AMENDMENT NO. 1
Exhibit 10.3
AMENDMENT NO. 1
TO
AMENDED AND RESTATED SCHEDULE TO LOAN AND SECURITY AGREEMENT
This Amendment No. 1 to Amended and Restated Schedule to Loan and Security Agreement is made this 31th day of July, 2012, by and between CRESTMARK COMMERCIAL CAPITAL LENDING LLC, a Michigan limited liability company, whose address is 000 Xxxxxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxx 00000 (“Crestmark”) and DATARAM CORPORATION, a New Jersey corporation, whose chief executive office is located at 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000 (“Borrower”). This Amendment No. 1 amends that certain Loan and Security Agreement executed July 27, 2010 (as amended, the “Loan Agreement”) and that certain Amended and Restated Schedule to Loan and Security Agreement executed May 17, 2012 (as amended, the “Schedule”).
BACKGROUND:
The parties have executed the Loan Agreement and Loan Documents, including but not limited to the Schedule;
The Borrower is indebted and/or obligated to Crestmark without offset or deduction pursuant to the Loan Agreement, the Schedule and the Loan Documents all of which are in full force and effect; and
Borrower and Crestmark desire to modify and amend certain terms, conditions, covenants and obligations contained in the Loan Agreement, the Schedule and the Loan Documents, including, but not limited to, the Financial Covenants.
Accordingly, the parties agree as follows:
| 1. | INCORPORATION BY REFERENCE: |
All definitions and terms used in the Loan Agreement, the Schedule and the Loan Documents are hereby incorporated in this Amendment No. 1.
| 2. | AMENDMENT AND MODIFICATION TO SCHEDULE TO LOAN AGREEMENT: |
Section 11 (E.) of the Schedule to the Loan Agreement is hereby deleted in its entirety, and in lieu thereof, the following is inserted:
| 11. | BORROWER'S PROMISES: |
E. FINANCIAL COVENANTS: Borrower will maintain the following Financial Covenants, which will be tested on a quarterly basis:
A minimum Tangible Net Worth of at least Two Million and no/100 Dollars ($2,000,000.00). “Tangible Net Worth” means, as of the date of determination, total assets less total liabilities less the sum of (i) the aggregate amount of non-trade Accounts Receivable, including Accounts Receivable from affiliated or related Persons but excluding any value added tax receivable; (ii) prepaid expenses; (iii) deposits; (iv) goodwill; and (v) any other asset which would be treated as an intangible asset under GAAP, plus Subordinated Debt. “Subordinated Debt” means any and all indebtedness presently or in the future incurred by Borrower to any creditor of Borrower entering into a written subordination agreement with Crestmark.
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All of the financial covenants in this Agreement shall be determined in accordance with GAAP, unless otherwise provided.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board that are applicable to the circumstances as of the date of determination and applied on a consistent basis.
| 3. | NO WAIVER: |
Borrower acknowledges that the execution of this Amendment No. 1 does not constitute a waiver or cure of any Default, whether matured or otherwise, if any, that previously existed or now exists under the Loan Agreement or any Loan Document. By execution of this Agreement, Crestmark will not be deemed to have waived any of its rights or remedies under the Loan Agreement or any Loan Document.
| 4. | SURVIVAL, REAFFIRMATION, AND NO DEFENSES: |
Borrower agrees, in all capacities in which the signatory has executed the Loan Agreement or any of the Loan Documents, as follows:
A. That, except as herein expressly modified or amended, all terms, conditions, covenants; representations and warranties contained in the Loan Agreement and the Loan Documents are true and correct, continue to be satisfied in all respects and are legal, valid and binding obligations. The undersigned hereby ratify, agree to and confirm the Loan Agreement and the Loan Documents and consent to and acknowledge the foregoing Amendment No. 1.
B. That payment of the Indebtedness is the valid obligation of Borrower and, as of the date hereof, Borrower has absolutely no defenses, claims, rights of set-off or counterclaims against Crestmark or the payment of the Indebtedness. This Amendment No.1 shall not impair the rights, remedies and Collateral given in the Loan Agreement and the Loan Documents.
C. That the liability of the undersigned howsoever arising or provided for in the Loan Agreement and the Loan Documents is hereby reaffirmed.
| 5. | RELEASE: |
In consideration of Crestmark executing this Amendment No. 1, Borrower does hereby release and discharge Crestmark of and from any and all claims, harm, causes of action, liabilities, injuries, expenses (including attorneys’ fees) and damages of any and every kind, known or unknown, legal or equitable, which Borrower has against Crestmark from the date of Borrower's first contact with Crestmark up to the date of this Agreement. Borrower confirms to Crestmark that they have reviewed the effect of this release with legal counsel of their choice, or have been afforded the opportunity to do so, prior to the execution of this Amendment No. 1 and each acknowledges and agrees that Crestmark is relying upon this release in executing this Amendment No. 1.
| 6. | CONFIRMATION OF LIEN UPON COLLATERAL: |
The Borrower acknowledges and agrees that pursuant to the terms of the Loan Agreement, the obligations of the Borrower and the Indebtedness are secured by a first priority lien and security interest in the Collateral (as defined in the Loan Agreement). The Collateral is and shall remain subject to and encumbered by the lien, charge, and encumbrance of the Loan Agreement, and nothing contained herein shall affect or be construed to affect the lien or encumbrance created by the Loan Agreement or the priority thereof.
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| 7. | NO ORAL MODIFICATION: |
This Amendment No. 1 may only be altered or modified by written· instrument duly executed by Borrower and Crestmark.
The parties hereto have executed this Agreement the day and year first appearing above.
“CRESTMARK”
Crestmark
Commercial Capital Lending LLC,
a Michigan limited liability company
By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, 1st Vice President - Legal
“BORROWER”
Dataram Corporation,
a New Jersey corporation
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, President & CEO
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