Document:

EXHIBIT 10.2

 

SECURITY
AGREEMENT

 

THIS
AGREEMENT is effective the 8th day of January, 2016 and is entered into by and between Pamela Barnhill, as Trustee of INNSUITES
HOSPITALITY TRUST, an Ohio unincorporated real estate investment trust (the “Trust”), and IBC HOTELS, LLC,
an Arizona limited liability company (“IBC”), whose addresses are 1625 E Northern Avenue, Suite # 105 Phoenix,
Arizona 85020 (hereinafter the Trust and IBC are collectively referred to as either “Borrower” or “Debtor”),
in favor of LAURENCE HOLDINGS LIMITED, an Ontario corporation, whose address is 403-150 Caroline Street, South Waterloo,
Ontario, Canada N2L 0A5 (hereinafter referred to as the “Secured Party”).

 

W I T N E S S E T H:

 

WHEREAS,
Borrower has executed a purchase money Promissory Note dated effective January 8, 2016 in the original principal amount of $400,000.00
United States Dollars (“USD”) (hereinafter referred to as the “Note”) in favor of the Secured Party;
and

 

WHEREAS,
as a further inducement to the Secured Party to accept the Note from Borrower, and in order to evidence further the security interest
held by the Secured Party in certain tangible and intangible assets of Borrower, Borrower desires to grant a security interest
in favor of Secured Party and desires to evidence such grant and pledge by executing a Security Agreement in favor of the Secured
Party.

 

NOW
THEREFORE, for good and valuable consideration in hand paid and received, including the mutual promises and sums of money
set forth herein and in the Note, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

The
above recitals are affirmed as being true and correct and are hereby incorporated herein by reference.

 

SECTION
1. Grant of Security. Borrower hereby assigns, hypothecates, and pledges to the Secured Party and hereby grants, conveys,
sets over, and assigns to the Secured Party a first priority and continuing security interest in all of Borrower’s present
and future right, title, and interest in and to the following property (hereinafter referred to as the “Collateral”)
as described on, attached hereto, and incorporated herein by reference as SCHEDULE “1.”

 

SECTION
2. Security for Obligations. The Collateral secures the payment of the obligation, as evidenced by the Note, and renewals
and extension thereof, of Borrower to the Secured Party under the Note, or otherwise, whether for principal, interest, fees, or
expenses, including but not limited to attorneys’ fees and costs and including appellate attorneys’ fees and costs
(all such obligations being hereinafter collectively referred to as the “Obligations”).

 

SECTION
3. Representations and Warranties. Borrower represents and warrants to the Secured Party as follows:

 

(a)
This Agreement is a legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its respective
terms.

 

    	 	Page 1 of 19	 

    	 	 	 

    

 

(b)
The chief place of business of each Borrower is located at the addresses specified on page 1 above. For the first six months after
the Borrower’s acquisition of the assets of International Vacation Hotels, Inc. an additional office of the Borrower will
be located at 12750 Merit Drive Suite 1431 Dallas, Texas 75251 which is anticipated to be closed on or before June 11, 2016.

 

(c)
Borrower owns the Collateral free, clear, and unencumbered by any lien, security interest, or charge, except for the security
interest created by this Agreement. No effective financing statement or other instrument similar in effect covering all for any
part of the Collateral is on file in any recording office, expect such as may have been filed in favor of the Secured Party.

 

(d)
This Agreement, together with the filing of a UCC-1 Financing Statement, creates a valid and first priority perfected security
interest in the Collateral, securing the payment of the Obligations. The “debtor” for InnSuites Hospitality Trust
under Ohio law is deemed to be IBC Hotels, LLC, a subsidiary of InnSuites Hospitality Trust, with an address at 1625 E Northern
Avenue, Suite #105, Phoenix, Arizona 85020.

 

(e)
No authorization, approval, or other action by and no notice to or filing with any governmental authority or regulatory body is
required either (i) for the grant by Borrower of the security interest granted hereby or for the execution, delivery or performance
of the terms of this Agreement by Borrower or (ii) for the perfection of or the exercise by the Secured Party of Secured Party’s
rights and remedies hereunder.

 

SECTION
4. Further Assurances.

 

(a)
Borrower shall at Borrower’s own expense promptly execute and deliver all further instruments and documents and take all
further action that may be necessary or desirable or that the Secured Party may request in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the foregoing, Borrower shall execute and file such
financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary, or desirable
or as Secured Party may request in order to perfect and preserve the security interests granted or purported to be granted hereby
or, alternatively, Borrower expressly grants and extends to Secured Party the authority to file such financing or continuation
statements or amendments as Secured Party deems appropriate.

 

(b)
Borrower will furnish to the Secured Party upon request and/or at such intervals as the Secured Party may establish statements
and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the
Secured Party may reasonably request all in reasonable detail.

 

SECTION
5. Inventory. Borrower shall:

 

(a)
Keep the Inventory (other than Inventory sold in the ordinary course of business) at the place therefor specified in Section 3(b)
or upon thirty (30) days prior written notice to Secured Party at such other place or places in jurisdictions where all action
shall have been taken to perfect the security interest of the Secured Party in such Inventory at the new locations; and

 

(b)
Pay promptly when due all property and other taxes, assessments, and governmental charges or levies imposed upon and all claims
(including claims for labor, materials, and supplies) against the Inventory, except to the extent the validity thereof is being
contested in good faith by appropriate proceedings.

 

    	 	Page 2 of 19	 

    	 	 	 

    

 

(c)
The term Inventory shall be defined as set forth in the Statutes of the State of New York.

 

SECTION
6. Insurance. Borrower shall at its own expense maintain in force insurance with respect to the Collateral in such amounts,
against such risks, in such form, and with such insurers, as shall be selected by Borrower and approved by the Secured Party.
Borrower shall, if so requested by the Secured Party, deliver to the Secured Party original or duplicate policies or certificates
of such insurance and, as often as the Secured Party may reasonably request, a report of a reputable insurance broker with respect
to such insurance. If requested by the Secured Party, at any time the Secured Party shall be named as an additional insured and
loss payee on said insurance policies.

 

SECTION
7. Transfers and Other Liens. Borrower shall not:

 

(a)
Sell, transfer, convey, lease, assign (by operation of law or otherwise) or otherwise dispose of all or any part of Borrower’s
interest in any portion of the Collateral (other than the sale of Inventory in the ordinary course of Borrower’s business);
or

 

(b)
Create or suffer to exist any lien, security interest or other charge or encumbrance (except for the security interest created
by this Agreement) upon or with respect to any of the Collateral to secure the debt of any person or entity.

 

SECTION
8. Secured Party May Perform. In the event Borrower fails to perform any agreement contained herein which is deemed an
Event of Default, as hereinafter defined, the Secured Party may itself perform, or cause performance of, such agreement; and the
expenses of the Secured Party incurred in connection therewith shall be payable by Borrower under Section 13.

 

SECTION
9. The Secured Party’s Duties. The powers conferred on the Secured Party hereunder are discretionary and are solely
to protect the Secured Party’s interest in the Collateral and shall not impose any duty upon the Secured Party to exercise
any such powers. Except for the safe custody of any Collateral in the Secured Party’s possession and the accounting for
moneys actually received by it hereunder, the Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Upon the occurrence
of an Event of Default (or if the Borrower fails to cooperate in completing a Collateral Assignment (as defined below)), the Borrower
hereby appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of the Borrower and in the
name of the Borrower or otherwise, from time to time in the Secured Party’s discretion, to take any action and to execute
any instrument which the Secured Party may reasonably deem necessary to accomplish the purposes of this Agreement. If requested
by the Secured Party at any time after April 15, 2016, the Borrower shall cooperate with the Secured Party in completing a transfer
and collateral assignment of the domain names of the Borrower to further secure its interests under this Agreement (a “Collateral
Assignment”). 

