EXHIBIT 10.1
AMENDMENT NUMBER ONE TO SENIOR SECURED CREDIT AGREEMENT
This Amendment Number One to Senior Secured Credit Agreement
("Amendment"), dated as of November 9 2005, and effective as of May 31,
2005, is entered into by and among XXXXX 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 (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.
(a) Exhibit B-1 - Form of Borrowing Base Certificate is
replaced with the Exhibit B-1 attached to this Amendment.
(b) Exhibit C-1 - Form of Compliance Certificate is replaced
with the Exhibit C-1 attached to this Amendment.
(c) The definition of "Borrowing Base" set forth in Schedule
1.1 to the Agreement is hereby amended to read as follows:
"Borrowing Base" means, as of any date of determination, the
result of:
(a) the lesser of
(i) $10,000,000, and
(ii) 85% of the amount of Eligible Accounts,
minus the amount, if any, of the Dilution
Reserve, plus
(b) the lesser of
(i) $20,000,000, and
(ii) 100% of TSM Recurring Revenues, minus
(c) the sum of (i) the Bank Product Reserve, and (ii)
the aggregate amount of reserves, if any,
established by Lender under Section 2.1(b).
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(d) The definition of "Maximum Revolver Amount" set forth in
Schedule 1.1 of the Agreement is hereby amended to read as follows:
"Maximum Revolver Amount" means $30,000,000, minus the Line
Block.
(d) Section 6.16(b)(i) of the Agreement is amended in its
entirety to read as follows:
"(b) Make:
(i) CAPITAL EXPENDITURES. Capital Expenditures in any
fiscal year in excess of the amount set forth in the following
table for the applicable period:
For the First 6 Months of Fiscal
Fiscal Year 2005 Fiscal Year 2006 Year 2007
$ 17,500,000(*) $ 16,000,000 $ 8,000,000
(*) No more than $8,000,000 of such amount shall consist of Capital
Expenditures reflected as "purchases of property and equipment" on
Parent's and its Subsidiaries' statement of cash flows (contained within
Parent's and its Subsidiaries' financial statements) prepared from time to
time."
3. 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.
4. NO DEFAULTS. Borrowers hereby affirm to Lender that no Event of
Default has occurred and is continuing as of the date hereof.
5. CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon receipt by Lender of a fully executed copy of this
Amendment.
6. 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.
7. 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.
8. COUNTERPARTS; 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. This Amendment shall become effective upon the execution of a
counterpart of this Amendment by each of the parties hereto.
[Signatures on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first set forth above.
XXXXX FARGO FOOTHILL, INC.,
a California corporation
By: /s/ Mara Vaisz
----------------------------
Title: Vice President
S-1
Amendent Number One to Credit Agreement
CRAY INC.,
a Washington corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
CRAY FEDERAL INC.,
a Washington corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Title: President
S-2
Amendement Number One to Credit Agreement
EXHIBIT B-1
FORM OF BORROWING BASE CERTIFICATE
Xxxxx Fargo Foothill, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
The undersigned, Cray Inc., a Washington corporation ("Parent"),
pursuant to Schedule 5.2 of that certain Credit Agreement, dated as of May 31,
2005 (as amended, restated, modified, supplemented, refinanced, renewed, or
extended from time to time, the "Credit Agreement"), entered into among Parent,
its subsidiaries signatory thereto as Borrowers (collectively with Parent,
"Borrowers"), and Xxxxx Fargo Foothill, Inc., a California corporation as the
lender (in such capacity, together with its successors and assigns, if any, in
such capacity, "Lender"), hereby certifies to Lender that the following items,
calculated in accordance with the terms and definitions set forth in the Credit
Agreement for such items are true and correct, and that Borrowers are in
compliance with and, after giving effect to any currently requested Advances,
will be in compliance with, the terms, conditions, and provisions of the Credit
Agreement.
All initially capitalized terms used in this Borrowing Base
Certificate have the meanings set forth in the Credit Agreement unless
specifically defined herein.
[Remainder of page intentionally left blank.]
