Exhibit 10.3
AMENDMENTNO. 1
TO
AMENDED AND RESTATEDSCHEDULETOLOANANDSECURITYAGREEMENT
ThisAmendmentNo.1toAmendedandRestatedScheduletoLoanandSecurityAgreementismadethis 31th day of July, 2012, by and betweenCRESTMARK COMMERCIAL CAPITALLENDINGLLC,a Michigan limited liability company,whose addressis 726 HighlandiaDrive, BatonRouge, Louisiana 70810 (“Crestmark”) andDATARAM CORPORATION, a New Jerseycorporation, whose chief executiveoffice is locatedat 777AlexanderRoad,Suite 100,Princeton, NewJersey 08540 (“Borrower”). ThisAmendment No. 1 amends that certainLoanandSecurityAgreement executed July 27, 2010(as amended, the“LoanAgreement”) and that certainAmended and Restated Scheduleto Loanand Security Agreement executed May17, 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 BYREFERENCE: |
Alldefinitions andterms usedintheLoan Agreement, theSchedule andtheLoan Documentsarehereby incorporatedinthis AmendmentNo. 1.
| 2. | AMENDMENT ANDMODIFICATION TOSCHEDULE TO LOANAGREEMENT: |
Section 11 (E.) of the Schedule to the Loan Agreement is hereby deleted in its entirety, and in lieu thereof, the following is inserted:
E. FINANCIAL COVENANTS: Borrower will maintain thefollowing Financial Covenants, which will be tested ona quarterly basis:
A minimumTangible Net Worth of at least Two Million and no/100Dollars ($2,000,000.00). “Tangible Net Worth” means,as of the dateof determination, total assetsless total liabilities less the sum of (i) the aggregate amount of non-trade Accounts Receivable, includingAccounts Receivable from affiliated or related Persons butexcluding anyvalueadded taxreceivable; (ii) prepaid expenses; (iii) deposits; (iv) goodwill; and (v)any other asset which would be treated as an intangibleassetunder GAAP,plus SubordinatedDebt. “Subordinated Debt” means any and all indebtedness presentlyor in the future incurred by Borrower to any creditor of Borrowerentering intoawritten subordinationagreement 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 andappliedon aconsistent basis.
Borrower acknowledges that the execution of this Amendment No. 1 doesnot constitute a waiver orcure ofany Default, whether maturedor otherwise,ifany, that previously existed or nowexists under the Loan Agreement or any Loan Document. By execution of this Agreement, Crestmark will not bedeemed to have waivedanyof its rightsorremedies undertheLoanAgreement orany Loan Document.
| 4. | SURVIVAL, REAFFIRMATION, AND NO DEFENSES: |
Borrower agrees,in all capacities in which the signatory hasexecuted the Loan Agreement or any of the LoanDocuments, asfollows:
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.
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. | CONFIRMATIONOF LIENUPON 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 definedin the Loan Agreement). The Collateralis and shall remainsubject to and encumberedby thelien, charge, and encumbrance of the Loan Agreement,and nothingcontainedherein shall affect or be construedto affect the lien orencumbrancecreated bytheLoanAgreement or the prioritythereof.
This Amendment No. 1mayonly be altered or modified by written·instrument duly executed by Borrowerand Crestmark.
The parties heretohave executedthisAgreement the dayand yearfirstappearing above.
“CRESTMARK”
CrestmarkCommercialCapitalLending LLC,
aMichigan limitedliability company
By:/s/ Christy Morgan
Christy Morgan, 1st Vice President - Legal
“BORROWER”
DataramCorporation,
a New Jersey corporation
By:/s/ John H. Freeman
John H. Freeman, President & CEO
