Document:

<PAGE>
                                                                     Exhibit 4.4

                               AMENDMENT NO. 2 TO
                       CONVERTIBLE SUBORDINATED DEBENTURES
                             AND PURCHASE AGREEMENT

               THIS AMENDMENT NO. 2 TO THE CONVERTIBLE SUBORDINATED DEBENTURES
AND PURCHASE AGREEMENT, dated as of August 29, 2002 (this "Amendment No. 2"), is
by and between the Investors (as such term is defined below) and Cray Inc., a
corporation organized and existing under the laws of the State of Washington
(the "Company").

               WHEREAS, the Company and Riverview Group, LLC, Omicron Partners,
LP, Laterman & Co., Forevergreen Partners, Clarion Capital Corporation and
Morton A. Cohen TTEE FBO The Morton A. Cohen Revocable Living Trust (together,
the "Investors") are parties to a Convertible Subordinated Debentures and
Warrant Purchase Agreement, dated as of November 6, 2001, as amended by
Amendment No. 1 dated as of November 15, 2001 thereto ("Amendment No. 1") (such
agreement, as amended by Amendment No. 1, is referred to herein as the "Purchase
Agreement") pursuant to which the Company issued the Investors an aggregate of
$9,300,000 principal amount of 5% Convertible Subordinated Debentures (the
"Debentures") and Warrants to purchase an aggregate of 367,590 shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock"), and

               WHEREAS, all capitalized terms used but not defined herein shall
be as defined in the Debentures or the Purchase Agreement, and

               WHEREAS, the Company and the Investors want to amend the
Debentures and the Purchase Agreement to delete the right of the holders to
convert the Debentures at the Alternate Conversion Price and to restore the
right of the Company to make an optional redemption of the Debentures under
certain circumstances as set forth herein,

               NOW THEREFORE, in consideration of the foregoing premises, and
the promises and covenants herein contained, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, and acknowledging that each
party intends to and is entitled to rely on provisions herein in its favor, the
parties, intending to be legally bound, hereby agree as follows:

        1.      Amendments to the Debentures. The parties hereto hereby amend
                each of the Debentures as follows:

                        Section 4(a)(ii) of each Debenture is deleted, and the
                        Set Price shall be the sole conversion price at which
                        each Debenture is convertible into Common Stock at the
                        option of the Holder. In the first sentence of Section
                        4(a)(i) of each Debenture, the parenthetical "(subject
                        to the limitations on conversion set forth in Section
                        4(a)(ii) hereof)" is amended

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<PAGE>

                        to "(subject to the limitations on conversion set forth
                        in Section 4(d) hereof)".

        2.      Amendment to the Purchase Agreement. Section 1(d) of Amendment
                No. 1 to the Purchase Agreement is hereby amended to add the
                following at the end of that section:

                        ; provided, however, that, notwithstanding any of the
                        foregoing, if the VWAPs for each of any twenty (20)
                        consecutive Trading Days exceeds $6.00 per share
                        (adjusted proportionately for stock splits or other
                        subdivisions or combinations of the outstanding Common
                        Stock), the Company shall have the right to redeem the
                        Debentures as set forth in Sections 5(a) and (b) of the
                        Debentures, subject to all of the terms and conditions
                        therein, if the Company gives an Optional Redemption
                        Notice within 30 days after any such 20 Trading Day
                        period.

        3.      Entire Amendment. This Amendment No. 2 sets forth all of the
                amendments being made to the Debentures and the Purchase
                Agreement at this time.

                       [Signature Page to Amendment No. 2]

               IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 2 to be executed by the undersigned, thereunto duly authorized, as of the
date first written above.

                                    CRAY INC.

                                    By     /s/ James E. Rottsolk
                                      ------------------------------------------
                                           James E. Rottsolk, President

                                    INVESTORS:

                                    RIVERVIEW GROUP, LLC

                                    By     /s/  Terry Feeney
                                      ------------------------------------------
                                           Name:  Terry Feeney
                                           Title: Chief Administrative Officer

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                                    OMICRON PARTNERS, LP

                                    By:    Omicron Capital L.P., as subadvisor
                                    By:    Omicron Capital Inc., general partner

                                    By     /s/ Bruce Bernstein
                                      ------------------------------------------
                                           Bruce Bernstein, President

                                    LATERMAN & CO.

