AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT ("Amendment") dated as of January 21, 2002 is by and
between FIRST UNION NATIONAL BANK, a national banking association with a
place of business at 000 Xxxxx Xxxx, Xxxxxx, Xxx Xxxxxx 00000 (the "Bank")
and Dataram Corporation, a New Jersey corporation having its chief
executive office at 000 Xxxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxx Xxxxxx 00000 (the
"Borrower")
W I T N E S S E T H:
WHEREAS, the Borrower and Bank are parties to a certain Credit
Agreement dated as of April 16, 2001 (the "Credit Agreement") and certain
other Loan Documents executed and delivered in connection therewith; and
WHEREAS, the Borrower has requested certain modifications to certain
covenants and a reduction of certain of the interest rates set forth in the
Credit Agreement; and
WHEREAS, Bank is agreeable to the requests of the Borrower on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto hereby agree as follows:
1. Defined Terms; Effect of Amendment.
(a) Unless otherwise modified hereby, all capitalized terms used
herein which are defined in the Credit Agreement, and not otherwise defined
herein, are used herein as defined in the Credit Agreement. All
capitalized terms used herein which are defined in the Credit Agreement and
modified herein shall have the meaning assigned to such terms in the Credit
Agreement as so modified.
(b) This Amendment is an amendment to the Credit Agreement. Unless
the context of this Amendment otherwise requires, the Credit Agreement and
this Amendment shall be read together and shall have effect as if the
provisions of the Credit Agreement and this Amendment were contained in one
agreement. After the effective date of this Amendment, all references in
the Credit Agreement to the "Credit Agreement", "this Agreement", "hereto",
"hereof', "hereunder" or words of like import referring to the Credit
Agreement shall mean the Credit Agreement as amended by this Amendment, and
all references in the Notes and the other Loan Documents to the Credit
Agreement shall mean the Credit Agreement as amended by this Amendment.
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2. Amendments to Credit Agreement.
(a) The definition of "Consolidated Net Earnings Available for
Fixed Charges" in Section 1. of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Consolidated Net Earning Available for Fixed Charges" means for
the Four Quarter Period immediately preceding the date of determination,
the amount by which (a) the sum of (i) Consolidated Net Earnings plus (ii)
Consolidated Interest Charges (to the extent deducted in determining
Consolidated Net Earnings), plus (iii) depreciation and amortization
charges (to the extent deducted in determining Consolidated Net Earnings)
plus (iv) all non-cash charges (to the extent deducted in determining
Consolidated Net Earnings), exceeds (b) the sum of (i) Capital Expenditures
of the Borrower and Subsidiaries and (ii) dividends or other distributions
paid on the Borrower's capital stock in cash or property, and other amounts
paid in connection with any purchase, redemption, retirement or other
acquisition of any capital stock of the Borrower by the Borrower or any
Subsidiary, net of cash proceeds realized from the sale of stock of the
Borrower under its stock option plans.
(b) There shall be added a new clause (E) to the end of the
definition of Permitted Liens in Section 1.1 of the Credit Agreement, that
will read as follows:
"and (E) any Lien on the specific assets acquired with the
proceeds of the Debt permitted to be under Section 5.4 (A) (iii) solely for
the purpose of securing said Debt."
(c) The reference in Section 2.l(D)(1)(b) to "one and three
quarters percent (1.75%)" shall be amended to read: "one and one quarter
percent (1.25%)".
(d) Inasmuch as upon the effectiveness of this Amendment the Term
Loan shall be paid in full, Section 2.2 of the Credit Agreement shall be
deleted and replaced with the following reference:
"2.2 [INTENTIONALLY DELETED]"
(e) Section 5.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"5.1 LOANS, ADVANCES AND INVESTMENTS
The Borrower will not, and will not permit any Subsidiary to,
make any loan or advance to, or investment in, any Person except for (A)
loans, advances or investments by any Subsidiary to or in the Borrower; (B)
loans, advances or investments by the Borrower to or in any Subsidiary made
in any fiscal year of the Borrower which do not exceed, individually or in
the aggregate, the greater of $3,000,000 or 50% of Excess Cash Flow for
such fiscal year; (C) other loans, advances or investments which, in the
aggregate do not exceed $100,000 (measured on a consolidated basis as to
the Borrower
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and Subsidiaries); and provided further that at the time of any loan,
advance or investment permitted under clauses (A), (B) or (C) above no
Default or Event of Default exists or would result from the making of such
loan, advance or investment."
(f) Section 5.2(A) of the Credit Agreement is hereby deleted in
its entirety, and shall be replaced with the following reference:
"(A) [INTENTIONALLY DELETED]"
(g) Section 5.2(B) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(B) Fixed Charge Coverage Ratio. The Borrower will not permit
the ratio, expressed as a percentage, of Consolidated Net Earnings
Available for Fixed Charges to Consolidated Fixed Charges at any time to be
less than 125 percent for the immediately preceding Four Quarter Period."
(h) Section 5.2(D) of the Credit Agreement is hereby deleted and
replaced with the following new covenant:
"(D) Total Liabilities to Tangible Net Worth Ratio. The Borrower
shall, at all times, maintain a ratio of Consolidated Total Debt to
Consolidated Tangible Net Worth of not more than 1.50 to 1.00. For purposes
of calculating the covenant above, the amount of any Debt that is
subordinate to the Obligations on terms and conditions approved by the
Bank, in its sole discretion, shall be subtracted from Consolidated Total
Debt."
