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                                                                   EXHIBIT 10.17

                       FIRST AMENDMENT TO CREDIT AGREEMENT

      THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of March 5, 2004, 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 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, the parties hereto agree that the Credit
Agreement shall be amended as follows:

      1. The following is hereby added to the Credit Agreement as Section 1.1.
(c):

                  "(c) Letter of Credit Subfeature. As a subfeature under the
            Line of Credit, Bank agrees from time to time during the term
            thereof to issue or cause an affiliate to issue standby letters of
            credit for the account of Borrower (each, a "Letter of Credit" and
            collectively; "Letters of Credit"); provided however, that the
            aggregate undrawn amount of all outstanding Letters of Credit shall
            not at any time exceed Ten Million Dollars ($10,000,000.00). The
            form and substance of each Letter of Credit shall be subject to
            approval by Bank, in its sole discretion. No Letter of Credit shall
            have an expiration date subsequent to the maturity date of the Line
            of Credit. The undrawn amount of all Letters of Credit shall be
            reserved under the Line of Credit and shall not be available for
            borrowings thereunder. Each Letter of Credit shall be subject to the
            additional terms and conditions of the Letter of Credit agreements,
            applications and any related documents required by Bank in
            connection with the issuance thereof. Each drawing paid under a
            Letter of Credit shall be deemed an advance under the Line of Credit
            and shall be repaid by Borrower in accordance with the terms and
            conditions of this Agreement applicable to such advances; provided
            however, that if advances under the Line of Credit are not
            available, for any reason, at the time any drawing is paid, then
            Borrower shall immediately pay to Bank the full amount drawn,
            together with interest thereon from the date such drawing is paid to
            the date such amount is fully repaid by Borrower, at the rate of
            interest applicable to advances under the Line of Credit. In such
            event Borrower agrees that

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            Bank, in its sole discretion, may debit any account maintained by
            Borrower with Bank for the amount of any such drawing."

      2. The following is hereby added to the Credit Agreement as Section 1.2.
(d):

                  "(d) Letter of Credit Fees. Borrower shall pay to Bank fees
            upon the issuance of each Letter of Credit, upon the payment or
            negotiation of each drawing under any Letter of Credit and upon the
            occurrence of any other activity with respect to any Letter of
            Credit (including without limitation, the transfer, amendment or
            cancellation of any Letter of Credit) determined in accordance with
            Bank's standard fees and charges then in effect for such activity.
            Fees will be payable quarterly in arrears for each Letter of Credit
            issued."

      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/ Scott J. Poteracki                        By: /s/ Russ Carson
    -----------------------                           --------------------------
    Scott J. Poteracki,                               Russ Carson,
    CFO                                               Assistant Vice President

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