AMENDMENT NO. 2 TO GUARANTY
AMENDMENT NO. 2 ("Amendment No. 2"), dated as of March 7, 1997, from
SILICON GRAPHICS, INC., a Delaware corporation (the "Guarantor"), to VIRTUAL
FUNDING, LIMITED PARTNERSHIP, a Delaware limited partnership (the "Lessor").
WHEREAS, the Lessor and Silicon Graphics Real Estate, Inc. entered
into an Agreement for Lease dated as of November 18, 1993, as amended by
Amendment No. 1 to Agreement for Lease dated as of March 15, 1995; and
WHEREAS, the Lessor and Silicon Graphics Real Estate, Inc. entered
into a Lease Agreement dated as of November 18, 1993, as amended by Amendment
No. 1 to Lease Agreement dated as of March 15, 1995 and Amendment No. 2 to Lease
Agreement dated as of July 1, 1996; and
WHEREAS, the Guarantor and the Lessor entered into a Guaranty, dated
as of November 18, 1993, as amended by Amendment No. 1 to Guaranty dated as of
March 15, 1995 (as amended, the "Guaranty"); and
WHEREAS, the Guarantor and the Lessor now desire to amend further the
Guaranty as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
1. Section 11(e) of the Guaranty is hereby amended by deleting
Section 11(e) in its entirety and inserting in its place the following:
(e) FIXED CHARGE COVERAGE RATIO. The Guarantor shall not permit its
Fixed Charge Coverage Ratio to be less than (x) for the Measurement
Periods ending March 31, 1997 and June 30, 1997, 3.75:1.00, and (y)
for all other Measurement Periods thereafter, 4.00:1.00. For purposes
hereof, the term "Fixed Charge Coverage Ratio" means, for any
Measurement Period, determined on a consolidated basis in accordance
with generally accepted accounting principles, the ratio of (i) the
sum of the Guarantor's earnings before interest expense, rent expense,
income taxes, depreciation, amortization and non-recurring charges
(i.e., restructuring and merger related charges) for such Measurement
Period, but including interest income for such Measurement Period, TO
(ii) all obligations of the Guarantor
paid in such Measurement Period in respect of interest expense and
rent expense. For purposes hereof, the term "Measurement Period"
means, with respect to any fiscal quarter of the Guarantor, the period
of four fiscal quarters ending on the last day of such fiscal quarter.
2. The Guarantor hereby agrees to deliver to the Lessor on the date
hereof a certificate dated the date of this Amendment No. 2, from the Secretary
or Assistant Secretary of the Guarantor certifying (i) as to the incumbency and
signature of each officer of the Guarantor authorized to execute and deliver
this Amendment No. 2, (ii) that attached thereto are true and complete copies of
the Restated Certificate of Incorporation and By-Laws of the Guarantor as in
full force and effect on the date of this Amendment No. 2 and (iii) that
attached thereto is a true and complete copy of the resolutions of the Board of
Directors of the Guarantor authorizing the execution, delivery and performance
of this Amendment No. 2 and the transactions contemplated hereby, together with
a certificate of another officer of the Guarantor as to the incumbency and
signature of such Secretary or Assistant Secretary.
3. The Guarantor hereby represents and warrants that each of the
representations and warranties made in Section 4 of the Guaranty are Accurate
and Complete with the same force and effect as though made on and as of the date
of this Amendment No. 2, except to the extent that any such representations or
warranties expressly relate to an earlier date, in which case, such
representations and warranties were Accurate and Complete on and as of such
earlier date.
For purposes of this paragraph, the term "Accurate and Complete" means
when referring to any representation or warranty, that such representation and
warranty is true in all material respects and that the Guarantor has not failed
to disclose to the Lessor in writing any fact which if not disclosed to the
Lessor would make the facts actually stated materially misleading.
4. Except as expressly modified and amended hereby, the Guaranty
remains unchanged and in full force and effect in all respects. As expressly
modified and amended hereby, the Guarantor hereby affirms the Guaranty.
5. THIS AMENDMENT NO. 2 SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6. This Amendment No. 2 may be executed in any number of
counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Amendment No. 2.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 2 to be executed by their officers thereunto duly authorized as of
the date first above written.
SILICON GRAPHICS, INC.,
as Guarantor
By: /S/ XXXXXXX X. XXXXXXXX
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President,
Finance and Chief
Financial Officer
By: /S/ XXXXXX X. XXXXXXXXX
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President, Finance
and Treasurer
Acknowledged and Agreed:
VIRTUAL FUNDING, LIMITED PARTNERSHIP
By: Virtual Capital, Inc.,
General Partner
By: /S/ XXXX X. XXXXXXXXX
---------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President and
Assistant Secretary