 

SECTION
10. Events of Default. The following events shall constitute events of default (hereinafter referred to as “Events
of Default”):

 

(a)
Failure by Borrower or any guarantor to pay promptly when the same shall become due all or any portion of the Obligations, including,
but not limited to, any principal or interest due under the Note or due under any other instrument evidencing the Obligations;
or

 

(b)
Failure by Borrower or any guarantor to comply with or perform any provision of this Agreement or any provision of any document
contemplated by or delivered in connection with this Agreement on Borrower’s part to be complied with or performed; or

 

    	 	Page 3 of 19	 

    	 	 	 

    

 

(c)
Any representations or warranties made or given, or to be made or given, by Borrower in this Agreement, or in any certificate,
agreement, instrument or statement contemplated by or made or delivered in connection with this Agreement, shall have been incorrect,
false, or misleading in any material respect when made; or

 

(d)
Breach of, or a violation of, any covenant of Borrower made or given in connection with this Agreement; or

 

(e)
Subjection of the Collateral, or any part thereof, to attachment, levy, of execution or other judicial process; or

 

(f)
The occurrence of an assignment for the benefit of creditors by Borrower; the adjudication in bankruptcy of Borrower; the filing
of a voluntary petition by Borrower under any of the provisions of the federal bankruptcy laws, or in any other insolvency proceeding;
the filing of any answer or other pleading by Borrower admitting the material allegations of any petition filed against Borrower
or failure of Borrower in any bankruptcy or insolvency proceeding; the filing of a petition under any of the provision of the
federal bankruptcy laws against Borrower or the failure of Borrower to pay the said party’s respective debts as they become
due; or

 

(g)
The issuance of a notice of tax lien or the institution of proceedings in connection with the enforcement or a tax lien against
Borrower or the failure by Borrower to pay, withhold, collect, or remit any tax or tax deficiency when assessed or due; or

 

(h)
Liquidation, merger, sale or distribution or transfer of assets, consolidation or other change in control, or suspension of usual
business of or by Borrower or a change in trustee by the Trust; or

 

(i)
Application for, consent to, or appointment without application of a receiver, trustee or liquidator for Borrower, or for any
part of the Collateral or other assets of Borrower.

 

SECTION
11. Remedies. If any Event of Default shall have occurred and be continuing:

 

(a)
The Secured Party may exercise with respect to the Collateral, in addition to other rights and remedies provided for under this
Agreement, or under the Note, or under any other instrument evidencing or securing the Obligations, or otherwise available to
the Secured Party, all the rights and remedies of a secured party under the Uniform Commercial Code (hereinafter referred to as
the “Code”) when a debtor, which term debtor shall include for purposes of this Agreement Borrower, is in default
(whether or not the Code applies to the affected Collateral) and also may (i) require Borrower to, and Borrower hereby agrees
that it will, at Borrower’s expense and upon request of the Secured Party forthwith assemble all or part of the Collateral
requested by the Secured Party and make it available to the Secured Party at a place to be designated by the Secured Party which
is reasonably convenient to both parties and (ii) without notice, except as specified below, sell the Collateral or any part thereof
in one or more parcels at public or private sale, at any of the Secured Party’s offices or elsewhere, for cash or on credit
(Borrower shall be credited with the net proceeds of such sale only when such proceeds are actually received by the Secured Party)
or for future delivery, and at such price or prices and upon such other terms as is commercially reasonable. The nature of any
such sale as “commercially reasonable” shall be governed by the Uniform Commercial Code. Borrower agrees, that to
the extent notice of sale shall be required by law, notice to Borrower at least ten (10) days prior to the time and place of any
public or private sale is to be held shall constitute reasonable notification. The Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The Secured Party may postpone and adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and such sale may without further notice
be made at the time and place to which it was so adjourned. Re-notice to Borrower shall not then be required, and Borrower does
hereby waive the necessity of such re-notice.

 

    	 	Page 4 of 19	 

    	 	 	 

    

 

(b)
All cash proceeds (including proceeds from insurance) received by the Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may in the discretion of the Secured Party be held by the Secured
Party as collateral for and/or then or at any time thereafter be applied (after payment of any amounts payable to the Secured
Party pursuant to Section 12) in whole or in part by the Secured Party against all or any part of the sums due to the Secured
Party under the Note or under any other instrument evidencing the Obligations in such order as the Secured Party shall elect.
Any surplus of such cash or cash proceeds held by the Secured Party remaining after payment in full of all of the principal and
interest due under the Note or under any other instrument evidencing the Obligations shall be paid over to Borrower or to such
party as may be lawfully entitled to receive such surplus.

 

SECTION
12. Indemnity and Expenses.

 

(a)
Borrower shall and does hereby indemnify the Secured Party and the Secured Party’s directors and officers, if any, against
any and all claims, losses, and liabilities growing out of or resulting from this Agreement (including, without limitation to,
enforcement of this Agreement), except claims, losses or liabilities resulting from the Secured Party’s negligence
or willful misconduct.

 

(b)
Borrower shall upon demand pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees
and disbursements of Secured Party’s attorneys and of any experts and agents (including any costs or expenses associated
with perfecting a security interest in the various states where the Debtors and Collateral are located), which the Secured Party
may incur in connection with (i) the drafting, negotiation, execution and ongoing administration of this Agreement (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Collateral; (iii) the
exercise or enforcement of any of the rights of the Secured Party hereunder; or (iv) the failure by Borrower to perform or observe
any of the provisions hereof. Fees and costs incurred by the Secured Party in connection with the negotiation of this Agreement
and the Note shall be paid by Borrower out of the Note proceeds or by wire transfer from Borrower on the same day that invoices
are presented to Borrower.

 

SECTION
13. Amendments. No amendment or waiver of any provision of this Agreement nor consent to any departure by Borrower herefrom
shall in any event be effective unless the same shall be in writing and signed by the Secured Party, and then such wavier or consent
shall be effective only in the specific instance and for the specific purpose for which it is given.

 

SECTION
14. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic
communication) and, if to the Secured Party, mailed, telegraphed, faxed, or delivered to Secured Party, addressed to Secured Party
at the address noted on page 1 above; if to Borrower, mailed or delivered to Borrower, addressed to the address noted on page
1 above, or as to either party at such other address as shall be designated by such party in a written notice to the other party
supplying a new address for notices under the terms of this Section. All such notices and other communications shall, when mailed,
telegraphed, faxed, or delivered, respectively, be effective when deposited in the mails or delivered to the telegraph company,
placed on the facsimile machine, or delivered respectively, addressed as aforesaid.

 

SECTION
15. Continuing Security Interest; Transfer of Note. This Agreement shall create a continuing security interest in the Collateral
and shall (i) remain in full force and effect until written termination of this Agreement by the Secured Party, (ii) be binding
upon Borrower, and Borrower’s successors and assigns, and (iii) inure to the benefit of the Secured Party and the Secured
Party’s heirs, legal representatives, successors, participants, transferees and assigns. Without limiting the generality
of the foregoing clause (iii), the Secured Party may assign or otherwise transfer the Note, or any other instrument evidencing
the Obligations, or this Agreement, or any other evidence of indebtedness held by the Secured Party to any other person or entity;
and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to the Secured
Party herein or otherwise. Upon the termination of this Agreement by the Secured Party, all rights to the Collateral shall revert
to Borrower.

 

SECTION
16. Governing Law; Terms. This Agreement shall be governed by and constructed in accordance with the laws of the State
of New York. Venue for any dispute hereunder shall lie in New York County, New York.

 

SECTION
17. Purchase Money Security Agreement. This Agreement is a purchase money security agreement and secures a purchase money
Note.

 

SECTION
18. Receiver. Secured Party may seek the appointment of a receiver to protect and preserve the Property in the event of
the occurrence of an Event of Default, as defined in this Agreement.

 

IN
WITNESS WHEREOF, the undersigned have caused these presents to be executed on the dates set forth below.

 

[Signature
Pages Follow]

 

    	 	Page 5 of 19	 

    	 	 	 

    

 

	Signed,
    sealed and delivered 	 	 	“BORROWER”
    or “DEBTOR”
	in
    the presence of:	 	 	 
	 	 	 	 	 
	/s/
    Adam Remis	 	/s/
    Pamela Barnhill
	(Name:	Adam Remis	)	 	Pamela
    Barnhill, as Trustee
	 	 	 	 	of
    INNSUITES HOSPITALITY TRUST, an Ohio
	 	 	 	 	unincorporated
    real estate investment trust
	 	 	 	 	 
	 	 	 	 	IBC
    HOTELS, LLC,
	 	 	 	 	an
    Arizona limited liability company
	 	 	 	 	 	 
	/s/
    Christa Leesman	 	By:	/s/
    Pamela Barnhill
	(Name:	Christa Leesman	)	 	 	Pamela
    Barnhill, Manager

 

	STATE
    OF __________________	)
	 	)ss:
	COUNTY
    OF ________________ 	)

 

I
HEREBY CERTIFY that before me, a Notary Public, personally appeared PAMELA BARNHILL, as Trustee of INNSUITES HOSPITALITY
TRUST, an Ohio unincorporated real estate investment trust, and as Manager of IBC HOTELS, LLC, an Arizona limited liability
company, respectively, to me known to be the person described in and who executed the foregoing instrument and who acknowledged
before me that said person executed the same for the purposes therein set forth on behalf of said Trust and Company. I further
state that (check one) _____ I have examined the current driver’s license of the aforesaid person, or _____ I
am familiar with the identity of the aforesaid person, and have confirmed said person’s identity.

