer  with any other Person or permit any  Subsidiary
to do so except that (a) any Subsidiary may merge into or transfer assets to the
Company,  (b) any  Subsidiary  may merge into or  consolidate  with or  transfer
assets to  another  Subsidiary,  (c)  provided  the Bank has been  given  notice
pursuant  to  Section  5.1(11),  the  Company  may merge  into any other  Person
provided  the  Company  is  the   surviving   corporation   or  acquire  all  or
substantially  all of the  properties  or  assets  of any  other  Person  in any
transaction which, after giving effect to such merger or acquisition,  would not
otherwise  violate any of the  provisions  of this  Agreement  including but not
limited to Sections 5.10, 6.7 and 6.9 (such merger or acquisition  hereinafter a
"Permitted  Acquisition");  provided,  however,  if the  Person  to be  acquired
conducts  business  outside of the Company's Line of Business,  such acquisition
shall  not be  considered  a  Permitted  Acquisition  and will not be  permitted
without the Bank's prior written  consent which consent will not be unreasonably
withheld or delayed.  The Company's  Line of Business shall mean the business of
providing  computerized data processing services to the health care industry and
the general commercial market.

     6.4 Sale of Assets: Sell, assign,  transfer,  lease or otherwise dispose of
all or any part of its  assets or  property  or permit any  Subsidiary  to do so
(which consent will not be unreasonably  withheld or delayed) except (a) for the
sale or other  disposition  of assets no longer used or useful in the conduct of
its business,  (b) for the sale of inventory  disposed of in the ordinary course
of business,  (c) subject to the proviso below, any Subsidiary may sell, assign,
lease or  otherwise  transfer  its assets to the  Company and (d) subject to the
proviso below, any Subsidiary may sell, assign,  lease or otherwise transfer its
assets, provided in each instance referred to in (c) or (d) hereof, the proceeds
of the sale are used to repay Advances.

     6.5 Contingent Liabilities: Assume, guarantee, endorse, sell with recourse,
contingently agree to purchase,  discount,  or otherwise become or remain liable
with respect to any  indebtedness,  obligation or other liability of any Person,
or enter  into any  agreement  for the  purchase  or  other  acquisition  of any
products,  materials or supplies,  or for  transportation or for the payment for
services,  if in any such case payment  therefor is to be made regardless of the
non-delivery of the products, materials or supplies or the non-furnishing of the
transportation   or  service  except  for  (a)  the  endorsement  of  negotiable
instruments in the ordinary  course of business,  (b) guaranties in favor of the
Bank, (c) provided no Default or Event of Default has occurred or would occur as
a result of entering into or performing the following guaranties,  guaranties of
auto leases  which  leases do not in the  aggregate  require the Company and the
Guarantors to make payments  (including  taxes,  insurance and similar  expenses
which the  Company or any  Guarantor  is  required to pay under the terms of any
lease) during any calendar year in excess of  $100,000.00  and (d) a guaranty by
the Company and the Guarantors of the  obligations of BFS Realty LLC to the U.S.
Small Business Administration in a principal amount not exceeding $750,000.00.

     6.6 Investments;  Loans: Purchase,  acquire, exercise an option to purchase
or acquire,  or own the assets,  obligations,  stock or any other interest of or
in, or make loans or advances  to, or  investments  in, any  Person,  whatsoever
except for (i) investments in certificates of deposit issued by or time deposits
with  banks  with   capital  in  excess  of  One  Hundred   Million  and  00/100
($100,000,000.00)   Dollars;  (ii)  direct  obligations  of  the  United  States
Government;  (iii) loans  reflected in the financial  statements  referred to in
Section 3.8 hereof, but not any extensions, renewals or replacements of any such
loans;  (iv)  acquisitions  permitted  by Section 6.3 hereof and (v)  commercial
paper of a domestic issuer rated at least "A-1" by Standard & Poor's Corporation
or "P-1" by Moody's Investors Service, Inc.

     6.7  Capital  Expenditures:  Make  any  net  expenditures,  or  permit  any
Subsidiary  to do so,  on a  consolidated  basis  for  fixed or  capital  assets
including  software  development  costs exceeding,  on a cumulative basis in the
aggregate,   $2,500,000.00   for  any   fiscal   year   net  of   sale/leaseback
proceeds.

     6.8 Nature of  Business:  Change the general  nature of its business or the
general  manner of  conducting  its business or permit any  Subsidiary to do so.

