SCHEDULE TO LOAN AND SECURITY AGREEMENT
DATED: July 27, 2010
This Schedule is part of the Agreement between:
CRESTMARK COMMERCIAL CAPITAL LENDING LLC ("CRESTMARK")
000 XXXXXXXXXX XXXXX
XXXXX XXXXX, XX 00000
ATTN: XXXXXXX XXXXX, GROUP PRESIDENT
FACSIMILE #: (000) 000-0000
AND
DATARAM CORPORATION ("BORROWER")
000 XXXXXXXXX XXXX
XXXX XXXXXXX, XX 00000
ATTN: XXXX XXXXXXX, CEO/PRESIDENT
FACSIMILE #: (000) 000-0000
The following paragraph numbers correspond to paragraph numbers contained in
the Agreement.
2. LOAN; LOAN ADVANCES.
Advance Formula: Advances of the Loan may be measured against a
percentage of Eligible Accounts.
The Loan Amount may not exceed an amount which is the lesser of:
(a) Five Million Dollars ($5,000,000.00) ("Maximum Amount"); or
(b) Eighty percent (80%) of Eligible Accounts (the "Advance
Formula").
Crestmark in its sole discretion may raise or lower any percentage advance
rate with respect to the Advance Formula.
Eligible Accounts are accounts that arise in the ordinary course of
business, are represented by an invoice, are presently due, are free from
any dispute, are not from any parent, subsidiary or affiliate of Borrower,
and are acceptable to Crestmark in its sole discretion. Excluded from
Eligible Accounts are accounts that: (i) are more than 90 days from invoice
date; (ii) with the exception of account debtors from Canada, are from a
foreign account debtor; (iii) are from an account debtor on a xxxx and hold,
guaranteed sale, C.O.D. sale, return sale of any kind, sale on approval,
consignment or other conditional sale; (iv) are for tooling; (v) are contra
accounts or are from an account debtor who is owed money by Borrower; or
(vi) are in excess of twenty percent (20%) cross aging by dollar amount.
Crestmark will determine in its sole discretion whether any Collateral is
eligible for an Advance, but no Collateral will be considered eligible
unless the requirements set forth above are met. Regardless of whether any
Collateral is eligible, it is still part of the Collateral securing the
Obligations.
Prior to any request for an Advance Borrower must furnish to Crestmark
invoices, credit memos, purchase orders, evidence of delivery, proof of
shipment, timesheets or any other documents Crestmark requests, in its sole
discretion, with respect to the Accounts that Borrower is tendering to
Crestmark to support the Advance ("Account Documents"). Crestmark will
endeavor to provide the requested Advance by the end of the next business
day following the date it receives the request as long as the complete
package of information for the request has been received by Crestmark by
3:00 p.m. Central Time on the date of the request for the Advance. All
requests for funding will be subject to Crestmark's then standard fees for
electronic funds transfer, wire transfers and check services.
Each time an Advance is made, the amount of the Obligations will be
increased by the amount of the Advance. Three (3) business days ("Clearance
Days") after checks, ACH or wire transfers or other credit instruments are
applied to a specific invoice, Crestmark will credit the Loan Account with
the net amount actually received. On the date a collection is applied to a
specific invoice Borrower will receive immediate credit on such funds in
determining availability for Advances.
When Crestmark receives a payment from an Account Debtor, it will attempt to
apply it against the appropriate Account Debtor and invoice according to the
Account Debtor's remittance advice. If it is not clear which Account Debtor
or invoice the payment is to be applied against, Crestmark may contact
Borrower or the payor for assistance.
4. FEES AND EXPENSES. The following fees will be paid by Borrower:
These Fees are in addition to the Fees set forth in the Note or
elsewhere in the Agreement.
Misdirected Payment Fee: Borrower will pay Crestmark a misdirected
payment fee in an amount equal to fifteen percent (15%) of the amount of any
payment where said payment has been received by Borrower and not delivered
in kind or the proceeds paid by Borrower to Crestmark within two (2)
business days.
Monthly Maintenance Fee: Each month Borrower will pay Crestmark a
monthly maintenance fee (the "Maintenance Fee") of six-tenths of one percent
(0.6%) of the monthly average principal balance of the Loan outstanding from
the preceding month as a maintenance fee commencing on the first (1st) day
of the month following the initial Advance, and continuing on the first
(1st) day of each month thereafter until this Agreement is terminated and
Crestmark is repaid the Indebtedness in full, including any exit fee
contained in the Note.
Exit Fee: Borrower may elect to prepay the Obligations and/or
terminate the Agreement but only upon the payment of all Obligations
including the following exit fee ("Exit Fee"), as liquidated damages and not
as a penalty: Two percent (2%) of the Maximum Amount stated herein, if
termination is requested more than thirty (30) days prior to the first
anniversary date of this Note. Borrower shall not be responsible for the
Exit Fee if it provides Crestmark with sixty (60) days written notice of its
intent to terminate if Borrower in good faith believes that Crestmark has
not made advances to Borrower when it is not in Default of its obligation
under the Agreement or has not deemed acceptable a material amount of
accounts that are not otherwise excluded from Eligible Accounts pursuant to
paragraph 2 of the Schedule to the Agreement. After the first anniversary
date hereof, the Exit Fee will be waived so long as Borrower notifies
Crestmark in writing within thirty (30) days of Borrower's intention to
terminate the Agreement.