 

WITNESS
my hand and official seal in the state and county last aforesaid this ____ day of January, 2016.

 

	 	 	 
	 	NOTARY
    PUBLIC, STATE OF	 

	 	(Name:		)

 

	My
    commission expires: 	(Affix
    Seal)

 

    	 	Page 6 of 19	 

    	 	 	 

    

 

	Signed,
    sealed and delivered 	 	 	“SECURED
    PARTY”
	in
    the presence of: 	 	 	 
	 	 	 	 	LAURENCE
    HOLDINGS LIMITED,
	 	 	 	 	an
    Ontario corporation
	 	 	 	 	 	 	 
	 	 	By:
    	/s/
    Peter Schwarz
	(Name:
    	 	)	 	 	Peter
    Schwartz
	 	 	 	 	(Title:	 	)
	 	 	 	 	 
	 	 	 	 	 
	(Name:
    	 	)	 	 	 	 

 

	COUNTRY
    OF CANADA 	)
	 	)ss:
	PROVINCE
    OF _________________	)

 

I
HEREBY CERTIFY that before me, a Notary Public, personally appeared PETER SCHWARTZ, as _____________ of LAURENCE HOLDINGS
LIMITED, an Ontario corporation, to me known to be the person described in and who executed the foregoing instrument and who
acknowledged before me that said person executed the same for the purposes therein set forth on behalf of said corporation. I
further state that (check one) _____ I have examined the current driver’s license of the aforesaid person, or
_____ I am familiar with the identity of the aforesaid person, and have confirmed said person’s identity.

 

WITNESS
my hand and official seal in the Country and Province last aforesaid this ____ day of January, 2016.

 

	 	 
	 	NOTARY
    PUBLIC
	 	(Name:	 	)

 

	My
    commission expires: 	(Affix
    Seal)

 

    	 	Page 7 of 19	 

    	 	 	 

    

 

SCHEDULE
“1”

 

(Business
Assets)

 

	 	●	All
    assets purchased by IBC Hotels, LLC (“IBC”), including all the furniture, fixtures, equipment, inventory, intellectual
    property, other tangible assets, and general intangibles of the business (the “Business”), from Vacation Technologies
    International, Inc. d/b/a International Vacation Hotels, a Texas corporation located at 12750 Merit Drive Suite 1431, Dallas,
    Texas 75251, in Dallas County, Texas (as further specified in this Schedule “1”) and all property and assets acquired
    by the Debtor after the date hereof relating to the Business.
	 	 	 
	 	●	Customer
    accounts and records and deposits associated with the Business.
	 	 	 
	 	●	Business
    trade name, International Vacation Hotels.
	 	 	 
	 	●	All
    Business contracts and agreements, including but not limited to contracts with customers of the Business and suppliers of
    the Business.
	 	 	 
	 	●	Website
    (www.internationalvacation.com) and all software (and related licenses) and all other intellectual property utilized in connection
    with the Business.

 

All
of the following referenced assets:

 

	 	a.	All
    of the following Domain Names, and any trademarks and associated goodwill related to the Domain Names, any accounts receivable,
    accounts, instruments, general intangibles and payment intangibles arising from or related to use of the Domain Names, and
    proceeds:

 

AFRICAN-TULIP.COM

AFRICANREGENT.COM

AFWELLODGE.COM

AIRPORTHOTELGHANA.COM

ALADDINREDSEA.COM

ALDIARMINA.COM

ALDIARREGENCY.COM

ALLRIVIERARESORT.NET

AMETISHOTELS.COM

AQUARELLESVILLAS.COM

 

    	 	Page 8 of 19	 

    	 	 	 

    

 

ARAWAKBEACHINN.COM

ARAWAKBEACHINN.NET

ARENASCANCUN.COM

ARENASCANCUNHOTEL.COM

AYCRESORT.COM

AZAMBEZIRIVERLODGE.COM

beachcrossvillas.com

BESTVACATIONDEAL.COM

BESTVACATIONDEALS.COM

BIGCAVECAMP.COM

BLUEHUTHOTEL.COM

BLUEORCHIDSHOTEL.COM

BOMANICAMP.COM

BUSUABEACH.COM

BUTTERFLYBEACH.NET

BUTTERFLYBEACHHOTEL.COM

BUTTERFLYBEACHRESORT.COM

CACAOBEACHRESORT.COM

CANCUNARENASHOTEL.COM

CARIBBEABAY.COM

CARIBBEABAYRESORT.COM

CARLTONINNATTOTEMLAKE.COM

CASAMEXICANAHOTEL.NET

CASASOLISABELA.COM

CHATEAUBLANCAPARTMENTS.COM

CHATEAUBLANCAPTS.COM

CHIPICANMOTEL.COM

CLUBALIGIO.COM

COLUMBUSHEIGHTS.COM

COOPMARENARESORT.COM

CORALMISTHOTEL.COM

CORALSEASGARDEN.COM

CORALSEASRESORT.COM

CORONADELMARBELIZE.COM

COSTADORADABEACHRESORTS.COM

COSTADORADARESORTS.COM

COSTADORADOBEACHRESORTS.COM

COSTADORADORESORTS.COM

COZYNESTGUESTHOUSE.COM

CRATERLAKECAMP.COM

CRATERSAFARILODGE.COM

CRESTABOSELE.COM

CRESTABOTSALOHOTEL.COM

 

    	 	Page 9 of 19	 

    	 	 	 

    

 

CRESTACHURCHILL.COM

CRESTAGOLFVIEWHOTEL.COM

CRESTAJAMESON.COM

CRESTAJWANENGHOTEL.COM

CRESTALODGEGABORONE.COM

CRESTALODGEHOTEL.COM

CRESTAMAHALAPYE.COM

CRESTAMARANGHOTEL.COM

CRESTAMOWANASAFARI.COM

CRESTAOASIS.COM

CRESTAPRESIDENTHOTEL.COM

CRESTARILEYSMAUN.COM

CRESTASPRAYVIEWZIMBABWE.COM

CRESTATHAPAMAHOTEL.COM

CRYSTALPALMHOTEL.COM

CRYSTALPALMHOTELS.COM

DAHABOASIS.COM

DIAMONDSDREAMOFZANZIBAR.COM

DIAMONDSLAGEMMA.COM

DOMAINEDELANSEDESROCHERS.COM

DONARCADIA.COM

DONBEACHROAD.COM

DONEASTGATE.COM

DONJOHANNESBURG.COM

DONROSEBANK.COM

DONSANDTON.COM

ELEGANZIACONDOS.COM

ELEPHANTHILLSRESORT.COM

ELGRECOSUITESRESORT.COM

ELMINABEACHHOTEL.COM

ENYATILODGE.COM

FIREFLYCOTTAGESNEGRIL.COM

FOOTEPRINTS.NET

FOXINN.COM

FREEZONEPRINCESSCASINO.COM

FREEZONEPRINCESSHOTEL.COM

GALAPAGOSISLANDHOTEL.COM

GARRAWAYHOTEL.NET

GATESOFPARADISEHOTEL.COM

GIRASOLCANCUN.COM

GIRASOLHOTEL.COM

GLORYVILLAS.COM

GLORYVILLASHOTEL.COM

 

    	 	Page 10 of 19	 

    	 	 	 

    

 

