Document:

Exhibit
10.9

 

SILICON GRAPHICS, INC.

 

1993 LONG-TERM INCENTIVE
STOCK PLAN

 

NON-STATUTORY STOCK OPTION GRANT
AGREEMENT

 

Silicon Graphics, Inc., a Delaware corporation (the
“Company”), has granted to the Optionee named on the attached NOTICE OF GRANT
OF STOCK OPTION AND GRANT AGREEMENT (the “NOTICE”) which is incorporated herein
by reference, an option to purchase the total number of shares of Common Stock
and at the price determined, both as set forth on the attached NOTICE, and in
all respects subject to the terms, definitions and provisions of the 1993
Long-Term Incentive Stock Plan (the “Plan”) adopted by the Company which is
incorporated herein by reference. The terms defined in the Plan shall have the
same defined meanings herein.

 

By signing the NOTICE, Optionee acknowledges
responsibility of reviewing the terms of the Plan and the related prospectus,
copies of which are available at http://www-finance.corp.sgi.com/stock or upon
request from Employee Stock Services (MS-645 or stock_support@sgi.com) and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof.
Optionee further agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under the
Plan.

 

1.             Nature
of the Option. This Option is a non-statutory option and is not intended to
qualify for any special tax benefits to the Optionee.

 

2.             Exercise
Price. The exercise price for each share of Common Stock is as set forth in
the attached NOTICE, which price is not less than the fair market value per
share of the Common Stock on the date of grant.

 

3.             Exercise
of Option. This Option shall be exercisable during its term in accordance
with the provisions of Section 7 of the Plan as follows:

 

(a)           Right
to Exercise.

 

(i)            Subject
to subsection 3(a) (ii) and (iii), below, this Option shall be exercisable to
the extent of two percent (2%) of the Shares subject to the Option per month on
each anniversary of the date of grant as set forth in the attached NOTICE.

 

(ii)           This
Option may not be exercised for a fraction of a share.

 

(iii)          In the event of
Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Sections 7, 8, and 9 below.

 

(b)           Method
of Exercise. This Option shall be exercisable by written notice signed by
the Optionee and delivered to the Company’s Employee Stock Services group or by
using the electronic exercise methods approved from time to time by Employee
Stock Services (currently www.optionslink.com). If electronic exercise method
is not chosen, such notice shall be in the form of Exhibit A (Stock Exercise
Request) found at Employee Stock Services’ web

 

 

site or upon request. The
exercise notice shall be accompanied by payment of the exercise price. The
Option shall be deemed to be exercised upon receipt by the Company of such
written notice accompanied by the exercise price.

 

No Shares will be issued pursuant to the exercise of
an Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such shares.

 

4.             Optionee’s
Representations. In the event the shares purchasable pursuant to the
exercise of this Option have not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, Optionee shall,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company his or her Investment Representation Statement in the form of
Exhibit B, (available in Employee Stock Services) and shall read the applicable
rules of the Commissioner of Corporations attached to such Investment
Representation Statement.

 

5.             Method
of Payment. Payment of the exercise price shall be by any of the following,
or a combination thereof, at the election of the Optionee:

 

(i)            cash;
or

 

(ii)           check;
or

 

(iii)          surrender of other Shares of Common Stock of
the Company of a value equal to the exercise price of the shares as to which
the Option is being exercised which, in the case of shares acquired previously
upon exercise of an option have been owned by the Optionee for more than six
(6) months on the date of surrender; or

 

(iv) delivery of a properly executed exercise notice
together with such other documentation as the Company and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price.

 

6.             Restrictions
on Exercise. This Option may not be exercised until such time as the Plan
has been approved by the shareholders of the Company, or if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations (“Regulation G”) as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

 

7.             Termination
of Status as an Employee or Consultant. If Optionee ceases to serve as an
Employee or Consultant, he or she may, but only within three (3) months after
the date he or she ceases to be an Employee or Consultant of the Company,
exercise this Option to the extent that he or she was entitled to exercise it
at the date of such termination. To the extent that he or she was not entitled
to exercise this Option at the date of such termination, or if he or she does
not exercise this Option within the time specified herein, the Option shall
terminate.

