<PAGE>   1

                                                                    Exhibit 10.3

                              TECHNOLOGY AGREEMENT

        This Agreement ("Technology Agreement") is made, entered into, and to be
effective as of the Closing Date (as defined below) by and between Silicon
Graphics, Inc., a Delaware corporation ("Seller") and Tera Computer Company, a
Washington corporation, ("Purchaser").

                                    RECITALS

        WHEREAS, Purchaser desires to purchase and acquire from Seller, and
Seller desires to sell, assign, license and transfer to Purchaser, certain
business, property, technology, assets and goodwill of the Business on the terms
and subject to the conditions of this Technology Agreement.

        WHEREAS, as part of the foregoing, Seller and Purchaser have entered
into an Asset Purchase Agreement dated as of March 1, 2000 (the "Asset Purchase
Agreement Date");

        WHEREAS the Parties desire to enter into this ancillary Technology
Agreement pursuant to which Seller will assign and license to the Purchaser
certain intellectual property specifically related to the Cray Products sold in
connection with the Business, and Purchaser will license back certain rights to
Seller.

        NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements, provisions and covenants contained in this Technology
Agreement, the Parties hereby agree as follows:

1.      DEFINITIONS

        1.1.    The Parties to this Technology Agreement hereby incorporate by
                reference the definition set forth in the Asset Purchase
                Agreement.

        1.2.    "Affiliates" shall mean any corporation or other entity that is
                directly or indirectly controlling, controlled by or under
                common control with a Party. For the purpose of this definition,
                "control" shall mean the direct or indirect ownership of more
                than fifty percent (50%) of the capital stock of the subject
                entity entitled to vote in the election of directors (or, in the
                case of an entity that is not a corporation, interests entitled
                to vote in the election of the corresponding managing
                authority).

        1.3.    "Capture Period" means the period starting on the Asset Purchase
                Agreement Date and ending one (1) year therefrom .

        1.4.    "Closing Date" means March 31, 2000.

        1.5.    "Cray Heritage MPP Products" ("CHMPP") means the T3D and T3E
                computer systems as of the Closing Date, and a T3E derivative
                product as specifically defined below (" T3Eplus"). "T3Eplus"
                means a T3E computer system that has



<PAGE>   2

                been modified by (i) enabling adaptive routing; (ii) increasing
                system frequency through clock speed enhancements to the EV4,
                EV5 or EV56 Alpha processors and corresponding bus multiplier
                changes; (iii) supporting through software warm reboot or
                dynamic system reconfiguration; (iv) adding support for I/O
                controller upgrades (i.e., support for industry standard I/O
                cards); or (v) other minor repackaging or remanufacturing
                changes of components (e.g., redesign of the clock chip to
                ensure an on-going supply). CHMPP shall not include successor
                products to the T3D or T3E other than a T3Eplus derivative
                product expressly defined above. For example, CHMPP shall not
                include a "T3F" or other distributed shared memory parallel
                processor computer system derived from the CHMPP Non-Patent
                Intellectual Property that incorporate performance enhancing
                engineering changes extending the architecture of the T3D and
                T3E such as by (a) use of a next generation processor (e.g.,
                Alpha EV6 or later, or IA64), (b) reengineering and redesigning
                of ASICs or system boards to increase performance and
                functionality or (c) reengineering and redesigning the operating
                system to increase performance or retarget applications.

        1.6.    "Cray Heritage Vector Products" ("CHVP") means the Cray 1, X-MP,
                X-MP EL, XMS, Y-MP, YMP EL, IOS-E, IOS-F, Cray 2, C90, T90, J90,
                SV1, SV1e and SV1ex.

        1.7.    "Cray Products" means CHMPP, CHVP, SV2 and Cray Software
                products.

        1.8.    "Cray Software Products" means UNICOS and other software
                products designated "assigned to Cray" on Schedules G and H.

        1.9.    "Documentation" means publications and documentation for the
                Cray Products used in the Business.

        1.10.   "Front End Host Computer" means a general purpose computer that
                is connected to a specialized back-end computing system and is
                responsible for performing general-purpose computing and I/O
                tasks for the specialized back-end computing system, including
                but not limited to, handling all network and tape I/O,
                hierarchical storage management, and compilation tasks for the
                back-end computing system.

        1.11.   "Intellectual Property Right" shall mean (i) Patents; (ii)
                copyrights in both published works and unpublished works,
                registrations and applications therefor and associated moral
                rights (collectively "Copyrights"); (iii) rights in mask works
                (collectively "Maskworks"); (iv) Know-How; (v) Software; (vi)
                trade secrets, confidential information, technical information,
                data, plans, drawings, and blue prints (collectively "Trade
                Secrets") whether arising under the laws of the United States or
                any other state, country or jurisdiction; and (vii) common law,
                state, federal, international and statutory rights in any
                trademarks,



                                       2
<PAGE>   3

                trademark registrations and applications, service marks, trade
                names, corporate names and fictitious names (collectively
                "Trademarks").

        1.12.   "Non-Patent Intellectual Property Rights" means Trade Secrets,
                Know-How, Maskworks, and Copyrights.

        1.13.   "Patents" means all classes or types of patents, design patents,
                utility patents, including, without limitation, originals,
                divisions, continuations, continuations-in-part, extensions,
                reexaminations, or reissues, patent applications and invention
                disclosures for these classes or types of patent rights in all
                countries of the world listed on Schedules A and B.

        1.14.   "Purchaser Capture Period Patents" means only those patents and
                patent applications filed by Purchaser that have an earliest
                effective filing date during the Capture Period and constitute
                inventions arising from improvements to the Intellectual
                Property Rights assigned or licensed herein.

        1.15.   "Purchaser Products" means the Cray Products and Vector
                Supercomputers distributed, licensed and/or sold by Purchaser.