GOASIA4LESS.COM

GOCARIBBEAN4LESS.COM

GOCAYMAN4LESS.COM

GOCHINA4LESS.COM

GOEUROPE4LESS.COM

GOFLORIDA4LESS.COM

GOHAWAII4LESS.COM

GOJAMAICA4LESS.COM

GOLDBEACHRESORT.COM

GOLDENLEOPARDRESORT.COM

GOLFVILLAGEHOTEL.COM

GOMEXICO4LESS.COM

GOORLANDO4LESS.COM

GORGESLODGEZIMBABWE.COM

GORILLASAFARI-LODGE.COM

GOVEGAS4LESS.COM

GRANDHOTELDEPARIS.NET

GRANHOTELLASGALERAS.COM

GRANITERIDGEZIMBABWE.COM

GREATZIMBABWEHOTEL.COM

HAMEAUBEAUREGARD.COM

HAMEAUDEBEAUREGARD.COM

HARARESAFARI.COM

HARARESAFARILODGE.COM

HAWANERESORT.COM

HENNESSISHOTEL.COM

HENRYMORGANBEACHRESORT.COM

HISMAJESTYSHOTEL.COM

HOLYTRINITYHOTEL.COM

HONEYMOON4LESS.COM

HOSTALCONTINENTALPERU.COM

HOSTALMACHUPICCHU.COM

HOSTALPLAZAPERU.COM

HOSTALPRESIDENTE.COM

HOTEL-AFRICANA.COM

HOTELACROPOLISMAYA.COM

HOTELAMBASSADEUR.NET

HOTELANSEDESROCHERS.COM

HOTELARAWAK.COM

HOTELARAWAK.NET

HOTELBAEZCARRIZAL.COM

HOTELBASDUFORT.COM

HOTELBOLIVARPERU.COM

 

    	 	Page 11 of 19	 

    	 	 	 

    

 

HOTELBRITANNIACOSTARICA.COM

HOTELCANELLABEACH.COM

HOTELCARACOLPLAZA.COM

HOTELCARAYOU.COM

HOTELCARAYOUMARTINIQUE.COM

HOTELCARVALLOCUENCA.COM

HOTELCARVALLOECUADOR.COM

HOTELCASABELLA.NET

HOTELCHEZJOSEPH.COM

HOTELDELAGALLERIA.COM

HOTELEDENPALM.COM

HOTELELSANTUARIO.COM

HOTELESCLUBDELSOL.COM

HOTELIMPERIALLASPERLAS.COM

HOTELINTERNATIONAL2000.COM

HOTELKAIRABA.COM

HOTELLAALDEA.COM

HOTELLAMADA.COM

HOTELLAPIEDRA.COM

HOTELMAGICACANTARRANA.COM

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HOTELNORDCHAMPAGNE.COM

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HOTELPRESIDENTEPERU.COM

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HOTELPUNTACANAGRAND.COM

HOTELPUNTACOCLES.COM

HOTELPUNTAGALEON.COM

HOTELPUNTAGALEON.NET

HOTELPUNTAGALEONRESORT.NET

HOTELREGENTINTERCONTINENTAL.COM

HOTELROOMRENTALS.COM

HOTELSANTAANITA.COM

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HOTELSOLISABELA.COM

HOTELVICTORIAUPN.COM

HOTELVILLABELLA.COM

HOTELVILLASVILMA.COM

HOTELVILLAVISTAARENAL.COM

HTAHOTEL.COM

 

    	 	Page 12 of 19	 

    	 	 	 

    

 

INTERNATIONALHOTELROOM.COM

INTERNATIONALHOTELROOMS.COM

INTERNATIONALVACATION.COM

INTVAC.COM

ISLANDDREAMSRENTALS.COM

IVISITAFRICA.COM

JOHNSHALLADVENTURETOURS.COM

JOSHUAROSEGUESTHOUSE.NET

JUNGLEBAYRESORTANDSPA.COM

KEDARCOUNTRYHOTEL.COM

kedarheritagelodge.com

KILIFIBAYRESORT.COM

KUNDUCHIBEACHAPARTMENTS.COM

KUNDUCHIBEACHRESORT.COM

KWANTUHOTEL.COM

LAHAUTPLANTATION.COM

LAKEMANYARALODGETZ.COM

LAPAGERIEHOTEL.COM

LAPALMROYALBEACHHOTEL.COM

LAPEQUENACASITA.COM

LASGAVIOTASTAMARINDO.NET

LASSIRENASHOTEL.COM

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LEFLAMBOYANTSTMARTIN.COM

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LEPARCQUITO.COM

LEVALLONRESIDENCE.COM

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LUKEHOTEL.COM

MAASAIOSTRICH.COM

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MANSIONTARAHUMAURA.COM

MANTENGACULTURALVILLAGE.COM

MAPENZIBEACH.COM

MASAIMARAFIGTREECAMP.COM

MATETSIWATERLODGE.COM

 

    	 	Page 13 of 19	 

    	 	 	 

    

 

MATOBOHILLSLODGE.COM

MERICAHOTEL.COM

MERICAHOTELS.COM

MEXICOHOTELSGUIDE.COM

MILLGATEHOUSEHOTEL.COM

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NEWVICTORIAINN.NET

NOGAHILHOTEL.COM

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PEACOCKMILLENNIUMTOWERS.COM

PHHOTELSACCRA.COM

PHHOTELSGHANA.COM

PHOTW.COM

PICARDBEACHCOTTAGES.COM

 

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PINKPANTHERHOTEL.COM

PORTSMOUTHBEACHHOTEL.COM

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POSADASDELINCA.COM

PREMIUMHOTELSOFTHEWORLD.COM

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PWANIBEACH.COM

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REINACUMAYASA.COM

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RELAX-RESORT.COM

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RIDGEHILLSUITES.COM

ROYALEHUMMINGBIRD.COM

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RYADMOGADOROPERA.NET

SABLESANDSLODGE.COM

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SANAGUSTINCOLONIAL.COM

SANAGUSTINDECALLO.COM

SANAGUSTINELDORADO.COM

SANAGUSTINEXCLUSIVE.COM

SANAGUSTINHOTELES.COM

 

    	 	Page 15 of 19	 

    	 	 	 

    

 

SANAGUSTININTERNACIONAL.COM

SANAGUSTINMONASTERIO.COM

SANAGUSTINPARACAS.COM

SANAGUSTINPLAZA.COM

sanagustinposadamonasterio.com

SANAGUSTINRIVIERA.COM

SANAGUSTINURUBAMBA.COM

SEABREEZEBEACHHOTEL.COM

SEACLIFFRESORTSPA.COM

SEASPLASH.COM

SENTIDONEPTUNEBEACH.COM

SENTIDOPALMBEACH.COM

SENTIDOPARADISEBEACH.COM

SENTIDOVILLAGEBEACH.COM

SENTRIM680.COM

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sentrimelementaita.com

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SENTRIMTSAVO.COM

SENZIGUESTHOUSE.COM

SENZIGUESTLODGE.COM

SHASHANILODGE.COM

SHAWPARKHOTEL.COM

SHIELDSNEGRIL.NET

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SIKUMITREELODGE.COM

SIXEIGHTYHOTEL.COM

SKREGENCY.COM

SOLISABELA.COM

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SPINDRIFTBELIZE.COM

SUGARCANEBARBADOS.COM

SUNBIRDHOTELS.COM

SUNFLOWERSEAVILLAS.COM

SUNSETONTHEBEACHRESORT.COM

SUNSETONTHECLIFFSRESORT.COM

SUTTONPLACEDOMINICA.NET

TABACONGRANSPA.COM

THEAFRICANREGENT.COM

 

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THEBAOBABSEALODGE.COM

THEEVERGREENHOTEL.COM

THEFISHERMANSPOINT.COM

THEHARMONYSUITES.COM

THEHOTELALHAMBRA.COM

THEHUMMINGBIRDHOTEL.COM

THEHUMMINGBIRDSAINTLUCIA.COM

THEPLAYABLANCARESORT.COM

THEPOINTCONTADORA.COM

THERAINBOWTOWERS.COM

THESTILLPLANTATION.COM

THETRAVELCZAR.COM

THEWOODENHOUSEHOTEL.COM

TRANQUILITYCOVERESORT.COM

TRANSITLODGE.COM

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TROPICALDREAMBEACHRESORT.COM

