<PAGE>

                                                                   EXHIBIT 10.23

                                CREDIT AGREEMENT

         THIS AGREEMENT is entered into as of February 6, 2001, by and between
DOT HILL SYSTEMS CORP.,a New York corporation ("Dot Hill") and SILICON ALLEY
MANAGEMENT, INC., a Delaware corporation ("Silicon Alley," and together with Dot
Hill, the "Borrowers"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

         Borrowers have requested that Bank extend or continue credit to
Borrowers as described below, and Bank has agreed to provide such credit to
Borrowers on the terms and conditions contained herein.

         NOW,THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrowers hereby agree as follows:

                                   ARTICLE 1
                                  CREDIT TERMS

     SECTION 1.1       LINE OF CREDIT.

     (a) LINE OF CREDIT. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to either Borrower from time to time up to
and including December 31, 2002, not to exceed at any time the aggregate
principal amount of Fifteen Million Dollars ($15,000,000.00) ("Line of Credit"),
the proceeds of which shall be used to finance Borrowers' working capital
requirements. Borrowers' obligation to repay advances under the Line of Credit
shall be evidenced by a promissory note substantially in the form of Exhibit A
attached hereto ("Line of Credit Note"), all terms of which are incorporated
herein by this reference.

     (b) LETTER OF CREDIT SUBFEATURE. As a subfeature under the Line of Credit,
Bank agrees from time to time during the term thereof to issue or cause an
affiliate to issue standby and/or sight commercial letters of credit for the
account of either Borrower to finance the procurement of material and services
(each, a "Letter of Credit" and collectively, "Letters of Credit"); provided
however, that the aggregate undrawn amount of all outstanding Letters of Credit
shall not at any time exceed One Million Dollars ($1,000,000.00). The form and
substance of each Letter of Credit shall be subject to approval by Bank, in its
sole discretion. Each Letter of Credit shall be issued for a term not to exceed
three hundred sixty-five (365) days, as designated by a Borrower; provided
however, that no Letter of Credit shall have an expiration date subsequent to
the maturity date of the Line of Credit. The undrawn amount of all Letters of
Credit shall be reserved under the Line of Credit and shall not be available for
borrowings thereunder. Each Letter of Credit shall be subject to the additional
terms and conditions of the Letter of Credit agreements, applications and any
related documents required by Bank in connection with the issuance thereof. Each
draft paid under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrowers in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that
if advances under the Line of Credit are not available, for any reason, at the
time any draft is paid, then Borrowers shall immediately pay to Bank the full
amount of such draft, together with interest thereon from the date such draft is
paid to the date such amount is


                                      -1-

<PAGE>

fully repaid by Borrowers, at the rate of interest applicable to advances under
the Line of Credit. In such event Borrowers agree that Bank, in its sole
discretion, may debit any account maintained by either Borrower with Bank for
the amount of any such draft.

     (c) BORROWING AND REPAYMENT. Each Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

     (d) RESERVATION OF FOREIGN EXCHANGE "DELIVERY LIMIT." The largest aggregate
outstanding principal amount of Borrowers' foreign exchange contracts (entered
into by Bank as set forth in Section 1.2 below) which will mature during any
single two (2) day period shall be reserved under the Line of Credit and shall
not be available for borrowings thereunder.

     (e) RESERVATION OF BUSINESS MASTERCARD LINE. The principal balance
outstanding under Dot Hill's Business MasterCard Line with Bank shall be
reserved under the Line of Credit and shall not be available for borrowings
thereunder.

     SECTION 1.2       FOREIGN EXCHANGE FACILITY.

     (a) FOREIGN EXCHANGE FACILITY. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make available to Borrowers a facility (the
"Foreign Exchange Facility") under which Bank, from time to time up to and
including December 31, 2002, will enter into foreign exchange contracts for the
account of either Borrower for the purchase and/or sale by a Borrower in United
States dollars of foreign currencies designated by such 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). No foreign exchange contract shall be executed for a term in
excess of twelve (12) months or for a term which extends beyond December 21,
2002. Borrowers shall have a "Delivery Limit" under the Foreign Exchange
Facility not to exceed at any time the aggregate principal amount of One Million
Five Hundred Thousand United States Dollars (US$1,500,000.00), which Delivery
Limit reflects the maximum combined principal amount of each Borrower's foreign
exchange contracts which may mature during any two (2) day period. All foreign
exchange transactions shall be subject to the additional terms of a Foreign
Exchange Agreement, substantially in the form of Exhibit B attached hereto
("Foreign Exchange Agreement"), all terms of which are incorporated herein by
this reference.