                                    By     /s/  Bernard Laterman
                                      ------------------------------------------
                                           Bernard Laterman, Managing Partner

                                    FOREVERGREEN PARTNERS

                                    By     /s/ Bernard Laterman
                                      ------------------------------------------
                                           Bernard Laterman, Managing Partner

                                    CLARION CAPITAL CORPORATION

                                    By     /s/ Morton A. Cohen
                                      ------------------------------------------
                                           Morton A. Cohen, President

                                    MORTON A. COHEN TTEE FBO
                                    THE MORTON A COHEN REVOCABLE
                                    LIVING TRUST

                                    By     /s/   Morton A. Cohen
                                      ------------------------------------------
                                           Morton A. Cohen, Trustee

                                       16<PAGE>
                                                                     Exhibit 4.5

                          COMMON STOCK PURCHASE WARRANT

              To Purchase _______________ Shares of Common Stock of

                                    CRAY INC.

THIS CERTIFIES that, for value received, _____________ (the "Holder"), is
        entitled, upon the terms and subject to the limitations on exercise and
        the conditions hereinafter set forth, at any time on or after August 30,
        2002 (the "Initial Exercise Date") and on or prior to the close of
        business on the fourth anniversary of the Initial Exercise Date (the
        "Termination Date") but not thereafter, to subscribe for and purchase
        from Cray Inc., a corporation incorporated in the State of Washington
        (the "Company"), up to ____________ shares (the "Warrant Shares") of
        Common Stock, par value $.01 per share, of the Company (the "Common
        Stock"). The purchase price of one share of Common Stock (the "Exercise
        Price") under this Warrant shall be $4.50. The Exercise Price and the
        number of Warrant Shares for which the Warrant is exercisable shall be
        subject to adjustment as provided herein.

Title to Warrant. Prior to the Termination Date and subject to compliance with
applicable laws, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the Holder in person
or by duly authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed.

Authorization of Shares. The Company covenants that all Warrant Shares which may
be issued upon the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

Exercise of Warrant.

                Except as provided in Section 4 herein, exercise of the purchase
        rights represented by this Warrant may be made at any time or times on
        or after the Initial Exercise Date and on or before the Termination Date
        by the surrender of this Warrant and the Notice of Exercise Form annexed
        hereto duly executed, at the office of the Company (or such other office
        or agency of the Company as it may designate by notice in writing to the
        registered Holder at the address of such Holder appearing on the books
        of the Company) and upon payment of the Exercise Price of the shares
        thereby purchased by wire transfer or cashier's check drawn on a United
        States bank, the Holder shall be entitled to receive a certificate for
        the number of Warrant Shares so purchased. Certificates for shares
        purchased hereunder shall be delivered to the Holder within three (3)
        Trading Days after the date on which this Warrant shall have been
        exercised as aforesaid. This Warrant shall be deemed to have been
        exercised and such certificate or certificates shall be deemed to have
        been issued, and Holder or any other person so designated to be named
        therein shall be deemed to have become a holder of record of

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<PAGE>

        such shares for all purposes, as of the date the Warrant has been
        exercised by delivery of the Warrant and the duly executed Notice of
        Exercise and payment to the Company of the Exercise Price and all taxes
        required to be paid by the Holder, if any, pursuant to Section 5 prior
        to the issuance of such shares, have been paid.

                If this Warrant shall have been exercised in part, the Company
        shall, at the time of delivery of the certificate or certificates
        representing Warrant Shares, deliver to Holder a new Warrant evidencing
        the rights of Holder to purchase the unpurchased Warrant Shares called
        for by this Warrant, which new Warrant shall in all other respects be
        identical with this Warrant.

                Notwithstanding anything herein to the contrary, in no event
        shall the Holder be permitted to exercise this Warrant for Warrant
        Shares to the extent that (i) the number of shares of Common Stock owned
        by such Holder (other than Warrant Shares issuable upon exercise of this
        Warrant) plus (ii) the number of Warrant Shares issuable upon exercise
        of this Warrant, would be equal to or exceed 4.999% of the number of
        shares of Common Stock then issued and outstanding, including shares
        issuable upon exercise of this Warrant held by such Holder after
        application of this Section 3(c). As used herein, beneficial ownership
        shall be determined in accordance with Section 13(d) of the Exchange
        Act. To the extent that the limitation contained in this Section 3(c)
        applies, the determination of whether this Warrant is exercisable (in
        relation to other securities owned by the Holder) and of which a portion
        of this Warrant is exercisable shall be in the sole discretion of such
        Holder, and the submission of a Notice of Exercise shall be deemed to be
        such Holder's determination of whether this Warrant is exercisable (in
        relation to other securities owned by such Holder) and of which portion
        of this Warrant is exercisable, in each case subject to such aggregate
        percentage limitation, and the Company shall have no obligation to
        verify or confirm the accuracy of such determination. Nothing contained
        herein shall be deemed to restrict the right of a Holder to exercise
        this Warrant into Warrant Shares at such time as such exercise will not
        violate the provisions of this Section 3(c). The provisions of this
        Section 3(c) may be waived by the Holder upon, at the election of the
        Holder, not less than 61 days' prior notice to the Company, and the
        provisions of this Section 3(c) shall continue to apply until such 61st
        day (or such later date, as determined by the Holder, as may be
        specified in such notice of waiver). No exercise of this Warrant in
        violation of this Section 3(c) but otherwise in accordance with this
        Warrant shall affect the status of the Warrant Shares as validly issued,
        fully-paid and nonassessable.

