exv10w42



 





Exhibit 10.42




FIRST AMENDMENT TO CREDIT AGREEMENT




     THIS
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of January 31, 2007, by
and between CRAY INC., a Washington corporation (“Borrower”), and WELLS 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
December 29, 2006, 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, the parties hereto agree that the Credit Agreement shall be amended as follows:



     1. Notwithstanding any
provision to the contrary in the Credit Agreement or in the Line of
Credit Note, the maximum amount available for advances and Letters of Credit under the
Line of Credit shall at all times be reduced by an amount equal to the Maximum Potential
Exposure (defined below) of all outstanding foreign exchange
contracts between Borrower and Bank. If at any time, the sum of (a)
the outstanding principal balance of advances under the
Line of Credit, (b) the amount available to be drawn under outstanding Letters of Credit,
(c) amounts drawn under Letters of Credit and not yet reimbursed to Bank, and (d) the
amount of the Maximum Potential Exposure exceeds $25,000,000.00, Borrower shall on demand
by Bank (a) make a principal reduction of the outstanding principal balance of the Line
of Credit in the amount of such excess, or (b) if no advances are outstanding, provide
cash collateral (maintained at Bank and which may be in the
securities account which secures Borrower’s
 obligations to Bank hereunder) in the amount of such excess as security
for Borrower’s liability under Letters of Credit and/or foreign exchange contracts in the
amount of such excess. The foregoing cash collateral requirement is in addition to
Borrower’s requirement to maintain the Collateral Value of the Securities
Account equal to at least $25,000,000.00 as set forth in the Amended and Restated
Addendum to Security Agreement dated as of the date hereof executed by Borrower and Bank.



     2. The
following are hereby added to the Credit Agreement as Sections 1.1(d) and (e):




     “(d)
Foreign Exchange Facility. Subject to the terms and conditions of
this Agreement, Bank hereby agrees to make available to Borrower a
facility (the “Foreign Exchange Facility”) under which
Bank, from time to time up to and
including December 1, 2008, will enter into “payment versus
delivery” foreign
exchange contracts for the account of Borrower for the purchase
and/or sale by
Borrower in United States dollars of Japanese yen, Euros, Pound Sterling; provided
however, that no such foreign exchange contract shall be entered into if the
Maximum Potential Exposure (as defined below) at such time is, or if the contract were entered into, would be in
excess of Ten Million United States



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Dollars (US$10,000,000.00). No foreign
 exchange contract shall be executed for a
term in excess of twelve (12) months or for a term which extends beyond December
1, 2008. All foreign exchange transactions shall be subject to the
additional terms of a Foreign Exchange Agreement dated as of January 24, 2006 (“Foreign
Exchange Agreement ”), all terms of which are incorporated herein by this
reference. The term “Maximum Potential Exposure” means at
any time the amount of Borrower’s maximum potential liability to
Bank under (i) all foreign exchange contracts outstanding at such
time, and (ii) as applicable, all foreign exchange
contracts requested by Borrower at such time, as determind by
Bank.



(e) Settlement. Each foreign exchange contract under the Foreign Exchange
Facility shall be settled on its maturity date by Bank’s debit to any deposit
account maintained by Borrower with Bank”.



     3. 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.



     4. 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.


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.




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	WELLS FARGO BANK,	 	 
	CRAY INC.	 	 	 	  NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Brian C. Henry
	 	 	 	By:
	 	/s/ Russell Carson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Brian C. Henry, Executive Vice
	 	 	 	 	 	Russell Carson, Relationship Manager

	 	 
	 

	 	President, Chief Financial Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kenneth W. Johnson	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Kenneth W. Johnson, Senior V.P.,	 	 	 	 	 	 	 	 
	 

	 	General Counsel, Corporate Secretary	 	 	 	 	 	 	 	 







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