     6.9  Transactions  with  Affiliates:  Except in the ordinary  course of and
pursuant to the  reasonable  requirements  of the  Company's  or a  Subsidiary's
business and upon fair and reasonable  terms no less favorable to the Company or
such Subsidiary than would obtain in a comparable arms' length  transaction with
a Person  not an  Affiliate,  enter  into any  transaction,  including,  without
limitation,  the purchase, sale, or exchange of property or the rendering of any
service,  with any  Affiliate,  or  permit  any  Subsidiary  to  enter  into any
transaction,  including,  without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate.  "Affiliate" shall
mean a person (1) which directly or indirectly controls, or is controlled by, or
is under common control with the Company or a Subsidiary,  (2) which directly or
indirectly  beneficially owns or holds five (5%) percent or more of any class of
voting stock of the Company or any Subsidiary,  or (3) five (5%) percent or more
of the voting  stock of which is directly or  indirectly  beneficially  owned or
held by the Company or a Subsidiary.  The term "control"  means the  possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management  and policies of a Person,  whether  through the  ownership of voting
securities, by contract, or otherwise.

     6.10 No Lien  Senior to or Equal to Loan  Documents:  Create or cause to be
created any lien or charge on any property subject to the security  interests of
the Loan Documents which is superior or equal to the liens or security interests
of the Loan Documents. 

     6.11 Change of  Management:  Permit  Bert E.  Brodsky at any time to not be
active on a  substantially  full time  basis in the  affairs  of the  Company by
maintaining the position of President or its equivalent.

     6.12  Dividends  and Purchase of Stock:  Declare any  dividends or make any
distributions  either  in cash or  property  on any  shares  of any class of its
capital stock or apply any of its property or assets to the purchase, redemption
or other  retirement  of, or set apart any sum for the payment of any  dividends
on,  or the  purchase,  redemption  or other  retirement  of,  or make any other
distribution  by  reduction of capital or otherwise in respect of, any shares of
any class of capital stock of the Company or any Guarantor;  provided,  however,
Sandata,   Inc.  may  redeem  stock  in  an  aggregate   amount  not  to  exceed
$3,000,000.00  provided that Sandata, Inc.  simultaneously raises capital in the
amount of the redeemed  stock and  provided  further that no Default or Event of
Default has occurred or will occur as a result of such redemption.

                          SECTION 7: EVENTS OF DEFAULT

     "Event of Default",  wherever  used herein,  means any one of the following
events  (whatever  the reason for such Event of Default  and whether it shall be
voluntary or  involuntary  or be effected by operation of law or pursuant to any
agreement,  decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

          (a)  Default in the  payment of the  principal  of or  interest on the
     Revolving Credit Note or any amount payable pursuant to Section 2.5 or 2.6;
     or

          (b) Any  representation or warranty made by the Company or a Guarantor
     herein or any statement or representation  made in any certificate,  report
     or opinion delivered  pursuant hereto shall prove to have been incorrect in
     any material respect when made; or

          (c) Default in the due  observance  or  performance  of any  covenant,
     condition  or  agreement  on the  part of the  Company,  a  Guarantor  or a
     Subsidiary to be observed or performed  pursuant to Section 5.10 or 5.11 or
     Section 6 hereof; or

          (d)  Default  in the  due  observance  or  performance  of  any  other
     covenant, condition or agreement on the part of the Company, a Guarantor or
     a Subsidiary  to be observed or  performed  pursuant  hereto  (other than a
     covenant, condition or agreement a default in the performance of which or a
     breach of which is elsewhere in this Section  specifically  dealt with) and
     such default shall remain  unremedied for thirty (30) consecutive  calendar
     days after written notice shall have been given by the Bank; or

          (e) Entry of a decree or order by a court having  jurisdiction  in the
     premises  adjudging the Company,  a Subsidiary or a Guarantor a bankrupt or
     insolvent,   or   approving   as   properly   filed  a   petition   seeking
     reorganization,  arrangement, adjustment or composition of or in respect of
     the Company,  a Subsidiary or a Guarantor under the Federal Bankruptcy Code
     or any other  applicable  Federal or state law, or  appointing  a receiver,
     liquidator,  assignee, trustee, (or other similar official) of the Company,
     a Subsidiary or a Guarantor or of any substantial  part of their respective
     properties,  or ordering the winding up or liquidation of their  respective
     affairs,  and the  continuance  of any such decree or order unstayed and in
     effect for a period of sixty (60) consecutive days; or