        1.16.   "Seller Exclusive Issued Patents" means all Patents in all
                countries of the world (other than design patents) assigned or
                exclusively licensed to the Seller as of the Closing Date that
                are not otherwise assigned or licensed to Purchaser in this
                Technology Agreement.

        1.17.   "Seller Group" means Seller and it's Affiliates.

        1.18.   "Seller Products" means any hardware or software products, or
                combinations thereof, distributed, licensed and/or sold by
                Seller, excluding the Cray Products.

        1.19    "Software" means a set of statements or instructions to be used
                directly or indirectly in a computer in order to bring about a
                certain result.

        1.20.   "Source" shall mean the latest commercially released or
                internally accepted version of source code, and prior versions
                to the extent reasonably available, corresponding to the
                specifically identified intellectual property asset.

        1.21    "SV2" means the (i) Vector Processor-based supercomputer system
                under design by Seller as of the Closing Date, (ii) targeted for
                the high performance technical computing market.

        1.22.   "Vector Processor" means an integrated circuit or collection of
                integrated circuits configured to process instructions wherein
                the instruction set exposes user registers with more than two
                64-bit or greater elements and is designed,



                                       3
<PAGE>   4

                marketed and optimized for performing vector-based computational
                operations.

        1.23    "Vector Supercomputer" means hardware, software and combinations
                thereof for a scaleable Vector Processor based high performance
                computer system.

2.      TECHNOLOGY RIGHTS

        2.1.    Patents Assigned to Purchaser. Seller hereby sells, conveys,
                assigns and transfers to Purchaser, and Purchaser hereby
                accepts, all of Seller's right, title and interest in and to the
                Patents listed in the Schedule A (Assigned Patents), together
                with all ancillary rights thereto, including without limitation,
                the right to sue and recover damages for past, present and
                future infringements and to fully and entirely stand in the
                place of Seller in all matters related thereto. Upon Purchaser's
                reasonable request, Seller agrees to take further action and to
                execute such additional documents at Purchaser's expense as may
                be necessary to perfect Purchaser's title in and to the Assigned
                Patents.

                2.1.1   Patent License to Seller in Assigned Patents. Purchaser
                        grants to Seller a non-exclusive, royalty-free,
                        fully-paid, perpetual, worldwide license, without the
                        right to grant sublicenses to others, to make, have
                        made, use, import, sell, practice any method of
                        manufacture, and otherwise dispose of Seller's Products
                        under the Assigned Patents listed on Schedule A and
                        Purchaser Capture Period Patents.

        2.2.    Patents Licensed to Purchaser. Seller hereby grants to the
                Purchaser, a non-exclusive, royalty-free, fully-paid, worldwide
                license, without the right to grant sublicenses to others, to
                make, have made, use, import and sell Purchaser Products, and to
                practice any method of manufacture in connection with the
                Purchaser Products, under the Patents listed on Schedule B.

        2.3.    Non-Patent Intellectual Property Rights in CHVP Assigned to
                Purchaser. Seller hereby sells, conveys, assigns and transfers
                to Purchaser, and Purchaser hereby accepts, all of Seller's
                right, title and interest in and to the Non-Patent Intellectual
                Property Rights listed in the Schedule C, together with all
                ancillary rights thereto, including without limitation, the
                right to sue and recover damages for past, present and future
                infringements and to fully and entirely stand in the place of
                Seller in all matters related thereto. Upon Purchaser's
                reasonable request, Seller agrees to take further action and to
                execute such additional documents at Purchaser's expense as may
                be necessary to perfect Purchaser's title in and to the
                Non-Patent Intellectual Property Rights listed on Schedule C.

                2.3.1   Non-Patent Intellectual Property Rights in CHVP Licensed
                        to Seller. Purchaser grants to Seller a nonexclusive,
                        royalty-free, fully-paid, perpetual, worldwide license,
                        without the right to grant sublicenses to



                                       4
<PAGE>   5

                        others, to practice any method of manufacture and to
                        make, have made, use, import and sell Seller Products
                        under the Non-Patent Intellectual Property Rights listed
                        on Schedule C.

        2.4.    Non-Patent Intellectual Property Rights in CHMPP Licensed to
                Purchaser. Seller hereby grants to the Purchaser, a
                non-exclusive, royalty-free, fully-paid, worldwide license,
                without the right to grant sublicenses to others, to make, have
                made, use, import and sell Purchaser Products, under the
                Non-Patent Intellectual Property Rights listed on Schedule D.

                2.4.1   Exclusive Right to Manufacture the CHMPP. Seller further
                        grants to Purchaser the exclusive, royalty-free, fully
                        paid, worldwide right under the Non-Patent Intellectual
                        Property Rights listed on Schedule D to manufacture
                        CHMPP products.

        2.5.    Non-Patent Intellectual Property Rights in SV2 Assigned to
                Purchaser. Seller hereby sells, conveys, assigns and transfers
                to Purchaser, and Purchaser hereby accepts, all of Seller's
                right, title and interest in and to the Non-Patent Intellectual
                Property Rights listed in the Schedule E, together with all
                ancillary rights thereto, including without limitation, the
                right to sue and recover damages for past, present and future
                infringements and to fully and entirely stand in the place of
                Seller in all matters related thereto. Upon Purchaser's
                reasonable request, Seller agrees to take further action and to
                execute such additional documents at Purchaser's expense as may
                be necessary to perfect Purchaser's title in and to the
                Non-Patent Intellectual Property Rights listed on Schedule E.

