SECOND AMENDMENT TO LOAN AGREEMENT

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into effective as of December 19, 2012, by and between INTERPHASE CORPORATION, a Texas corporation (“Borrower”), and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Lender”).

WHEREAS, Borrower and Lender entered into that certain Loan Agreement dated as of December 19, 2008, as amended by that certain First Amendment to Loan Agreement dated March 20, 2009 (as amended, the “Loan Agreement”); and

WHEREAS, the Loan Agreement currently governs (a) a revolving borrowing base line of credit in the maximum amount of $5,000,000.00 (the “Line of Credit”), as currently evidenced by that certain promissory note dated December 19, 2008, payable by Borrower to the order of Lender in the stated principal amount of $5,000,000.00 (the “Note”), (b) a guidance line of credit with respect to foreign currency forward contracts in the amount of $7,500,000.00 (the “Guidance Line of Credit”), and (c) a letter of credit subfacility in the amount of $500,000.00 (the “LC Facility”); and

WHEREAS, the parties hereto now desire to modify the Loan Agreement as hereinafter provided; and

WHEREAS, the Loan Agreement, the Note, and all other documents evidencing, securing, governing, guaranteeing and/or pertaining to the Line of Credit and the Guidance Line are hereinafter referred to collectively as the “Loan Documents”.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and agreements contained herein, and for other valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

Section 1.01      The terms used in this Amendment to the extent not otherwise defined herein shall have the same meanings as in the Loan Agreement.

ARTICLE II

Section 2.01      Effective as of the date hereof, the following definitions in Section 1.1 of the Loan Agreement are hereby amended to read as follows:

 

 

SECOND AMENDMENT TO LOAN AGREEMENT

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Section 2.02     Effective as of the date hereof, the first paragraph of Section 2.1(B) of the Loan Agreement is hereby amended to read as follows:

 

“B.        Guidance Line of Credit.  Lender may, in its sole and absolute discretion, enter into foreign currency forward contracts with Borrower from time to time from the date hereof to December 19, 2015 up to the aggregate amount of $6,500,000.00; provided, however, (i) that the Guidance Line Borrowing Base Usage shall not exceed the Borrowing Base minus all outstanding Advances and Letter of Credit Liabilities, and (ii) the term of any such foreign currency forward contract cannot exceed one (1) year and cannot extend past the Termination Date.  No provision in this Agreement or any other Loan Document shall in any way obligate Lender to enter into any foreign currency forward contract with Borrower.  Borrower shall execute any and all documents, instruments and agreements requested by Lender in connection with such forward contracts and such items shall be deemed to be Loan Documents for all purposes.”

 

Section 2.03             Effective as of the date hereof, Section 2.1(C)(i) of the Loan Agreement is hereby amended to read as follows:

“C.      Letters of Credit.  (i)  Subject to the terms and conditions of this Agreement, Lender agrees to issue one or more letters of credit (collectively, the “Letters of Credit”) for the account of Borrower from time to time from the date hereof to and including the Termination Date; provided, however, that the outstanding Letter of Credit Liabilities (as defined below) shall not at any time exceed the lowest of (i) Five Hundred Thousand and No/100 Dollars ($500,000.00), (ii) an amount equal to the Commitment minus the sum of the outstanding Advances plus the Guidance Line Borrowing Base Usage, or (iii) the Borrowing Base minus the sum of the outstanding Advances plus the Guidance Line Borrowing Base Usage.  Each Letter of Credit shall have an expiration  date not to exceed 364 days, shall not have an expiration date that extends more than thirty (30) days beyond the Termination Date, shall be payable in United States Dollars, shall have a minimum face amount of Fifty Thousand and No/100 Dollars ($50,000.00), must be issued to support Borrower’s obligation under it real estate lease, must otherwise be satisfactory in form and substance to Lender, and shall be issued pursuant to such documents and instruments (including, without limitation, Lender’s standard application for issuance of letters of credit as then in effect, each an “Application”) as Lender may require.  No Letter of Credit shall require any payment by Lender to the beneficiary thereunder pursuant to a drawing prior to the third business day following presentment of a draft and any related documents to Lender.  As used herein, the term “Letter of Credit Liabilities” means the aggregate face amount of all outstanding Letters of Credit.

Section 2.04      Effective as of the date hereof, the Advances shall be evidenced by a Promissory Note of even date herewith, executed by Borrower and payable to the order of Lender in the principal amount of $5,000,000.00, and such promissory note shall be the “Note” referenced in the Loan Agreement.

 

SECOND AMENDMENT TO LOAN AGREEMENT

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ARTICLE III

 
 

Section 3.01     Borrower hereby represents and warrants that: (i) the representations and warranties contained in the Loan Agreement are true and correct on and as of the date hereof as though made on and as of the date hereof, (ii) no event has occurred and is continuing that constitutes an Event of Default or would constitute an Event of Default but for the requirement of notice or lapse of time or both, and (iii) there are no claims or offsets against, or defenses or counterclaims to, the Note, the indebtedness evidenced thereby or the liens securing same (including without limitation, any defenses or offsets resulting from or arising out of breach of contract or duty, the amount of interest charged, collected or received on the Note heretofore, or breach of any commitments or promises of any type).

Section 3.02    The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Loan Agreement, but except as expressly modified and superseded by this Amendment, the terms and provisions of the Loan Agreement are ratified and confirmed and shall continue in full force and effect, Borrower hereby agreeing that the Loan Agreement and the other Loan Documents are and shall continue to be outstanding, validly existing and enforceable in accordance with their respective terms.

ARTICLE IV

Section 4.01      Each of the Loan Documents is hereby amended so that any reference in the Loan Documents to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby.

Section 4.02      This Amendment may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 4.03      This Amendment has been entered into in Dallas County, Texas and shall be performable for all purposes in Dallas County, Texas.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  Courts within the State of Texas shall have jurisdiction over any and all disputes arising under or pertaining to this Amendment, and venue in any such dispute shall be the courts located in Dallas County, Texas.

Section 4.04      This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(Signature Page Follows.)

 

EXECUTED as of the date first above written.