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<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>

<P align="center" style="font-size: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P align="center" style="font-size: 10pt"><B>Date of Report (Date of earliest event reported): August 26, 2008</B>

<P align="center">

<P align="center" style="font-size: 24pt"><B>CRAY INC.<BR></B>
<FONT style="font-size: 10pt">(Exact name of registrant as specified in its charter)
</FONT>

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    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>Washington</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>0-26820</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>93-0962605</B></TD>
</TR>
<TR valign="top">
    <TD>(State or other Jurisdiction of Incorporation)</TD>
    <TD>&nbsp;</TD>
    <TD>(Commission File Number)</TD>
    <TD>&nbsp;</TD>
    <TD>(IRS Employer Identification No.)</TD>
</TR>
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    <TD width="49%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
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    <TD style="border-bottom: 1px solid #000000"><B>411 First Avenue South, Suite 600<BR>Seattle, WA 98104-2860<BR></B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>98104-2860</B></TD>
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<TR valign="top">
    <TD>(Address of Principal Executive Offices)</TD>
    <TD>&nbsp;</TD>
    <TD>(Zip Code)</TD>
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<P align="center" style="font-size: 10pt">Registrant&#146;s telephone number, including area code: <B>(206) 701-2000</B>


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    <TD nowrap style="border-bottom: 1px solid #000000"><B>None<BR></B></TD>
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    <TD nowrap>(Former name or former address if changed since last report.)</TD>
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<P align="left" style="font-size: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:

<P align="left" style="font-size: 10pt">
<FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


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<P align="LEFT" style="font-size: 10pt"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement</B>



<P align="left" style="font-size: 10pt; text-indent: 4%">A.&nbsp;On August&nbsp;26, 2008, we entered into a lease (the &#147;Lease&#148;) with 900 Fourth Avenue Property LLC for office space
located at 901 Fifth Avenue, Seattle, Washington. Upon the completion of the leasehold improvements, we plan to move
our approximately 130 Seattle-based employees, which include corporate headquarters personnel as well as employees in
development, sales and marketing, to the new premises.


<P align="left" style="font-size: 10pt; text-indent: 4%">The new premises consist of approximately 54,000 square feet. The Lease has a term of approximately 102&nbsp;months
from the commencement date, which is expected to begin in the first quarter of 2009. The stated initial annual rent is
$1,647,188, subject to an abatement of approximately 50% for the first year. The abatement along with a leasehold
improvement allowance will not be payable in the absence of a default by us under the Lease. The annual rent for the
second year is $1,696,604, and future annual rents are subject to an increase of 3% per year thereafter. In addition to
the annual rent, we are obligated under the Lease to pay our proportionate share of defined expenses and taxes
attributable to the building in excess of those incurred by the landlord in the 2009 base year. We have one option to
renew the Lease for five additional years following the expiration of the initial term.


<P align="left" style="font-size: 10pt; text-indent: 4%">A copy of the Lease is filed as Exhibit&nbsp;10.1 to this Report.


<P align="left" style="font-size: 10pt; text-indent: 4%">B.&nbsp;On August&nbsp;28, 2008, we amended our Credit Agreement with Wells Fargo Bank, National Association, to reduce the
principal amount of the credit facility from $10,000,000 to $1,398,384. This facility is used solely to support
letters of credit. The effect of this amendment is to reduce from $10,000,000 to $1,398,384 the amount of cash, cash
equivalents and similar investments required to secure the facility and to reduce similarly the amount of additional
liquid assets we are required to maintain.


<P align="left" style="font-size: 10pt; text-indent: 4%">A copy of the Third Amendment to the Credit Agreement is filed as Exhibit&nbsp;10.2 to this Report.


<P align="left" style="font-size: 10pt; text-indent: 4%">Wells Fargo &#038; Company, on behalf of two of its registered investment advisor subsidiaries, filed with the SEC a
Schedule&nbsp;13G on January&nbsp;23, 2008, reporting beneficial ownership of 5,521,938 shares of our common stock as of December
31, 2007, which constituted approximately 16.8% of our outstanding common stock as of March&nbsp;17, 2008. Wells Fargo &#038;
Company and its affiliates have no representation on our Board of Directors. The beneficial ownership interest in our
common stock held by Wells Fargo &#038; Company played no role in our decision to amend the Credit Agreement.