No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise Price.

Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be

                                       18
<PAGE>

directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

Closing of Books. The Company will not close its stockholder books or records in
any manner which prevents the timely exercise of this Warrant.

Transfer, Division and Combination.

                Subject to compliance with any applicable securities laws,
        transfer of this Warrant and all rights hereunder, in whole or in part,
        shall be registered on the books of the Company to be maintained for
        such purpose, upon surrender of this Warrant at the principal office of
        the Company, together with a written assignment of this Warrant
        substantially in the form attached hereto duly executed by the Holder or
        its agent or attorney and funds sufficient to pay any transfer taxes
        payable upon the making of such transfer. Upon such surrender and, if
        required, such payment, the Company shall execute and deliver a new
        Warrant or Warrants in the name of the assignee or assignees and in the
        denomination or denominations specified in such instrument of
        assignment, and shall issue to the assignor a new Warrant evidencing the
        portion of this Warrant not so assigned, and this Warrant shall promptly
        be cancelled. A Warrant, if properly assigned, may be exercised by a new
        holder for the purchase of Warrant Shares without having a new Warrant
        issued. Notwithstanding the above, the Holder shall not transfer this
        Warrant or any rights hereunder to any person or entity which is then
        engaged in a business that is in the reasonable judgement of the Company
        is in direct competition with the Company.

                This Warrant may be divided or combined with other Warrants upon
        presentation hereof at the aforesaid office of the Company, together
        with a written notice specifying the names and denominations in which
        new Warrants are to be issued, signed by the Holder or its agent or
        attorney. Subject to compliance with Section 7(a), as to any transfer
        which may be involved in such division or combination, the Company shall
        execute and deliver a new Warrant or Warrants in exchange for the
        Warrant or Warrants to be divided or combined in accordance with such
        notice.

                The Company shall prepare, issue and deliver at its own expense
        (other than transfer taxes) the new Warrant or Warrants under this
        Section 7.

                The Company agrees to maintain, at its aforesaid office, books
        for the registration and the registration of transfer of the Warrants.

No Rights as Shareholder until Exercise. This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof pursuant to Section 3(a).

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Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.

Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall be
a Saturday, Sunday or a legal holiday, then such action may be taken or such
right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.

Adjustments of Exercise Price and Number of Warrant Shares. The number and kind
of securities purchasable upon the exercise of this Warrant and the Exercise
Price shall be subject to adjustment from time to time upon the happening of any
of the following. In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, or (iv) issue any shares
of its capital stock in a reclassification of the Common Stock, then the number
of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.

Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed to the holders of Common Stock of the Company, then the Holder
shall have the right thereafter to receive upon exercise of this Warrant, the
number of shares of Common Stock of the successor

                                       20
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or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

Voluntary Adjustment by the Company. The Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for any
period of time deemed appropriate by the Board of Directors of the Company.

Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of
securities or other property purchasable upon the exercise of this Warrant or
the Exercise Price is adjusted, as herein provided, the Company shall promptly
mail by registered or certified mail, return receipt requested, to the Holder
notice of such adjustment or adjustments setting forth the number of Warrant
Shares (and other securities or property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (and other securities or
property) after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made. Such notice, in the absence of manifest error, shall be
conclusive evidence of the correctness of such adjustment.