 

 

8.             Disability
of Optionee. Notwithstanding the provisions of Section 7 above, if Optionee
is unable to continue his or her employment or consulting relationship with the
Company as a result of his or her Disability, the Optionee may, but only within
twelve (12) months from the date of such termination, exercise his or her
Option to the extent he or she was entitled to exercise the Option at the date
of such termination. To the extent that he or she was not entitled to exercise
the Option at the date of termination, or if he or she does not exercise such
Option within the time specified herein, the Option shall terminate.

 

9.             Death
of Optionee. In the event of the death of Optionee during the term of this
Option, the Option may be exercised, at any time within twelve (12) months
following the date of death, by Optionee’s estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued as of the date of death.

 

10.           Transferability
of Option. Unless otherwise determined by the Committee to the contrary,
this Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

 

11.           Term
of Option. This Option may not be exercised more than ten (10) years (five
years if Optionee owns, immediately before this Option is granted, stock
representing more than 10 percent of the total combined voting power of all
classes of stock of the Company) from the date of grant of this Option, and may
be exercised during such term only in accordance with the Plan and the terms of
this Option.

 

12.           Taxation Upon
Exercise of Option. Optionee understands that, upon exercise of this
Option, he will recognize income for tax purposes in an amount equal to the
excess of the then fair market value of the shares over the exercise price. The
Company will be required to withhold tax from Optionee’s current compensation
with respect to such income; to the extent that Optionee’s current compensation
is insufficient to satisfy the withholding tax liability, the Company may
require the Optionee to make a cash payment to cover such liability as a condition
of exercise of this Option. Upon a resale of such shares by the Optionee, any
difference between the sale price and the fair market value of the shares on
the date of exercise of the Option will be treated as capital gain or loss.

 

13.           Acceleration
Upon Change of Control. Notwithstanding provisions of Section 3(a) with
respect to option exercisability, in the event of a Change of Control of the
Company, this Option shall automatically become exercisable in full if, within
twenty-four (24) months after a Change of Control Date, (i) the Optionee is
involuntarily terminated by the Company or any successor company (hereinafter,
the “Employer”) without Cause or (ii) the Optionee voluntarily resigns from the
Employer for Good Reason.

 

14.           Definitions.
For purposes of Section 13, the terms “Cause,” “Change of Control,” “Change of
Control Date,” and “Good Reason” shall have the meanings set out below:

 

(a)           “Cause”
means the termination of employment of an Optionee shall have taken place as a
result of:

 

 

(i)            any
act or acts of dishonesty undertaken by such Optionee and intended to result in
gain or personal enrichment of the Optionee, or

 

(ii)           persistent
failure to perform the duties and obligations of such Optionee which is not
remedied in a reasonable period of time after receipt of written notice from
the Employer, or

 

(iii)          violation of confidentiality or proprietary
information obligations to or agreements entered into with the Employer, or

 

(iv)          use,
sale or distribution of illegal drugs on the Employer’s premises, or

 

(v)           threatening,
intimidating, or coercing or harassing fellow employees, or

 

(vi)          the
conviction of such Optionee of a felony.

 

(b)           “Change
of Control” of the Company means:

 

(i)            the
acquisition by any Person (as such term is used in Sections 13(d) and 14(d) of
the 1934 Act) as Beneficial Owner (as such term is used in Rule 13d-3
promulgated under the 1934 Act), directly or indirectly, of fifty percent (50%)
or more of the combined voting power of the outstanding shares of capital stock
of the Company’s then outstanding securities with respect to the election of
the directors of the Board.