TROPICALMANSIONSUITES.COM

TROPICALPARADISE-CAYECAULKER.COM

TRUEVINELODGE.COM

TSODILOLODGE.COM

TURQUOISERESIDENCE.COM

TURTLEBAYBEACHCLUB.COM

TUXEDOVILLASSTLUCIA.COM

UGANDAEXCLUSIVELODGES.COM

USHOTELS4LESS.COM

VFMSUITES.COM

VIKHOTELARENABLANCA.COM

VIKHOTELCAYENABEACH.COM

VILLABAYAHOTEL.COM

VILLAGECREOLEHOTEL.COM

VILLAGEHOTELJAMAICA.COM

VILLASVILMA.COM

VISIT2VISIT.COM

VISITCOSTABALLENA.COM

VISITTOVISIT.COM

WINDSORINNLODGE.COM

WOODENHOUSEHOTEL.COM

WORTHINGCOURTAPARTMENTS.COM

ZAKIHOTEL.COM

ZANZIBARBEACHRESORTTZ.COM

 

	 	b.	All
    of the Business reservation phone numbers and fax numbers
	 	 	 
	 	c.	All
    of the Business emails

 

    	 	Page 17 of 19	 

    	 	 	 

    

 

	

 

PROMISSORY
NOTE

 

U.S.
$400,000.00 

Effective
Date: January 8, 2016

 

BEING
INDEBTED, for value received, Pamela Barnhill, as Trustee of InnSuites Hospitality Trust, an Ohio unincorporated real estate
investment trust, and IBC Hotels, LLC, an Arizona limited liability company, jointly and severally (hereinafter collectively
referred to as “Borrower”), promise to pay to LAURENCE HOLDINGS LIMITED, an Ontario corporation, its successors
and/or assigns (hereinafter referred to as “Holder”), or order, at 403-150 Caroline Street, South Waterloo, Ontario,
Canada, the sum of FOUR HUNDRED THOUSAND and NO/100 ($400,000.00) DOLLARS OF THE UNITED STATES OF AMERICA (“USD”),
together with interest thereon on all sums advanced from the date hereof, at the fixed rate of Eight (8.00%) Percent per annum.
Commencing on and effective as of February 1, 2016 and on the first (1st) day of each and every month thereafter until
the payment due on May 1, 2016, Borrower shall make interest only payments to Holder at the rate set forth above. Commencing on
June 1, 2016 and on the first (1st) day of each and every month thereafter until the Maturity Date, as defined below,
Borrower shall make monthly payments in USD to Holder of principal and interest in the amount of $14,787.88 USD. The proceeds
from this Note shall be used solely to fund the acquisition of the business and assets of Vacation Technologies International,
Inc. upon terms and conditions satisfactory to Holder in its sole discretion.

 

All
unpaid sums of unpaid principal and accrued interest shall become immediately due and payable in full on February 1, 2019 (hereinafter
and heretofore referred to as the “Maturity Date”).

 

Time
is of the essence hereof. This Note shall be deemed and considered and deemed in default when any payment required to be made
hereunder shall not have been received by Holder within five (5) days following the due date and shall remain in default until
all sums then declared to be due and payable by Holder shall have been paid. While in default, this obligation shall bear interest
at the highest applicable rate permitted under New York law. If any monthly installment or other payment due under this Note is
in default as defined herein, or if any action or forbearance under any related loan or security document is in default as defined
therein, the entire principal amount outstanding and accrued interest thereon shall become immediately due and payable at the
option of Holder upon five (5) days advance written notice to Borrower. Holder may exercise this option to accelerate during any
default regardless of any prior forbearance. If suit is brought to collect this Note, Holder shall be entitled to collect all
reasonable costs and expenses of that suit not limited to taxable costs, including but not limited to reasonable attorneys’
fees, including appellate attorneys’ fees.

 

The
five (5) day default period shall have no applicability to the final payment due on the Maturity Date, which said final payment
shall be deemed and considered in default if not paid on the Maturity Date.

 

The
obligation evidenced by this Note may be prepaid in whole or in part without penalty. All payments made upon this Note shall be
applied first to the payment of accrued interest and secondly upon the principal balance, except that payments made hereon may
first be applied against any late charges or other fees and expenses incurred by Holder and then to interest and principal as
aforesaid at Holder’s option.

 

Notwithstanding
the rates of interest set forth in this Note, it is the intention of Borrower and Holder that the interest charged shall in no
event ever exceed the maximum allowed by law; and any sums paid or collected which would render this obligation usurious shall
be refunded or credited to Borrower.

 

 

    	 	Page 18 of 19	 

    	 	 	 

    

 

	 

                            Borrower
                            and all makers, endorsers, sureties, and guarantors jointly and severally waive any and all rights
                            or entitlements Borrower may have to a trial by jury in any dispute in connection with this instrument.

 

Borrower
and all makers, endorsers, sureties, and guarantors jointly and severally waive notice of and consent to any and all extensions
of time, renewals, waivers, or modifications that may be granted by Holder with respect to the payment or other provisions of
this Note, and to the release of the collateral or any part thereof, with or without substitution, and agree that additional makers,
endorsers, guarantors, or sureties may become parties to this Note without notice to them and without affecting their liability
hereunder.

 

Holder
shall not be deemed by any act of omission or commission to have waived any of Holder’s rights or remedies under this Note,
unless such waiver is in writing and signed by Holder and then only to the extent specifically set forth in the writing.

 

Failure
of Holder to exercise any right or remedy on any occasion shall not constitute a waiver of the right to exercise such right or
remedy on any other occasion.

 

Holder
and Holder’s successors and assigns may freely and without the consent of Borrower being required, at any time and from
time to time, assign or transfer this Note and any and all of its related loan and security documents. Borrower acknowledges and
affirms that the right and entitlement of Holder or Holder’s successors and assigns to assign or transfer this Note is a
critical component of this obligation.

 

This
Note shall be governed by and construed in accordance with the laws of the State of New York. It shall be of no relevance or materiality
where this instrument is held by the Holder.

 

This
is a purchase money Promissory Note, which is secured by a purchase money Security Agreement executed in favor of Holder of even
date herewith.

 

	 	 	“BORROWER”	 
	 	 	 	 	 
	 	 	/s/
    Pamela Barnhill	 
	 	 	Pamela
    Barnhill, as Trustee of InnSuites Hospitality Trust, 

    an Ohio unincorporated real estate investment trust	 
	 	 	 	 
	 	 	IBC
    HOTELS, LLC,	 
	 	 	an
    Arizona limited liability company	 
	 	 	 	 	 
	 	 	By:	/s/
    Pamela Barnhill	 
	 	 	 	Pamela
    Barnhill, Manager	 
	 	 	 	 	 

 

    	 	Page 19 of 19Exhibit

Exhibit 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is entered into as of January 7, 2016, by and between CRAY INC., a Washington corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

RECITALS

Borrower has requested that Bank renew Borrower’s credit described in the credit agreement between the parties dated as of October 1, 2012 (as amended from time to time, the “Prior Agreement”), and has also asked for additional credit and certain other changes to the Prior Agreement, which Bank is agreeable to granting, provided that Borrower agrees to the restatement of the Prior Agreement by this Agreement, which shall replace the Prior Agreement in its entirety and provide for the extension of credit on the terms and conditions contained herein.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as follows:

ARTICLE I 
CREDIT TERMS

SECTION 1.1.    CREDIT FACILITIES.

(a)    Line of Credit.  Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from time to time up to and including December 1, 2017, not to exceed at any time the aggregate principal amount of Fifty Million Dollars ($50,000,000.00) ("Line of Credit"), the proceeds of which shall be used to finance Borrower’s working capital requirements, and for general corporate purposes, including capital expenditures.  Borrower's obligation to repay advances under the Line of Credit shall be evidenced by a promissory note dated as of January 7, 2016, ("Line of Credit Note"), all terms of which are incorporated herein by this reference.

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

(2)    Borrowing and Repayment.  Borrower may from time to time during the term of the Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of 

1

the limitations, terms and conditions contained herein or in the Line of Credit Note; provided however, that the total outstanding borrowings under the Line of Credit shall not at any time exceed the maximum principal amount available thereunder, as set forth above.

(3)    Termination or Reduction of Line of Credit.  Borrower shall have the right, at any time or from time to time after the Closing Date, by notice to Bank pursuant to Section 7.2 below, to terminate in whole or permanently reduce in part, without premium or penalty, the maximum amount of the Line of Credit available to an amount not less than the then aggregate principal amount of all outstanding borrowings, including undrawn amounts of all Letters of Credit then outstanding and all drawn and unpaid amounts under such Letters of Credit, and accrued but unpaid fees and costs.  Any such termination or partial reduction shall be effective on the date specified in the Borrower’s notice.

SECTION 1.2.    INTEREST/FEES.

