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As previously disclosed, on May 8, 2006, Silicon Graphics, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under chapter 11 of title 11, United States Code (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Southern District of New York (the “Court”) (Case Nos. 06-10977 (ALG) through 06-10990 (ALG)). The Debtors will continue to operate their business as “debtors-in possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court.
On May 10, 2006, the Company, Silicon Graphics Federal, Inc. and Silicon Graphics World Trade Corporation (collectively, the “Borrowers”) entered into a Post-Petition Loan and Security Agreement dated as of Mary 8, 2006 (the “DIP Agreement”) with Quadrangle Master Funding Ltd., Watershed Technology Holdings, LLC and Encore Fund, L.P. (collectively, the “Lenders”). The DIP Agreement provides a term loan to the Borrowers in the aggregate amount of $70,000,000 and is secured by certain assets of the Borrowers. The interest rate under the DIP Agreement is the per annum rate equal to the greater of (i) the rate of interest published in the Wall Street Journal from time to time as the “Prime Rate” plus seven percentage points and (ii) 250 basis points higher than the rate at which cash interest is then payable under the DIP Agreement, provided that upon an event of default, the then current interest rate under the DIP Agreement is increased by two percentage points.
In any fiscal year in which any sale or disposition by the Borrower or any of their subsidiaries of property or assets (other than sales of inventory or equipment in the ordinary course of business) exceeds $500,000, the Borrowers are required to pay 100% of the net proceeds from any such sale or disposition to the Lender as prepayment on the outstanding obligations under the DIP Agreement. In any fiscal year in which the Borrowers have extraordinary receipts in excess of $250,000, the Borrowers are required to pay 100% such excess to the Lender as prepayment on the outstanding obligations under the DIP Agreement.
The DIP Agreement terminates and all outstanding borrowed amounts under the DIP Agreement become due on the earliest to occur of (i) the date that is 180 days after the closing date of the DIP Agreement, (ii) the consummation of the Debtors’ plan of reorganization in their chapter 11 cases, (iii) the date of the occurrence of an event of default under the DIP Agreement, (iv) the date of any decision by the board of directors of any Borrower to proceed with the sale or liquidation of any Borrower without the consent of all of the Lenders, or (v) the date the Borrowers pay all of the required Lenders in full and terminate the term loan under the DIP Agreement, unless terminated earlier in accordance with the terms of this DIP Agreement
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just a word of caution here, when they emerge from bankruptcy ALL common shares will be cancelled without recourse. play it smart, dont hold to long, keep an eye on news updates every day! good luck! from a PR, RE: reorganization>>>>>>>>>>>>>>>>&g t;>>>>>>>>>>>>>>>>>>>&g t;>>>>>All of SGI's existing common stock and the unsecured subordinated debentures will be cancelled upon confirmation of the plan by the court and receive no recovery.
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Silicon Graphics Inc., a pioneer in computerized special effects for movies like "Jurassic Park," filed for bankruptcy, with an agreement to give noteholders a majority stake in the company and cut $250 million in debt. Silicon Graphics said it will file a plan within 30 days that will outline a strategy to exit bankruptcy, reduce debt by $250 million, and repay creditors.
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quote:Originally posted by RCAnalyst2007: They will exit bankruptcy
Silicon Graphics Inc., a pioneer in computerized special effects for movies like "Jurassic Park," filed for bankruptcy, with an agreement to give noteholders a majority stake in the company and cut $250 million in debt. Silicon Graphics said it will file a plan within 30 days that will outline a strategy to exit bankruptcy, reduce debt by $250 million, and repay creditors.
and when they do all common shares will be cancelled.
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that's not gonna happen or happen right away.. There are so many people benefit from SGID shares including board members and creditors.
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