                2.5.1   Non-Patent Intellectual Property Rights in SV2 Licensed
                        to Seller. Purchaser grants to Seller a nonexclusive,
                        royalty-free, fully-paid, perpetual, worldwide license,
                        without the right to grant sublicenses to others, to
                        make, have made, use, import and sell Seller Products,
                        and to practice any method of manufacture, under the
                        Non-Patent Intellectual Property Rights listed on
                        Schedule E.

                2.5.2   Non-Patent Intellectual Property Rights Licensed to
                        Purchaser. Seller hereby grants to the Purchaser, a
                        non-exclusive, royalty-free, fully-paid, worldwide
                        license, without the right to grant sublicenses to
                        others, to make, have made, use, import and sell
                        Purchaser Products, under the Non-Patent Intellectual
                        Property Rights listed on Schedule F.

                2.5.3   Intellectual Property Rights in the SV2 Retained by
                        Seller. The Parties acknowledge that the SV2, in its
                        current stage of development, may include certain
                        Intellectual Property Rights owned by Seller that are
                        not being assigned, licensed or otherwise transferred to
                        Purchaser, including without limit, the components
                        listed in Schedule L. Except



                                       5
<PAGE>   6

                        for the specific rights granted to Purchaser herein, all
                        other Intellectual Property Rights in the SV2 are
                        expressly excluded.

        2.6.    Assignment of Software and Documentation to Purchaser. Seller
                hereby sells, conveys, assigns and transfers to Purchaser, and
                Purchaser hereby accepts, all of Seller's right, title and
                interest in and to the Software and Documentation designated on
                Schedules G and H as "Assign" to Purchaser, together with all
                ancillary rights thereto, including without limitation, the
                right to sue and recover damages for past, present and future
                infringements and to fully and entirely stand in the place of
                Seller in all matters related thereto. Upon Purchaser's
                reasonable request, Seller agrees to take further action and to
                execute such additional documents at Purchaser's expense as may
                be necessary to perfect Purchaser's title in and to the assigned
                Intellectual Property Rights on Schedules G and H.

                2.6.1   Modified Source Distribution License to Seller for
                        UNICOS. Purchaser hereby grants to the Seller a
                        non-exclusive, royalty-free, fully-paid, perpetual,
                        worldwide license, to the UNICOS Software designated on
                        Schedule H as "Assign" to Purchaser, to use, modify and
                        create derivative source and object code works from the
                        associated source code, including the right to
                        distribute the source or derivatives, or derived object
                        code to third parties solely as enhancements or
                        modifications of Seller Products.

                2.6.2   "Republication" License to Seller. Purchaser hereby
                        grants to the Seller a non-exclusive, royalty-free,
                        fully-paid, perpetual, worldwide license, to the
                        Documentation designated on Schedule G as "Assign" to
                        Purchaser and "Republication" to SGI to reproduce,
                        recreate or republish the associated publications or
                        documentation (Republished Works) for use in connection
                        with the Seller Products, under the condition that no
                        improper use is made of the Trademarks listed on
                        Schedule K. To the extent that Seller provides service
                        and/or support for Purchaser Products, Purchaser grants
                        to the Seller a non-exclusive, royalty-free, fully-paid,
                        perpetual, worldwide license, to the Documentation
                        designated on Schedule G as "Assign" to Purchaser to
                        reproduce, recreate or republish the associated
                        publications or documentation (Republished Works) for
                        use in connection with the Purchaser Products.

                2.6.3   "Source-Only" License to Seller. Purchaser hereby grants
                        to the Seller a non-exclusive, royalty-free, fully-paid,
                        worldwide license to use, modify, and create derivative
                        source and object code works from the associated source
                        code solely for internal use in connection with the
                        design, manufacture and distribution of Seller Products,
                        without the



                                       6
<PAGE>   7

                        right to grant sublicenses or distribute, under the
                        Software and Documentation designated on Schedule G as
                        "Assign" to Purchaser and "Source-Only" to SGI.

                2.6.4   "Source-Binary Distribution" License to Seller.
                        Purchaser hereby grants to the Seller a non-exclusive,
                        royalty-free, fully-paid, worldwide license to use,
                        modify and create source and object code works from the
                        associated source code and distribute object code
                        derived from the source or its derivatives to third
                        parties, solely for Seller Products, without rights to
                        sublicense or distribute source code or source
                        derivatives to third parties other than source that is
                        licensed to customers solely for its use in connection
                        with the support or service of a Seller Product, under
                        the Software designated on Schedule G as "Assign" to
                        Purchaser and "Source-Binary Distribution" to SGI.

                2.6.5   "Source Distribution" License to Seller. Purchaser
                        hereby grants to the Seller a non-exclusive,
                        royalty-free, fully-paid, worldwide license to use,
                        modify and create derivative source and object code
                        works from the associated source code, including the
                        right to distribute and sublicense the source or
                        derivatives, or derived object code to third parties,
                        under the Software designated on Schedule G as "Assign"
                        to Purchaser and "Source Distribution" to SGI.

        2.7.    "Binary-Only" License to Purchaser. Seller hereby grants to the
                Purchaser five (5), royalty-free, non-exclusive, worldwide
                licenses to use in binary form, without the right to grant
                sublicenses or distribute, for internal use on Purchaser
                Products, under the Software designated on Schedule G as
                "Binary-Only" to Purchaser, if any, subject to Seller's standard
                terms and conditions for such software and only for those
                versions of the Software that is made commercially available by
                Seller within one-year of the Closing Date.

        2.8.    "Source-Only" License to Purchaser. Seller hereby grants to the
                Purchaser a non-exclusive, royalty-free, fully-paid, worldwide
                license to use, modify, and create derivative source and object
                code works from the associated source code solely for internal
                use in connection with the design, manufacture and distribution
                of Purchaser Products, without the right to grant sublicenses or
                distribute, under the Software and Documentation designated on
                Schedule G as "Source-Only" to Purchaser.