(a)    Interest. The outstanding principal balance of each credit subject hereto shall bear interest at the rate of interest set forth in each promissory note or other instrument or document executed in connection therewith.

(b)    Computation and Payment.  Interest shall be computed on the basis of a 360-day year, actual days elapsed.  Interest shall be payable at the times and place set forth in each promissory note or other instrument or document required hereby.

(c)    Unused Commitment Fee.  Borrower shall pay to Bank a fee equal to eighteen hundredths of one percent (0.18%) per annum (computed on the basis of a 360-day year, actual days elapsed) on the daily unused amount of the Line of Credit (not including the notional amount of any Letters of Credit then issued and outstanding), which fee shall be calculated on a quarterly basis by Bank and shall be due and payable by Borrower in arrears on the 15th day of each January, April, July and October, commencing on January 15, 2016.

(d)    Letter of Credit Fees.  Borrower shall pay to Bank (i) fees upon the issuance of each Letter of Credit equal to one and one quarter percent (1.25%) per annum (computed on the basis of a 360-day year, actual days elapsed) of the face amount thereof, and (ii) fees upon the payment or negotiation of each drawing under any Letter of Credit and fees upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Bank's standard fees and charges then in effect for such activity. Fees will be payable quarterly in arrears for each Letter of Credit.

SECTION 1.3.    COLLECTION OF PAYMENTS.  Borrower authorizes Bank to collect all principal, interest and fees due under each credit subject hereto by charging Borrower's deposit account number 4950041103 with Bank, or any other deposit account maintained by Borrower with Bank, for the full amount thereof.  Should there be insufficient funds in any such deposit account to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower.

SECTION 1.4.    COLLATERAL.

As security for all indebtedness and other obligations of Borrower to Bank subject hereto, Borrower hereby grants to Bank security interests of first priority in all Borrower's accounts receivable and other rights to payment, general intangibles, inventory and equipment; provided, however, that such collateral shall not include any collateral expressly excluded by any separate security agreement between Borrower and Bank then in effect.

All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds or mortgages, and other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank.  Borrower shall pay to Bank immediately upon demand the full 

2

amount of all charges, costs and expenses (to include fees paid to third parties and all allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance.

ARTICLE II 
REPRESENTATIONS AND WARRANTIES

Borrower makes the following representations and warranties to Bank, which representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect until the full and final payment, and satisfaction and discharge, of all obligations of Borrower to Bank subject to this Agreement.

SECTION 2.1.    LEGAL STATUS.  Borrower is a corporation, duly organized and existing and in good standing under the laws of Washington, and is qualified or licensed to do business (and is in good standing as a foreign corporation, if applicable) in all jurisdictions in which such qualification or licensing is required or in which the failure to so qualify or to be so licensed could have a material adverse effect on Borrower.

SECTION 2.2.    AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract, instrument and other document required hereby or at any time hereafter delivered to Bank in connection herewith (collectively, the "Loan Documents") have been duly authorized, and upon their execution and delivery in accordance with the provisions hereof will constitute legal, valid and binding agreements and obligations of Borrower or the party which executes the same, enforceable in accordance with their respective terms.

SECTION 2.3.    NO VIOLATION. The execution, delivery and performance by Borrower of each of the Loan Documents do not violate any provision of any law or regulation, or contravene any provision of the Articles of Incorporation or By-Laws of Borrower, or result in any breach of or default under any contract, obligation, indenture or other instrument to which Borrower is a party or by which Borrower may be bound.

SECTION 2.4.    LITIGATION. There are no pending, or to the best of Borrower's knowledge threatened, actions, claims, investigations, suits or proceedings against Borrower or its properties by or before any governmental authority, arbitrator, court or administrative agency which could reasonably be expected to have a material adverse effect on the financial condition or operations of Borrower other than those disclosed by Borrower to Bank in writing prior to the date hereof.

SECTION 2.5.    CORRECTNESS OF FINANCIAL STATEMENT. The annual financial statement of Borrower dated December 31, 2014, and all interim financial statements delivered to Bank since said date, true copies of which have been delivered by Borrower to Bank prior to the date hereof, (a) are complete and correct and present fairly the financial condition of Borrower, (b) disclose or reflect all liabilities of Borrower that are required to be disclosed, reflected or reserved against under generally accepted accounting principles, whether liquidated or unliquidated, fixed or contingent, and (c) have been prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”).  Since the dates of such financial statements there has been no material adverse change in the financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or otherwise encumbered any of its assets or properties except in favor of Bank or as permitted by Section 5.7 or otherwise permitted by Bank in writing.

SECTION 2.6.    INCOME TAX RETURNS.  Borrower has no knowledge of any pending assessments or adjustments of its income tax payable with respect to any year which, if paid or payable. will not create an Event of Default hereunder or which could reasonably be expected to have a material adverse effect on the financial condition or operations of Borrower other than those disclosed by Borrower to Bank in writing prior to the date hereof.

SECTION 2.7.    NO SUBORDINATION. There is no agreement, indenture, contract or instrument to which Borrower is a party or by which Borrower may be bound that requires the subordination in right of 

3

payment of any of Borrower's obligations subject to this Agreement to any other obligation of Borrower.

SECTION 2.8.    PERMITS, FRANCHISES.  Borrower possesses, and will hereafter possess, all permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade names, patents, and fictitious names, if any, necessary to enable it to conduct the business in which it is now engaged in compliance with applicable law except to the extent that failure to possess such permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade names, patents, and fictitious names necessary to enable it to conduct the business in which it is now engaged in compliance with applicable law could not have a material adverse effect on Borrower or its business.

SECTION 2.9.    ERISA.  Borrower is in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from time to time ("ERISA"); Borrower has not violated any provision of any defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in accordance with the Plan documents and under generally accepted accounting principles.

SECTION 2.10.    OTHER OBLIGATIONS. Borrower is not in default on any obligation for borrowed money.  Borrower is not in default on any purchase money obligation or any other lease, commitment, contract, instrument or obligation default in which, individually or collectively, could reasonably be expected to have a material adverse effect on the financial condition or operations of Borrower.

SECTION 2.11.    ENVIRONMENTAL MATTERS.  Except as disclosed by Borrower to Bank in writing prior to the date hereof, Borrower is in compliance in all material respects with all applicable federal or state environmental, hazardous waste, health and safety statutes, and any rules or regulations adopted pursuant thereto, which govern or affect any of Borrower's operations and/or properties, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time.  None of the operations of Borrower is the subject of any federal or state investigation evaluating whether any remedial action involving a material expenditure is needed to respond to a release of any toxic or hazardous waste or substance  into the environment.  Borrower has no material contingent liability in connection with any release of any toxic or hazardous waste or substance into the environment.

ARTICLE III 
CONDITIONS

SECTION 3.1.    CONDITIONS OF INITIAL EXTENSION OF CREDIT.  The obligation of Bank to extend any credit contemplated by this Agreement is subject to the fulfillment to Bank's satisfaction of all of the following conditions:

(a)    Approval of Bank Counsel.  All legal matters incidental to the extension of credit by Bank shall be satisfactory to Bank's counsel.

(b)    Documentation.  Bank shall have received, in form and substance satisfactory to Bank, each of the following, duly executed:

		
	(1)
	This Agreement and each promissory note or other instrument or document required hereby.

		
	(2)
	Corporate Resolution: Borrowing.

		
	(3)
	Certificate of Incumbency.

4

		
	(4)
	Continuing Security Agreement: Rights to Payment and Inventory.

		
	(5)
	Security Agreement: Equipment.

		
	(6)
	Such other documents as Bank may require under any other Section of this Agreement.

(c)    Financial Condition.  There shall have been no material adverse change in the financial condition or business of Borrower or any Third Party Obligor hereunder, if any.

(d)    Insurance.  Borrower shall have delivered to Bank evidence of insurance coverage, in form, substance, amounts, covering risks and issued by companies satisfactory to Bank, and where required by Bank, with lender loss payable endorsements in favor of Bank.

SECTION 3.2.    CONDITIONS OF EACH EXTENSION OF CREDIT.  The obligation of Bank to make each extension of credit requested by Borrower hereunder shall be subject to the fulfillment to Bank's satisfaction of each of the following conditions:

(a)    Compliance. The representations and warranties contained herein and in each of the other Loan Documents shall be true on and as of the date of the signing of this Agreement and on the date of each extension of credit by Bank pursuant hereto, with the same effect as though such representations and warranties had been made on and as of each such date, and on each such date, no Event of Default as defined herein, and no condition, event or act which with the giving of notice or the passage of time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist.