     (b) SETTLEMENT. Each foreign exchange contract under the Foreign Exchange
Facility shall be settled on its maturity date by Bank's debit to any deposit
account maintained by either Borrower with Bank.

     (c) LIMITATION ON AVAILABILITY OF FOREIGN EXCHANGE FACILITY.
Notwithstanding anything to the contrary contained herein, Bank shall not enter
into foreign exchange contracts for the account of either Borrower if and to the
extent that the sum of the aggregate principal balance outstanding under the
Line of Credit (including the undrawn amount of any Letters of Credit) plus the
amounts described in subsections (d) and (e) of Section 1.1 above exceeds
Fifteen Million Dollars ($15,000,000.00).


                                      -2-

<PAGE>

     SECTION 1.3       INTEREST/FEES.

     (a) INTEREST. The outstanding principal balance of each credit subject
hereto shall bear interest at the rate of interest set forth in each promissory
note or other instrument executed in connection therewith.

     (b) COMPUTATION AND PAYMENT. Interest shall be computed on the basis of a
360-day year, actual days closed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument required hereby.

     (c) UNUSED COMMITMENT FEE. Borrowers shall pay to Bank a fee equal to
one-quarter percent (.25%) per annum (computed on the basis of a 360-day year,
actual days elapsed) on the average daily unused amount of the Line of Credit,
which fee shall be calculated on a monthly basis by Bank and shall be due and
payable by Borrowers in arrears within thirty (30) days after each billing is
sent by Bank.

     (d) LETTER OF CREDIT FEES. Borrowers shall pay to Bank fees upon the
issuance of each Letter of Credit, upon the payment or negotiation of each draft
under any Letter of Credit and upon the occurrence of any other activity with
respect to any Letter of Credit (including without limitation, the transfer,
amendment or cancellation of any Letter of Credit) determined in accordance with
Bank's standard fees and charges then in effect for such activity.

     SECTION 1.4       COLLATERAL.

     As security for all indebtedness of Borrowers to Bank subject hereto, Dot
Hill hereby grants to Bank security interests of first priority in Dot Hill's
10671900 Account No. Investment Management Account, maintained with Wells
Capital Management Inc.

     All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements and other documents as Bank shall
reasonably require, all in form and substance satisfactory to Bank. Borrowers
shall reimburse Bank immediately upon demand for all costs and expenses incurred
by Bank in connection with any of the foregoing security.

                                    ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES

     Each Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrowers to Bank
subject to this Agreement.

     SECTION 2.1 LEGAL STATUS. Dot Hill is a corporation, duly organized and
existing and in good standing under the laws of the State of New York. Silicon
Alley is a corporation, duly organized and existing and in good standing under
the laws of the State of Delaware. Each Borrower is qualified or licensed to do
business (and is in good standing as a foreign corporation, if applicable) in
all jurisdictions in which such qualification or licensing is required or in
which the failure to so qualify or to be so licensed could have a material
adverse effect on such Borrower.


                                      -3-

<PAGE>

     SECTION 2.2 AUTHORIZATION AND VALIDITY. This Agreement and each promissory
note, contract, instrument and other document required hereby or at any time
hereafter delivered to Bank in connection herewith (collectively, the "Loan
Documents") have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of each Borrower or the party which executes the
same, enforceable in accordance with their respective terms.

     SECTION 2.3 NO VIOLATION. The execution, delivery and performance by each
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of such Borrower, or result in any breach of or default under any
contract, obligation, indenture or other instrument to which such Borrower is a
party or by which such Borrower may be bound.

     SECTION 2.4 LITIGATION. There are no pending, or to the best of either
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of either Borrower other than those disclosed
by Borrowers to Bank in writing prior to the date hereof.

