Document:

Exhibit 10.3

 

FIRST AMENDMENT TO

THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

 

THIS FIRST
AMENDMENT to Third Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into as of October
21, 2021, by and among (a) SILICON VALLEY BANK, a California corporation (“Bank”), (b) LANTRONIX, INC.,
a Delaware corporation (“Lantronix”), (c) LANTRONIX HOLDING COMPANY, a Delaware corporation (“Holding”),
(d) LANTRONIX TECHNOLOGIES CANADA (TAIWAN) LTD., a Canadian corporation (“Lantronix Taiwan”), (e) LANTRONIX
CANADA, ULC, a Canadian corporation (“Lantronix ULC”), and (f) TRANSITION NETWORKS, INC., a Minnesota corporation
(“TNI” and together with Lantronix, Holding, Lantronix Taiwan and Lantronix ULC, each individually and collectively,
jointly and severally, “Borrower”).

 

RECITALS

 

A.         
Bank and Borrower have entered into that certain Third Amended and Restated Loan and Security Agreement dated as of August
2, 2021 (as the same may from time to time be further amended, modified, supplemented or restated, collectively, the “Loan Agreement”).

 

 B.             Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

 

C.           
Borrower has requested that Bank amend the Loan Agreement to (i) clarify the interest payment schedules, and (ii) make certain
other revisions to the Loan Agreement as more fully set forth herein.

 

D.            
Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms,
subject to the conditions and in reliance upon the representations and warranties set forth below.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1.             
Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 

2.              Amendments to Loan Agreement.

 

2.1          
Section 2.1.2 (Term Loan Advance). Sections 2.1.2(b) and 2.1.2(c) of the Loan Agreement hereby are amended and restated in
their entirety to read as follows:

 

“(b)          Interest Payments.
Interest on the Term Loan Advance shall be payable in accordance with Section 2.3(a) below.

 

(c)             Principal
Repayment. Commencing on October 1, 2021, and continuing on each Payment Date thereafter, Borrower shall repay the principal amount
of the Term Loan Advance in quarterly installments of principal equal to the Applicable Term Loan Principal Payment Amount. All outstanding
principal and accrued and unpaid interest under the Term Loan Advance, and all other outstanding Obligations with respect to the Term
Loan Advance, are due and payable in full on the Term Loan Maturity Date.”

 

 

 

    	 	1	 

     

    

 

2.2          
Section 2.3 (Payment of Interest on the Credit Extensions). Section 2.3(a) of the Loan Agreement hereby is amended and restated
in its entirety to read as follows:

 

“(a)          Interest Rates; Payment.

 

(i)            
Each Advance and the Term Loan Advance shall bear interest on the outstanding principal amount thereof from the date when made,
continued or converted until paid in full at a rate per annum equal to (A) for Prime Rate Advances, the Prime Rate plus the applicable
Prime Rate Margin, and (B) for LIBOR Advances, the LIBOR Rate plus the applicable LIBOR Rate Margin.

 

(ii)           
On and after the expiration of any Interest Period applicable to any LIBOR Advance outstanding on the date of occurrence of an
Event of Default or acceleration of the Obligations, the amount of such LIBOR Advance shall, during the continuance of such Event of Default
or after acceleration, bear interest at a rate per annum equal to the Default Rate for Prime Rate Advances.

 

(iii)         
Interest on each Advance that is a Prime Rate Advance shall be paid monthly on the Payment Date commencing on the first Payment
Date following the Funding Date of the applicable Advance. Interest on each Advance that is a LIBOR Advance shall be paid on the applicable
Interest Payment Date, but no less frequently than quarterly on the last day of each calendar quarter commending on the first Interest
Payment Date/calendar quarter end date (whichever is earlier) following the Funding Date of the applicable Advance.

 

(iv)         
Interest on each Term Loan Advance that is a Prime Rate Advance shall be paid quarterly on the Payment Date commencing on the first
Payment Date following the Funding Date of the applicable Term Loan Advance. Interest on each Term Loan Advance that is a LIBOR Advance
shall be paid on the applicable Interest Payment Date, but no less frequently than quarterly on the last day of each calendar quarter
commending on the first Interest Payment Date/calendar quarter end date (whichever is earlier) following the Funding Date of the applicable
Term Loan Advance.

 

(v)           
Interest shall also be paid on the date of any prepayment of any Advance or Term Loan Advance pursuant to this Agreement for the
portion of any Advance or Term Loan Advance so prepaid and upon payment (including prepayment) in full thereof.