(b)    Documentation.  Bank shall have received all additional documents which may be required in connection with such extension of credit.

(c)    Additional Letter of Credit Documentation. Prior to the issuance of each Letter of Credit, Bank shall have received a Letter of Credit Agreement, properly completed and duly executed by Borrower. 

ARTICLE IV 
AFFIRMATIVE COVENANTS

Borrower covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in writing:

SECTION 4.1.    PUNCTUAL PAYMENTS.  Punctually pay all principal, interest, fees or other liabilities due under any of the Loan Documents at the times and place and in the manner specified therein.

SECTION 4.2.    ACCOUNTING RECORDS.  Maintain adequate books and records in accordance with generally accepted accounting principles consistently applied, and permit any representative of Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies of the same, and to inspect the properties of Borrower.

SECTION 4.3.    FINANCIAL STATEMENTS.  Provide to Bank all of the following, in form and detail satisfactory to Bank:

(a)    not later than 90 days after and as of the end of each fiscal year, an audited  financial statement of Borrower, prepared by a certified public accountant acceptable to Bank, to include balance sheet, income statement, and statement of cash flow;

(b)    not later than 40 days after and as of the end of each fiscal quarter, a financial statement of Borrower, prepared by Borrower, to include balance sheet, income statement, and statement of cash flow;

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(c)    from time to time such other information as Bank may reasonably request. 

SECTION 4.4.    COMPLIANCE.  Preserve and maintain all licenses, permits, governmental approvals, rights, privileges and franchises necessary for the conduct of its business; and comply with the provisions of all documents pursuant to which Borrower is organized and/or which govern Borrower's continued existence and with the requirements of all laws, rules, regulations and orders of any governmental authority applicable to Borrower and/or its business.

SECTION 4.5.    INSURANCE.  Maintain and keep in force, for each business in which Borrower is engaged, insurance of the types and in amounts customarily carried in similar lines of business, including but not limited to fire, extended coverage, public liability, flood, property damage and workers' compensation, with all such insurance carried with companies and in amounts satisfactory to Bank, and deliver to Bank from time to time at Bank's request schedules setting forth all insurance then in effect.

SECTION 4.6.    FACILITIES. Keep all properties useful or necessary to Borrower's business in good repair and condition, ordinary wear and tear excepted, and from time to time make necessary repairs, renewals and replacements thereto so that such properties shall be preserved and maintained to a standard that could reasonably be expected to be useful and necessary to the operations of Borrower.

SECTION 4.7.    TAXES AND OTHER LIABILITIES.  Pay and discharge when due any and all indebtedness, obligations, assessments and taxes, both real or personal, including without limitation federal and state income taxes and state and local property taxes and assessments, except (a) such as Borrower may in good faith contest or as to which a bona fide dispute may arise, and (b) for which (i) Borrower has established adequate reserves in accordance with GAAP, and (ii) no foreclosure, distraint, levy, sale or similar proceedings have yet commenced with respect to any of Borrower’s assets as a result of such taxes or assessments.

SECTION 4.8.    LITIGATION.  Promptly give notice in writing to Bank of any litigation pending or threatened against Borrower with a claim in excess of $250,000.00.

SECTION 4.9.    FINANCIAL CONDITION.  Maintain Borrower's financial condition as follows using generally accepted accounting principles consistently applied and used consistently with prior practices (except to the extent modified by the definitions herein)

(a)    Current Ratio not less than 1.85 to 1.0 at any time, with "Current Ratio" defined as total current assets divided by total current liabilities.

(b)    Total Liabilities divided by Tangible Net Worth not greater than 1.1 to 1.0 at any time, with "Total Liabilities" defined as the aggregate of current liabilities and non-current liabilities less subordinated debt, and with "Tangible Net Worth" defined as the aggregate of total stockholders' equity plus subordinated debt less any intangible assets.

SECTION 4.10.    NOTICE TO BANK.  Promptly (but in no event more than five (5) days after the occurrence of each such event or matter) give written notice to Bank in reasonable detail of:  (a) the occurrence of any Event of Default, or any condition, event or act which with the giving of notice or the passage of time or both would constitute an Event of Default; (b) any change in the name or the organizational structure of Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any funding deficiency with respect to any Plan; or (d) any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any other cause affecting Borrower's property.

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ARTICLE V
NEGATIVE COVENANTS

Borrower further covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower will not without Bank's prior written consent:

SECTION 5.1.    USE OF FUNDS.  Use any of the proceeds of any credit extended hereunder except for the purposes stated in Article I hereof.

SECTION 5.2.    OTHER INDEBTEDNESS.  Create, incur, assume or permit to exist any Indebtedness except (a) the liabilities of Borrower to Bank, (b) any other Indebtedness of Borrower existing as of, and disclosed to Bank prior to, the date hereof and (c) lndebtedness not to exceed an aggregate of $30,000,000.00.  As used herein, “Indebtedness” shall mean and include, with respect to any person, without duplication, all of the following, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or several (i) all obligations of such person for borrowed money (including recourse and other obligations to repurchase accounts or chattel paper under factoring, receivables purchase, or similar financing arrangements) or for the deferred purchase price of property or services (other than accounts payable for goods for goods or services); (ii) all obligations in respect of surety bonds and letters of credit; (iii) all obligations of such person evidenced by notes, bonds, debentures or other similar instruments, (iv) all capital lease obligations; (v) all obligations or liabilities of others secured by a lien of any kind on any asset of such person, whether or not such obligation or liability is assumed; (vi) all guaranties of such person of the obligations of another person; and (vii) net exposure under any interest rate swap, currency swap, forward, cap, floor or other similar contract that is not entered to in connection with a bona fide hedging operation that provides offsetting benefits to such person, which agreements shall be marked to market on a current basis.

SECTION 5.3.    MERGER, CONSOLIDATION, TRANSFER OF ASSETS.  

(a)    Merge into or consolidate with any other entity; provided, however that 

(i)    merger or consolidation with a consolidated subsidiary of Borrower is permitted if Borrower shall be the continuing or surviving entity and so long as (A) Borrower provides Bank with prompt notice of any such transaction (which notice shall include executed copies of all of the documents entered into in connection with such transaction); (B) Borrower is in pro forma compliance with the provisions of Section 4.9 hereof immediately before and immediately after such transaction, and (C) no default or Event of Default has occurred and is continuing prior to, or would occur after giving effect to, such transaction; and 

(ii)    any investment expressly permitted by Section 5.5 may be structured as a merger or consolidation;

(b)    make any substantial change in the nature of Borrower's business as conducted as of the date hereof; 

(c)    acquire all or substantially all of the assets of any other entity except as otherwise permitted under Section 5.5 below; nor 

(d) sell, lease, transfer or otherwise dispose of all or a substantial or material portion of Borrower's assets except in the ordinary course of its business; provided, however, that sale, lease or transfer of Borrower’s assets in an amount of less than $20,000,000.00 in the aggregate during the term of this Agreement shall not be considered a substantial or material portion of its assets so long as (i) Borrower provides Bank with prompt notice of any such transaction (which notice shall include executed copies of all 

7

of the documents entered into in connection with such transaction); (ii) Borrower is in pro forma compliance with the provisions of Section 4.9 hereof immediately before and immediately after such transaction, (iii) no default or Event of Default has occurred and is continuing prior to, or would occur after giving effect to, such transaction, and (iv) the disposition of the assets could not reasonably be expected to have a material adverse effect on the financial condition or operations of Borrower.

SECTION 5.4.    GUARANTIES.  Guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of Borrower as security for, any liabilities or obligations of any other person or entity, except any of the foregoing in favor of Bank and except for guaranties by Borrower of obligations of subsidiaries (so long as such subsidiaries are consolidated for accounting purposes under GAAP) under leases or for the purchase of goods used in such subsidiaries’ ordinary course of business.

SECTION 5.5.    LOANS, ADVANCES, INVESTMENTS.  Make any loans or advances to or investments in any person or entity, except any of the foregoing existing as of, and disclosed to Bank prior to, the date hereof, and additional loans, advances or investments in amounts not to exceed an aggregate of $50,000,000.00 outstanding at any one time during the term of this Agreement; provided, however, that no “investment” structured as a merger or consolidation is permitted hereunder unless (i) Borrower provides Bank with prompt notice of any such transaction (which notice shall include executed copies of all of the documents entered into in connection with such transaction); (ii) Borrower is in pro forma compliance with the provisions of Section 4.9 hereof immediately before and immediately after such transaction, (iii) no default or Event of Default has occurred and is continuing prior to, or would occur after giving effect to, such transaction and (iv) Borrower shall be the continuing or surviving entity.