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<P align="left" style="font-size: 10pt"><B>Item&nbsp;9.01 Financial Statements and Exhibits</B>


<P align="left" style="font-size: 10pt">(d)&nbsp;Exhibits


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    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lease dated as of August&nbsp;11, 2008, between 900 Fourth Avenue Property LLC and Cray Inc.</TD>
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    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.2</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Third Amendment to Credit Agreement entered into as of August&nbsp;22, 2008, between Wells Fargo
Bank, National Association, and the Company.</TD>
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<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>


&nbsp;

<P align="left" style="font-size: 10pt; text-indent: 4%">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.


<P align="left" style="font-size: 10pt">August&nbsp;29, 2008



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    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Cray Inc. <BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Kenneth W. Johnson
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Kenneth W. Johnson &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Senior Vice President and<br>
General Counsel&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
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{"company-data": {"conformed-name": "CRAY INC", "cik": "0000949158", "assigned-sic": "3571", "irs-number": "930962605", "state-of-incorporation": "WA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26820", "film-number": "081049234"}, "business-address": {"street1": "411 FIRST AVE SOUTH", "street2": "SUITE 600", "city": "SEATTLE", "state": "WA", "zip": "98104-2860", "phone": "2067012000"}, "mail-address": {"street1": "411 FIRST AVE SOUTH", "street2": "SUITE 600", "city": "SEATTLE", "state": "WA", "zip": "98104-2860"}, "former-company": {"former-conformed-name": "TERA COMPUTER CO \\WA\\", "date-changed": "19950809"}}
Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 26, 2008
CRAY INC.
(Exact name of registrant as specified in its charter)
Washington
0-26820
93-0962605
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
411 First Avenue South, Suite 600
Seattle, WA 98104-2860
98104-2860
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code:
(206) 701-2000
None
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
A. On August 26, 2008, we entered into a lease (the "Lease") with 900 Fourth Avenue Property LLC for office space
located at 901 Fifth Avenue, Seattle, Washington. Upon the completion of the leasehold improvements, we plan to move
our approximately 130 Seattle-based employees, which include corporate headquarters personnel as well as employees in
development, sales and marketing, to the new premises.
The new premises consist of approximately 54,000 square feet. The Lease has a term of approximately 102 months
from the commencement date, which is expected to begin in the first quarter of 2009. The stated initial annual rent is
$1,647,188, subject to an abatement of approximately 50% for the first year. The abatement along with a leasehold
improvement allowance will not be payable in the absence of a default by us under the Lease. The annual rent for the
second year is $1,696,604, and future annual rents are subject to an increase of 3% per year thereafter. In addition to
the annual rent, we are obligated under the Lease to pay our proportionate share of defined expenses and taxes
attributable to the building in excess of those incurred by the landlord in the 2009 base year. We have one option to
renew the Lease for five additional years following the expiration of the initial term.
A copy of the Lease is filed as Exhibit 10.1 to this Report.
B. On August 28, 2008, we amended our Credit Agreement with Wells Fargo Bank, National Association, to reduce the
principal amount of the credit facility from $10,000,000 to $1,398,384. This facility is used solely to support
letters of credit. The effect of this amendment is to reduce from $10,000,000 to $1,398,384 the amount of cash, cash
equivalents and similar investments required to secure the facility and to reduce similarly the amount of additional
liquid assets we are required to maintain.
A copy of the Third Amendment to the Credit Agreement is filed as Exhibit 10.2 to this Report.
Wells Fargo & Company, on behalf of two of its registered investment advisor subsidiaries, filed with the SEC a
Schedule 13G on January 23, 2008, reporting beneficial ownership of 5,521,938 shares of our common stock as of December
31, 2007, which constituted approximately 16.8% of our outstanding common stock as of March 17, 2008. Wells Fargo &
Company and its affiliates have no representation on our Board of Directors. The beneficial ownership interest in our
common stock held by Wells Fargo & Company played no role in our decision to amend the Credit Agreement.
2
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1
Lease dated as of August 11, 2008, between 900 Fourth Avenue Property LLC and Cray Inc.
10.2
Third Amendment to Credit Agreement entered into as of August 22, 2008, between Wells Fargo
Bank, National Association, and the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
August 29, 2008
Cray Inc.
By:
/s/ Kenneth W. Johnson
Kenneth W. Johnson
Senior Vice President and
General Counsel
3