     SECTION 2.5 CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of
Dot Hill dated June 30, 2000, a true copy of which has been delivered by Dot
Hill to Bank prior to the date hereof, (a) is complete and correct and presents
fairly the financial condition of Dot Hill, (b) discloses all liabilities of Dot
Hill that are required to be reflected or reserved against under generally
accepted accounting principles, whether liquidated or unliquidated, fixed or
contingent, and (c) has been prepared in accordance with generally accepted
accounting principles consistently applied. Since the date of such financial
statement there has been no material adverse change in the financial condition
of Dot Hill, nor has Dot Hill mortgaged, pledged, granted a security interest in
or otherwise encumbered any of its assets or properties except in favor of Bank
or as otherwise permitted by Bank in writing.

     SECTION 2.6 INCOME TAX RETURNS. Neither Borrower has any knowledge of any
pending assessments or adjustments of its income tax payable with respect to any
year.

     SECTION 2.7 NO SUBORDINATION. There is no agreement, indenture, contract or
instrument to which either Borrower is a party or by which either Borrower may
be bound that requires the subordination in right of payment of any of either
Borrower's obligations subject to this Agreement to any other obligation of
either Borrower.

     SECTION 2.8 PERMITS, FRANCHISES. Each Borrower possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it is now
engaged in compliance with applicable law.

     SECTION 2.9 ERISA. Each Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); neither Borrower has
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by such Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by either Borrower; each Borrower has met its minimum
funding requirements under ERISA with respect to each Plan; and each Plan will
be


                                      -4-

<PAGE>

able to fulfill its benefit obligations as they come due in accordance with
the Plan documents and under generally accepted accounting principles.

     SECTION 2.10 OTHER OBLIGATIONS. Neither Borrower is in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

     SECTION 2.11 ENVIRONMENTAL MATTERS. Except as disclosed by Borrowers to
Bank in writing prior to the date hereof, each Borrower is in compliance in all
material respects with all applicable federal or state environmental, hazardous
waste, health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of such Borrower's operations and/or
properties, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time. None of the operations of
either Borrower is the subject of any federal or state investigation evaluating
whether any remedial action involving a material expenditure is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment. Neither Borrower has any material contingent liability in
connection with any release of any toxic or hazardous waste or substance into
the environment.

                                   ARTICLE 3
                                   CONDITIONS

     SECTION 3.1 CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:

     (a) APPROVAL OF BANK COUNSEL. All legal matters incidental to the extension
of credit by Bank shall be satisfactory to Bank's counsel.

     (b) DOCUMENTATION. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

      (i)   This Agreement and each promissory note or other instrument required
            hereby.
      (ii)  Security Agreement: Securities Account.
      (iii) Securities Account Control Agreement.
      (iv)  Addendum to Security Agreement: Securities Account.
      (v)   Statement of Purpose (form U-1) for Dot Hill.
      (vi)  Authorization for Foreign Exchange Transactions for Dot Hill.
      (vii) Authorization for Foreign Exchange Transactions for Silicon Alley.
      (viii) Foreign Exchange Agreement for Dot Hill.
      (ix)  Foreign Exchange Agreement for Silicon Alley.
      (x)   Corporate Borrowing Resolution for Dot Hill.
      (xi)  Corporate Borrowing Resolution for Silicon Alley.
      (xii) Certificate of Incumbency for Dot Hill.
      (xiii) Certificate of Incumbency for Silicon Alley.
      (xiv) Such other documents as Bank may require under any other Section of
            this Agreement.


                                      -5-

<PAGE>

     (c) FINANCIAL CONDITION. There shall have been no material adverse change,
as determined by Bank, in the financial condition or business of either
Borrower, nor any material decline, as determined by Bank, in the market value
of any collateral required hereunder or a substantial or material portion of the
assets of either Borrower.

     (d) INSURANCE. Borrowers shall have delivered to Bank evidence of insurance
coverage on all of each Borrower's property, in form, substance, amounts,
covering risks and issued by companies satisfactory to Bank, and where required
by Bank, with loss payable endorsements in favor of Bank.

     SECTION 3.2 CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank
to make each extension of credit requested by Borrowers hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:

     (a) COMPLIANCE. The representations and warranties contained herein and in
each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

     (b) DOCUMENTATION. Bank shall have received all additional documents which
may be required in connection with such extension of credit.

