Exhibit 10.1


 


 


November 11, 2003


 


 


SILICON GRAPHICS, INC.


SILICON GRAPHICS FEDERAL, INC.


1600 Amphitheatre Parkway


Mountain View, California 94043


Attn:  Jean Furter, Vice President and Treasurer


 


Re:          Amended and Restated
Loan and Security Agreement


 


Dear Jean:


 


Reference is
made to that certain Amended and Restated Loan and Security Agreement, dated as
of September 20, 2002 (as amended, restated, supplemented, or modified from
time to time, the “Loan Agreement”), entered into among Silicon
Graphics, Inc., a Delaware corporation (“Parent”), Silicon Graphics
Federal, Inc., a Delaware corporation (together with Parent, “Borrowers”),
the Lenders signatory thereto (the ‘Lenders”), and Wells Fargo Foothill,
Inc., a California corporation, as the arranger and administrative agent for
the Lenders (“Agent”). Capitalized terms, which are used herein but not
defined herein, shall have the meanings ascribed to them in the Loan Agreement.


 


Borrowers have
requested that (a) the Loan Agreement be amended to provide for a revised
percentage of the aggregate principal amount of Senior Convertible Notes for
which Parent is required to cause the extension of the Current Senior
Convertible Note Maturity Date and (b) Agent consent to the creation of a
junior priority Lien on certain of the assets of Parent.


 


Subject to the
satisfaction of the terms and conditions set forth in this letter agreement,
Agent is willing to grant the amendment and consent requested by Borrowers as
described in the preceding sentence.


 


NOW,
THEREFORE, Agent and Borrowers hereby agree to the following:


 


1.             Section 1.1 of
the Loan Agreement is hereby amended by adding the following defined terms in
proper alphabetical order or amending and restating the following definition in
its entirety, as the case may be:


 


“Exchange
Commitments’ means the commitment by holders of Senior Convertible Notes of
not less than 80% of the outstanding principal amount of Senior Convertible
Notes to exchange said Senior Convertible Notes pursuant to the Exchange
Offer.”


 


“Exchange
Offer’ means the offer by Parent to exchange Parent’s 6.5% Senior Secured
Convertible Notes due 2009 and 11.75% Secured Senior Notes due 2009 for Senior
Convertible Notes, in accordance with Parent’s filings with the SEC.”


 

















 


“New
Indentures’ means (a) the Indenture, with respect to 6.5% Senior Secured
Convertible Notes due 2009, and (b) the Indenture, with respect to 11.75%
Secured Senior Notes due 2009, each proposed to be entered into between Parent
and Trustee.”


 


“Permitted
Liens’ means (a) Liens held by Agent for the benefit of Agent and the
Lenders, (b) Liens for unpaid taxes that either (i) are not yet delinquent, or
(ii) do not constitute an Event of Default hereunder and are the subject of
Permitted Protests, (c) Liens set forth on Schedule P-1, (d) the interests of
lessors under operating leases, (e) purchase money Liens or the interests of
lessors under Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness and so long as such Lien attaches only to
the asset purchased or acquired and the proceeds thereof, (f) Liens arising by
operation of law in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, incurred in the ordinary course of
Borrowers’ business and not in connection with the borrowing of money, and
which Liens either (i) are for sums not yet delinquent, or (ii) are the subject
of Permitted Protests, (g) Liens arising from deposits made in connection with
obtaining worker’s compensation or other unemployment insurance, (h) Liens or
deposits to secure performance of bids, tenders, or leases incurred in the
ordinary course of Borrowers’ business and not in connection with the borrowing
of money, (i) Liens granted as security for surety or appeal bonds in connection
with obtaining such bonds in the ordinary course of Borrowers’ business, (j)
Liens resulting from any judgment or award that is not an Event of Default
hereunder, (k) any Lien with respect to any Real Property, and (l) provided
that all of the conditions precedent set forth in Section 3 of the
letter agreement, dated November 11, 2003, among the parties hereto are
satisfied prior to March 5, 2004.  Liens
in favor of Trustee pursuant to the terms of the New Indentures.”


 


“Required
Exchange Approvals’ means, collectively, the valid tender by holders of
Senior Convertible Notes of not less than 80% of the outstanding principal
amount of Senior Convertible Notes pursuant to the Exchange Offer and the
majority vote of the shareholders of the common stock of Parent approving the
reservation of shares to be issued on conversion of the notes issued in the
Exchange Offer.”


 


“Trustee’
means U.S. Bank National Association, a national banking association organized
and existing under the laws of the United States of America.”