SECTION 5.6.    DIVIDENDS, DISTRIBUTIONS.  Declare or pay any dividend or distribution either in cash, stock or any other property on Borrower's stock now or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of any class of Borrower's stock now or hereafter outstanding, except for payment of applicable taxes in connection with restricted stock and stock options issued pursuant to the company’s stock incentive plans approved by the company’s shareholders.

SECTION 5.7.    PLEDGE OF ASSETS.  Mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of Borrower's assets now owned or hereafter acquired, except (a) any of the foregoing in favor of Bank or which is existing as of, and disclosed to Bank in writing prior to, the date hereof and (b) additional security interests securing amounts not to exceed an aggregate of $30,000,000.00 at any time outstanding; provided, however, that nothing contained in this Section permits Borrower to create liens or security interests in assets in which Bank has been granted a security interest except with respect to cash security (including as deposit accounts held in other financial institutions) granted solely to secure outstanding letters of credit issued by other financial institutions or obligations under foreign exchange transactions, in each case so long as such amounts are included within the $30,000,000.00 in aggregate liens at any time outstanding as set out above; provided further that, notwithstanding the foregoing, Borrower may create liens or security interests on assets at the time such assets are acquired, including through the use of capitalized leases, but only so long as (i) such asset is acquired in the ordinary course of Borrower’s business, (ii) the lien does not encumber any assets other than the assets subject to such lien at the time such assets are acquired and (iii) such lien does not exceed the cost to Borrower of the assets acquired.

ARTICLE VI
EVENTS OF DEFAULT

SECTION 6.1.    The occurrence of any of the following shall constitute an "Event of Default" under this Agreement:

(a)    Borrower shall fail to pay when due any principal, interest, fees or other amounts payable under any of the Loan Documents.

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(b)    Any financial statement or certificate furnished to Bank in connection with, or any representation or warranty made by Borrower or any other party under this Agreement or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made.

(c)    Any default in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other Loan Document (other than those specifically described as an “Event of Default” in this section 6.1), and with respect to any such default that by its nature can be cured, such default shall continue for a period of twenty (20) days from its occurrence.

(d)    Any default in the payment or performance of any obligation, or any defined event of default, under the terms of any contract, instrument or document (other than any of the Loan Documents) pursuant to which Borrower or any guarantor hereunder (with each such guarantor referred to herein as a "Third Party Obligor") (i) has incurred any debt or other liability to any person or entity other than Bank or its affiliates or subsidiaries (including but not limited to any obligation with respect to any purchase money lien or capitalized leases) which default or defaults permit such persons or entities to declare any payment obligation of more than $5,000,000.00 in the aggregate to be due and payable; or (ii) has incurred any debt or other liability to Bank or its affiliates or subsidiaries.

(e)    Borrower or any Third Party Obligor shall become insolvent, or shall suffer or consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as they become due, or shall make a general assignment for the benefit of creditors; Borrower or any Third Party Obligor shall file a voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to time ("Bankruptcy Code"), or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or any involuntary petition or proceeding pursuant to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors is filed or commenced against Borrower or any Third Party Obligor, and such petition or proceeding shall continue undismissed for 60 days; or Borrower or any Third Party Obligor shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition; or Borrower or any Third Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower or any Third Party Obligor by any court of competent jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors.

(f)    The filing of a notice of judgment lien against Borrower or any Third Party Obligor; or the recording of any abstract of judgment against Borrower or any Third Party Obligor in any county in which Borrower or such Third Party Obligor has an interest in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the assets of Borrower or any Third Party Obligor; or the entry of a judgment against Borrower or any Third Party Obligor for more than $5,000,000.00 individually or in the aggregate.

(g)    The death or incapacity of Borrower or any Third Party Obligor if an individual.  The dissolution or liquidation of Borrower or any Third Party Obligor if a corporation, partnership, joint venture or other type of entity; or Borrower or any such Third Party Obligor, or any of its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of Borrower or such Third Party Obligor.

SECTION 6.2.    REMEDIES.  Upon the occurrence of any Event of Default: (a) all indebtedness of Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall at Bank's option and without notice become immediately due and payable without presentment, demand, protest or notice of dishonor, all of which are hereby expressly waived by Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available under each of the Loan Documents, or accorded by law, including without limitation the right to resort to any or all security for any credit subject 

9

hereto and to exercise any or all of the rights of a beneficiary or secured party pursuant to applicable law.  All rights, powers and remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity.

ARTICLE VII 
MISCELLANEOUS

SECTION 7.1.    NO WAIVER.  No delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of the Loan Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power or remedy.  Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of the Loan Documents must be in writing and shall be effective only to the extent set forth in such writing.

SECTION 7.2.    NOTICES.  All notices, requests and demands which any party is required or may desire to give to any other party under any provision of this Agreement must be in writing delivered to each party at the following address:

BORROWER:    CRAY INC.
901 5th Avenue, Suite 1000
Seattle, WA  98164

BANK:    WELLS FARGO BANK, NATIONAL ASSOCIATION
999 3rd Avenue, 12th Floor
Seattle, WA  98104

or to such other address as any party may designate by written notice to all other parties.  Each such notice, request and demand shall be deemed given or made as follows:  (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt.

SECTION 7.3.    COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of Bank's in-house counsel), expended or incurred by Bank in connection with the negotiation and preparation of this Agreement and the other Loan Documents, Bank's continued administration hereof and thereof, and the preparation of any amendments and waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the collection of any amounts which become due to Bank under any of the Loan Documents, and (c) the prosecution or defense of any action in any way related to any of the Loan Documents, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity.

SECTION 7.4.    SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties; provided however, that Borrower may not assign or transfer its interests or rights hereunder without Bank's prior written consent.  Bank reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Bank's rights and benefits under each of the Loan Documents. In connection therewith, Bank may disclose all documents and information which Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, or any collateral required hereunder.

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SECTION 7.5.    ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute the entire agreement between Borrower and Bank with respect to each credit subject hereto and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. This Agreement may be amended or modified only in writing signed by each party hereto.

SECTION 7.6.    NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their respective permitted successors and assigns, and no other person or entity shall be a third party beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any other of the Loan Documents to which it is not a party.

SECTION 7.7.    TIME.  Time is of the essence of each and every provision of this Agreement and each other of the Loan Documents.

SECTION 7.8.    SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement.

SECTION 7.9.    COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same Agreement.

SECTION 7.10.    GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

SECTION 7.11.    ARBITRATION.

(a)    Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the Loan Documents, and their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit.

(b)    Governing Rules.  Any arbitration proceeding will (i) proceed in a location in Washington selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting  choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to herein as applicable, as the “Rules”).  If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control.  Any party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law.

(c)    No Waiver of Provisional Remedies, Self-Help and Foreclosure.  The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain 

11

provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph.

(d)    Arbitrator Qualifications and Powers.  Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00.  Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State of Washington or a neutral retired judge of the state or federal judiciary of Washington, in either case with a minimum of ten years’ experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim.  In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator's discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the substantive law of Washington and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award.  The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the Washington Rules of Civil Procedure or other applicable law.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction.  The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.

(e)    Discovery.  In any arbitration proceeding, discovery will be permitted in accordance with the Rules.  All discovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date.  Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing that the request for discovery is essential for the party's presentation and that no alternative means for obtaining information is available.

(f)    Class Proceedings and Consolidations.  No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, except parties who have executed any Loan Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity.

(g)    Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding.

(h)    Miscellaneous.  To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA.  No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation.  If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON  LAW.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first written above.

	
		
	CRAY INC.

By:/s/ Brian C. Henry                          
Brian C. Henry,
Executive Vice President, and Chief Financial Officer
	WELLS FARGO BANK,
NATIONAL ASSOCIATION

By:/s/ Russell Carson                              
Russell Carson, Relationship Manager

	

By:/s/ Michael C. Piraino                     
Michael C. Piraino,
Senior Vice President Administration, General Counsel & Corporate Secretary
	 

13

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