        2.9.    "Source-Binary Distribution" License to Purchaser. Seller hereby
                grants to the Purchaser a non-exclusive, royalty-free,
                fully-paid, worldwide license to use, modify and create source
                and object code works from the associated source code and
                distribute object code derived from the source or its
                derivatives to third parties, solely for Purchaser Products,
                without rights to sublicense or



                                       7
<PAGE>   8

                distribute source code or source derivatives to third parties
                other than source that is licensed to customers solely for its
                use in connection with the support or service of a Purchaser
                Product, under the Software designated on Schedule G as
                "Source-Binary Distribution" to Purchaser.

        2.10.   "Source Distribution" License to Purchaser. Seller hereby grants
                to the Purchaser a non-exclusive, royalty-free, fully-paid,
                worldwide license to use, modify and create derivative source
                and object code works from the associated source code, including
                the right to distribute and sublicense the source or
                derivatives, or derived object code to third parties, under the
                Software designated on Schedule G as "Source Distribution" to
                Purchaser.

        2.11.   "Republication" License to Purchaser. Seller hereby grants to
                the Purchaser a non-exclusive, royalty-free, fully-paid,
                worldwide license, to the Documentation designated on Schedule G
                as "Republication" to Purchaser to reproduce, recreate or
                republish the associated publications or documentation
                (Republished Works) for Purchaser Products, provided that
                Purchaser may not use Seller's trademarks without the written
                approval from Seller, which approval shall not be unreasonably
                withheld.

        2.12.   "Source-Only" License under IRIX to Purchaser. Seller hereby
                grants to the Purchaser a non-exclusive, royalty-free,
                fully-paid, worldwide license to use, modify, and create
                derivative source and object code works from the associated
                source code solely for internal development of the SV2, without
                the right to grant sublicenses or distribute, under the Software
                and Documentation designated on Schedule I as "Source-Only" to
                Purchaser.

        2.13.   "Source-Binary" Development License to Purchaser under IRIX.
                Seller hereby grants to the Purchaser a non-exclusive,
                royalty-free, fully-paid, worldwide license to use and modify,
                without rights to sublicense or distribute to third parties, to
                create derivative source and object code works from the Software
                designated on Schedule I as "SV2 IRIX Source-Binary
                Distribution" to Purchaser, solely for the SV2, provided that
                all licenses granted to the Software on Schedule I under the
                heading "Specially-Protected IRIX Source" shall terminate
                immediately if (i) the Purchaser transfers, whether by sale,
                assignment, merger, operation of law or otherwise any of its
                rights under this Technology Agreement or (ii) upon a Purchaser
                Change of Control. As used in sections 2.13 and 2.14, "Purchaser
                Change of Control" shall mean more than thirty percent (30%) of
                the outstanding shares or securities (representing the right to
                vote for the election of directors or other managing authority)
                of Purchaser becomes owned or controlled, directly or
                indirectly, by any person (as such term is used in section 13(d)
                and section 14(d)(2) of the Securities and Exchange Act of 1934,
                as amended (the "Exchange Act"), as in effect on the



                                       8
<PAGE>   9

                Closing Date) or related persons constituting a group (as such
                term is used in Rule 13d-5 under the Exchange Act).

        2.14.   "Source-Binary Distribution" License to Purchaser under IRIX.
                Seller hereby grants to the Purchaser a non-exclusive, worldwide
                license to distribute the derivative works licensed under
                Section 2.13 in object code form solely for use on the SV2,
                subject to a license fee paid by Purchaser to Seller of five
                thousand dollars ($5,000.00) for each such license granted and
                without rights to sublicense or distribute source code or source
                derivatives to third parties other than source that is licensed
                to customers solely for its use in connection with the support
                or service of an SV2, under the Software designated on Schedule
                I as "SV2 IRIX Source-Binary Distribution" to Purchaser,
                provided that all licenses granted to the Software on Schedule I
                under the heading "Specially-Protected IRIX Source" shall
                terminate immediately if (i) the Purchaser transfers, whether by
                sale, assignment, merger, operation of law or otherwise any of
                its rights under this Technology Agreement or (ii) upon a
                Purchaser Change of Control.

        2.15.   Assignment of Rights in Third Party Licenses and Contracts to
                Purchaser. To the extent permitted by the underlying contracts
                and licenses, and subject to all of the rights, conditions and
                obligations contained therein, Seller assigns and transfers to
                Purchaser, and Purchaser hereby accepts, all of Seller's rights
                and obligations under the contracts and licenses designated on
                Schedule J. Upon Purchaser's reasonable request, Seller agrees
                to take further action and to execute such additional documents
                at Purchaser's expense as may be necessary to perfect
                Purchaser's title in and to the assigned Intellectual Property
                Rights designated on Schedule J.

        2.16.   Trademarks Assigned to Purchaser. Seller hereby sells, conveys,
                assigns and transfers to Purchaser, and Purchaser hereby
                accepts, any and all of Seller's right, title and interest in
                and to the Trademarks designated on Schedule K ("Assigned
                Trademarks"), together with the goodwill of the Business
                connected with the use of and symbolized by the Trademarks,
                including without limitation, the right to sue and recover
                damages for past, present and future infringements and to fully
                and entirely stand in the place of Seller in all matters related
                thereto. Upon Purchaser's reasonable request, Seller agrees to
                take further action and to execute such additional documents at
                Purchaser's expense as may be necessary to perfect Purchaser's
                title in and to the Assigned Trademarks.

        2.17.   Right to Retain Information. Seller shall have the right to
                retain copies of all materials included in and associated with
                the Intellectual Property Rights assigned to Purchaser in this
                Section 2.



