APPLICATIONS

SEATTLE, WA -- Global supercomputer leader Cray Inc. (Nasdaq:CRAY) today announced the company has raised $8.0 million from institutional investors in the form of convertible subordinated debentures and common stock purchase warrants. The debentures are convertible into common stock at $2.35 per share. During each three month period beginning February 6, 2002, up to 25% of the principal amount of the debentures are convertible at an alternate conversion price based on a volume weighted average price of the common stock at the time of each conversion. The debentures bear interest at the rate of 5% per year, payable semiannually in stock or cash at the company's option, and mature in three years, if not converted earlier. The company may redeem the debentures at any time at 105% of the principal amount for the first six months and 110% of the principal amount after six months. The warrants cover 316,206 shares of common stock, are exercisable in cash only at $4.42 per share, and expire in three years. The company has agreed to file a registration statement for the resale of the common shares issuable under the debentures and warrants. ``We are pleased by the investors' confidence in Cray and its future,'' said Jim Rottsolk, Chairman. ``This financing will provide us with sufficient capital to execute our plans and bridge our operations until we build revenue from shipments of the SV1ex and our other products under development.'' For more information visit www.cray.com