 

(ii)           During
any period of three (3) consecutive years individuals who, at the beginning of
such period, constitute the Board (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a Director of the Board subsequent to the date of this agreement whose
election, or nomination for election by the Company’s shareholders, was
approved by the vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of any individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Board, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the 1934 Act) shall be, for these purposes, considered as though such
person were a member of the Incumbent Board.

 

(c)           “Change
of Control Date” means the effective date of the Change of Control or such
date, which the Board shall, by resolution, deem to be the Change of Control
Date.

 

(d)           “Good
Reason” for voluntary resignation means (i) the Employer reduces by ten percent
(10%) or more the Optionee’s compensation at the rate in effect immediately
prior to the Change of Control or (ii) without the Optionee’s express written
consent, the Employer requires the Optionee to change the location of his or
her job or office, so that he or she will be based at a location more then
fifty (50) miles from the location of his or her job or office immediately
prior to the Change of Control. For these purposes, “Compensation” includes
base salary, exclusive of bonus, incentive compensation and shift differential,
paid by the Employer as consideration for the Optionee’s service.

 

(New Employee Grant)

 

SILICON GRAPHICS, INC.

 

1993 LONG-TERM INCENTIVE
STOCK PLAN

 

NON STATUTORY STOCK OPTION GRANT
AGREEMENT

 

Silicon Graphics,
Inc., a Delaware corporation (the “Company”), has granted to the Optionee named
on the attached NOTICE OF GRANT OF STOCK OPTION AND GRANT AGREEMENT (the
“NOTICE”) which is incorporated herein by reference, an option to purchase the
total number of shares of Common Stock and at the price determined, both as set
forth on the attached NOTICE, and in all respects subject to the terms,
definitions and provisions of the 1993 Long-Term Incentive Stock Plan (the
“Plan”) adopted by the Company which is incorporated herein by reference. The
terms defined in the Plan shall have the same defined meanings herein.

 

By accepting the NOTICE, Optionee acknowledges
responsibility of reviewing the terms of the Plan and the related prospectus,
copies of which are included in this option grant package and available at
http://www-finance.corp.sgi.com/stock or upon request from Employee Stock
Services (MS-645 or stock_support@sgi.com). Optionee further represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee
further agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions arising under the Plan.

 

1.             Nature
of the Option. This Option is a non-statutory option and is not intended to
qualify for any special tax benefits to the Optionee.

 

2.             Exercise
Price. The exercise price for each share of Common Stock is as set forth in
the attached NOTICE, which price is not less than the fair market value per
share of the Common Stock on the date of grant.

 

3.             Exercise
of Option. This Option shall be exercisable during its term in accordance
with the provisions of Section 7 of the Plan as follows:

 

(a)           Right
to Exercise.

 

(i)            Subject
to subsection 3(a) (ii) and (iii), below, this Option shall be exercisable
cumulatively, to the extent of twenty percent (20%) of the Shares subject to
the Option on the anniversary ten (10) months after the date of hire as set
forth in the attached NOTICE; thereafter, the Shares subject to the Option
shall be exercisable to the extent of an additional two percent (2%) of the
Shares per month on each subsequent anniversary date of the date of hire.

 

i.      This Option may not be
exercised for a fraction of a share.

 

ii.     In the event of Optionee’s
death, disability or other termination of employment, the exercisability of the
Option is governed by Sections 7, 8, and 9 below.

 

(b)           Method
of Exercise. This Option shall be exercisable by written notice

 

 

signed by the Optionee
and delivered to the Company’s Employee Stock Services group or by using the
electronic exercise methods approved from time to time by Employee Stock
Services (currently www.optionslink.com). If electronic exercise method is not
chosen, such notice shall be in the form of Exhibit A (Stock Exercise Request)
found at the Stock Administration website. The exercise notice shall be
accompanied by payment of the exercise price. The Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
exercise price.

 

No Shares will be issued pursuant to the exercise of
an Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such shares.

 

4.             Optionee’s
Representations. In the event the shares purchasable pursuant to the
exercise of this Option have not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, Optionee shall,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company his or her Investment Representation Statement in the form of
Exhibit B, (available in Employee Stock Services) and shall read the applicable
rules of the Commissioner of Corporations attached to such Investment
Representation Statement.

