exv10w3



 





EXHIBIT 10.3




FIRST AMENDMENT TO CREDIT AGREEMENT




     THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of July 1, 2006, by
and between DOT HILL SYSTEMS CORP., a Delaware corporation (“Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”).



RECITALS




     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of July 1, 2004, as amended from time
to time (“Credit Agreement”).



     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set
forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said
changes.



     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:



     1. Section 1.1.(a) is hereby amended by deleting “July 1, 2006” as the last day on which Bank
will make advances under the Line of Credit, and by substituting for said date “July 1, 2007,” with
such change to be effective upon the execution and delivery to Bank of a promissory note dated as
of July 1, 2006 (which promissory note shall replace and be deemed the Line of Credit Note defined
in and made pursuant to the Credit Agreement) and all other contracts, instruments and documents
required by Bank to evidence such change.



     2. The first sentence of Section 1.2.(a) is hereby deleted in its entirety, and the following
substituted therefor:




     “Subject to the terms and conditions of this Agreement, Bank
hereby agrees to make available to Borrower a facility (the “Foreign
Exchange Facility”) under which Bank, from time to time up to and
including July 1, 2007, will enter into foreign exchange contracts
for the account of Borrower for the purchase and/or sale by Borrower
in United States dollars of foreign currencies designated by
Borrower; provided however, that the maximum amount of all
outstanding foreign exchange contracts shall not at any time exceed
an aggregate of Five Million United States Dollars
(US$5,000,000.00).”



     3. The following is hereby added to the Credit Agreement as Section 5.4:




     “SECTION 5.4. CAPITAL EXPENDITURES. Make any additional
investment in fixed assets in any fiscal year in excess of an
aggregate of $1,000,000.00.”



     4. Section 7.2 is hereby amended by deleting the reference to “6305 El Camino Real, Carlsbad,
CA 92009” as the Borrowers address, and by substituting in its place “2200 Faraday, Suite 100,
Carlsbad, CA 92008.”



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     5. Except as specifically provided herein, all terms and conditions of the Credit Agreement
remain in full force and effect, without waiver or modification. All terms defined in the Credit
Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit
Agreement shall be read together, as one document.



     6. Borrower hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as of the
date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any
condition, act or event which with the giving of notice or the passage of time or both would
constitute any such Event of Default.



     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day
and year first written above.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	WELLS FARGO BANK,	 	 
	DOT HILL SYSTEMS CORP.	 	NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Dana Kammersgard
	 	By:
	 	/s/ Brian P. Chambers
	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Dana Kammersgard
	 	 	 	Brian P. Chambers	 	 
	 

	 	Chief Executive Officer
	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Shad Burke	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Shad Burke	 	 	 	 	 	 
	 

	 	Chief Financial Officer	 	 	 	 	 	 







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