EXECUTION COPY
NOTE AND SECURITY AGREEMENT
NOTE AND SECURITY AGREEMENT, dated as of February 24, 2010, by and
among ▇▇▇▇▇ ▇▇▇▇▇▇, whose principal address is ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Sheerr") and Dataram Corporation ("Dataram"),
whose principal address is ▇▇▇▇▇ ▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ 08543-
7528.
WHEREAS, Dataram wishes to borrow from Sheerr, and Sheerr wishes to
lend to Dataram, the sum of $1,000,000.00 (the "Loan") upon the terms and
conditions set forth herein; and
WHEREAS, in order to induce Sheerr to extend such accommodations,
Dataram is willing to grant to Sheerr a first priority security interest in
the Collateral (as defined herein);
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Loan. Dataram hereby acknowledges receipt of the sum of
$1,000,000.00 and agrees to pay to the order of Sheerr, in
the manner hereinafter specified, the sum of $1,000,000.00 with
interest from the date hereof at the fixed rate of 5.25% per
annum, calculated on the basis of a 360 day year, on the balance
from time to time remaining unpaid. Accrued interest shall be
payable monthly on the 15th day of each month, or the next
business day if such date falls on a Saturday, Sunday or holiday
for banks located in New Jersey. Principal and accrued interest
shall be payable six months from the date of this Agreement,
which date of repayment may be extended at the discretion of
Dataram for a period not to exceed three months; provided,
however, that the principal and all accrued interest shall
become immediately due and payable, in full, upon Sheerr's
termination of employment by Dataram or his assignment to an
office of Dataram other than ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇. Dataram may prepay any or all sums
due under this Agreement at any time without penalty. All
payments shall be made to Sheerr at the address listed above or
at such other address or wire instructions as Sheerr shall
designate in writing.
2. Grant of Security Interest. In order to secure the obligations
of Dataram to repay the Loan, interest thereon, and any other
sums payable by Dataram to Sheerr (the "Payment Obligations"),
Dataram hereby assigns, grants and pledges to Sheerr a
continuing first priority security interest in all machinery,
equipment and inventory of Dataram now or hereafter existing at
its ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ location,
together will all additions and accessions thereto and
substitutions therefor (collectively, the "Collateral").
Dataram will not, without the prior written consent of Sheerr,
other than in the ordinary course of business (i) sell, assign
or transfer (by operation of law or otherwise) any Collateral or
(ii) move any Collateral.
3. Preservation and Protection of Security Interest. Dataram
represents and warrants that it has, and covenants and agrees
that at all times during the term of this Agreement, it will
have, good and marketable title to the Collateral from time to
time owned or acquired by it free and clear of all mortgages,
pledges, liens, security interests, charges or other
encumbrances, except those in favor of Sheerr, and shall defend
the Collateral against the claims and demands of all persons,
firms and entities whomsoever. Dataram covenants and agrees
that it shall not, without the prior written consent of Sheerr
(i) borrow against the Collateral or any portion of the
Collateral from any other person, firm or entity, (ii) grant or
create or permit to attach or exist any mortgage, pledge, lien,
charge or other encumbrance, or security interest on, of or in
any of the collateral or any portion of the Collateral except
those in favor of Sheerr, (iii) permit any levy or attachment to
be made against the Collateral or any portion of the Collateral
or (iv) permit any financing statements to be on file with
respect to any of the Collateral, except financing statements in
favor of Sheerr. Dataram shall faithfully preserve and protect
Sheerr's security interest in the Collateral and shall at its
own cost and expense, cause that security interest to be
perfected and continue to be perfected so long as the Loan or
any portion of the Loan is outstanding, unpaid or executory.
For purposes of the perfection of Sheerr's security interest in
the Collateral in accordance with the requirements of this
Agreement, Dataram shall from time to time at the request of
Sheerr file or record, or cause to be filed or recorded, such
instruments, documents and notices, including assignments,
financing statements and continuation statements (including,
without limitation, financing statements filed in the State of
New Jersey, as Sheerr may deem necessary or advisable from time
to time in order to perfect and continue perfected such security
interest. Dataram shall do all such other acts and things and
shall execute and deliver all such other instruments and
documents, including further security agreements, pledges,
endorsements, assignments and notices, as Sheerr in its
reasonable discretion, may deem necessary or advisable from time
to time in order to perfect and preserve the priority of such
security interest as a first lien security interest in the
Collateral prior to the rights of all third persons, firms and
entities, except as may be otherwise provided in this Agreement.
Dataram irrevocably appoints Sheerr (and any of Sheerr's
designated agents) as the attorney-in-fact of Dataram to do all
acts and things which may reasonably deem necessary or advisable
from time to time to preserve, perfect and continue perfected
Sheerr's security interest in the Collateral in accordance with
the requirements of this Agreement, including, but not limited
to, signing any financing statements or amendments to financing
statements evidencing Sheerr's security interest in the
Collateral for and on behalf of Dataram. Dataram agrees that a
carbon, photographic or other reproduction of this Agreement or
a financing statement is sufficient as a financing statement and
may be filed instead of the original.