 

5.             Method
of Payment. Payment of the exercise price shall be by any of the following,
or a combination thereof, at the election of the Optionee:

 

(i)            cash;
or

 

(ii)           check;
or

 

(iii)          surrender of other Shares of Common Stock of
the Company of a value equal to the exercise price of the shares as to which
the Option is being exercised which, in the case of shares acquired previously
upon exercise of an option have been owned by the Optionee for more than six
(6) months on the date of surrender; or

 

(iv) delivery of a properly executed exercise notice
together with such other documentation as the Company and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price.

 

6.             Restrictions
on Exercise. This Option may not be exercised until such time as the Plan
has been approved by the shareholders of the Company, or if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations (“Regulation G”) as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

 

7.             Termination
of Status as an Employee or Consultant. If Optionee ceases to serve as an
Employee or Consultant, he or she may, but only within three (3) months after
the date he

 

 

or she ceases to be an
Employee or Consultant of the Company, exercise this Option to the extent that
he or she was entitled to exercise it at the date of such termination. To the
extent that he or she was not entitled to exercise this Option at the date of
such termination, or if he or she does not exercise this Option within the time
specified herein, the Option shall terminate.

 

8.             Disability
of Optionee. Notwithstanding the provisions of Section 7 above, if Optionee
is unable to continue his or her employment or consulting relationship with the
Company as a result of his or her Disability, the Optionee may, but only within
twelve (12) months from the date of such termination, exercise his or her
Option to the extent he or she was entitled to exercise the Option at the date
of such termination. To the extent that he or she was not entitled to exercise
the Option at the date of termination, or if he or she does not exercise such
Option within the time specified herein, the Option shall terminate.

 

9.             Death
of Optionee. In the event of the death of Optionee during the term of this
Option, the Option may be exercised, at any time within twelve (12) months
following the date of death, by Optionee’s estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued as of the date of death.

 

10.           Transferability
of Option. Unless otherwise determined by the Committee to the contrary,
this Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

 

11.           Term
of Option. This Option may not be exercised more than ten (10) years (five
years if Optionee owns, immediately before this Option is granted, stock
representing more than 10 percent of the total combined voting power of all
classes of stock of the Company) from the date of grant of this Option, and may
be exercised during such term only in accordance with the Plan and the terms of
this Option.

 

12.           Taxation
Upon Exercise of Option. Optionee understands that, upon exercise of this
Option, he will recognize income for tax purposes in an amount equal to the
excess of the then fair market value of the shares over the exercise price. The
Company will be required to withhold tax from Optionee’s current compensation
with respect to such income; to the extent that Optionee’s current compensation
is insufficient to satisfy the withholding tax liability, the Company may
require the Optionee to make a cash payment to cover such liability as a
condition of exercise of this Option. Upon a resale of such shares by the
Optionee, any difference between the sale price and the fair market value of
the shares on the date of exercise of the Option will be treated as capital
gain or loss.

 

13.           Acceleration
Upon Change of Control. Notwithstanding provisions of Section 3(a) with
respect to option exercisability, in the event of a Change of Control of the
Company, this Option shall automatically become exercisable in full if, within
twenty-four (24) months after a Change of Control Date, (i) the Optionee is
involuntarily terminated by the Company or any successor company (hereinafter,
the “Employer”) without Cause or (ii) the Optionee voluntarily resigns from the
Employer for Good Reason.