          (f) The Company,  a Subsidiary or a Guarantor  shall: (i) apply for or
     consent to the  appointment  of a receiver,  trustee or  liquidator  of the
     Company,  such  Subsidiary  or such  Guarantor  or any of their  respective
     properties or assets;  (ii) admit in writing its inability to pay its debts
     as  they  mature;  (iii)  make a  general  assignment  for the  benefit  of
     creditors;  (iv) be  adjudicated  a bankrupt  or  insolvent;  or (v) file a
     voluntary  petition  in  bankruptcy,  or a  petition  or an answer  seeking
     reorganization or an arrangement with creditors or to take advantage of any
     bankruptcy,  reorganization,  insolvency, readjustment of debt, dissolution
     or  liquidation  law  or  statute,  or an  answer  admitting  the  material
     allegations of a petition filed against it in any proceeding under any such
     law or if  corporate  action  shall  be  taken  by the  Company,  any  such
     Subsidiary or any such  Guarantor,  for the purpose of effecting any of the
     foregoing; or

          (g) Rendering against the Company,  a Subsidiary or a Guarantor of one
     or more judgments,  decrees or orders for the payment of money in excess of
     Two  Hundred  Fifty  Thousand  and  00/100  ($250,000.00)  Dollars  in  the
     aggregate  other  than a  judgment  for which the  Company,  Subsidiary  or
     Guarantor is fully insured and the continuance of such  judgments,  decrees
     or orders unsatisfied and in effect for a period of thirty (30) consecutive
     days without a stay of execution; or

          (h) The Company,  a Subsidiary or a Guarantor  defaults in any payment
     of principal of or interest on any  indebtedness or obligation for borrowed
     money (other than the Revolving  Credit Note) or for the deferred  purchase
     price of property (which  indebtedness,  obligation,  or deferred  purchase
     price exceeds One Hundred Thousand and 00/100 ($100,000.00)  Dollars in the
     aggregate) or defaults in the performance of any other  agreement,  term or
     condition  contained in any such  obligation or in any  agreement  relating
     thereto, if the effect of such default is to cause, or to permit the holder
     or holders  of such  obligation  (or a trustee on behalf of such  holder or
     holders)  to  cause,  such  obligation  to become  due prior to its  stated
     maturity; or

          (i) Any of the  following  events  occur or exist with  respect to the
     Company,  a  Guarantor,  a  Subsidiary  or  an  ERISA  Affiliate:  (1)  any
     Prohibited  Transaction  involving any Plan, (2) any Reportable Event shall
     occur with respect to any Plan,  (3) the filing under Section 4041 of ERISA
     of a notice of intent to terminate any Plan or the termination of any Plan,
     (4) any  event  or  circumstance  exists  which  might  constitute  grounds
     entitling the PBGC to institute proceedings under Section 4042 of ERISA for
     the termination of, or for the appointment of a trustee to administer,  any
     Plan,  or the  institution  by the  PBGC of any  such  proceedings,  or (5)
     complete or partial  withdrawal  under Section 4201 or 4204 of ERISA from a
     Multiemployer Plan or the reorganization,  insolvency or termination of any
     Multiemployer  Plan,  and in each  case  above,  such  event or  condition,
     together with all other events or conditions,  if any, could in the opinion
     of the Bank subject the Company to any tax, penalty,  or other liability to
     a Plan,  a  Multiemployer  Plan,  the PBGC or otherwise  (or a  combination
     thereof)  which in the  aggregate  exceed or may exceed Two  Hundred  Fifty
     Thousand and 00/100 ($250,000.00) Dollars; or

          (j) Any Loan  Document  shall  cease to be in full force and effect or
     the  party  obligated  thereunder  shall  assert  that  it has  no  further
     obligation to the Bank thereunder.

     Then,  upon the  happening of any of the foregoing  Events of Default,  the
Commitment  of the  Bank  to make  any  further  Advance  shall  terminate,  the
principal of and accrued  interest on the Revolving Credit Note shall become and
be immediately due and payable upon  declaration to that effect delivered by the
Bank to the Company;  provided,  that, upon the happening of any event specified
in subsections  (e) or (f) of this Section 7, the obligation of the Bank to make
the  Commitment  of the Bank to any further  Advances  shall  terminate  and the
Revolving  Credit Note shall be immediately due and payable without  declaration
or other notice to the Company and the Company expressly waives any presentment,
demand, protest or other notice of any kind.

