Exhibit 10.22
SILICON VALLEY BANK
AMENDMENT TO LOAN AND SECURITY AGREEMENT
BORROWER: ISILON SYSTEMS, INC., A DELAWARE CORPORATION
DATED AS OF: MARCH 10, 2005
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrower named above (the "Borrower"). The Parties
agree to amend the Loan and Security Agreement between them, dated June 24,
2004, as amended or otherwise modified from time to time (the "Loan Agreement"),
as follows, effective as of the date hereof. (Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. REVISED SCHEDULE TO LOAN AGREEMENT. The Schedule to Loan Agreement is
hereby amended and restated to read as is set forth on the Schedule to Loan
Agreement as is attached hereto.
2. REVISED DEFINITION. The definition of "Eligible Accounts" as set forth
in Section 8 of the Loan Agreement is hereby amended to read as follows:
"Eligible Accounts" means Accounts arising in the ordinary course of
Borrower's business from the sale of goods or the rendition of services,
or the non-exclusive licensing of Intellectual Property, which Silicon, in
its good faith business judgment, shall deem eligible for borrowing.
Without limiting the fact that the determination of which Accounts are
eligible for borrowing is a matter of Silicon's good faith business
judgment, the requirements in the remainder of this definition (the
"Minimum Eligibility Requirements") are the minimum requirements for an
Account to be an Eligible Account: (i) the Account must not be outstanding
for more than 90 days from its invoice date (the "Eligibility Period"),
(ii) the Account must not represent progress xxxxxxxx, or be due under a
fulfillment or requirements contract with the Account Debtor, (iii) the
Account must not be subject to any contingencies (including Accounts
arising from sales on consignment, guaranteed sale or other terms pursuant
to which payment by the Account Debtor may be conditional), (iv) the
Account must not be owing from an Account Debtor with whom Borrower has
any dispute (whether or not relating to the particular Account), (v) the
Account must not be owing from an Affiliate of Borrower, (vi) the Account
must not be owing from an Account Debtor which is subject to any
insolvency or bankruptcy proceeding, or whose financial condition is not
acceptable to Silicon, or which, fails or goes out of a material portion
of its business, (vii) the Account must not be owing from the United
States or any department, agency or instrumentality thereof (unless there
has been compliance, to Silicon's satisfaction, with the United States
Assignment of Claims Act), (viii) the Account must not be owing from an
Account Debtor located outside the United States or those provinces or
territories of Canada that have adopted the Personal Property Security Act
(unless pre-approved by Silicon in its discretion in writing, or backed by
a letter of credit satisfactory to Silicon, or FCIA insured satisfactory
to Silicon) (with any such Accounts so owing from such Account Debtors
being
referred to herein as the "Foreign Accounts" and any such Foreign Accounts
that would otherwise be deemed Eligible Accounts hereunder apart from the
foreign location of the Account Debtors are referred to herein as the
"Foreign Eligible Accounts"), (ix) the Account must not be owing from an
Account Debtor to whom Borrower is or may be liable for goods or services
purchased by Borrower, or third-party intellectual property licensed by
Borrower (as licensee), from such Account Debtor or otherwise (but, in
such case, the Account will be deemed not eligible only to the extent of
any amounts owed by Borrower to such Account Debtor) *. Accounts owing
from one Account Debtor will not be deemed Eligible Accounts to the extent
they exceed 25% ** of the total Accounts outstanding. In addition, if more
than 50% of the Accounts owing from an Account Debtor are outstanding for
a period longer than their Eligibility Period (without regard to unapplied
credits) or are otherwise not eligible Accounts, then all Accounts owing
from that Account Debtor will be deemed ineligible for borrowing. Silicon
may, from time to time, in its good faith business judgment, revise the
Minimum Eligibility Requirements, upon written notice to Borrower.
* , PROVIDED THAT THE FOREGOING SHALL NOT APPLY TO EXCLUDE ANY AMOUNTS
OWING BY AN ACCOUNT DEBTOR AS TO WHOM BORROWER HAS RECOGNIZED OR CAN
RECOGNIZE DEFERRED REVENUE (THEREBY RENDERING DEFERRED REVENUE AMOUNTS
ELIGIBLE PORTIONS OF ACCOUNTS TO THE EXTENT ANY SUCH ACCOUNTS ARE
OTHERWISE DEEMED ELIGIBLE ACCOUNTS., AND (XI) THE ACCOUNT MUST HAVE BEEN
BILLED TO THE ACCOUNT DEBTOR.
** (OR, IN THE CASE OF THE ACCOUNT DEBTOR KNOWN AS OFOTO, 50%)
3. PERMITTED NEW SUBORDINATED DEBT. Borrower has informed Silicon that it
anticipates entering into a subordinated debt financing transaction in the
forthcoming year in an approximate dollar amount of $5,000,000. Silicon
acknowledges and consents to such type of transaction, subject to the execution
and delivery of a debt and lien subordination agreement in form and substance
acceptable to Silicon.
4. CONDITION TO EFFECTIVENESS. The effectiveness of this Amendment is
conditioned upon the occurrence of all of the following:
(a) A certificate of the Secretary or the Assistant Secretary of
Borrower, in form and substance satisfactory to Silicon, certifying the adoption
of resolutions of the Board of Directors of Borrower approving this Agreement
and the transactions contemplated hereby (including the documents, instruments
and agreements described in this Section) is delivered to Silicon, in form
acceptable to Silicon.
(b) A new ten year Warrant to Purchase Stock is issued to the
Silicon regarding 250,000 shares of Series C Preferred Stock of the Borrower at
an initial exercise price of $0.60 per share together with other rights and
provisions as are acceptable to Silicon.
(c) Borrower's payment of the fee to Silicon as set forth in the
Amended and Restated Schedule to Loan Agreement attached hereto in the aggregate
amount of $______________ and payment of all Bank Expenses relating hereto;
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(d) Counterparts of this Agreement have been duly executed and
delivered to the Administrative Agent by all parties thereto.
5. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct.
6. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and the Borrower, and
the other written documents and agreements between Silicon and the Borrower set
forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with respect
to the subject hereof. Except as herein expressly amended, all of the terms and
provisions of the Loan Agreement, and all other documents and agreements between
Silicon and the Borrower shall continue in full force and effect and the same
are hereby ratified and confirmed. This Agreement and Consent may be executed in
any number of counterparts, which when taken together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
BORROWER: SILICON:
ISILON SYSTEMS, INC. SILICON VALLEY BANK
BY /s/ XXXXXX X. XXXXXXXXXX BY /s/ XXXXXXX XXXXXXXX
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TITLE: CFO TITLE SR. VICE PRESIDENT
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