Exhibit 10.1
AMENDMENT NUMBER TWO TO SENIOR SECURED CREDIT AGREEMENT
This Amendment Number Two to Senior Secured Credit Agreement
("Amendment"), dated as of March 14, 2006, is entered into by and among ▇▇▇▇▇
FARGO FOOTHILL, INC., a California corporation ("Lender") on the one hand, and
CRAY INC., a Washington corporation ("Parent"), and each of Parent's
Subsidiaries identified on the signature page hereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as a
"Borrower", and individually and collectively, jointly and severally, as the
"Borrowers"), on the other hand, in light of the following:
A. Lender and Borrowers have previously entered into that certain
Senior Secured Credit Agreement, dated as of May 31, 2005, as amended by that
certain Amendment Number One to Senior Secured Credit Agreement, dated November
9, 2005, and effective as of May 31, 2005 (collectively, the "Agreement").
B. Borrowers and Lender desire to amend the Agreement as provided for
and on the conditions herein.
Now, THEREFORE, Borrowers, Agent and Lenders 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.
2.1 Effective as of the date of this Amendment, the definition of
"EBITDA" set forth in Schedule 1.1 of the Agreement is hereby amended to read as
follows:
"EBITDA" means, with respect to any fiscal period, Parent's
and its Subsidiaries': (a) consolidated net earnings (or loss), plus (b)
without duplication, the sum of the following amounts for such period, to
the extent deducted in determining consolidated net earnings (or loss) of
Parent and its Subsidiaries for such period: (i) interest expense, plus (ii)
income tax expense, plus (iii) depreciation and amortization, plus (iv)
extraordinary losses, plus (v) restructuring charges and non-recurring
charges incurred in calendar year 2005 up to an aggregate amount of not more
than $14,000,000 and which are recorded as an expense on the books of the
applicable Borrower or Subsidiary by no later than March 31, 2006, plus (vi)
non-cash (unrealized) losses due to fluctuations in currency values, plus
(vii) non-cash stock option expense, plus (viii) BioNumerik non-cash
investment expense, plus (ix) other non-recurring non-cash expenses, minus
(c) without duplication, the sum of the following amounts for such period,
to the extent included in determining consolidated net earnings (or loss) of
Parent and its Subsidiaries for such period: (i) extraordinary gains, plus
(ii) interest income, plus (iii) non-cash (unrealized gains due to
fluctuations in currency values, plus (iv) all other non-operating income,
as all of the foregoing are determined in accordance with GAAP.
2.2 Effective as of the date of this Amendment, Section 6.16(a)(i) of
the Agreement is amended in its entirety to read as follows:
(a) Fail to maintain or achieve:
(i) Minimum EBITDA. EBITDA, measured as of the end of
each fiscal quarter of Parent, of at least the required amount set forth in
the following table for the applicable period set forth opposite thereto:
BN799030v5 1
Applicable amount Applicable Period
----------------- -------------------------------------------------
$(3,500,000) For the 9 month period ending on March 31, 2006
$(4,150,000) For the 12 month period ending June 30, 2006
$(6,600,000) For the 12 month period ending September 30, 2006
$(1,550,000) For the 12 month period ending December 31, 2006
$ 8,100,000 For the 12 month period ending March 31, 2007
3. WAIVER. Lender hereby waives the violation by Borrowers of the financial
covenant set forth in Section 6.1(a)(i) of the Agreement for the period ending
December 31, 2005.
4. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby affirms to Lender
that all of such Borrower's representations and warranties set forth in the
Agreement are true, complete and accurate in all respects as of the date hereof.
5. NO DEFAULTS. Borrowers hereby affirm to Lender that no Event of Default
has occurred and is continuing as of the date hereof.
6. CONDITION PRECEDENT
6.1 The effectiveness of this Amendment is expressly conditioned upon
receipt by Lender of an executed original of this Amendment.
6.2 The effectiveness of this Amendment is expressly conditioned upon
receipt by lender of an amendment and waiver fee in the amount of $30,000.
7. COSTS AND EXPENSES. Borrowers shall pay to Lender all of Lender's
out-of-pocket costs and expenses (including, without limitation, the fees and
expenses of its counsel arising in connection with the preparation, execution,
and delivery of this Amendment and all related documents.
8. 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.
9. COUNTERPARTS: ELECTRONIC EXECUTION; 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. Delivery of an executed counterpart of this Amendment by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Amendment.
Any party delivering an executed counterpart of this Amendment by telefacsimile
or other electronic method of transmission also shall deliver an original
executed counterpart of this Amendment but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Amendment. This Amendment shall become effective upon the
execution of a counterpart of this Amendment by each of the parties hereto.
[Signatures on next page]
BN799030v5 2
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
WELLSFARGO FOOTHILL, INC.,
a California corporation
By: /s/ ▇▇▇▇▇ ZUCHT
-------------------------------------
Title: Senior Vice President
----------------------------------
BN799030v5 S-1
CRAY INC.,
a Washington corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Executive Vice President and CFO
----------------------------------
CRAY FEDERAL INC.,
A Washington corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Title: President
----------------------------------
BN799030v5 S-2
