Exhibit 10.42FIRST AMENDMENT TO CREDIT AGREEMENT     THISAMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of January 31, 2007, byand between CRAY INC., a Washington corporation (“Borrower”), and WELLS FARGO BANK, NATIONALASSOCIATION (“Bank”).RECITALS     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of thatcertain Credit Agreement between Borrower and Bank dated as ofDecember 29, 2006, as amended from time to time (“CreditAgreement”).     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth inthe 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 herebyacknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:     1. Notwithstanding anyprovision to the contrary in the Credit Agreement or in the Line ofCredit Note, the maximum amount available for advances and Letters of Credit under theLine of Credit shall at all times be reduced by an amount equal to the Maximum PotentialExposure (defined below) of all outstanding foreign exchangecontracts between Borrower and Bank. If at any time, the sum of (a)the outstanding principal balance of advances under theLine 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) theamount of the Maximum Potential Exposure exceeds $25,000,000.00, Borrower shall on demandby Bank (a) make a principal reduction of the outstanding principal balance of the Lineof Credit in the amount of such excess, or (b) if no advances are outstanding, providecash collateral (maintained at Bank and which may be in thesecurities account which secures Borrower’s obligations to Bank hereunder) in the amount of such excess as securityfor Borrower’s liability under Letters of Credit and/or foreign exchange contracts in theamount of such excess. The foregoing cash collateral requirement is in addition toBorrower’s requirement to maintain the Collateral Value of the SecuritiesAccount equal to at least $25,000,000.00 as set forth in the Amended and RestatedAddendum to Security Agreement dated as of the date hereof executed by Borrower and Bank.     2. Thefollowing are hereby added to the Credit Agreement as Sections 1.1(d) and (e):     “(d)Foreign Exchange Facility. Subject to the terms and conditions ofthis Agreement, Bank hereby agrees to make available to Borrower afacility (the “Foreign Exchange Facility”) under whichBank, from time to time up to andincluding December 1, 2008, will enter into “payment versusdelivery” foreignexchange contracts for the account of Borrower for the purchaseand/or sale byBorrower in United States dollars of Japanese yen, Euros, Pound Sterling; providedhowever, that no such foreign exchange contract shall be entered into if theMaximum Potential Exposure (as defined below) at such time is, or if the contract were entered into, would be inexcess of Ten Million United States
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Dollars (US$10,000,000.00). No foreign exchange contract shall be executed for aterm in excess of twelve (12) months or for a term which extends beyond December1, 2008. All foreign exchange transactions shall be subject to theadditional terms of a Foreign Exchange Agreement dated as of January 24, 2006 (“ForeignExchange Agreement ”), all terms of which are incorporated herein by thisreference. The term “Maximum Potential Exposure” means atany time the amount of Borrower’s maximum potential liability toBank under (i) all foreign exchange contracts outstanding at suchtime, and (ii) as applicable, all foreign exchangecontracts requested by Borrower at such time, as determind byBank.(e) Settlement. Each foreign exchange contract under the Foreign ExchangeFacility shall be settled on its maturity date by Bank’s debit to any depositaccount maintained by Borrower with Bank”.     3. Except as specifically provided herein, all terms and conditions of the CreditAgreement remain in full force and effect, without waiver or modification. All termsdefined in the Credit Agreement shall have the same meaning when usedin this  Amendment. This Amendment and the Credit Agreement shall be read together, as onedocument.     4. Borrower hereby remakes all representations and warranties contained in the CreditAgreement and reaffirms all covenants set forth therein. Borrower further certifies thatas of the date of this Amendment there exists no Event of Default asdefined in the Credit Agreement, nor any condition, act or event which with the giving of notice or thepassage of time or both would constitute any such Event of Default.**ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TOFORBEAR 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 andyear 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