     SECTION 3.3 CONDITION SUBSEQUENT. As a condition subsequent to the
effectiveness of this Agreement, Dot Hill shall transfer all of its primary
operating accounts to Bank within sixty (60) days of executing this Agreement.

                                   ARTICLE 4
                              AFFIRMATIVE COVENANTS

     Each Borrower covenants that so long as Bank remains committed to extend
credit to Borrowers pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrowers to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrowers subject hereto, each Borrower shall, unless Bank otherwise consents
in writing:

     SECTION 4.1 PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees
or other liabilities under any of the Loan Documents at the times and place and
in the manner specified therein, and immediately upon demand by Bank, the amount
by which the outstanding principal balance of any credit subject hereto at any
time exceeds any limitation on borrowings applicable thereto.

     SECTION 4.2 ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of each Borrower.

     SECTION 4.3 FINANCIAL STATEMENTS. Provide to Bank all of the following, in
form and detail satisfactory to Bank:


                                      -6-

<PAGE>

     (a) not later than 90 days after and as of the end of each fiscal year, an
audited financial statement of each Borrower, prepared by a certified public
accountant acceptable to Bank, to include a balance sheet, an income statement,
a statement of cash flow, and all footnotes;

     (b) not later than 90 days after and as of the end of each fiscal quarter,
a financial statement of Dot Hill prepared by Dot Hill, to include a balance
sheet, an income statement, a statement of cash flow, and all footnotes;

     (c) not later than 90 days after and as of the end of each fiscal quarter,
an updated operating plan of Dot Hill;

     (d) from time to time such other information as Bank may reasonably
request.

     SECTION 4.4 COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which each such Borrower is organized and/or which govern each such
Borrower's continued existence and with the requirements of all laws, rules,
regulations and orders of any governmental authority applicable to each such
Borrower and/or its business.

     SECTION 4.5 INSURANCE. Maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of each
such Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth all
insurance then in effect.

     SECTION 4.6 FACILITIES. Keep all properties useful or necessary to each
such Borrower's business in good repair and condition, and from time to time
make necessary repairs, renewals and replacements thereto so that such
properties shall be fully and efficiently preserved and maintained.

     SECTION 4.7 TAXES AND OTHER LIABILITIES. Pay and discharge when due any and
all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as either Borrower may in good
faith contest or as to which a bona fide dispute may arise, and (b) for which
such Borrower has made provision, to Bank's satisfaction, for eventual payment
thereof in the event such Borrower is obligated to make such payment.

     SECTION 4.8 LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against either Borrower.

     SECTION 4.9 FINANCIAL CONDITION. Maintain Dot Hill's financial condition as
follows using generally accepted accounting principles consistently applied and
used consistently with prior practices (except to the extent modified by the
definition herein): Net income after taxes not less than $1.00, determined as of
December 31, 2001.

     SECTION 4.10 NOTICE TO BANK. Promptly (but in no event more than five (5)
days after the occurrence of each such event or matter) give written notice to
Bank in reasonable


                                      -7-

<PAGE>

detail of: (a) the occurrence of any Event of Default, or any condition, event
or act which with the giving of notice or the passage of time or both would
constitute an Event of Default; (b) any change in the name or the organizational
structure of either Borrower; (c) the occurrence and nature of any Reportable
Event or Prohibited Transaction, each as defined in ERISA, or any funding
deficiency with respect to any Plan; or (d) any termination or cancellation of
any insurance policy which either Borrower is required to maintain, or any
uninsured or partially uninsured loss through liability or property damage, or
through fire, theft or any other cause affecting either Borrower's property.

     SECTION 4.11 DEPOSIT ACCOUNTS. Dot Hill shall maintain all of its primary
operating accounts with Bank (after such accounts have been transferred to Bank
pursuant to Section 3.3 above).

                                   ARTICLE 5
                               NEGATIVE COVENANTS

     Each Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrowers to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrowers subject hereto, neither Borrower shall, without Bank's prior
written consent:

     SECTION 5.1 USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.

     SECTION 5.2 MERGER. Merge into or consolidate with any other entity.

                                   ARTICLE 6
                                EVENTS OF DEFAULT

     SECTION 6.1 The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

     (a) Borrowers shall fail to pay when due any principal, interest, fees or
other amounts payable under any of the Loan Documents.