 

 

14.           Definitions.
For purposes of Section 13, the terms “Cause,” “Change of Control,” “Change of
Control Date,” and “Good Reason” shall have the meanings set out below:

 

(a)           “Cause”
means the termination of employment of an Optionee shall have taken place as a
result of:

 

(i)            any
act or acts of dishonesty undertaken by such Optionee and intended to result in
gain or personal enrichment of the Optionee, or

 

(ii)           persistent
failure to perform the duties and obligations of such Optionee which is not
remedied in a reasonable period of time after receipt of written notice from
the Employer, or

 

(iii)          violation of confidentiality or proprietary
information obligations to or agreements entered into with the Employer, or

 

(iv)          use,
sale or distribution of illegal drugs on the Employer’s premises, or

 

(v)           threatening,
intimidating, or coercing or harassing fellow employees, or

 

(vi)          the
conviction of such Optionee of a felony.

 

(b)           “Change
of Control” of the Company means:

 

(i)            the
acquisition by any Person (as such term is used in Sections 13(d) and 14(d) of
the 1934 Act) as Beneficial Owner (as such term is used in Rule 13d-3
promulgated under the 1934 Act), directly or indirectly, of fifty percent (50%)
or more of the combined voting power of the outstanding shares of capital stock
of the Company’s then outstanding securities with respect to the election of
the directors of the Board.

 

(ii)           During
any period of three (3) consecutive years individuals who, at the beginning of
such period, constitute the Board (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a Director of the Board subsequent to the date of this agreement whose
election, or nomination for election by the Company’s shareholders, was
approved by the vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of any individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Board, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the 1934 Act) shall be, for these purposes, considered as though such
person were a member of the Incumbent Board.

 

(c)           “Change
of Control Date” means the effective date of the Change of Control or such date
which the Board shall, by resolution, deem to be the Change of Control Date.

 

(d)           “Good
Reason” for voluntary resignation means (i) the Employer reduces by ten percent
(10%) or more the Optionee’s compensation at the rate in effect immediately
prior to the Change of Control or (ii) without the Optionee’s express written
consent, the Employer

 

 

requires the Optionee to
change the location of his or her job or office, so that he or she will be
based at a location more then fifty (50) miles from the location of his or her
job or office immediately prior to the Change of Control. For these purposes,
“Compensation” includes base salary, exclusive of bonus, incentive compensation
and shift differential, paid by the Employer as consideration for the
Optionee’s service.Exhibit 10.31

AMENDMENT NUMBER EIGHT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NUMBER EIGHT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this “Amendment”), dated as of July 14,
2004 and effective as of July 23, 2004, is entered into between and among, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a California
corporation, as the arranger and administrative agent for the Lenders (“Agent”
and together with the Lenders, collectively, the “Lender Group”), SILICON GRAPHICS, INC., a Delaware
corporation (“Parent”), and each of Parent’s Subsidiaries identified on
the signature pages hereof (such Subsidiaries, together with Parent, are
referred to hereinafter each individually as a “Borrower,” and
individually and collectively, jointly and severally, as “Borrowers”),
in light of the following:

WITNESSETH

WHEREAS,
Borrowers and the Lender Group are parties 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”);

WHEREAS,
Borrowers have requested that Agent (i) increase both the Maximum Revolver
Amount and Letter of Credit sub-limit to $60,000,000; (ii) make certain
adjustments to arrangements with respect to the Lender Group Bank Products; and
(iii) consent to and ratify the amendment to the Intercreditor Agreement dated
as of June 22, 2004 (the “Intercreditor Agreement Amendment”);

WHEREAS,
subject to the satisfaction of the conditions set forth herein, the Lender
Group is willing to so consent to the amendment of the Loan Agreement.

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree to amend the Loan Agreement as
follows:

1.             DEFINITIONS.  Capitalized terms, which are used in this Amendment
but not defined herein, shall have the meanings ascribed to them in the Loan
Agreement, as amended hereby.

 

2.             AMENDMENTS TO LOAN AGREEMENT.

 

                (a)           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:

                                “‘Lender
Group Bank Product Agreements’ means those agreements entered into from
time to time by Administrative Borrower or its Subsidiaries with a Lender Group
Bank Product Provider in connection with the obtaining of any of the Lender
Group Bank Products.”

 

“‘Lender Group Bank Product Providers’ means
Wells Fargo or any of its Affiliates.”

