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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