                                       9
<PAGE>   10

        2.18.   No Other Rights To the extent that any of the Intellectual
                Property Rights covered or identified in this Technology
                Agreement are not expressly assigned or licensed, all such
                Intellectual Property Rights shall remain with the Seller. No
                other rights are granted hereunder, by implication, estoppel,
                statute or otherwise, except as expressly provided herein.
                Except as expressly provided in this Section 2, nothing in the
                licenses granted hereunder or otherwise contained in this
                Technology Agreement shall expressly or by implication, estoppel
                or otherwise give either party any right to license the other
                Party's Intellectual Property to third parties. No license or
                immunity is granted by either Party hereto directly or by
                implication, estoppel or otherwise to any third parties
                acquiring products from either Party for the combination of such
                products with other items or for the use of such combination.

        2.19    Residuals. Notwithstanding anything herein to the contrary,
                either party may use Residuals for any purpose, including use in
                the development, manufacture, promotion, sale and maintenance of
                its products and services; provided that this right to Residuals
                does not represent a license under any Intellectual Property
                Rights of the disclosing party. The term "Residuals" means
                information of a general nature, such as general knowledge,
                ideas, concepts, know-how, professional skills, work experience
                or techniques, that is retained in the unaided memories of
                either party's employees who have had access to the other
                party's information prior to execution of this Agreement. An
                employee's memory is unaided if the employee has not
                intentionally memorized the Information for the purpose of
                retaining and subsequently using or disclosing it.

        2.20.   Duty to Maintain Patents and Non-Patent Intellectual Property.
                In the event that the Purchaser decides not to file a Patent
                application or to abandon the prosecution of any such Patent
                application or not to maintain any granted Patent that is
                assigned to the Purchaser under this Technology Agreement,
                Purchaser will (i) notify the Seller within a reasonable time to
                permit the Seller to continue such prosecution or maintain such
                Patent (at the Seller's expense), and (ii) assign to the Seller
                the right, title and interest in and to such Patents. Purchaser
                shall take all commercially reasonably actions necessary to
                maintain the validity and enforceability of the Non-Patent
                Intellectual Property Rights assigned to it herein.

        2.21.   No Foundry Rights. Purchaser understands and acknowledges that
                the licenses granted to it by Seller under Section 2 are
                intended to cover only the Purchaser Products and are not
                intended to cover foundry activities that Purchaser may
                undertake on behalf of third parties.

        2.22.   Third Party Rights. Purchaser understands that some of the
                Intellectual Property Rights and materials assigned or licensed
                to Purchaser hereunder may



                                       10
<PAGE>   11

                contain third party intellectual property. Purchaser agrees
                that: (i) Seller's obligations and Purchaser's licenses under
                this Section 2 are subject in all cases to any restrictions,
                limitations or obligations contained in agreements entered into
                between Seller and third parties, (ii) Purchaser shall be solely
                responsible for obtaining such licenses or consents, provided,
                however, that upon request by Purchaser, Seller shall cooperate
                with Purchaser in obtaining such licenses or consents, as
                appropriate, (iii) Purchaser agrees that in the event any third
                party licenses or consents are required, Purchaser will obtain
                such third party licenses or will not use such third party
                intellectual property or Seller Intellectual Property Rights
                into which such third party intellectual property is integrated,
                and (iv) Purchaser will undertake all efforts necessary to
                protect Seller's rights and meet Seller's obligations under
                agreements with third parties to the extent such rights and
                obligations are affected by this Technology Agreement.

        2.23.   Confidentiality Agreement with Former Employees of Seller. All
                offers of employment made to, and employment agreements made
                with, former employees of Seller shall include the provisions
                set forth in Schedule M.

3.      COVENANT NOT TO SUE

        3.1.    Seller's Covenant Not to Sue. Seller hereby covenants and agrees
                with Purchaser that Seller will not bring suit or otherwise
                assert a patent claim against Purchaser or its customers before
                any court or administrative agency in any country of the world
                under the Seller Exclusive Issued Patents in connection with the
                sale of Cray Products to the extent the Cray Products existing
                as of the Closing Date infringed such claim of Seller Exclusive
                Issued Patents. This covenant shall run with the title of the
                Seller Exclusive Issued Patents and shall bind any assignee or
                other person to whom the Seller may convey an interest in the
                Seller Exclusive Issued Patents.

        3.2.    Purchaser's Covenant Not to Sue. Purchaser hereby covenants and
                agrees with Seller Group that Purchaser will not bring suit or
                otherwise assert any claim against the Seller or its customers
                before any court or administrative agency in any country of the
                world under the Intellectual Property Rights assigned or
                licensed to Purchaser in this Technology Agreement to the extent
                such Intellectual Property Rights are incorporated, in whole or
                in part, into Seller's hardware or software products
                commercially available or under development prior to the Closing
                Date. This covenant shall run with the title of the Intellectual
                Property Rights assigned or licensed to Purchaser herein and
                shall bind any assignee or other person to whom the Purchaser
                may convey an interest in such Intellectual Property Rights.

4.      DISCLAIMER



                                       11
<PAGE>   12

        4.1.    No Implications. Nothing contained in this Technology Agreement
                shall be construed as:

                4.1.1.  A representation or warranty by either of the Parties to
                        this Technology Agreement as to the validity,
                        enforceability or scope of any class or type of
                        Intellectual Property Rights assigned or licensed
                        herein;

                4.1.2.  A warranty or representation that anything made, used
                        sold or otherwise disposed of under any assignment or
                        license set forth in this Technology Agreement is or
                        will be free from infringement of any third party
                        Intellectual Property Rights other than those which are
                        assigned or licensed hereunder;

                4.1.3.  Except as explicitly set forth in Section 8, an
                        agreement to bring or prosecute or any grant of a right
                        to bring or prosecute actions or suits against third
                        parties for infringement;

                4.1.4.  Requiring either Party to obtain the right to license
                        for the other Party, third party technology contained in
                        any know-how, software or other materials licensed,
                        assigned or provided hereunder. The Parties agree that
                        the receiving Party shall be solely responsible for
                        obtaining any necessary third party licenses;

                4.1.5.  Except as expressly set forth herein, requiring Seller
                        to furnish, locate, compile or disclose technical
                        information relating to the Intellectual Property Rights
                        assigned or licensed to Purchaser herein;.