     If one or more  Events of  Default  shall  occur,  the Bank  shall have the
right, in addition to all other rights and remedies  available to it, to set off
against the unpaid  balance of the  Revolving  Credit Note any debt owing to the
Company by the Bank,  including  without  limitation,  any funds in any  deposit
account  maintained by the Company with the Bank,  and nothing in this Agreement
shall be deemed any waiver or  prohibition  of the Bank's right of banker's lien
or set-off.


                            SECTION 8: MISCELLANEOUS

     8.1 Consents to  Amendments:  This Agreement may be amended and the Company
may take any  action  prohibited,  or omit to  perform  any act  required  to be
performed by it, if the Company shall first obtain the Bank's written consent to
such amendment, action or omission to act. 

     8.2 Survival of Representations: All representations, warranties, covenants
and  agreements  made by the Company and the  Guarantors in connection  herewith
shall  survive the  execution  and delivery of this  Agreement and the Revolving
Credit Note. 

     8.3 Successors and Assigns:  All covenants and agreements herein shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto,  provided  the Company  may not  transfer or assign any of its rights or
interests hereunder without the specific written consent of the Bank.

     8.4  Liability  in  Acting:  In  connection  with  this  Agreement  and the
Commitment,  each party  hereto  will be  protected  in acting  upon any notice,
request,  consent,  certificate,   agreement,  writing,  signature,  resolution,
application or other paper or document  believed by it to be genuine and to have
been  signed,  executed,  passed,  presented or delivered by the proper party or
parties.

     8.5 The Bank's  Rights Not  Waived;  Cumulative  Rights:  Wherever  in this
Agreement or in any other manner an option,  power or right is granted the Bank,
it may be exercised  without notice to the Company,  except as in this Agreement
specifically  provided.  Each and every right  granted to the Bank  hereunder or
under any other  document  delivered  hereunder or in  connection  herewith,  or
allowed it by law or equity,  shall be cumulative and may be exercised from time
to  time.  No  delay,  omission  or  failure  to act on the  part of the Bank in
exercising any option,  power or right,  shall operate as a waiver thereof,  nor
shall any single or  partial  exercise  thereof  preclude  the  other,  later or
further exercise thereof or the exercise of any other power or right.

     8.6 Expenses:  The Company  agrees (a) to pay or reimburse the Bank for its
origination  fee and the  fees  and  disbursements  of  counsel  to the  Bank in
connection with the development, preparation and execution of this Agreement and
any other Loan Document prepared in connection herewith, and the consummation of
the transactions  contemplated  hereby and thereby and all of its  out-of-pocket
costs and expenses incurred in connection with the development,  preparation and
execution of any amendment, supplement or modification to this Agreement and any
other Loan Document prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
fees and  disbursements  of counsel to the Bank; and (b) to pay or reimburse the
Bank for all its costs and expenses  incurred in connection with the enforcement
or  preservation  of any  rights  under this  Agreement  and any such other Loan
Document,  including,  without limitation,  fees and disbursements of counsel to
the Bank. The agreements in this subsection shall survive repayment of the Notes
and all other amounts payable hereunder.

     8.7  Other  Agreements:  The  rights  granted  to the  Bank by the  Company
hereunder are  cumulative  and in addition to the rights  granted by every other
agreement  which the Company at any time executes and delivers to the Bank,  and
no such  agreement  shall be read or construed  to limit,  restrict or otherwise
modify in any way the  rights  given  hereby,  except as the  intent to limit is
expressly  set  forth  in such  agreement  and  likewise  no  provision  of this
Agreement shall be deemed to limit,  restrict or otherwise modify in any way any
rights  granted to the Bank by other  agreements by the Company.  All agreements
herein  contained  and contained in any such other  written  agreement,  whether
typed or otherwise,  shall be fully effective and fully  enforceable in favor of
the Bank and  against  the  Company,  except  that if there by a conflict in the
provisions  of such  agreements  with this  Agreement,  the  provisions  of this
Agreement shall prevail, and if there are similar but not identical  provisions,
the provisions of this Agreement shall prevail.