 

(vi)          
All accrued but unpaid interest on the Advances shall be due and payable on the Revolving Line Maturity Date. All accrued by unpaid
interest on the Term Loan Advance shall be due and payable on the Term Loan Maturity Date.”

 

2.3          
Section 2.3 (Payment of Interest on the Credit Extensions). Section 2.3(c) of the Loan Agreement hereby is amended and restated
in its entirety to read as follows:

 

“(c)          LIBOR
Advances. The interest rate applicable to each LIBOR Advance shall be determined in accordance with Section 3.6(a) hereunder. Subject
to Sections 3.5 and 3.6, such rate shall apply during the entire Interest Period applicable to such LIBOR Advance, and accrued interest
calculated thereon shall be payable on the Interest Payment Date applicable to such LIBOR Advance, but no less frequently than quarterly
on the last day of each calendar quarter commending on the first Interest Payment Date/calendar quarter end date (whichever is earlier)
following the Funding Date of the applicable Advance. The LIBOR Rate Margin applicable to LIBOR Advances shall be determined on the basis
of Borrower’s most recent Leverage Ratio, as reported to Bank in Borrower’s Quarterly Financial Statements provided pursuant
to Section 6.2(c), and such LIBOR Rate Margin shall be adjusted promptly upon each receipt of such Quarterly Financial Statements.”

 

 

 

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2.4          
Section 13.1 (Definitions). The following defined terms and their respective definitions set forth in Section 13.1 of the Loan
Agreement hereby are amended and restated in their entirety to read as follows:

 

“Applicable
Term Loan Principal Payment Amount” is (a) Four Hundred Thirty-Seven Thousand Five Hundred Dollars ($437,500) for the principal
payments due on October 1, 2021, January 1, 2022, April 1, 2022, July 1, 2022, October 1, 2022, January 1, 2023, April 1, 2023 and July
1, 2023, and (b) Six Hundred Fifty-Six Thousand Two Hundred Fifty Dollars ($656,250) for the principal payments due on October 1, 2023
through the Term Loan Maturity Date.

 

“Payment
Date” is (a) with respect to the Term Loan Advance, the first (1st) day of the months of January, April, July and October in
each calendar year, and (b) with respect to Advances, the last calendar day of each calendar month.

 

3.             Limitation of Amendments.

 

3.1          
The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely
as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any
Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection
with any Loan Document.

 

3.2          
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations,
warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and
shall remain in full force and effect.

 

4.            
Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall
be deemed to constitute one and the same instrument.

 

5.            
Effectiveness. This Amendment shall be deemed effective upon the due execution and delivery to Bank of this Amendment by each
party hereto.

 

[Balance of Page Intentionally
Left Blank]

 

 

 

 

 

 

 

 

 

 

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

 

 

	BANK:	 	BORROWER:	 
	 	 	 	 
	SILICON VALLEY BANK	 	LANTRONIX, INC.	 
	 	 	 	 
	By: /s/ Will Deevy	 	By: /s/ Jeremy Whitaker             	 
	 	 	 	 
	Name: Will Deevy	 	Name: Jeremy Whitaker	 
	 	 	 	 
	Title: Director	 	Title: Chief Financial Officer	 
	 	 	 	 
	 	 	LANTRONIX HOLDING COMPANY	 
	 	 	 	 
	 	 	By: /s/ Jeremy Whitaker             	 
	 	 	 	 
	 	 	Name: Jeremy Whitaker	 
	 	 	 	 
	 	 	Title: Chief Financial Officer	 
	 	 	 	 
	 	 	LANTRONIX CANADA, ULC	 
	 	 	 	 
	 	 	By: /s/ Jeremy Whitaker             	 
	 	 	 	 
	 	 	Name: Jeremy Whitaker	 
	 	 	 	 
	 	 	Title: Chief Financial Officer	 
	 	 	 	 
	 	 	LANTRONIX TECHNOLOGIES CANADA (TAIWAN) LTD.	 
	 	 	 	 
	 	 	By: /s/ Jeremy Whitaker             	 
	 	 	 	 
	 	 	Name: Jeremy Whitaker	 
	 	 	 	 
	 	 	Title: Chief Financial Officer	 
	 	 	 	 
	 	 	TRANSITION NETWORKS, INC.	 
	 	 	 	 