                4.1.6.  Conferring by implication, estoppel or otherwise, upon
                        either Party licensed hereunder, any license or other
                        right under any Intellectual Property Rights except the
                        assignments, licenses and rights expressly granted
                        hereunder regardless of whether such Intellectual
                        Property Rights are dominant or subordinate to the
                        rights granted hereunder;

                4.1.7.  Assuming any obligation to provide support, updates,
                        revisions, errors, bug fixes or other service in
                        connection with any of the assignments or licenses
                        expressed;

                4.1.8.  A warranty or representation that Seller has the right
                        to assign, sublicense or otherwise transfer, in whole or
                        in part, any of the contracts or licenses listed on
                        Schedule J;

                4.1.9.  A warranty or representation as to the commercial or
                        technical viability of any of the Cray Products; or



                                       12
<PAGE>   13

                4.1.10. A warranty or representation as to the commercial
                        availability of any component, sub-component or
                        assemblies required to manufacture and sell the Cray
                        Products.

        4.2.    No Warranties. EACH PARTY HEREBY DISCLAIMS ANY EXPRESS OR
                IMPLIED WARRANTIES WITH RESPECT TO THE INTELLECTUAL PROPERTY
                RIGHTS OR RELATED MATERIALS ASSIGNED OR LICENSED HEREUNDER,
                INCLUDING WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY,
                NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. UNLESS
                SPECIFICALLY PROVIDED ALL ASSIGNMENTS AND LICENSES ARE "AS IS,
                WHERE IS."

5.      CONFIDENTIALITY

        5.1.    Obligation. Purchaser and Seller each acknowledges that by
                reason of its relationship with the other Party, it has and will
                have access to certain information and materials that is
                confidential and of substantial value to the other Party
                ("Confidential Information"), which value would be impaired if
                such information were disclosed to third parties. Each Party
                agrees that, except as specifically authorized hereunder, it
                will not use in any way for its own account or the account of
                any third party, nor disclose to any third party, any such
                Confidential Information, and will take every reasonable
                precaution to protect the confidentiality of such information
                which shall in no event be less than the industry standard and
                shall include: entering into non-disclosure agreements with
                third parties prior to disclosing any Confidential Information
                that the other Party grants permission to disclose, entering
                into employment agreements with all employees requiring
                employees to protect Confidential Information, providing to
                employees access to Confidential Information on a need to know
                basis only, where appropriate based on the nature of the
                Confidential Information, password protect servers that contain
                Confidential Information, restricting access to Confidential
                Information by third parties (including contractors) unless they
                have a need to know and they have entered into appropriate
                non-disclosure agreement. Upon request by a Party, the other
                Party will advise the requesting Party whether or not it
                considers any particular information or materials to be
                Confidential Information.

        5.2.    Transfer of Information. Purchaser acknowledges that (i) all
                technical information, know-how, software, or other materials
                (excluding non-technical business materials) transferred by
                Purchaser from Seller are listed on Schedules to this Technology
                Agreement and will be transferred to Purchaser as agreed to by
                the Parties, and (ii) Purchaser will not have access to the
                Seller's servers as of the Closing Date or as mutually agreed.
                Purchaser agrees to promptly return or destroy all copies of any
                unauthorized Seller Confidential



                                       13
<PAGE>   14

                Information in its possession or control. Seller agrees to
                cooperate with Purchaser in identifying Seller Confidential
                Information in the possession or control of Purchaser. Purchaser
                agrees that Seller, during the period up to three hundred and
                sixty (360) days after the Closing Date, shall have the right to
                audit Purchaser's servers, files, and premises to ensure
                compliance with this Section 5. In the event Seller discovers
                material unauthorized use of Seller Confidential Information,
                Purchaser shall pay the cost of the audit and shall use its best
                efforts to correct such unauthorized use including without
                limitation, obtaining a license to use such information,
                destroying or returning such information, and ceasing to license
                or distribute products or materials that contain such
                information.

        5.3.    Exceptions. The foregoing restrictions will not apply to
                information that (i) has become publicly known through no
                wrongful act of the receiving Party; (ii) has been rightfully
                received from a third party authorized to make such disclosure
                without restriction; (iii) has been independently developed by
                the receiving Party after the Closing Date of this Technology
                Agreement; (iv) has been approved for release by written
                authorization of the disclosing Party, or (v) is required by law
                or regulation to be disclosed; provided, however, that the
                receiving Party has provided written notice to the disclosing
                Party promptly to enable disclosing Party to seek a protective
                order or otherwise prevent disclosure of Confidential
                Information.

        5.4.    Term. The obligations of each Party pursuant to this Section 5
                with respect to Confidential Information shall continue in full
                force and effect for a period of ten (10) years after the
                Closing Date of this Technology Agreement; provided that if the
                disclosing Party requests an additional ten (10) year period for
                maintaining the confidentiality of any specified Confidential
                Information, the obligations under this Section 5 shall continue
                with respect to such Confidential Information for an additional
                ten (10) years.

        5.5.    Injunctive Relief. Each Party acknowledges that any breach of
                any of its obligations under this Section 5 may cause
                irreparable harm and significant injury to the disclosing Party
                to an extent that may be extremely difficult to measure.
                Accordingly, the receiving Party agrees that the disclosing
                Party will have, in addition to any other rights or remedies
                available to it at law or in equity, the right to seek
                injunctive relief to enjoin any breach of this Section 5.