4. Default. If any of the sums of principal or interest mentioned
herein are not promptly paid when due, or if each and every
agreement, stipulation, condition and covenant of this Agreement
are not fully performed, complied with or abided by, or if
Dataram shall file or have a petition filed against it under any
applicable bankruptcy or insolvency laws or makes an assignment
for the benefit of creditors or otherwise admits in writing a
failure to pay debts as they fall due (an "Event of Default"),
then any Payment Obligations shall at the option of the holder
hereof become at once due and collectible without notice, time
being of the essence. Failure to exercise this option shall not
constitute a waiver of the right to exercise the same in the
event of any subsequent default. Dataram hereby waives
presentment, protest, notice of protest and notice of dishonor
and agrees to pay all costs, including reasonable attorneys'
fees, whether suit be brought or not, if, after the date any
payment is due hereunder or a default has occurred hereunder,
counsel shall be employed to collect any Payment Obligations or
to protect the security of the Collateral.
5. Rights and Remedies of a Secured Party. (a) In addition to all
rights and remedies given to Sheerr by this Agreement, Sheerr
shall have all the rights and remedies of a secured party under
the Uniform Commercial Code of the State of New Jersey.
(b) Sheerr shall have such other rights and remedies which Sheerr
may have at law or in equity or under this Agreement, including
without limitation, but only after 10 days' written notice to
Dataram, the right to enter any premises where the Collateral
is located and take possession and control thereof without
demand or notice and without prior judicial hearing or legal
proceedings, which Dataram expressly waives. Thereafter, Sheerr
may immediately sell any or all Collateral at private sale at
any time or place in one or more sales, at such price or prices
and upon such terms, either for cash or on credit, as Sheerr, in
his sole discretion exercised in good faith, may elect, or sell
any or all Collateral at public auction, either for cash or on
credit, as Sheerr, in his sole discretion exercised in good
faith, may elect, and at any such sale, Sheerr may bid for and
become the purchaser of any or all such Collateral. Sheerr
shall apply the proceeds of any sale or liquidation of the
Collateral, first to the payment of the reasonable costs and
expenses incurred by Sheerr in connection with such sale or
collection, including without limitation reasonable attorneys'
fees and legal expenses, second to the payment of the Payment
Obligations, whether on account of principal or interest or
otherwise as Sheerr in his sole discretion may elect, and then
to pay the balance, if any, to Dataram or as otherwise required
by law. If such proceeds are insufficient to pay the amounts
required by this Agreement, Dataram shall be liable for any
deficiency. The right of Sheerr under this paragraph to take
possession of and sell the Collateral is of the essence of this
Agreement and Sheerr may, at his election, enforce such right by
an action in equity for injunctive relief or specific
performance.
6. Continuing Obligations; Remedies, etc., Cumulative. This
Agreement shall create a continuing security interest in the
collateral, and all covenants and agreements of Dataram shall
survive until payment in full of all Payment Obligations. This
Agreement shall be binding upon Dataram and its respective
successors and assigns and shall inure to the benefit of Sheerr
and his respective heirs and assigns. Each right, power and
remedy of Sheerr provided for in this Agreement, now or
hereafter existing at law or in equity or by statute, shall be
cumulative, and may be exercised cumulatively or concurrently
and are not exclusive of any rights or remedies provided by law.
7. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
8. Governing Law; Terms. this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New
Jersey without regard to principles of conflict of laws, except
as required by mandatory provisions of law and except to the
extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of the Collateral
are governed by the laws of a jurisdiction other than the State
of New Jersey.
9. Judicial Proceedings; Jury Trial Waiver. Any judicial proceeding
brought with respect to this Agreement may be brought in any
court of competent jurisdiction in ▇▇▇▇▇▇ County, the State of
New Jersey or in ▇▇▇▇▇▇▇▇▇▇ County, Commonwealth of
Pennsylvania, and each party hereto hereby waives any objection
that they may have to the laying of venue in any such court or
that any such court is an inconvenient forum or does not have
personal jurisdiction over them. Each party hereto agrees that
service of process may be made upon it by mailing a copy of said
process to such party, by certified or registered mail, return
receipt requested, at its address set forth herein. EACH PARTY
HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO
WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, THE RELATIONSHIP ESTABLISHED HEREUNDER OR ANY
DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION
HEREWITH. No failure or delay on the part of Sheerr in
exercising any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof or of any other
right, remedy, power or privilege of Sheerr hereunder; nor shall
any single or partial exercise of any such right, remedy, power
or privilege preclude any other right, remedy, power or
privilege or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
10. Further Assurances. Each party hereto agrees to (i) execute
and deliver, or to cause to be executed and delivered, all such
other and further agreements, documents and instruments
(including, but not limited to, any UCC financing statements,
amendments or continuations thereto or terminations thereof) and
(ii) take or cause to be taken all such actions as the other
party may reasonably request to effectuate the intent and
purposes, and to carry out the terms, of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
DATARAM CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
_____________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice-President, Finance
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