	 	 	By: /s/ Jeremy Whitaker             	 
	 	 	 	 
	 	 	Name: Jeremy Whitaker	 
	 	 	 	 
	 	 	Title: Chief Financial Officer	 

 

  

[Signature Page to First Amendment to Third A&R
Loan and Security Agreement]

 

 

    	 	4Document

SECOND AMENDMENT
TO
RIGHTS AGREEMENT

THIS SECOND AMENDMENT TO RIGHTS AGREEMENT (this “Amendment”), dated as of February 7, 2022, by and between Whitestone REIT, a Maryland real estate investment trust (the “Company”), and American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights Agent”), amends the First Amendment to the Rights Agreement, dated as of April 21, 2021, by and between the Company and the Rights Agent (the “Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Agreement.

WHEREAS, Section 27 of the Agreement provides, among other things, that the Company may, and the Rights Agent shall if the Company so directs, so long as the Rights are then redeemable, from time to time supplement or amend any provision of the Agreement in any respect without the approval of any holders of the Rights;

WHEREAS, the Company Board deems it advisable and in the best interests of the Company and its shareholders to amend certain provisions of the Agreement as set forth herein;

WHEREAS, the Company has provided an Officer’s Certificate in compliance with the terms of Section 27(e) of the Agreement, attached hereto as Exhibit A; and

WHEREAS, pursuant to and in accordance with Section 27 of the Agreement, the Company desires to amend the Agreement as set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows:

1.Amendments.

(a) Paragraph (a) of Section 7 of the Agreement is amended by removing the reference to “May 13, 2022” and replacing it with “February 7, 2022”.

(b) Exhibit B to the Agreement is amended by removing the reference to “May 13, 2022” and replacing it with “February 7, 2022”.

(c) Exhibit C to the Agreement is amended by removing the reference to “May 13, 2022” and replacing it with “February 7, 2022”.

(d) The third sentence of the second paragraph of Exhibit C to the Agreement is amended by adding to the end of such sentence the phrase “and as an exhibit to a Registration Statement on Form 8-A/A filed on February 11, 2022”.

2.    Effect of this Amendment. The parties hereto intend that this Amendment constitutes an amendment of the Agreement as contemplated by Section 27 thereof. This Amendment shall be deemed effective as of the date hereof. Except as expressly provided in this Amendment, the terms of the Agreement remain in full force and effect.

3.    Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.

4.    Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Maryland and for all purposes shall be governed by, and construed in accordance with, the laws of such State applicable to contracts to be made and performed entirely in such State, without giving effect to any choice or conflict of laws provisions or rules that would cause the application of the laws of any jurisdiction other than such State; except that the rights, duties, immunities and obligations of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely in such State.

5.    Severability. If any term or provision of this Amendment is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms and provisions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

6.    Descriptive Headings. Headings of the sections of this Amendment and of the exhibit hereto are for convenience of the parties hereto only and shall be given no substantive or interpretative effect whatsoever.

7.    Further Assurances. The parties hereto shall cooperate and take such action as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Amendment, the Agreement and any transactions contemplated hereunder and thereunder.

[Signature Page Follows]
 

-2-

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

By: _/s/ David K. Holeman_________
Name: David K. Holeman
    Title: Chief Executive Officer

AMERICAN STOCK TRANSFER & 
TRUST COMPANY, LLC,
as Rights Agent

By: _/s/ Joseph Dooley___________
Name: Joseph Dooley
Title: Senior Vice President 

[Signature Page to First Amendment to Rights Agreement]

EXHIBIT A

OFFICER’S CERTIFICATE

February 7, 2022

Pursuant to Section 27 of the Rights Agreement, dated as of May 14, 2020 (the “Rights Agreement”), by and between Whitestone REIT, a Maryland real estate investment trust (the “Company”), and American Stock Transfer & Trust Company, LLC, as rights agent (the “Rights Agent”), the undersigned officer of the Company does hereby certify, solely in his capacity as an officer of the Company, that the Second Amendment to Rights Agreement, to be entered into as of the date hereof by and between the Company and the Rights Agent, is in compliance with the terms of Section 27 of the Rights Agreement.

[Signature Page Follows]

 

IN WITNESS WHEREOF, the undersigned hereby executes this Officer’s Certificate as of the date first above written.
 
WHITESTONE REIT

By: _/s/ David K. Holeman____
Name: David K. Holeman
Title: Chief Executive Officer

[Signature Page to Officer’s Certificate]

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