6.      TERM AND TERMINATION

        6.1.    Term. This Technology Agreement and the rights and licenses
                granted hereunder shall become effective on the Closing Date and
                shall continue in effect, unless terminated as provided below,
                until the latter of: (i) expiration,



                                       14
<PAGE>   15
               revocation, invalidation or abandonment of the last Patent
               licensed hereunder, or (ii) the Parties cease to use the
               Non-Patent Intellectual Property Rights.

        6.2.   Termination

                6.2.1.  Termination for Bankruptcy. Either Party may terminate
                        this Technology Agreement effective immediately and
                        without liability upon written notice to the other Party
                        if any one of the following events occurs:

                        (a)     the other Party files a voluntary petition in
                                bankruptcy or otherwise seeks protection under
                                any law for the protection of debtors;

                        (b)     A proceeding is instituted against the other
                                Party under any provision of any bankruptcy laws
                                that is not dismissed within ninety (90) days;

                        (c)     Any adjudication that the other Party is
                                bankrupt or insolvent;

                        (d)     A court assumes jurisdiction of all or a
                                substantial portion of the assets of the other
                                Party under a reorganization law;

                        (e)     A trustee or receiver is appointed by a court
                                for all or a substantial portion of the assets
                                of the other Party;

                        (f)     The other Party becomes insolvent, ceases or
                                suspends business;

                        (g)     The other Party makes an assignment of the
                                majority of its assets for the benefit of its
                                creditor; or

                        (h)     The other Party admits in writing its inability
                                to pay its debts as they become due.

                6.2.2.  Termination for Breach. If either Party materially
                        breaches any material term or condition ("Material
                        Breach") of this Technology Agreement or the Asset
                        Purchase Agreement ("Breaching Party"), than the Other
                        Party may terminate this Technology Agreement if (i) the
                        Other Party gives written notice to the Breaching Party
                        describing the nature of the Material Breach; and (ii)
                        the Breaching Party does not cure the Material Breach
                        within forty-five (45) days of receipt of the notice of
                        the Material Breach, unless the default reasonably
                        requires more than forty-five (45) days to correct and
                        the Breaching Party has begun substantial corrective
                        actions to remedy the default and is



                                       15
<PAGE>   16

                        diligently pursuing such actions, in which event, the
                        Breaching Party shall have so much time as is reasonably
                        necessary to cure such default.

        6.3.    Effect of Termination. In the event of termination pursuant to
                Section 6.2 above, (i) the Party terminating the Technology
                Agreement pursuant to Section 6.2 above shall retain all
                licenses and rights granted to it under this Technology
                Agreement for the term of the Technology Agreement, and all
                licenses granted to the other Party shall terminate subject to
                any sublicenses previously granted, and (ii) the following
                sections shall survive any termination or expiration of the
                Technology Agreement: Sections 2.1, 2.1.1, 2.3, 2.3.1, 2.5,
                2.5.1, 2.5.3, 2.6, 2.6.1, 2.6.2, 2.15, 2.16, 2.17, 2.18, 2.19,
                2.20, 2.21, 2.22, 2.23, 3, 4, 5, 6, 7, 8, and 9.

7.      ASSIGNMENT AND CHANGE OF CONTROL

        7.1.    Purchaser. Assignment, sale, sublicense or transfer by Purchaser
                of any rights and/or obligations of this Technology Agreement
                are governed by Section 16.3 of the Asset Purchase Agreement.
                Any purported assignment, sale, sublicense or transfer, except
                as explicitly permitted therein, shall be deemed a breach of
                this Technology Agreement and shall be null and void. This
                Technology Agreement shall be binding upon and inure to the
                benefit of the Parties and their permitted successors and
                assigns.

        7.2     Seller. The Seller may sublicense, assign or transfer this
                Technology Agreement and any right or obligation under it,
                provided that if it assigns or transfers the licenses in
                Sections 2.1.1, 2.3.1 and 2.5.1 of this Technology Agreement to
                NEC Corporation, Hitachi, Ltd. Fujitsu Limited, or any other
                manufacture of Vector Supercomputers (hereinafter "Buyer
                Competitors") during a period of three years from the Closing
                Date ("Restrictive Period"), the licenses in Sections 2.1.1,
                2.3.1 and 2.5.1 shall be limited to Seller Products, or
                combinations thereof, designed and/or manufactured by or on
                behalf of Seller as of any such assignment or transfer, or
                follow-on Seller Products or products in Seller's future product
                development plan (i.e., Road Map). In addition, if any of the
                Buyer Competitors merges or consolidates with Seller, or owns or
                controls, directly or indirectly, more than fifty percent (50%)
                of the outstanding shares or securities representing the right
                to vote for the election of directors or other managing
                authority during the Restricted Period, then the licenses in
                Sections 2.1.1, 2.3.1 and 2.5.1 shall be limited to Seller
                Products, or combinations thereof, designed and/or manufactured
                by or on behalf of Seller as of such merger, consolidation or
                change of control, or follow-on Seller Products or products in
                Seller's future product development plan. Nothing in this
                section shall restrict Seller from selling any Seller Products
                to any person or party on an end-user basis in the ordinary
                course of business.



                                       16
<PAGE>   17

8.      INFRINGEMENT ACTIONS

        8.1.    Cooperation in Infringement Actions. Each Party agrees, at the
                other's expense, to make available at reasonable times and under
                appropriate conditions all relevant personnel, records, papers,
                information, samples, specimens and other similar materials in
                its possession that are reasonably necessary to allow Seller or
                Purchaser to litigate or settle such suit, including without
                limitation, becoming party to the suit.

