AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND WAIVER
Exhibit 10.1
AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT AND WAIVER
This Amendment Number Seven to Credit Agreement and Waiver (this “Amendment”) is entered into as of November 10, 2014, by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), and XXXXX FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), on the one hand, and SILICON GRAPHICS INTERNATIONAL CORP., a Delaware corporation (“Parent”), and SILICON GRAPHICS FEDERAL, LLC, a Delaware limited liability company (“Silicon Federal”; and together with Parent each individually a “Borrower”, and individually and collectively, jointly and severally, the “Borrowers”), on the other hand, with reference to the following facts:
A. Borrowers, Agent, and Lenders have previously entered into that certain Credit Agreement, dated as of December 5, 2011 (as amended from time to time, the “Agreement”).
B. As of the date hereof, Borrowers are not in compliance with Section 6.9(d) of the Agreement as a result of making certain Restricted Junior Payments during the fiscal year ending June 27, 2014 without having the required Availability plus Qualified Cash at the time such payments were made (the “Specified Non-Compliance”).
C. Borrowers have requested that the Lender Group (i) waive the Specified Non-Compliance, and (ii) make certain amendments to the Agreement, as provided for and on the conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby amend and supplement the Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment shall have the meanings given to them in the Agreement unless specifically defined herein.
2. AMENDMENTS.
(a) Schedule 1.1 of the Agreement is amended by deleting clause (a) of the definition of “Borrowing Base” set forth therein in its entirety and replacing it with the following:
“(a) the sum of (i) 85% of the amount of Eligible Domestic Accounts, plus (ii) the lesser of (1) $10,000,000 and (2) 85% of the amount of Eligible Foreign Accounts, plus (iii) the lesser of (1) $10,000,000 and (2) 85% of the amount of Eligible US Government Accounts, less (iv) the amount, if any, of the Dilution Reserve, plus”
(b) Schedule 1.1 of the Agreement is amended by deleting the definition of “EBITDA” set forth therein in its entirety and replacing it with the following:
“EBITDA” means, with respect to any fiscal period, Parent’s consolidated net earnings (or loss), minus extraordinary gains, interest income, plus non-cash extraordinary losses, non-cash stock compensation expenses, interest expense, income taxes, fees and expenses incurred in connection with the entry into this Agreement, expenses incurred in connection with Permitted Acquisitions, cash expenses related to merger and acquisition transactions and restructuring not to exceed $1,000,000 in the aggregate per fiscal year, non-cash realized losses and impairment of investments, depreciation and amortization for such period, and actual restructuring expenses, not to exceed a maximum of $5,000,000, incurred during the period of June 28, 2014 through June 26, 2015, in each case, determined on a consolidated basis in accordance with GAAP. For the purposes of calculating EBITDA for any period of 4 consecutive fiscal quarters (each, a “Reference Period”), (a) if at any time during such Reference Period (and after the Closing Date), Parent or any of its Subsidiaries shall have made a Permitted Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such Permitted Acquisition, are factually supportable, and are expected to have a continuing impact, in each case to be mutually and reasonably agreed upon by Parent and Agent) or in such other manner acceptable to Agent as if any such Permitted Acquisition or adjustment occurred on the first day of such Reference Period, and (b) EBITDA for the fiscal quarter ended March 25, 2011, shall be deemed to be $982,000, (c) EBITDA for the fiscal quarter ended June 24, 2011, shall be deemed to be negative $5,397,000, and (d) EBITDA for the fiscal quarter ending September 30, 2011 and each fiscal quarter thereafter, shall be based on actual EBITDA.”
3. WAIVER. Upon the effectiveness of this Amendment, the Lender Group hereby waives the Specified Non-Compliance. Such waiver provided for herein is limited to the specifics hereof, shall not apply with respect to any non-compliance with the Loan Documents not specifically mentioned herein, or any other facts or occurrences other than those on which the same is based, shall not excuse future non-compliance with the Agreement and shall not be a practical construction, course of conduct or course of performance under the Agreement or under the Loan Documents.
4. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby affirms to the Lender Group that all of such Borrower’s representations and warranties set forth in the Agreement are true, complete and accurate in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date hereof (except to the extent that such representations and warranties relate solely to an earlier date).
5. NO DEFAULTS. Each Borrower hereby affirms to the Lender Group that after giving effect to this Amendment, no Event of Default has occurred and is continuing as of the date hereof.
6. CONDITIONS PRECEDENT. The effectiveness of this Amendment is hereby conditioned upon receipt by Agent of a fully executed copy of this Amendment from each party hereto.
7. REAFFIRMATION; ASSUMPTION. Each Borrower hereby acknowledges and reaffirms (i) all of its obligations and duties under the Loan Documents, and (ii) that the Agent, for the ratable benefit of the Lender Group, has and shall continue to have valid, perfected Liens in the Collateral as provided in the Security Agreement.
8. COSTS AND EXPENSES. Borrowers shall pay to Agent all of Agent’s and Lenders’ out-of-pocket costs and expenses (including, without limitation, the fees and expenses of its counsel, which counsel may include any local counsel deemed necessary, search fees, filing and recording fees, documentation fees, appraisal fees, travel expenses, and other fees) arising in connection with the preparation, execution, and delivery of this Amendment and all related documents.
9. LIMITED EFFECT. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement, as amended and supplemented hereby, shall remain in full force and effect.
10. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed and delivered shall be deemed to be an original. All such counterparts, taken together, shall constitute but one and the same Amendment. This Amendment shall become effective upon the execution of a counterpart of this Amendment by each of the parties hereto. This Amendment is a Loan Document and is subject to all the terms and conditions, and entitled to all the protections, applicable to Loan Documents generally.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
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a Delaware corporation
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By:
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/s/ Xxxxxx X. Xxxx
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Title:
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EVP, CFO
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SILICON GRAPHICS FEDERAL, LLC,
a Delaware limited liability company
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By:
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/s/ Xxxxxx Xxxxxx
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Title:
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Secretary
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XXXXX FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent and as a Lender
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By:
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/s/ Xxxxx Xxxxxxxxx
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Title:
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Director
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