 


2.             Section 3.4 of
the Loan Agreement is hereby amended and restated in its entirety as follows:


 


“Term.  This Agreement shall become effective upon
the execution and delivery hereof by Borrowers, Agent, and the Lenders, and
shall continue in full force and effect for a term ending on April 13, 2005
(the ‘Maturity Date”); provided, however, that, if on or
before March 5, 2004 Parent has not (i) extended the Current Senior Convertible
Note Maturity Date to a date no earlier than October 10, 2005 for not less than
80% of the principal amount of the Senior Convertible Notes (including by way
of an exchange offer), or (ii) in a manner satisfactory to Agent in its sole
discretion, made adequate alternative provisions for extension of the Current Senior
Convertible Note Maturity Date, then the Maturity Date will accelerate to June
2, 2004.  The foregoing


 


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notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the right
to terminate its obligations under this Agreement pursuant to Section 9.1.”


 


3.             The satisfaction of
each of the following shall constitute conditions precedent to the
effectiveness of this letter agreement and each and every provision hereof;


 


a.             The representations
and warranties in the Loan Agreement and the other Loan Documents shall be true
and correct in all respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate
solely to an earlier date);


 


b.             No Event of Default
shall have occurred between the date hereof and the date of the effectiveness
of this letter agreement;


 


c.             No injunction, writ,
restraining order, or other order of any nature prohibiting, directly or indirectly,
the consummation of the transactions contemplated herein shall have been issued
and remain in force by any Government Authority against any Borrower or Agent;


 


d.             Agent shall have
received from Borrowers an amendment fee (the “Amendment Fee”) in the
amount of $90,000.  The Amendment Fee
shall be payable on the earlier to occur of: (i) the date of receipt of the
Exchange Commitments; and (ii) the date of the Required Exchange Approvals.
When the Amendment Fee is payable as aforesaid, Agent shall be authorized to
charge Borrowers’ Loan Account the Amendment Fee, which Amendment Fee shall be
non-refundable when charged;


 


e.             Agent, Trustee and
Borrowers shall have entered into an Intercreditor Agreement, substantially in
the form of Exhibit A attached hereto and incorporated by reference
herein, and with such changes as shall be in form and substance satisfactory to
Agent in its sole and absolute discretion; and


 


f.              Agent shall have
received from Parent an officer’s certificate certifying the occurrence of the
Required Exchange Approvals (and, if applicable, receipt of the Exchange
Commitments), in form and substance satisfactory to Agent.


 


4.             Notwithstanding the
terms of Section 3 above, upon Agent’s receipt of a copy of this letter
agreement executed by Borrowers, Agent shall be authorized to charge Borrowers’
Loan Account a negotiation fee (the “Negotiation Fee”) in the amount of
$10,000; the Negotiation Fee shall be non-refundable when charged.


 


5.             This letter agreement
constitutes an amendment to the Loan Agreement. Except as expressly set forth
herein, the Loan Documents shall remain in full force and effect.


 


6.             Borrowers agree that
all of Agent’s attorney’s fees and costs in drafting and negotiating this
letter agreement are part of the Lender Group Expenses and are payable on
demand.


 


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7.             This letter agreement may be
executed in any number of counterparts and by different parties on separate
counterparts. Each of such counterparts shall be deemed to be an original, and
all of such counterparts, taken together, shall constitute but one and the same
agreement. Delivery of an executed counterpart of this letter agreement by
telefacsimile shall be equally effective as delivery of a manually executed
counterpart.


 


Please
indicate your agreement with the foregoing by signing in the space provided
below and returning the same to the undersigned.


 


	
   

  	
  WELLS FARGO
  FOOTHILL, INC.,

  a California corporation, as Agent

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Thomas
  P. Shughrue

  	
   

  	 

	
   

  	
  Name:

  	
  Thomas P. Shughrue

  	
   

  	 

	
   

  	
  Title:

  	
  Vice President

  	
   

  	 

	
   

  	
   

  	 

	
  Acknowledged
  and Agreed:

  	
   

  	 

	
   

  	
   

  	 

	
  SILICON
  GRAPHICS, INC.,

  a Delaware corporation

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  By:

  	
    /s/
  Jean Furter

  	
   

  	
   

  	 

	
  Name:

  	
  JEAN FURTER

  	
   

  	
   

  	 

	
  Title:

  	
  VICE PRESIDENT TREASURER

  	
   

  	
   

  
	
   

  	
   

  	 

	
  SILICON
  GRAPHICS FEDERAL, INC.,

  a Delaware corporation

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  By:

  	
  /s/ Jeff
  Zellmer

  	
   

  	
   

  	 

	
  Name:

  	
  JEFF ZELLMER

  	
   

  	
   

  	 

	
  Title:

  	
  VICE PRESIDENT

  	
   

  	
   

  	 

															



 


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