9.      GENERAL

        9.1.    Ownership of Technology. The Parties agree that the technical
                materials and Intellectual Property Rights assigned or licensed
                to Purchaser are limited to those expressly provided for
                hereunder. All other technology, materials and information
                (excluding non-technical business materials) under Seller's
                control shall be owned exclusively by Seller, and Purchaser
                shall have no rights or interest in such technology, materials
                and information unless expressly provided in this Technology
                Agreement. Purchaser shall not remove any tangible materials
                embodying such Intellectual Property Rights or information from
                Seller's premises other than those explicitly listed on the
                Schedules attached to this Technology Agreement. Except for the
                express licenses granted to Seller under the Intellectual
                Property Rights assigned to Purchaser hereunder, all rights
                thereto shall be owned exclusively by Purchaser and Seller shall
                have no rights or interest in such assigned Intellectual
                Property Rights.

        9.2.    Delivery of Assigned Technology or Purchaser Licensed
                Technology. All transfers of technology shall be conducted per
                the Transition Services Agreement. The Parties expressly agree
                that all such technology is provided on an "as is, where is"
                basis, and each Party shall have no obligation to locate,
                assemble, compile, deliver or otherwise assist the other Party
                in the transfer of such technology, provided that Seller agrees
                to cooperate with Purchaser's efforts.

        9.3.    Confidentiality of Technology Agreement. Each Party agrees that
                the terms and conditions of this Technology Agreement shall be
                treated as confidential information and that neither Party will
                disclose the terms or conditions to any third party without the
                prior written consent of the other Party, provided, however,
                that each Party may disclose the terms and conditions of this
                Technology Agreement, to the extent necessary:

                (a)     as required by any court or other governmental body;

                (b)     as otherwise required by law;



                                       17
<PAGE>   18

                (c)     to legal counsel of the Parties, accountants, and other
                        professional advisors;

                (d)     in confidence, to banks, investors and other financing
                        sources and their advisors;

                (e)     in connection with the enforcement of this Technology
                        Agreement; or

                (f)     in confidence, in connection with an actual or
                        prospective merger or acquisition or similar
                        transaction.

                With respect to disclosure required by a court order, the
                disclosing Party shall provide prior notification of such
                impending disclosure to the non-disclosing Party. All reasonable
                efforts to preserve the confidentiality of the terms of this
                Technology Agreement shall be expended by the disclosing Party
                in complying with such an order, including obtaining a
                protective order to the extent reasonably possible. The Parties
                shall cooperate in preparing and releasing an announcement or
                other form of publicity, if any, relating to this Technology
                Agreement.

        9.4.    Export Controls. Each Party understands and acknowledges that
                certain technology licensed or assigned hereunder is subject to
                regulation by agencies of the U.S. government, including the
                U.S. Department of Commerce, which prohibit export or diversion
                of certain products and technology to certain countries. Each
                Party warrants that it will comply in all respects with the
                export restrictions applicable to any materials or technology
                provided hereunder and will otherwise comply with the Export
                Administration Regulations or other United States laws and
                regulations in effect from time to time.

        9.5     Entire Agreement. This Technology Agreement including the
                Schedules and any schedules thereto, together with the Asset
                Purchase Agreement constitute the entire understanding of the
                Parties hereto with respect to the subject matter hereof,
                superseding all negotiations, prior discussions and prior
                agreements and understandings relating to such subject matter.
                If there is any conflict or inconsistency between any
                definitions, terms, or conditions of the Asset Purchase
                Agreement (or any interpretation thereof) and any term or
                condition of this Technology Agreement, this Technology
                Agreement shall prevail and the Asset Purchase Agreement will be
                deemed modified and/or interpreted to conform to this Technology
                Agreement. If there is any conflict or inconsistency between any
                definitions, terms, or conditions of the Technology Agreement
                (or any interpretation thereof) and any of the items on the
                Schedules to the Technology Agreement, the Schedules to the
                Technology Agreement shall prevail and the Technology Agreement
                will be deemed



                                       18
<PAGE>   19

                modified and/or interpreted to conform to the Schedules to the
                Technology Agreement.

        9.6     Expenses. All costs incurred in the interpretation, execution,
                delivery and implementation of this Technology Agreement and
                with the consummation of the transactions contemplated herein
                shall be paid by the Party incurring the expense.

        9.7     Severability. The provisions of this Technology Agreement shall
                be deemed separable. Therefore, if any part of this Technology
                Agreement is rendered void, invalid or unenforceable, such
                rendering shall not affect the validity or enforceability of the
                remainder of this Technology Agreement.

        9.8     No Waiver. Any failure by either Party to enforce at any time
                any terms and conditions of this Technology Agreement shall not
                be considered a waiver of the other Party's rights to enforce
                each and every term and condition of this Agreement.

        9.9     Unavoidable Delay. Neither Party shall be considered in default
                or be liable to the other Party for any delay in performance or
                non-performance caused by circumstances beyond the reasonable
                control of such Party, including but not limited to acts of God,
                explosion, fire, flood, war, whether declared or not, accident,
                labor strike or labor disturbances, inability to procure
                supplies from third party vendors, sabotage, order or decrees of
                any court, or action of government authority.

        9.10.   Choice of Law. This Technology Agreement shall be governed by
                and interpreted under the substantive laws of the State of
                California.

        9.11    Resolution of Disputes. Disputes involving this Technology
                Agreement shall be resolved in accordance with the procedure set
                forth in paragraph 29 of the Asset Purchase Agreement.

        IN WITNESS WHEREOF, the Parties hereto have duly executed this
Technology Agreement effective as of the date set forth above.



Seller                                      Purchaser



By:                                         By:
   ---------------------------------           ---------------------------------
Name:                                       Name:
Title:                                      Title:



                                       19