 

“‘Lender Group Bank Products Reserve’ means, as
of any date of determination, the amount of reserves that Lender has
established (based upon the Lender Group Bank Product Providers’ reasonable
determination of the credit exposure and related expenses of Administrative
Borrower and its Subsidiaries in respect of Lender Group Bank Products) in
respect of Lender Group Bank Products then provided or outstanding.”

 

“‘Loan Documents’ means this Agreement, the
Lender Group Bank Product Agreements, 
the Cash Management Agreements, the Disbursement Letter, Intellectual Property
Security Agreement, the Fee Letter, the Letters of Credit, the Intercompany
Subordination Agreement, the Intercreditor Agreement, as amended as of June 22,
2004, the Officers’ Certificate, the guaranty by Borrower with respect to
obligations of Silicon Graphics Finance S.A. to Agent, any note or notes
executed by a Borrower in connection with this Agreement and payable to a
member of the Lender Group, and any other agreement entered into, now, or in
the future, by any Borrower and the Lender Group in connection with this
Agreement.”

 

“‘Maximum Revolver
Amount’ means $60,000,000.”

 

“‘Obligations’ means (a) all loans, Advances,
debts, principal, interest (including any interest that, but for the provisions
of the Bankruptcy Code, would have accrued), contingent reimbursement
obligations with respect to outstanding Letters of Credit, premiums,
liabilities (including all amounts charged to Borrowers’ Loan Account pursuant
hereto or  arising pursuant to Lender
Group Bank Products), obligations (including indemnity obligations arising
pursuant to the Loan Documents or in connection with Lender Group Bank
Products), fees (including fees provided in the Fee Letter), charges, costs,
Lender Group Expenses (including any fees or expenses that, but for the provisions
of the Bankruptcy Code, would have accrued), lease payments, guaranties,
covenants, and duties of any kind and description owing by Borrowers to the
Lender Group pursuant to or evidenced by the Loan Documents and irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by law, or
otherwise.  Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
amendments, changes, extensions, modifications, renewals replacements,
substitutions, and supplements, thereto and thereof, as applicable, both prior
and subsequent to any Insolvency Proceeding; and (b) without duplication, all
obligations, liabilities, contingent reimbursement obligations, fees, and
expenses owing by Administrative Borrower or its Subsidiaries to any Lender
Group Bank Product Provider pursuant to or evidenced by the Lender Group Bank
Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or continent, due or to become due, now
existing or hereafter arising, and including all such amounts that
Administrative Borrower or its Subsidiaries are obligated to reimburse to
Lender as a result of Lender purchasing participations from, or executing
indemnities or reimbursement obligations to, a Lender Group Bank Product Provider
with respect to the Lender Group Bank Products provided by such Lender Group
Bank Product Provider to Administrative Borrower or its Subsidiaries.”

 

2

 

                (b)           Section 2.1(a) of the Loan
Agreement is hereby amended and restated in its entirety as follows:

 

“Subject to the
terms and conditions of this Agreement, and during the term of this Agreement,
each Lender with a Commitment agrees (severally, not jointly or jointly and
severally) to make advances to Borrowers in an amount at any one time outstanding
not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser
of (i) the Maximum Revolver Amount less the Letter of Credit
Usage, or (ii) the Borrowing Base less
the Letter of Credit Usage.  For
purposes of this Agreement, ‘Borrowing Base,’ as of any date of
determination, shall mean the result of:

 

“(x)          the
lesser of

 

“(i)          85% of Eligible Accounts, less
the amount, if any, of the Dilution Reserve; provided that in no event shall
the amount of credit availability created by:

 

“(A)        Eligible Canadian Accounts exceed
$2,000,000,

 

“(B)         Eligible Service Accounts exceed
$15,000,000, or

 

“(C)         Eligible SGI Solutions Finance Accounts
exceed $3,000,000, and

 

“(ii)         an amount equal to Borrowers’
Collections with respect to Accounts for the immediately preceding 45 day
period, plus

 

“(y)         the
lowest of: (i) 30% of the value of Eligible Inventory, (ii) 80% of the Net
Orderly Liquidation Value of the book value of Eligible Inventory, and (iii) $15,000,000, minus

 

“(z)          the aggregate amount of reserves, if any,
established by Agent

under Section 2.1(b) and the Lender Group Bank
Products Reserve.”