     (b) Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by either Borrower or any other
party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.

     (c) Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of thirty (30) days from its occurrence.

     (d) Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which either Borrower has incurred
any debt or other liability to any person or entity, including Bank.


                                      -8-

<PAGE>

     (e) The filing of a notice of judgment lien against either Borrower; or the
recording of any abstract of judgment against either Borrower in any county in
which such Borrower has an interest in real property; or the service of a notice
of levy and/or of a writ of attachment or execution, or other like process,
against the assets of either Borrower; or the entry of a judgment against either
Borrower.

     (f) Either Borrower shall become insolvent, or shall suffer or consent to
or apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its debts as they
become due, or shall make a general assignment for the benefit of creditors;
either Borrower shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against either
Borrower, or either Borrower shall file an answer admitting the jurisdiction of
the court and the material allegations of any involuntary petition; or either
Borrower shall be adjudicated a bankrupt, or an order for relief shall be
entered against either Borrower by any court of competent jurisdiction under the
Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors.

     (g) There shall exist or occur any event or condition which Bank in good
faith believes impairs, or is substantially likely to impair, the prospect of
payment or performance by Borrowers of their obligations under any of the Loan
Documents.

     (h) The dissolution or liquidation of either Borrower; or either Borrower,
or any of its directors, stockholders or members, shall take action seeking to
effect the dissolution or liquidation of such Borrower.

     (i) Any change in ownership during the term of this Agreement of an
aggregate of twenty-five percent (25%) or more of the common stock of
Borrower.

     SECTION 6.2 REMEDIES. Upon the occurrence of any Event of Default: (a) all
indebtedness of Borrowers under each of the Loan Documents, any term thereof to
the contrary notwithstanding, shall at Bank's option and without notice become
immediately due and payable without presentment, demand, protest or notice of
dishonor, all of which are hereby expressly waived by each Borrower; (b) the
obligation, if any, of Bank to extend any further credit under any of the Loan
Documents shall immediately cease and terminate; and (c) Bank shall have all
rights, powers and remedies available under each of the Loan Documents, or
accorded by law, including without limitation the right to resort to any or all
security for any credit subject hereto and to exercise any or all of the rights
of a beneficiary or secured party pursuant to applicable law. All rights, powers
and remedies of Bank may be exercised at any time by Bank and from time to time
after the occurrence of an Event of Default, are cumulative and not exclusive,
and shall be in addition to any other rights, powers or remedies provided by law
or equity.

                                   ARTICLE 7
                                  MISCELLANEOUS

     SECTION 7.1 NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver


                                      -9-

<PAGE>

of such right, power or remedy; nor shall any single or partial exercise of any
such right, power or remedy preclude, waive or otherwise affect any other or
further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, permit, consent or approval of any kind by Bank of any breach of or
default under any of the Loan Documents must be in writing and shall be
effective only to the extent set forth in such writing.

     SECTION 7.2 NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

      BORROWERS: Dot Hill Systems Corp.
                 6305 El Camino Real
                 Carlsbad, CA 92004

                 Silicon Alley Management, Inc.
                 103 Foulk Road #260
                 Wilmington, DE 19803

      BANK:      WELLS FARGO BANK, NATIONAL ASSOCIATION
                 San Diego RCBO
                 401 B Street Suite 2201
                 San Diego, CA 92101

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

     SECTION 7.3 COSTS, EXPENSES AND ATTORNEYS' FEES. Borrowers shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of this
Agreement and the other Loan Documents to a maximum of $2,500.00, Bank's
continued administration hereof and thereof, and the preparation of any
amendments and waivers hereto and thereto, (b) the enforcement of Bank's rights
and/or the collection of any amounts which become due to Bank under any of the
Loan Documents, and (c) the prosecution or defense of any action in any way
related to any of the Loan Documents, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to either Borrower or any other person or entity.

     SECTION 7.4 SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
neither Borrower may assign or transfer its interest hereunder without Bank's
prior written consent. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Bank's rights and benefits under each of the Loan Documents. In connection
therewith, Bank may disclose all documents and information which Bank now has or
may hereafter acquire


                                      -10-

<PAGE>

relating to any credit subject hereto, either Borrower or its business, or any
collateral required hereunder.

