EXHIBIT 10.19
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of November 29, 2004, by and between CRAY INC., a Washington corporation
("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of April 10, 2003, as amended from time to time ("Credit Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and subject to the conditions set forth in this
Amendment, the parties hereto agree that the Credit Agreement shall be amended
as follows:
1. Section 1.1(a) is hereby amended to reflect that (a) the last day on
which Bank will make advances under the Line of Credit is December 10, 2004, (b)
the maximum aggregate amount of advances to which Borrower is entitled to under
the Line of Credit after the date of this Amendment is $2,000,000, and (c) all
overdrafts in any of Borrower's accounts with Bank shall constitute advances
under the Line of Credit whether or not such overdrafts occur after the
expiration of the Line of Credit or exceed the maximum amount of advances
described in clause (b). Borrower acknowledges that clause (c) above does not
constitute a commitment of Bank to permit overdrafts in any of Borrower's
accounts with Bank.
2. Section 1.1(c) is hereby amended to reflect that Bank has no further
commitment to issue additional letters of credit under the letter of credit
subfeature of the Line of Credit other than one letter of credit in the amount
of $927,811 naming Public Procurement Service as the beneficiary. The Borrower's
existing letters of credit and the letter of credit described in the immediately
preceding sentence do not constitute advances for purposes of Section 1(b)
above.
3. Section 1.2(c) is hereby amended to reflect that effective on the date
of this Amendment, the unused commitment fee provided for therein shall cease to
accrue.
4. The maturity date of Line of Credit is hereby extended until December
10, 2004. The promissory note dated as of April 10, 2003, executed by Borrower
and payable to the order of Bank which evidences the Line of Credit is hereby
amended to reflect the December 10, 2004 maturity date. All other terms and
conditions of the Note remain in full force and effect, without waiver or
modification.
5. Borrower acknowledges that Bank has not committed to make any renewal
or further extension of the expiration date or maturity date of the Line of
Credit beyond December 10, 2004, and that any such renewal or further extension
remains in the sole discretion of Bank. This Amendment constitutes the entire
agreement between Bank and Borrower with respect to
the expiration date and the maturity date extension for the Line of Credit, and
supersedes all prior negotiations, discussions and correspondence concerning
such extension.
6. There is added to the Credit Agreement the following:
SECTION 7.12. SUBORDINATED DEBT.
(a) Borrower has informed Bank that it intends to issue up to
$80,000,000 of convertible senior subordinated notes (the "Notes").
Borrower agrees that in the event the Notes are issued by Borrower, the
Notes shall be issued pursuant to an Indenture in a form that contains
definitions of the terms "Designated Senior Debt", "Indebtedness", "Senior
Credit Facility" and "Senior Debt" substantially similar to those
contained in the draft Indenture sent to the Bank by Xxxxxx & Xxxxxxx via
email on November 19, 2004 at 9:46 a.m., Seattle time (the "Draft
Indenture"), as well as subordination provisions substantially similar to
the subordination provisions set forth in Article XIII of the Draft
Indenture.
(b) Until such time as all obligations of Borrower under the Credit
Agreement and the Line of Credit are satisfied in full, Borrower will not
amend or consent to the amendment of the provisions of the Indenture
described in paragraph (a) above.
(c) Borrower will not prepay, redeem or defease any of the Notes
unless there is (i) no outstanding amount under the Line of Credit
(provided that there can be outstanding Letters of Credit) and (ii) no
Event of Default under the Credit Agreement.
(d) Borrower shall not use the Line of Credit as a source of funds
to prepay, redeem or defease any of the Notes."
7. The modifications set forth in this Amendment shall not be effective
unless and until Borrower has executed and delivered to Bank this Amendment and
Borrower has paid to Bank a non-refundable fee of $9,000.
8. In the event that Bank receives and approves, on or before December 10,
2004, from Bear, Xxxxxxx & Co. Inc. (or one or more of its affiliates), a
purchase agreement to purchase Notes in the initial aggregate principal amount
of not less than $50,000,000, then the Credit Agreement shall be deemed further
amended by amending Sections 1,4 and 5 of this Amendment to delete all
references in such Sections to the date "December 10, 2004", and to replace such
date with the date "December 15, 2004".
9. Promptly upon demand by Bank, Borrower shall reimburse Bank for
attorneys' fees incurred by Bank in connection with this Amendment and Bank's
consent to the issuance of the Notes.
10. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
11. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor
any condition, act or event which with the giving of notice or the passage of
time or both would constitute any such Event of Default, other than financial
covenant defaults that the Bank has previously waived. The Bank confirms that
its existing waivers continue in effect through the maturity date of the Line of
Credit.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
CRAY INC. NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx
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Title: Senior Vice President Title: AVP / Relationship Mgr