5. LOCKBOX.
The Lockbox Account means:
Crestmark Capital
X.X. Xxx 00000
Xxxxx Xxxxx, XX 00000
As long as this Lockbox Bank is used there will be no additional
itemized lockbox charges to Borrower.
10. REPRESENTATIONS.
(A) Borrower's state of organization is New Jersey and its state
organizational identification number is 3407220000.
(D) Ring Technology v. Add-On Computer Peripherals, LLC, Case
No. 10-104(E.D. Texas).
(F) List Security Interests in the Collateral held by creditors
other than Crestmark as Permitted Encumbrances:
TYPICAL
APPROXIMATE MONTHLY
VALUE
VENDOR PRODUCT VALUE 7/27/2010 RANGE
____________________________________________________________________________
Various Dynamic Access Memory Chips $50,000-
Hynix (DRAMS) $72,000 $300,000
Sheerr
Memory, $3,000,000-
LLC Finished Memory Modules, DRAMS $3,000,000 $4,500,000
Printed Circuit Boards
Misc. electronic components (eg. Capacitors, resistors)
(J) List Borrower's Tradenames:
Dataram
Micro Memory Bank
Sterling Memory
00000xxxxxx.xxx
xxxxxxxxxxx.xxx
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 Five Million Seven
Hundred Thousand Dollars ($5,700,000.00). "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) net leasehold
improvements; (v) goodwill; and (vi) 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.
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.
13. FINANCIAL REPORTS.
Management Prepared Financial Statements: Borrower will deliver to
Crestmark management prepared financial statements, balance sheets, and
profit and loss statements for the quarter then ended, certified to by the
president or chief financial officer of Borrower. Such reports will set
forth the financial affairs and true condition of Borrower for such time
period and will be delivered to Crestmark no later than forty five (45) days
after the end of fiscal quarter.
Annual Financial Statements: Each year Borrower will deliver to
Crestmark annual financial statements, cash flow statements, balance sheets,
and profit and loss statements audited by a certified public accountant
acceptable to Crestmark, all without exceptions. Such reports will set
forth in detail Borrower's true condition as of the end of Borrower's fiscal
year no later than ninety (90) days after the end of Borrower's fiscal years.
All financial statements are and will be prepared in accordance with GAAP
applied on a consistent basis.
Accounts Receivable, Accounts Payable Aging and Inventory Reports:
Borrower will furnish to Crestmark the following certified to by the
president or chief financial officer of Borrower within the time periods set
forth:
(a) Accounts Receivable Reports: Monthly detailed Accounts
Receivable Aging Reports no later than fifteen (15) days
after the end of each month; and
(b) Accounts Payable Reports: Monthly detailed Accounts Payable
Aging Reports due no later than Monday following the end of
each week.
Tax Returns: Borrower will provide Crestmark with current annual tax
returns prior to August 15 of each year or if an extension is filed, at the
earlier of (a) filing, or (b) the extension deadline.
Field Examinations: Borrower will reimburse Crestmark for the costs
to perform at least one field examination per year (frequency of field
examinations to be determined in Crestmark's sole discretion) of Borrower's
books and records, assets and liabilities, to be performed by Crestmark's
inspector, whether a Crestmark officer or an independent party with all
expenses (whether for a Crestmark employee or otherwise, together with all
out of pocket expenses including, but not limited to, transportation, hotel,
parking, and meals) paid by Borrower. Upon Default, the number of field
examinations to be reimbursed by Borrower may be increased in Crestmark's
sole discretion. Field examinations are performed for Crestmark's internal
use and Crestmark has no obligation to provide Borrower with the results of
the examination or copies of any reports or work papers in whole or in part.
Borrower's reimbursement of field examinations will not exceed fifteen
thousand dollars ($15,000.00) per year.
Tax Deposit Evidence: Upon Crestmark's request, submit payroll
summaries and evidence of tax payments together with copies of bank
statements from which the funds are impounded.
Customer Lists: Upon Crestmark's request, Borrower will deliver to
Crestmark detailed customer lists showing the customer's name, address,
phone number and any other information Crestmark reasonably requests.
Projections: Upon Crestmark's request, Borrower shall deliver to
Crestmark, financial projections including balance sheet, income statements,
and statement of cash flows together with assumptions for the following
year, broken down monthly.
Other Information: Upon Crestmark's request, Borrower will also
deliver to Crestmark such other financial statements, financial reports,
documentation, tax returns and other information as Crestmark requests from
time to time.
18. NOTICES. Addresses for Notices are as set forth at the beginning
of this Schedule.
CRESTMARK: BORROWER:
_________ ________
CRESTMARK COMMERCIAL DATARAM CORPORATION
CAPITAL LENDING LLC
By:/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
___________________________ ____________________________
Xxxxxxx X. Xxxxx, Group President
Print Name: Xxxx X. Xxxxxxx
_____________________
Title: President & CEO
__________________________