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Effective Date of Calculation: ___________
A. BORROWING BASE CALCULATION
1. Eligible Accounts
a. (i) 85% of Eligible Accounts(1) $___________
(ii) the amount, if any,
of the Dilution Reserve $___________
(iii) Item 1.a.(i) minus
Item 1.a.(ii) $___________
b. $10,000,000 $___________
c. The lesser of Items 1.a. and 1.b. $___________
2.
a. 100% of TSM Recurring Revenues $___________
b. $20,000,000 $___________
c. The lesser of Items 2.a. and 2.b. $___________
3. Reserves
a. Bank Products Reserve $___________
b. the sum of the aggregate amount of
reserves, if any, established by
Lender under Section 2.1(b) of the
Credit Agreement $___________
c. Sum of Items 3.a. and 3.b $___________
(1) See Annex A
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4. Borrowing Base (Item 0.x.xxxx Item 2.c, minus Item 3.c.): $_______
5. Availability Calculation
a. (i) Maximum Revolver
Amount minus Line Block (if applicable) $_______
(ii) Letter of Credit Usage $_______
(iv) outstanding Advances $_______
(vi) Item 5.a(i) munus Item 5.a(ii)
minus Item 5.a(iii) $_______
b. (i) Borrowing Base $_______
(ii) Letter of Credit Usage $_______
(iii) outstanding Advances $_______
(iv) Item5.b(i) munus Item 5.b(ii)
munus Item 5.b(iii) $_______
c. The lesser of Item 5.a. and 5.b. $_______
B. LETTER OF CREDIT CALCULATION
1. maximum L/C amount $_______
2. L/Cs permitted under Borrowing Base
a. Borrowing Base (from Section A, Item 4) $_______
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b. Amount of current outstanding Advances $_______
c. Item 2.a. munus Item 2.b. $_______
3. L/Cs permitted under Maximum Revolver Amount
a. Maximum Revolver Amount minus
Line Block (if applicable) $_______
b. Amount of current outstanding Advances $_______
c. Item 3.a. munus Item 3.b. $_______
4. Letter of Credit Usage plus the amount
of any proposed Letters of Credit $_______
5. No L/C Avalilability if Item 4 is greater
than Item 1, Item 2.c. or Item 3.c. $_______
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Additionally, the undersigned hereby certifies and represents and warrants
to Lender on behalf of the Borrowers that (i) as if the date hereof, each
reprtesentation or warranty contained in or pursuant to any Loan Document, any
agreement, instrument, certificate, document or other writing furnished at any
time under or in connection with any Loan Document, and as of the effective date
of any advance, continuation or conversion requested above is true and correct
in all material respects (except to the extent any representation or warranty
expressly related to an earlier date), (ii) each of the covenants and
agreements contained in any Loan Document have been performed (to the extent
required to be performed on or before the date hereof or each such effective
date), (iii) no Default or Event of Default has occurred and is continuing on
the date hereof, nor will any thereof occur after giving effect to the request
above, and (iv) all of the foregoing is true and correct as of the effective
date of the calculations set forth above and that such calculation have been
made in accordance with the requirements of the Credit Agreement.
