Exhibit 10.20
HORIZON
Technology Finance
July 18, 2006
Xxxxx Xxxx
Corporate Controller
Isilon Systems, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxx:
This letter is written in connection with that certain Loan Agreement
between Horizon Technology Funding Company LLC ("Lender") and Isilon Systems,
Inc. ("Borrower"), dated March 22, 2006 and the loan documents related thereto,
whereby Xxxxxx has made a loan in the original principal amount of Six Million
Dollars ($6,000,000) to Borrower (the "Loan"). Xxxxxxxx has requested that the
subclause (e) of the definition of "Permitted Indebtedness" in Section 1.1 of
the Loan Agreement be amended to increase the principal amount of the permitted
senior revolving credit facility. In consideration for Xxxxxxxx's payment to
Lender of a fee and legal expenses in an aggregate amount of Thirty Thousand
Dollars ($30,000), the receipt of which is hereby confirmed by Xxxxxx, Xxxxxx
agrees that subclause (e) of the definition of "Permitted Indebtedness" in
Section 1.1 of the Loan Agreement is hereby deleted and replaced with the
following:
"(e) Indebtedness from Silicon Valley Bank consisting of (i) a
revolving credit facility in an aggregate principal amount
outstanding at any one time does not exceed Eleven Million Dollars
($11,000,000) in which (1) loans are limited to not more than One
Hundred Percent (100%) of Borrower's outstanding accounts
receivable, inventory and cash, and (2)may include cash management
services (including credit card lines of credit), letter of credit
arrangements or foreign currency hedging arrangements and (ii)
equipment term loans where advances are limited to the purchase
price of equipment purchased by Borrower plus soft costs related
thereto and the maximum aggregate original principal amount of such
term loans does not exceed Two Million Three Hundred Twenty Thousand
Dollars ($2,320,000);"
By signing below and returning a copy of this letter to Xxxxxx, Xxxxxxxx
acknowledges that the Loan Agreement is hereby modified in accordance with the
provisions set forth above. Xxxxxxxx further understands and agrees that in
modifying the Loan Agreement, Xxxxxx is relying upon Borrowers representations,
warranties, and agreements, as set forth in the Loan Agreement. Except as
expressly modified pursuant to this letter, the terms of the Loan Agreement
remain unchanged and in full force and effect. Lender's agreement to modify the
Loan Agreement in accordance with the provisions set forth in this letter in no
way shall obligate Lender to make any future waivers or modifications to the
Loan Agreement. Nothing in this letter shall constitute a satisfaction of the
Borrower's indebtedness to Lender. It is the intention of Xxxxxx and Borrower to
retain as liable parties all makers and endorsers of the Loan Agreement, unless
the party is expressly released in
Xxxxx Xxxx
Corporate Controller
Isilon Systems, Inc.
July 18, 2006
Page 2 of 2
writing. No maker or endorser will be released by virtue of this letter. The
terms of this paragraph apply not only to this letter, but also to all
subsequent loan modification agreements.
The provisions of this letter shall not be deemed effective until such
time as Borrower shall have returned a countersigned copy to Lender.
Very truly yours,
HORIZON TECHNOLOGY FUNDING
COMPANY LLC
By: Horizon Technology Finance, LLC,
its sole member
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Managing Member
By executing below, the undersigned acknowledges and confirms the
effectiveness of this letter to amend the provisions of the Loan Agreement.
Isilon Systems, Inc.
By: /s/ Xxxxx Xxxx
--------------------------
Xxxxx Xxxx
Corporate Controller
Dated: 7/18/06
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