     8.8 Repayment:  Subject to the terms and conditions of this Agreement,  the
Company  hereby  covenants  and  agrees  to repay  to the  Bank its  obligations
hereunder,  both  principal and interest,  as and when the same shall become due
and payable,  and  faithfully to perform  every term,  condition and covenant of
this Agreement and of any instrument evidencing such obligation, and every other
agreement securing or relating to the same.

     8.9  Applicable  Law and  Jurisdiction:  This  Agreement and the rights and
obligations  of the parties  hereunder  shall be construed  and  interpreted  in
accordance  with the law of the State of New York. The Company hereby submits to
the  jurisdiction  of the Supreme Court of the State of New York and agrees with
the Bank that personal  jurisdiction over the Company shall rest with said Court
for  purposes  of any  action  on or  related  to  this  Agreement  or the  Note
contemplated hereby.

     8.10  Counterclaim;  Trial by Jury: The Company and the  Guarantors  hereby
expressly  waive  any and  every  right  to  interpose  a  counterclaim  (except
mandatory  counterclaims)  and to a trial by jury in any action on or related to
this    Agreement    or   any   Loan    Document   or   the    enforcement    of
either or all of the same.

     8.11 Entire Agreement:  The Company, the Guarantors and the Bank agree that
this Agreement and the other Loan Documents executed and delivered in connection
herewith including the Notes represent the entire  understanding of the parties.
No  modification,  amendment or waiver of any provision of this Agreement or the
other Loan Documents,  nor consent to any departure by the Company,  a Guarantor
or a  Subsidiary  shall in any event be  effective  unless  the same shall be in
writing  and  signed  by the Bank and  then  such  waiver  or  consent  shall be
effective only in the specific  instance and for the purpose for which given. No
statements, agreements or representations,  oral or written, which may have been
made either by the Bank or by any employee, agent or broker with respect to this
Agreement or the Advances shall be of any force or effect,  except to the extent
stated  in this  Agreement,  and all prior  agreements  and  representations  in
respect  of this  Agreement  and the  Advances  are  merged  herein so that this
Agreement  shall contain the entire  agreement with respect to the provisions of
the Advances referred to herein. The Company and the Guarantors hereby expressly
acknowledge and agree that (i) no oral commitments have been made by the Bank to
extend or continue any credit to the Company or any other  party,  (ii) the Bank
has made no  representation or agreement that it will forebear or refrain in any
way from  exercising  any right or remedy in its favor  hereunder  or  otherwise
against the Company, and (iii) they will not rely on any commitment  (regardless
of when  made) to  extend  or  continue  any  credit,  or on any such  agreement
(regardless  of when made) to  forebear  or refrain  from  exercising  rights or
remedies  unless such commitment or agreement shall be in writing and not signed
by an officer of the Bank.

     8.12 Headings:  The headings herein are for convenience  only and shall not
limit or affect the meaning or construction of the provisions herein. 

     8.13 Notices:  Notices and consents provided herein shall be in writing and
shall be given to the other party by personal delivery or certified mail, return
receipt  requested,  in a pre-paid  wrapper  directed  to the other party at its
address  stated below or such other  address as from time to time  designated in
writing by one party to the other:

          (a) if to the Company or a Guarantor:

                           26 Harbor Park Drive
                           Port Washington, New York 11050
                           Attn:  Mr. Bert E. Brodsky
                                      Chairman

                           with a copy to:

                           Stuart Angowitz, Esq.
                           430 Park Avenue - 11th Floor
                           New York, New York 10022

          (b) if to the Bank:

                           Marine Midland Bank
                           534 Broad Hollow Road
                           Melville, New York 11747
                           Attn:  Mr. Gary Sarro
                                      Vice President

Notice by mail shall be effective when received but if not sooner received shall
be deemed effective at 2:45 p.m. on the second Business Day after mailing.  This
provision  shall not prevent  any party from using hand  delivery or delivery by
facsimile  as a method of  giving  notice  which,  if hand  delivered,  shall be
effective on the day on which  delivered to such party at its address  specified
above and, if sent by  facsimile,  shall be  effective  when sent to a facsimile
number provided by a party hereto.