CRAY, INC.,
a Washington corporation
as Parent
By:_____________________
Name:___________________
Title:__________________
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Annex A
Accounts created by a Borrower in the ordinary course of
its business arising out of sale of goods (and not out of the
rendition of services), that are not related to Recurring
Revenues, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan
Documents $______
less (without duplication)
The amount of customer deposits and unapplied cash
relating to Accounts
$______
Accounts that the Account Debtor has failed to pay
within 90 days of original invoice date or Accounts
with selling terms of more than 30 days $______
Accounts owed by an Account Debtor (or its
Affiliates) where 50% or more of all Accounts owed by
that Account Debtor (or its Affiliates) are deemed
ineligible under the immediately preceding clause $______
Accounts with respect to which the Account Debtor is
an Affiliate of any Borrower or an employee or agent
of any Borrower or any Affiliate of any Borrower $______
Accounts arising in a transaction wherein goods are
placed on consignment or are sold pursuant to a
guaranteed sale, a sale or return, a sale on
approval, a xxxx and hold, or any other terms by
reason of which the payment by the Account Debtor may
be conditional $______
Accounts that are not payable in Dollars and in the
United States $______
Accounts with respect to which the Account Debtor
either (i) does not maintain its chief executive
office in the United States or Canada, or (ii) is not
organized under the laws of the United States or any
state thereof or Canada, or (iii) is the government
of any foreign country or sovereign state other than
Canada, or of any state, province, municipality, or
other political subdivision thereof, or of any
department, agency, public corporation, or other
instrumentality thereof, unless (y) the Account is
supported by an irrevocable letter of credit
satisfactory to Lender (as to form, substance, and
issuer or domestic confirming bank) that has been
delivered to Lender and is directly drawable by
Lender, or (z) the Account is covered by credit
insurance in form, substance, and amount, and by an
insurer, satisfactory to Lender $______
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Accounts with respect to which the Account Debtor is
either (i) the United States or any department,
agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to
which the applicable Borrower has complied, to the
reasonable satisfaction of Lender, with the
Assignment of Claims Act, 31 USC Section 3727), or (ii)
any state of the United States $_______
Accounts with respect to which the Account Debtor is
a creditor of any Borrower, has or has asserted a
right of setoff, or has disputed its obligation to
pay all or any portion of the Account, to the extent
of such claim, right of setoff, or dispute $_______
Accounts with respect to which the Account Debtor is
subject to an Insolvency Proceeding, is not Solvent,
has gone out of business, or as to which a Borrower
has received notice of an imminent Insolvency
Proceeding or a material impairment of the financial
condition of such Account Debtor, $_______
Accounts with respect to which the Account Debtor is
located in a state or jurisdiction (e.g., New Jersey,
Minnesota, and West Virginia) that requires, as a
condition to access to the courts of such
jurisdiction, that a creditor qualify to transact
business, file a business activities report or other
report or form, or take one or more other actions,
unless the applicable Borrower has so qualified,
filed such reports or forms, or taken such actions
(and, in each case, paid any required fees or other
charges), except to the extent that the applicable
Borrower may qualify subsequently as a foreign entity
authorized to transact business in such state or
jurisdiction and gain access to such courts, without
incurring any cost or penalty viewed by Lender to be
significant in amount, and such later qualification
cures any access to such courts to enforce payment of
such Account, $_______
Accounts, the collection of which, Lender, in its
Permitted Discretion, believes to be doubtful by
reason of the Account Debtor's financial condition, $_______
Accounts that are not subject to a valid and
perfected first priority Lender's Lien, $_______
Accounts with respect to which (i) the goods giving
rise to such Account have not been shipped and billed
to the Account Debtor, or (ii) the services giving
rise to such Account have not been performed and
billed to the Account Debtor $_______
Accounts that represent the right to receive progress
payments or other advance xxxxxxxx that are due prior
to the completion of performance by the applicable
Borrower of the subject contract for goods or
services. $_______
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Total Excluded Accounts $_______
ELIGIBLE ACCOUNTS (TOTAL ACCOUNTS LESS TOTAL EXCLUDED ACCOUNTS): $_______
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EXHIBIT C-1
FORM OF COMPLIANCE CERTIFICATE
[on Parent's letterhead]
To: Xxxxx Fargo Foothill, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ____________
Ladies and Gentlemen:
Reference is made to that certain CREDIT AGREEMENT (the "Credit
Agreement") dated as of May 31, 2005, by and among XXXXX FARGO FOOTHILL, INC.
(together with its successors and permitted assigns, "Lender"), CRAY INC., a
Washington corporation ("Parent"), and each of its Subsidiaries party thereto.
Capitalized terms used in this Compliance Certificate have the meanings set
forth in the Credit Agreement unless specifically defined herein.
Pursuant to Schedule 5.3 of the Credit Agreement, the undersigned officer
of Parent hereby certifies that:
The financial information of Parent and its Subsidiaries with respect to fiscal
quarter end and fiscal year end periods (furnished in Schedule 1 attached
hereto), if applicable, has been prepared in accordance with GAAP (except for
year-end adjustments and the lack of footnotes), and fairly presents in all
material respects the financial condition of Parent and its Subsidiaries.