Notice of Corporate Action.  If at any time:

                (a) the Company shall take a record of the holders of its Common
        Stock for the purpose of entitling them to receive a dividend or other
        distribution, or any right to subscribe for or purchase any evidences of
        its indebtedness, any shares of stock of any class or any other
        securities or property, or to receive any other right, or

                (b) there shall be any capital reorganization of the Company,
        any reclassification or recapitalization of the capital stock of the
        Company or any consolidation or merger (where the Company is not the
        surviving corporation) of the

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        Company with, or any sale, transfer or other disposition of all or
        substantially all the property, assets or business of the Company to,
        another corporation or,

                (c) there shall be a voluntary or involuntary dissolution,
        liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

Authorized Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Principal Market upon which the Common
Stock may be listed.

        The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such

                                       22
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authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.

        Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

Miscellaneous.

                Jurisdiction. This Warrant shall constitute a contract under the
        laws of New York, without regard to its conflict of law, principles or
        rules.

                Restrictions. The Holder acknowledges that the Warrant Shares
        acquired upon the exercise of this Warrant, if not registered, will have
        restrictions upon resale imposed by state and federal securities laws.

                Nonwaiver and Expenses. No course of dealing or any delay or
        failure to exercise any right hereunder on the part of Holder shall
        operate as a waiver of such right or otherwise prejudice Holder's
        rights, powers or remedies, notwithstanding all rights hereunder
        terminate on the Termination Date. If the Company willfully and
        knowingly fails to comply with any provision of this Warrant, which
        results in any material damages to the Holder, the Company shall pay to
        Holder such amounts as shall be sufficient to cover any costs and
        expenses including, but not limited to, reasonable attorneys' fees,
        including those of appellate proceedings, incurred by Holder in
        collecting any amounts due pursuant hereto or in otherwise enforcing any
        of its rights, powers or remedies hereunder.

                Notices. Any notice, request or other document required or
        permitted to be given or delivered to the Holder by the Company shall be
        delivered in accordance with the notice provisions of the Purchase
        Agreement.

                Limitation of Liability. No provision hereof, in the absence of
        affirmative action by Holder to purchase Warrant Shares, and no
        enumeration herein of the rights or privileges of Holder, shall give
        rise to any liability of Holder for the purchase price of any Common
        Stock or as a stockholder of the Company, whether such liability is
        asserted by the Company or by creditors of the Company.

                Remedies. Holder, in addition to being entitled to exercise all
        rights granted by law, including recovery of damages, will be entitled
        to specific performance of its rights under this Warrant. The Company
        agrees that monetary damages would not be adequate compensation for any
        loss incurred by reason of a breach by it of the provisions of this
        Warrant and hereby agrees to waive the defense in any action for
        specific performance that a remedy at law would be adequate.

                Successors and Assigns. Subject to applicable securities laws,
        this Warrant and the rights and obligations evidenced hereby shall inure
        to the benefit of and

                                       23
<PAGE>

        be binding upon the successors of the Company and the successors and
        permitted assigns of Holder. The provisions of this Warrant are intended
        to be for the benefit of all Holders from time to time of this Warrant
        and shall be enforceable by any such Holder or holder of Warrant Shares.

                Amendment. This Warrant may be modified or amended or the
        provisions hereof waived with the written consent of the Company and the
        Holder.

                Severability. Wherever possible, each provision of this Warrant
        shall be interpreted in such manner as to be effective and valid under
        applicable law, but if any provision of this Warrant shall be prohibited
        by or invalid under applicable law, such provision shall be ineffective
        to the extent of such prohibition or invalidity, without invalidating
        the remainder of such provisions or the remaining provisions of this
        Warrant.

                Headings. The headings used in this Warrant are for the
        convenience of reference only and shall not, for any purpose, be deemed
        a part of this Warrant.

        IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: September __, 2002
                                    CRAY INC.

                                    By:
                                       -----------------------------------------
                                       James E. Rottsolk, President

                                       24
<PAGE>

                               NOTICE OF EXERCISE

To:     Cray Inc.

        (1) The undersigned hereby elects to purchase ________ Warrant Shares
(the "Common Stock"), of Cray Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.

        (2) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:

                     --------------------------------------

The Warrant Shares shall be delivered to the following:

                     --------------------------------------

                     --------------------------------------

                     --------------------------------------

                                    [PURCHASER]

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

                                    Dated:
                                          ---------------------------

                                     Page 25
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

        FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

                                               whose address is
-----------------------------------------------

---------------------------------------------------------------.

---------------------------------------------------------------

                                                 Dated:
                                                        --------------, --------

                         Holder's Signature:
                                            ------------------------------------

                         Holder's Address:
                                            ------------------------------------

                                            ------------------------------------

Signature Guaranteed:
                      -----------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.

                                    Page 26

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