     SECTION 7.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between Borrowers and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

     SECTION 7.6 NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

     SECTION 7.7 TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

     SECTION 7.8 SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement.

     SECTION 7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

     SECTION 7.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

     SECTION 7.11 ARBITRATION.

     (a) ARBITRATION. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

     (b) GOVERNING RULES. Any arbitration proceeding will (i) proceed in a
location in California selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and


                                      -11-

<PAGE>

procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all
costs and expenses incurred by such other party in compelling arbitration of
any dispute. Nothing contained herein shall be deemed to be a waiver by any
party that is a bank of the protections afforded to it under 12 U.S.C.
Section 91 or any similar applicable state law.

     (c) NO WAIVER OF PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

     (d) ARBITRATOR QUALIFICATIONS AND POWERS. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the
state or federal judiciary of California, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

     (e) DISCOVERY. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date and within 180 days of the filing of the
dispute with the AAA. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining information is
available.

     (f) CLASS PROCEEDINGS AND CONSOLIDATIONS. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration


                                      -12-

<PAGE>

proceeding and such dispute shall not be consolidated with other disputes or
included in any class proceeding.

     (g) PAYMENT OF ARBITRATION COSTS AND FEES. The arbitrator shall award all
costs and expenses of the arbitration proceeding.

     (h) REAL PROPERTY COLLATERAL; JUDICIAL REFERENCE. Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such dispute is not submitted to arbitration, the dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

     (i) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

     SECTION 7.12 JOINT AND SEVERAL LIABILITY

     (a) Each Borrower has determined and represents to Bank that it is in its
best interests and in pursuance of its legitimate business purposes to induce
Bank to extend credit pursuant to this Agreement. Each Borrower acknowledges and
represents that its business is related to the business of the other Borrower,
the availability of the commitments provided for herein benefits both Borrowers,
and advances and other credit extensions made hereunder will be for and inure to
the benefit of Borrowers, individually and together.

     (b) Each Borrower has determined and represents to Bank that it has, and
after giving effect to the transactions contemplated by this Agreement will
have, assets having a fair saleable value in excess of its debts, after giving
effect to any rights of contribution or subrogation which may be available to
such Borrower, and each Borrower has, and will have, access to adequate capital
for the conduct of its business and the ability to pay its debts as such debts
mature.

     (c) Each Borrower agrees that it is jointly and severally liable to Bank
for, and each Borrower agrees to pay to Bank when due the full amount of, all
indebtedness now existing or hereafter arising to Bank under or in connection
with each credit subject hereto and all


                                      -13-

<PAGE>

modifications, extensions and renewals thereof, including without limitation all
interest which accrues thereon and all fees, costs and expenses chargeable to
Borrowers or either of them in connection therewith. The obligations of
Borrowers to Bank for each credit subject hereto shall be in addition to any
obligations of Borrowers to Bank under any other agreement heretofore or
hereafter given to Bank unless said other agreement is expressly modified or
revoked in writing, and this Agreement shall not, unless expressly herein
provided, affect or invalidate any such other agreement.

     (d) The liability of each Borrower for each credit subject hereto shall be
reinstated and revived and the rights of Bank shall continue if and to the
extent that for any reason any amount at any time paid on account thereof is
rescinded or must otherwise be restored by Bank, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, all as though such
amount had not been paid.

     (e) Each Borrower authorizes Bank, without notice to or demand on such
Borrower, and without affecting such Borrower's liability for each credit
subject hereto, from time to time to: (a) alter, compromise, extend, accelerate
or otherwise change the time for payment of; or otherwise change the terms of,
the liabilities and obligations of the other Borrower to Bank on account of any
credit subject hereto; (b) take and hold security from the other Borrower for
the payment of any credit subject hereto, and exchange, enforce, waive,
subordinate or release any such security; (c) apply such security and direct the
order or manner of sale thereof, including without limitation, a non-judicial
sale permitted by the terms of the controlling security agreement or deed of
trust, as Bank in its discretion may determine; (d) release or substitute any
one or more of the endorsers or any guarantors of any credit subject hereto, or
any other party obligated thereon; and (e) apply payments received by Bank from
the other Borrower to indebtedness of such other Borrower to Bank other than the
credits; subject hereto.

