Exhibit 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”

 

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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

 

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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

 

 

 

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