The financial information of Parent and its Subsidiaries with respect to periods
other than fiscal quarter end and fiscal year end periods (furnished in Schedule
1 attached hereto), if applicable, do not include all of the adjustments or
footnotes necessary to be in compliance with GAAP. I believe that these
statements should provide a reasonable basis for the Lender to monitor Parents'
and its Subsidiaries' results from operations and their financial position.
These statements are not deliberately misleading and, to my knowledge, do not
contain fraudulent information or fail to include material information.
1. Such officer has reviewed the terms of the Credit Agreement and has
made, or caused to be made under his/her supervision, a review in reasonable
detail of the transactions and condition of Parent and its Subsidiaries during
the accounting period covered by the financial statements delivered pursuant to
Schedule 5.3 of the Credit Agreement.
2. Such review has not disclosed the existence on and as of the date
hereof, and the undersigned does not have knowledge of the existence as of the
date hereof, of any event or condition that constitutes a Default or Event of
Default, except for such conditions or events listed on Schedule 2 attached
hereto, specifying the nature and period of existence thereof and what action
Parent and its Subsidiaries have taken, are taking, or propose to take with
respect thereto.
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3. The representations and warranties of Parent and its Subsidiaries set
forth in the Credit Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date hereof (except to the extent they
relate to a specified date), except as set forth on Schedule 3 attached hereto.
4. Parent and its Subsidiaries are in compliance with the applicable
covenants contained in Section 6.16 of the Credit Agreement as demonstrated on
Schedule 4 hereof.
5. Attached hereto on Schedule 5 is a copy of Parent and its Subsidiaries
[10-Q QUARTERLY REPORT/10-K ANNUAL REPORT], filed since the delivery of
Borrower's last Compliance Certificate.
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IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of _______________, ___________.
CRAY INC.,
a Washington corporation
By:_____________________
Name:___________________
Title:__________________
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SCHEDULE 1
FINANCIAL
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SCHEDULE 2
DEFAULT OR EVENT OF DEFAULT
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SCHEDULE 3
REPRESENTATIONS AND WARRANTIES
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SCHEDULE 4
FINANCIAL COVENANTS
1. MINIMUM EBITDA.
Parent's and its Subsidiaries' EBITDA, tested as of the last day of each
fiscal quarter of Parent, for the most recently completed [6] [9] [12] [AS
APPROPRIATE] month period ending _________, ________ is $______________, which
amount [IS/IS NOT] greater than or equal to the amount set forth in Section
6.16(a)(i) of the Credit Agreement for the corresponding period.
2. MINIMUM RECURRING REVENUES.
Parent's and its Subsidiaries' Recurring Revenues, tested as of the last
day of each fiscal quarter of Parent, for the most recently completed [6] [9]
[12] [AS APPROPRIATE] month period ending _________, ________ are
$______________, which amount [IS/IS NOT] greater than or equal to the amount
set forth in Section 6.16(a)(ii) of the Credit Agreement for the corresponding
period.
3. CAPITAL EXPENDITURES.
Parent's and its Subsidiaries' Capital Expenditures, for the [FISCAL
YEAR ENDING _________, ________ ARE $____________] [FOR THE FIRST SIX MONTH OF
THE FISCAL YEAR ENDING _________, ________ ARE $____________] [AS APPROPRIATE],
which amount [IS/IS NOT] less than or equal to the amount set forth in Section
6.16(b)(i) of the Credit Agreement for the corresponding period. [WITH RESPECT
TO PARENT'S AND ITS SUBSIDIARIES' FISCAL YEAR ENDING 1995, PARENT'S AND ITS
SUBSIDIARIES' CAPITAL EXPENDITURES CONSISTING OF "PURCHASE OF PROPERTY AND
EQUIPMENT" ARE $______________, WHICH AMOUNT [IS/IS NOT] LESS THAN OR EQUAL TO
THE AMOUNT SET FORTH IN SECTION 6.16(B)(I) OF THE CREDIT AGREEMENT.]
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SCHEDULE 5
[10-Q QUARTERLY REPORT/10-K ANNUAL REPORT]
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