     (f) Each Borrower represents and warrants to Bank that it has established
adequate means of obtaining from the other Borrower on a continuing basis
financial and other information pertaining to the other Borrower's financial
condition, and each Borrower agrees to keep adequately informed from such means
of any facts, events or circumstances which might in any way affect its risks
hereunder. Each Borrower further agrees that Bank shall have no obligation to
disclose to it any information or material about the other Borrower which is
acquired by Bank in any manner.

     (g) Each Borrower waives any right to require Bank to: (i) proceed against
the other Borrower or any other person; (ii) proceed against or exhaust any
security held from the other Borrower or any other person; (iii) pursue any
other remedy in Bank's power; (iv) apply payments received by Bank from the
other Borrower to any credit subject hereto; or (v) make any presentments or
demands for performance, or give any notices of nonperformance, protests,
notices of protest or notices of dishonor in connection with any credit subject
hereto.

     (h) Each Borrower waives any defense to its liability for any credit
subject hereto based upon or arising by reason of: (i) any disability or other
defense of the other Borrower or any other person; (ii) the cessation or
limitation from any cause whatsoever, other than payment in full, of the
liability of the other Borrower for the credits subject hereto; (iii) any lack
of authority of any officer, director, partner, agent or other person acting or
purporting to act on behalf of the other Borrower or any defect in the formation
of the other Borrower; (iv) the application by the other Borrower of the
proceeds of any credit subject hereto for purposes other than the purposes
intended or understood by Bank or Borrowers; (v) any act or omission by Bank
which directly or indirectly results in or aids the discharge of the other
Borrower by operation of law or


                                      -14-

<PAGE>

otherwise, or which in any way impairs or suspends any rights or remedies of
Bank against the other Borrower; (vi) any impairment of the value of any
interest in any security for the credits subject hereto, including without
limitation, the failure to obtain or maintain perfection or recordation of any
interest in any such security, the release of any such security without
substitution, and/or the failure to preserve the value of, or to comply with
applicable law in disposing of, any such security; or (vii) any modification of
the obligations or liabilities of the other Borrower for any credit subject
hereto, including without limitation the renewal, extension, acceleration or
other change in time for payment of, or other change in the terms of, the
indebtedness of either Borrower for any credit subject hereto, including
increase or decrease of the rate of interest thereon. Until each credit subject
hereto and all indebtedness of each Borrower to Bank arising under or in
connection with this Agreement shall have been paid in full, neither Borrower
shall have any right of subrogation. Each Borrower waives all rights and
defenses it may have arising out of (A) any election of remedies by Bank, even
though that election of remedies, such as a non-judicial foreclosure with
respect to any security for the credits subject hereto, destroys its rights of
subrogation or its rights to proceed against the other Borrower for
reimbursement, or (B) any loss of rights it may suffer by reason of any rights,
powers or remedies of the other Borrower in connection with any anti-deficiency
laws or any other laws limiting, qualifying or discharging either Borrower's
indebtedness for the credits subject hereto, whether by operation of Sections
726 or 580d of the Code of Civil Procedure as from time to time amended, or
otherwise. Until the credits subject hereto and all indebtedness of each
Borrower to Bank arising under or in connection with this Agreement shall have
been paid in full, each Borrower waives any right to enforce any remedy which
Bank now has or may hereafter have against the other Borrower or any other
person, and waives any benefit of, or any right to participate in, any security
now or hereafter held by Bank.


                                      -15-

<PAGE>

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

DOT HILL SYSTEMS CORP.                             WELLS FARGO BANK,
                                                       NATIONAL ASSOCIATION
By: /s/ JAMES LAMBERT
    --------------------------------------
     James Lambert                                 By: /s/ BRIAN P. CHAMBERS
     President and Chief Executive Officer             ---------------------
                                                        Brian P. Chambers
                                                        Vice President

By: /s/ PRESTON ROMM
    --------------------------------------
     Preston Romm
     Vice President, Finance and CFO


SILICON ALLEY MANAGEMENT, INC.

By: /s/ BENJAMIN MONDERER
    --------------------------------------
     Benjamin Monderer
     President


By: /s/ PRESTON ROMM
    --------------------------------------
     Preston Romm
     Vice President and Secretary


                                      -16-