(i) Clause (A) Section 5.4 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"(A) The Borrower will not, and will not permit any Subsidiary
to, create, assume or suffer to exist any Debt (including any Contingent
Obligations) except for (i) Debt owed by the Borrower to any Subsidiary, or
by any Subsidiary to the Borrower or another Subsidiary, (ii) existing debt
set forth on Schedule 5.4 annexed hereto, and (iii) Debt in an amount not
to exceed $2,000,000 incurred solely to finance the acquisition of new
equipment to be used in the business of the Borrower and any Subsidiary,
whether such acquisition is through a purchase money loan or a Capitalized
Lease transaction."
(j) The reference to "with a copy to:" and the address that
follows said reference below the Bank's address in Section 8.10 of the
Credit Agreement is hereby deleted in its entirety.
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3. Full Force and Effect. Except as expressly modified by this
Amendment, all of the terms and conditions of the Credit Agreement shall
continue in full force and effect, and all parties hereto shall be entitled
to the benefits thereof. This Amendment is limited as written and shall not
be deemed (i) to be an amendment of or a consent under or waiver of any
other term or condition of the Credit Agreement or (ii) to prejudice any
right or rights which Bank now has or may have in the future under or in
connection with the Credit Agreement or such other agreements.
4. Representations and Warranties. In order to induce Bank to
enter into this Amendment, the Borrower makes the following representations
and warranties to the Bank, which shall survive the execution and delivery
hereof;
(i) The execution and delivery of this Amendment has been
authorized by all necessary corporate action on its part, this Amendment
has been duly executed and delivered by it, and this Amendment and the
Credit Agreement, as amended hereby, constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms subject to applicable bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally, moratorium laws from time
to time in effect and general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law);
(ii) No Default or Event of Default has occurred and is
continuing under the Credit Agreement; and
(iii) The representations and warranties set forth in the
Credit Agreement and the other Loan Documents are true and correct as of
the date hereof in all material respects.
5. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, and all which when taken together shall constitute one and the
same agreement.
6. Governing Law. This Amendment, including the validity thereof
and the rights and obligations of the parties hereunder, shall be construed
in accordance with and governed by the laws of the State of New Jersey.
7. Conditions Precedent. This Amendment shall not be effective
until (i) the Bank shall have received counterparts of this Amendment, duly
executed by each of the parties hereto, (ii) the Borrower shall pay in full
the existing Term Loan (at which time the Term Note shall be promptly
returned to the Borrower marked "Paid in Full"), (iii) Borrower shall
terminate interest rate swap transaction effected with the Bank in
connection with the Term Loan, and pay all costs associated with
termination, and (iv) Borrower shall have paid all reasonable fees and
expenses of the Bank's counsel incurred in connection with the preparation,
negotiation, execution and delivery and review of this Amendment.
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8. Release of Mortgage Upon Effectiveness. Upon the satisfaction
of each of the conditions set forth in Section 7 above, the Bank shall
execute and deliver to the Borrower a discharge of the Mortgage and the
Assignment of Leases, together with any other instruments a release that
the Borrower may reasonably request in connection with said discharge, and
said execution and delivery shall constitute the Bank's authorization to
record said discharge and other instruments in any relevant office of
public records to effectuate said discharge.
9. Landlord Waivers. The Borrower shall use its best good faith
efforts to furnish to the Bank each of the remaining outstanding landlord
waivers with respect to certain of its leased properties in the form
provided by the Bank on or about the time of the closing of the Credit
Agreement.
10. Payment of Certain Capitalized Lease Obligations. Attached
hereto is a schedule which identifies certain Capitalized Leases of the
Borrower. On or before February 15, 2002, the Borrower shall pay in full
all of its obligations thereunder, including, without limitation, all of
its Capitalized Rentals thereunder, to cause said leases to be terminated
and the title to the property leased thereunder to revert (or otherwise to
be conveyed) to the Borrower.
11. Execution Certification. The parties hereto certified that this
Amendment was executed and delivered in the State of New Jersey.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
day and year first above written.
Borrower:
WITNESS OR ATTEST DATARAM CORPORATION
XXXXXXX XXXXXX XXXX XXXXXXXX
By: _______________________________ By: _____________________________
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxxx
Title: Controller Title: Vice-President Finance
Bank:
FIRST UNION NATIONAL BANK,
By: _____________________________
Name:
Title:
THIS AMENDMENT IS ACKNOWLEDGED
AND CONSENTED TO:
WITNESS OR ATTEST DATARAM ACQUISITION SUBSIDIARY, INC.,
as Guarantor
XXXXXXX XXXXXX XXXX XXXXXXXX
By: _______________________________ By: _____________________________
Name: Xxxxxxx Xxxxxx Name: Xxxx Xxxxxxxx
Title: Controller Title: Vice-President Finance
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SCHEDULE OF CAPITALIZED LEASES TO BE PAID IN FULL
Lease contract no. 606552 dated April 29, 1999
Lessor: Nordea Finans Denmark
Leased Equipment: Three (3) Fuji production lines and One (1) Advantest
Tester.
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