     8.14  Indemnification:  (a) The  Company and each of the  Guarantors  shall
indemnify,  pay and hold the Bank and any holder of the  Revolving  Credit  Note
harmless from and against any and all liabilities, obligations, losses, damages,
penalties,  actions,  judgment,  suits, costs,  expenses or disbursements of any
kind or nature  whatsoever  which may be imposed  on,  incurred  by or  asserted
against the Bank or any holder of the Revolving  Credit Note in any way relating
to or arising out of the Company's,  any Guarantor's or any  Subsidiary's act or
omission to act in violation of this Agreement.

          (b) In the event that any claim or demand for which the Company and/or
     each  Guarantor  would be liable to the Bank  pursuant  to Section  8.14(a)
     above is  asserted  against  or sought to be  collected  from the Bank by a
     third  party,  the  Bank  shall  notify  the  Company  and the  appropriate
     Guarantor of such claim or demand,  specifying  the nature of such claim or
     demand and the amount or the  estimated  amount  thereof to the extent then
     feasible.  The Company and/or the appropriate Guarantor may, at its option,
     with the consent of the Bank in its sole discretion defend the Bank against
     such claim or demand with counsel satisfactory to the Bank.

     8.15  Authority  to  Disclose:  All  Federal,  state,  municipal  and other
authorities  (including the United States  Treasury  Department and the Internal
Revenue  Service) and all banks,  trust companies and other banking or financial
corporations,  and organizations and all accountants,  auditors,  appraisers and
examiners  with which or whom the Company or any Guarantor has  heretofore,  now
has or  hereafter  may  have  banking  or  professional  relations,  are  hereby
irrevocably  authorized  and directed to permit  representatives  of the Bank to
have  full  access  during  regular  business  hours  and from time to time upon
reasonable   request  to  make  copies  of  and   extracts   from  all  reports,
examinations,  audits, appraisals, and returns by or with respect to the Company
or any Guarantor  and all  information  concerning  the Company or any Guarantor
from time to time  contained  in their files and records  subject to  reasonable
restrictions  as  requested by the Company  provided  such  restrictions  do not
conflict with  applicable  law. The Bank shall hold  information  so obtained in
confidence except that it may disclose such information as it may be required by
law to disclose. The Company or any Guarantor may disclose the existence of this
Agreement  in  connection  with its filings  with the  Securities  and  Exchange
Commission and this Agreement may be filed and made available as a public record
in connection with such filings.

     8.16  Severability:  In the event that any one or more of the provisions of
this  Agreement  or the  Revolving  Credit  Note  shall be  invalid,  illegal or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  contained  herein  and  therein  shall  not in any way be
affected or impaired thereby.






<PAGE>



     8.17 Counterparts:  This Agreement may be executed simultaneously in two or
more  counterparts,  each of which shall be deemed an original.  It shall not be
necessary in making proof of this  Agreement to produce or account for more than
one counterpart. 

     IN WITNESS  WHEREOF,  the parties  hereto have duly executed this Agreement
the year and date first above written.

                                               BORROWER:
                    
                                               SANDSPORT DATA SERVICES, INC.

                                               By: /s/ Bert E. Brodsky
                                                   Bert E. Brodsky
                                                   Chairman

                                               GUARANTORS:

                                               SANDATA, INC.

                                               By: /s/ Bert E. Brodsky
                                                   Bert E. Brodsky
                                                   President

                                                SANDATA HOME HEALTH
                                                SYSTEMS, INC.

                                                By: /s/ Bert E. Brodsky
                                                    Bert E. Brodsky
                                                    President

                                                SANDATA PRODUCTIVITY, INC.

                                                By: /s/ Bert E. Brodsky
                                                    Bert E. Brodsky
                                                    President

                                                 SANDATA SPECTRUM, INC.

                                                 By:/s/ Bert E. Brodsky
                                                     Bert E. Brodsky
                                                     President

                                                 SANDATA INTECK, INC.

                                                 By: /s/ Bert E. Brodsky
                                                    Bert E. Brodsky
                                                    President






<PAGE>



                                                   SANTRAX SYSTEMS, INC.

                                                   By: /s/ Bert E. Brodsky
                                                      Bert E. Brodsky
                                                      President

                                                    BANK:

                                                    MARINE MIDLAND BANK

                                                    By:/s/ Gary Sarro
                                                       Gary Sarro
                                                       Vice President





<PAGE>


                                   SCHEDULE I

                          Subsidiaries of Sandata, Inc.


                           State of                 Percentage
Name                       Incorporation            Ownership

The Company                  New York                  100%

Sandata Home Health          Delaware                  100%
  Systems, Inc.

