Document:

Exhibit 10.25

 

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 Borrower’s 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 Untied 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

 

2

 

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 Governmental 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
attorneys’ fees and costs in drafting and negotiating this letter agreement are
part of the Lender Group Expenses and are payable on demand.

 

3

 

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/
  [ILLEGIBLE]

  	
   

  	
   

  
	
  Name:

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
  Title:

  	
  VICE
  PRESIDENT

  	
   

  	
   

  
										

 

4Exhibit 10.26

 

February 3, 2004

 

 

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 Lender’s signatory thereto (the “Lenders”), and Wells Fargo
Foothill, Inc., a California corporation (formerly known as Foothill Capital
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 increase the Maximum
Revolver Amount and the minimum restricted cash collateral covenant level, and
(b) Agent waive non-compliance by Borrowers with the minimum unrestricted cash
covenant.

 

Subject to the
satisfaction of the terms and conditions set forth in this letter agreement,
Agent is willing to grant the amendment and waiver 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 amending and restating the following definition
in its entirety:

 

“‘Maximum Revolver Amount’ means $50,500,000 effective as of
December 12, 2003, provided, however, that the Maximum Revolver
Amount shall be reduced by Agent to $50,000,000 if (x) upon Administrative
Borrower’s written request to Agent the amount set forth in Section
7.20(d)(ii) shall be concurrently reduced to $10,000,000, and (y) Agent
have given its prior written consent.”

 

2.             Section 2.12(a)(ii)  of the Loan Agreement is hereby deleted in
its entirety and replaced by the following:

 

“(ii)         the Letter of Credit
Usage would exceed an amount equal to the Maximum Revolver Amount, or”

 

1

 

3.             Section 7.20(d) of the Loan
Agreement is hereby deleted in its entirety and replaced by the following:

 

“Minimum Cash Held By Agent.  At all times during the term of this
Agreement, cash of Parent and its Subsidiaries, determined on a consolidated
basis, which cash will be held by Agent in an interest bearing account
maintained by Agent, in an amount equal to the greater of (i) the amount by
which the Obligations exceed the Borrowing Base and (ii) $15,000,000; provided,
however, that upon Administrative Borrower’s written request to Agent
the amount set forth in this clause (ii) may be reduced to $10,000,000, provided,
however, further that (x) the Maximum Revolver Amount shall be
concurrently reduced to $50,000,000, and (y) Agent shall have given its prior
written consent.”

 

4.             Agent grants to Borrowers a limited
one-time waiver of Section 6.2 of the Loan Agreement with respect only
to the weeks commencing November 30, 2003 and December 7, 2003.  Borrowers represent that the reports made by
Borrowers to Agent pertaining to compliance with Section 7.20(b) of the
Loan Agreement for those two weeks contained erroneous information; Agent’s
reliance on the information contained in those reports precipitated an Event of
Default which is being waived hereby. 
This waiver is not a waiver of any subsequent Default or Event of
Default of the same provisions of the Loan Agreement, nor is it a waiver of any
other current or future Default or Event of Default.  Agent is not obligated to provide this or any other waiver of its
default rights.

 

5.             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; and

 

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 Governmental Authority against any Borrower or Agent.

 

6.             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.

 

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

 

8.             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 

 

2

 

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:

  	
  VP TREASURER

  	
   

  	
   

  
	
   

  	
   

  
	
  SILICON
  GRAPHICS FEDERAL, INC.,

  	
   

  
	
  a Delaware
  corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  	
   

  
	
  Name:

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
  Title:

  	
  VICE
  PRESIDENT

  	
   

  	
   

  
										

 

3

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