 

                (c)           Section 2.12(a)(ii) of the
Loan Agreement is hereby amended and restated in its entirety as follows:

 

                                “(ii)         the Letter of Credit Usage would exceed
$60,000,000, or”

 

 

3.             CONSENT TO AND RATIFICATION OF INTERCREDITOR AGREEMENT
AMENDMENT.  Reference is
made to the Intercreditor Agreement Amendment dated as of June 22, 2004 by and
among Agent, U.S Bank National Association (“Trustee”) and Parent,
pursuant to which the security interest of Trustee in certain Leasing Program
Collateral (as such term is defined in the Intercreditor Agreement Amendment)
was subordinated to Agent’s security interest in the same collateral.  The parties hereby ratify, confirm and
consent to the execution 

 

3

 

and delivery of the Intercreditor Agreement Amendment, a copy of which
is attached hereto as Exhibit A.

 

4.             CONDITIONS
PRECEDENT TO THIS AMENDMENT.  The
satisfaction of each of the following shall constitute conditions precedent to
the effectiveness of this Amendment 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
Default or Event of Default shall have occurred and be continuing on the date
hereof or as of the date of the effectiveness of this Amendment;

 

(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 Borrower or the Lender Group; and

 

(d)           The
Reaffirmation and Consent attached hereto as Exhibit B, evidencing Trustee’s
consent to this Amendment, has been fully executed and delivered to Agent.

 

5.             CONSTRUCTION. 
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF CALIFORNIA.

6.             ENTIRE
AMENDMENT; EFFECT OF AMENDMENT.  This
Amendment, and terms and provisions hereof, constitute the entire agreement
among the parties pertaining to the subject matter hereof and supersedes any
and all prior or contemporaneous amendments relating to the subject matter
hereof.  Except for the amendments to
the Loan Agreement expressly set forth in Section 2 hereof, the Loan
Agreement and other Loan Documents shall remain unchanged and in full force and
effect. To the extent any terms or provisions of this Amendment conflict with
those of the Loan Agreement or other Loan Documents, the terms and provisions
of this Amendment shall control. This Amendment is a Loan Document.

 

7.             COUNTERPARTS; TELEFACSIMILE EXECUTION.  This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver an original executed
counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect
of this Amendment.

4

 

8.             MISCELLANEOUS.

 

(a)           Upon
the effectiveness of this Amendment, each reference in the Loan Agreement to
“this Agreement”, “hereunder”, “herein”, “hereof” or words of like import
referring to the Loan Agreement shall mean and refer to the Loan Agreement as
amended by this Amendment.

 

(b)           Upon
the effectiveness of this Amendment, each reference in the Loan Documents to
the “Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like
import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.

 

[Signature page
follows]

5

 

IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered as of the date first written above.

	
   

  	
  WELLS FARGO FOOTHILL, INC., 

  a California corporation, as Agent and as a Lender 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Thomas P. Shagrue

  
	
   

  	
  Name: 

  	
  Thomas P. Shagrue

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SILICON GRAPHICS, INC.,

  a Delaware corporation 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jean Furter

  
	
   

  	
  Name: 

  	
  Jean Furter

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  SILICON GRAPHICS FEDERAL, INC.,

  a Delaware corporation 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jeffrey V. Zellmer

  
	
   

  	
  Name: 

  	
  Jeffrey V. Zellmer

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

6

Exhibit
A

 

Intercreditor
Agreement Amendment

 

7

Exhibit
B

 

Reaffirmation
and Consent

 

8

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