Sandata Productivity, Inc.   Delaware                  100%

Sandata Spectrum, Inc.       Delaware                  100%

Sandata Inteck, Inc.         Delaware                  100%

Santrax Systems, Inc.        New York                  100%

Neither the Company nor any of the other Guarantors has any Subsidiaries.

                             Section 3.5 Litigation

None.





<PAGE>
                                    EXHIBIT A
                              REVOLVING CREDIT NOTE

$3,000,000.00                                                 Melville, New York
                                                                  April 18, 1997

     FOR VALUE RECEIVED,  SANDSPORT DATA SERVICES,  INC., a New York corporation
("Company")  promises to pay to the order of MARINE MIDLAND BANK ("Bank") at its
office located at 534 Broad Hollow Road, Melville, New York the principal sum of
the lesser of: (a) Three Million and 00/100 ($3,000,000.00)  Dollars; or (b) the
aggregate  unpaid  principal  amount  of all  Advances  made by Bank to  Company
pursuant to the Agreement hereinafter referred to, on March 1, 2000.

     Company  shall also pay  interest on the unpaid  balance  from time to time
outstanding,  at said  office at the rate and times and in  accordance  with the
provisions of Section 2.7 of the Revolving  Credit  Agreement among the Company,
certain  affiliated  corporations  and the  Bank  dated as of  April  18,  1997.
Interest  on payments  which are past due  whether at the stated  maturity or by
acceleration  or otherwise  shall accrue at the  otherwise  applicable  rate per
annum plus three (3%) percent.  All computations of interest  hereunder shall be
made on the basis of a 360 day year for the actual number of days elapsed.

     All  payments  including  prepayments  on this Note shall be made in lawful
money of the United  States of  America in  immediately  available  funds.  If a
payment  becomes  due and  payable  on a  Saturday,  Sunday,  or public or other
banking  holiday under the laws of the State of New York,  the maturity  thereof
shall be extended to the next  succeeding  business  day, and interest  shall be
payable thereon at the rate herein specified during such extension.

     Company  hereby  authorizes  Bank to enter  from time to time the amount of
each Advance to Company on the schedule  annexed  hereto and made a part hereof.
Failure of Bank to record such information on such schedule shall not in any way
affect the obligation of Company to pay any amount due under this Note.

     This Note is the  Revolving  Credit Note  referred to the Agreement as such
Agreement may be further amended from time to time, and is subject to prepayment
and its  maturity is subject to  acceleration  upon the terms  contained in said
Agreement.

     If any action or  proceeding  be  commenced to collect this Note or enforce
any of its  provisions,  Company further agrees to pay all costs and expenses of
such action or proceeding and reasonable  attorneys' fees and further  expressly
waives any and every right to interpose any  counterclaim  in any such action or
proceeding.  Company hereby submits to the  jurisdiction of the Supreme Court of
the  State of New York and  agrees  with Bank that  personal  jurisdiction  over
Company  shall rest with the Supreme Court of the State of New York for purposes
of any  action on or related to this Note or the  enforcement  of same.  Company
hereby  expressly waives any and every right to a trial by jury in any action on
or related to this Note or the enforcement of the same.

     Bank may  transfer  this  Note and may  deliver  the  security  or any part
thereof to any transferee or transferees, who shall thereupon become vested with
all the powers and rights above given to Bank in respect thereto, and Bank shall
thereafter  be forever  relieved  and fully  discharged  from any  liability  or
responsibility  in the matter.  The failure of any holder of this Note to insist
upon strict  performance of each and/or all of the terms and  conditions  hereof
shall not be construed or deemed to be a waiver of any such term or condition.

     Company and all  endorsers  and  guarantors  hereof waive  presentment  and
demand for payment, notice of non-payment, protest, and notice of protest.

     This Note and its provisions shall be construed in accordance with the laws
of the State of New York.

                                                   SANDSPORT DATA SERVICES, INC.


                                                   By:
                                                   Bert E. Brodsky
                                                   Chairman
                                                  
                                                   Address:
                                                   26 Harbor Park Drive
                                                   Port Washington, NY  11050

                 Schedule of Advances and Payments of Principal



       Amount of Principal Paid or Prepaid Name of Person Making Notation
                 Amount of Advance         Unpaid Principal Balance








<PAGE>